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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Industry Advocate Bill

Second Reading

Adjourned debate on second reading.

(Continued from 31 May 2017.)

Mr WINGARD (Mitchell) (16:43): As the lead speaker, I rise with great pleasure to speak on the Industry Advocate Bill. As we know, the bill is an attempt to make the Industry Advocate a statutory body. The Industry Advocate has been doing quite a bit of work around town, and we need to have a look at why this position is in place.

The Industry Advocate has been put in place to help industry talk with government and help with getting South Australian products into government procurement. If we look at why this is so important, we know it is very important to have South Australian products in South Australian government procurement, and it is very important to be exporting South Australian products interstate and overseas. It is also very important to be growing our economy, and that is potentially why this position has taken on greater focus and more importance.

So when we look at why the government is keen to have this position, we need to look back at the statistical history of South Australia. We know that the trend unemployment rate in South Australia is currently at 7.1 per cent. We have had the highest unemployment rate in the nation for 30 months in a row, so we know employment is a very big issue and, more specifically, unemployment in South Australia is in a very, very dire position. We also know that youth unemployment in South Australia is the highest in the nation.

The Labor government promised to produce 100,000 jobs back in February 2010. That was the commitment, to produce 100,000 jobs. Have they produced 100,000 jobs in that time? No, they certainly have not. In fact, they have produced only 17,200 jobs. Again, we can see that jobs is a very key point. South Australia's economic growth was 1.9 per cent in 2015-16. South Australia's gross state product grew 1.9 per cent compared with 2.8 per cent nationally. Only Tasmania and Western Australia grew slower than our state. So we are six out of eight when it comes to that measure as well.

Exports were $1.09 billion in April 2017—$11.05 billion in the 12 months to April 2017. Those figures show that exports fell 5.2 per cent on an annualised basis compared with the previous 12 months. The government's target is $18 billion by 2017, including services, so we are a fair way off that target as well. Another thing to take into consideration is interstate migration. People are leaving South Australia. In the year ending September 2016, it was minus 6,484. That is a massive exodus of people from this state. There are more people leaving than there are people coming, which is another big setback for South Australia.

We know that water prices in South Australia have again increased 233 per cent between 2002-03 and 2016-17. CommSec's State of the States ranked South Australia seven out of eight in terms of economic performance. That is the background. That is why it is important to fight for every position. That is why the government has put a real focus on the Industry Advocate and brought this bill before the house.

We need to do everything we can, and we understand that, but we need to have the background as to why it is absolutely vital for South Australia to fight for every possible job because we are in a dire state. We are in a very, very bad position. When we rank ourselves against all the other states in the country, we are doing incredibly badly. The unemployment figure is the key indicator. When it comes to unemployment, we have been at the bottom of the pile for 30 months in a row. That is the history. As I have said, 15 years of state Labor have put us in that position.

The member for Kaurna brought this bill before the house. We need to work out what the Industry Advocate is going to do. The member for Kaurna is adamant that the Industry Advocate will help to grow jobs in South Australia. He is saying that we need that conduit between business and government. A lot of people I have spoken to have begged the question: why are business and government not talking better? Why are they not communicating better? Why have we got to the point where we need to have an industry advocate in place?

It is a very fair question. Why have we come to this point? Many are concerned that it is the mismanagement of this government that has created that poor communication and that poor relationship between business, and South Australian businesses most importantly, and government procurement. The solution is the Industry Advocate. Whilst there may be some upside to it, there are some concerns as well, and I will run through a few of those as we go through this.

The member for Kaurna highlighted the use of steel. We know about the problems in Whyalla and Arrium steel and using South Australian steel in projects that the government is procuring. In his speech, I note that the member for Kaurna talked about the Northern Expressway and Arrium steel, and I am really keen to know how much Arrium steel from Whyalla—not Arrium steel from other sources—will be used in the project.

The recording, as the member for Chaffey says, is a very important point because it is the recording of where the steel comes from that we need to keep an eye on. The member for Kaurna says that there will be more Arrium steel in the Northern Expressway. We will hold him to that and we will keep checking on that. However, we have asked about the NRAH, the Convention Centre, the Adelaide Oval and other projects around South Australia. We have asked what steel was used, and how much South Australian Arrium steel was used? They say, 'We don't know. We didn't record it. We didn't keep it.'

We have reached a situation where now we need to have an industry advocate in place to make up for the government's shortfall in not knowing and not having that information at hand. It appears that the Industry Advocate is in place to cover the backside of a government that has not kept checks and balances on its procurement processes and what has happened. That seems to be the reason this is actually happening.

We know that the intent of the bill is to give South Australian businesses an opportunity to be involved in government procurement. The Industry Advocate will also resolve complaints, remove impediments to South Australian businesses and improve the procurement practices and processes I talked about. The Industry Advocate will maintain the Industry Participation Policy, and we understand the reason behind that. A fining system will also be in place for the Industry Advocate, should someone not adhere to the proper terms and conditions, and they can fine up to $20,000, which is interesting, too.

Speaking to different industry groups and getting feedback from different industry groups, I think the need for the idea is the very important factor here. The need for a body to facilitate between government and South Australian businesses to help with procurement has been brought about by 15 years of Labor's leadership, if you want to call it that—lack of leadership is probably a better term, I think—in South Australia. That is why the Industry Advocate is being put forward.

There are a couple of other interesting points regarding the bill. Speaking to some of the key stakeholders, they support the role of the Industry Advocate but they have concerns and questions and a number, including the Master Builders Association, questioned whether it needs to be a statutory position. Of course, the bill enshrines it as a statutory body, yet what some of these people are suggesting to me, and what a number of stakeholders have suggested to me, is that surely we should reach a position where government and industry have a very firm relationship and where they are working through that and a third party is not needed.

A number of stakeholders, including Business SA and the Ai Group, are concerned about the red tape and the cost it is going to add—and that is one of the big concerns about the bill. In principle, we understand what the government is trying to do and, like everyone in this room, knowing those stats and figures I reeled off at the start, we need to be doing everything we possibly can. The Ai Group has also raised a concern about the five-year term for the Industry Advocate as opposed to potentially a three-year term being more appropriate.

Again, I think they are coming from the same view, that if we can get this right and get this fixed then perhaps the Industry Advocate may not be as pertinent in the future because it is a problem that has been created and, if it could be resolved, will the Industry Advocate be needed in the future? Whilst the situation has meant that we need this position at the moment to help manage the problems we have, will it be needed down the track? Time will tell. The big issue, when we put these positions in place, is whether they will put a burden on industry.

Business SA has raised that with us, as they are concerned that this could put an unreasonable burden on the supplier. Added costs are another concern, as I have already mentioned. They are a couple of the issues that industry is talking about when it comes to this bill and they are things that we will very much be keeping an eye on during the passage of this bill. Another point I would like to make, and the member for Bragg will be mentioning this, is the concern centred around transparency. The bill calls for the Industry Advocate to be exempt from the Freedom of Information Act.

There is a grave concern about this state Labor government not wanting to be transparent and wanting to hide things. We think that the government should be transparent and should be accountable for what they are doing. To have this position exempt from the FOI Act is alarming, and the member for Bragg will speak more about that. We notice that the Small Business Commissioner is not exempt from the FOI Act, yet the government are looking to make the Industry Advocate exempt from freedom of information laws.

We know there have been a number of issues in the past. We have an ICAC, and the government has blocked a number of our moves to open up freedom of information and make things more accessible. We know the goings-on with Oakden at the moment in relation to not revealing what is happening, not wanting to be open and transparent, being a closed government and keeping the people of South Australia at arm's length. It is alarming that under this bill the government wants to make the Industry Advocate exempt from FOI, and that raises some concerns for us, and others have also raised the issue with us.

On the whole, we want to make sure that South Australian companies and businesses are growing, that we are giving them every opportunity, and with procurement opportunities that is absolutely fantastic. We know from the figures I reeled off at the start, including the economic growth in South Australia of 1.9 per cent, that we are below the national average, which is 2.8 per cent, and that is a fair indicator that South Australia is not going so well. We also mentioned the unemployment rate. I do not want to bang on about it, but 30 months in a row—you really need to have a look at that and work out why South Australia is going so bad and why we are in such dire straits.

I stress again that we want to give every opportunity to every South Australian business, but the focus must be on growing the pie, making sure that we are growing outside South Australia and overseas. That is why we on our side have policies in place, such as increasing the number of trade offices overseas so that we can sell more of our goods and services to other countries and grow the size of our pie. At the moment, South Australia is shrinking. We are being strangled under this state Labor government and everyone is feeling the pinch.

When I go doorknocking in local streets, I hear families talk about their children being forced to move interstate or overseas to work because there are no job opportunities in South Australia. That must be changed; it must be turned around. If the Industry Advocate goes a little way towards helping that, then all well and good, despite a couple of concerns raised by some key industry groups. The focus must be on the bigger picture, on growing the pie for South Australia, and that is what we on this side of the house are very focused on. With those few words, Deputy Speaker, I thank you for your time.

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (16:56): Can I commend the member for Mitchell for his contribution as the shadow minister for small business. I assume from his contribution that the opposition intends to support the bill. For that, I congratulate and commend them because I think it is a case of bipartisanship being the best course for this particular matter.

Could I start, as the Minister for Small Business, Investment and Trade and Defence Industries, by responding first to some of the interesting points that the member for Mitchell raised and then cut to the substance of the bill. First of all, could I extend to the member, as the shadow minister, an opportunity for a briefing on any small business matter. I would be delighted to make the Small Business Commissioner, the Industry Advocate or the Simpler Regulation Unit or DSD available at any time. If he would like to let my office know, we will set it up because I think there is lots of scope for us to work together. We all want small business to flourish.

The issues of unemployment raised by the member for Mitchell are well known. It is true that 6.9 per cent is an unemployment rate we would all prefer not to have. Being realistic, historically South Australia for the last 30 to 40 years—in fact, really since it was created—has faced some fundamental disadvantages compared with other states. It has meant that we have always bounced around in the bottom half of the employment figures and it has always been a struggle. We are at the end of the river, and we do not have the abundant natural resources of states like WA, which exports 42 per cent, I think, of our entire export output, or of Queensland, of the mountains of coal New South Wales enjoys or the dynamics of population growth seen in Sydney and Melbourne. We are the driest state in the driest continent.

Going back to Playford, there is a need to be very creative. Playford was the classic example of creativity in the way that he went out there and created the whitegoods industry, motor vehicle manufacturing, weapons research establishment and all the collaboration that went on with Defence both here and in the UK to establish a lot of key industries. Of course, in a protected economy, with a protected dollar, with barriers up, that strategy worked. Now we are transforming and we need to change the way we are doing things. Getting that unemployment rate down will be an ongoing challenge for whoever forms government for the coming decades.

It is a case of needing strategies and answers, rather than talking about the problem. I know that it is the natural tendency of many commentators, both in the media and in the political class, to discuss the problem—and we do need to discuss the problem—but it is always helpful if there are also some policies or solutions on what to do about the problem that come with that conversation. The government is certainly endeavouring to do that, and I think the Industry Advocate Bill that we are debating is one of those solutions that the government has developed.

Of course, there is the non-accelerating inflation rate of unemployment—that natural rate that is presumed, generally, to be around 5 per cent. It is very hard to get below that, and New South Wales has just edged below it, but there will always be a group in the community who, for one reason or another—disabilities, drugs and alcohol issues and certain other factors—economists generally recognise will not be employed for one reason or another, and that is generally around that 5 per cent mark.

You can take the view: is the cup 93 per cent full, or is it 7 per cent empty? We can ruminate, but there have been times when unemployment has reached 12, 13, 14 per cent. Certainly, in some of the countries I have visited it is remarkably higher than where we are and they would love to have our problem. Nevertheless, being at the bottom of the list is a title we would rather not have, and you make the right point that we all need to strive to fix it.

The issue of population growth comes up as well. Again, that is linked to the general economic paradigm that has been South Australia's story for a long time. Once the nation made decisions to float the dollar, deregulate the banking system and engage in an international economy, certain fundamentals kicked in that have culminated, ultimately, with the closure of the motor vehicle industry that cannot compete. As the member knows, they were decisions made by the current federal government, and it could have been avoided, but there was probably—

An honourable member interjecting:

The Hon. M.L.J. HAMILTON-SMITH: What was that?

The DEPUTY SPEAKER: He should not be interjecting, and you should not take any notice of him.

The Hon. M.L.J. HAMILTON-SMITH: I apologise for inviting him to do so.

The DEPUTY SPEAKER: Ignore him.

The Hon. M.L.J. HAMILTON-SMITH: I lost myself—I am probably looking for a barney. I think that most commentators would agree that there was a certain inevitability to the motor car industry, eventually, and there were some strategic reasons for that. How did the two countries that lost World War II manage to emerge from it with the most sophisticated motor car industries—Japan and Germany? I would argue because they were smart—very smart—and they decided that innovation, quality and excellence would be their paradigm in their motor car industries, and they produced Porsche, they produced Audi, they produced Mercedes and they produced Lexus.

We fell into a strategic paradigm of producing 'me too' motor vehicles from GM, Ford, Chrysler and then, later, Mitsubishi—those cars that are at the high volume, middle range, lower value and can be produced more effectively overseas. If we were producing Ferraris, Audis, Porsches, and so on, it might be a different story. We made some mistakes strategically as a nation over many decades and we have ultimately paid a price, in that the motor car industry will no longer be with us.

Anyway, we are where we are, and the question is: how do we emerge from that? How do we restructure the economy for change? It all needs to be built around intellectual property. It all needs to be built around international engagement. We need to be producing smart, savvy products that are low volume, high value, high margin. For example, the wine industry provides a very good example. The food industry generally is producing high quality products that are sought after because they are good—very good—and our primary producers and winemakers are to be commended. We need to really emulate that across other industry sectors, including manufacturing, construction and services.

I was pleasantly surprised and uplifted when I saw the recent figures on services exports by the ABS—a growth of 11 per cent in South Australia, outperforming the nation, which is at 9 per cent. It signals that tourism, education and professional services, including construction and so on, are growing faster in South Australia than in other states, and that is a very good thing.

The economy of the future is going to look different. It is going to be built more around high-tech manufacturing, like naval shipbuilding and submarines, medical devices and advanced manufacturing in the food and wine sector. It is going to be about those dramatically different things. It is also going to be about looking at the 3.5 billion customers in our region, rather than at the 25 million customers in Australia. But it is also about making sure that government expenditure is wisely expensed and made accessible to all businesses, both federal and state. At the state level, by creating the Industry Advocate the state government has taken a step towards enabling small businesses and companies generally to access government work more freely.

I do remember—when I was leader of the opposition, actually—being asked to go out to the Northern Expressway by the civil contractors, who were very concerned at the time at the amount of interstate work being given on that project. I must say I was shocked to see three or four items of plant out of every five on that roadway with interstate licence plates. It was jolly outrageous, and I agreed with them that it was just terrible when you are spending state taxpayers' money and the work is going off interstate to companies in Queensland, Victoria and New South Wales—often because we simply had not made it easy for our people to get a slice of the action.

We are in a federation, and we cannot legislate or predicate that South Australian companies must get the action; we would not want that either, because we want South Australian companies to be able to bid for work in Victoria and New South Wales and Queensland. Many of them depend upon it. We cannot do anything that contradicts the constitution or strikes against federal laws. So the Industry Advocate was charged with finding solutions, and it has been a pretty good outcome.

South Australia is a small business state, and it is these small businesses that are the key to creating jobs in a growing economy. The Industry Advocate Bill will secure the government policy of assessing and rewarding economic contributions to our state in the SA government procurement process. The introduction of the Industry Advocate Bill—and I commend the member for Kaurna for his hard work on this—and the changes to the South Australian Industry Participation Policy signal the state government's strong commitment to help the continued growth of the state's small to medium enterprises by providing the right conditions and equipping businesses with the tools to innovate and grow.

The importance of government expenditure in stimulating economic growth has often been recognised overseas because of its ability to create an environment that is growth friendly. The government established an industry advocate position in 2013 to provide independent advice and recommendations to the government about procurement reforms. The aim was to use procurement as a policy tool to increase economic growth in South Australia. Under this bill, the Industry Advocate's role will be strengthened to make sure that, wherever possible, the government is purchasing from locally based suppliers and suppliers who source inputs locally, thereby maximising the economic contribution being retained by the state.

I must say it is part of a broader strategy. When I became small business minister I set up an immediate weekly communication forum between myself; the Industry Advocate; the Small Business Commissioner, John Chapman; the DSD head of agency, Adam Reid; and Julie Holmes, the head of the Simpler Regulation Unit. We meet every week, we share information and talk about what we can do to help small business thrive. There is regular communication. Those agencies report to other ministers and coordinate regularly with the member for Kaurna and the Treasurer and the Assistant Treasurer. We all collaborate to the benefit of small business, and this bill is largely a result of that collaboration.

Since the establishment of the Industry Advocate, as much as 90 per cent of the value of goods and services contracts let with suppliers located in South Australia has been achieved. This compares with 51 per cent in 2012-13, showing just how successful the Office of the Industry Advocate has been since it was established. There has been a similar outcome with the state government's major projects consistently showing 80 to 90 per cent going to local subcontractors and suppliers, which is spent on local jobs and manufactured products sourced from within South Australia, as well as raw materials supplied or sourced from within the state, all directly benefiting the state economy.

The Office of the Industry Advocate runs a Meet the Buyer series of events, and a Supplying to Government event, which brings together senior project and contract managers with the state government and local businesses. I have spoken at a lot of these, as the Minister for Small Business, and they are remarkably successful. You really do have a situation where small businesses can meet the people who are writing the contracts for that road, that school, that sewerage or waterworks project and so on. We have done them in Adelaide, we have done them in Whyalla, we have done them in Mount Gambier, we have done them all over the countryside, in the regions as well as in the city, because this is something that goes to every single corner of the state.

The positive feedback I have received as Minister for Small Business very much confirms the points made by my parliamentary friend the Assistant Treasurer about the state's Industry Advocate being seen by industry itself as a very significant asset. The government's Industry Participation Policy is being well received by businesses across the state. Mr Phil Sutherland from the Civil Contractors Federation sums up much of this sentiment with his comment, 'Don't ever think that the role of the Industry Advocate is not making a serious difference, because it is.' They are the very civil contractors who quite rightly pointed out to me all those years ago that too much of the work was going interstate without South Australians having had an opportunity to have a crack at it.

Grant Eckert, Group Manager for stationery group, Ancol, says, 'We are indebted to the Industry Advocate because, quite simply, without his services KW Stationers would no longer be trading in our current form. Having a dedicated advocate for local businesses was key in providing the confidence to invest $1.5 million in a new warehouse facility.' Given the relatively small size of the South Australian economy, local small to medium enterprises (SMEs) can be heavily reliant upon winning work let by state and local governments. There is also evidence in regional South Australia that this is the case, particularly when considering the value of procurement across 68 council regions.

I know the Industry Advocate has been helping the Local Government Association develop a model of economic participation policy for councils. My parliamentary friend the Minister for Local Government confirms that point. I would hope that most of the state's local councils will adopt this policy and actively apply the economic contribution weighting method used by the state. It is not about special treatment or price preferencing, but rather about assisting local businesses to be engaged in government procurement as a fair and efficient competitor who uses local people to fill jobs and sources materials locally whenever possible.

Finally, as the minister responsible for South Australia's trade and engagement internationally, it is my intention to build on the success of these strategies to increase the number and to diversify the number of businesses from South Australia winning work through the Asian Development Bank and World Bank procurement projects. This is a very important point. What we have done here is quite unique. It is showing national leadership. I do not think there is any other state that has the formula quite as right as we have. We are spreading that joy to local government.

Our challenge now is to go to the nation and to the world. I am encouraging the Industry Advocate now to embrace the procurement processes in Victoria, New South Wales, Queensland, Western Australia and everywhere, to be in a position to explain to South Australian companies what they need to do to compete for that work interstate. They are similar processes, and it is a matter of being aware of the tender sites and what the buyers expect, meeting them and going after the work.

We can replicate what we have achieved at the state government level interstate and then overseas, as I just mentioned, by going to the Asian Development Bank in Manila and the World Bank, and understand their procurement processes and get that message through to our own businesses so that they can compete; then we will truly be internationally engaged. There are much bigger markets out there in Australia and the world for us to tackle using the same devices pioneered by the Industry Advocate that we have created here at the state level.

We are being looked at as a role model. The Industry Advocate recently gave evidence to a Senate subcommittee on Defence procurement in Port Augusta, and there was considerable interest in what we are doing. For example, Defence is spending quite a significant amount of money in Woomera, Cultana and Adelaide at Edinburgh and various places. What we do not want to see is material brought across the border—whether it is bread and milk or whether it is bricks and mortar—to fulfil Defence contract requirements because Defence happens to have a contract with a company based in Melbourne or Sydney and our companies, through lack of knowledge, simply did not know how to compete for that contract when it was put open.

We are trying to make sure that the commonwealth procurement processes are made known to our people so that they can go after the work. In that way, we will create jobs everywhere from Mount Gambier to Ceduna and from Coober Pedy down to Kangaroo Island. South Australia, through its procurement practices, builds local capacity, skills and expertise. A better understanding of dealing with governments will position our local businesses to participate more fully and competitively in a national and international setting.

Again, as the Minister for Small Business, I thank the member for Mitchell for his contribution and the opposition for signalling their support for this matter. I think you will find, going into the future, that this will deliver real and tangible outcomes for the people we are here to represent, the small business men and women of the state and their employees. I thank the member for Kaurna for bringing the bill to the house and I commend him for it. I commend the bill to all members.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (17:15): I rise to speak on the Industry Advocate Bill of 2017 and acknowledge the Assistant Minister to the Treasurer's introduction of the bill on 31 May. It had a gestation period of consultation over a number of months and follows the government's announcement that they would initiate this statutory body. Essentially, the bill proposes to enshrine the role of the Industry Advocate by statute.

Currently, Mr Ian Nightingale is the Industry Advocate, appointed in February 2013, so he has operated over a number of years to date. That followed the government's introduction of an industry participation policy in July 2012, which they claimed aimed to deliver an economic benefit to South Australia via procurement. Essentially, in that regard, where appropriate, it is to give some weighting for local employment, product and service in the procurement that is offered by contract in the development of their infrastructure, etc. It is a valuable pool of money, so it is not hard to identify the significant extra economic benefit to the state if, in fact, local produce and labour are employed.

It should be noted that the government continues to maintain a procurement board, which provides an annual report to the parliament. The State Procurement Board report for 2015-16 was published and I wish to refer to three features in respect to that report. Firstly, the functions of the board, as far as affecting members of the public, are described as follows:

As the Government's principal procurement body for goods and services, the Board's objective is to oversee a system of procurement for public authorities directed towards obtaining value for money in the expenditure of public money, providing for ethical and fair treatment of participants and ensuring probity, accountability and transparency in procurement operations.

Whilst there are a number of strategies that support this board that it operates under, including to ensure that there is a level of probity in respect to the procurement offered by a number of public authorities, it clearly identifies a value for money principal objective. It seems to me, with the establishment of the Industry Participation Policy and development in that regard (through a different entity, admittedly) that there needs to be some consistency.

Clearly, the public authorities, which are basically the government departments and which operate under the rules that are applied and supervised by this board, have a number of exemptions. Included in those are a number of statutory authorities, such as the Motor Accident Commission, the Return to Work Corporation and the Urban Renewal Authority. If ever there were a body that should be under supervision, it ought to be that body, in my view. Fortunately, there are other means to manage some of the projects they undertake, not the least of which is the one sitting out the back of this building and which seems to have haemorrhaged into dysfunction in recent times.

Let me go back to the fact that the State Procurement Board, under the Freedom of Information Act, is obliged in its annual report to the parliament to tell us about information that is to be published pursuant to section 9 of that act. I mention the fact that it is not an exempt agency under the Freedom of Information Act. The member for Mitchell has identified that we will be supporting the passage of the bill. There has been a call for the commitment to ensure that there be an industry participation policy and that we have some process by which to implement that.

Over the last three years, that has been under the supervision of the Industry Advocate, as I have said. It seems, on inquiry to Mr Nightingale, that there has not been, in the three years of his office, one single occasion when he has sought information from a contracting party under the definitions of this act, or anyone else he might have asked, for that matter, when information and documents have not been provided for his scrutiny. So, it begs the question why it is necessary to introduce a regime of a statutory body under which there is a penalty of up to $25,000 for failing to provide information or documents.

As others no doubt will identify, including the Law Society, there is no definition in this bill of what is to be covered by 'information or documents'; nevertheless, the potential $20,000 penalty for noncompliance is there. Members should be aware that there is also a confidentiality obligation and a proposed penalty of up to $20,000 for noncompliance with that on a person, who is presumably the Industry Advocate or any employees in his mini-department, who receives information or documentation.

There is one aspect of that I find concerning; that is, it is confidential, subject to legal proceedings. There is no identification of what the legal proceedings are. I raise this in respect of the question of how we deal with the obligation under this proposed legislation on someone who is a party to a contract, within the definition, but is also a party to litigation with the government in respect of a legal dispute, to produce a document to the Industry Advocate. Quite clearly, in those circumstances, we would suggest there should be no obligation to produce that material.

Let me raise a couple of other general matters in respect of the bill. The government claims that the bill is modelled on the Small Business Commissioner Act, which is an entity established by the government. John Chapman is the Small Business Commissioner in this state, and he has a role to manage and mediate disputes, frequently between contractors—small business—and the government because they are not being paid or whatever. Nevertheless, he is playing a useful role in that sense.

We from our side of the house did not see that as a necessary statutory role, but that does not mean he is not doing good work in trying to manage what has really been a burdensome job for the small businesses of South Australia in dealing particularly with government in respect of their rights being enforced. Notwithstanding that, it should be noted that the Small Business Commissioner model, under his act, does not make provision for that agency to be exempt under the Freedom of Information Act. They, too, have a model in which there is a penalty for not complying with a request to produce information or documents.

The Kangaroo Island commissioner is another commissioner of this government. There are plenty of them. In the last 15 years that I have been here, we seem to have been swimming in them. That is another one where there is a financial penalty if you do not produce documents or information. Indeed, even contracts of a local government have to be produced. There is a financial penalty together with this powerful weapon of reporting them to the parliament if they do not do as they are told.

If the education department at Kingscote does not tell the KI commissioner about what they propose to do in a certain area, they can report them to the parliament. Presumably, the KI minister, who I think still is the Attorney-General, is then able to march into the cabinet, armed with this report from the KI commissioner and say, 'These are naughty people from the other departments. Minister Close, what are you doing in your education department? Why haven't you given this information?' It is almost laughable.

Nevertheless, we have this concept where people have a financial penalty if they do not comply, or in the case of the KI commissioner, they are reported to the teacher. Under this bill, we are also going to have a report to the teacher process, where you give a report to the minister if they do not do what they say they are going to do under a contract. Presumably the Industry Advocate rings the minister—presumably he already does this if there is some difficulty in this regard—and I am not sure which one it will be yet. Let us say it is the Minister for Finance; he says, 'Dear minister, we've got a recalcitrant party here and we want some action.' 'Well, report to the teacher.' Big deal, I say.

In any event, the KI commissioner, under her legislation, is not exempt, an exempt agency. We have exempt agencies under the FOI Act for the ICAC commissioner, for SAPOL, for the Ombudsman's office. There are obviously investigative agencies, not a statutory inspector, for the government, which is what the advocacy bill will produce. They are not, and should not be, an exempt agency. It is as simple as that. There is no basis whatsoever for that to occur.

What has been presented to us is that there needs to be a level of trust by the people who are going to give the information that there will not be a breach of confidentiality in respect of what is commercial-in-confidence. Well, hello—that is exactly what is already in the Freedom of Information Act, which enables a document, or a part thereof, to be redacted or withheld on the basis of something being commercially sensitive, along with other things, including being exempt for the purposes of being a cabinet document, including personal information and the like. That is all in the Freedom of Information Act.

We do not need that in this act by declaring this an exempt agency and then having some clawback in clause 17 of the bill that purports to exempt in a sort of reverse way the agency, save and except for the financial and administrative information relating to the operation of the Industry Advocate—whatever that is—and statistical information that does not identify any particular personal business. There is no definition of these matters in this new bill. It is completely novel in this legislation.

It is completely unnecessary in the context of it being a freedom of information exempt agency because the Freedom of Information Act makes it very clear that the protections that are sought in this regard are already covered under the Freedom of Information Act. Is there not already an anticipation that the government will say that there should be some very explicit provision in this bill and it should be done in the reverse? There should not be an exempt agency under the Freedom of Information Act. In my view—and I will move an amendment accordingly—clause 17 should be deleted. There should not be an exempt agency at all.

I agree that proposed clause 13 can be amended to specifically protect commercial-in-confidence documents. That can be specifically there. It has to be in the same wording as the Freedom of Information Act. Furthermore, as has been pointed out by the Law Society, it is completely unacceptable that the government should be given the right via the Industry Advocate or any other party to demand, under threat of penalty of a major fine, documents or information when the party concerned may already be in litigation with the government. They are the party to these contracts. It is totally unacceptable. It is a backdoor disclosure or discovery process that is completely unacceptable. I am absolutely amazed that no-one from Business SA or anyone else, other than the Law Society, has screamed out about this. It is just completely unacceptable.

I say to the government: if you want to have this statutory provision in respect of the Office of the Industry Advocate, so be it, but do not try to cherrypick out bits of things that you say are going to be a helpful instrument in trying to ensure that procurement and the local use of a product or service or employment is going to be an advantage economically for the state by using this as some battering ram for the purposes of obtaining information in circumstances that you should not, or, further, using it as a means by which you can protect yourself against scrutiny, the same as any other government agency, in respect of what you do. That is the message I give clearly to the government.

Can I say that there must be some capacity to review an industry advocate's notice to demand the production of information. It is administrative law; it is administrative law 101. It is not acceptable that a person, whether they call themselves an industry advocate, a commissioner, the head of a department or anyone else, has the power to require a certain thing to happen and there is no capacity for administrative review, other than to apply to the Supreme Court of South Australia as an administrative act, and that in itself is limited.

What is entirely appropriate here, the same as for any other act of a public sector employee or, indeed, a minister in this regard, is that there must be a review process. We would suggest that be via an option through the SACAT, which is supposed to be the streamlined, new, efficient, humming, multijurisdictional tribunal for the purposes of sorting out with a quick and efficient capacity of review.

I say that, with those three matters to be considered in the amendments, which I will move in committee, it is important that the government recognise that the importance of accountability is very, very significant here. It has some ironing out to do in respect of its inconsistency with the Procurement Board. I hear Mr Nightingale's plea not to overload him with the current work of the Procurement Board, and it may be that issue has to be looked at, but certainly some streamlining of the strategy needs to be dealt with. It does not have to be put into statute, but we need to have it dealt with.

Finally, in respect of transparency generally, the Freedom of Information Act needs reform, and we have been waiting years for the government to undertake Mr Lander's recommendations in respect of freedom of information reform. It still sits languishing, just like the whistleblower reform in this state—and that is deadlocked in a conference at this point and the government seems to have no appetite to move—and consistent with that is the government's approach not even to have open hearings for ICAC in respect of maladministration and misconduct matters.

At every level, the government appears to be closing down, shutting down and excluding the capacity for anyone to scrutinise their management or mismanagement of this state. The secrecy surrounding the information on which they rely, closeting it in a bubble of concealment, is completely unacceptable. By all means, move to a statutory body if you want to. It seems there is no reason that we have to have a statutory body. It seems there is not one single case of anyone not complying—and, frankly, why would they not comply? Most of them are desperate to get a job. They want the contract signed.

Nevertheless, if that is the way the government want to go through, we can see how that operates. In the meantime, do not try to cover it up with some secret cover and cloth of concealment as though this is going to be some agency of economic benefit for the state but it has to be done in some secret Star Chamber, unreviewable and with no protection for those who may find themselves prosecuted for their failure to provide a document or information.

As I said to Mr Nightingale during the briefings, it is not just the documents that you say you are going to rely on for the modelling, etc., that are later attached to the contract stating how many local people are going to be employed, what steel is going to be used, etc. The information is not defined. You can ask, 'Are you sleeping with the contractor's wife?' There is absolutely no definition in this bill, and we need to have some idea about what the rules are going to be.

The government, and in particular the Assistant Minister to the Treasurer, has a little bit more work to do. I hope that he will look sympathetically at our amendments because they are presented in good faith and try to make the Industry Advocate role continue to be productive, which I think it is. There is no provision in here for an annual report to the parliament—there is a report to the minister, and goodness knows what happens to it after that—but I think there should be. Nevertheless, I ask that we maintain some transparency and accountability and that the amendments are considered favourably.

The DEPUTY SPEAKER: The member for Hammond.

Mr Hughes interjecting:

Mr PEDERICK (Hammond) (17:34): Are you speaking?

Mr Hughes: I am going to speak, yes.

The DEPUTY SPEAKER: I have asked the member—

Mr Hughes: I will let you go first and you can listen to me last.

The DEPUTY SPEAKER: Order! The member for Hammond is on his feet and has the call. If he does not want to speak, he will sit down.

Mr PEDERICK: Thank you, Madam Independent Deputy Speaker. I rise to support the Industry Advocate Bill 2017. The bill establishes the role of the Industry Advocate as a statutory position and strengthens its powers to hold contractors to the commitments they make to utilise South Australian workers and materials. It seeks to capitalise on increasing community and industry stakeholder support for a 'buy South Australian' type policy, and this noise from the industry and community has come over recent years.

As we heard in earlier contributions, people are shocked when they visit some of our roadworks projects and see all the interstate plates on roadwork machinery. This bill essentially locks in the current advocate—and that is Ian Nightingale—for a five-year term and gives the advocate greater powers to require information, and that can be a penalty of up to $20,000. It also recommends action by the minister for noncompliance with commitments under a tender.

Quite a few stakeholders have been consulted on this bill, such as Business SA, the Australian Industry Group, the Civil Contractors Federation, the Australian Steel Institute, the Australian Subcontractors Association and Consult Australia. Broadly, they have all been supportive, although some have raised questions about details in the bill. There was concern raised by some about the role of the Industry Advocate. They questioned the need for it to be a statutory position. Concerns have also raised about the possibility of increased costs to taxpayers from the increase in red tape and government intrusion into the private sector. However, there has not been outright opposition put to us about this piece of legislation.

The bill enshrines the role of the Industry Advocate by statute, currently held by Ian Nightingale, who has been in that position since 2013. This followed the government's introduction of its Industry Participation Policy in July 2012, which aimed to deliver economic benefit to South Australia via procurement. As has been stated on this side of the house, there are clearly some deficiencies in the drafting of the bill, but we are concerned about the proposal to make the Industry Advocate an exempt agency for the purposes of the Freedom of Information Act 1991. Certainly, the deputy leader, the member for Bragg, will be putting an amendment in regard to clause 17 of the bill, which, except in limited areas, seeks that the Industry Advocate be an exempt agency.

The bill purports to be drafted on the Small Business Commissioner model, which, as I indicated, has a fine of up to $20,000 for a person who is a party to a contract who refuses a request to provide documents or information to the Industry Advocate. I note that the Small Business Commissioner is not an exempt agency for the purposes of the Freedom of Information Act. Currently, the list of exempt agencies includes royal commissions, ICACs, SAPOL, the Auditor-General, the Parole Board, the Crown Solicitor, the department of public prosecutions and the like. Over the last 15 years, we have seen the creation of a number of commissioners, providing status and, presumably, security of employment for these positions, but they have not even made the Commissioner for Kangaroo Island and exempt agency.

In regard to some of the legal advice we have received about the bill and the procurement process at present, the two documents and the tender process include the formal tender, which is treated as commercial-in-confidence, and, secondly, the local industry participation and job creation document. The Industry Advocate confirmed that the latter becomes an attachment to any contract in due course, but clause 13 could be amended to specifically protect against documents identified as commercial-in-confidence.

Certainly, we understand that the government have declined to accept a recommendation by the Law Society to define 'information' in the bill. They point out that it would be, at the very least, to compel someone who might be in dispute to request information relevant to it. I also note that there is no provision for a review of the Industry Advocate's notice, and this should be included, with an appeal available to SACAT, for example.

We believe that provision for the Industry Advocate to be an exempt agency is certainly not justified. There are protections already in the Freedom of Information Act—for instance, in regard to whether personal information, commercial-in-confidence, cabinet documents (and we have had some discussions about cabinet documents in here recently), and documents, including communications between members of the Industry Advocate office and/or to the minister, should be available.

We on this side of the house have always maintained a strong commitment to transparency and accountability of government. As has been indicated recently, the government has certainly been brought to the table kicking and screaming in respect of the Office for Public Integrity and ICAC and still refuse to progress the whistleblowers act reform, including the right to go public after three months, and freedom of information reform has certainly stalled. We note that the Police Complaints Ombudsman reform took two years and that shield laws have consistently been opposed. We have seen all this go on under this government.

I would now like to talk about the different support of different people who represent this great state at a federal level and the use of local industry. Yesterday, the member for Grey, Rowan Ramsey, put a motion that, should the Adani coalmine go ahead, the order for $74 million worth of steel from Arrium in Whyalla should be used for the rail line to take the coal from the mine to the coast. I certainly acknowledge that the member for Barker, Tony Pasin, supported it, but then we note that Rebekha Sharkie, the member for Mayo from the Nick Xenophon Team, did not support it. She said that the project is only 2 per cent of Arrium's debt. How outrageous! We have a federal member of parliament representing this state not supporting—

Ms Chapman: It's incredible.

Mr PEDERICK: —yes, it is incredible, as the member for Bragg said—local work for South Australians in Whyalla, in the member for Giles' area. It is completely, absolutely outrageous, and people need to be aware of these things because we have a state election coming up, and when it comes up people need to take note of how people reflect on supporting local industry in this state.

In regard to the Nick Xenophon Team, they are not supporting local industry in this state in relation to the potential use of $74 million of steel produced at Whyalla for the Adani project. It is outrageous. It is outrageous to have that position, to just knock that amount of work out of this state on some green ideology, because of the Xenophon team's 50 per cent renewable electricity target. It is crazy stuff where ideology again rules the waves.

We have seen it here in this state with the clean energy target of this state Labor government of 50 per cent renewable energy, and we saw what happened: we saw Black Wednesday on 28 September last year, we saw blackouts earlier this year and we will see more blackouts this summer, unless they bring a Turkish ship along that is usually moored off places like Iraq supplying emergency power to Third World countries. We are probably going to see a ship off the coast that can generate hundreds of megawatts of energy using either fuel oil or diesel. We might see 200 huge 40-foot containers, diesel generators. So where is everyone's climate change policy now? We just melt down a bit more diesel to get us through summer, and that is what will happen.

It is interesting to note that with all this opposition to coal, the Finkel report acknowledges that 58 per cent of our energy in Australia at the moment comes from coal sources, and in 2030 we will still be needing a generation capacity of 56 per cent of coal to keep our power supply going in this country. People really need to have a look at what people are saying around jobs. They need to talk about the targets. On this side of the house, we support the federal government's energy target of 23.5 per cent; that is a far more realistic target in regard to energy generation in this state and this country.

I just want to reflect on Peter Humphries. From what I am told, he was anointed and just had to go through the preselection process for the Xenophon team to be the lead candidate in the other place, the Legislative Council. Yet on the same day that the member for Mayo was on the radio, he was on the radio condemning their climate change policy, so guess what happened to Peter Humphries? That was the end of his state political career. From what I understand, he got a text that afternoon from Nick Xenophon and it was all over—all over just like that. He should have held his fire and at least got through the preselection process, and then they would still have done him over, I guess.

People need to look at the ideology of different political parties in this state. They need to have a darned good look at what people are actually saying. I note, though, that the Labor Party in South Australia—even with their mad, ideological response to green energy and fast-tracking it and imposing darkness on this state with their 50 per cent clean energy target—from what I understand actually support Arrium steel going into the Adani coalmine project, if it goes ahead. Good on them for that, because none of this should be standing in the way of those jobs at Whyalla and the jobs that flow on from those jobs at Whyalla—the freight of that steel, the handling and everything else that goes along with that production. People need to have a good look and reflect on anyone who discounts any job opportunities in this great state of ours; they need to have a darned good look.

We support this bill in regard to the Industry Advocate. It does seem amazing that we need to legislate that governments have to have a certain percentage of procurement from South Australian contractors. You would think it would be just common sense, but I guess common sense does not come into play and we have to legislate to make sure that ministers do the right thing as far as procurement goes with major projects in this state. We certainly support it; we will be looking at some amendments in the committee stage of the debate but, in the main, we support the bill. I commend its speedy passage through here and the other place.

Mr HUGHES (Giles) (17:48): I think I might be a bit briefer than some of the other speakers, but it is very tempting to chase down some of the tangents that have been produced in this debate. I acknowledge that the opposition, in the main, supports the bill. I am a strong supporter of this bill, and also the work of the Office of the Industry Advocate, both Ian Nightingale and Nari Chandler as well as the other people who work in that office, and the good work they do. They were recently up in Whyalla at the Meet the Buyer get-together up there. A lot of businesses turned up and it was a very productive day. I think the businesses I spoke to found it a very useful exercise.

Of course, my interest in the Office of the Industry Advocate and the work it carries out has centred for some time now around the future of the steel industry. Before getting on to that, I will chase down one of the tangents because we had Adani in Whyalla with the Acting Prime Minister at the time, the national resources minister. It was somewhat strange to see all these people coming to Whyalla to witness the signing of a memorandum of understanding. It was not actually the signing of a done deal. It was the signing of a memorandum of understanding and the Acting Prime Minister was there.

People talk about ideology, but ideology was clearly on show at that time. I know a lot of people who work in that part of the steelworks that produces rail. I know people at the finishing end at the rail plant. Indeed, I have a son who works as a fitter in that part of the steelworks. It is interesting to put the Adani contract into some sort of context. We produce over one million tonnes a year of steel in Whyalla, and the Adani contract would represent over a two-year period something over 50,000 tonnes of steel. You need a bit of context.

The thing that angered me about the visit to Whyalla was the way it was staged to get some headlines in the media, especially in The Australian which gave it the front page before they got to Whyalla. Bear in mind that this is a community that has been facing an existential threat, and the headline was that if the mine goes ahead, this Adani contract would be a lifeline for Whyalla. That is nonsense. The workers at the steelworks felt that they were being used in quite a cynical political exercise.

If the mine goes ahead, we welcome the steel contract. We will sell steel to anyone. Rail projects are good projects to get. There is a regional margin on rail, but the inland project would be a far more useful contract to get, a far bigger contract. When it comes to the federal government and the federal member for Grey, Rowan Ramsey, and when we start talking about procurement, I have had the debate with Rowan in our media some time ago before we all became friends again because we want to secure the future of the steelworks.

When I talked about steel procurement in my community and said that the federal government should mirror what we have done in South Australia when it comes to steel procurement, he rejected it out of hand. In fact, he did not even understand the policy in South Australia. So, I think that the federal government has a responsibility to ensure that it maximises the use of Australian steel in projects that it supports in the various states around Australia.

When we were having this argument, he said that procurement should just be a state responsibility when it comes to projects, notwithstanding that a lot of these state projects require a very significant financial input from the federal government. It would have been very easy for the federal government to insist, as a result of their funding support for the various states, that they use Australian steel which, to me, is a no-brainer. I find it bizarre that other countries have no problem in going in this direction nationally and have gone in this direction for many years.

I will get back on to the bill itself now, but I just had to mention some of those bits and pieces. As the member for Giles, I can tell you firsthand how important this bill is to securing jobs in critical industries like the steel industry in our regions. I know that the Office of the Industry Advocate is now starting to focus on the regions. It is good to have Ian Nightingale in that office because for part of his life Ian was the head of a regional economic development board based on Eyre Peninsula, so Ian knows the importance of supporting business activity in regional South Australia.

The Industry Advocate Bill commits the South Australian government to maintaining its Industry Participation Policy, including as a key objective the economic development of the steel industry. It also strengthens the Industry Advocate's power to ensure contractors on state government projects follow through on their commitment to use local steel, steelworkers and fabricators.

Our Industry Participation Policy mandates that reinforcing and structural steel used on projects funded by the South Australian government must fully meet Australian Standards. Steelwork procured for public works in South Australia must also be sourced from independently verified fabricators that are capable of meeting quality requirements to ensure its quality and safety, levelling the playing field for the local steel industry even further.

The South Australian government believes the quality of locally produced steel and steelwork creates a competitive advantage for our steel suppliers and fabricators that should be capitalised on. Government projects that use significant amounts of steel include a 20 per cent industry participation weighting at tender that measures commitments to local jobs, investment and supply chain opportunities.

It is really important to understand how that policy works because it meshes with a standards-based approach. One of the usually naïve criticisms is that a standards-based approach is not sufficient and that is all that we have, because it is clear that there are mills overseas capable of producing steel that meets Australian standards. A lot of the steel that has come in to Australia does not meet Australian standards, which is another failure at a national level, the fact that we have substandard steel that comes into this country. That has also sorts of implications; it has cost implications and safety implications.

When you speak to boilermakers who go to do their work on some of this imported steel, they are amazed at the incredible poor quality of the steel that they have to work on, which is often impossible to weld. Even through one section of steel, you can get varying degrees of quality in a section of steel. This stuff has been coming in to our country because not only the private sector but also some public sector entities have been using this steel because they think, 'Oh God, this is a bargain; this is cheap,' but it is a false sense of economy.

We know what happens when you do not adequately ensure compliance with standards, and it goes beyond steel. The building industry is rife with it and the consequences of that are sometimes incredibly serious. Look at what has happened in London; apparently, that material did not meet the standards and I think it was actually illegal. I seek leave to continue my comments.

Leave granted; debate adjourned.

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