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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-11-01 Daily Xml
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Auditor-General's Report

Auditor-General's Report

In committee.

(Continued from 31 October 2023.)

The CHAIR: I declare the examination of the report of the Auditor-General 2022-23 open. I remind members that the committee is in normal session. Any questions have to be asked by members who are on their feet, and all questions must be directly referenced to the Auditor-General's 2022-23 Report and Agency Statements for the year 2022-23, as published by the Auditor-General on their website. I welcome the Deputy Premier and the Leader of the Opposition, and I call for questions.

The Hon. D.J. SPEIRS: Sorry, Deputy Premier, I have misled you a little bit. We only have very, I would say, padding out questions for DEW. All the questions I am keen to do are in Defence. I understand, Chair, that Defence are not here yet. Can we pause the clock until they arrive?

The CHAIR: I suppose we will have to, won't we?

The Hon. S.E. CLOSE: An interesting conundrum has been raised in that the agency is not listed in the Auditor-General's Report and so they were told that they did not need to send anyone and there couldn't be any questions, given that they are not listed in the report. I am not certain what we should do about that and what page numbers the leader might have that might help guide who ought to be here to advise me.

The CHAIR: I am not sure who has provided you with that advice, Deputy Premier, but my advice is that there are a couple of sections which actually look at Defence SA and the space industry as well, so they are actually mentioned in the report.

The Hon. D.J. SPEIRS: I am happy to reallocate this time to some time tomorrow, a time that the government would like to give up because I am just thinking, from the public servant's point of view, it might be a bit difficult if they are not prepared to talk on this.

The CHAIR: The Auditor-General's Report deals with the minister's portfolio, so you are at liberty to ask any other areas of the portfolio until those other advisers are available.

The Hon. D.J. SPEIRS: Some of the questions are reasonably broad anyway, so I think that is all fine. Just for reference to both the Deputy Premier and the Chair, I am relying on the independent Auditor's report, specifically the opinion on Defence SA. I will begin my questioning on page 11 of that opinion, which outlines the objectives of the program. The third paragraph specifically talks about the objectives of that program. I will just ask a general question to start with. Can the minister please provide an overview of current defence shipbuilding programs in South Australia?

The Hon. S.E. CLOSE: Yes. Obviously, defence is run by the federal government and is procurer of these programs. What the agency in South Australia does is supports the industry to be in the best position to bid for these projects and also facilitates the way in which the South Australian infrastructure can support making sure these projects are delivered.

What we have substantially in the shipbuilding program is the Collins class submarines sustainment work, of course. It is a six-vessel fleet and there are some 1,300 jobs supported in South Australia. At present, the plan is, and our expectation is, that full cycle docking remains at the Osborne Naval Shipyard. People may recall that in the last few years there was a big question about whether that would be moved to Western Australia, and it was finally determined that it would not.

The life-of-type extension work is also going to be commencing in 2026 in Osborne. This life-of-type extension will keep the Collins class submarines operationally capable and available into the 2040s, which will support the transition to Australia's nuclear-powered submarines, of course, to fill that gap.

There are the Hunter class frigates being built by BAE Systems Maritime Australia. We know that that is subject to a strategic review that is currently being contemplated by the commonwealth government. The reason for that, as we would all be aware, is that a view was formed at the commonwealth level that, having determined to alter the approach on what kind of submarine would be used—and the technology that would be used and the capability of those submarines that would be used for South Australia's future submarine capability—the question became whether that had any consequences for the kind of surface ship capability that South Australia required, around questions of speed, capacity to carry people and, very crucially, the kind of weaponry, radar and other detecting technologies that the ships are capable of carrying.

The commonwealth's primary concern relates to the question of capability, as opposed to the question of sustainment of workforce and manufacturing capability that is the primary concern of the South Australian government. We are therefore, as the Premier has repeatedly said, very keen to get an answer on what the strategic review has generated, what decision will be made by the commonwealth government about the surface ships and, crucially, how that fits into this pressing need to make sure that we continue to have a workforce at Osborne in order to be ready to build up for the nuclear submarines.

At present, as you would be aware, there are nine anti-submarine warfare frigates being proposed—three, three and three. There has been speculation about whether the final three would continue or not, and we await further advice from the commonwealth government about how their disposition of building will be.

The Hunter Class Frigate Program will, in time, sustain more than 5,000 jobs across not only that business but the wider Australian defence supply chain over the life of the program. I am advised that it anticipates to include up to 1,000 apprenticeship and graduate roles. The prototyping started a couple of years ago with the ship blocks, and construction has now started on the first schedule protection block, which will be used in the frigate. So, although they spend some time building blocks that to all intents and purposes could be used in a ship, they then start the first real ship separately to that, having tested out the technology.

There are also the Arafura class offshore patrol vessels, of which there are 12 in total for Australia, the first two being built in the Osborne Naval Shipyard by Luerssen Australia and the remaining 10 moving over to Western Australia. That involves 400 direct jobs. The first ship was launched on 16 December 2021 at the shipyard and the second ship is currently being outfitted and is almost completed.

For the Hobart class destroyer project, obviously the Hobart class destroyers have been built. I was present for at least one, if not two, of their launches at Osborne. That will now be involved in a process of upgrading the combat management systems. That will be started in South Australia from 2024, and it involves about 300 jobs.

Then there is Osborne North, which is where we expect to have not only the sustainment of the Collins class but also the preparation of the infrastructure for the submarine construction yard.

The Hon. D.J. SPEIRS: What actions have you taken to ensure that the entire complement of the Hunter class program is constructed at Osborne?

The Hon. S.E. CLOSE: I will speak more on behalf of the government than just myself. As we have been very clear about, the Premier takes a role in engaging directly with the commonwealth, as is absolutely appropriate for such a crucial and highly sensitive area of advanced manufacturing in South Australia, where the purchaser is the commonwealth. They are in the process of obtaining the land necessary, for example, from the South Australian government and investing $2 billion just in the infrastructure over the next four years that will be required to build the submarines.

But the question of course was specifically about the Hunter class frigates and the challenge of the strategic review. As I said, I understand from a capability perspective why the commonwealth has decided to do that. This question of the extent to which the capability of the Hunter class is sufficient is all that is needed to support from the surface what will be a new fleet of submarines, very large submarines, very quiet and crucially very, very fast submarines. That does change the expectations and the demands on the surface vessels. So it is right and proper that the commonwealth have done this.

As I said, South Australia's primary concern, although of course as being part of Australia we want us to have the best defence capability possible, as a government is that our primary responsibility is to ensure that we are industrially capable of building as much as possible and of taking the benefits of that building and spreading it through the economy, both through people who are working directly and also through the capability and the supply chain.

I understand we were the only jurisdiction to put a submission into that most recent strategic review to explain the demands and the expectations of a healthy shipyard in Osborne, the role that the surface ship build plays in the overall projections of how we train up and keep the staff required and also keep the supply chain involved.

I recall when we were so concerned about the loss of the Collins class submarine work, the full cycle docking question, one of the things that bothered me most about the question that it would go to Western Australia was the harm that would do to the supply chain into the submarines, that if that were broken to then get that supply chain ready for the next submarines in the future would be so much more difficult. As for that, so too for the involvement in the Hunter class frigates.

That said, we have put our presentation forward. The Premier has had frequent and lengthy discussions with the Deputy Prime Minister. Having presented the case for the importance in the overall capability of the shipyard, we recognise the need to ensure that the overall capability of Australia is at the best class it can be. We await the decision that they make.

The Hon. D.J. SPEIRS: Is the minister aware or has modelling been undertaken to determine how many jobs would be lost if the Hunter class program was cut from nine ships to six ships?

The Hon. S.E. CLOSE: The challenge in that is how far away the final three ships are and what other work is being brought forward at the same time. If that were to happen, and I say a big if because I am in no way in possession of any privileged knowledge about the decision that will be made and it may well be that they stick with the nine, but in the event that they were not to, in that hypothetical, the questions would be: what is that replaced by? Where is that built? What is the length of time over which the six will be built? And what is the way in which we can integrate the workforce required for the six into preparing for the building of the submarines?

There is an expectation, obviously, when you are talking about the submarines that are even more sophisticated than the ships, that we need not just skilled workers but skilled workers with experience. Some of that experience will be able to be made in the surface ship build and then translated, with additional training of course, to being able to work on the submarines. This is a complex interworked shipyard, it is not individual projects that sit entirely in isolation, so that planning will need to be done over time. There is an expectation that some of the submarine workers will come from the shipyard.

I say all this noting that there is a demand for more workers right now for Hunter class. They have yet to build up to the full complement that they need and so at present there is no question of shedding staff. In fact, the question is making sure that we can supply the staff in South Australia to successfully do the build of the first three lot, then the next three lot and then we will find out before long whether the speculation in the press is accurate about the final three.

We are not in a position at the moment of needing to model in several years' time what might be an alteration of the final build; we are more in the position of having to make sure that we are training people up ready to be added to the build right now.

Mr PATTERSON: On the same Auditor-General's Report and Defence SA, moving to section 1.3 which deals with budget performance, in the statement of comprehensive income it talks through some of the spending lines there. In particular, in the expenses it has grants and subsidies. The original budget was $8.214 million and the actual was $4.389 million—a shortfall of about $3.825 million. Is the minister able to explain what those grants were for in the actuals?

The Hon. S.E. CLOSE: My hope is that very shortly I will be able to do that. If you have any other more general questions first, you may like to ask that question again shortly.

Mr PATTERSON: I have a number of them. Maybe I could read them in, you can take them on notice, and if they get here we can do it. In particular, that line where we talk about the grant expenditure, can the minister explain what those grants were for and who the recipients were, what the programs were and provide information as to why the program milestones were not met?

The Hon. S.E. CLOSE: I will take those on notice.

Mr PATTERSON: A similar follow-up also in regard to the supplies. It had a shortfall of $1.442 million in supplies and services, and it was explained in subnote (b) that this expenditure variance was due to changes in the expenditure on milestone profiles of several projects, including the SASAT-1 Space Services Mission. Is the minister able to expand on what those programs and projects were and, again, what the changes in expenditure and milestone profiles were? Further to that, in regard to Kanyini, can you explain the variance there and what the progress of Kanyini is? Is it still on track?

The Hon. S.E. CLOSE: I can talk about Kanyini, and I will take all those other items on notice and make sure you have a detailed answer. Regarding Kanyini, the launch date has been delayed; it was intended to be October this year—so the month just past—but it has now been moved to mid next year. That is the expectation.

There is an arrangement with the company that Elon Musk is involved with that does launches, and therefore it is likely to be in California. Originally the proposal had been that it would be at Cape Canaveral in Florida. The company that is building the outer casing of Kanyini has almost completed building that, and it is a case of making sure we have the right launch window, which is being lined up for next year.

Mr PATTERSON: Following on from that, again, in the same area in relation to the grants, it talks about the fact that, in 2022, $1.2 million was allocated to Defence SA via contingency funding provided by the Department of Treasury and Finance. In 2023, there were zero dollars allocated. Can the minister please explain what the original contingency funding was for, and the reason for the variation in 2023?

The CHAIR: Can you just reference a page number, member for Morphett?

Mr PATTERSON: Sorry, yes; page 15.

The Hon. S.E. CLOSE: We do not have the page numbers on our document. Can you give us a reference number of the paragraph that you are talking about?

Mr PATTERSON: Sure. You have 1.5, 'Budget performance', so it would be the second page into that under the heading of 2.3, 'Grants'. Two is 'Income', so it is those zero-income lines.

The Hon. S.E. CLOSE: We will have to take that on notice and get you a detailed response.

Mr PATTERSON: I move to section 4, 'Expenses' on page 23. Looking at 'Supplies and services', in 2023 there was $2.056 million spent on contractors. Can the minister explain what services those contractors undertook for Defence SA, and what contracting companies were used?

The Hon. S.E. CLOSE: This was work done on an AUKUS task force to prepare for the question of social licence, but also engagement in the supply chain, so that we were clear on the way in which the supply chain would be able to work into the AUKUS proposition.

Mr PATTERSON: Thank you. If we just go back to page 15 in section 2.4, 'Recoveries', in 2022 $60,000 was being allocated to Defence SA through the Defence Innovation Partnership recoveries, and then zero in 2023. Can you explain what those recoveries were in 2022, in the first instance, and the reason why there were no recoveries in 2023?

The Hon. S.E. CLOSE: This is a fairly minor part of the accounting for the agency, as you may well recall, so the 60 probably refers to running some events for another part of government and then getting a recovery for that, and there were not any of that sort in 2023.

Mr PATTERSON: Again in regard to 4.3, going back to expenses—sorry to move around—we have the research programs. In 2022, $1.411 million was spent by Defence SA for research programs. In 2023, this was $911,000. Can the minister please explain what those research grants involved and the reason for grants into research programs falling by nearly half a million dollars?

The Hon. S.E. CLOSE: This is about a collaborative research fund. You see variation across the year because there are only four or five of these projects a year and the funding is based on timing on the completion. There will be a variability year by year on which ones are finished in any given time period. An example would be a collaborative research project with DEWC on their electronic warfare system. You would probably be familiar with others that have occurred in the past.

Mr PATTERSON: If we go to page 11, program 2, relating to the South Australian Space Industry Centre, in June 2023, prior to the federal government announcing it was going to cut the $1.2 billion National Space Mission for Earth Observation, it had been reported that the minister was briefed by the federal government that this was to occur. Did the federal government also brief the minister about the status of the $20 million of modern manufacturing funding that the former federal government had committed to the Australian Space Park?

The Hon. S.E. CLOSE: That was a bit of a broad-ranging question initially but specifically about the $20 million for the Modern Manufacturing Initiative and the Space Park. At the time that occurred, when that grant was originally provided, the project was being managed out of the Department for Trade and Investment; therefore, no, I was not informed about a decision by the Australian government to no longer fund that.

That came on the back of the chief proponent, which is Fleet Technologies, putting in a variation to the proposal that included informing the federal government that two of the companies that they had been in collaboration with—there had originally been four—had withdrawn their involvement. The commonwealth government made a decision and informed Fleet, but that was largely managed through the Department for Trade and Investment at the time. With the most recent budget in South Australia, we transferred all the money that South Australia had always had committed to that facility over to the agency for defence industries and ensured that the funding for space was increased so that we were able to continue to work closely.

We now have charge of the project to have the collaborative working space, which, given the change in industry appetite away from very large satellites to much more small satellites, has been determined to be best served probably at Lot Fourteen. We are working on that at present with industry to make sure that it is of most use to them. The Space Park at the Airport, however, continues. Fleet are still very keen on pursuing that, and I believe that has been going well in terms of negotiating their relationship with the airport.

Mr PATTERSON: Just to confirm, when you were given the briefing, did you avail yourself of the opportunity to then contact the federal minister, Ed Husic, to fight for the funding for the Australian Space Park?

The Hon. S.E. CLOSE: The decision on modern manufacturing had been made prior to that and prior to my direct involvement in the project. Of course, when I met with Ed Husic, and I have met with him several times, each time I pressed him—possibly he is tired of hearing from me—on how important space is to Australia as well as to South Australia. We discussed my disappointment in their decision to make some cuts to their projects but also that we continue to work together where we can, and that South Australia will continue to identify opportunities.

I also add at this point that he has always been absolutely clear that he will not be moving the Space Agency from South Australia, which I take great comfort in. It is very important that it was secured here by the Marshall government, following the International Astronautical Congress that was held here in 2017. That ongoing anchor point for Lot Fourteen in particular is very important. It is, again, one of the reasons why we think that the collaborative centre will probably be best served on Lot Fourteen.

Mr PATTERSON: In recent reporting around the federal government not providing funding for the Australian Space Park, a federal government spokesperson said:

…following the finalisation of contract negotiations earlier this year, the Australian Space Park project no longer aligned with MMI Collaboration Stream program guidelines and consequently funding was withdrawn.

That speaks to a decision being made by the federal government prior to June, when the National Space Mission for Earth Observation had those cuts. At any stage during the year, were you informed by Minister Ed Husic that the federal government would not be going ahead with this $20 million of funding?

The Hon. S.E. CLOSE: We were informed by Fleet.

Mr PATTERSON: In the minister's view, what would the impact be of not having that sizeable Australian Space Park at $66 million, rather only $20 million?

The Hon. S.E. CLOSE: That calls for speculation and opinion. The Space Park will go ahead with Fleet as its anchor and will be of immense value to the space industry. Our Common User Facility will also go ahead, and I can only see a brighter future for space in South Australia.

The CHAIR: I would like to thank the Deputy Premier, the Leader of the Opposition and also the member for Morphett. The time available to examine this part of the Auditor-General's Report has expired. We now welcome the Minister for Police and the relevant opposition spokesperson. Member for Flinders, the floor is yours.

Mr TELFER: Thank you, sir, and thank you, minister. I will jump straight into some questions around the workforce at SAPOL.

The CHAIR: You also need to reference the page or the reference.

Mr TELFER: I refer to the SAPOL workforce, and I will particularly start the focus on the financial statements at page 17, which talks about the employee benefit expenses and employee remuneration. At the bottom you see the number of employees within the following bands, and for 2022 it indicates 1,108 and for 2023 it is 880. Can you give an explanation as to the dramatic change?

The Hon. J.K. SZAKACS: I thank the member for his question. I recall that we were not standing last year because I had a moon boot on. That was your indulgence; my apologies. I can advise that the material difference or reduction in those numbers from last financial year to the just completed financial year is a very significant reduction in overtime as a result of the cessation of COVID operations. Of course, 2021-22 still retained a degree of COVID operations, so the reduction in the numbers of people in that band is largely as a result of the overtime component which pushed those individuals up.

Mr TELFER: The 220 person difference, near on 20 per cent, was all as a result of COVID; is that what you are saying, minister?

The Hon. J.K. SZAKACS: Yes, that is what I am saying. I am saying that the advice that I have, to repeat my previous answer, is that results from the very significant impact of COVID operations, particularly on the overtime that was carried by the organisation, by SAPOL, had a material impact on the number of individuals that had a band creep in that year. I am advised that that is the material difference from 2021-22 and 2023-24.

Mr TELFER: To unpack a little further, you talk about the band creep, which must talk about the ones below the $157,000 to $160,000. Are you saying that a significant number of those 220 have fallen below the $157,000 band?

The Hon. J.K. SZAKACS: No, not necessarily. I think your question was about the $160,000-plus, so my advice to you is only in relation to that band.

Mr TELFER: Maybe I was not clear, minister. I was talking about the total number of employees within that range, which was 1,108 in 2022 and 880 in 2023, so some 228. Are you saying that number is predominantly because they fell below the band which is within that bottom range of $157,000 to $160,000?

The Hon. J.K. SZAKACS: I can advise and perhaps provide some additional detail to the member. There are 154 substantive employees in that bracket that the member asked about. An additional 74 were in the bracket for the reporting purposes of the Auditor-General as a result of overtime.

Mr TELFER: At page 355 of the big document, the annual report, the Auditor-General made comment around some of the workforce challenges and highlighted the Establishment Management Committee, which is:

…responsible for overseeing the planning for the sworn and unsworn workforce to ensure it meets SAPOL's strategic objectives. It has not met since February 2021 and has not finalised its terms of reference.

Can you give me some explanation as to why?

The Hon. J.K. SZAKACS: I can. I probably cannot provide a whole lot of information as to why that Establishment Management Committee stopped meeting definitively in February of 2021. I am happy to take this on notice and be corrected if need be, but February 2021 was deep in COVID operations for SAPOL. I would reasonably understand—and this not a critique of the former government at all—and this is acknowledgement that there were special circumstances at around that time that may have caused that committee and the resourcing and the time involved in that committee to cease. I am happy to take some further information and I will correct the record if that is the case.

As for the re-establishment of the Establishment Management Committee, I can confirm that the terms of reference will be imminently signed off by the commissioner who has worked through various individuals in SAPOL, including People and Culture, the deputy commissioner, and will be imminently signed off by the police commissioner and that will then execute the re-establishment and the meeting of the Establishment Management Committee.

For the record, the Establishment Management Committee, whilst acknowledging the findings and the recommendation of the Auditor-General, the advice that I have received subsequently from SAPOL is that that work is still being undertaken extensively within SAPOL, but, recognising the prerogative of the Auditor-General to make that recommendation, SAPOL have acted accordingly.

Mr TELFER: In reflection of that commentary, I do note that the Auditor-General noted that the strategic transfer committee was established to specifically manage vacancies due to COVID-19 and address frontline resourcing challenges. They have not had to deal with those specific COVID-19 challenges over the last 12 months. Why is the EMC not being reinstated or their duties reinstated? Are you in your explanation saying that SAPOL made the judgement that the EMC was not necessary?

The Hon. J.K. SZAKACS: Simply, I do not have the advice to be able to reflect on whether SAPOL have determined that the EMC was not necessary, but I can note and advise that the work undertaken by the EMC has been continuing, in fact at a pace not previously seen within SAPOL. I really want to recognise and also acknowledge the hard work of SAPOL. It was very clear when we came to government that the police commissioner was doing the best with what he was given, and that is why we determined, and I determined as minister, that simply hoping that we could train more police without funding was ridiculous.

In that period, there has been a very substantial body of work undertaken to ensure that SAPOL first was business ready and operationally ready to receive and execute the substantial additional funding—I think about a $94 million package—that we provided. That first body of work was of course to ensure that SAPOL was ready to press go on that. That has been undertaken. But as I reflected on before, the EMC will now reconvene. The terms of reference will be signed by the police commissioner, it is advised to me, imminently and they will continue the good work SAPOL does right across the board.

Mr TELFER: On page 16 of the financial statements line 3.3 talks about employee benefits and expenses. There is a line which says 'additional compensation'. That number has more than doubled from just over $6 million to nearing $14 million. Can you give an explanation as to why?

The Hon. J.K. SZAKACS: I can respond by advising that that is because of an actuarial reassessment of workers compensation liabilities. There has been an actuarial assessment done at the end of the financial year. That is the materiality of that increase.

Mr TELFER: Line 4 talks about workers compensation, the change from $17 million to $27 million. That is the workers compensation bit. Is that the explanation you are giving?

The Hon. J.K. SZAKACS: I am advised that the two distinct accounting treatments or measures, workers compensation and the additional compensation, are both workers compensation, and the actuarial assessment is applied to both of those, the latter of which, that your questioning related to, was the actuarial reassessment based upon market interest rates forward projections.

Mr TELFER: Referring to the same page, page 16, there is a significant change in the long service leave, a seemingly over $30 million change from 2022 to 2023. Can you give an explanation as to why?

The Hon. J.K. SZAKACS: I can advise that the calculations for long service leave are central accounting that is done through the Department of Treasury and Finance and that the numbers that the member inquires of also relate to an actuarial assessment or, more accurately, reassessment of future liabilities. Of course, long service leave liabilities are prospective and future. They are not a snapshot of long service leave taken this week or last month. They are a liability held for the future.

Mr TELFER: I have absolutely taken that into account. That is why I was questioning why there is such a significant change. It is astonishing, really. I am surprised that that is the explanation, that it is an actuarial adjustment.

The Hon. J.K. SZAKACS: I probably cannot provide much more advice in relation to your surprise, other than that the advice is that the treatment has been provided against long service leave liabilities across the public sector at large. These are done by a central agency, DTF. Specific market conditions that the member may or may not be surprised at I would not begin to comment on, but these are the way that things are done. This is why the DTF applies the assessment.

Mr TELFER: Page 355 states that the average active FTE figures include employees who are on extended leave without pay, meaning that the number of sworn positions filled may be lower than depicted in the chart. There were 164 FTEs on extended leave at 30 June 2023. What is this number compared to other years, the extended leave? Is it a reflection of what is going on broadly within the South Australian police force?

The Hon. J.K. SZAKACS: What it does not reflect is the nonsense that the member for Flinders has tried to put through the media, that women who take maternity leave are somehow ruining the operations of the police force, or other nonsense that the member has tried. He also reflects on the other things going on in SAPOL. I am very happy to provide the member, on the record, for his future consideration, the numbers that he has sought.

It is 179.2 for the year ending 2023. The member for Flinders will be pleased to know that, notwithstanding some of his conjecture, that is less than the year before, which was 187.2, and the year before that was 171.5.

Mr TELFER: I refer you to page 363, which talks a little bit about the Thebarton barracks relocation. It says:

The SA Government provided $2 million in funding to DIT for relocation planning work, with SAPOL incurring costs to be reimbursed of $1.6 million in 2022‐23.

Does the minister anticipate having to find increased funding for SAPOL relocation planning work associated with that relocation? Is that remaining $400,000 currently left of the initial $2 million budget deemed sufficient to complete the planning work?

The Hon. J.K. SZAKACS: As far as that question relates to appropriations to the Department for Infrastructure and Transport, I cannot comment. It is obviously a matter that the member can raise with Minister Koutsantonis. But I have received no advice, nor have I received any request that the funding is not sufficient.

The ACTING CHAIR (Mr Brown): Any further questions?

Mr PEDERICK: Fire and emergency services.

The ACTING CHAIR (Mr Brown): We can certainly move to that, if you wish, member for Hammond.

Mr PEDERICK: I refer to the Auditor-General's Report, Part C: Agency audit reports, South Australian Fire and Emergency Services Commission, pages 375 and 376, involving staffing. Is the minister concerned about the drop in volunteer numbers from last year, and is he aware of any reasons behind this?

The Hon. J.K. SZAKACS: Of course, I acknowledge the extraordinary work that our volunteers undertake. I am happy to take some further questions from the member if it is relating to volunteers of any particular significant cohort, or if it is even Volunteer Marine Rescue. But, no, all of the advice I have is that volunteer numbers are stable and have been for some time; in fact, we have seen an uptick in the SES membership both during and post Murray River flooding. I would very much hope, as I am sure the member would, that we would not see another natural disaster like the flood to increase and incentivise volunteering, but, certainly, as advised to me, the SES have seen an uptick in numbers.

The volunteering of our SES and CFS and Volunteer Marine Rescue remains stable. Of course, we are always eager, as a government, to invest directly into that support. One of the major announcements that I was able to make with the Treasurer this financial year was the nearly $2 million of increased mental health support for volunteers, a very important piece of work, one that has been led for some time by a group of highly capable and highly efficient staff within SAFECOM as well as the agencies.

That has been a very significant focus of mine and the government and I also acknowledge the investment made by the commonwealth government that has also been directly investing into mental health triage support for volunteers, not only coming into summer but recognising that the work of a volunteer these days is truly a 365-day-a-year exercise.

Mr PEDERICK: Same pages. What is the paid staff turnover rate within the CFS?

The Hon. J.K. SZAKACS: I will have to take that on notice.

Mr PEDERICK: I refer to pages 368 and 369: appliance and equipment inspection. Does the minister find it concerning that some South Australian Metropolitan Fire Service sites were not able to provide evidence of inspection reporting while at other sites reports were only partially completed, unauthorised or lacked evidence of any review?

The Hon. J.K. SZAKACS: Obviously, as far as the Auditor-General has recommended, my strong view is that the processes could be improved. I am not concerned from an output perspective. I think that the findings of the Auditor-General were quite explicit in the nature of which this was determined to be a largely administrative improvement that was able to be made by the MFS. I am pleased to advise that the MFS are working on that. They have already undertaken the improvement work necessary to ensure that the findings of the Auditor-General are both heeded and also well and truly implemented in time for the next reporting cycle.

Mr PEDERICK: Have all operational commanders since been consulted on the need for full staff compliance with inspection reporting requirements?

The Hon. J.K. SZAKACS: My advice is that there has been extensive engagement through the chain of command in the MFS. Again, I will undertake to correct the record if need be, but my advice to the member, based upon the advice that I have received, is that there has been a full chain of command and organisational flow-through of the remedial work undertaken as a result of the recommendation of the Auditor-General.

Mr PEDERICK: I refer to page 376, the independent bushfire review status update. In May 2023, the Auditor-General found that 29 of the 48 actions that the emergency services sector was responsible for had been completed. Three were on track and 16 required further funding. Can you identify the three action items that were on track to be completed?

The Hon. J.K. SZAKACS: I can advise—with also some specific detail that the member seeks; that is, of September 2023—that 65 per cent of total actions have been resolved and implementation has commenced on a further 21 actions. Those three actions identified by the Auditor-General as not yet being commenced are as follows. The first of those is finding 5.5.1:

The level of fuel reduction permitted on private land is unclear and there is an inconsistent approach to compliance action (Section 105 Notices) to reduce fuel hazards.

The action arising from that is:

Develop a Code of Practice for Private Land Fuel Management to remedy an inconsistent approach to compliance actions (S105 Notices).

The second per the member's question is finding 6.13.2:

ICT systems are inconsistent across the CFS—some volunteers are successfully using brigade management systems like BART but it has not been officially endorsed by the CFS or accepted service-wide.

The action arising from that being to:

Consider standardisation of brigade management deployment systems such as BART.

The third of these is finding 7.6.2:

The CFS should consider how to deploy heavy machinery with adequate protection for plant operators in planning for severe, extreme, or catastrophic fire danger days.

The action being to:

Implement a pre-deployment plan integrated with ROMPS and GOMPS to utilise the asset management system.

Mr PEDERICK: In regard to those three action items, when do you expect them to be completed and also has further funding been provided so the remaining 16 actions can be completed?

The Hon. J.K. SZAKACS: I will take that in two parts, the first being the three and then the 16. The 16 already have funding attached. There is funding attached to various discrete actions arising from those.

As for the work in relation to the further three, there continues to be led through the coordination and engagement of the CFS as well as DPC through ultimate organisational leadership and through the SEMC a process of the prioritisation for future funding rounds. That prioritisation through future funding rounds is arrived at through addressing actions where possible through broader pieces of work such as the emergency management capability and the capacity uplift project, which I think I have advised the member of through estimates, and also by leveraging national investments such as the national stockpile management.

On that, I will note two very important steps forward. The first is that we are very pleased to be working with a federal government that takes their role in emergency management, preparedness and resilience-building very seriously. I did not spend a lot of time as minister working with the former government so I will not take unnecessary potshots—I will leave that to other states. As a statement of fact, I am very pleased by the excellent engagement by the federal government, including Minister Murray Watt.

I know the member would be particularly pleased to hear that just this weekend the first procurement through the national stockpile has been entered into with Humanihut—Humanihut being a great South Australian company, one that the member knows very well and has been a strong advocate for. It is a $14 million national contract with Humanihut to supply temporary housing and accommodation not only for relief housing but also for the forward deployment of emergency services workers and other workers. Also, I can advise that that will be based here in South Australia. I am advised that Humanihut are scaling up their workforce as we speak to better meet the demand of this new contract with the federal government.

Mr PEDERICK: I go to page 370, vehicles and vessels not serviced. The Auditor-General found that 78 per cent of the South Australian SES vehicles and vessels had not been serviced to requirements, which is a 14 per cent increase from last year. How many assets does that relate to?

The Hon. J.K. SZAKACS: The SES or the CFS?

Mr PEDERICK: The SES.

The Hon. J.K. SZAKACS: I can provide additional detail to the member. I do have some advice regarding vehicles and I might be able to also provide some servicing details for the member for non-vehicles such as trailers, boats and such.

There were 62 trucks serviced in 2022-23; two motorcycles that were serviced in 2022-23; 108 QRVs car admins that were serviced; and 37 trailers. I note with trailers that there are a total of 225 trailers in fleet and 37 of those were serviced, so that is a very low percentage. Obviously it pushes down in the overall percentage of fleet because the Auditor-General has correctly analysed the entire fleet for this.

On the other hand, I can advise that, for example, 78.5 per cent of trucks were serviced, 81 per cent of our tractors and forklifts, 100 per cent of our hook lifts and 100 per cent of our vans—recognising the work that needs to be undertaken and obviously acknowledging the recommendation of the Auditor-General.

I potentially took this on notice but, to ensure that the record is correct, I believe that the member, in his question, or perhaps in the preamble, suggested there had been a decrease in volunteer numbers. I can actually advise that there has been a decrease in the CFS numbers of 47 across thirteen and a half thousand and there has been an increase into the SES identified, and that number is 35. That is just to be clear about the numbers.

The CHAIR: The time allocated for the examination of this portion of the Auditor-General's Report has expired. I thank the Minister for Police and the members for Flinders and Hammond. I welcome the Minister for Health and Wellbeing and the member for Schubert.

Mrs HURN: Thank you, sir, and thank you to all the staff that are here supporting the minister in answering all our questions. Minister, I refer you to part C, pages 119 and 120, in relation to the Independent Commissioner Against Corruption report, the Troubling Ambiguity: Governance in SA Health report.

In 2023, the Auditor-General raised a few issues in relation to progress, the first being inconsistent management of rosters. What steps is the minister taking through his department to rectify inconsistent roster management?

The Hon. C.J. PICTON: I thank the honourable member for her question. Members may recall that the background to this matter goes back to shortly after the election of the previous government, when the then Independent Commissioner Against Corruption met with the then government and requested funding to undertake a detailed investigation into SA Health at the time. That was denied by the previous government.

The then commissioner subsequently issued a report entitled Troubling Ambiguity, which outlined a number of the commissioner's concerns that led him to ask for that investigation to be done—which was denied. It did not make any specific recommendations at that time, but was merely bringing those factors onto the agenda.

The then government undertook a piece of work—I think they set up a task force—looking at the issues that were raised, and said that they had responded to the issues raised in there. I think at various points in time there was a discussion that recommendations had been responded to but, of course, there were not any recommendations made. Subsequently, the new Independent Commissioner Against Corruption has revisited the work that Commissioner Lander had done and has issued a new report, which does make a number of specific recommendations.

There are some things that we are looking at that we can do. However, as I think I said at the time that this report came out, they are very limited because of the fact—and as the commissioner herself notes in the report—that these issues are also tied with the enterprise bargaining agreement that is in place for salaried medical officers in this state. That is an enterprise bargaining agreement. that was signed just before the last election and I believe came into place at the beginning of 2022.

The commissioner also notes in her report—and I am paraphrasing—that she is surprised that a number of those issues were not raised as part of those enterprise bargaining negotiations at the time, hence the recommendations go to issues to look at it to the extent that we can at the moment but also to consider in the context of the next enterprise bargaining agreement, which I believe will kick off late next year, and we certainly will do that. These will be issues that we will raise through that process.

I know there has been some work done, particularly on the specific question in relation to rostering. The enterprise bargaining agreement is specific in terms of not having set hours for consultants in particular who are salaried medical officers, but there also had been agreement through that process that there should be arrangements in terms of managing their time across the week in terms of allocations of what time would be there for clinical time and what time would be there for teaching and research, etc., and non-clinical time. I think progress has been made on that.

There had been already some local health networks who had made progress on that. Subsequently, in the last couple of months there has been more progress made at a central level. This was an area where there was a dispute through the South Australian Employment Tribunal with SASMOA about that as well. However, to get to the crux of this matter and the recommendations that have been made, they really do take changes to the enterprise bargaining agreement and obviously that will be subject to negotiation with our employees, and with SASMOA who are the representative union.

Mrs HURN: I appreciated that introduction to a report that was kickstarted after 16 years of a Labor government managing the SA Health system. The second point that the Auditor-General raises is in relation to time sheets. How many staff are not completing time sheets reflective of the hours worked? Can you also confirm: do these concerns relate to clinicians who are working more hours than are put on their time sheet or fewer hours than are put on their time sheet?

The Hon. C.J. PICTON: As I articulated in the answer to the previous question, elements of the salaried medical officers agreement were last signed at the beginning of last year before the last election, which are very specific in terms of no fixed hours. Therefore, implementing a requirement to put in place time sheets is not possible under that enterprise bargaining agreement. However, of course for non-consultant staff—colloquially known as junior doctors—they do put in time sheets, particularly in areas such as an emergency department, etc., where there will be some quite complicated formulas of additional allowances, etc., that people will get, depending upon the times and hours that they have worked.

There was again an issue that we identified upon coming into government where the delays that were in place through Shared Services meant that, if there was a delay in terms of that time sheet or the processing of that time sheet, quite often those doctors were not getting paid. That has now been rectified in the first sense by making sure that there is a minimum number of hours that will be paid to those doctors, irrespective of that time-sheet issue. Secondly, the bigger fix for that issue is work that we need to do in relation to electronic time sheets that the department and the local health networks are working on to make sure that that is an easier process and a faster process to put in place.

In relation to consultants and time sheets, that will have to be a matter that will be subject to negotiations at the next enterprise bargaining agreement. In relation to the member's question about whether they are under or over in terms of hours worked, I think that certainly will be an argument that we will put as part of those negotiations in that it may well show that people are working more hours. It is not necessarily that people are working fewer hours. That would obviously be demonstrated by a time sheet arrangement, as the commission is recommending, but for consultants that would have to be subject to negotiation.

Mrs HURN: Minister, in relation to page 119 and private practices, the Auditor-General notes, 'DHW indicated that the time, attendance and rights to private practice policies and procedures are under consideration.' What is the status of admitting rights for obstetricians at the Women's and Children's Hospital? I know that there was an issue earlier in the year. Has that been resolved as part of this concern raised by the Auditor-General?

The Hon. C.J. PICTON: I am happy to answer, but they are two entirely separate points. The first issue in relation to the rights of private practice that the Auditor-General was raising is in relation to the rights of private practice agreement, which is in a sense an addendum to the enterprise bargaining agreement that is in place for the salaried medical officers and has been in place for a number of years. That private practice arrangement helps essentially to divvy up the income that is gained from private practice arrangements through public hospitals for clinicians who work for SA Health.

That has been subject to a number of discussions over many years. There was a proposal in, I believe, the 2018-19 budget to significantly curtail those private practice arrangements. I believe there was a consultancy done by the previous government in relation to that. That did not progress in the end, and those private practice arrangements stayed in effect from the new enterprise bargaining agreement that was signed just before the last election. We implement what has been agreed in that private practice arrangement, and any changes to that would obviously have to be subject to negotiation.

In relation to the separate question, which is not in the Auditor-General's Report but I am happy to talk about it, in relation to the Women's and Children's Hospital, there had been an arrangement in place for a number of years where a number of private obstetricians had been able to access the Women's and Children's Hospital for high-risk pregnancies where they believed that women would necessitate access to that hospital for those arrangements. Over the years, I think that had progressed to the point where, off the top of my head, casual contracting arrangements were put in place to provide some legal and industrial certainty around the arrangements that were in place there.

In previous months, there had been concerns raised by doctors at the hospital about those arrangements and about whether it was appropriate and safe for doctors who were less familiar with the hospital to come in and deliver babies at the hospital. It had been proposed by the hospital at the time that, instead of that arrangement, if there was a transfer that needed to happen, then it would be transferred to the hospital and the doctors who work in a structured, permanent or part-time way at the hospital would be involved in the delivery of the baby.

That became known to me. I think the first notification I had in the 24 hours before it became public was from the Speaker himself, through one of his constituents raising it with him, then it became public shortly afterwards. When it was raised, I spoke with the previous CEO of the Women's and Children's Hospital. I certainly expressed my disappointment that this was not an issue that had been raised with me or with the department's chief executive, Dr Robyn Lawrence, and asked that this be put on hold for 12 months at the very least and that we go through a process of working through arrangements with private obstetricians.

Obviously, that is now a couple of months in. I have not had any update on the conclusion of that work. It is still ongoing between the hospital and private obstetricians. I have had initial feedback. Certainly, I will declare an interest: the obstetrician for our upcoming baby is one of the obstetricians impacted. He is very grateful that that has been put on hold so that this can be worked through between the hospital and the obstetricians, and so I look forward to that reaching an outcome hopefully that can be beneficial for all parties involved.

Ms PRATT: Continuing on, minister, but referring you back to page 120 and country specialists, how many country specialists are working without contracts, and where are they located? What is the breakdown across LHNs?

The Hon. C.J. PICTON: Thank you. I know that this has been the subject of work that is underway, particularly coordinated by the Rural Support Service, looking at the contracting arrangements with those doctors across regional South Australia. I do not have, obviously, the exact figures with me. We will have to go away and see if we can obtain them.

When it comes to these arrangements, there are many doctors who do an incredible job. They are Adelaide-based doctors who will go to many and varied places across regional South Australia providing services. Some of these arrangements are new, but many of them have been going on for many years, sometimes decades, and they have close relationships with patients and families and other clinical staff who work in those regions.

Particularly where those arrangements have been historical in nature, they necessarily have not always had those arrangements contracted. I suspect that that is the issue that the Rural Support Service and the Auditor-General highlight in here that needs to be addressed to make sure that those arrangements have the proper contracting around them, but we certainly do not want to do anything that will discourage the partnership and the work that many specialists provide right across regional South Australia.

Mrs HURN: Minister, I refer you to pages 154 and 155, noting that earlier on page 127 there is a comment that says controls for ensuring clearances and checks are current could be improved across CALHN, SALHN and NALHN. Referring specifically to CALHN, how many employees in a prescribed position do not have a working with children check or an aged-care sector employment check in the CHRIS payroll system?

The Hon. C.J. PICTON: We do not have that information with us. We will have to take that on notice.

Mrs HURN: This may also be one to take on notice, but what type of position is a prescribed one?

The Hon. C.J. PICTON: If that is able to be broken down, then we will be able to do so.

Mrs HURN: Potentially, minister, you may like to take this on notice as well. How many employees have expired working with children checks and expired aged-care sector employment checks as well?

The Hon. C.J. PICTON: We will certainly follow that up as well.

Mrs HURN: Minister, I refer you to a comment made by the Auditor-General. The Auditor-General reviewed six medical officers who onboarded in 2022-23, and they found two incidents which were rather concerning.

The Hon. C.J. Picton: Which page are we on?

Mrs HURN: Page 155. The first one was where the credentialing application was approved after the letter of offer was issued, and there was an employee's working with children check that was issued after the letter of offer and after the commencement date. The Auditor-General says, 'This may increase the risk of compromising employee and patient safety and result in reputational damage to CALHN.' How many employees in CALHN have been issued their employment contract in the absence of a working with children check?

The Hon. C.J. PICTON: I think that is similar to the previous question, but we will see whether we can get the information on that. Certainly, I note what the Auditor-General himself says in relation to the report:

CALHN responded that it will continue to revise its appointment practices to ensure all essential credentialling and screening requirements are satisfied before employment commences. It will also ensure that any offer letters issued before credentialling and screening requirements are met clearly stipulate that the offer is subject to completing these requirements before employment commences.

Mrs HURN: Could you elaborate under what circumstance could someone be offered a contract by SA Health before they provided their relevant screenings and/or checks?

The Hon. C.J. PICTON: I think as per the CALHN response to this, they are revising their practices to make sure that does not happen and that all essential credentialling and screening requirements are satisfied before the employment commences and that any offers issued clearly stipulate that it is a requirement to have those credentialling and screening requirements before employment commences.

Ms PRATT: Minister, I refer to page 154 on credentialling and I just refer to some of the Auditor-General's comments where he states:

Different positions within an LHN can require different types of employment clearances.

He went on to note:

In 2020-21 [the Auditor-General] found that it was not clear which CALHN employees were required to comply with the legislative requirements of the various Acts…In March 2022, CALHN developed a fact sheet outlining the certificates required by employees.

My question is: has this fact sheet contributed to any improved practices, and, if so, will it be adopted by other LHNs?

The Hon. C.J. PICTON: I think we will have to get a response specifically from CALHN in relation to that. However, I hope that, if it has proved a benefit, it would be shared through LHNs. Obviously, one of the things that needs to be managed with devolution of health services is that it helps not only to devise local solutions but also where there is something that has been developed we need to make sure that that is shared appropriately so we do not have all of our LHNs having to reinvent the wheel. So, we will check to see that has been shared appropriately with other LHNs.

Ms PRATT: That being the case, and where the Auditor-General states that different LHNs need different types of employment clearances, what employment clearances are required for the Flinders Upper North LHN, and what improvements to credentialling for new doctors have been made since the Flinders Upper North LHN incident to prevent another unregistered doctor working in the system?

The Hon. C.J. PICTON: I refer you to the reports that have been released in relation to that incident in the Flinders and Upper North Local Health Network. They are very extensive reports into that particular issue that do recommend very specific changes that need to be made in that LHN's management, and obviously that information has also been shared with other LHNs to make sure that they can consider the issues raised in those reports as well and take any appropriate action that may be necessary.

Ms PRATT: In light of that answer then in terms of referring to the reports, would you say that the Flinders and Upper North LHN is making progress with those recommendations?

The Hon. C.J. PICTON: Yes; however, of course, they are not fully implemented because a significant amount of work is involved in those reports to make sure that all of those recommendations are implemented.

Mrs HURN: Minister, I refer to page 134 down the bottom where it states 'Conflict of interest forms could not be located'. The Auditor-General notes:

For one of the significant procurements [that they reviewed], there were a number of evaluation team member conflict of interest forms that could not be located.

What is the significant procurement referred to in the above scenario?

The Hon. C.J. PICTON: We do not have that information. If that is something that is appropriate to be provided, then we will. I obviously note what was said by the Auditor-General, that the department has advised that it is reminding staff of the requirement to complete those conflict-of-interest forms.

Mrs HURN: How many people failed to complete a conflict-of-interest form and what positions did they hold? Separate from that is: have they since completed a conflict-of-interest form and was a conflict declared? I note the reference to communication with staff. Potentially, if you could elaborate on whether that communication went just to the staff involved in this procurement that is mentioned, or did that go to SA Health more broadly?

The Hon. C.J. PICTON: I do note that the Auditor-General did not outline that there was a particular conflict in this case, only that there was not the form that could be located. Presumably, if the Auditor-General had identified there was a conflict, the Auditor-General would have no issue in terms of saying so. We will check that and consider it as part of the previous question as well, if we can appropriately release that information, if there are any issues around that. In relation to who is being reminded, I am advised by the department that it is specifically people who have been involved in procurement who are the people being reminded, rather than the 47,000 people who work for SA Health who would unlikely be involved in a procurement.

Mrs HURN: Minister, I just refer you to 'Procurements not on the forward procurement plan.' Again, that is at the bottom of page 134. The Auditor-General notes that:

None of the procurements we reviewed were included on the forward procurement plans…provided to Procurement Services SA, despite all of them being over the threshold for inclusion.

Why were procurements not included on the forward procurement plan?

The Hon. C.J. PICTON: I think the department acknowledges, particularly in the work that they have done through COVID, that there was a number of standard procurement work, and obviously resources and focus and attention was diverted to the more urgent COVID procurement work that needed to happen over the course of the last three years. This is one area of focus—getting back up to date with the forward procurement plan—for the department and the procurement team to make sure that those future procurements are all documented in that plan.

Mrs HURN: Just as a follow-up to that, I note that as part of a response from DHW there was an expectation that the forward procurement planning would be complete by August 2023. Can you confirm whether that is being met or not?

The Hon. C.J. PICTON: I cannot confirm; I will check whether that has happened now.

Mrs HURN: At the top of page 135 the Auditor-General notes that 'Not all contracts were reported to Procurement Services SA as required.' Again, it notes that 97 contracts on SA Health's contract register that should have been reported to Procurement Services SA were not. Can you talk us through the nature of those contracts and what the value of those contracts were?

The Hon. C.J. PICTON: You will be shocked that I do not have the full list and names and values of the 97 contracts with me. However, SA Health is implementing a control to ensure that procurement activities are reported to Procurement Services SA, and they are aiming to do that by the start of next year.

Mrs HURN: The Auditor-General found that SA Health policies and procedures were not clear about who was responsible for procurements above $550,000, with its internal procurement framework referring to a responsibility matrix that was not available at the time of the review. Can you confirm whether this matrix now exists and who is responsible for maintaining it?

The Hon. C.J. PICTON: What page?

Mrs HURN: Page 134, sorry, 'Procurements and responsibilities were not clear'; halfway through 134.

The Hon. C.J. PICTON: As per what the report says, the department has responded that it will review and amend its policies and procedures to ensure the roles and responsibilities are clear.

Mrs HURN: Just to confirm, is the matrix now complete?

The Hon. C.J. PICTON: The advice that I have is that the matrix is complete. It is very exciting.

Mrs HURN: I refer again to page 135 regarding payment without delegation, 'Approval of payments'. It mentions that financial authorisations have not been reviewed and approved for over 18 months. Why have authorisations not been reviewed since the state election?

The Hon. C.J. PICTON: I suspect because people have been busy doing many things, but this is something which the department has committed to doing and making sure that those financial authorisations are reviewed, as per the Treasurer's Instructions 8.

Mrs HURN: Again, I note that this was initially raised as a concern in August 2022 and there was a commitment to review those by October 2022. Has that now been completed?

The Hon. C.J. PICTON: I am advised that the work is underway, but has not completely been completed yet.

Mrs HURN: I refer to the bottom of page 135, 'System authorisation limits are not agreed to approved authorisations and we noted discrepancies'. What is the number and total value of payments approved by employees who did not have an approved delegation, and when will the financial delegations be reviewed?

The Hon. C.J. PICTON: I do not have all of that detail, but I can confirm that the department has committed to performing an annual review and changes will be processed to systems. It also noted that some systems are now integrated, so changes can be made automatically to multiple systems once identified.

The CHAIR: The time available for this portion has expired.

Progress reported; committee to sit again.

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