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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-10-28 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 2024-25 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 Report 2024-25 and Agency Statements for the year ending 2024-25, as published on the Auditor-General's website.

I welcome for the government the Premier and for the opposition the Leader of the Opposition. I call for questions. At the end of the allotted time—we have 30 minutes, so we will finish at 4.30 this session.

The Hon. V.A. TARZIA: Good afternoon, Premier. In Part C: Agency Audit Reports, Department of the Premier and Cabinet, financial statistics, page 264, the report states that 390 FTEs fall under the responsibility of DPC. My question is to the Premier. Can he please advise: of these, how many additional FTE were brought on for CreateSA?

The Hon. P.B. MALINAUSKAS: CreateSA obviously fits within the Minister for Arts' portfolio. We do not have that number at hand, but I am sure the Minister for Arts will be able to advise the leader throughout the course of the Auditor-General's process and discussions.

The Hon. V.A. TARZIA: How many FTEs' primary job description involves communications, social media and media?

The Hon. P.B. MALINAUSKAS: They are going to bring it up for us, so we can eventually come back to that—appreciating that there is the department and then there is the Office of the Premier and that the Office of the Premier employs, as has always been the case, the media advisers who get allocated to various ministers' offices. With respect to employees of the department, that is of course all publicly disclosed every year, including their salaries. But in terms of within DPC we will get that number.

The other thing I am happy to consider is that there has also been a centralisation of many of these functions as well from other agencies into the Department of the Premier and Cabinet through the creation of the hub.

The Hon. V.A. TARZIA: How many of these FTEs are executives?

The Hon. P.B. MALINAUSKAS: I will not take it on notice just yet because they are procuring a list now and hopefully I will be able to give you the answer before we finish.

The Hon. V.A. TARZIA: In the same section—and it could also be one that you might be able to furnish there if you are able in a short space of time—by how much have executive FTEs grown since July 2022?

The Hon. P.B. MALINAUSKAS: That I will have to take on notice, but the actual number I think—

The Hon. V.A. TARZIA: I suppose related to that is: in relation to the number of executives in terms of FTEs, how does that align with the government's commitment to reduce executives—I think it was by 50 FTE—from 2022 numbers?

The Hon. P.B. MALINAUSKAS: That relates directly to the previous answer we are taking on notice, which we are happy to do.

The Hon. V.A. TARZIA: Related to that, can the Premier provide an update on how the government is tracking on that commitment and advise how many Public Service FTEs have reduced since taking office?

The Hon. P.B. MALINAUSKAS: I am happy to have a look at that. Is that across government, or in respect of DPC?

The Hon. V.A. TARZIA: DPC. I refer to Part C: Agency Audit Reports, Department of the Premier and Cabinet, significant events and transactions, page 264. Can the Premier provide detail on why the Office of the Commissioner for Public Sector Employment was transferred to DPC?

The Hon. P.B. MALINAUSKAS: The commissioner for the public sector is an attached office; it always has to be attached to somewhere in government regarding corporate services and the like. It was transferred to DPC because the commissioner for the public sector is a central function within government, so it made sense to put it with a central agency—it could be DPC, it could be DTF. It was moved to DPC, but it still stands as a standalone attached office.

The Hon. V.A. TARZIA: As an attached office to the department, can the Premier define what reporting is provided to DPC by OCPSE?

The Hon. P.B. MALINAUSKAS: The same reporting that is always provided to governments. The role of the office has not changed.

The Hon. V.A. TARZIA: Does OCPSE oversee the government's commitment to reduce executive numbers?

The Hon. P.B. MALINAUSKAS: That responsibility ultimately sits with chief executives of various agencies.

The Hon. V.A. TARZIA: The report states that 'Land, buildings and improvements assets were revalued up by $27.9 million.' Can the Premier advise which valuations contributed to the rise and, of each revaluation, how much?

The Hon. P.B. MALINAUSKAS: The $27.9 million—to be more specific, $27.853 million—is made up of $2.992 million from leasehold improvements, $2.901 million from buildings, I am advised, and $21.96 million from land. In terms of what made that up amongst the land, I am advised that it is predominantly the following: Adelaide film studios to the tune of $19.8 million, Lion arts centre by $1.175 million, Queen's Theatre by $275,000, and Walkley Heights by $480,000.

The Hon. V.A. TARZIA: I refer to Part C: Agency Audit Reports, Department of the Premier and Cabinet, employee related expenses, page 266. On page 266, the report states that employee-related expenses decreased mainly due to the transfer of OCIO Digital Programs and ODA employees to DTF. So, whilst that shows a reduction in overall employee expenses, did any programs within DPC have any increases in employee expenses? If so, in which programs and in which roles?

The Hon. P.B. MALINAUSKAS: The short answer to your question, I am advised, is yes. Those reductions were partially offset by increases in employees associated with the Major Projects division to the tune of $524,000: First Nations engagement, the Office of Autism, the Children in the North initiative and engagement of the Cross Border Commissioner.

The Hon. V.A. TARZIA: How many employees employed by DPC have a total remuneration greater than $400,000?

The Hon. P.B. MALINAUSKAS: My advice is that the financial statements disclose those numbers over various thresholds. That should be on the public record. If we can find those for you—I have seen something similar to this myself—over 400. In 2025, there are one, two, three, four is the advice I have here.

The Hon. V.A. TARZIA: Is that more or less than last year?

The Hon. P.B. MALINAUSKAS: More by one. In 2024, according to this—and this is publicly available—there was one in the band from $391,000 to $411,000. In 2025, that person was not in that band and presumably went up to the $411,000 to $431,000 band. It could be the same or different by one.

The Hon. V.A. TARZIA: Can the Premier advise what each of these staff do?

The Hon. P.B. MALINAUSKAS: My advice is, as is often the case with public servants, we do not disclose the names of those individuals. I think an exception is provided with respect to the CEs, the chief executives of departments, but not the names of the individuals in those roles, and therefore those roles with the exception of the chief executive.

The Hon. V.A. TARZIA: In saying that, are we able to get the job titles or job descriptions? We are not necessarily asking for the names of the individuals.

The Hon. P.B. MALINAUSKAS: That would serve the same purpose in terms of the specific job title. My understanding is that is a practice that has been in place across governments for some time for privacy reasons and the like.

The Hon. V.A. TARZIA: Referring back to a previous answer, what caused the increase in employee-related expenses in the major projects division?

The Hon. P.B. MALINAUSKAS: The function of those roles is across a number of certain things. Where major project delivery services are covered off within DPC, such as, for instance, the Cultural Institutions Storage Facility, Barossa Park—the team there is doing the work on the North Adelaide golf course proposition—any project that needs to be overseen by someone within government that does not automatically fit within DIT can be done by that unit.

The Hon. V.A. TARZIA: I refer to Part C: Agency Audit Reports, Department of the Premier and Cabinet, highlights of the financial report, income, other, page 265. Of the $7 million of income categorised as 'Other', can the Premier advise the resources that his department has received free of charge? What does that mean?

The Hon. P.B. MALINAUSKAS: When you say 'free of charge', what do you mean?

The Hon. V.A. TARZIA: I will get some clarity on that. While I do that, I will go to the next one. I refer to Part C: Agency Audit Reports, Department of the Premier and Cabinet, highlights of the financial report, expenses, supplies and services, page 265. Can the Premier advise the amount spent on consultants in the last financial year?

The Hon. P.B. MALINAUSKAS: I am happy to take that on notice.

The Hon. V.A. TARZIA: For those consultants paid on a time and material basis, can the Premier provide those receiving more than $100 per hour?

The Hon. P.B. MALINAUSKAS: I am happy to take that on notice.

The Hon. V.A. TARZIA: Under 'Expenses' for supplies and services, the report states $133 million spent. Were there any variations to the budgeted amount?

The Hon. P.B. MALINAUSKAS: Not much was budgeted in the last financial year for supplies and services. I am happy to get the detail for the leader. My advice is it almost certainly would have varied from the budget because of events and activities that happened throughout the course of the year. In terms of what specific amount was allocated at the budget, we will have to take that on notice.

The Hon. V.A. TARZIA: Do we have any of those other answers to the earlier questions? Do you want to take the time to do some of those? I might have some questions from those. Is the Premier able to provide a breakdown? When we go to the $133 million for supplies and services, how much was used on sponsorships and external contributions?

The Hon. P.B. MALINAUSKAS: The $133 million, and the more granular number that we have here, $132.430 million, can be broken up in these ways: $80,802 from intra-government transfers; public information activities, $8.672 million—I am just giving you some of them, for example—information technology and communication charges, $6.7 million; general administration and consumables, $5.1 million; temporary staff, $1.1 million; Microsoft licence and support, $1.3 million; and managed network services, $260,000. There is a whole range of things—repairs and maintenance, $3.7 million. It sort of jumps around a bit. I am happy to read out the full list if you want.

Just to go back to your question about the distinction between the budget, the budget was $74.95 million, ending up being $132 million. The variance is $57 million and that is principally accounted for by a range of things, including intra-government transfers being the biggest contributor to that. So the variance in the budget accounts for, and I will read them all:

intra-government transfers, $8.3 million;

accommodation, $1.49 million;

Public Information Services, $661,000;

information, technology and communications charges, negative $24.8 million;

general administration and consumables, negative $189,000;

repairs and maintenance, $781,000;

sponsorships and external contributions, $212,000;

contractors, negative $2.63 million;

Shared Services, $1.5 million;

consultants, $225,000;

Microsoft licence and support, negative $1.6 million;

temporary staff, negative $2.7 million;

staff development and recruitment, negative $360,000;

managed network services, negative $4.770 million; and

other suppliers and services, negative $2.701 million.

This adds up to a variance of negative $26.709 million. That is the variance between the 2025 number and the 2023-2024 financial year.

The Hon. V.A. TARZIA: The consultants that the Premier referred to, can you outline what they do?

The Hon. P.B. MALINAUSKAS: What I can share with you is the information I have here at hand. If there is any more you need, let us know. There was a decrease in consultants between the 2023-24 financial year and the 2025 financial year of 48 per cent, or the $2.63 million figure. The decrease is primarily due to the Office of the Chief Information Officer, Digital Programs, data analytics that transferred to DTF. That was primarily offset by the increase through the Inklings pilot program, which is money we have invested in the Inklings Program, which is associated with autism; ICT infrastructure, $215,000; and establishing the Government Advertising and Insights Hub, $262,000.

The Hon. V.A. TARZIA: In relation to the sponsorships and external contributions that we were talking about, does that line item cover money spent to stand up the Government Advertising and Insights Hub? If so, can the Premier explain how that came to, I think, $3 million?

The Hon. P.B. MALINAUSKAS: The advice I have for that question is that the answer is no. I have the other question you were asking, about the comms and social media from DPC: 14 FTEs is the advice I have received.

The Hon. V.A. TARZIA: If it is more efficient to centralise government advertising, why did it take DPC that time to take on the responsibility of the government advertising and insights position, and why is that occurring just before an election?

The Hon. P.B. MALINAUSKAS: Sorry, say that again?

The Hon. V.A. TARZIA: In terms of government advertising, obviously that has been somewhat centralised. Why did it take DPC the time that it did to take on the responsibility of government advertising and insights?

The Hon. P.B. MALINAUSKAS: My understanding is everything was lined up to commence in February. In terms of taking time to appoint someone, it was just going through a process. There was a process for the head of the hub.

The Hon. V.A. TARZIA: I refer to Part C: Agency Audit Reports, DPC, highlights of the financial report, expenses for supplies and services, page 265. Of the $133 million spent on supplies and services, how much of this spending was to grow existing events in the state?

The Hon. P.B. MALINAUSKAS: You said 'existing events'?

The Hon. V.A. TARZIA: Yes. The question, and where I am going, is: of the $133 million spent on supplies and services, how much of this spending was to grow existing events? I suppose the lead-on is: how much of this was spent on new events in the state?

The Hon. P.B. MALINAUSKAS: I have to take that on notice because I am just trying to distinguish between the two. I will take that on notice.

The Hon. V.A. TARZIA: I refer to Part C: Agency Audit Reports, DPC, highlights of the financial report, administered items, page 268. Can the Premier advise what the objectives/activities are for the department's administered items?

The Hon. P.B. MALINAUSKAS: Page 268? Sorry, what are you asking here?

The Hon. V.A. TARZIA: Highlights of the financial report, administered items, page 268: I am asking what the objectives/activities are for the department's administered items.

The Hon. P.B. MALINAUSKAS: As per the Department of the Premier and Cabinet's 'Notes to and forming part of the financial statements'—that is to say, the department's financial statements—A1.2 goes directly to the leader's question about objectives/activities of the department's administered items. Their analysis is as follows.

Special act salaries and allowances: the department disburses the parliamentary salaries and allowances pursuant to the Agent-General Act 1901 and the Parliamentary Remuneration Act 1990 on behalf of the state government. There is the Bank of Tokyo Cultural and Social Exchange: the department holds funds for the purpose of supporting cultural and social exchange between South Australia and Japan. SA Okayama: the department holds funds for the purpose of furthering South Australia's relationship with Okayama. The fund was established from the trading surplus from South Australia's presence at the Seto Ohashi Expo 88.

Promotion of the state: the department provides the funding for activities that advance the interests of South Australia by promoting the economic, social and cultural aspects of the state on behalf of the state government. SA Motor Sport: the department holds funding associated with the Motor Sport Board for the Adelaide 500 and the Motorsport Festival and other motorsport activities. Finally, the Office of the Commissioner for Public Sector Employment: the Office of the Commissioner for Public Sector Employment is an attached office of the department, effective from 1 July 2024, as a result of the administrative restructure, as published in the South Australian Government Gazette on 27 June 2024.

The Hon. V.A. TARZIA: I refer to Part C: Agency Audit Reports, Department of the Premier and Cabinet, highlights of the financial report, income, on page 265. There is a table there which shows $18 million from the sale of goods and services for 2025, down from $25 million during 2024. Is the Premier able to explain that variation? Do you have any of the questions taken on notice from before?

The Hon. P.B. MALINAUSKAS: The advice I have received is that it is to do with the transfer of land and buildings from the DPC to the Adelaide Festival Centre.

The CHAIR: The time has expired. I welcome the Treasurer and the member for Morphett, who I assume is going to be the spokesperson for the opposition. I call on the member for Morphett for questions. We will go for 30 minutes, starting now.

Mr PATTERSON: Thank you, Chair. Turning to the Office of Hydrogen Power South Australia, financial statements, on page 11 it talks through employee-related expenses and in particular breaks down the bands of employee remuneration over 2025. It shows there that one employee was paid between $831,000 and $851,000. Is that relating to the former CE of the Office of Hydrogen Power?

The Hon. A. KOUTSANTONIS: No.

Mr PATTERSON: So then who? In comparing the 2024 to the 2025 figures there, you had eight employees on remuneration in those bands, moving over to seven. So does it relate to one of the employees from 2024?

The Hon. A. KOUTSANTONIS: I am advised that the employee included in the employee remuneration bandwidth received a termination payment at the end of April 2025, in addition to 10 months of their salary, from July 2024 to 30 April 2025. The expenses reported include the employee's salary, termination payment as well as other costs, including superannuation and remaining leave entitlements.

Mr PATTERSON: Can you provide a breakdown between the actual salary portion of that band and then the termination portion of that band?

The Hon. A. KOUTSANTONIS: I will endeavour to do that.

Mr PATTERSON: You will take that on notice and bring it back?

The Hon. A. KOUTSANTONIS: I will endeavour to do it, yes.

Mr PATTERSON: That being the case then, in terms of these reports here, if it is not the CE, can I confirm, though, that the CE moved across to become the state lead of the Whyalla Steelworks industrial transformation, and was that on the same salary as was applied in 2025?

The Hon. A. KOUTSANTONIS: As a result of legislation passed in this parliament, the Whyalla Steelworks was placed into administration. As a result of that administration, the commonwealth and state governments are investing over $1.9 billion into the maintenance of structural steel manufacturing in this country, a capability that is incomprehensible in its economic sovereignty impact on our nation.

Given the nature and the size of the task, it was appropriate that we had someone who had a familiarity and knowledge not only of Whyalla but of the transformational task because at its core the Hydrogen Jobs Plan was about the transformation of the steel industry, and that transformation of the steel industry was about providing hydrogen as a reductant to remove oxides from iron oxide, not as a heat source, as members opposite have implied.

So it was only appropriate that the chief executive of the Hydrogen Jobs Plan then move across as the state's lead on this because the negotiations with the commonwealth government, the errors—I want to say errors but I suppose the rush by the banks and the former administration to (1) appoint an administrator and (2) award the sale process to Mr Sanjeev Gupta—were something that, if we could turn back the clock, we would all want to change.

The banks are motivated by, obviously, a return on their debt. They are the ones that funded the administration, they are the ones that placed Arrium into administration, and the moment they had a cash offer that they were happy with, they accepted it and the administrators settled and Mr Gupta walked out with a multibillion dollar asset for about $700 million in which he never reinvested and he just strip-mined Whyalla for the next nearly decade after that, building up an empire in Europe while taking billions of dollars out of Whyalla, including over $4 billion in steel turnover and over $7 billion in iron ore sales. That is something I think we can all look back on and say should not have occurred.

So, yes, Sam Crafter is someone the government has complete confidence and trust in. He is an exceptional individual and an exceptional public servant. I remind the house that on the change of government in 2018 he was kept on by the then Minister for Energy and Mining, who later became the deputy premier. I think both governments have recognised his quality and recognised his commitment to the state and his ability to serve the government of the day, no matter its political persuasion, and that is a strong trait he has.

Mr PATTERSON: Now that we have gone through that part of it, in terms of the other employees, why were those other ones not mentioned? Why did they not need redundancy? Have they been moved into the Department for Energy and Mining?

The Hon. A. KOUTSANTONIS: The advice I have is that the overwhelming majority have been redistributed back within government. These are people who are highly qualified public servants who have expertise and skills the government can use. They were directors or executive directors and they have gone and found roles within government. My understanding is only a couple did not have their contracts renewed, and one took a redundancy. I think overall this is a very good example of a very efficient operation by the government in terms of being able to recruit staff from within government to run this project. Once the project was halted because of what was occurring in Whyalla, we were able to redistribute that staff very efficiently back into government.

Mr PATTERSON: Just referring to Part A: Executive Summary of the annual report, on page 13 the Auditor-General provides a breakdown of the $285.2 million spent to 30 June and lists $136 million for land, property, plant and equipment combined. Of that $136 million, how much is associated with land as an asset?

The Hon. A. KOUTSANTONIS: My understanding is a small portion of it was for land and a large overall portion of that was for equipment.

Mr PATTERSON: Thank you. I was looking for a specific breakdown.

The Hon. A. KOUTSANTONIS: We are in a procurement process now for our generators. I do not want to have to give away the price to the people who are about to purchase them. I know the member has been erroneously saying we spent half a billion dollars with nothing to show for it. Of course, that is completely false and a lie, and if he dares to repeat it in the chamber, there could be a privileges committee into the way he deliberately misleads the parliament.

The truth is we have gone out and bought infrastructure and we have bought land. These are assets that the government has and owns, and they will have a value. If the member continues with his erroneous lies about what has occurred here—he can say one thing on radio, but the parliament is something very different. If he doesn't believe me, he can ask his former Deputy Premier Vickie Chapman what happens to people who mislead the parliament.

Mr PATTERSON: I asked for the land value. That was what it was.

The Hon. A. KOUTSANTONIS: The land value was between $12 million and $13 million.

Mr PATTERSON: In terms of property as well, did that include any accommodation in Whyalla?

The Hon. A. KOUTSANTONIS: No, not in that portion. The $136 million is for land that we purchased from the council and the rest is for plant and equipment that the government has as an asset.

Mr PATTERSON: Just in terms of that plant and equipment, is there any dollar amount of that $136 million associated with the electricity infrastructure that is mentioned further on as associated with the contingent liability, or had any of that contingent liability fallen due by 30 June?

The Hon. A. KOUTSANTONIS: The contingent liability is something I need to explain probably again to members opposite. The contingent liability is only there if no-one else uses the infrastructure and the government then pays money for that infrastructure to be built.

So ElectraNet or SA Power Networks, depending on who built the particular infrastructure, built that on the basis it was a transaction that would be levied over a period of time. The contingent liability is that if no-one takes up that capacity, the government will pay. That is how you underwrite infrastructure, much like the underwriting of Project EnergyConnect that members opposite dived into headfirst while they were closing off our gas-fired turbines and banning gas extraction in the state.

What we have done is we have invested with ElectraNet and SA Power Networks to underwrite and unlock greater capacity in the Upper Spencer Gulf and Eyre Peninsula. I would have thought any member of parliament from Eyre Peninsula or the Upper Spencer Gulf would be thinking, 'You know what we have never had in the Upper Spencer Gulf? Really good quality power with excellent capacity for upgrades for industrial applications, because it is a long, skinny grid that is rarely invested in.' Here we have a government that is investing in infrastructure in the Upper Spencer Gulf, yet alas, members opposite call it a waste of money.

Mr PATTERSON: From your answer, can you confirm that there are no dollars associated with electricity infrastructure in that $136 million?

The Hon. A. KOUTSANTONIS: I said generators are part of that $136 million. That is electricity infrastructure. They are an asset the government owns. I have to be very careful here. The Vickie Chapman principle is if you mislead the parliament you have to go. You have got to go, there are no two ways about it, so it is very important that we get this right.

So, yes, the $136 million does include energy infrastructure because it includes generators. We are in a procurement process. This is a payment towards a total payment. A part of it is land and the other part is plant and equipment. The plant and equipment part is energy infrastructure. What you are asking about is poles and wires. My advice to the opposition is say what you mean and mean what you say. If you want to know the cost of underwriting energy infrastructure, ask it.

Mr PATTERSON: So, from your answer two before, there is no money in that $136 million associated with poles and wires?

The CHAIR: Take a deep breath and have a drink as well, then count to ten.

The Hon. A. KOUTSANTONIS: Yes, Mr Chairman. I think I made it pretty clear. Contingent liability is the underwriting of electrical infrastructure, transmission and distribution. Plant and equipment is plant and equipment that we own. Contingent liability we do not own; we pay, because we have underwritten it, only if no-one else uses it. I will give you an example. If I underwrite the renting of your house and I say, 'Every week it's not rented, I will pay you the rental,' but you rent it out every week, what do I pay you? Nothing. However, if it is not rented out, it is listed as a contingent liability because I might have to pay it if it is not rented out. Is that simple enough for you?

Mr PATTERSON: On the same page, let's talk about the $125 million of ongoing obligations. Just to confirm, that is over and above the $285.2 million that has been spent as of 30 June 2025.

The Hon. A. KOUTSANTONIS: Are we at the same page, page 13?

Mr PATTERSON: Yes.

The Hon. A. KOUTSANTONIS: You are talking about $285 million and those subsets make up a part of it?

Mr PATTERSON: No. The Auditor-General at the top says $285.2 million spent as of 30 June, then in the second paragraph I am just confirming, in addition to that, the reported contractual commitments of $125 million. That is in addition to the $285.2 million.

The Hon. A. KOUTSANTONIS: The member just recently announced an election commitment to buy 200 megawatts of generation. Take a guess, roughly—I know your shadow treasurer is sitting alongside you, so you would have had some sort of shadow cabinet bilateral. Did you disclose what you think it might cost to buy 200 megawatts worth of generation? I have just told you that, of the $136 million, about $12.4 million or so was for land and the rest was for generators, then there is another bit in there for the rest of the generators.

I see the smile on your face. It is all coming together now, isn't it? It is obviously more plant and equipment, but the part that the member deliberately misleads on is that that is an asset the government has. It is not foregone, it is not lost. That is an asset we own—an asset I would remind the committee that the member himself has already gone out and promised and said if he is elected and he is energy minister he is going to go out and buy. Yet he is telling everyone what we have just done, which is buy 200 megawatts of generation, is a waste of money. So if our 200 megawatts is a waste of money, what does that say about yours? The silence is deafening.

So, yes, I think members opposite are starting to come to the realisation that they are building a house on mud. They are building their house on mud. I think it is pretty self-evident what is occurring here. It is pretty obvious to any reader and layperson reading this that generators in the market are anywhere between $1 million and $1.5 million and $2 million a megawatt to purchase. If you have land and property and equipment at $136 million and you know that a portion is for land and then you have another $125 million commitment coming after the next financial year—well, one plus one equals a generator.

Mr PATTERSON: I go to page 8 on the financial statements for the Office of Hydrogen Power.

The CHAIR: What page was that, sorry?

Mr PATTERSON: The financial statements for the Office of Hydrogen Power South Australia, page 8. It talks a bit about the $125 million.

The Hon. A. KOUTSANTONIS: Page 8?

Mr PATTERSON: Yes, in the financial statements. The report says that these $125 million commitments relate to rental agreements for the offices located in Adelaide and Whyalla. How much of that $125 million relates to rental agreements for the office for Adelaide and Whyalla rentals?

The Hon. A. KOUTSANTONIS: I understand it is about $120,000 for rental.

Mr PATTERSON: I will go to Part A.

The Hon. A. KOUTSANTONIS: Part A?

Mr PATTERSON: Part A of the annual report, Executive Summary.

The Hon. A. KOUTSANTONIS: What page?

Mr PATTERSON: Page 13. The Auditor-General talks about business money spent to 30 June—$85.7 million that was impaired because the costs provided no immediate future economic benefits and were predominantly related to the early contractor involvement costs. Can the minister provide a breakdown of that $85.7 million? How much was paid to contractors, how much was paid to consultancies and how much was paid in legal costs?

The Hon. A. KOUTSANTONIS: It has to be done to protect the position of all governments to be able to contract for consultant services and make sure that we do not get ripped off, but this is important work. This is work that, through an accounting standards sense, the Auditor-General is required to call an impairment because this project now has been suspended. That does not mean that the work has no value to government and cannot be used for another application.

For example, members opposite have announced a policy that, if they are elected in March, they will be buying a generator. A lot of the consultancy work that we have done is about the operation and management of a generator. If members opposite form government in March 2026, they will go to the Department for Energy and Mining and the Department of Treasury and Finance and they will say, 'You know that stuff the Auditor-General called an impairment? We would like to grab it, please, because we are about to buy some generators and those generators need to be run and dispatched into the grid. So we want to see the consultancies that the government used to be able to identify how they are being used and how they are being run and how to dispatch them.' You have to distinguish and delineate between a project that is no longer going on and the information gathered within that project.

When the algal bloom ends—and it will end—all the scientific consultancy work that we have done through that work will technically be an impairment because the algal bloom will be over. Does that mean that that work has had no value? Of course not—absolutely of course not. We will use that information. It is no different here.

I am going to make sure that we protect our ability to go out and contract with contractors. I do not want to disclose the individual values because the government is constantly in tender processes with consulting agencies. I do not want other consultants to know exactly what we are paying different groups. We always have consultants come in and give us advice to crosscheck what the public sector says to us, and the public sector uses that, but we want to have competitive tension there. The moment you say, 'X consultant got Y for this body of work,' that is something—what we do is we say the total amount.

Mr Telfer: You did not say what body of work it includes.

The Hon. A. KOUTSANTONIS: The bodies of work are on things like the generators and how to integrate hydrogen with the steelworks, because hydrogen in the steelworks, whether members opposite understand it or not, is coming. It is not a matter of ideology. It is not a matter of Labor or Liberal. It is a matter of chemistry. The only way you decarbonise steelmaking is you move away from coking coal, which is blast furnace technology, to direct iron reduction.

Direct iron reduction can be gas—that is, natural gas, which members opposite are opposed to—or hydrogen. The by-product using gas, while still emitting carbon dioxide, is considerably less than coking coal. When using coking coal, as a rough guide, for every tonne of steel manufactured or iron manufactured you get two tonnes of carbon dioxide, but for every tonne of iron produced using direct iron reduction you get 600 kilograms of carbon dioxide: a dramatic reduction from blast furnace down to DRI. When you use hydrogen as a reductant, what you get then is you have no carbon emissions at all and the by-product is water vapour.

That consultancy work is vitally important and will be used by people who are considering purchasing the steelworks, but we have done this body of work already about the integration of hydrogen within the steelworks and how it can best be used—and, of course, the work we have done on getting gas to the generators that will also be used for direct iron reduction in Whyalla, because we believe in the Upper Spencer Gulf. We have invested money to try to understand how best to upgrade the Upper Spencer Gulf to maintain it as an industrial hub, whether it is protecting Whyalla and Port Pirie or, of course, investing in Northern Water for Roxby Downs and unlocking water for the Upper Mid North.

These are vital industries that we care deeply about. We want to add value to them. So while technically the Auditor-General must call these an impaired expense, these are vital pieces of information that the government has gathered that will benefit us for generations to come.

Mr PATTERSON: When you announced the deferral of the hydrogen power plant and that the money was going to be transferred across to Whyalla, the $593 million budget was said to have been transferred across for the $600 million support package. Here, the Auditor-General lays bare that when you take into account not only the money spent to 30 June, the $285 million, but also the $125 million you have contracted, plus the contingent liabilities, there are costs there that just cannot be recovered. How much of the $593 million has been able to be transferred across to the support package as of 30 June 2025?

The Hon. A. KOUTSANTONIS: The work on the electrical infrastructure that is a contingent liability was not part of the Hydrogen Jobs Plan; that was additional work we had done. I will give the member an understanding of this so he can understand it better. We could have built the Hydrogen Jobs Plan with our generator and our electrolyser using the existing availability of the substations and transmission lines that were there, but it would have sterilised any future upgrade, either for the steelworks or any other industry in the Upper Spencer Gulf, because we would have taken up all that capacity. We saw this as an opportunity to upgrade it.

While members opposite are seeking to catastrophise our intervention in Whyalla as much as they possibly can, despite voting for it, what we have done is we have invested additional funds outside the $593 million to make sure that we could have robust infrastructure in Upper Spencer Gulf. That is money into our regions for industrial capability in regional areas and members of the opposition are complaining about it. Is it any wonder that of the Upper Spencer Gulf cities the opposition holds no seats, where once they held two out of the three? You have to ask yourself.

Mr Telfer: There are only two seats there.

The Hon. A. KOUTSANTONIS: There used to be three. There used to be three seats. Frome used to cover Port Pirie. Stuart used to cover Port Augusta and Giles used to cover Whyalla. There was a time when the Liberal Party held two of the three seats in the Upper Spencer Gulf and now you hold none. These are industrial towns that the Liberal Party has walked away from and now you are complaining about us upgrading the infrastructure in those very towns that allows them to upgrade their industrial capacity at no extra cost to them.

Any proponent wanting to build new infrastructure in the Upper Spencer Gulf would have to pay that infrastructure if we had just taken up the latent capacity and not upgraded it. So we took time to bring more money into the budget to upgrade that infrastructure that the members opposite are now complaining about. The government makes absolutely no apology for that whatsoever because upgrading the electrical infrastructure, upgrading substations, upgrading transmission lines is good for the Upper Spencer Gulf and for Eyre Peninsula.

The upgrades of the swell lines that run down Eyre Peninsula and upgrading those transmission lines—the member for Flinders will know this: the number of complaints we used to get about the quality of power on Eyre Peninsula, the number of small businesses that would have their fridges and their equipment constantly wrecked by inconsistent power supply and surges and the quality of the power they received was a cost on business. We have invested in it. Those complaints have now all but dried up.

Mr Telfer: This government? The last government did that upgrade.

The Hon. A. KOUTSANTONIS: It was not the last government. It was our government. It was our government. It was the Weatherill government that did it and members opposite complained about us doing it. That was when you were chair of the LGA and just a candidate. That was a time when you were championing what we were doing—

Mr Telfer: When I was a candidate was when we were in government. What is going on?

The Hon. A. KOUTSANTONIS: It was not when you were in government. That is not how regulatory periods work. You do the regulatory period work. You do the work in the regulatory period beforehand. I know the shadow treasurer is a bit upset that the more senior shadow minister is asking all the questions, and he is sitting watching and not asking any questions, but the truth is we have invested heavily in infrastructure in the Upper Spencer Gulf. That is a good outcome for the people of the Upper Spencer Gulf and a good outcome, I think, for the South Australian economy.

The idea that $593 million was all we spent—we spent money, extra money, upgrading infrastructure in the Upper Spencer Gulf that was not for our project. It was so that we would not sterilise any future investment in the Upper Spencer Gulf's industrial capacity. I think that was a good outcome for the people of South Australia.

The CHAIR: I am sad to say that time has expired. Next please. I think the Minister for Tourism and Multicultural Affairs should walk through that door shortly.

The ACTING CHAIR (Ms Stinson): I welcome the minister and the member for Frome and I call for questions.

Ms PRATT: I indicate that I am the lead speaker for the opposition and will be focusing during this session on the Auditor-General's Part C: Agency audits on the South Australian Tourism Commission, page 330. Minister, of the 140 FTEs employed by the South Australian Tourism Commission, what ratio of those employees might be based in the regions, how many, where and in what role?

The Hon. Z.L. BETTISON: I will just get that directly. I think it is 139 FTEs that we have. None are actually based directly in the regions, but of course our destination group are going out and connecting in the regions. I know they certainly have been out there a lot. When I have gone out to regions and had my round tables and visits, they often talk about the Destination Development team and their connection to that as well.

As you know, we fund regional tourism managers out into the regions as well. Of course, in the last budget, we increased the funding that goes towards having those regional tourism managers in 11 regions across the state. Something that I am very proud of is that we have increased the money that they get. Along with councils and regional development authorities, that is how they are engaged in their role. We are very actively involved with them.

As you well know, we have done that regional review and we are starting to roll that out. I, personally, am very committed to supporting our regions and that is what that money went to straightaway. It is also about how we can lift the products and experiences we have for the international market. I have been sharing that with our regional tourism managers when I catch up with them as we start to roll out these zones.

Ms PRATT: In your reference to the destination management team, are you able to provide a range in salaries from lowest to highest?

The Hon. Z.L. BETTISON: No. We do not directly employ those regional tourism managers. They all have different ways of being employed—some with councils, some with separate bodies, some through the RDA—but we are not responsible for their salary.

Ms PRATT: Just to clarify then my understanding, when you mentioned 'destination management team' is that incorporating the 11 regional managers? Who makes up the destination management team?

The Hon. Z.L. BETTISON: The Destination Development team is an internal team within the Tourism Commission. I will just get you a breakdown of how many people are in that team. That is a very important team because it is about the growth in tourism. In particular, we have had quite a bit of success in regard to aviation commitments that we have had.

Just this morning, we saw the first flight come in with Air New Zealand and that is going from Adelaide to Christchurch—the first time we have ever been going to the southern island. Later on this week, we will see Qantas flying internationally from Adelaide for the first time in 10 years. They will be flying to Auckland. Of course, we have Cathay coming back, which we have been working on, because they used to be here prior to COVID. The one that I am so excited about, which will be very influential economically in South Australia, not just in tourism but in trade as well and defence, is the United flight that will connect us to the US. The Destination Development team is approximately 10 FTE people who work in that area.

Ms PRATT: I am getting my language right now, minister: the Destination Development team, 10 FTEs approximately, can you provide a breakdown of salaries ranging from lowest to highest and how many might be paid over $110,000?

The Hon. Z.L. BETTISON: I can talk about that—if you want it specifically for Destination Development, we will just have to take that on notice in regard to the division of salaries there.

Ms PRATT: Just to clarify your figures versus the Auditor-General's, on page 330, the figure for FTEs is 140 but you stipulate 139. I am just looking for clarification on that. Is that an increase or a decrease of FTEs from last year?

The Hon. Z.L. BETTISON: So the actual FTE count, if we are being very specific, at 30 June 2025 was 139.6. The average FTEs during the year was 144.2. Of course, that was in line with our cap. We have increased by one FTE from last year. Our cap has increased by one FTE from last year.

Ms PRATT: At page 331, can you explain or expand on the increase of appropriation funding as per the audit line where it shows income appropriation for this financial year at $67 million—the increase of appropriation from 2024 to 2025?

The Hon. Z.L. BETTISON: There was an increase in appropriation of $3.9 million and that is additional funding to accelerate adoption and consumer awareness of our South Australia Brand, which, of course, we launched in April of this year. We really want to lift the state's appeal and awareness internationally and interstate and also to support our regions. There was some money in the previous budget for that specifically to work on it and the Celebrate the Simple Pleasures that we ran out on TV. Of course, there was additional support for the Regional Tourism Alignment Initiative to bolster regional tourism, industry capability and product development.

I consider myself a bit of a champion of regional tourism and that additional money was there to work with our regions to make sure that we are talking collectively as South Australia. That dispersal into the regions is really important. Particularly when we have had events, we really want to push people out to the regions. I remember distinctly with Harvest Rock: from the first time we had Harvest Rock to the second time, we saw this increase in the length of stay. We saw the same thing with Gather Round and this is what we want because we want to push people out to the regions. Particularly in Gather Round, I liked how about 50 per cent of people drove here, so we make sure that they are going through the Limestone Coast and not just staying one night but trying to stay more than one night and see some events.

We also had some additional funding to ensure that the Santos Tour Down Under met its expectation priorities of the UCI and it remains a world-class, compelling event. Of course, we want to see that growth in visitor expenditure and media value and community outcomes. We also had an indexation of our base funding. Obviously, every time you have an increase in appropriations there are some offsets. We did have some change in sponsorships and we had some savings that were there and, of course, we saw that the funding for the River Revival Voucher program had finished in that time.

Ms PRATT: Minister, moving between pages 330 and 331, just briefly reading out what is in the audit line, SATC continues to sponsor and manage major events; I think we can read that for ourselves. My question is: what is the full list of events sponsored and managed? Three are listed; is that the full list? Does it extend further than that, and does it extend even further than what is listed on the bottom of page 331?

The Hon. Z.L. BETTISON: To clarify, you are asking here if there are any sponsored and managed events other than the Santos Tour Down Under, National Pharmacies Christmas Pageant and Tasting Australia; is that what you are asking?

Ms PRATT: Yes. Would the combination of the references on both pages, the full list, include Gather Round and LIV Golf? What is the list of events sponsored and managed?

The Hon. Z.L. BETTISON: Let me start by saying there are three that we manage, which are the Santos Tour Down Under, Tasting Australia and the National Pharmacies Christmas Pageant. They are managed by the SATC. The full list of the major events receiving sponsorship in 2024-25 are Illuminate Adelaide, which of course is in July; the Australian Junior Volleyball Championships; the Suncorp Super Netball Grand Final; the AusCycling Masters and Junior Road National Championships; the 2024 Australian Short Course Swimming Championships; and Chihuly in the Botanic Garden, which was a particularly exceptional event for us.

We put money into the Socceroos versus China PR, the AFC match in October of last year; the spring finals of the National Drag Racing Championship; CheeseFest; the Webex Players Series; The Bend Classic; the Australian Superbike Championships; the Australian Beach Volleyball Tour; and the Adelaide International tennis, which was particularly special this year. We had 13 of the top 20 women in the world of tennis descend on Adelaide. I was very pleased to see the female winner, Madison Keys, coming back.

We also supported the Viking age treasure the Galloway Hoard; LIV Golf Adelaide; the Adelaide Festival; WOMADelaide; the Riverbend Nationals of the drag racing; the AFL Gather Round; the Adelaide Equestrian Festival; the Trans-Tasman Throwdown, which was a basketball competition between Australia and New Zealand; the Wheelchair Rugby National Championship; and the 2025 Australian Swimming Trials.

Ms PRATT: Having shared that list, minister, is a breakdown of funding per event available today or to be taken on notice and tabled?

The Hon. Z.L. BETTISON: No. The sponsorship details are subject to contractual confidentiality restrictions and therefore cannot be disclosed, which is consistent with what I have said every single year.

Ms PRATT: On page 330, in reference to a long-term destination brand and collaboration with other government agencies, minister, can you just expand which other agencies yours has collaborated with? Did those agencies contribute funding and, if so, how much and what for?

The Hon. Z.L. BETTISON: Particularly, there was a lot of collaboration with Brand South Australia, which we re-established on coming to government in 2022. That work was obviously around our state's brand and coordinating those efforts that strengthen our image and reputation. We continue to work quite well with Brand SA. I can say also that when we were working through that process of establishing our place brand, we did work with DPC as well, but of course SATC took the lead in that. That is what the additional funding was in that previous year's budget that we did.

What we want to do is look at consistent messaging across key sectors: the tourism, trade, investment and education areas. Of course, in April we rolled out Celebrate the Simple Pleasures, and we will continue to support Brand SA to use that in their brand alignment—and that conversation continues as well. It was a very big decision for us to have something in market—namely, Celebrate the Simple Pleasures—that has longevity. What you might have seen in the past is a brand that is out there for about two years at a time, and what we really want to do is build an appeal factor for South Australia. In doing that, we did a lot of work on identity. There were a lot of interviews that took place about who we are as South Australians, where we see ourselves in the world and in the nation and what we want to share with the nation and the world. I think the work that was done there was exceptional.

Over this period of time we also updated our tourism strategy to 2030. It is very clear about our ambitions—ambitions about the authenticity of who we are. Since that time we are all clear in our identity of knowing that the drivers of tourism are food and drink. It is festivals and events and the connection to nature. So those conversations to lead us to that point did work with Brand SA and with DPC as well. But we led, and the cost came from us.

Ms PRATT: Continuing on with the Simple Pleasures campaign and the long-term brand destination, can you expand on it from its launch in April to October and November? How are we tracking? How does the agency measure success?

The Hon. Z.L. BETTISON: Member for Frome, you asked me about this in estimates. We did not quite have enough at that point to talk about it. As I said, we are looking for longevity and looking to grow in consideration and appeal over time through sustained and consistent activity.

There is a performance study, conducted by an independent research agency on behalf of SATC, that demonstrates the campaign has a strong message take-out and portrays positively. Specifically, non-South Australian residents who recall seeing the Simple Pleasures campaign are significantly more likely to consider a visit and to find South Australia appealing. Amongst those who recalled the campaign, prompts and consideration were 9 percentage points higher, appeal was 8 percentage points higher and likelihood to visit was 9 percentage points higher. That is from an independent study that we had.

More than two-thirds of the people surveyed agreed that the Simple Pleasures TV ads make them think that South Australia is an appealing destination. That research confirms that those ads are successful in converting people from finding South Australia unappealing to finding it appealing. Of course, I would never say it was unappealing to start with, but perhaps not top of mind, which is obviously what we want to portray and what we have been trying to achieve in this situation. I thought the TV ads worked really well.

A separate study, conducted by Uber, who is one of our advertising partners, reported that people exposed to our Simple Pleasures ads are up to 28 per cent more likely to consider a trip to South Australia.

Ms PRATT: Minister, my question, which you have answered, was: how does the government track the success of that campaign? In your answer I heard about two independent studies. Is there any more to the metrics or the measurements, other than those studies, whether it is a tourism warehouse database—I have not got that language right, but what other mechanisms do we use, as government, to track the success of a campaign like that? Are there international groups that are involved for those international visitors we are trying to attract?

The Hon. Z.L. BETTISON: We also measure digital lead indicators. In the six months since the launch, we saw more than 1.2 million of the leads generated go to South Australian tourism businesses via southaustralia.com. That is an 11 per cent increase, year on year, that is measured there.

Obviously, we have gone out internationally to New Zealand and the US to talk about our new ad, but I do not think I have anything at this point. I can take that on notice as far as how we are measuring that internationally. I guess what we can say, though, with the two new flights that are going into New Zealand, is that New Zealand is a really important market for us now with these additional connection flights. That will obviously see some cooperative marketing to look at those areas.

Of course, there is also this brand-new flight that is going from San Francisco through to Adelaide, which we have not had before. That is an opportunity for us to do cooperative marketing and also to look at it as a destination. But as far as how we are capturing that from an international audience, Meta is doing some also. We have some surveys that Meta did as well, which are all positive, but I will specifically come back about international measurement if that is different.

Ms PRATT: Referring to page 331, audit line underneath Statement of Comprehensive Income, where the Auditor-General has written, 'SATC's financial activities vary each year depending on the mix of marketing,' how would you describe the mix of ingredients this year? I am seeking a breakdown of funding for those three references: marketing, destination development, and event activities.

The ACTING CHAIR (Ms Stinson): While the minister is looking for that, where is that reference on the page, just so I can follow along?

Ms PRATT: Page 331, where the Auditor-General at the bottom says that the financial activities vary each year and therefore so does the level of funding.

The Hon. Z.L. BETTISON: Let me just start by saying that, if you actually look at page 332, you can see different things here—income and expenses. You can see that things have been quite consistent over the last three years in how we split things up between event operations, advertising, promotion and industry assistance. I guess I can say that they are consistent. I will just get those figures for you exactly. Your question was how much has contributed to each. Tourism development is $9.3 million, tourism advances is $98.7 million, and tourism marketing is $34.5 million. That is how it is split.

Ms PRATT: On page 332 then, minister—perhaps I will go back to income, which is at the top of the page. I think we can read along as we go. The income from the SA government totalled $126.3 million (I am reading the second paragraph) with a total revenue of 91 per cent. This included $55.9 million received from the DPC Major Events Fund. How do we identify that amount of the $123.1 million in the highlights on the previous page? How do we find that amount in the highlights of the financial report on the page before? We have total income on page 331 of $141 million; how do I break down or identify the contribution from the SA government of $126.3 million?

The Hon. Z.L. BETTISON: I think the way to answer that for you is to understand that it is an intergovernment transfer through the year-on-year event sponsorship, which is why you cannot see it in the way that you are looking to see it. So that happens, and, of course, that fluctuates throughout the year depending on when that money moves across.

Ms PRATT: Moving to 'net result', where the Auditor-General highlights that SATC has recorded negative net results since 2022, as the minister responsible—and you have touched on this slightly—how do you account for successive budget blowouts four years in a row, based on a budget in 2021 that was in the black?

The Hon. Z.L. BETTISON: I do not concur with you that it is a budget blowout in any way whatsoever. I think we have been in one of the most active periods of time for tourism. While we are looking at just the last year, I think the role of tourism has increased exponentially within its role as an economic driver for our state. Of course, we have stepped up to the plate many times, whether it is new events that are coming on, to help manage them or sponsor them, or when we have been there when South Australians needed us the most, so Rise Up for our River, and in this financial year we are rolling out rounds 1 and 2 of the travel vouchers.

In regard to your question, when we are looking at the equity or net assets that we have, it has decreased for the period from 2021 to 2025, and that is shown in those results, the statement of the comprehensive income and movements and statement of financial position. The movement in equity is part due to Treasury-approved budget deficits in each of these years, largely comprising the carryover payments and the grant funding programs earlier to latest year.

Particularly why you have seen that negativity is with the Tourism Industry Development Fund—that was $20 million received in 2021-22 and 2022-23—but then the funds were expended over the following years, which contributed to those deficits up to 2024-25. The carryover happened every year, but the money that came out did not happen in that set period, so that is why it is.

In 2024-25, the decrease in equity of $2 million was due to a budgeted Treasury-approved deficit of $0.7 million, due to timing differences between the cash payment of rent and accounting recognition of lease expenses; the final budgeted carryover of spending on the Tourism Industry Development Fund grants program of $0.1 million from earlier years, 2024-25; and there were some accounting revaluations for foreign exchange balances and employee leave liabilities of $0.5 million.

Ms PRATT: Responding to the minister's response to me, I am merely interpreting what the Auditor-General documents, where expenses exceed income each year for those four years. Minister, I think we share a common passion for regional tourism, and there is a lot of work still to be done.

Based on the last four years, where expenses exceed income, it would appear there is a bigger claim to make on the Treasurer for increasing the budget. My question then is: have you had that conversation with the Treasurer, and are there any surprises in store for regional tourism by the Mid-Year Budget Review next month?

The Hon. Z.L. BETTISON: It would be inappropriate for me to detail my conversations with the former or current Treasurer, although I am ambitious for tourism. I particularly think the focus around marketing has been a key focus for us and where we are heading, particularly when you think about the marketing that comes with additional events that we have had, which is important, and of course regional events that we do are very important to us.

We know that we have received $5 million per annum as a part of the 2024-25 state budget, and that is about supporting the 'place' brand, and that is for all South Australia. We are nothing without our regions, so when I am selling South Australia I do not say that it is for this region and not the other. When I think about where a lot of the focus will go for our current voucher program, that is in the regions and those coastal areas as well. Of course, we will continue to have a look at that as well. We know that events drive visitation, but we really want to go out to the regions, such as the Barossa being used for Gather Round this year.

The ACTING CHAIR (Ms Stinson): The allotted time having expired, I thank the minister and her advisers and also the member for Frome.

Progress reported; committee to sit again.

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