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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-11-01 Daily Xml
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Auditor-General's Report

AUDITOR-GENERAL'S REPORT

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (16:58): I move:

That standing orders be so far suspended as to enable the report of the Auditor-General for the year ended 30 June 2012 to be referred to a committee of the whole and for ministers to examine all matters contained in the report for a period of one hour's duration.

Motion carried.

The PRESIDENT: There not being an absolute majority in the council, ring the bells.

An absolute majority of the whole number of members being present:

Motion carried.

In committee.

The Hon. D.W. RIDGWAY: I thank the minister for the opportunity to ask questions. For the benefit of the departmental people here today, it is our intention to ask minister Gago questions for 30 minutes, briefly covering tourism, forestry, regional development and PIRSA. In the second part, my colleague the Hon. Stephen Wade will question the Hon. Ian Hunter, and we have a couple of questions at the very end—only a couple because we do not want to overstrain the Hon. Russell Wortley.

My first questions are in relation to tourism. The South Australian Tourism Commission's statement of income at page 1814 shows a drop in commission on sales from $683,000 to $64,000 over the last 12 months. That is a drop of more than $500,000—about $620,000—in just one financial year. Can the minister offer an explanation as to why that has happened?

The Hon. G.E. GAGO: I thank the honourable member for his question. I am advised that the SATC ceased operation of the SA Visitor and Travel Centre in July 2012. The residual revenue in 2011-12 relates to travel bookings made prior to the transfer of operations to a private service operator.

The Hon. D.W. RIDGWAY: The table on page 1818 (disaggregated disclosures) shows administration and accommodation costs totalling $8.8 million. How much of this figure is accommodation, and can you give me a definition of accommodation? I would also like to know what the rent was for the Visitor Information Centre in King William Street, the costs incurred for anything to do with Grenfell Street and, of course, any costs incurred on the North Terrace site.

The Hon. G.E. GAGO: I am advised that there was no rent paid for Grenfell Street in any year.

The Hon. D.W. RIDGWAY: What about King William Street; what was the rent for that?

The Hon. G.E. GAGO: I will have to take that on notice; I do not have that detail.

The Hon. D.W. RIDGWAY: Minister, can you explain what that $8.8 million for administration and accommodation costs is for? I am assuming it is for the lease of some King William Street offices rather than the visitor information centre, but can you perhaps provide a breakdown of those figures?

The Hon. G.E. GAGO: I am advised that the $8.8 million includes all the accommodation costs, which include the office accommodation at King William Street, the pageant warehouse at Woodville and a warehouse at Dudley Park. It also includes other associated costs, such as running photocopiers and other overheads, as well as the administrative costs.

The Hon. D.W. RIDGWAY: The costs for any of the SATC staff who may travel to promote the state, is that out of administrative costs or is it in another budget line?

The Hon. G.E. GAGO: I am advised that those costs are included in the administrative costs.

The Hon. D.W. RIDGWAY: I would be surprised if the minister had it available, but can she provide a breakdown of how much has been spent on travel and expenses incurred by SATC personnel and whether it was for travel intrastate, interstate or overseas?

The Hon. G.E. GAGO: I am advised that the international flights are published in the annual report, so they are already available. We can make the interstate and intrastate travel available; I will take it on notice.

The Hon. D.W. RIDGWAY: That is the conclusion of the questions I had on tourism. I do indicate that we will be seeking to examine the supplementary report when it is tabled on the visitor information centre.

The Hon. M. PARNELL: I might ask my question now, and I ask it of the minister in her capacity as Leader of the Government rather than in any particular portfolio—and I am conscious that the suspension of standing orders does allow us to ask questions only of ministers rather than anyone else. In her capacity as Leader of the Government, I refer the minister to Part B: Agency Audit Reports, Volume 3, pages 882 to 931, which is in relation to the legislature. This year, as in previous years, the Auditor-General criticises the accountability of parliamentary finances. If I can indulge the committee with three sentences from the Auditor-General's Report, he says:

The inability to perform a complete audit of the functions and financial activity of the Joint Parliamentary Service was again raised with the Joint Parliamentary Service Committee. Audit has been advised that there is no change in the Committee's position of not providing Audit access to the Committee's minutes of meetings and to the records and accounts relating to the catering division trading account activities.

In my opinion, the financial accountability and auditability of the Joint Parliamentary Service falls short of that adopted and applied to the public accounts and the financial operations and accounts of public authorities.

I pose the question now to the minister, and I will let the minister respond but expect that part of the minister's response might be that that is not a matter for government, that that is a matter for the Joint Parliamentary Service Committees. First of all, I want to know: does the government have any response to the criticism? If the minister does not believe that it is a government issue, my question is: what is the process for members of parliament to be able to question either ministers or parliamentary office holders in relation to the running of parliament and, in particular, the income and expenditure of the parliament?

The Hon. G.E. GAGO: It is clearly very complex. I am happy to take the question on notice. I do not know how much of it is actually relevant for me as leader of this house in relation to the Auditor-General's Report before us, but I am happy to look into that. Basically, there is a joint parliamentary committee and there is a finance committee, and the Auditor-General audits the finance committee and those reports are publicly available.

I understand that there is some catering money that has nothing to do with government, and therefore is outside these parameters. Fundamentally, the bulk of the parliamentary spending is dealt with by the finance committee, and those accounts are audited by the Auditor-General. The rest of the question, I will take on notice.

The Hon. M. PARNELL: I thank the minister for taking that on notice. I guess what I am keen to know is: is there any process at all for members of parliament to access this information? If the minister takes that question as part of her question on notice, I would appreciate that.

The Hon. G.E. GAGO: I have been advised that the audited accounts are published.

The Hon. M. PARNELL: The Auditor-General has gone out of his way to criticise the unaccountability of parliamentary finances, and he has said so in his report.

The Hon. G.E. GAGO: Well, that is not my portfolio. I am not responsible for that, so it is outside the purview of my responsibilities.

The Hon. M. PARNELL: If the minister can pass that on to whichever minister she does believe is responsible, I would appreciate it.

The Hon. G.E. GAGO: No; the other house has a process for managing the Auditor-General's reports. The ministers here are held accountable. I am happy to take questions in relation to my portfolios.

The Hon. D.W. RIDGWAY: I assume that I now ask questions in relation to forestry.

The CHAIR: The Hon. Mr Ridgway.

The Hon. D.W. RIDGWAY: Thank you, Mr Chairman. The minister did refer somewhat to this, I think, during question time. Page 1553 is in relation to the proposed distribution of assets and liabilities of the South Australian Forestry Corporation's owner and forward sale of forest rotations, and the table just above that shows the assets classified as held for distribution to the owner, totalling $1,032,776,000. I will just quickly read this relevant passage:

The SA government announced...that it would proceed with the forward sale of three forest rotations in the South East. At 30 June 2012 the forward sale had not been completed, however, the sale process was at an advanced stage and it was considered highly probable that it would be completed during [2013].

On 22 August 2012 the [government] announced that it had agreed to sell the forward rotations of the Green Triangle's plantations to a consortium led by The Campbell Group...representing a number of investors including Australia's Future Fund. Completion of the sale [date was] later in 2012.

The [Forestry Corporation] has been advised by its owner, the [government], that the forward sale will be structured such that:

[the South Australian Forestry Corporation] will distribute all relevant assets and liabilities to its owner at book value

the [government], or one of its entities other than SAFC, will then enter into contractual arrangements with the new plantation owner whereby the Green Triangle standing timber is sold, land is leased and other associated agreements are entered into.

In these financial statements SAFC has therefore classified and presented the assets and liabilities that are expected to be involved in these transactions as 'held for distribution to [the] owner', in accordance with [Accounting Standard 5].

My question is: can the minister explain which of these assets have been sold or transferred to The Campbell Group? Given that I think we received $670 million for the sale, I am intrigued just to know exactly what has gone to them and what we still hold.

The Hon. G.E. GAGO: I have been advised that the asset sold is the standing timber, and that is the 593 666 figure.

The Hon. D.W. RIDGWAY: Can the minister explain why the other assets are classified as 'held for distribution to owner'? Further in the commentary, the second dot point states that the government 'will then enter into contractual arrangements with the new plantation owner whereby the Green Triangle standing timber is sold, land is leased and other associated arrangements are entered into'. What are the other associated arrangements?

The Hon. G.E. GAGO: I have been advised that the other assets included there in item 13 that were not sold were transferred from the Forestry Corp to the Treasurer and the Treasurer then leased those to The Campbell Group. In relation to the second part of your question about other associated arrangements, it includes things like plantation management, a nursery purchasing agreement and suchlike.

The Hon. D.W. RIDGWAY: So if we are looking at a round figure of roughly $600 million worth of timber that was sold, are you saying ownership of the other assets was transferred to the Treasurer and then as part of the sale they have leased them those other assets?

The Hon. G.E. GAGO: That is what I have been advised.

The Hon. D.W. RIDGWAY: So if we say that the standing timber is valued at $600 million, you have a one-off payment of $70 million for the lease of all of those other assets, access to the land and everything else for 100 years or three rotations?

The Hon. G.E. GAGO: I have been advised that the $670 million figure is for the whole group of assets, including an up-front lease arrangement, and I have also been advised that you cannot attribute the $600 million of the $670 million figure and infer that you are only getting $70 million for the land lease.

The Hon. D.W. RIDGWAY: I cannot infer that; okay, I will move on, as I am aware of the time and trying to give everybody a chance. I will continue on forestry for a little longer. On page 1534, Part B: Agency Audit Reports, Volume 5, the South Australian Forestry Corporation forward rotations were sold for $670 million. Treasurer Jack Snelling stated that the sale to the consortium led by the US-based Campbell Group was substantially above the reserve. Can the minister advice us what was the reserve price?

The Hon. G.E. GAGO: I am advised that that figure is a commercially confidential figure.

The Hon. D.W. RIDGWAY: The sale has gone through and the deal has been done. I am surprised that it is still commercial-in-confidence. This is a deal for 100 years, not for 10 minutes.

The Hon. G.E. GAGO: That is the advice I have received.

The Hon. D.W. RIDGWAY: Page 1534, Part B: Agency Audit Reports, is in relation to the sale. It says that the completion of the sale date is expected to occur late in 2012. Can the minister provide a specific date that finalisation will happen and, basically, when does the Campbell Group take over?

The Hon. G.E. GAGO: The date is 17 October 2012 and the Campbell Group takes over one minute past midnight on 18 October 2012.

The Hon. D.W. RIDGWAY: So, they took over a couple of weeks ago. I want to give other members a chance to ask questions, so finally a set of conditions were agreed to by the forestry round table. I refer to page 1534, Part B: Agency Audit Reports, in relation to the sale. Will the minister or her advisers provide us with a copy of those terms and conditions, and do they mirror what was agreed by the forestry round table and have there been any other terms and conditions added by the Treasurer?

The Hon. G.E. GAGO: I am advised that the roundtable recommendations were reflected in the terms and conditions of the contract and those roundtable recommendations were published by the Treasurer some time ago. In relation to other terms and conditions to the contract, it is an extremely comprehensive contract. There are many terms and conditions associated with that contract.

The Hon. D.W. RIDGWAY: I will not ask any more questions given that there are other members who would like to ask questions. I think the Hon. John Dawkins will ask some questions in relation to PIRSA or regional development.

The Hon. J.S.L. DAWKINS: The general PIRSA section but initially one on regional development. I refer to Part B, Volume 4, page 1378 and there are other references in that section to the regional development team moving from DMITRE (formerly DTED) to PIRSA on 1 January this year. The regional development team in its various identities since it was established by the Olsen government—and I had a fair bit to do with it in those days—has always been with DTED and DTED's predecessors. It is indicated that there are two different styles of reporting and the manner of determining staffing levels, TVSPs, embedded in two different departments. My question really is: given the change from DMITRE to PIRSA, has there been any change of approach in the way in which the regional development team works with federal agencies and local government in relation to the Regional Development Australia bodies?

The Hon. G.E. GAGO: I think the short answer is not that I am aware. I have talked in the house about how there have been changes to the structure and regrouping of resources and a setting up of new coordinators, regional coordinators and suchlike, so there have been changes in the structure of PIRSA. PIRSA continues to evolve and develop as most agencies do, so that does not stand still, but my understanding is that the fundamental relationships that had with other federal bodies and local government are pretty much the same. I do not know whether there are any new MOUs. The LGA are always wanting a new MOU, so there might be a new MOU in there. I am sure there are a few. Fundamentally, the relationships are pretty much the same.

The Hon. J.S.L. DAWKINS: I move now to general PIRSA issues. I refer to Part C: State finances and related matters, page 21. It refers to a report of 131 actual full-time equivalents below the cap. Will the minister explain what external parties the department is dealing with? Why is it taking so long to fill vacancies? Which research and development corporations are causing the uncertainty?

The Hon. G.E. GAGO: I have been advised that the primary industries reported actual FTEs of 131 below its cap is primarily due to delays in establishing and finalising contracts with a number of external parties in filling vacancies and uncertainty of funding from research and development corporations. Many of the research and development corporations do not work on a financial year, they have different time frames, so you have to realise that the 131 is a particular point in time which fluctuates and varies quite significantly throughout the year. It is just one snapshot at one particular point in time, and it does vary throughout the year.

The Hon. J.S.L. DAWKINS: Still on Part C, I refer to page 55, 8.2.4, Grants. Will the minister explain the community service obligation payments made to the South Australian Forestry Corporation?

The Hon. G.E. GAGO: I have been advised that community service obligation is an annual payment and involves fire protection, industry development and community use, so it is, in effect, the non-commercial component of ForestrySA.

The Hon. J.S.L. DAWKINS: I refer to page 64. Table 8.4—Summary of adjusted 2010-11 new budget operating savings, states that primary industries and regions saw an increase of $4.2 million from 2011-12 to 2012-13. Will the minister explain the detail of this increase?

The Hon. G.E. GAGO: Can I just clarify which figures you are referring to?

The Hon. J.S.L. DAWKINS: Table 8.4, the summary. It shows an increase of $4.2 million in the budget operating savings. Are you with me?

The Hon. G.E. GAGO: Yes; that is the combination of the 17.8 and the 22?

The Hon. J.S.L. DAWKINS: That is right, yes.

The Hon. G.E. GAGO: I have been advised that it relates to the incremental increases in savings requirements in relation to SARDI, RSSA and things like the executive reductions.

The Hon. J.S.L. DAWKINS: I refer to page 66 of Part C, State finance and related matters, table 8.5. Will the minister explain the detail of the 186 full-time equivalent savings initiatives?

The Hon. G.E. GAGO: I have been advised that that detail is outlined in the budget documents and the budget measures paper, and these have already been published; so that detail is already published and publicly available.

The Hon. J.S.L. DAWKINS: I refer again to Part C, page 68, and particularly the reference to the 131 full-time equivalents not met, which we talked about earlier, and 66 TVSPs. Will the minister indicate if this is attributed to the audit findings stated in Part B: Agency Audit Reports, Volume 4, for the Department of Primary Industries and Regions, which states there is:

...no evidence of certification of time attendance by managers; inconsistent practice in monitoring leave recording…Shared Services…systems and control environments could not be considered robust during 2011-12…a number of outstanding debts greater than 120 days old [in accounts receivable]…[fishing licensing] reconciliations were not performed on a timely basis.

What measures are being put in place to rectify what would seem to be relatively poor departmental management?

The Hon. G.E. GAGO: I have been advised that in relation to payroll, PIRSA has been progressively implementing the Timewise electronic time and attendance system across the agency with associated policies which address the concerns raised in the audit findings. The audit suggests that its findings support a conclusion that the CHRIS payroll system may not provide a complete and accurate record of leave taken by the departmental employees and leave balances may be overstated. PIRSA is reviewing any inconsistencies between the leave recorded in local time recording systems, including Timewise, and the CHRIS payroll system, and we will take any corrective steps as necessary.

In relation to the MPAR system, PIRSA will continue to work with Shared Services SA to investigate and rectify reconciling items. The reinstatement of the reconciliation process for the two subsidiary systems—namely, the standard invoicing system, SIS, and the SEEDS system—has been addressed in relation to the number of outstanding debtors greater than 120 days. PIRSA is continuing to follow up relevant clients in line with the agency's debt management processes. It should be noted that the outstanding debtors greater than 120 days have decreased significantly since the time of this audit.

In relation to licensing revenue, PIRSA has addressed the timeliness issues for fisheries licensing revenue and strengthened the current control arrangements with updated procedures. So, all those matters have been addressed in one way or another.

The Hon. J.S.L. DAWKINS: Thank you, minister. In your response you have covered some other areas of questioning that I had, and I appreciate that. When dealing with the reference to the debts that were greater than 120 days old, why were they left for longer than three months and not collected earlier?

The Hon. G.E. GAGO: I have been advised that it does not mean that those debts have not been followed up. It means that those debts have not been collected in that period. There is a whole range of different circumstances that might lead to that. For instance, the client might have gone into liquidation and there are issues around being able to collect payment, or issues around a dispute about payment that need to be resolved. There is a range of different circumstances that result in a slowdown of payment.

The Hon. J.S.L. DAWKINS: My final PIRSA question relates to the ongoing reference to the role of Shared Services. The minister referred to that in her earlier response. On page 1338 of Part B—Agency audit reports, the reference there was that Shared Services SA systems and control environments could not be considered robust during 2011-12. Will the minister explain what efforts PIRSA and Shared Services will undertake to make sure that they are robust?

The Hon. G.E. GAGO: I have been advised that, while noting that the responsibility of Shared Services obviously falls under the Minister for Finance, PIRSA will be monitoring the Shared Services SA progress in addressing the concerns that have been raised by the audit and will obviously work with them where required.

The Hon. S.G. WADE: I refer to the Auditor-General's Report Part C—State finances and related matters. With the recent downgrading of South Australia's credit rating I understand that the government will be paying higher interest on its borrowings. Can the minister advise whether there is a guarantee or similar fee that councils pay into the state budget because they have access to funds at a lower rate of interest than a private entity? Has this fee reduced since the loss of the AAA credit rating and, if so, by how much has it reduced across all local government entities?

The Hon. R.P. WORTLEY: I thank the honourable member for his very important question. I will take it on notice and get a response back to him as soon as possible.

The Hon. T.J. STEPHENS: On page 235 of the recently released Auditor-General's Report the Auditor-General raised a number of concerns about the process of grant funding within the Department of Communities and Social Inclusion. In one instance an NGO received $1.5 million of payments for services that were not covered by a grant agreement. Which NGO received the grant the Auditor-General was referring to? From which subprogram within the department was the funding provided? Why was no grant agreement initially established, and for what purpose was the funding provided?

The Hon. I.K. HUNTER: I thank the Hon. Terry Stephens for his excellent question and for his early notice of it last week.

The Hon. S.G. Wade: He is too kind to you.

The Hon. I.K. HUNTER: He is indeed; when he finds out the reason for it all he will be upset, of course, but there we are. I am advised that the non-government organisation that received the payment was Leveda Inc. It was funded through the subprogram within the agency of disability. Payment to Leveda Inc. was made in accordance with the department's grants management policy.

The variation to the grant agreement for these payments was prepared with effective dates to cover the services provided. During the execution stage the effective date was inadvertently transcribed as 1 July 2012 when it should have been processed as 1 July 2011. The error was not detected in the documentation process, but essentially it was a typo. As noted in the Auditor-General's Report, page 235, Leveda Inc. has provided the relevant services but there was an inadvertent error in the documentation.

The agreement is being varied to include the amounts paid and the services provided. The department will review the process controls in this area to ensure alignment between service provided and agreement documentation. I am advised that the funding was for the purpose of continuing support services provided at three group homes for people with disability. Essentially, as I said, it was a typographical error.

The Hon. S.G. WADE: My question is on a similar theme to that of the Hon. Terry Stephens. I refer to Part B, Volume 1, page 234 of the Auditor-General's Report. In the last financial year the minister responded to questions about funding being provided before a grant agreement had been reached. At the time he stated that 'the department has procedures in place that allow for payments to be made prior to finalisation of grant agreement if emergencies arise'. Can the minister advise what procedures the department introduced to address this issue and, given the Auditor-General's continued concerns, what steps will the government take to address the issues he has raised?

The Hon. I.K. HUNTER: I thank the honourable member for his question. Audit did find instances where execution of some grant agreements occurred after the service period had begun. The department endeavours to commence the preparation of service agreements and variations in adequate time to ensure that these can be executed before the commencement date. I am advised that the department does have internal controls to identify existing grant agreements which are soon to expire, but in some instances it can be difficult to provide adequate time to prepare and execute agreements before the service must commence. Such instances include responding to vulnerable people needing urgent care due to a change in their personal or family circumstances.

I am sure the honourable member will concur with us in saying that making sure the service is provided is much more important than getting the paperwork done on time, even though we attempt to do both. However, in circumstances where funding must be directed to a non-government organisation as a matter of urgency, or where process requirements could cause delays to the continuation or implementation of a service which may lead to a significant client risk, the department's policy allows the funding to be provided prior to an agreement being executed. The department will continue to review its internal processes to ensure that variations are prepared as early as possible.

The Hon. S.G. WADE: I refer to Part B, Volume 1, page 239 of the Auditor-General's Report in relation to accounts receivable. The Auditor-General's Report describes how outstanding debtors are a shared responsibility between the department and Shared Services, and that overdue invoices are required to be followed up within 10 days of month's end. The report found that as at 30 June 2012 overdue invoices had not been followed up since March 2012. Can the minister advise why there is a three-month delay, despite the departmental policy being less than 10 days in following up? Secondly, can the minister advise the total value of overdue invoices and how many overdue invoices there are?

The Hon. I.K. HUNTER: I understand that, in fact, ministerial responsibility for issues related to Shared Services lies with the Minister for Finance, Michael O'Brien, in the other place. I can advise that, thus far, expenditure processing services are provided to the department by Shared Services SA, and the department is reliant on Shared Services to rectify the issues identified by the Auditor-General. In relation to e-procurement (whatever that might be), the department has a number of additional internal controls to ensure that payments—

The Hon. G.E. Gago: You're e-literate!

The Hon. I.K. HUNTER: Indeed, I am quite e-literate, but I am sure that the honourable member is not.

The Hon. S.G. Wade interjecting:

The Hon. I.K. HUNTER: Brought to you by the letter 'e' in this case. In relation to that e-procurement thing, the department has a number of additional internal controls to ensure that payments are made in accordance with the department's financial approval limits. The department reviews a sample of all payments and, in particular, all payments in excess of $20,000. The department will continue to liaise with Shared Services on the issues raised by the Auditor-General, and it will monitor the progress of Shared Services' projects to ensure that these matters are promptly addressed.

The Hon. S.G. WADE: I refer to Part B, Volume 1, page 240—Concessions. The Auditor-General found problems with concessions not being reconciled against the department's database of clients. The department has previously advised that this problem will be remedied by the introduction of CASIS, which was due to be completed in 2011-12, which did not occur. Rather than ask the minister what CASIS is, I ask: can the minister explain the reason for the delay in rolling out cases and how much has so far been spent on developing the program?

The Hon. I.K. HUNTER: I can actually advise what CASIS is: it is Concessions and Seniors Information System. Over the last three years, the department has implemented a number of interim controls to minimise the risk of concessions being provided to ineligible customers. These include annual random sampling of clients receiving emergency services levy concessions on fixed property, and water and sewerage concessions provided by SA Water. The department is presently developing an internal audit plan to look at implementing additional controls across concessions systems, including controls for energy concessions, to ensure that concessions are made available only to eligible customers.

The development of the Concessions and Seniors Information System has experienced a number of delays, but significant progress has been made over the last six months, with the expectation that the system should be operational in 2013. Once implemented, the new system will significantly reduce the effort and cost for the department in managing concessions, with an improved data exchange system and better identity management.

It will also reduce the technology effort and cost for concession partners, SA Water, energy retailers, local government and other partners, in administering concessions due to improved system interfaces; streamline relationships and services between concession customers and partners through utilising single entry point infrastructure; and contribute to the future development of improved service delivery models across the Department for Communities and Social Inclusion; customer delivery service; customer service delivery initiatives; and concessions administration. There was a second part to the question?

The Hon. S.G. WADE: Yes. The minister did acknowledge that there has been a delay. I was particularly interested in the reason for that delay and how much has been spent on the program thus far.

The Hon. I.K. HUNTER: I will have to take that question on notice.

The Hon. S.G. WADE: My next question relates to the Auditor-General's Report, Part B, Volume 5, page 1606, in relation to rent assessment guidelines. Can the minister please advise why the household occupancy declarations, which are required to be issued to every household each 12 months, have not been issued since June 2010?

The Hon. I.K. HUNTER: My advice is that, regarding the household occupancy declaration process, the South Australia Housing Trust advises that the process is currently under review—hence, the delay—with various models being considered with a view to reintroducing the process in 2013.

The Hon. S.G. WADE: I presume that, with the Housing Trust tenant community, there would be reasonable turnover of occupancy over a two-year period and, if we are talking about 2013, we are talking about a three-year period. Given that by not conducting this assessment the government is likely to have forgone the opportunity to recognise potentially higher rents, how much revenue does the government expect to forgo because of this delay?

The Hon. I.K. HUNTER: My advice is that, whilst it may be so that there is a high turnover, we have other processes in place which would capture some of that information that would allow us to make decisions about rental issues; one of those is Centrelink. We have a memorandum of understanding with them, I think, and income issues are dealt with through an exchange of information at least twice a year, every six months. In terms of other processes, we have home visits where we would, amongst other things, check on how many individuals are living at the premises and whether those people should be paying a higher rate of rental.

The Hon. S.G. WADE: I refer to Part B, Volume 5, page 1611—Loss on disposal of assets. Can the minister advise why 642 properties are shown as having been sold when cabinet only approved the sale of 450 properties and why this occurred during a soft market, presumably resulting in those sales being on average below book value?

The Hon. I.K. HUNTER: My advice is that the decision in relation to cabinet was actually on achieving a revenue target, not a total number of houses. We are committed, of course, to realising a certain amount of revenue each year to repay the Housing Trust debt. A lower average sale price per property, of course, meant that we had to sell more properties to realise that sale target.

The Hon. S.G. WADE: The same page refers to staffing costs. How many staff are included in that $7 million expense, and how many were working for the Housing Trust prior to the key development projects referred to in the report?

The Hon. I.K. HUNTER: My advice is that it is complicated. A number of staff were reduced because projects were completed, and therefore the number of ongoing projects, of course, was reduced. Many staff who were on contracts for those projects, of course, did not have their contracts renewed. In terms of the absolute numbers, I will need to take that question on notice, however.

The CHAIR: I report that the committee has considered the Auditor-General's Annual Report and the Financial Statements.

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