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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2021-10-26 Daily Xml
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Auditor-General's Report

Auditor-General's Report

In committee.

The CHAIR: I declare the examination of the Report of the Auditor-General 2020-21 open. I remind members that the committee is in normal session. Any questions have to be asked by members on their feet, and all questions must be directly referenced to the Auditor-General's 2020-21 report and Agency Statements for the year ending 2021, as published on the Auditor-General's website. I welcome the Premier for the first part of the examination and I call for questions from the opposition.

Mr MALINAUSKAS: On my feet, sir?

The CHAIR: On your feet. They are my instructions, yes.

Mr MALINAUSKAS: My first question to the Premier is in relation to Part C: Agency Audits, page 464, starting the quote, 'Key impacts of the cessation of the Superloop Adelaide 500'. Do the key impacts of the cessation of the Adelaide 500 mentioned in the Auditor-General's Report include the sanction fee and compensation paid to Supercars?

The Hon. S.S. MARSHALL: The Auditor-General makes that clear that there has been a provision as of 30 June and, yes, I think that would be the total amount that has been provided at that point in time.

Mr MALINAUSKAS: Page 465 states that event operations expense included payments to settle contracts that were terminated. What was the total amount paid out to terminate all the contracts associated with the Supercars event, not just the Supercars but the other contractors as well?

The Hon. S.S. MARSHALL: I do not have that information and, as I said, the Auditor-General makes the comment with regard to a provision that had been made, and I do not think that that had been fully paid out at that point in time. As I have repeatedly said, both in this chamber and more publicly, any of those negotiations with Supercars for that sanction fee was subject to a commercial-in-confidence negotiation.

Mr MALINAUSKAS: What was the total amount paid to Supercars to cancel the 2021 event?

The Hon. S.S. MARSHALL: I think I will just refer the Leader of the Opposition to my previous answer.

Mr MALINAUSKAS: Why will the Premier not tell the people of South Australia how much it cost to cancel the Supercars event in 2021?

The Hon. S.S. MARSHALL: I was not the person who was conducting the negotiation, but my understanding is, and I am advised, that that was the subject of a commercial-in-confidence negotiation. We are bound by that, therefore I am bound by that, and I will not break that confidence here in the parliament.

Mr MALINAUSKAS: Is it right to say that it was north of $2 million?

The Hon. S.S. MARSHALL: I refer the Leader of the Opposition to my previous answer, but he can see the provision that was made, current as of 30 June.

The Hon. S.C. MULLIGHAN: Just arising from the Premier's previous answer that there are confidentiality provisions that he says prevent him from disclosing this amount, is there a contract or a signed confidentiality agreement to that effect?

The Hon. S.S. MARSHALL: That is what I have been advised. There was a negotiation which was commercial-in-confidence. We have, I understand, concluded that negotiation and that figure remains commercial-in-confidence. With regard to the examination, this is for the previous financial year and I think there is a disclosure in total that was the provision that had been made as of 30 June.

The Hon. S.C. MULLIGHAN: Just to be clear, the terms of the agreement that has been reached between the government of South Australia and Supercars Australia specifically precludes the government from releasing that dollar figure that the Leader of the Opposition sought.

The Hon. S.S. MARSHALL: That is my understanding, but I am happy to check that and, if it is incorrect, I will come back to you.

The Hon. S.C. MULLIGHAN: Can I also ask when the Premier checks that detail whether he could come back to the house and advise whether there is an exclusion from that confidentiality agreement which allows that information in fact to be disclosed for parliamentary purposes.

The Hon. S.S. MARSHALL: I am happy to make that inquiry.

Mr MALINAUSKAS: Notwithstanding the Premier's supposed inability to publicly reveal the amount of compensation paid, does the Premier know what the figure is?

The Hon. S.S. MARSHALL: I refer the leader to my previous answers. I just remind this investigation here today, or this committee here today, that we are examining the Auditor-General's Report through to 30 June last year. I think I have made adequate reference to his comments with regard to that provision that he has identified within his report. I have tried to provide this committee with as much information as possible. I have taken a couple of questions from the member for Lee on notice and I am happy to make those investigations and come back to the committee if there is any update.

Mr MALINAUSKAS: Did Supercars offer to reduce the sanction fee for the 2021 event?

The Hon. S.S. MARSHALL: This is not a matter at all that is canvassed in the Auditor-General's Report and, whilst it might be of interest to the Leader of the Opposition, there are other ways that he can ask those questions. But this is a very important time; it is limited to 30 minutes. It is the examination of the Auditor-General's Report, so I just ask the leader to think about his questions in light of what is actually in the Auditor-General's Report. That would make more sense to me.

The CHAIR: I appreciate that, Premier. As far as I can tell, the leader is still referencing pages 464 and 465 at this stage. Yes, you have the call.

Mr MALINAUSKAS: I was hoping the Premier might answer the question, given that the Auditor-General's Report specifically pertains to issues regarding the Supercars, the cancellation of the contract and the cost to the South Australian taxpayer regarding that.

The Hon. S.S. MARSHALL: That was not a question: that was a statement.

Mr MALINAUSKAS: I was referring to my previous question, which you did not answer.

The CHAIR: The Premier has answered a number of questions on this line of questioning.

The Hon. S.S. Marshall interjecting:

The CHAIR: The Premier is called to order.

Mr MALINAUSKAS: On page 465 of the Auditor-General's Report, it states that $690,000 was provided to cover unsettled claims resulting from contracts that were terminated. What were the contracts that had to be terminated?

The Hon. S.S. MARSHALL: I am happy to provide information on the general headings with regard to that. Obviously, you have raised one already with regard to the contract that existed with Supercars, but there would have been other contracts we had over an extended period of time that were in place that would need to have also been settled, but they will fall under that broad heading.

The Hon. S.C. MULLIGHAN: I am grateful to the Premier for his counsel. We do understand the heading that they fall under. We are specifically asking: what were those contracts?

The Hon. S.S. MARSHALL: I am happy to make an inquiry and come back to the committee.

Mr MALINAUSKAS: You will come back to the committee in the next 24 minutes, or will you take the question on notice?

The Hon. S.S. MARSHALL: I will take the question on notice and come back via the committee. That is the way that it works.

Mr MALINAUSKAS: On notice?

The Hon. S.S. MARSHALL: Yes.

Mr MALINAUSKAS: Still on the same pages, the $6.7 million write-down of motorsport infrastructure to $2.5 million, on page 464: is the $2.5 million the total amount the Premier expects to recoup from the sale of the Adelaide 500 infrastructure?

The Hon. S.S. MARSHALL: As you would be aware, Mr Chairman, we need to make sure that we keep our books in order in terms of the current asset value in accordance with the Treasurer's Instructions and also in accordance with the Australian accounting standards, and so from time to time we need to make an adjustment to the valuation on the balance sheet. There has been a write-down.

Of course, we make write-downs for depreciation in normal years, but when there is an extraordinary circumstance which reduces the valuation of those assets because its useful life is diminished, then there needs to be that adjustment. That is the adjustment that has been made and so, as of 30 June, the most up-to-date valuation of those residual assets is $2.5 million.

Mr MALINAUSKAS: Thank you for explaining that to us, Premier. I really appreciate it. If we could just go back to the question, the question was: does the government expect to recoup the full $2.5 million attributed to the value of the Adelaide 500 infrastructure through its sale?

The Hon. S.S. MARSHALL: I think I have just answered that question. You have an asset value that sits on the books; there is an action which diminishes the useful life of it—you write it down to what you think is the useful life—and as at 30 June that was $2.5 million. Of course, that is our expectation, but we need to test the market with regard to that. I think that all best endeavours were made in accordance with the Treasurer's Instructions and in accordance with the Australian accounting standards to make sure that we have a true reflection of that asset value.

The Auditor-General has taken a look at that process. He has made no findings with regard to this or any recommendations. If the work is being done in accordance with those standards and the Auditor-General has looked at that and made no finding, then I have no reason to suspect that it is not accurate at that point in time.

Mr MALINAUSKAS: Can the Premier provide a total figure regarding the total cost to South Australian taxpayers to cancel the 2021 Adelaide 500 event?

The Hon. S.S. MARSHALL: No, I do not have that information.

Mr MALINAUSKAS: Why not?

The Hon. S.S. MARSHALL: We made a decision which was not going to be without financial consequence, and we made that very clear to the people of South Australia. It was on the unanimous recommendation of the SATC board. We canvassed this over an extended period of time. The reality is that this was not the best use of the finite taxpayer dollars in terms of bringing people and visitor nights into South Australia.

There was a better proposal which was put by the SATC board members (the board) to the government and we accepted that we would spread the events out over time throughout the entire year. We recognise that, whilst there was going to be an initial hit, there would be an ultimate benefit to the people of South Australia, and that plan is being implemented as we speak.

Mr MALINAUSKAS: I appreciate the Premier acknowledging that there was a deliberate decision made to cancel the Adelaide 500, notwithstanding the fact that there was a cost to the taxpayer in doing that. My question to the Premier is: given the Premier's awareness of the fact that there would be a cost associated with doing that, what is that cost?

The Hon. S.S. MARSHALL: As you would be more than aware, sir, there was a net benefit because there was a huge expenditure in the forward estimates for this. The amount for settlement was significantly lower than—

The Hon. A. Koutsantonis: What is it?

The Hon. S.S. MARSHALL: If the member for West Torrens would like to ask a question, I am sure the leader will allow him to; he seems to defer to him on most things. At this point, I am still answering the leader's question.

As I said, there is not actually a net cost to the people of South Australia: there is a net benefit to the people of South Australia. That money, that net benefit, can be deployed on other activities that will bring people into South Australia. That was the recommendation, that was the advice of the SATC board to the government. Of course, it is a separate statutory authority, but we do provide the funding for it. We were happy to support that because we thought it was in the best interests of the people of South Australia.

They did not take this decision lightly. They recognised how important this race was to the people of South Australia. It was an initiative of the Olsen government, of course, or the Brown government possibly—it was during that period of Brown/Olsen—and it has been very good for South Australia. However, the reality was that a better alternative for that expenditure was presented by the board. It came via the chief executive to me, and we were happy to support the unanimous decision.

Mr MALINAUSKAS: I thank the Premier for identifying the fact that he ultimately has to accept responsibility, notwithstanding the unanimous decision of the board. My question to the Premier is: what are these great new events that replace the Adelaide 500? Of course, the Premier—

The Hon. S.S. Marshall: What does this have to do with the Auditor-General's Report?

Mr MALINAUSKAS: I am referring to your previous answer—

The Hon. S.S. Marshall: Have you run out of questions already? You wanted to extend this and you do not even have any questions.

The Hon. Z.L. Bettison interjecting:

The CHAIR: Order! The leader has the call, and he will be referencing a page at least—

Mr MALINAUSKAS: Page 464 again, sir. I am just asking the Premier, as he referred to in his previous answer, to please illuminate the house, and indeed the people of this state, about the plethora of events that were said to replace the Adelaide 500 or that have replaced the Adelaide 500. I invite the Premier to refer to the new events that have been announced since the decision to cancel the Adelaide 500, and obviously I'm not talking about the Royal Show or the pageant or any of those events.

The CHAIR: Before I give the Premier the call, it is a fairly tenuous link. I notice you did mention the Adelaide 500, but I will give the Premier the opportunity to answer.

The Hon. S.S. MARSHALL: This is extraordinarily tenuous. A few minutes into the examination of the Auditor-General's Report and the opposition has already run out of questions. The reality is all the information—

Members interjecting:

The CHAIR: Order! The Premier has the call.

The Hon. S.C. Mullighan interjecting:

The CHAIR: Order, member for Lee! The Premier has the call.

The Hon. S.S. MARSHALL: The shrill voices of the opposition continue. The reality is—

The CHAIR: We are nearly halfway through.

The Hon. S.S. MARSHALL: The reality—

The Hon. Z.L. Bettison interjecting:

The Hon. S.S. MARSHALL: I beg your pardon. Sorry, I did not hear the words of—

The Hon. Z.L. BETTISON: You said there was a shrill—

The Hon. S.S. MARSHALL: No; what did you say?

The Hon. Z.L. BETTISON: I said it very clearly in the report, in the opening lines of the Auditor-General.

The Hon. S.S. Marshall interjecting:

The Hon. Z.L. BETTISON: And you said I was shrill.

The Hon. S.S. MARSHALL: Sorry, what did you say?

The Hon. Z.L. BETTISON: I said that the point you were making—

The Hon. S.S. MARSHALL: We will check it; it does not matter if you do not want to say it now, if you are embarrassed.

The CHAIR: Member for Ramsay, you do not actually have the call at the moment.

The Hon. A. Koutsantonis: Is this how you talk to everyone?

The CHAIR: The member for West Torrens is called to order.

The Hon. S.C. Mullighan interjecting:

The CHAIR: It does not really worry me if members are not going to make good use of this half-hour. Premier.

The Hon. S.S. MARSHALL: Thank you very much, sir. As I was saying, there is no reference to this in the Auditor-General's Report. All the information that is requested by the Leader of the Opposition at the moment is in the public domain. I am happy to go through it again because it is their time, but it seems to me quite extraordinary that they want to. I am very happy to provide a detailed answer to this—

The CHAIR: Before you do that—leader, do you rise in a point of order?

Mr MALINAUSKAS: Yes, sir. It is page 462 of the Auditor-General's Report. We do not want to waste time, but the Premier is refusing to answer the question on the basis that there is no reference to it. It says here quite clearly:

The Superloop Adelaide 500 motor sport race for 2020-21 did not proceed and will no longer be held. SATC advised us that the net funding received from the SA Government for the race will be redirected to support new major events from 2021-22.

The Hon. S.S. Marshall interjecting:

Mr MALINAUSKAS: The current financial year. The Premier referenced more new events. The Auditor-General's Report references new events. We are simply asking: can the Premier please tell the people of South Australia what those new events are?

The CHAIR: And I note that reference, leader.

The Hon. S.S. MARSHALL: Notwithstanding the oration that we have just received, I was saying that I am happy to go through it even though all this information is actually available to—

The Hon. A. Koutsantonis interjecting:

The CHAIR: The member for West Torrens!

The Hon. S.S. MARSHALL: —the people—

Members interjecting:

The Hon. S.S. MARSHALL: Well, let's be very clear. The Auditor-General in his report goes through the accounts for the people of South Australia. There is no finding, there is no recommendation with regard to this line of questioning. I find it extraordinary that this is the focus, but nevertheless it is one of their very few policies they have announced and so they probably want to ask some questions about it.

Again, I go back to the fact that all the information with regard to the alternative use for this money has been canvassed in this parliament and in press conferences, and I think very well circulated with the people of South Australia. There are a number of new events that we have had since we have come to government. For example, the Adelaide International. We have had A Day at the Drive, and we hope to be able to hold another event at the redeveloped Memorial Drive—

The CHAIR: Sorry, there is a point the order.

Mr MALINAUSKAS: Again, going back to the reference on page 462, the question was about new events announced since the cancellation of the Adelaide 500. We are very conscious that we have spent a bit of time on this and we would like to move on, so I simply just ask the Premier—

The Hon. S.S. Marshall interjecting:

The CHAIR: Premier!

Mr MALINAUSKAS: —to answer the question: what other new events?

The CHAIR: The leader has repeated his question. Premier, I am sure you were getting to the nub of the question.

The Hon. S.S. MARSHALL: Yes, trying to, sir. For some reason those opposite are not interested in the Adelaide International, which I think is a great event. They are probably not interested in the Illuminate Adelaide, which I must say I was absolutely astounded with the dollars which that generated in its very first iteration.

I suppose in many ways this has given us confidence for what is proposed now, which is a new umbrella for events and which we are calling Bloom. It is a combination of taking some of our existing events and putting more money, more marketing behind it, and new events as well.

All of this information is publicly available. If the Leader of the Opposition is genuinely interested, I am very happy—if he cannot find it on the website or if he cannot find it in the press conferences or in the press releases—for the SATC to provide a detailed briefing for the Leader of the Opposition.

We take the improvements to our visitor economy extraordinarily seriously. I am very, very pleased with the work that the SATC has done through what can only be described as one of the most turbulent periods in our recent history. During that period of time, what we have also seen is a very significant increase in intrastate travel. We are very hopeful now with the border restrictions being removed on 23 November that we are going to significantly increase interstate travel into South Australia, and events are a big part of that.

It is, of course, a disrupted calendar of events during a global pandemic, but when we look at what has happened interstate I am very pleased that we have been able to get the vast majority of all our events away.

Mr MALINAUSKAS: In light of the fact that we have only 12 minutes left and we have had lengthy answers from the Premier, we will just simply note the fact that the Premier has not been able to announce or name literally one single new event that has replaced the Adelaide 500. We appreciate that, and I will now defer to the shadow treasurer to move onto a different subject.

The Hon. S.C. MULLIGHAN: I draw the Premier's attention to the financial statements for the Department of the Premier and Cabinet, and in particular note 2.3 to the financial statements and commonwealth-sourced grants and funding. There is $6.5 million, which the Auditor-General records as being paid for the Adelaide City Deal, yet the Premier on 9 April of this year signed a project agreement for the Adelaide City Deal, which outlined that the state should receive $15.5 million in that financial year. Can you explain why the commonwealth did not provide us the $15.5 million?

The CHAIR: While the Premier is seeking advice on that, member for Lee, do you have a page number for me to reference?

The Hon. S.C. MULLIGHAN: Unfortunately, the Auditor-General must be working off Microsoft Works. There are no page numbers on this.

The CHAIR: So here am I with a hard copy.

The Hon. S.C. MULLIGHAN: Note 2.3 to the financial statements.

The CHAIR: We will do our best.

The Hon. S.S. MARSHALL: I am advised that the payment that you refer to this year was for funding to support the Adelaide City Deal agreement. It states here, 'funding to support growth in South Australia's innovation and tourism, including Lot Fourteen, the Heysen Gallery at Hahndorf and Carrick Hill Visitors' Centre'. As for a reconciliation against something previously, we are happy to take that question on notice and come back to the committee.

The Hon. S.C. MULLIGHAN: Perhaps I can provide some enlightenment for the Premier to jog his memory. The project agreement for the Adelaide City Deal required certain milestones to be met by certain dates in order for payments from the commonwealth to be made to the state. For example, in April of this year, 2021, the state government was required to provide a business case that meets the requirements of clause 17 of the agreement to be submitted and accepted by the Australian government in order to receive, for example, $4 million towards the Aboriginal Art and Cultures Centre. Was that business case completed and submitted to the commonwealth and deemed acceptable by them?

The Hon. S.S. MARSHALL: I am happy to take that question on notice. There has been a huge amount of work done on the Aboriginal Art and Cultures Centre. My understanding is that we have a finalised design and we have a finalised business case. The commonwealth are very happy. Whether it met that April deadline, I am not sure. I am happy to go and check. But the good news is that we should be in a position to announce who the contractor for that work is very soon. I am hoping that ground works will begin in the coming months.

This is a very important project for South Australia. It was always important from our perspective to get it right, not rushed, and so there may have been some slippage in that finalisation of the business case, but it has been completed now. As I said, we are on track to turn soil on that site in the coming months, certainly before early next year. Hopefully, we can announce the contractor in the coming weeks.

The Hon. S.C. MULLIGHAN: Again, with regard to note 2.3 of the financial statements, the project agreement that you signed on 9 April 2021 required that in April 2021, that same month you signed the agreement, the state government would have submitted and had accepted by the commonwealth a business case for that project. When you were signing the actual document, was it in your mind whether you were going to be meeting your obligations under the agreement?

The Hon. S.S. MARSHALL: The member for Lee puts forward his version as he—

The Hon. S.C. Mullighan: It's not my version; it's the commonwealth's. It is right here. Here is the project agreement.

The CHAIR: Member for Lee, you asked the question. The Premier had just taken to his feet to answer.

The Hon. S.C. Mullighan: Well, he seeks to mislead the house, sir.

The Hon. S.S. MARSHALL: The member for Lee just said that I seek to mislead the house. I ask him to withdraw and apologise—

The CHAIR: Run me through this. What did—

The Hon. S.S. MARSHALL: —or move a substantive motion.

The CHAIR: What did the member for Lee say?

The Hon. S.S. Marshall: That I sought to mislead the house.

The CHAIR: Is that correct?

The Hon. S.S. Marshall: Yes.

The Hon. S.C. MULLIGHAN: Yes, it is, sir, and with some basis too. I am happy to explain. He said at the beginning of his answer that it was my version of events. As I have pointed out, we have the financial statements from the Auditor-General saying that only $6½ million was received last financial year. We have a project agreement, which you signed in that financial year in April, saying that we should receive $15.5 million and, in particular, in the same month that you signed the agreement that you should have—'you' being the minister responsible for this project and for Lot Fourteen—submitted a business case that was acceptable by the commonwealth. So it is not my version of events: it is the version of events that the documents you signed create and substantiate.

The Hon. S.S. MARSHALL: I ask the member to withdraw and apologise.

The CHAIR: Member for Lee, the Premier has taken offence to you suggesting that he has misled the house. The best thing to do here would be to withdraw that comment. Are you prepared to do that?

The Hon. S.C. MULLIGHAN: I am. I know the delicacy of the Premier's constitution—

The CHAIR: No, just withdraw.

The Hon. S.C. MULLIGHAN: —and so I withdraw and I apologise fulsomely to him.

The CHAIR: Thank you, member for Lee. I am actually pleased you did that because the only option for me, other than that, was to name you, and I did not want to do that of course.

The Hon. S.C. Mullighan interjecting:

The CHAIR: No, you go. Premier, the member for Lee has withdrawn and apologised.

The Hon. S.S. MARSHALL: As I was saying when I was last on my feet, I had previously taken on notice the question asked by the member for Lee. He then stood up to offer his explanation as to what had occurred. I have already committed to looking at that reconciliation, but I cannot take on the word of the member for Lee that that is exactly and precisely what has occurred, but I have provided some explanation to the house already with regard to this important project.

I am happy to take on notice the comments that have been made by the member for Lee, as his explanation as to why there may be an issue with regard to that original reconciliation but, most importantly, I will rely on the advice that I receive from my own department and, ultimately, from Treasury, if needed, with regard to this important project.

The City Deal is an important deal for South Australia. It is one that we are in partnership with the federal government. We have cut out the fake fights that existed under the previous government and we have been able to deliver substantially for South Australia. I know those opposite are a little bit sensitive with regard to Lot Fourteen. They had other plans for that site; in fact, they had sold it to a private developer. They wanted to put 1,300 private apartments on the Parklands, which would have been a terrible use of that seven hectares in the centre of the city.

By contrast, we have created I think one of the most exciting urban renewal precincts in Australia at the moment, as referenced by the huge number of companies that are now signing up to put their headquarters in South Australia. This is creating a huge number of jobs for our state.

The Hon. S.C. MULLIGHAN: On the same line of questioning, in the same month that the Premier signed that project agreement with the commonwealth the Premier was also required to provide a business case for the international centre for food, hospitality and tourism studies. That was due to go to the commonwealth for a payment, according to the project agreement, for $2 million. Did the Premier send a business case to the commonwealth for the international centre for food, hospitality and tourism studies, as was required of him in the project agreement in April 2021?

The Hon. S.S. MARSHALL: I thank the member for Lee for his question. He raises an important question regarding this plan that was embodied in the City Deal to establish a centre for culinary excellence in hospitality on Lot Fourteen. As the member may be aware—if not, I am happy to provide him with a briefing—due to the unforeseen circumstances with regard—

The Hon. S.C. Mullighan: You signed a deal and then cut it.

The Hon. S.S. MARSHALL: The member for Lee is literally an expert on all topics.

The Hon. S.C. Mullighan: Well, somebody has to be because you're certainly not.

The CHAIR: The member for Lee is called to order. Continue on, Premier, with your answer.

The Hon. S.S. MARSHALL: I have nothing further to add, sir.

The Hon. S.C. MULLIGHAN: Perhaps while the Premier is checking what he was meant to do, he could also check whether, as per the terms of the agreement that he signed with the commonwealth, he has presented a signed signature page for the development agreement for the innovation hub, which was due in July of this year, for $2 million; whether he has submitted a project plan for delivery for the Aboriginal arts and cultures gallery in August of this month, which was necessary in order to receive $4 million from the commonwealth; and whether he has submitted a project plan for delivery in August 2021 for the international centre for food, hospitality and tourism studies, which was necessary in order to receive $2 million. I presume not because, of course, the Treasurer advised the estimates committee that the government has cancelled that project. Did the Premier—

The Hon. V.A. Chapman interjecting:

The CHAIR: Member for Lee, you have the call.

The Hon. S.C. MULLIGHAN: I realise that Vickie is feeling left out, sir. Did the Premier sign this agreement knowing that he was about to cancel the international centre for food and tourism?

The Hon. S.S. MARSHALL: As I said, I am happy to take that question on notice and come back to the committee.

The CHAIR: The time has expired for the examination of the Premier in relation to the Auditor-General's annual report. We come now to the Attorney-General. I remind members that we have an hour dedicated to this examination.

The Hon. A. Koutsantonis: Yes, we do. We have all been looking forward to it.

The CHAIR: Member for West Torrens, bear with me—you will get your chance. Any questions need to be asked by members on their feet and all questions must be directly referenced to the Auditor-General's 2021 report. I open the examination of the Attorney-General. The advisers are in place.

Mr PICTON: Are we still waiting for Frances Nelson QC to come as well to advise?

The Hon. V.A. Chapman: Do you need her advice too?

Mr PICTON: I thought she was your adviser.

The CHAIR: That is an unnecessary comment.

The Hon. A. Koutsantonis: But a funny one, sir.

The CHAIR: For what it is worth, I get it, but it is an unnecessary comment.

The Hon. V.A. CHAPMAN: I indicate that this is Mr Andrew Swanson to my left, who is the adviser.

Mr PICTON: A QC of the future, I am sure. My first question is in relation to Part C, page 23, referring to the administrative expenses of the Attorney-General's Department. What have been the expenses to date to the government in relation to legal advice for the Kangaroo Island Plantation Timbers matter?

The Hon. V.A. CHAPMAN: I am sorry, could you repeat the question?

Mr PICTON: What have been the government's legal expenses to date in relation to the Kangaroo Island Plantation Timbers planning matter?

The Hon. V.A. CHAPMAN: I do not know the answer to that question, but I am happy to take it on notice and, if I am able to provide it, I will.

Mr PICTON: On the same line, has the Attorney requested any legal advice in relation to that matter?

The Hon. V.A. CHAPMAN: The member would be aware that there has been Crown Solicitor's advice provided to the department and myself in relation to the project, the approval process but, in relation to the select committee that is currently extant, no.

Mr PICTON: Has there been legal advice to the Attorney in relation to any other inquiry in relation to this matter?

The Hon. V.A. CHAPMAN: I am not sure how to answer that. I have indicated that there is in relation to the process, in relation to the application for approval, and there is the select committee. If there is some other process, I do not know about—

The CHAIR: By 'this matter', I take it, member for Kaurna, that you meant the Kangaroo Island—

Mr PICTON: Plantation Timbers.

The CHAIR: I remind members that there is a select committee in relation to this at the moment.

The Hon. A. Koutsantonis: Yes, we know, sir.

The CHAIR: I know you know.

The Hon. A. KOUTSANTONIS: If I can refer the Attorney-General to page 34, expenses, employee benefits, supplies and services, loss on revaluation of intangibles and other total expenses, for 2021 how many hours in AGD were used compiling documents for ICAC?

The Hon. V.A. CHAPMAN: Where are you again?

The Hon. A. KOUTSANTONIS: Expenses, interpretation and analysis of the financial report for AGD. In terms of total hours by the department, how many hours were spent accumulating documents requested by ICAC in relation to the KIPT planning decision?

The Hon. V.A. CHAPMAN: I am not sure whether I can answer that, in any event, but even if it was able to be discussed there is no reference in here to hours of work done. There are expenses in relation to employees of $152 million for the 2021 year. There is no breakdown in relation to the expenditure in relation to staff, and I would expect that, if it were to be explored, there may be a summary or a list of the numbers of employees and amounts paid that total the $152 million—that is the first thing.

The second thing is in relation to alleged work done for the purpose of ICAC. It is just beyond belief that you would even ask that. In any event, that is my answer.

The CHAIR: I do not know, member for West Torrens, whether the Attorney would be in a position to know the number of hours spent—

The Hon. A. KOUTSANTONIS: She could ask her advisers, sir.

The CHAIR: —finding information for a statutory authority.

The Hon. A. KOUTSANTONIS: The department have interagency costs that are transferred. If another agency requests information from this agency for the purposes of inquiry, there is an expense assigned to the collation of that information. What I am simply asking, as part of the audit process, is what was the cost to AGD of compiling documents to be sent to ICAC for the purposes of an investigation into KIPT?

The CHAIR: Attorney, before I give you the call—

The Hon. V.A. CHAPMAN: It is just outrageous that he can even make that sort of assertion.

The CHAIR: —member for West Torrens, you are making a huge assumption here, are you not?

The Hon. A. Koutsantonis: I do not know if I am sir, no.

The CHAIR: Well, I do not know. There is no reference in here to the Independent Commissioner Against Corruption.

The Hon. A. Koutsantonis: I am just asking a question, sir.

The CHAIR: Attorney.

The Hon. V.A. CHAPMAN: All I can advise the committee is that I understand there had been some inquiry made by the select committee as to documentation. There has been correspondence forwarded by the CE indicating that, as was obvious, there cannot be any disclosure in relation to any such matter without the permission of ICAC. That material has not come forward at this point.

The Hon. A. KOUTSANTONIS: I just point out to you, Mr Chairman, this is parliament and parliament can inquire into any matter it chooses. In the Auditor-General's examination, I can ask any question about any inquiry.

The Hon. V.A. Chapman: Ask what you like—

The Hon. A. KOUTSANTONIS: I will, but there is nothing prohibiting you from answering—nothing.

The CHAIR: There is nothing prohibiting the Attorney from answering—

The Hon. A. KOUTSANTONIS: No.

The CHAIR: —but ministers also, and you would be well aware of this, member for West Torrens, can answer in whichever way they see fit.

The Hon. A. KOUTSANTONIS: We will get to the bottom of this in another way, sir.

Mr PICTON: Can the Attorney confirm in relation to the KIPT matter that there has been no legal advice provided to her from the Attorney-General's Department or the Crown Solicitor in relation to the select committee that is being formed?

The Hon. V.A. CHAPMAN: That is correct, for myself.

Mr PICTON: My question is in relation to page 39, under expenses, dot point 3, regarding intragovernment transfers paid to the Outback Communities Authority and the Local Government Grants Commission. As the minister acknowledged earlier this year in budget estimates, the Local Government Infrastructure Partnership Program overwhelmingly funded projects in Liberal-held seats, with 57 projects in council areas that represent a Liberal seat versus 11 projects in councils in Labor-held seats.

Does the Local Government Grants Commission, the Office of Local Government or the minister now have a process to question the breakdown of grants funding allocated to ensure funding is more equitably distributed?

The Hon. V.A. CHAPMAN: The best I think I can assist in relation to this matter is that I recall the assertion being made as to some disproportionate distribution of grants for the purpose of Liberal-held seats compared with Labor-held seats. Of course, the regional areas that had put in a number of applications are significantly held by Liberal members.

I just explain to the committee that the Local Government Grants Commission is an independent commission. It has certain models of distribution for the work that it does and in the money it gets from the commonwealth. If there is anything specific you have as to any concern or information you seek as to a particular grant, I am happy to take that on notice.

Mr PICTON: I refer to page 41 of Part C, Statement of Administered Cash Flows, dot point 5: 'Commonwealth-sourced grants and funding, $1.7 million'. Does the minister expect to see similar funding from the commonwealth grants in 2022 and, if not, will the state government commit to increasing its funding to make up the difference to ensure continued investment and stimulus with the impact on local government from COVID-19?

The Hon. V.A. CHAPMAN: My adviser has just asked you to repeat that. I think the question was what confidence do I have in what money is going to be received in 2022, this financial year; is that the question?

Mr PICTON: Yes, so you are getting this year $1.7 million. Do you think you are going to continue to get that and, if not, then are you going to top up the difference, essentially, to make sure that local government will have the support, given the impacts of COVID-19?

The Hon. V.A. CHAPMAN: I am not certain but my understanding is that there are several pockets of money that come from the commonwealth to the grants commission in relation to distribution of funds to councils. Some of that has been supplementary and some of it has been part of the main grant that is received. As I said, there are certain models for distribution for what states get and then how that is distributed to respective councils.

So I am not sure yet what has been received. It may have already been received. Mr Swanson does not have it yet. I will take that on notice as to whether that has been received and how much it is, but I am assuming that is yet to be negotiated and yet to be announced by the commonwealth. Certainly in the last couple of years they have maintained contributions and, in fact, have been very generous in the contributions that have gone for the purposes of these fund distributions.

I have also been informed of the information that has been presented. My Chief of Staff has asked for the Crown Solicitor's Office in relation to the select committee material as to what his obligations are because I understand that he has received a letter from the select committee for production of material.

Mr PICTON: Supplementary to that question: is your chief of staff receiving ongoing legal assistance in relation to this matter or just that one question that he has asked?

The Hon. V.A. CHAPMAN: Not that I am aware, no.

Mr PICTON: In relation to page 35 under expenses in the first paragraph, of the increases and expenses noted in the report, will any of the $15.6 million in grants and subsidies go towards regional councils to address affordable housing shortages within their communities?

The Hon. V.A. CHAPMAN: I do not believe that that is what is there specifically for that purpose. Is it the penultimate paragraph that you are referring to? It is referring to 'increases in employee benefits' and 'supplies and services'.

Mr PICTON: 'Grants and subsidies of $15.6 million' is what we are talking about.

The CHAIR: It is the second to last paragraph on page 35.

Mr PICTON: It is the third line from the bottom.

The Hon. V.A. CHAPMAN: The third line from the bottom, where it talks about 'The increase is mainly due to increases in employee benefits expenses'?

Mr PICTON: So 'grants and subsidies of $15.6 million'.

The Hon. V.A. CHAPMAN: Yes, and 'depreciation and amortisation expense of $3.5 million'. That is all grants and subsidies.

Mr PICTON: Yes, so the question is: of that $15.6 million, is there anything going to regional councils to assist them in relation to affordable housing shortages?

The Hon. V.A. CHAPMAN: From looking at what was there before and what is now there, there has been an increase in money under the national legal assistance for community legal services. There has been a tiny reduction—it is only $795,000 down to $728,000—for policy and research. There has been an increase in money for crime prevention and CCTV, and there has been a reduction in money in 'other', whatever they are, but again, it is hundreds of thousands.

The new items that are there are for national legal assistance, Aboriginal legal services, $5.192 million; legal assistance funding for COVID-19, $4.546 million; Office of Local Government, $2.911 million; and Planning and Land Use Services, $1.615 million; and legal assistance funding, specifically for bushfire support, $875,000. So they are the new initiatives and the moneys that are allocated. They are identified on page 35, which relates to the notes of the Attorney-General's Department.

Mr PICTON: I refer to page 23, significant events and transactions, and dot point 2, which refers to the transfer of local government to the minister. I understand that during estimates, when you were asked a question regarding the state government's commitment to support the rollout of some 150 amendments during the local government review, you said that there would be at least $250,000 of support provided to the LGA. Can the minister confirm that this $250,000 has gone to the LGA, and how much of it is direct state government funding?

The Hon. V.A. CHAPMAN: I would have to take on notice as to what provision has been made. I know that there was a million dollars for the establishment of one of the frameworks and there are various projects and some items of money that were made specifically allocated for work that the LGA would need to take on for the purposes of bringing into effect some of those reforms.

I do not know if the $250,000 is correct but, if the member is suggesting that it is, I will make inquiries as to whether those moneys that we identified would be paid to them have been paid. I have certainly had no complaint from the LGA that they have not got the money that we have said that they are to have. I have regular meetings with them. In fact, I had one just on Friday—I think was the last time I had a meeting with the LGA; anyway, it was late last week—and I have regular meetings with them to discuss not only the reforms but a number of other matters, including most recently the examination of their community wastewater management systems program by the Auditor-General.

Mr PICTON: On page 35 in relation to expenses, the first paragraph, of the increases in expenses will there be any FTE responsible for the rollout of the local government information framework on the site's ongoing maintenance to support local government with the rollout of the new data collection portal?

The Hon. V.A. CHAPMAN: I think I have canvassed this in another forum. I think the member is referring to whether separate money is allocated in the establishment of the framework for councils to actually provide the data that is necessary to populate the new portal. From memory, that was at estimates, and I made it clear at that time that the data that was being sought to be provided to populate this electronic medium of access of information to anyone—let us say for the moment, ratepayers—is all information that it provides anyway in its annual reporting. It is not new information. It is a collation of information that councils provide and so there is not any extra cost for them to collate or prepare that data. It is the same data that that they are required to produce anyway. From memory, it is the same member who asked me those questions at estimates.

Mr PICTON: Are you confirming that the LGA will have to bear the costs in relation to the maintenance of the website?

The Hon. V.A. CHAPMAN: The provision of the data is the issue that was raised. In relation to the maintenance of the website, I can ask who is paying for the electronic costs or whatever in relation to that, but we have put a million dollars on the table, from memory, to set it up, and it will continue to be provided. I am getting some information direct from the CE, and she is the one who authorises everything, that the AGD maintains the website within its existing resources, so the answer to your question is no.

Ms MICHAELS: Can I take you to page 23, significant events, the third item. The report notes an asset transfer of $25.9 million and says it is mainly for the ePlanning system. Can you identify the cost of the ePlanning system up until it went live in full on 19 March 2021?

The Hon. V.A. CHAPMAN: I think the member was asking what the planning reform program build total cost was. If that was the question, the answer to that is $43.5 million and the total budget for the reform program was $43.6 million. I think that was provided at estimates, was it not? In any event, if it was not, it is there.

Ms MICHAELS: Can I ask if any of that $43.5 million was spent after 19 March 2021 in order to fix any errors or problems with the software or the system?

The Hon. V.A. CHAPMAN: We will check on that, but there have been about 180-odd amendments to the planning code for the whole ePlanning platform since 19 March this year when it went live. Those adjustments have been made, usually in response to matters that have been raised either internally by the department or other users of the whole new system.

I just want to place on record how appreciative I am of those who worked extremely hard to make sure that that has not only been effective in this new platform but that they have been very responsive in being able to accommodate any errors or glitches or improvements that needed to be done. Ms Anita Allen, who has been very active in this role, not only has led a team for the implementation of this Australia-first process but has been working very hard.

I meet regularly with all the stakeholders in this area, and from time to time they raise with me areas of importance to them. Universally, this has been a new model of delivery of this service which has been very well received.

Ms MICHAELS: On page 35 of the Auditor-General's Report, under the income section there is reference to an increase in income into the AGD from the transfer of planning and also local government. In relation to the Planning and Development Fund, which moved over to AGD, are you able to provide a breakdown of income collected into that fund per local council area in the last financial year?

The CHAIR: Member for Enfield, do you have a dot point perhaps on page 35?

Ms MICHAELS: The statement that says, 'fees and charges received $192.7 million'. There is a reference in here to—sorry, the first point.

The Hon. V.A. CHAPMAN: First dot point, 'appropriations, up $93.3 million'.

Ms MICHAELS: Including those 'received for the transfer of the planning and local government'.

The CHAIR: Yes, got that, thank you.

The Hon. V.A. CHAPMAN: The Planning and Development Fund is not in that, just to be clear. That has a different set of accounts. It is not in what you are referring to. I think your question in relation to the Planning and Development Fund was: what were the amounts in and what were the amounts out and what were they for? I do not have that information with me at the moment, I do not think, for that financial year. Bear with me, I will see if it is here, but if it is not I will see whether we can make that inquiry. No, I am advised that it is not in these records.

Ms MICHAELS: Can I take you to page 32 in relation to Consumer and Business Services, under the heading, 'No procedure to manage and reduce unclaimed bonds liability'. As at 31 March 2021, unclaimed bonds totalled $15 million, an increase of 16 per cent from the previous year. I understand there was a further increase of 17 per cent from the year before that. Can you advise what CBS is doing to ensure historical bonds are being returned to South Australian tenants?

The Hon. V.A. CHAPMAN: I will ask the commissioner to come forward if I may. In the event that I do not cover this comprehensively, I may need his extra information. This was the subject of an Advertiser article post the publication of the report in which there had been identified, by the Auditor-General, the unclaimed moneys—bonds, it seems, principally—from tenants.

As I understand it, the reasons for this are where landlords claim only a portion of the bond and the tenant is uncontactable and the remaining portion of the bond remains unclaimed; or tenants not providing current contact or banking details at the end of the tenancy and, in some cases, not cashing refund checks that have been processed and sent by CBS to the last known address; or neither the landlord nor the tenant claim the bond refund at the end of the tenancy. So, yes, there is an accumulation of funding, and the Auditor-General makes some comment in relation to that.

It is important to note that the Auditor found there was no system control within the bonds management system to prompt an independent review of the accuracy of the bank account details entered and other charges, but CBS is currently exploring options regarding the controls that can be implemented. This is expected to be completed by 31 December 2021.

If we go back to the actual refund arrangement, where the refund payments file had not been restricted the Auditor identified, firstly, that several users, including officers within and outside the bonds team with read and write capability, should not have access to the EFT bond refunds payment file. In relation to that, CBS said it had now implemented restrictions on access. So that has been dealt with.

In relation to the unclaimed bonds, the Auditor raised the need for the unclaimed bonds liability procedure to outline how CBS will manage and reduce that liability, noting the liability had grown from the $11 million, as has been referred to, to $15 million as of March 2021. The Auditor acknowledged, however, that CBS has a dedicated project officer engaged and a project underway to identify preventative measures and to determine the best method to address these historical amounts.

Audit recommended that CBS continue to actively reduce the unclaimed bonds liability and update the procedure to outline the steps CBS takes to manage and reduce this liability. So issues were raised specifically in relation to the unclaimed bonds, which you have referred to. The project undertaken by CBS to deal with this issue is as follows.

First, improving tenant identification: identification requirements for tenants will be implemented at the time of the bond lodgement to assist with facilitating refunds at the end of a tenancy. Secondly, reminder prompts will be implemented at key points of a tenancy. For example, tenants will receive an email 14 days after the bond has been lodged to encourage them to register online and help facilitate the refund of the bond at the end of the tenancy.

Additional emails will be sent to all tenants at 12-monthly intervals 30 days prior to the anniversary of the tenancy reminding them of their right to apply for a bond refund should their lease be coming to an end. Tenants will receive a further email should their bond be unclaimed to prompt a refund application. Thirdly, an online search portal will be made available. Fourth, outbound calls to former tenants regarding outstanding bonds will be instigated.

Fifth, refunding existing unclaimed bonds: contact information has been identified for around 10,000 claimants and approximately 25,000 unclaimed bonds currently held. In addition to contacting each of these claimants, it is intended to issue media releases and post articles on the CBS and SA government websites encouraging refund applications for unclaimed bonds. The expected completion of this work is proposed to be finalised by 31 December 2021.

This parliament this morning dealt in rapid time with a bill in relation to the unclaimed moneys act. This is an issue that is not uncommon. People leave money in bank accounts, they leave money in tenancy bonds and superannuation, and we have processes to try to manage that, find them, give it back to them, alert them to the fact that it is there and, if all else fails, processes are in place where it ultimately essentially vests back with the Crown.

What the Auditor identified here is to say that the CBS has a responsibility obviously to properly manage this money. They noticed an accumulation of funds in this tenancy bonds account and they have been asking the CBS to try to make sure that it does everything that it can to get that money back to the people who actually still own it. That is in process. As I understand it, there has been no further request from the Auditor-General. I am getting a shaking of the head from Commissioner Soulio, so I am accepting that process he has outlined is acceptable to the Auditor-General.

Ms MICHAELS: In relation to that list you just provided with respect to what CBS is doing to improve the situation, which of those items have actually been implemented as at today's date and which are to be implemented still?

The Hon. V.A. CHAPMAN: We are now at 26 October, and those that have actually been implemented already are improving tenant identification at the time of bond lodgement to assist with facilitating refunds at the end of the tenancy. This is a new system and that has been implemented.

Secondly, reminder prompts, it says, will be implemented at key points of the tenancy, and I outlined what they were. It is in place. It is yet to be activated by the person when it comes up to the 30 days before, etc. That is in place. The third thing that is already being implemented is the online register, which is available on the CBS website where tenants can check in if they are owed money from a previous bond and which will be published more prominently. I have not been on the website to check that, but Mr Soulio says that he has done it and I am satisfied with that.

Ms MICHAELS: Has the commissioner asked for additional funding to finish the implementation of these programs?

The Hon. V.A. CHAPMAN: I am advised that there have not been any requests submitted at this stage. Again, the chief executive is the person who has to find the money for these things, but the commissioner tells me that he expects there will be some costs, and obviously if they are over the threshold that is required to be absorbed in any agency or if they are to be a separate funding arrangement they then become the subject of a budget bid to submit that.

Of course, sometimes there are swings and merry-go-rounds in relation to the administration costs of any particular unit. From experience, I have seen Mr Soulio even save money in some areas, so we will see how he goes by the end of the year as to whether he wants more money, and then, secondly, whether he actually needs it.

The Hon. A. KOUTSANTONIS: I refer the Attorney-General to page 62 of Report 12 and Financial statistics. Under expenses, there is $17.8 million in expenses.

The Hon. V.A. CHAPMAN: Page 62, entitled Attorney-General's Department, Financial statistics.

The Hon. A. KOUTSANTONIS: Of the $17.8 million, 22.5 per cent is detailed as other expenses, excluding employee costs. Of that 22.5 per cent, how much of that $17.8 million was allocated in the audit period for legal indemnities?

The Hon. V.A. CHAPMAN: We are not actually referring to the Attorney-General's Department. This is actually the Auditor-General's—

The Hon. A. KOUTSANTONIS: My mistake. Yes, my mistake.

The Hon. V.A. CHAPMAN: You will have to ask the Treasurer that, I think.

The Hon. A. KOUTSANTONIS: I will get back to you.

The Hon. V.A. CHAPMAN: I look after a lot of things but not the Auditor-General's Department.

The Hon. A. KOUTSANTONIS: Then I refer you to page 34, employee benefits, supplies and services. During the audit period last year, your supplies and services were $61 million. This year it is $139 million. Of the total expenses of $358 million for the audit period, what amount was for legal indemnities?

The Hon. V.A. CHAPMAN: I do not have the breakdown for any of that. There is an explanation of the variation of expenses on page 35 as to why there had been increases significantly, of course, because of the transfer of the planning and development and local government function. But in relation to supplies and services, I think the question was: how much was spent on legal indemnity? Are these of employees or other parties?

The Hon. A. KOUTSANTONIS: Anyone who sought legal indemnity through the Crown Solicitor's legal bulletin.

The Hon. V.A. CHAPMAN: You mean reimbursement of legal expenses?

The Hon. A. KOUTSANTONIS: Yes.

The Hon. V.A. CHAPMAN: I see. We may have that anyway. I do not think we need to digest it out of page 34. I have been advised:

1. The CSO made inquiries to determine the availability of a suitable qualified investigator with the requisite experience. The investigator was engaged by the CSO on instructions. This resource has not been funded by the CSO;

2. No indemnities have been issued to Liberal MPs or former Liberal MPs for any legal proceedings that are currently underway; and

3. A total of six MPs have received a reimbursement of legal costs since 1 July 2018.

That information has been provided to you.

The Hon. A. KOUTSANTONIS: What was the total amount of those reimbursements for the six Liberal MPs?

The Hon. V.A. CHAPMAN: I think I just read it, didn't I?

The Hon. A. KOUTSANTONIS: No.

The Hon. V.A. CHAPMAN: No, we do not have that.

The Hon. A. KOUTSANTONIS: Could I ask you to take that on notice.

The Hon. V.A. CHAPMAN: From 2018?

The Hon. A. KOUTSANTONIS: Yes.

The Hon. V.A. CHAPMAN: We will take it on notice and what we can provide we will make available.

The Hon. A. KOUTSANTONIS: Thank you.

The Hon. V.A. CHAPMAN: Was there anything from your side?

The Hon. A. KOUTSANTONIS: I am sure there might have been. I have no problem with MPs claiming a legal indemnity for their role of being ministers of the Crown. That is entirely appropriate.

The Hon. V.A. CHAPMAN: Just to be clear on the question, because it is legal indemnities per se, as the member would be well aware, there are provisions made, subject to certain thresholds; that is, the Crown Solicitor has to approve that and, of course, meet the thresholds before it ultimately comes for sanction to pay legal fees, and that applies not just to MPs, ministers and staff but I think to boards of directors under Legal Bulletin 5. There may be another category. It is really MPs, ministers, staff and board directors. I cannot think of any other category. I only read it again recently. In any event, I will make an inquiry. You are wanting the total indemnities—

The Hon. A. KOUTSANTONIS: Yes, please.

The Hon. V.A. CHAPMAN: And for that financial year?

The Hon. A. KOUTSANTONIS: While the Attorney-General is being helpful, could she also please take on notice, unless she has the answer for me, how many applications for indemnities were sought by Liberal MPs but refused by the Crown Solicitor under the audit period and the value of those indemnities that were sought?

The Hon. V.A. CHAPMAN: I am not sure that I get that information. I think it comes to me as Attorney-General if something gets to the threshold. I am not sure that I even get access to that information. I will make an inquiry, as I have before in the past and made information available based on the breakdown of MPs, obviously including ministers. We can do it separately for staff and boards of directors.

The Hon. A. KOUTSANTONIS: Has the AGD claimed legal professional privilege over any documents sought by ICAC during the audit period?

The Hon. V.A. CHAPMAN: I simply cannot answer that. The member knows full well that I cannot answer that. In any event, it has nothing to do with the Auditor-General's Report.

The Hon. A. KOUTSANTONIS: I disagree. The reason I disagree is that the financial report also covers the cost of handling documents. Those documents are stored. They are stored either on a paper basis or they are stored in the cloud or electronically and they are assigned a cost. If an external agency is seeking access to those documents, those documents have to be sought. An opinion is then gleaned about whether or not they can be given. I would like the Attorney-General to please answer the question as I have asked it. I reference page 34. Has the department exercised legal professional privilege over documents sought by ICAC? It is a very simple question. It is a yes or no answer.

The CHAIR: And, again, member for West Torrens, the Attorney can answer this as she wishes, but my view of your question is that you have made a big assumption. We cannot know what you are suggesting.

The Hon. V.A. CHAPMAN: I have nothing further to add.

The Hon. A. KOUTSANTONIS: So the Attorney-General is refusing to answer the question about whether the department has exercised legal professional privilege over documents sought by an ICAC investigation. I think that is a matter that should be revealed to this committee, to this examination, because those documents are not the property of the Attorney-General: they are the property of the state, and this is the place where we ask questions about them. I ask her to take that on notice and come back to the house with a considered answer. We are going to find out one way or another.

The CHAIR: Well, that is true, member for West Torrens, but I suspect that any minister who is asked about the commission would be circumspect in their answer—surely.

The Hon. A. KOUTSANTONIS: They may want to be read the standing orders, sir.

The CHAIR: Yes, you are going to refer it?

The Hon. A. KOUTSANTONIS: If you look at the standing orders, the privileges of this parliament are set out, and no-one can question our right to free speech in this place at all.

The CHAIR: Member for West Torrens, I am not questioning our right to free speech or your right to ask that question. What I am suggesting is that the Attorney, and any minister in fact, understandably would be circumspect in the way they answer.

The Hon. A. KOUTSANTONIS: Sure. What has been the total cost—again, page 34 of expenses—of CSO lawyers dealing with ICAC inquiries in relation to KIPT?

The Hon. V.A. CHAPMAN: I do not know the answer to that question. If there is something in it that we can provide, I can have a look at that. All of this committee that you are referring to conducting the inquiry has been recently formed. The KIPT case as such—that is, an application or declaration of it being a major development—harks back to 2017 and way before my time in relation to that application.

If it relates to matters that are extant in relation to an inquiry of the select committee, then that is a matter which is of course in this financial year, not in the Auditor-General's Department. If it is available or even if I know about it, in any event, if it is information that can be provided that is appropriate and I am allowed to provide it, we will have a look at it.

The Hon. A. KOUTSANTONIS: My question is about the audit period. My question is not about this financial year.

The CHAIR: The period 2020-21?

The Hon. A. KOUTSANTONIS: That is right. As the Attorney-General says, she is quite right, this process began in 2017, so if there have been CSO lawyers engaged to deal with the inquiries over the entire matter, whether they be ICAC or otherwise, I would like the Attorney-General to go away and get an answer for us about the total cost of CSO's involvement in dealing with the matter of KIPT. It is very simple.

The Hon. V.A. CHAPMAN: Can I just advise the committee that from time to time I have asked for an indication of what it costs extra for all the agencies to deal with the COVID matters—preparation of directions, advice to government, all those sorts of things. Estimates have been looked at for a big exercise like that. I do not know whether there is even a recording of advice that is given on individual development applications, including major developments. I will make that inquiry.

If it is not, that may be a major body of work that would need to be done because, as the member would be quite well aware, there are a number of major projects at any time. Obviously, there are a number of other projects in planning that from time to time require advice, by either me or other personnel in the department who have to make the decisions on a number of these matters and give advice on them.

As the member well knows, the Crown Solicitor's Office are really the government's lawyers. They advise all government departments. They have capacity to say, 'We don't have the expertise' or 'We need to have somebody specialist to come in.' There are certain processes to go through where private solicitors are retained for that purpose, but essentially I am not even aware whether that is something that is recorded by CSO or how difficult that might be to retrieve, but in any event we will have a look at it.

The CHAIR: Before I call the member for West Torrens, I might ask the member for Newland to step outside. There is a particularly audible conversation going on just behind us. If you could ask them to desist or move on, please.

Mr Picton: Send the Serjeant-at-Arms.

The CHAIR: It has not come to that yet, member for Kaurna.

The Hon. A. KOUTSANTONIS: I would be stunned if the CSO did not keep detailed costs with the work that they do because I would imagine that they charge each department for the work and advice that they provide, so I assume that they do keep detailed records. So, again, for the audit period, could you please give us a breakdown of the total costs of CSO's involvement for all matters involving Kangaroo Island Plantation Timbers? It is a very simple question: can you?

The Hon. V.A. CHAPMAN: As I said, I do not know the answer to that. I think I have explained why. Notwithstanding that the member for West Torrens might be stunned at something, that may be his view, but I am indicating what the position is.

The Hon. A. KOUTSANTONIS: During the audit period for which we are examining today, has the Attorney-General's Department received any correspondence from ICAC that they are conducting an inquiry into the Kangaroo Island Plantation Timbers planning assessment?

The Hon. V.A. CHAPMAN: I simply cannot answer that question. I would need to take advice; probably I would need to get consent from the ICAC commissioner.

The Hon. A. KOUTSANTONIS: Speaking in parliament?

The Hon. V.A. CHAPMAN: I know the member takes the view that he thinks he can say anything in parliament about anything or anyone. That might be your view. I am a member of parliament as well, but I am also a minister of the Crown and I have certain areas of responsibility and as South Australians we are all subject to provisions of the law, so I am simply not going to be drawn into that sort of allegation—hypothetical at this point—in answering that question.

The Hon. A. KOUTSANTONIS: So to be clear, the Attorney-General is telling the house that she has no knowledge of any ICAC inquiry relating to Kangaroo Island Plantation Timbers?

The CHAIR: No, she did not say that.

The Hon. A. KOUTSANTONIS: It sounded like it, sir.

The CHAIR: She did not say that.

The Hon. A. KOUTSANTONIS: Maybe she can tell us.

The CHAIR: I will take you back to the previous question and that was in relation to correspondence.

The Hon. A. KOUTSANTONIS: No, sir, I will leave that.

The CHAIR: I beg your pardon?

The Hon. A. KOUTSANTONIS: I asked if she received any correspondence and she will not answer.

The CHAIR: No, that is right. She is able to answer in whichever way she sees fit.

Ms MICHAELS: Can I take the Attorney to page 31—and you touched on this earlier, Attorney—in terms of the bond refunds EFT payments file not being restricted. Is the Attorney concerned that the Auditor-General states in his report that this has been a problem for several years and nothing has been done about it?

The Hon. V.A. CHAPMAN: I have been in this parliament nearly 20 years and I have seen lots of things that, over a number of years, the Auditor-General has raised. I have been through the recommendations that have been made by the Auditor-General and his staff with agencies, including CBS, and sought responses, updates, etc. Some of these, of course, are already published in the report.

Remember that a lot of these things are alerting to a practice or procedure or failure to do something that could result in some very significant problems—fraud, stealing of money, etc.—especially where there are funds involved, so of course they are serious and sometimes they are identified as having occurred over a number of years.

I use the example of the inquiry of the LGA's dealing with the Community Wastewater Management Systems program. It has its own report. The LGA have had a management plan in operation since December 2017. It has been reviewed over the last 3½ years by the Auditor-General, and he has made some statements about it. I have spoken to the LGA about it, just as an example, and I am satisfied that they are doing as the Auditor-General says they must do, that is, obviously conduct that review into next year. In fact, just recently I was advised that the terms of reference for their process to attend to that are in place.

So, yes, no matter which agency is the subject of comment, from my point of view I need to come to this committee and be able to answer these questions, but I also need to be satisfied that there has been a follow-up at least consistent with the Auditor-General's recommendations or some explanation if they have not.

I am pleased to see that in relation to this year's report that, while there have been some significant events and transactions recorded, and some audit findings, none of them from my assessment have been reflective of a practice that has not been remedied or is on the way to being remedied consistent with those recommendations. Am I worried about it? No. I deal with Mr Soulio quite often, and I am satisfied that he runs a pretty good ship.

Ms MICHAELS: So you are comfortable that the processes and procedures you are talking about will now be implemented even though they were recommended to be implemented by the Auditor-General year after year in the last few years?

The Hon. V.A. CHAPMAN: At the bottom of that page, or the last paragraph of the section on residential tenancies funds, it says:

CBS advised us that it will continue to perform the end-of-day banking process and retain evidence of this review. A review of current access to the shared folder where the EFT payments file is saved has been completed and staff access has been limited to read only where appropriate. Procedures have been updated and staff have been educated.

That is in the Auditor-General's Report, so he is obviously satisfied that it has happened.

Ms MICHAELS: Another similar issue is raised by the Auditor-General on page 30. I refer to the first dot point in the middle of that page in terms of the Promadis to general ledger reconciliation. It says at the end of that, 'A similar issue has been raised in previous years.' Once again, when issues have been raised year after year and nothing has been done about it does the Attorney-General have any concerns about the procedures and policies in place at Consumer and Business Services?

The Hon. V.A. CHAPMAN: The CBS response on the next page says this:

CBS advised us that it:

has updated its procedure to specify the time frame for completing and reviewing the Promadis to general ledger reconciliation and distributed it to relevant staff. The reconciliation will be performed and reviewed within 15 working days of the end of each month

will document procedures for the monthly review of the Promadis user access

has investigated why the online payments system charged a fee for each licence variation and implemented changes to correct the system

will ensure LOGIC fees are updated and checked using a spreadsheet documenting changes to descriptors.

Again, that is what the Auditor-General has advised. He has not raised any further point to say, 'I have raised this before and they didn't do it,' or, 'I am not satisfied that they are doing it properly,' or whatever. I have sat in the position the member for Enfield sits in and asked questions and been puzzled as to why something might be raised in repeat years of the predecessor standing in this spot, who was the member's predecessor.

Again, what was brought to my attention was that this is an assessment that was being done by the Auditor-General. I assure the committee that, for the areas of responsibility that I am involved in, I maintain an interest in what the Auditor-General says that he has identified as alerts and/or concerns—but most of these are alerts—and that he has indicated what has been offered to be done to remedy any potential problems arising out of a lack of process or application of a process, and he has not then identified that this is something so serious that it would require some other investigation.

So we can only really rely in the parliament here on what the Auditor-General tells us in these reports. He does not come along to these committees to be asked or quizzed about whether he thinks a certain standard has been reached. But he, of course, is the person who can and does report to this parliament. So he can come in here and say, 'This is not good enough,' if he wants to and he has not.

Ms MICHAELS: Following from that then, on page 31 there is reference to customer bank account details not being independently reviewed in the Bonds Management System. How would we know if refunds were deposited into incorrect bank accounts and what the extent of that has been over the last financial year?

The Hon. V.A. CHAPMAN: I thought I had referred to some of that, but I will repeat it if you wish. I will answer the latter question first: how would they know? That is why they are trying to contact these people, to let them know. But I will just repeat what I said earlier. Under the independent review of customer bank details, audit found there was no system control with the Bonds Management System (BMS) to prompt an independent review of the accuracy of bank account details entered and that changes to bank account details are valid and supported by an approved form. CBS is currently exploring the options regarding controls that can be implemented and that is expected to be completed by 31 December 2021.

Mr PICTON: I refer to Part A of the report at page 19, referring projects to the Public Works Committee. This section deals with different interpretations of section 16A of the Parliamentary Committees Act 1991. The Auditor-General reports that there are two interpretations put forward by SA Water in terms of what needs to be referred to the Public Works Committee, firstly:

That the prohibition in section 16A only applies where the acquisition and installation of fixtures, plant or equipment occur together, meaning agencies are free to procure the goods and services necessary for a project without waiting for the Public Works Committee to complete its inquiries.

Secondly:

That Parliament intended for all components that make up a public work to be subject to Public Works Committee scrutiny, meaning that agencies are prohibited from committing any money on a public work until the Committee has completed its inquiries and submitted its final report.

Clearly, there are two different interpretations. The final paragraphs of this section say:

I brought this matter to the attention of the Attorney‐General in September 2020. Clarity is important so that agencies can implement appropriate controls to ensure they comply with the law.

In May 2021 the Attorney‐General advised me that she had consulted with the Public Works Committee and DIT on this matter, and that she had deferred consideration of amending section 16A of the PC Act until next year.

My question to the Attorney-General: why did she take eight months to reply to the Auditor-General, and why has the Attorney indicated that this issue will not be addressed before the election when this matter was raised 18 months before the election?

The Hon. V.A. CHAPMAN: I am happy to have a look at that. This was a reference of a matter—

An honourable member interjecting:

The Hon. V.A. CHAPMAN: Well, you want to answer your own question. But this is a reference of a matter of an SA Water project. All I can say is that, as would be the usual process, I get advice in relation to whether there needed to be legislative reform or what was the appropriate action to be taken in relation to that advice. That letter has been forwarded then in May 2021 once I had obtained that advice. That sets out what I have advised them, advised them back to the Auditor-General.

Again, he does not pick it up to say, 'I'm not satisfied with that,' or, 'I think that's wrong,' or, 'I think she should do something else,' or, 'I'm going to write to her again.' He notes that in his report, so I do not know that I can add anything further. I will check what happened between September 2020 and May 2021, but I expect it will be that the matter has been forwarded to our department, I have obtained advice that may or may not have required legal advice in the Crown Solicitor's Office, a minute would normally come to me and then I have responded, and that is what the Auditor-General has noted.

Mr PICTON: What interpretation is the government using in relation to that section of the act?

The Hon. V.A. CHAPMAN: In what way? Do you want my legal advice?

Mr PICTON: It sets out very clearly that there are two different interpretations that are being used as to what needs to be referred to public works and which interpretation is the government using on what should be referred and what should not.

The Hon. V.A. CHAPMAN: Again, I will have to reread the whole of this section to ascertain how it is being operationally implemented, if there is any diversity between any of the other departments. This particular issue relates to public works for referral of a matter from SA Water, but in any event I think the member is right: it should probably relate to all infrastructure projects over $4 million. I will just ascertain what public works are doing, and if that can be useful to the committee I will get it back to you.

The CHAIR: The time for the examination of the Attorney-General in relation to the Auditor-General's Report has completed. We come now to the examination of the Minister for Energy and Mining. I remind members, including the minister, that this is a normal session of the committee and that any questions need to be asked and answered by members on their feet. Also, questions need to directly reference the Auditor-General's Report.

The Hon. A. KOUTSANTONIS: I refer the minister to page 103, Part C. Again, this is something from last year, I understand. It states, 'DEM's processes were not always effective in ensuring the prompt review of key payroll reports.' Can the minister expand on what the Auditor-General was talking about? I understand that this has been a finding by the Auditor-General for two years in a row. I am not implying that there is any wrongdoing, but I assume that there is some problem that the department cannot get on top of.

The Hon. D.C. VAN HOLST PELLEKAAN: Consistent with last financial year, the Auditor-General has not issued an agency-specific controls opinion in 2021; instead, departmental controls were tested by the Auditor-General informing an overall controls opinion for government as outlined in Part B of this report. Financial report opinion, controls opinion findings and any other audit findings for the Department for Energy and Mining are outlined in Part C of the report. The report program for the Department for Energy and Mining covered major financial systems in a wide range of specific areas. I am pleased to report there were no significant controls or opinion findings in the 2020-21 report for the department.

The Auditor-General identified that the department's 'processes were not always effective in ensuring the prompt review of key payroll reports'. I am advised that the department has implemented additional measures for monitoring key payroll information which addresses the audit finding. With regard to the Department for Energy and Mining financial report, the Auditor-General has issued an unmodified opinion.

For the member's benefit, I can add that in our recent discussions essentially the summary view from myself and DEM is that there was an issue raised last time around. This time it is recognised that things have improved significantly, but we recognise there is still work to do in this area and the chief executive has actually taken it upon himself to personally steer this area. However, I stress again that there were no adverse findings whatsoever.

The Hon. A. KOUTSANTONIS: I did not ask if there were any adverse findings. I just asked if the minister could explain what the reason is for 'not always effective in ensuring the prompt review of key payroll reports'. What is the Auditor-General actually talking about?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that the Auditor-General pointed out the fact that on occasions there were delays in the assessment of bona fides reports associated with payroll. Nothing wrong was actually discovered, but there were some delays with regard to assessing those bona fides reports.

The Hon. A. KOUTSANTONIS: Again, I do not want to labour on this because we have only 27 minutes left. I accept that this is probably a minor issue and I don't think there are any systemic problems in the department, but I would just like to know, in terms of the payroll reports, are you talking about annual leave entitlements, are you talking about superannuation? What is the delay in the reporting? What are you delaying reporting on? That is the issue.

The Hon. D.C. VAN HOLST PELLEKAAN: DEM paid a total of $31 million in salaries and wages to around 322 staff in the 2020-21 year. DEM's processes were not always effective in ensuring the prompt review of key payroll reports—I stress again, the review of the reports. DEM's main control to ensure payments to employees are correct is the review of the bona fides certificates. A report from June 2021 showed there were 48 outstanding bona fides and leave reports with 33 overdue by more than two months. The longest outstanding was overdue by five months.

The ineffective review of key payroll information increases the risk of incorrect payroll payments being processed because errors are not identified or rectified promptly. DEM responded that since May 2020 additional measures for monitoring key payroll information had been implemented. These included a monthly audit of outstanding bona fides certificates, manager education and support, and regular performance reporting, with reviewing key payroll reports as one of the metrics.

DEM also noted it would continue to reinforce the importance of this process. DEM was satisfied that despite the instances of noncompliance, compensating controls currently in place to monitor salary and wages variances against budget mitigate the risk of any material incorrect payroll payments being processed. I am advised that the key area where this came up was leave entitlements.

The Hon. A. KOUTSANTONIS: I refer to page 102 of Part C, expenses, employee benefits making up 22 per cent of $175 million. Of the 22 per cent of that $175 million, what amount is for retention allowances?

The Hon. D.C. VAN HOLST PELLEKAAN: I do not have the information here. I am happy to take that on notice and provide the information to you, but my adviser is fairly confident that we actually provided that information during estimates as well.

The Hon. A. KOUTSANTONIS: You did. I would like to reconcile the two amounts and make sure they are identical, so thank you very much for providing those. I like to check them, so this is a different audit.

If I could now take you to page 105 of Part C. At the bottom of the page we are talking about EnergyConnect and you receiving $52.7 million in reimbursements on Project EnergyConnect. Could you tell me: was that money received by the agency and then sent to consolidated revenue or was it kept as a reconciliation against the grant? How was that money treated when DEM received it?

The Hon. D.C. VAN HOLST PELLEKAAN: You will remember, member for West Torrens, many times hearing about the government underwriting early works for the interconnector so that we could keep the project on track timewise. We took a considered risk to provide some taxpayers' money in advance so that the work could be started in advance of the AER actually giving the final approval.

Of course, those agreements with TransGrid and ElectraNet were that once that approval was given, they would repay the money because it would be part of the total package. The $52.7 million represents money that came from TransGrid and ElectraNet back to DEM. If I just take a step earlier: DTF to DEM to the companies—when all conditions were met, the companies paid DEM and DEM provided the money back to DTF for consolidated revenue.

The Hon. A. KOUTSANTONIS: Were any grants written off to TransGrid or ElectraNet?

The Hon. D.C. VAN HOLST PELLEKAAN: No. They did not actually get any grants. They got money essentially lent to them so that they could get started on the work, to be repaid when all the conditions of the project going ahead were met. They were all met and so all the money was repaid.

The Hon. A. KOUTSANTONIS: The reason why I used the word 'grants' is that that is what the Auditor-General calls them. He says on page 106, 'Grants were paid for Project EnergyConnect.' My guess is that they were treated as grants and when those monies were paid back they were treated as revenue for the government in the operating balance; is that correct?

The Hon. D.C. VAN HOLST PELLEKAAN: Yes. They were treated as recoveries, which I am advised technically fall in the revenues category.

The Hon. A. KOUTSANTONIS: With the Home Battery Scheme, on the bottom of page 106 and onto page 107, if my maths is right you have installed, to the end of the audit period, 13,995 batteries. What is the total number of batteries that have been installed in people's homes since the beginning of the project?

The Hon. D.C. VAN HOLST PELLEKAAN: As at 20 October 2021, more than 15,300 installations had been completed and a further 1,500 houses are awaiting their installation. These installed batteries are supplying 180 megawatt hours of storage to the grid, with a further 20 megawatt hours awaiting installation. South Australia has now more than 27,000 home batteries installed or committed, with almost 17,000 supported by this scheme, cementing our position as a leader both nationally and internationally for the adoption of residential storage.

I want to add to that for the member that we do have a target, which we will meet, which is 40,000 batteries in total through this scheme. What we have found, though, is that while we estimated upfront that the average size of the batteries that would be rolled out through this scheme would be about seven kilowatts, the actual batteries actually taken up by this scheme have been close to 11½ kilowatts. While we will still deliver on the number, the 40,000, we are rolling out a total aggregated storage capacity of these batteries actually surpassing our expectations and that is what benefits the grid.

The Hon. A. KOUTSANTONIS: Of the $100 million government subsidies on offer, how much is unexpended as at the end of the audit period?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that we do not have that here with us. We will take that on notice and provide it to you.

The Hon. A. KOUTSANTONIS: While you are taking questions on notice, can you give me a profile of the forward estimates of what you expect that to be expended on, of the $100 million that is remaining? I will cross to forward estimates: how much do you estimate you will need to spend each year until you reach your target?

The Hon. D.C. VAN HOLST PELLEKAAN: My answer is that I will consider that request.

The CHAIR: There you have it, member for West Torrens.

The Hon. A. KOUTSANTONIS: There you have it, sir. Beware the wrath of a patient man. Can I ask why? I do not understand what the problem would be about letting us know. You have given me the numbers for periods outside the audit period already. Why would you not give me the breakdown across the forward estimates?

The Hon. D.C. VAN HOLST PELLEKAAN: I did not say I would not. You describe yourself as a patient man—

The Hon. A. KOUTSANTONIS: No, you.

The CHAIR: And I am not.

The Hon. D.C. VAN HOLST PELLEKAAN: I describe myself as a cautious man. If it is appropriate to provide that information to you then we certainly will.

The CHAIR: And, of course, the question was about the forward estimates rather than the audit period.

The Hon. A. KOUTSANTONIS: That is right, sir. What is the time line for the completion of the program?

The Hon. D.C. VAN HOLST PELLEKAAN: I am advised that the best estimate is 2023-24, but we will come back with a confirmed answer for that.

The Hon. A. KOUTSANTONIS: What was the original proposed timeline for the project to be completed by?

The Hon. D.C. VAN HOLST PELLEKAAN: By 2022-23.

The Hon. A. KOUTSANTONIS: So it has blown out by a year? There has been a year's delay?

The Hon. D.C. VAN HOLST PELLEKAAN: Yes.

The Hon. A. KOUTSANTONIS: Can the minister explain why.

The Hon. D.C. VAN HOLST PELLEKAAN: Yes, happily. What we do with this scheme is, of course, subsidise the uptake of the batteries. You need to do that as Liberal, Labor, state, federal and territory governments have done for a long time, put taxpayers' money in to subsidise the private sector's purchase of certain pieces of equipment. You do that for quite a few reasons, understanding it is taxpayers' money for private purchases and that only a small section of the taxpaying community actually gets to directly benefit from that subsidy.

You do it when commercial means would not quite make it work. It used to happen with solar. Solar pays for itself now. Batteries do not quite pay for themselves. You do it for quite a few reasons, most obviously to help that household that has the capacity to invest in solar and invest in the battery with a subsidised price—and good luck to those households—and that is a terrific thing. You also do it for other reasons.

You do it because you want to get the batteries moving so that, as is often the case with new technology, the cost of that technology will come down. We very deliberately skewed our subsidies early on in the program to deliberately more than the average subsidy that we would be able to offer throughout the program. We started off with a maximum subsidy of $6,000 per unit. We knew at the time the budget was not there for $6,000 per unit, but we did that very deliberately so that we could get the cost of the batteries down.

The maximum subsidy now—or very shortly, if it has not quite ticked over—is $2,000. The subsidy three years ago was max $6,000; now, max $2,000. One of the several things we have tried to achieve through this program is that the cost of batteries has fallen by $4,700 over that period. The household that purchased the battery with a $6,000 subsidy versus the household that purchased it with a $2,000 subsidy is still $700 better off now with a $2,000 subsidy than it was with a $6,000 subsidy.

As I mentioned earlier, the aggregated storage of all these batteries is also very important While we are pleased for each household to get the benefits, it is the aggregated storage of the batteries that really helps the grid. Coming back to my comments about all other taxpayers being vital, all other taxpayers are putting the money in, all other taxpayers need to get a result back. Right now, there are about 27,000 batteries and not too far down the track there will be 40,000 to 50,000.

When these batteries are aggregated and rooftop solar is going into the batteries in the middle of the day and the afternoon instead of into the grid, we are helping to address the risk of negative demand. When, in the evening, households are taking their electricity out of the batteries instead of out of the grid, then they are helping take the peak—

The Hon. A. KOUTSANTONIS: Point of order, sir. I do not mean to interrupt the minister's manifesto, but could you please bring him back to the substance of the question, which was: why has the rollout of the batteries taken a year longer than the government legislated?

The CHAIR: As the member from West Torrens well knows, the member is renowned for his fulsome answers, and he said that he will happily answer the question, which he is doing.

The Hon. D.C. VAN HOLST PELLEKAAN: Absolutely, and it is directly related to what I am talking about. From an all-of-taxpayer perspective, it is the aggregated total of these batteries that counts. When we found that we were getting 11-kilowatt batteries instead of seven-kilowatt batteries taken up and we were heading very quickly towards our total aggregated capacity of storage of these batteries, it would have been very tempting to say, 'Right, we said we were going to do 40,000 at seven kilowatts. Well, actually, we are doing however many thousand at 11 kilowatts. Instead, we have achieved what we wanted to.' But we decided that we would do both.

We decided that we will still stick with our 40,000 household battery unit target. So, while on one measurement we are overachieving, we thought we would keep overachieving and let's still do 40,000. So, instead of delivering 40,000 batteries at seven kilowatts, we will deliver 40,000 batteries at 11 kilowatts, and that has taken just a little bit longer than 40,000 at seven kilowatts.

The Hon. A. KOUTSANTONIS: If I can take the minister to page 109 of Part C of the Agency Audit Reports, emergency generators, the Auditor-General tells us that $9 million was expended by DEM in the operation or lease of these generators or costs incurred. What were those costs and when were they incurred?

The Hon. D.C. VAN HOLST PELLEKAAN: The member will know, as I do, the history of these generators and would be familiar with the operating costs and SAPN's involvement in that. We certainly honoured the commitments that we found ourselves with at that point in time.

The generators were then transferred to a generator leasing corporation company, essentially, which the Treasurer manages. There are costs that go with that. The $9 million you mentioned was a cost to DEM that has already been repaid to DEM, so from a DEM perspective there is a zero net cost, but there was a time when DEM incurred some of those costs before the transfer into, essentially, that leasing corporation and then leased into private hands.

The Hon. A. KOUTSANTONIS: So the cost to the department was a paper cost, not a maintenance, repair or operational cost?

The Hon. D.C. VAN HOLST PELLEKAAN: It was a real cost incurred by DEM, but repaid to DEM. It was money that was paid for actual costs associated with the operation of the generators, but nil cost to DEM at the end because it was repaid by DTF.

The Hon. A. KOUTSANTONIS: We are getting lost here in translation. For what purpose was the expense incurred?

The Hon. D.C. VAN HOLST PELLEKAAN: The South Australian government took ownership of the temporary generators on 21 December 2018, with the transfer of $226.8 million to APR Energy. The government completed a lease by tender process, with two agreements to lease contracts executed by the Treasurer on 28 August 2019. The leasing arrangements ensure that the generators will remain in South Australia and will be available to provide services in times of energy shortfall. This strategy seeks to drive the maximum benefit for South Australians from the future ownership of the generators.

I am advised that, for administrative purposes, during 2020-21 the department continued to incur costs associated with the operation of the generators totalling $9 million. These costs are reported in supplies and services (note 4.2 of the audited financial statements) as emergency generator and storage expenditure and offsetting recoverable has been recorded as revenue in note 2.9 of the statements.

I do not have any more information with me about specifically what they were used for, but I am happy to provide that information. Essentially, they were the same costs that you would be familiar with because I believe they are the same costs we were incurring, which the previous government entered into agreements for. If there is any other information that is useful, I am happy to get it for you.

The Hon. A. KOUTSANTONIS: I find this perplexing. The government came into office and executed its policy to lease the generators on the basis that they stay in South Australia. The minister told the house in 2019 that they were leased. The audit period is 1 July 2020 to 30 June 2021. In that period, while the generators are in the command and control of someone else, we incurred an expense of $9 million. Yes, we will be reimbursed for them. All I am asking is: what was the expense? Was it diesel? Was it gas? Were they turned on for a system security event? What was the reason? Can you please just tell us?

The Hon. D.C. VAN HOLST PELLEKAAN: The way the member has just described it is not accurate. Certainly, the costs were incurred, but it is not a matter of saying the generators were leased to private companies and the government kept incurring costs. There are timings that are tied up with this. I have already offered to get more detailed information for you with regard to that.

For example, both sets of generators were not leased at exactly the same time. They were not leased with the same sorts of conditions. While the government was responsible for them, they are the same style of operating costs that the previous government entered into. There is nothing saying that after they were leased out and somebody else was in charge of them the government incurred costs. It has nothing to do with that whatsoever, and I am very happy to get more detailed information for the member.

The Hon. A. KOUTSANTONIS: Did the generators dispatch into the NEM during the audit period?

The Hon. D.C. VAN HOLST PELLEKAAN: I do not believe so. The generators were used once in January for emergency backup, as we always said that we would. It was two or three years ago. Let me just check that for you.

The Hon. A. Koutsantonis: I am asking about the audit period.

The Hon. D.C. VAN HOLST PELLEKAAN: Yes, I realise. So that key occurrence, which we are all familiar with, was outside the audit period. With regard to did they dispatch into the NEM, well, they do have to run just for maintenance, just for keeping everything fluid, mobile and up to spec. It would not surprise me at all if they actually put some electricity into the grid in a non-emergency period just as part of its regular maintenance and testing. I am happy to get information for the member and bring it back.

The Hon. A. KOUTSANTONIS: In the 45 seconds I have left, can the minister please take on notice whether the generators were used to dispatch during the audit period for any emergency response or any ancillary services, or any requests by either AEMO or any other regulatory body, to provide system security to the South Australian grid for this audit period? I cannot seem to understand why no-one can give me an answer about what this $9 million was.

The Hon. D.C. VAN HOLST PELLEKAAN: That question is just a more detailed way of asking the same question you asked before. That is how I took at the first time. My answer is the same as it was the first time.

The ACTING CHAIR (Mr Cowdrey): Given that time has expired for the examination of the Auditor-General's Report in regard to the Minister for Energy and Mining, the committee has therefore examined the minister on matters contained in the report and referred to and has made progress therein.

We will now shift to the Minister for Education. I have been asked to remind members that the committee is in a normal session; therefore, any questions have to be asked by members on their feet and all questions must be directly referenced to the Auditor-General's 2020-21 Report and Agency Statements for the year ending 2020-21, as published by the Auditor-General's website.

Mr BOYER: Thank you, Acting Chair, and thank you, minister and Mr Bernardi—it is good to see your face again. Minister, if I could start on page 99 regarding education, the Auditor-General raises concerns about capital works programs, specifically in relation to the transition of year 7 into high school. The words he uses here are, 'Any time delays in these works may impact this transition.' Are all capital work projects that will accommodate the year 7s moving into a high school setting next year be ready for day one of term 1 next year?

The Hon. J.A.W. GARDNER: My understanding is yes. I should introduce my officers. Thank you for welcoming Mr Bernardi, who is the CFO for the Department for Education. Anthony Creek is the Director of Financial Accountability and Compliance. Again, as we did during estimates, I send the best wishes of the shadow minister, I am sure, and myself to Julieann Riedstra, who I have no doubt is watching online as she was last time.

My understanding is yes. That is, yes, I believe I have interpreted the member's question correctly. It was that the projects that needed to be ready for the year 7s to fit into the accommodation need to be ready. Primary schools' projects where there is work that is unrelated to increasing capacity—for example, there is an ongoing stream of projects. But the ones that we need to build capacity for the year 7s and the aspects of those projects certainly to fit the year 7s in are still at this stage on track and I certainly anticipate to continue. I certainly hope it will continue. We are working very hard to ensure that is the case.

Mr BOYER: On the same page, in reference to your answer, my understanding from previous comments the chief executive has made is that, if some of those projects that have been delayed and do not have the bricks and mortar builds to accommodate year 7 students moving onto a high school campus completed in time for the first day of term next year—and in some cases portable or demountable buildings will be used—is there still a plan to have those deployed? If so, is there an indication of how many might be used?

The Hon. J.A.W. GARDNER: I will be really clear. The plan is to have the accommodation ready—bricks and mortar or whatever else. As we get closer to the end of this year, we can say that with greater confidence. Indeed, the risks are reducing with every project that gets completed and with every project still to be completed that has less and less work still to do.

In relation to contingency plans that may be in place for worst possible case scenarios, the chief executive has made comments about that in the past and you would want there to be contingency plans in place. But I reiterate that, of course, our absolute first focus is on getting these projects completed. As I say, the risk is reducing every day that goes past with these bodies of work that continue to be done.

Mr BOYER: Thank you, minister, for your answer. If I could take you to page 92, still on education, there is a bar graph at the bottom of that under Employees that shows the number of administration, school service officers (SSOs) and teachers. Admittedly I am working off a pretty poor photocopy here, but my reading of that is that the number of teachers between 2018 and the most recent data there of 2021 shows fewer teachers. Can you tell us why that is the case, if I am correct in my characterisation of that?

The Hon. J.A.W. GARDNER: I know the graph the member is talking about. I think there may be an issue with the point of time it was gathered. I think my assessment of that graph was a slight increase from 2018 to 2021.

Notwithstanding that, the number that the department uses far more regularly in estimating its workforce planning and reporting to Treasury and DPC and so forth is the term 1 census. As the member would potentially recall, that is taken at the last payday in March before the school holidays every term 1, and that shows 2018 at that term 1 census there being 12,678 FTE and, in 2021, 13,748 FTE.

In relation to any variation between the term 1 census date figure and the graph in the Auditor-General's Report, which I am assuming is a 30 June figure, I will take on notice why that difference is apparent. Although my reading of the chart is slightly different to the shadow minister's, it certainly does not seem to reflect in my view that increase of over 1,000 FTE that our term 1 census data shows.

Mr BOYER: Thank you, minister, for your answer. Yes, you are correct. I see there the difference between the 2018 figure and the 2021 figure. If I could take you back to the capital works to accommodate year 7s transitioning into a high school setting to question a bit more your previous answer, regarding those schools getting works done to accommodate year 7 students who are moving on to their campus, have some schools been told to expect works that will be ongoing in term 1 of next year? Are there many?

The Hon. J.A.W. GARDNER: There are a couple in a situation—they are the sorts of works I think we have spoken about before. As an example, I think Playford International College is one. I stand to be corrected if I am making a mistake here; it is not specifically to the Auditor-General's Report but I think the question is a reasonable one. If I recall correctly, the situation at Playford is one where there are some capacity increases. There are a range of works that will be completed by the end of this year, and there is one specific segment of the project, if you like–I think it is possibly the tech studies area or it might be a science area. But, anyway, there is one specific building where it is not actually part of the project to expand the numbers that is required, but it is an upgrade to an existing facility.

So in term 1 the existing facility is capable of being used and I believe that the plan is that in term 2 that new facility will be ready and the existing one can then be decommissioned altogether. That is an example of the sort of work that I am talking about. The expansion is certainly on track, as I understand, but a specific portion of it, an upgrade to a facility if you like, might potentially be—certainly at that school there is an expectation that it will be a little bit later.

I think there are a couple of schools where it has been identified that potentially some of the landscaping might be into term 1 a little bit. This is not an unusual feature in school builds, that some of these processes take a bit longer. I think there is a school where there is a question mark over whether the car parking is due to be finished the week before week zero or week zero or week 1. Obviously it would be better if it was the week before week zero, but if it was week 1 then it is the sort of thing that people manage. Car parks get fixed from time to time and this is a car park at the end of a building project.

But to the member's core question of the works that will be going on to ensure that the facilities are ready for the year 7s, the last advice that I recall receiving is that certainly that was the case—that they will be ready—but, indeed, there are works that will continue. With some projects, particularly at primary schools, there are a number where the upgrades started later and will be completed during next year, as is the time frame that has been well understood for a while.

Certainly there are further projects that we announced this year. We announced a series of projects in this year's budget and they will be rolled out next year, I think some of them into the first half of the following year as part of the ongoing capital works program.

Mr BOYER: If I could take you to page 101, under administered items there are some lines here which talk about transfers and grants to private schools. If I could ask about the loans which are administered under the SA Government Financing Authority (SAFA), can you tell us how many loan applications were received in the 2020-21 financial year and how many of those were approved, if Mr Bernardi has that data?

The Hon. J.A.W. GARDNER: It is a Treasury program but, that said, rather than asking the member to get the shadow treasurer to ask the Treasurer, maybe it is easier if I just take that on notice. SAFA is obviously part of the Treasury department. The administration is a role where a report comes through Education and I send a memo to the Treasurer, as I understand it, reporting on that progress. Irrespective of which ministry is relevant, I will take that on notice and bring back an answer to the member.

Mr BOYER: I appreciate you taking that on notice; thank you, minister. I have a supplementary of sorts. Are you the minister who approves those, or does the Treasurer approve the loans under SAFA?

The Hon. J.A.W. GARDNER: Maybe we can incorporate that answer into the previous question in terms of getting the technicality right. Certainly I will make a recommendation to the Treasurer based on information from the panel, which is an independent panel—public servants from Education and Treasury, and there may be somebody else on it. They make a recommendation to me and I pass the memo onto the Treasurer. Who is formally the signatory? Certainly he is. We can clarify the status of my memo on the way, if you like.

Mr BOYER: Thank you, minister. That sounds like a plan. I have heard—admittedly anecdotally—that the wait times to have the loans approved have blown out. Is there anything you can tell us about whether or not it is true that over the last few years the amount of time between a non-government school applying for a loan under the SAFA budget line has blown out, so to speak, and that schools are waiting longer to hear if they have been approved?

The Hon. J.A.W. GARDNER: I cannot speak for what the original year or two of the loans were. The genesis of the project was, I think, in the last couple of years of the former government. There was a low interest loan facility announced by Treasurer Koutsantonis, as he was then. That was taken up by a number of schools.

When we came in, we continued that program and then, in last year's budget, we adjusted it significantly. We turned it from a low interest loans program to a no interest loans program for the first five years of the loan. We were also able to put some further money into that program to provide more opportunities for schools.

There has certainly been that change in last year's budget, and that generated a significant level of interest, I understand, from the non-government school sector, people who were interested in accessing one of those loans. Of course, we do have a process—which the member will get a bit more detail about in the answer to the previous question I have taken on notice—to ensure that taxpayers' money is wisely spent and that the applications meet the requirements of the program.

In relation to whether there are any differences from the way it was administered previously, I do not have any anecdata to compare to the member's anecdata. I imagine there was possibly some impact; the change from a low interest loan program to a no interest loan program would have meant there was a gap between the ones under the last program and the ones under the new program. Maybe people who were thinking about putting in a low interest loan application thought, 'We might wait a month or two until the no interest loan is a more attractive proposition.' That may well be part of it, but beyond that I cannot answer.

Mr BOYER: On the same topic—and I accept this is probably something you will have to take on notice as well—I wonder if you can tell me what the average turnaround time is from application to approval, the shortest turnaround time and the longest turnaround time from application to approval under that loans line.

The Hon. J.A.W. GARDNER: I will take the question on notice, but I cannot commit to the categories the member has identified necessarily matching up neatly with anywhere there is data, and I will give the member of an example of why I say that is the case. You may have an application for a loan that does not meet the criteria or that meets part of the criteria, where the panel may have asked for further information or the school may have redone their application to ask for something slightly different, acknowledging that their criteria was not met. As I understand it, not all these applications are necessarily approved, or they might not necessarily be approved for the sum of money requested in the first place.

I will take the question on notice and endeavour to provide information that will meet the sense of the sorts of things the member is asking about. However, I cannot commit to the exact details that the member is asking for because the answers might not actually match up neatly to the questions being asked.

Mr BOYER: Thank you, minister. I am happy to phrase that in a different way. Perhaps if you could take on notice the data for all applications that were approved, regardless of whether they were approved for the initial asking amount or a different amount, and the shortest, longest and average wait times. That would be fantastic.

The Hon. J.A.W. GARDNER: Consider it done.

Mr BOYER: Page 89 talks about significant events and transactions and it mentions here that 'Education returned $111 million to the Department of Treasury and Finance.' I wonder if you can tell us what budget lines that was returned from.

The Hon. J.A.W. GARDNER: I am advised that the return of $111.4 million was pursuant to the Department of Treasury and Finance's cash alignment policy. In relation to the more technical detail related to the question, I will take that on notice and bring back an answer.

Mr BOYER: On the bottom of page 100 this time, it says that schools receive funding for 'repairs, maintenance and minor works' but not all of that has been spent. I am wondering if you can tell us how much of that money provided for repairs, maintenance and minor works was not spent and why that was the case.

The Hon. J.A.W. GARDNER: I thank the member for the question. The substantial answer to this is that the way that it works is the money goes to schools, who then hold it in their SASIF accounts. We were seeking that schools spend that money during the calendar year and, indeed, get those projects underway. We certainly provided a high level of flexibility to the schools to have that money spent for that purpose. They have the money.

We will come back to the house with further detail in relation to where we are up to on how much has now been spent, depending on the records that we have available. There is, obviously, a reconciliation that takes place after the fact, so the work is done, the tradie invoices the school and gets paid, and it has that delay in appearing in the budget statement.

Mr BOYER: Still on page 100, the bottom dot point under statement of cash flows talks about SASIF (SA Schools Investment Fund). I note this most recent Auditor-General's Report talks about just shy of half a billion dollars being held collectively in the SASIF accounts and that that amount increased by $42 million.

The increase of $42 million I do not suppose is very surprising, given the events of COVID, but has the minister or his department done any work in terms of plans to try to access any of that money or encouraging schools to use some of the $499 million they have sitting collectively in their SASIF accounts?

The Hon. J.A.W. GARDNER: I thank the member for the question. There are, I think, three significant new funding programs that have seen additional money go to schools in the period more than was previously. One of them we just touched on in relation to those maintenance grants for schools: $20,000 to $100,000 for every school and preschool in the public education system, all 900 of them, and the preschools having had that earlier round as well.

That large amount of money, and I think it totals in the order of $37 million, is in varying stages of having been spent on works completed, spent on works underway, to be spent on works underway, and there are possibly a smaller number of schools that are seeking to consolidate it with further money they are looking to spend on getting their projects.

Indeed, a number of schools or preschools I am aware of, having had the grants of $20,000, $30,000, $70,000, $100,000—however much—have chosen to supplement that with their own projects. They might have had $50,000 to combine with $50,000 new; you can get a significant project underway. So certainly that is a part of it.

The second group is there was $7 million paid to schools in May to June 2021 to assist with purchasing furniture, fittings, fixtures for the year 7 transition. Obviously, those grants are being spent for a particular purpose, and I would anticipate that schools are going to be spending that by the beginning of next year, if they have not already. Further, there was the agreement in the EB for complexity funding. That money is going directly to schools. I anticipate that a large amount of that has been spent for its purpose but, because of the timing of when we are paying it, there is that as well.

Schools put money into their SASIF accounts for purpose. They have their own ideas about things they would like to spend money on, and indeed we certainly encourage them to do so, and we work with those schools that wish to do so. We will continue to monitor SASIF balances, but also while doing so and encouraging schools, facilitating schools to do so, we do like schools to have a certain amount of flexibility that they can identify projects they wish to pursue and fund them or, indeed, individual capital projects, but they could also be ongoing projects where the school has plans for those moneys as well.

Mr BOYER: Thank you for your answer, minister. If I could take you back to page 101, it also mentions the operating grant provided to the SACE Board, which is, I think, $22 million for an operating grant. No doubt the minister is aware of what has been in the press around what has been characterised as staff turnover. I am wondering if the minister can tell us any work he or his department have done around finding out why that staff turnover is occurring and what is being done to rectify it?

The Hon. J.A.W. GARDNER: The SACE Board is obviously a statutory authority with a reasonable level of independence from the day-to-day management of the minister. It has a board. The chair of that board is Jane Danvers. She was appointed under the former government, and she has been reappointed under this government. The Chief Executive of SACE is Professor Martin Westwell. He was appointed under the former government, and he has continued to serve under this government. The point I am making is that there is a level of independence there.

I was interested to see Professor Westwell asked about this very question on the television news on Sunday night. I noted his response—that he thought it was a pretty low thing. I do not want to quote him exactly because I do not recall his exact words, but he certainly described the fearmongering involved in the beat-up in relation to this matter as very disrespectful to our year 12 students who are about to undertake their exam preparations. He reassured the community, as he has reassured me, that the relevant work that needs to be done to ensure that our exams are accurately marked, assessed on time and the results are provided on time is indeed absolutely on track to be the case.

I have spoken to the chair of the SACE Board, Jane Danvers, about this as well. She has reassured me that it is not just her opinion but that of the relevant members of the SACE Board who have the expertise and who have looked at the matter with the chief executive, following the fearmongering being raised in the media. They are very confident that the response provided by the chief executive in relation to this matter was accurate.

As our year 12 students undertake their exams, it is worthwhile—and I thank the member for the opportunity—to reassure them that their exams will be assessed well by SACE and accurately and on time. That is the assurance I have had from the SACE Board. That is the assurance I have had from experts on the SACE Board.

I understand that there is disagreement with some relevant union representatives, and the union and the SACE Board are having that disagreement. There has been a push to put that into the media, and that is very disappointing. I would encourage all members not to fan that fire, to let the union disagreement with the SACE Board be dealt with by the union and the SACE Board's management, as is appropriate, and indeed to give our students, their families and their teachers the respect that the end of their year 12 deserves.

Mr BOYER: I am happy to move to TAFE in the time we have remaining. Thank you, minister. Welcome, Mr Coltman. Page 527 of the Auditor-General's investigation into a report on TAFE shows the total FTEs at the point in time that this was done, I presume it would be, and I note in the most recent budget as well I think it had 140 FTEs to be cut from TAFE. I am wondering whether the minister or Mr Coltman could provide us some advice about whether or not those cuts, or what would be savings measures I presume, have been realised?

The Hon. J.A.W. GARDNER: I am sorry, I am not trying to be funny. Can you repeat the question? A 140 FTE cut, I am not quite familiar with that.

Mr BOYER: That was the figure in the budget, I believe, and here it has total FTEs under TAFE SA at 1,945. I am wondering whether or not the forecast FTE reduction of 140 foreshadowed in the budget is represented in this figure of 1,945?

The Hon. J.A.W. GARDNER: I am not sure that is a fair reflection; that does not marry up. Rather than argue the point, might I take that question on notice and allow the member for Wright to have some more questions.

Mr BOYER: Given the Auditor-General's Report into TAFE deals in quite explicit detail with income received by the organisation for the courses it runs, I am wondering whether the minister can tell us whether or not there are any further reductions, which we saw represented in the previous Auditor-General's Report, which we can expect to see represented in this one or forthcoming in the next financial year?

The Hon. J.A.W. GARDNER: I will kill two birds with one stone: no planned reductions, and I have some advice in relation to the last one. The 140 figure apparently is not a cut: it is how much TAFE was under their cap, which is something quite different, as I understand it.

Mr BOYER: Am I right in saying across the last financial year and the reporting period for the Auditor-General, there has been no reduction in FTEs from TAFE?

The Hon. J.A.W. GARDNER: I will take that on notice so that you can have another question.

Mr BOYER: I appreciate that, minister. My question is really the same as the former one but in relation to courses. If the minister could advise us about whether there has been a reduction in the total number of different courses offered by TAFE in the last financial year.

The Hon. J.A.W. GARDNER: I am advised that there is not a reduction in the total number.

Mr BOYER: My final question is: has any further work or investigation been done by the minister or his agency into planned closures of any further TAFE campuses in South Australia?

The Hon. J.A.W. GARDNER: Not that I am aware and not that Mr Coltman is aware of.

The CHAIR: The examination in regard to the Auditor-General's Report with respect to the Minister for Education has concluded, given that the time has expired.

Progress reported; committee to sit again.

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