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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-10-16 Daily Xml
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Question Time

FORESTRYSA

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:21): I seek leave to make a brief explanation before asking the Minister for Forests a question about the SA forests.

Leave granted.

The Hon. D.W. RIDGWAY: Last year's state budget ominously forecast the forward sale of our South-East forests. This was a multimillion dollar deal designed to prop up the government's ailing budget which was deep in deficit. The opposition has argued against the forward sale, but Labor didn't listen and now it emerges that it completely mucked up the sale process.

A conflict of interest declaration could not be provided to the Auditor-General—$9.5 million was paid to consultants for the sale process, the majority of which was a success fee. There was a lack of assessment of the success fee by Treasury to see whether the success fee represented fair value for money—$25.6 million of taxpayers' money was spent on the forests and lotteries sale.

In the rushed appointment of consultancies, the government approached five firms and only one responded which, according to the Auditor-General, raises value-for-money issues. Meanwhile, even after the forward sale of the three rotations, ForestrySA is still costing taxpayers money. It is contracted to do work for OneFortyOne Plantations but, sadly, is losing money on an ongoing basis. In fact there is a gap between the revenue they receive and what it costs to run ForestrySA. My questions to the minister are:

1. Why was a conflict of interest declaration not provided to the Auditor-General?

2. As the Auditor-General says, not even he with his trained staff and forensic skills can work out what impact this had on the sale process. Can the minister with her staff and forensic skills inform the people what the impact was?

3. Finally and most importantly, what is the annual shortfall between the revenue that ForestrySA gets from either OneFortyOne Plantations or the remnant forests and the actual costs of providing those services funded by the taxpayers?

The PRESIDENT: Minister for Forests, just ignore the opinion and the debate in the explanation and proceed with your answer.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for the Status of Women, Minister for State/Local Government Relations) (14:23): Thank you, Mr President, and I thank the honourable member for his most important questions. I just remind honourable members that we have designated a special hour for question time in relation to the Auditor-General's Report and notice has been given of that for 14 November, so I just remind members that we do have that time. In previous years the opposition has run out of questions during that time. It has always been a very sad and embarrassing occasion when the opposition run out of questions for us.

Members interjecting:

The Hon. G.E. GAGO: The next one is 14 November and last year they ran out of questions, and the year before that they struggled. Every year it has been a struggle for them; they struggle to scrape the bottom of the barrel to come up with all sorts of questions because, as I said, they run out of questions year after year. Anyway, we will look forward to the 14th, but I am happy to give what information I can in relation to the A-G's report in relation to forestry.

Generally speaking, the A-G's report has raised some findings about forestry forward rotation sales. He has raised a number of issues. The specific question the honourable member has asked is in relation to the declaration of conflict of interest. I am advised that the Auditor-General noted that in one case there was insufficient documentation surrounding a declaration of a potential conflict of interest, although no conflict of interest actually arose in that case. The DTF agrees with the audit finding that better documentation should have been maintained, but no actual conflict of interest was identified or arose in that case that the Auditor-General has been talking about.

The Auditor-General found that there was a lack of clear documentation of detailed assessment of and actions to mitigate the risks arising from preliminary sales adviser being permitted to submit a bid for the sales adviser role. Although DTF considers those risks were in fact adequately addressed and mitigated, DTF acknowledges that the extent of the documentation on the treatment of the risk could have been more comprehensive, and obviously they have put measures in place to ensure that those sorts of processes are better addressed in the future.

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