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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Auditor-General's Report

Auditor-General's Report

In committee.

(Continued from 15 November 2018.)

The ACTING CHAIR (Mr Duluk): I declare the examination of the Report of the Auditor-General 2017-18 open. I remind members that the committee is in normal session. Any questions have to be asked by members on their feet. All questions must be directly referred to the Auditor-General's Report 2017-18. I welcome the Premier and now call for any questions.

Mr MALINAUSKAS: I refer the Premier to Report 5, Part B, pages 9 to 14. The Auditor-General notes on page 14 that the Stadium Management Authority moved in 2015-16 to run a non-sporting pursuit on the property known as the Adelaide Oval RoofClimb. To do this, it established the Commercial Operations Trust to operate the RoofClimb in the Adelaide Oval core area.

The Adelaide Oval Stadium Management Authority licensed the Commercial Operations Trust (COT) to operate the business from 1 July 2016 to 16 November 2031. The issuing of the licence was approved, and the SMA also entered into a service agreement with the COT that enables the SMA to manage the RoofClimb on behalf of the COT. Can the Premier advise what entities have been in discussions with the government regarding the hotel proposal?

The Hon. S.S. MARSHALL: I fail to understand how that has anything to do with the Auditor-General's Report, which covers off last financial year.

Mr MALINAUSKAS: I have just referred the Premier to the relevant section. As I said, in Report 5, Part B, pages 9 to 14, there are clear references to the Stadium Management Authority. We have questions regarding the Stadium Management Authority.

The Hon. S.S. MARSHALL: This is the examination of the Auditor-General's Report. It does not mean that, because the words 'Stadium Management Authority' are in it, we can start exploring other topics related to the Stadium Management Authority not covered by the Auditor-General's Report of the last financial year.

Mr MALINAUSKAS: The question pertains to the Stadium Management Authority's finances, and indeed my questions speak to matters that may well have been in the last financial year.

The ACTING CHAIR (Mr Duluk): Leader, obviously we are here, as the Premier has indicated, to look at actual items the Auditor-General has raised in the report. If there is an item that the Auditor-General has raised in regard to the 2017-18 financial year, then that is where your questions are to come from. It is very similar to estimates, in which I know we had the same experience.

Mr MALINAUSKAS: Yes, indeed, and occasionally—

The ACTING CHAIR (Mr Duluk): And I would not want to go down that path, leader.

Mr MALINAUSKAS: Occasionally your judgement was wise, Mr Chairman. Just to be clear, is the Premier unwilling or unable to answer questions regarding the SMA?

The ACTING CHAIR (Mr Duluk): If you sit down for a moment, please, leader, that question is completely out of order because I have just ruled that the questions—and I appreciate this is your first Auditor-General's Report in the House of Assembly—are to come from statements arising from Auditor-General's Report; otherwise, we are going to be here for a long, long time.

The Hon. S.C. MULLIGHAN: I refer to Report 5, Part B, page 14. Is there only one Commercial Operations Trust in existence at the SMA?

The Hon. S.S. MARSHALL: I do not have details of that; I am happy to come back to the committee.

The Hon. S.C. MULLIGHAN: Thank you, I appreciate the Premier committing to do that. Could he also provide to the parliament when the Commercial Operations Trust to which the Auditor-General refers was established, who the trustees of the trust are and who the beneficiaries of the trust? Can those questions also be answered for any other trusts, if indeed they are in existence.

The Hon. S.S. MARSHALL: I am happy to take the first part. As for other components of the SMA, I will seek advice from them.

Mr MALINAUSKAS: I will move on to questions regarding Report 5, Part B, page 285. Sorry, let me rephrase: the first page of the financial grants and subsidies regarding Brand SA.

The ACTING CHAIR (Mr Duluk): Sorry, what page?

Mr MALINAUSKAS: We are talking about section F, Mr Chairman. I have one quick question on this area. Brand SA is funded by a grant from Department of the Premier and Cabinet. Can the Premier can give us an insight as to whether or not that funding will continue beyond this financial year?

The Hon. S.S. MARSHALL: The government has not reached a determination on that at this point.

Mr MALINAUSKAS: Sorry?

The Hon. S.S. MARSHALL: We have not reached a position on that.

Mr MALINAUSKAS: Moving on, then, regarding Part A: Executive summary, page 26, I draw the Premier's attention, as he is obviously already aware, that responsibility for Lot Fourteen was delegated to the Premier on 19 June 2018. The Auditor-General's Report notes the redevelopment cost of $476 million over five years and:

In June 2018 the Treasurer and Minister approved a $194 million increase in the [Urban Renewal Authority's] core debt facility…

Was that approval made by the minister responsible for the authority or by the Premier in his delegated role as responsible for Lot Fourteen?

The Hon. S.S. MARSHALL: I will take that question on notice.

Mr MALINAUSKAS: Who has oversight of Lot Fourteen's tenancy agreements and approvals?

The Hon. S.S. MARSHALL: Renewal SA.

Mr MALINAUSKAS: For the sake of clarity, when the Premier took over responsibility for Lot Fourteen back in June he did not take over responsibility for tenancy agreements and approvals?

The Hon. S.S. MARSHALL: No.

The Hon. S.C. MULLIGHAN: A follow-on question from that: it is understandable that those tenancy agreements would be managed by Renewal SA but are they reporting to you or to the minister who usually superintends Renewal SA?

The Hon. S.S. MARSHALL: As per the notation in the Auditor-General's Report, I have taken responsibility for Lot Fourteen because this is a site which actually has multiple government departments interested in the site. For example, it has Industry and Skills, it has DPC with Arts, it has DPTI with their involvement with Renewal SA, so I have taken over ultimate responsibility. But I am certainly not responsible on a day-to-day basis for tenancies on that site. That remains the responsibility of Renewal SA.

The Hon. S.C. MULLIGHAN: I am grateful to the Premier for that advice. Is Renewal SA providing any form of reporting to you as minister responsible for Lot Fourteen on the tenancies that are at Lot Fourteen?

The Hon. S.S. MARSHALL: I am down there on a regular basis. Daniel Redden, who looks after that element of Renewal SA's work, is the project manager for Lot Fourteen and keeps me abreast of decisions that Renewal SA has made. They are more likely to seek advice regarding tenancies from the Chief Entrepreneur, Jim Whalley, and his team because they are responsible for the overall curation of what happens on that site.

The Hon. S.C. MULLIGHAN: Does Mr Redden, I think you said his name was, and the other staff of Renewal SA have delegated authority to reach tenancy agreements with tenants down there? Do they report to you any metrics on the tenancies—for example, the number of tenancies that are in effect, say, at 30 June or quarterly?

The Hon. S.S. MARSHALL: As I have already answered, I am down there on a pretty regular basis. I have a pretty good understanding of who is there at the moment and who is in the pipeline. But as for a quarterly report, I am more than happy to provide the member with details regarding tenancies, but there is nothing I can put my finger on at the moment.

Mr MALINAUSKAS: Does the Premier have any sense of how many tenants or occupants are currently at Lot Fourteen on rent-free deals?

The Hon. S.S. MARSHALL: I am not aware of any, but I am happy to take that on notice.

Mr MALINAUSKAS: Was a business case and cultural assessment done for the proposed national Aboriginal arts and cultural gallery?

The Hon. S.S. MARSHALL: I am not sure what you are referring to in the Auditor-General's Report, but in the state budget you would note that there was money put aside for that express purpose and I think it was in the order of $200,000.

Mr MALINAUSKAS: Yes, was there a business case done?

The Hon. S.S. MARSHALL: I have answered that question.

Mr MALINAUSKAS: Obviously, conscious of the budget commitment, was there a business case done for that?

The Hon. S.S. MARSHALL: I have answered that question. It is very difficult when the Leader of the Opposition, because he does not have any actual questions regarding the Auditor-General's Report, seeks to continue to waste the time of the committee asking the same question over and over again. There is $200,000. Firstly, I do not see where it relates in the Auditor-General's Report and, secondly, I have made it very clear to the committee that $200,000 was included in the budget to conduct that work.

The Hon. S.C. MULLIGHAN: In providing the detail to the committee that the Premier has committed regarding the tenancies, in addition to providing the number of tenancies, could he also indicate to the parliament in those answers the rents which are being paid, perhaps on a dollar per square metre basis?

The Hon. S.S. MARSHALL: I am not sure that that would be appropriate, but if it is I am happy to provide it to the committee. I am not sure that providing commercial rent rates to the parliament would be appropriate.

The Hon. S.C. MULLIGHAN: In doing so, in providing that information, could you also indicate the number of and which tenancies are subsidised by the government?

The Hon. S.S. MARSHALL: Again, I am happy to take that on notice and I will come back to the committee if we are in a position to provide that level of detail.

The Hon. S.C. MULLIGHAN: Just to be clear, I do not think it is unreasonable to ask for the number of tenancies. You have already committed to providing that and I appreciate it, but the number of tenancies within that global number that are subsidised and the extent to which they are subsidised is reasonable information.

The Hon. S.S. MARSHALL: I am happy to do that.

Mr MALINAUSKAS: Premier, regarding Lot Fourteen, for which you are the responsible minister, I was just wondering: what is the status of our bid for the Australian Space Agency?

The ACTING CHAIR (Mr Duluk): Leader, I have been pretty generous. Obviously, we are looking at the Auditor-General's Report and unless I can find the words 'Space Agency'—

Mr MALINAUSKAS: No, Lot Fourteen; not just the Space Agency.

The Hon. S.S. MARSHALL: He has run out of questions. I can talk for the remaining 18 minutes on the Space Agency bid and put him out of his misery. South Australia is very well positioned with our enormous capability and history in space, going back more than 50 years. In September 2017, the federal government announced that they would establish an Australian Space Agency. They have put money into their budget to support that decision and now they are in the midst of making a decision as to where the Australian Space Agency will be located and whether it will be one central body, a distributed model or a combination.

We are obviously working very hard to secure as much of that Space Agency as possible to come to South Australia. We do this not because we are simply being parochial but because we genuinely believe that we are the best place to locate the headquarters for the Space Agency and, more than that, some of the very important components of the Space Agency that the federal government is considering at the moment. About 70 per cent of expenditure in terms of the Space Agency at the moment is related to or comes from the defence sector. As the Leader of the Opposition well knows, we are the defence state and we have enormous capability in that area.

By way of evidence of the support for the space sector from the defence sector, we only need look at the details of the very competitive bid that we have put in for the SmartSat Cooperative Research Centre (CRC), which is an excellent proposal. That bid is now over $200 million; $65 million, I understand, is in cash. We are also looking forward to having a decision made on that in the next six months, but that gives evidence of the level of support we have for industry for the SmartSat CRC and hence the potential Australian Space Agency node, headquarters or both here in this state. This is something that Defence SA takes the key area of responsibility for.

We have put a proposal to the federal government that would see that headquarters being located in the McEwin Building on the old Royal Adelaide Hospital site—Lot Fourteen—and I think we have put in a compelling bid. We look forward to the federal government making a decision on this. The federal government has now appointed Dr Megan Clark, former head of the CSIRO, to evaluate the opportunities that each state presents, finalise the plan for the national Space Agency and present this to the Prime Minister and cabinet, and we await their decision.

We are particularly interested in this site because, although the federal government's budget line for this is not massive, we believe that it will attract the type of investment that will have a significant effect on our economy in South Australia. More than that, we think it will have a significant effect on promoting school students into STEM subjects. I think all the indicators are that kids at school love learning about space. We believe that this will have a massive, positive effect not only in terms of investment in our state but in future generations studying more STEM subjects, which we believe will have a very positive effect in many other sectors of our economy.

Mr MALINAUSKAS: Regarding the financial statements for Defence SA, point 25, contingent assets and liabilities—

The ACTING CHAIR (Mr Duluk): Where and which page?

Mr MALINAUSKAS: Under the Defence SA section, point 25. Premier, the report's financial statements note that there is a disputed claim for the recoupment of costs associated with the maintenance dredging contract at the Techport Common User Facility. Defence SA states it has paid its contracted sums, but there are variations totalling $1.95 million for extra costs and downtime. What progress has been made on resolving this dispute?

The Hon. S.S. MARSHALL: This dispute goes back well before my time as the minister for defence industries. It goes back to an issue with regard to the previous government. I am happy to get a full brief on that issue, that problem which we inherited from the previous government, and come back to this committee.

Mr MALINAUSKAS: I refer to point 2.2 in the same document, Defence Industry Development. By way of background, in November 2017, Becker Helicopters received a grant from the Economic Investment Fund of $3 million to establish a new operating base in Whyalla, relocating from Queensland. Defence SA has carriage of the relocation project. Can the Premier advise on the progress of that relocation and the number of jobs and economic activity that have been derived from the relocation?

The Hon. S.S. MARSHALL: Again, this is a project of the previous government. It is one that they spoke about repeatedly, how they had won this work to come to South Australia and the jobs that it would create in South Australia. I am happy to get an update for the Leader of the Opposition on his previous government's program and the progress to date.

Mr MALINAUSKAS: Regarding Part A: Executive summary, pages 8 to 10, the Auditor-General makes observations about his access to the decisions and processes of cabinet and lists the proposals he made to the state government in August 2018. He states, 'Cabinet Office advised me that the policy and process were being worked through.' What is the Premier's position now and what is the Auditor-General's position now? What discussions has the Premier had with the Auditor-General?

The Hon. S.S. MARSHALL: As the leader would be more than aware, the Auditor-General has been making comments for some time now about access to documents. There were some changes that the previous government made in 2017. We have of course upheld that access regime. On coming to government, I invited the Auditor-General to come to cabinet. He made some further representations about access to documents that he thinks is best practice. They are currently under active consideration. My understanding is that the Attorney-General and her department have considered those. They have come or will come to my department and then ultimately go via cabinet. We hope to have something to update the parliament on in the coming weeks.

The Hon. S.C. MULLIGHAN: Can the Premier indicate when the Auditor-General presented to cabinet?

The Hon. S.S. MARSHALL: I do not have the date. It probably would have been in the first two or three months of the new government. But if it is particularly important to you, I am happy to come back with an answer.

The Hon. S.C. MULLIGHAN: Do you have an expectation about when the government might respond to the Auditor-General?

The Hon. S.S. MARSHALL: I answered that two minutes ago.

The Hon. S.C. MULLIGHAN: No, I understand the process that you advised.

The Hon. S.S. MARSHALL: I said in the coming week.

The Hon. S.C. MULLIGHAN: In the coming weeks? Okay.

The Hon. S.S. MARSHALL: So if you just listen carefully. I know it won't chew up more time—

The ACTING CHAIR (Mr Duluk): Premier.

The Hon. S.S. MARSHALL: —but it will probably look better on the Hansard if people are reading it.

Mr MALINAUSKAS: Am I right in saying that the Premier has not had any cabinet papers, reports or documents that have been released thus far?

The Hon. S.C. Mullighan interjecting:

The ACTING CHAIR (Mr Duluk): Member for Lee!

The Hon. S.C. Mullighan interjecting:

The ACTING CHAIR (Mr Duluk): Nothing is germane. If it is not in the Auditor-General's Report, it is not germane at all. I am happy to rule out any further questions from the opposition if they cannot identify it in the Auditor-General's Report.

The Hon. S.C. Mullighan interjecting:

The ACTING CHAIR (Mr Duluk): The member for Lee is called to order. The leader.

Mr MALINAUSKAS: Regarding the report, Part B, page 285, the Attorney-General criticises the lack of documented evaluation plans for renewable energy.

The Hon. S.S. Marshall: Auditor-General.

Mr MALINAUSKAS: Sorry, the Auditor-General criticises—

The Hon. S.S. Marshall interjecting:

Mr MALINAUSKAS: —an even longer week for you—the lack of documented evaluation plans for renewable energy fund grant programs transferred to another agency, namely, the Department for Energy and Mining, in July. I refer to concerns the Auditor-General raised regarding separately documented evaluation of grant programs, concerns that were addressed by the agency.

My question relates to the final terms and conditions negotiated by this government for the subsidised solar panel and battery scheme. What risk assessment was made of the agreement to subsidise a minimum of 40,000 batteries?

The Hon. S.S. MARSHALL: Well, (1), as the leader would be more than aware, energy sat within the Department of the Premier and Cabinet under the previous government; it does not sit within the Department of the Premier and Cabinet under the current government.

Actually, you have already been through the Auditor-General questions with regard to mining and energy and asked questions, so I would have thought that somebody could have given you a briefing on your own side that those questions would be better directed to the Minister for Mining and Energy. With regard to the work that we did, I think we canvassed this extensively before the last election that we had an external company that came in and looked at our energy policy, and I refer honourable members to that information.

The Hon. S.C. MULLIGHAN: I refer to Part A, page 3. Has the Premier or anyone in his office sought a briefing from the Auditor-General regarding Carillion?

The Hon. S.S. MARSHALL: I am happy to ask whether anybody in my office has sought a briefing from the Auditor-General regarding that matter.

The Hon. S.C. MULLIGHAN: Is it your recollection that you have not yet had a briefing on the Carillion matter that the Auditor-General refers to?

The Hon. S.S. MARSHALL: I have already given an answer to that question.

The Hon. S.C. MULLIGHAN: You will have to check with someone else whether you were briefed on something?

The Hon. S.S. MARSHALL: I know you have run out of questions.

The ACTING CHAIR (Mr Duluk): Order! Premier, do not provoke the opposition, please.

The Hon. S.C. MULLIGHAN: Does the Premier have any interest in the Auditor's observations around Carillion?

The Hon. S.S. MARSHALL: I have an interest in everything the Auditor-General has an interest in.

The Hon. S.C. MULLIGHAN: Yet you cannot recall whether you have been briefed on Carillion?

The Hon. S.S. MARSHALL: Is that a question or a statement?

The Hon. S.C. MULLIGHAN: Yes, that was a question.

The ACTING CHAIR (Mr Duluk): Order!

The Hon. S.C. MULLIGHAN: Would you like me to air punctuate it for you?

The ACTING CHAIR (Mr Duluk): Order! Premier, please also stand up when addressing any reply.

Members interjecting:

The ACTING CHAIR (Mr Duluk): Gentlemen!

The Hon. S.C. MULLIGHAN: Has the Premier been briefed on the Auditor's agency audit approach revised for the 2018-19 financial year? It is on page 13 of Part A.

The Hon. S.S. MARSHALL: I am advised that each chief executive has been briefed on the changes that the Auditor-General proposes.

The Hon. S.C. MULLIGHAN: Is this a change that is acceptable to the government?

The Hon. S.S. MARSHALL: The Auditor-General has given advice on how he sees audits progressing in the future. He has provided briefings to the chief executives within the various departments. I am not sure that he is seeking feedback or approval.

Mr MALINAUSKAS: Regarding Part B of the report, page 285, contract extensions and single offer market approaches, did the Auditor-General express any concerns about the consultancy contract with New Zealand's Wayne Eagleson?

The Hon. S.S. MARSHALL: Not that I am aware of.

Mr MALINAUSKAS: Has the contract with Mr Wayne Eagleson been extended beyond the initial term?

The Hon. S.S. MARSHALL: This was something that was done originally by the Acting Chief Executive of the Department of the Premier and Cabinet. I am not sure that there was a defined term for that contract, but I am happy to find out and come back to you.

Mr MALINAUSKAS: In that exercise, if it is established that there is not a contract extension, when does the term cease? If there is a contract extension, under what terms and conditions has that contract extension been made? If you could take that on notice, that would be great.

The Hon. S.S. MARSHALL: Yes.

The Hon. S.C. MULLIGHAN: Regarding my earlier line of questioning—

The ACTING CHAIR (Mr Duluk): Page number?

The Hon. S.C. MULLIGHAN: Page 13.

The Hon. S.S. MARSHALL: Carry on, Rumpole of the Bailey.

The Hon. S.C. MULLIGHAN: Well, you certainly do not have one next to you, that is for sure. That is why she is here and not sitting on a bench somewhere.

The ACTING CHAIR (Mr Duluk): Order!

The Hon. S.C. MULLIGHAN: My question referred to—

An honourable member interjecting:

The Hon. S.C. MULLIGHAN: You are here for now and hopefully when that changes Josh will not have to park next to me.

The ACTING CHAIR (Mr Duluk): Member for Lee, it is entirely inappropriate.

The Hon. S.C. MULLIGHAN: Will the Department of the Premier and Cabinet be one of those agencies that is prioritised for a controlled review by the Auditor-General?

The Hon. S.S. MARSHALL: I am more than happy to find out and come back to the committee. Are you going to go back to an old question as well?

The ACTING CHAIR (Mr Duluk): Premier, please do not provoke the leader.

Mr MALINAUSKAS: I am actually going to go to a similar section in the same report: Part B, page 285, contract extensions and single offer market approaches. Was the process that the government used to recruit New Zealand's Steven Joyce to review the state government's trade and investment strategy the same process that you used to appoint Wayne Eagleson?

The Hon. S.S. MARSHALL: For starters, that is not an activity that relates to this financial year and I cannot find any reference to it whatsoever in the Auditor-General's Report.

Mr MALINAUSKAS: Again, regarding the same section, did the Premier examine the former Economic Development Board's comprehensive review of investment strategies completed in December 2013, which recommended the consolidation of cross-agency efforts into a single investment attraction agency—an agency that was established in 2015 and dismantled by your government shortly after your coming into office, i.e., during the last financial year?

The Hon. S.S. MARSHALL: We took a range of advice regarding the formulation of our strategy, and we are absolutely satisfied that we arrived at the right point.

The ACTING CHAIR (Mr Duluk): Alas, time has expired. We now proceed to the examination of the Auditor-General's 2017-18 report in relation to the Minister for Child Protection. I remind members that the committee is in normal session. Any questions have to be asked by members on their feet. All questions must be directly referenced to the Auditor-General's 2017-18 report.

The CHAIR: The allotted time has arrived. The previous Chair has declared the examination open. I welcome the minister, the member for Badcoe and various advisers to the questioning. I remind the member for Badcoe that it is a normal committee process and that you will need to stand to ask questions. With the time having arrived, member for Badcoe, you have the call.

Ms STINSON: I refer to Report 5, Part A: Executive summary, section 2.5.1, page 37. How many children were in care as at 30 June?

The Hon. R. SANDERSON: When I was the shadow minister, this figure always vexed me because some reports record children to the age of 17 and some reports require it to the age of 18, which is why there is often a disparity in figures, so I understand why you would ask this. As at 30 June 2018, the number of children from zero to 18 years—so that includes 18 years—was 3,734.

Ms STINSON: The figure published on the DCP website's statistics page was 3,672 and then in the budget it was 3,675. Can you explain the discrepancy between the three different numbers?

The Hon. R. SANDERSON: The correct figure for our reporting principles, which is up to the age of 18—so 17 year olds are included—was 3,672. The difference of three that you indicated was a pre-auditing figure, so there is a discrepancy at some points in time when they are verifying all the figures.

Ms STINSON: To clarify, the number in the September budget is incorrect and the number published in July on your website is correct?

The Hon. R. SANDERSON: Apparently, multiple reconciliation processes are done to verify the figures. As at July 2018, the actual figure is 3,672 from our recording, which is only inclusive of 17 year olds, which is the figure required for the report on government services. So including the age of 18, more are included in that figure.

Ms STINSON: Obviously that number is broken down in the statistics in both the Auditor-General's Report and on your website. For the sake of clarity, how many of those 3,672 children were in commercial care as at 30 June?

The Hon. R. SANDERSON: As at 30 June 2018, there were 93 children in commercial care. It was previously reported online as 86, but that was before the data was re-audited and confirmed.

Ms STINSON: I am also asking what the figures are at 30 June for residential care, foster care and kinship care. To assist you, I have the number for children in residential care as 412, the number in foster care as 1,434 and I have different numbers for kinship care: 1,664 or 1,685. Could you clarify what the correct numbers are for residential care, foster care and kinship care as at 30 June?

The Hon. R. SANDERSON: Can I take that on notice and we will get you a thorough response?

Ms STINSON: You can do that. That can be taken on notice, thank you. Do you have a total figure for the cost of care as at 30 June 2018?

The Hon. R. SANDERSON: While we are looking for that, would you like to ask your next question?

Ms STINSON: That would be good, thank you. On the same reference, but page 38, the proportion of children in commercial care fell by 3 per cent, from 2016-17 to 2017-18, according to the Auditor-General's Report. What is your target for either increase or decrease over the next financial year?

The Hon. R. SANDERSON: That was a 3 per cent decrease for commercial care?

Ms STINSON: Yes, that is what the Auditor-General's Report states.

The Hon. R. SANDERSON: I have not actually specified it as a percentage for each individual. I have been working on numbers, but we are aiming at reducing commercial care as quickly as possible, and residential care. The problem is I cannot stop the children coming into care. So at the same time that we are working on early intervention and prevention through the Early Intervention Research Directorate, which is now managed through Human Services, as we wait for programs to start and get results to stop the incoming, it is hard to stop the total, so we are continuing to work on that.

I do have a goal of increasing foster carers by 50 per year, which, if you did not have any extra children coming in, would see a reduction of 50 across residential care and commercial care, so it is just dependent on how many are coming in at the same time. Certainly a big goal of mine is to focus on getting children out of commercial care, as many as possible out of that situation, and into family-based care.

Ms STINSON: With that goal of 50 new foster carers, is that above attrition?

The Hon. R. SANDERSON: I would hope so. That is the plan, yes. I can report the budget figures. We budgeted for 80 in commercial care for the 2018-19 year, whereas the 2017-18 figure was 115, so a reduction of 35 is anticipated.

Ms STINSON: I am not sure if we have lost track of where questions are up to, but could you explain what those figures are that you just read out? I am not sure what that is in answer to.

The CHAIR: If we just go back a little bit to a couple of questions ago, you asked a question, member for Badcoe. The minister said she would seek the answer and in the interim you could ask some more questions. So we can go back to what was asked.

Ms STINSON: It is my recollection that the minister took my questions in regard to the number of children in care on notice, so I imagine she will get back to me at some later date about that. My subsequent question to that was what the total cost of care was at 30 June.

The Hon. R. SANDERSON: Sorry, we do not have that with us today, so we will take that on notice as well.

Ms STINSON: In estimates, the minister talked about there being a forecast of 33 extra children coming into the system over the next 12 months and that the budget was structured around that. Has that figure been revised and, if so, what is the new figure?

The Hon. R. SANDERSON: The Mid-Year Budget Review is of course still to be released, so I will not be discussing what will happen there. To further clarify the 33, the 33 figure was actually calculated by the former Labor government in February, before I came into government. It was formulated on the basis of the policies of the previous government and the way that it had always been negotiated between Treasury and Finance and my department.

To give you an example, in the 2015-16 year, the Labor government estimated a reduction in the total number of children in care of 48, yet ended up with actual growth of 402, which was 450 off its own budget. You are quite reasonable to be suspect of that figure of 33 because the following year, in 2016-17, the Labor government predicted growth of 128, yet actually got growth of 244. The year after, in 2017-18, the Labor government predicted growth of only 14 children and yet got 168.

So consistently this has been calculated poorly, I would say, and we are now working with Treasury and Finance to see if we can work a better way because of the way that it is calculated. We cannot give an actual figure; we cannot predict how many children really will be removed. In one weekend, you might get 17, and then there might be none for two weeks and you think everything is going well. It is not something we can control. There are drugs involved. There are domestic violence and mental health issues—they are not things I can control.

We have to respond as a department, but the way that Treasury and Finance need their figures is on real figures, which we cannot give them because it is a very volatile department. As you can see, the way that it has been calculated consistently over many years has been quite incorrect and we are working to fix that at the moment with Treasury and Finance.

Ms STINSON: Thank you. That is the answer to the question I asked in estimates several months ago, but I appreciate it anyway. What is your targeted time line for achieving zero children in commercial care?

The Hon. R. SANDERSON: What page is that on?

Ms STINSON: Report 5, Part A, section 2.5.1, page 38.

The CHAIR: The top two lines of page 38, minister.

The Hon. R. SANDERSON: I cannot see the relevance of the question. That point says:

The proportion of children in commercial care has fallen to 2% in 2017-18, compared to 5% in 2016-17, and the proportion in foster or kinship care has increased to 85% from 83%.

You might note—and it has been recorded in the RoGS—that South Australia has consistently had double the number of children in non-family based out-of-home care, which is, we know, the worst form of care. It is great to see that there is a reduction already starting to occur and we are continuing that. My goal is to get us to the national average as soon as possible. That will take at least, I would say, four to five years but, again, this is a figure that is a goal you would work towards—it is an aspiration.

I cannot control the number of children coming in, as Labor would know. The former government announced $9 million to increase foster carers by 150; they did not increase them at all and spent $9 million to do that. We are looking at different and better ways of increasing our foster carers. One way is by looking after them better so that word of mouth can be our best form of advertisement. It is a very difficult area to predict, but we are working as hard as we can to improve that and at least get to the national average.

Ms STINSON: Thank you. I refer to Part B: Agency audit reports, page 61, under 'Contracted out-of-house care services expense'. It is only a very simple question and you might want to take it on notice, given the answers to previous questions. What is your anticipated cost for commercial care in 2018-19? There was a drop of 16 per cent between the previous two years, which is noted on that page, so what is your anticipated cost for commercial care in this financial year.

The Hon. R. SANDERSON: The budgeted cost for commercial care is $51,791,000.

Ms STINSON: Page 62 of the same part notes:

Additional appropriations [were drawn] from the Governor's Appropriation Fund of $40 million and the contingency fund…to offset cost pressures.

Do you envisage receiving funds from these sources of income in this financial year?

The Hon. R. SANDERSON: We cannot comment on that at this stage. We still have the Mid-Year Budget Review to be announced; however, I will note that in the 2016-17 financial year, under the former Labor government, there was an additional $120,946,000 from the Governor's Appropriation Fund, so it is reducing but has still been quite out of control.

Ms STINSON: So you do not know if you are expecting to draw on either of those funding sources?

The Hon. R. SANDERSON: We do not know at this stage; we are only five months in. My goal would be not to access that fund, but I am sure that was the goal of the former Labor government, yet they accessed $40 million and $120 million the year before. If there are children who need to be removed, we have to remove them, and if we need the money to do that we have to find it. We cannot say, 'We've run out of money; we can't have it.' It is very difficult to predict.

Ms STINSON: Part B: Agency audit reports, page 53. Under 'Significant events and transactions', the Auditor-General notes:

The remaining elements of the [new act] will come into force on 22 October 2018. The new Act requires all employees who work with children to have a psychometric test.

Have all Department for Child Protection employees undergone psychometric tests?

The Hon. R. SANDERSON: All department staff who are working with children in care have been psychometrically tested—from the department, in residential care.

Ms STINSON: Just to clarify, is that all department staff in residential care or all department staff who have contact with children?

The Hon. R. SANDERSON: Psychometric testing only applies to staff working in residential care. All the DCP staff have been tested and have passed—the ones who are working with children. I believe there was an extension of one year for non-government residential care providers to give them time to do all the assessments.

Ms STINSON: That brings me to my next question. Have all non-department workers (for example, NGO and agency staff) undergone psychometric testing? Based on your last answer, you might give an indication as to how many have been tested and how many more are to be tested, if they have received an extension.

The Hon. R. SANDERSON: There is not a specific answer here. It is my understanding that the non-government organisations had a year's extension; however, apparently it is part of the transitional legislation. If that is not correct, I will get back to you with the correct answer.

Ms STINSON: Have you made inquiries whether all NGO and agency staff have been tested and where that process is up to?

The Hon. R. SANDERSON: I have actually met with every single provider, every single non-government organisation that provides staff, to discuss this very issue. As you might know, they have been reticent to have to do it because of the cost and the time that is involved; hence, they were given a time extension so that they had the capacity, the money and the time to get all of their staff tested. It is their intention to meet the legislative requirement and they are all undergoing it, but there is only one provider in South Australia at this time and he has put on a lot more staff, so they are doing them as quickly as possible. They are working through them as fast as they can.

Ms STINSON: When does that extension of time expire?

The Hon. R. SANDERSON: We are just checking, but my understanding was that it was one year from meeting with the NGOs; that was their belief, but we are just confirming that.

Ms STINSON: I am happy for you to take it on notice so that we do not end up getting confused with the sequence of questions, if that assists. How many staff have either failed or had an uncertain or questionable outcome or had red flags raised by their test? I realise it is not a simple pass/fail, so I am asking how many have had questionable outcomes or red flags raised by the outcome of their test.

The Hon. R. SANDERSON: I am advised that a small number of employees have been assessed as being potentially unsuitable to work in residential care facilities. It should be noted that the majority of these have not been assessed as providing an immediate risk to the safety of children in residential care but have presented with psychological wellbeing concerns that if not effectively managed might, in the opinion of the psychologist, present an indirect risk to the safety of children in care.

These employees are currently either undertaking suitable duties in non-residential care settings, if deemed appropriate by the chief executive, or are absent from the workplace pending further consideration, including where applicable further consideration about the current management of their psychological risk factors to enable reconsideration of the current psychological assessment outcome and will receive an opportunity to provide further information to inform this assessment before a final decision is made by the chief executive regarding their suitability. There are not exact figures.

Ms STINSON: Can I please request exact figures? Would you like to take that question on notice as to the exact figures?

The Hon. R. SANDERSON: The reason the figures have not been released is that the figures are rather small and it would then make it easy to identify which staff are affected. For privacy reasons, the exact numbers will not be released.

Ms STINSON: Surely that is not much of a consideration if they have left the workplace, though. Can you expand on why that is an issue? I do not see much difference between saying there is a small number and saying five or six.

The Hon. R. SANDERSON: Because many of these people have been redeployed, it would make it obvious who they are. Some of them are for reasons of mental health issues that do not need to be publicised and because it is such a small number the department staff working there would be able to work it out, therefore the numbers are not being released.

Ms STINSON: How many have been redeployed?

The Hon. R. SANDERSON: That is the same thing and would identify them.

Ms STINSON: How many have been directed away from the workplace?

The Hon. R. SANDERSON: We will take that on notice.

Ms STINSON: How many remain in the workplace who have red flags?

The Hon. R. SANDERSON: We will take that on notice and provide a full answer around this issue. Clearly, it is of interest to you.

Ms STINSON: Well, you have had a month to look at this. I asked this question in estimates as well, so I do not see why you have come without any answers to these questions.

The Hon. R. SANDERSON: If you look back on the last four years of Auditor-Generals and the years before that, your line of questioning is considerably different to the Auditor-General's Report, so I was not anticipating this. This is more budget and finance questioning; however, we will take it on notice and we will get the information that you have requested.

Ms STINSON: I am asking questions that are directly related to what is in the Auditor-General's Report. I have not actually strayed far at all from the Auditor-General's Report, but I take it that you will take it on notice. Could you also take on notice how many have returned to the workforce since their adverse outcome; how many are no longer employed in the department, an agency or an NGO; how many have handed in a voluntary resignation; and how many have been forcibly removed, for want of a better term, from the workplace?

I refer now to Part B: Agency audit reports, page 58. Has the Chief Information Officer begun their program to address the identified areas of risk? When will that be devised and implemented?

The Hon. R. SANDERSON: Firstly, this finding is accepted by the department. The C3MS has been rated as 'sensitive medical' by the department after following the ISMF guideline. This recommendation has been approved by the technology and information governance subcommittee, so that has already been completed.

Weaknesses in the password configuration, which was also a finding, have been accepted. There is work underway to synchronise the password used by staff for logging into their PC to C3MS. Initial testing is underway and it is expected that this will be rolled out by the end of 2018. This will then change the minimum password age, complexity and expiry requirements to be in line with those used across the DCP identity system. The DCP identity system meets the ISMF requirements, and aligning this will assist C3MS to meet these requirements also.

Ms STINSON: Do you want me to repeat the question?

The Hon. R. SANDERSON: Which section?

Ms STINSON: My question was: has the Chief Information Officer begun their program to address the identified areas of risk? When will that be devised and when will it be implemented?

The Hon. R. SANDERSON: I am answering that. There were multiple areas of risk that were identified, one being the password configuration, which is on track. Implementation is planned for January/February 2019. The inappropriate assigning of user access, and no review of user access, is also on track. That was accepted, and they are expecting completion around April 2019. The lack of database audit logs is not yet commenced; however, it was accepted and DCP will consider the inclusion of an audit logging guideline in the development of the ICT policies and guidelines framework.

The inadequate patch management is also on track. This finding was also accepted, and it is noted by DCP that the regular patching of systems reduces the risk of known bugs and issues being experienced and also reduces security risk. NEC provide fully managed service for all ongoing C3MS systems, and there are continuing discussions with them. The finding regarding the lack of disaster recovery management was also accepted and is on track. A disaster recovery plan for technical recovery of the C3MS system in the event of a primary environment is unavailable.

The plan for successful recovery of C3MS was successfully implemented and tested on 20 May 2018. However, it is noted that the formal approval of the plan, along with a periodic review, is required and review is currently underway. Development of regular, annual DR exercises will be planned. The other finding of weakness in vulnerability and threat management is also on track and was accepted. DCP will develop a patch policy that reflects a risk management approach and will outline why certain patching was not considered wise due to application, compatibility and stability concerns.

The CHAIR: Final question.

Ms STINSON: Has any confidential information been compromised as a result of weaknesses in C3MS?

The Hon. R. SANDERSON: We will take that on notice.

Ms STINSON: You do not know if there have been any security compromises of personal information?

The CHAIR: The time has expired, member for Badcoe. The minister has indicated that she will take it on notice. I thank the minister, the member for Badcoe and the advisers. We proceed now to the examination of the Auditor-General's 2017-18 report in relation to the Minister for Primary Industries and Regional Development.

I welcome the Minister for Primary Industries, the member for Giles and also the minister's advisers. I remind members that the committee is in normal session. Any questions need to be asked by members on their feet. All questions must be directly referenced to the Auditor-General's 2017-18 report. I call for questions, member for Giles.

Mr HUGHES: Thank you, Mr Chairman. I refer to page 301 of Part B: Agency audit reports regarding PIRSA. On that page, the Auditor-General notes, under Statement of Comprehensive Income, that there has been a $2.1 million decrease in payments for natural disaster recovery programs. Can the minister confirm if he believes the current drought in South Australia is a natural disaster? If so, what direct financial help will the Marshall government be providing to farmers and drought-affected communities?

The Hon. T.J. WHETSTONE: Where is the drought mentioned in the report?

Mr HUGHES: We are actually referring to the reduction in the natural disaster recovery programs, so I am asking you whether you see—

The CHAIR: Just for my benefit, is it page 301?

Mr HUGHES: Page 301, Part B: Agency audit reports, natural disasters.

The CHAIR: The very the bottom line. Your question really is whether we are suffering a natural disaster?

Mr HUGHES: Yes.

The Hon. T.J. WHETSTONE: In the 2016-17 year, there was support there for the Pinery bushfire grant of $762,000; the Gawler flood, $1.209 million; and the Riverland storm in the 2016-17 year, $502,000. That added up to $2.473 million. The reason there is a reduction is because of the assistance with respect to the Riverland storm of 347, and that equates to a reduction in $2.1 million.

Mr HUGHES: I guess it is a definitional thing when it comes to whether drought constitutes a natural disaster, so I would gather that the criteria are such that they do not cover drought. Could you explain what the current criteria are for receiving funding through the natural disaster recovery programs?

The Hon. T.J. WHETSTONE: I will take that on notice.

Mr HUGHES: Given the recent events in the Adelaide Hills, will the apple and pear industry in the Adelaide Hills receive any direct financial assistance as a result of the recent hail damage, taking into account that this is the second year in a row that they have experienced damage?

The Hon. T.J. WHETSTONE: Whereabouts are you referring? What page?

Mr HUGHES: We are still referring to the same page, page 301, the $2.1 million decrease in payments for the natural disaster recovery programs. It is actually linked to the program.

The Hon. T.J. WHETSTONE: You are in the wrong year.

The CHAIR: Yes, to be fair, member for Giles, your questions should be relating to the report itself rather than what might be in the future.

Mr HUGHES: I refer now to page 296 of Part B: Agency audit reports, regarding PIRSA. On that page the Auditor-General notes, under the section 'Significant events and transactions', that the regional development fund was repurposed as the Regional Growth Fund. How this fund will be spent in the future will be determined by the minister on the basis of recommendations. Given that the first round has closed, have any submissions at this stage been successful?

The Hon. T.J. WHETSTONE: At this stage there have been 84 applications in the competitive pool, and they are currently being assessed. There has also been a number of inquiries to the strategic pool. That strategic pool is open all year round but, as you have highlighted, the competitive round opened on 2 July and it closed on 31 August. That gave applicants two full months to prepare and submit applications, and those guidelines for that fund were available online.

Mr HUGHES: When are we likely to know which applications have been successful?

The CHAIR: I appreciate the minister's answer to the question before, but I remind the member for Giles that we are actually talking about the 2017-18 financial year. The minister may choose to answer that, but I will bring the member for Giles back to the report itself. Minister.

Mr HUGHES: Some applications do apply to that time period.

The Hon. T.J. WHETSTONE: They do. The applications apply to that period, but the assessment of those applications do not.

Mr HUGHES: I refer to page 303 of Part B: Agency audit reports, regarding PIRSA. On that page the Auditor-General general notes, under the section 'Other expenses', that there has been a $2.8 million increase in workers compensation liability re-evaluation expense as a result of the review of the liability by a new consulting actuary in 2018-19. Can the minister advise why a new actuary and a review were required?

The Hon. T.J. WHETSTONE: That actuary was for the entire government, not just for PIRSA. It was not just a PIRSA-related incident; it was for the entire government.

Mr HUGHES: In relation to PIRSA, what were the implications, the findings and the liabilities?

The Hon. T.J. WHETSTONE: It is not an actual amount: it is a forecast cost.

Mr HUGHES: I refer to page 307 of Part B: Agency audit reports, regarding PIRSA. On that page, the Auditor-General notes in the 'Administered items' section, 'The main administered revenues are industry contributions and aquaculture and fishing licence fees.' Can you give the breakdown of the revenue sources?

The Hon. T.J. WHETSTONE: I can, but just before I do that I will answer the first question that I took on notice when you talked about the national disaster criteria. That is actually the responsibility of the Treasurer to determine in association with the commonwealth, and you would have to direct that question to the appropriate minister. It is not my responsibility: the Treasurer works in association with the commonwealth.

I have the breakdown of revenue from fees and charges. For aquaculture and fishing licences in the 2018 year, $14.168 million; penalties and fines, $53,000; and other fees and levies equated to 2.391. So total revenue from fees and charges is $29.525 million.

Mr HUGHES: On fees, charges and licences, has the agency done any modelling on revenue projection from the introduction of recreational fishing licences?

The CHAIR: I am going to rule that one out of order, member for Giles. It was an excellent try. The member for Giles has the call.

Mr HUGHES: I refer to page 301 of Part B: Agency audit reports, regarding PIRSA. On that page, the Auditor-General notes, under the section Statement of Comprehensive Income, that employee benefits' expenses increased by $3 million to $95 million, largely due to the increase in salaries and wages. Can you please advise how many staff in PIRSA are currently on salaries of over $100,000 and how many are on salaries over $150,000?

The Hon. T.J. WHETSTONE: I can tell you that the breakdown of the Auditor-General's Report is that there are 35 people who earn over $149,000.

Mr HUGHES: And $100,000?

The Hon. T.J. WHETSTONE: That is not in the report.

Mr HUGHES: Returning to page 296 of Part B: Agency audit reports, regarding PIRSA, that page covers the regional development fund and the repurposing of the funds to the Regional Growth Fund. Can you explain the process by which the agency makes recommendations for the use of the funds and the process by which it assesses applications for funding?

The Hon. T.J. WHETSTONE: I have already answered that. The guidelines for the fund, including the assessment criteria, are available on the PIRSA website.

Mr HUGHES: Are the evaluation processes available on the website as well?

The Hon. T.J. WHETSTONE: The evaluation processes are determined by an appointed independent chair. He will oversee the assessment of projects under the competitive pool, and he will undertake an assessment of all applications as an independent chair.

Mr HUGHES: Can the minister clarify the degree of openness and transparency in relation to the submissions and ultimate decisions?

The Hon. T.J. WHETSTONE: Yes, I can: it is very open and very transparent.

Mr HUGHES: How is the minister going to ensure that is the case?

The Hon. T.J. WHETSTONE: I have an independent chair who oversees the assessment of all those projects. He has been appointed. He has significant knowledge and background in government grants. That is why he was appointed as the chair, an independent person away from the government department.

Mr HUGHES: Will those decision-making processes be publicly available?

The Hon. T.J. WHETSTONE: Yes, they will.

Mr HUGHES: With that, I conclude my questions.

The CHAIR: Thank you very much. I thank the minister, the member for Giles and the minister's advisers.

Progress reported; committee to sit again.

The Hon. J.A.W. GARDNER: Sir, I draw your attention to the state of the house.

The DEPUTY SPEAKER: There not being a quorum, ring the bells.

A quorum having been formed:

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