HANSARD FROM ESTIMATES 27th June 2007
The Hon. J.D. LOMAX-SMITH: Yes.
The Hon. I.F. EVANS: Yes.
The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure that the chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the committee secretary by no later than Friday 7 September. I propose to allow both the minister and the lead speaker for the opposition to make opening statements of about 10 minutes each. There will be a flexible approach to giving the call for asking questions based on about three questions per member, alternating each side. Supplementary questions will be the exception rather than the rule.
A member who is not part of the committee may at the discretion of the chair ask a question. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. Members unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the House of Assembly Notice Paper. There is no formal facility for the tabling of documents before the committee. However, documents can be supplied to the chair for distribution to the committee. The incorporation of material in Hansard is permitted on the same basis as applies in the house, that is, that it is purely statistical and limited to one page in length. All questions are to be directed to the minister, not the minister's advisers. The minister may refer questions to advisers for a response. I also advise that, for the purpose of the committees, there will be some freedom allowed for television coverage by allowing a short period of filming from the northern gallery.
I declare the proposed payments open for examination and refer members to the Portfolio Statement, Volume 2, Part 9. Minister, do you wish to make any opening comments in relation to this section?
The Hon. J.D. LOMAX-SMITH: I would be very happy to make opening comments about the whole portfolio.
The CHAIR: Is the member for Davenport happy for that to occur now?
The Hon. I.F. EVANS: Yes.
The CHAIR: Please proceed.
The Hon. J.D. LOMAX-SMITH: This relates to the education and children's services portfolio. As everyone knows, education is the key to young South Australians gaining the skills, values and attributes they need to live, work and contribute to our community in the 21st century. That is why I am proud that the state budget 2007 08 has again increased investment in education and children's services. The 2007 08 budget provides, on average, an additional $708 for every government school student when compared to the 2006 07 budget. This is an increase of 6.7 per cent. Since 2001 02, spending for each student has increased by $3 606. The 2007 08 budget increases total spending in education and children's services by $127.2 million compared to the 2006 07 budget.
The key to this year's state budget is both additional education dollars and also investment right across government to assist children and families. Teachers are the first to tell me that young people do not learn in isolation. Mental and physical health, access to community services, transport, housing and location all impact on the opportunities and aspirations of every child. Our whole of government approach includes support for children and families through additional services in health, recreation and sports, the arts, family and community services, housing and transport in city and regional communities.
Our investment reflects the Rann government's long term commitment and the central role of education and children's services in South Australia's Strategic Plan for the future. We are engaged in significant reform and revitalisation of the state's education system, extending from early childhood and education to the training landscape. This requires change, renewal and reinvestment, because our services must first and foremost be about children and their future.
The government's reform agenda and investment includes connecting services for children and families with reinvested funds of $5.5 million, which have been added to the $23.3 million program to deliver 20 new children's centres which join up education, health and community services. In addition, it will streamline education children's services from birth to year 12 and beyond school, with investment in school infrastructure, including the $216 million education works initiative and a strategic asset management system to improve the quality of schools and preschools. Capital works funding includes new major works for 14 schools and preschools in 2007-08.
We will also continue our security upgrade grants, solar schools program, and our ecologically sustainable develop¬ment grant programs in 2007-08. We will also develop stronger school-to-work connections, with $13.3 million from our $84 million school-to-work strategy this year supporting teachers in schools across Catholic, independent and government schools as we work together to deliver a new SACE system. Building skills for the future will be enhanced with $4.7 million to be provided to enhance the trade schools for future initiative, bringing support over the period 2006-07 to 2010-11 to $29.5 million for our school-to-work strategy to enable young people to gain practical, higher level skills for work.
The 21st century education system will also be supported by legislative reform, which includes measures to ensure young people are in school, training or work until at least their 17th birthday. While we are revitalising services, the cornerstone of our education system, of course, is the quality of our teachers, leaders and all staff who work hard to enable young people to develop and learn. This year we invest $54.9 million in delivering the latest instalment of a 14 per cent pay rise for our teachers. As a government, we are committed to working with teachers, staff, parents and students, so that our massive reform agenda can be implemented and can help achieve our end goal to have a modern education system that strives on excellence where every child can reach their full potential.
I would like to put on record my appreciation to the hard working staff in schools, preschools, district offices and, of course, our central office, for their ongoing commitment to education in the state. It is only by all working together that our massive reform agenda will be effectively implemented. I look forward to another productive year that generates improved opportunities for all young people and the future of South Australia.
The CHAIR: Member for Davenport, do you wish to make a statement?
The Hon. I.F. EVANS: No.
The CHAIR: Question?
The Hon. I.F. EVANS: What access do non government schools have to programs such as Healthy Eating Guidelines, the Premier's Be Active Challenge, solar schools, and the greening schools programs (or is it the ecologically sustain¬able development program—I think you mentioned ESD)? How does the government ensure quality of access and funding to these programs for the non-government school sector?
The Hon. J.D. LOMAX-SMITH: The programs about which the member for Davenport has required information are the ESD grants program, the Premier's Active Challenge and the Healthy Eating Guidelines. The ESD grants are part of the DECS program for their own schools, and that is part of an internal strategy within DECS. The Premier's challen¬ges have traditionally been inclusive in that all of these programs have been devised to reach State Strategic Plan targets. So, our Premier's reading challenge led the way and, I have to say, has been an extraordinarily successful program. It has been taken up by parents, families, communities, teachers and children in both public and non government schools, and it has proved to be one of the most successful ways of engaging children in reading opportunities.
Within our public school system we have supported that, of course, by our major $35 million literacy program. We have also supported it across the early childhood sector with books that have gone into child care centres and kindergar¬tens. The reading challenge is very popular in non government schools, which have the same access to the program. The Healthy Eating Guidelines is a DECS program. I understand that there may well be Healthy Eating Guide¬lines in other systemic parts of the non government system but, of course, we do not make independent schools adhere to the guidelines set down in DECS schools.
The Hon. I.F. EVANS: To clarify, do I understand that the only program out of those I have listed to which they have access is the Premier's Be Active Challenge?
The Hon. J.D. LOMAX-SMITH: The member for Davenport seems confused. The independent schools are independent. The DECS budget is to provide facilities for DECS schools, so it would not be proper for independent schools to access the funding that is provided for government schools.
The CHAIR: Member for Davenport, in asking your questions, would you please refer to the budget line?
The Hon. I.F. EVANS: The second question refers to Budget Paper 4, Volume 3. Is the government considering increasing the funding to non government schools to 25 per cent of the average government school recurrent costs? If the government does increase funding to non government schools to 25 per cent of the average government school recurrent costs, what would be the cost to government per year? What are the average government school recurrent costs? I understand that the minister has been lobbied on this issue.
The CHAIR: Member for Davenport, that does not give an identifiable reference. Can you please give an identifiable reference?
The Hon. I.F. EVANS: It is in the appropriation lines. The CHAIR: You said Budget Paper 4, Volume 3. That is not sufficient to identify the line of reference.
The Hon. I.F. EVANS: It is in the appropriation lines, Madam Chair.
The CHAIR: Can you give it a more relevant reference so that people can find it? That is the requirement at all times.
The Hon. I.F. EVANS: Well, there is not actually a budget line that specifically refers to that amount, because the way your government, Chair, does the budget papers, it is not described. But the minister knows, and you know and I know, that within Budget Paper 4, Volume 3 there is funding to the non government schools sector, and this question applies to that funding.
The CHAIR: Can you identify that funding?
The Hon. I.F. EVANS: That is what I am asking the minister to do.
The CHAIR: Minister, in the absence of an identifiable line, you can do your best.
The Hon. J.D. LOMAX-SMITH: The member for Davenport has not been able to identify a line that he wishes to interrogate, but he might be interested to know that this year there has been $16 million invested above and beyond the normal arrangements into the non government schools to support children who are disadvantaged or who have disabilities, and that was well received by the non government sector. I am not sure what his question relates to.
The Hon. I.F. EVANS: It relates to administered items. Page 9.4 deals with administered items and cash flow statement to do with non government schools. The question stands that, in relation to non government schools, is the government considering increasing the funding to non government schools to 25 per cent of the average government school recurrent costs? If the government did increase funding to non government schools to 25 per cent of the average government school recurrent costs, what would the extra cost to government be per year? What are the average government school recurrent costs?
The CHAIR: Some of that question is hypothetical. Again, minister, supply what information is possible, but the question is not clearly within the parameters for estimates.
The Hon. J.D. LOMAX-SMITH: I think that the member for Davenport is referring to some arrangements that date back to 1993 94 or a review that occurred in that period where there was some debate about how funding for the non government sector should be regulated. The reality is that I have very good relationships with the non government sector—the independent and Catholic sectors—and we have ongoing discussions about how to fund their schools and we will continue to do that.
The Hon. I.F. EVANS: Minister, is it not true that you have had a meeting with some representatives of the non government school sector in the past few weeks who have raised that specific issue with you? I am simply asking you those questions to try to clarify the position. You know and I know that it does not date back to 1993. It comes from lobbying you have received within weeks of today.
The Hon. J.D. LOMAX-SMITH: I imagine that if the member for Davenport can predict what is in my mind, he is a very fortunate man, but the reality is that I have ongoing discussions with the non government sector on a very regular basis and, if I do have discussions with leaders in those sectors over a range of issues, they might be related to the future SACE, a range of programs, funding or initiatives, or registration or licensing of a whole range of structures. But if I do have private discussions, I would imagine they would be private, and I would think he would understand that.
The Hon. I.F. EVANS: So, you cannot even advise the committee what the average government school recurrent costs are, even though your department has those calcula¬tions?
The Hon. J.D. LOMAX-SMITH: I do not think that is relevant to the discussion or the point about budget lines.
The Hon. I.F. EVANS: I refer to the same budget line. Minister, can you advise what funding is available for capital works for the non government schools in this year's budget? If it is none, will the government be reinstating the industry subsidy for non government schools or is it looking at other schemes to assist in funding non government school capital works?
The CHAIR: I was interested in the reference to the same line; I am still trying to find the previous line. Do you have something more specific, member for Davenport?
The Hon. I.F. EVANS: Madam Chair, look at the appropriation lines. It gives you only one line. It does not describe it. I cannot write the description if the budget papers do not describe it. As long as it has one word in there about non government schools, I am entitled to ask a question about non government schools. You can play this game all night, Madam Chair, but I am not going to wear it. You have been here long enough—
The CHAIR: Order!
The Hon. I.F. EVANS: —and so have I to know how this works. If it mentions non government schools—
The CHAIR: Order!
The Hon. I.F. EVANS: —I am allowed to ask a question on non government schools.
The CHAIR: Order! The questions must relate to an identifiable line and identifiable matters within the budget paper. I am seeking your assistance in enabling the minister and her advisers to identify the information you seek. Please proceed with decorum. Minister, are you able to provide any response?
The Hon. J.D. LOMAX-SMITH: I think that the member for Davenport has written letters on this matter, if I recall, and that he has been interested in this matter. I may be confused—I cannot be sure—but I think he has raised this matter previously. Certainly, there was a system implemented by the previous Liberal government that gave funding to the non government sector, but it was an anomalous funding mechanism that was not within the budget. It was not a budget line that could be identified, nor was it a budget line that was in the budget or portfolio statements, and it was not an identifiable line within the administered items. The reason for that was that the previous funding came from the DECS budget.
The Hon. I.F. EVANS: Sorry, the previous funding came from the—
The Hon. J.D. LOMAX-SMITH: The DECS budget, I am informed. So, there is no budget line to interrogate.
The Hon. I.F. EVANS: I turn to Budget Paper 4, Volume 2, page 9.2. I am interested as to why there is an increase in the workforce for SSABSA and what extra work they are doing this year that requires six more staff?
The Hon. J.D. LOMAX-SMITH: I understand that there were some unfilled positions, some of them relating to IT, during the period of last year and those positions have now been filled.
The Hon. I.F. EVANS: Even if they were unfilled, wouldn't they have been budgeted for last year?
The Hon. J.D. LOMAX-SMITH: The honourable member was looking at the estimated result.
The Hon. I.F. EVANS: I was looking at the workforce descriptions going from 74 to 80.
The Hon. J.D. LOMAX-SMITH: I think that this is the detail from the board's budgeting analysis, and I might ask Dr Keightly whether she could explain that to the honourable member. A decision over those budget allocations is made by the board, and I respect them because the board does a brilliant job. It runs a complex and difficult system. It is creative and innovative in relation to the study it does in a range of areas to increase involvement by certain categories of young people. Some of the innovation it has begun has been integral in the development of the future SACE. The board is independent and it makes decisions about staffing. I pass the honourable member over to Dr Keightly.
Dr KEIGHTLY: Our head count is 80 full time equiva¬lents. In the previous year we did not fund a small number of positions. Some of those were related to the IT industry because, at the time, we knew that we would not be able to fill them because there was a shortage of workforce. Several other positions were not filled on a relatively short term basis and, certainly, were not filled at 30 June last year. They are all now fully funded for this year. There have been some changes in the IT industry; and, in fact, today we have just signed off completing the full IT complement of staff, so that the total head count is funded for this coming year.
The Hon. I.F. EVANS: I have no further questions on this line.
The CHAIR: There are no questions from my right. We do not have a separate line for this area, so it is just a matter of thanking the SSABSA and non government school advisers.
Additional Departmental Advisers:
Ms Jan Andrews, Deputy Chief Executive, Schools and Children's Services, Department of Education and Children's Services.
Ms Julieann Riedstra, Director, Infrastructure Manage¬ment Services.
The CHAIR: Minister, I understood that your previous opening statement related to the whole portfolio area, so there is no need for a statement now?
The Hon. J.D. LOMAX-SMITH: No, madam. I might bring a different member of staff to advise if it is a specific issue related to another area. Ms Julieann Riedstra might talk about capital works if one of those questions is raised.
The CHAIR: Does the member for Davenport wish to make an opening statement now or proceed to questions?
The Hon. I.F. EVANS: I do not have a statement; I will go to questions. I refer to Budget Paper 4, Volume 2, page 9.37. Given the government's backdown on not charging an extra WorkCover compensation levy on schools, has the saving target for the department been reduced or will the savings of $170 million over four years still have to be found from within the department?
The Hon. J.D. LOMAX-SMITH: The honourable member is speaking, I think, about the full year impact of 2006 07? So, he is talking about the year impact of last year's budget. Is that the line?
The Hon. I.F. EVANS: That is the line that relates to the budget savings, yes, and the WorkCover levy was a budget saving.
The Hon. J.D. LOMAX-SMITH: The issue the honour¬able member raises is about workers compensation. I am very pleased that we have been through a process of consultation on that matter, because it has allowed us to listen to the community and the principals. It is our belief that workers compensation still needs some reform. It is an area in which we have made considerable progress, but the Premier this morning gave a commitment that schools will not have to find nearly $17 million in their budgets in the next four years. That commitment was given this morning.
Our view of workers compensation is that it is an area that should be administered better. We have been in a process of improvement for some years. For example, 25 per cent fewer open claims are present currently compared to previous years, and I think this is a great tribute to the way the system has been managed to date. However, through the consultation process, we have learnt that there are other ways we might bring about better management of this system, and we will continue to work with the principals who have suggested ideas for streamlining the system. Certainly, there are ways we can improve the system, and we will go about working with them to find them.
The Hon. I.F. EVANS: The minister did not clarify the point. The point of the question was to clarify whether the savings target for the department would be reduced or whether the savings target would remain at $170 million over four years? What is the minister's understanding of the new savings target?
The Hon. J.D. LOMAX-SMITH: We aim to be effective and efficient within our expenditure. The reality its that, overall, our government has put more money into educa¬tion—overall in the first five years, 38 per cent more per capita per child in education. This year that investment has come to $3 606 on average per child; and this year again, over last year's budget, $127 million more in the education budget. There is rearrangement and reinvestment within the department. We could not fund the massive reform agenda unless we were prepared to examine the way we do business and unless we were prepared to spend money wisely.
I think that any parent would expect a responsible government to want to reduce the number of injuries within the workplace. We have a moral obligation to reduce the number of injuries within the workplace and to spend our money effectively in schools rather than in workers compen¬sation claims, and we will strive to achieve that goal. Obviously, it will require diligence, and we will have to review that matter as we go forward. Importantly, the government listened to the views of the community leaders and the principals. We have decided that we will not impose that levy on schools because we realise it is a blunt instru¬ment and there are other ways we might be able to achieve more effective management.
The Hon. I.F. EVANS: Madam Chair, I will ask my second question this way: the same budget line, page 9.37. Minister, last year you announced $170 million worth of savings over four years, and that figure included approxi¬mately $16.9 million over four years for workers compensa¬tion. Today you have dumped the workers compensation levy, and I am asking you: as a result of that decision, can you please advise the committee what is your new savings target?
The Hon. J.D. LOMAX-SMITH: I can assure the committee that we will always strive to reduce our workers compensation expenses, but the reality is that the schools will not have a levy imposed upon them, and will not be asked to make savings. The reality is that we will always seek to spend every dollar on children's education.
The Hon. I.F. EVANS: Minister, do you know your savings target over the next four years—adjusted, as I have explained in my previous question—and, if so, what is it?
The Hon. J.D. LOMAX-SMITH: The budget line you quote from last year is—
The Hon. I.F. EVANS: The budget line I quoted was this year's budget line.
The Hon. J.D. LOMAX-SMITH: The budget line you quoted was last year's because it says:
The full year impact of the 2006 07 state budget savings measures is $18.2 million.
That was not the four-year impact, as you recall. The reality is that we will seek to redefine our workers compensation processes, and I do not think that any responsible government would want to do other than that.
The Hon. I.F. EVANS: Can you ask your chief executive what his new saving target is after today's decision? Someone at that table must know what the new savings target is? For a year you have known it is $170 million over four years. Today you dump $17 million of it. I am asking you: is it $170 million still, is it $153 million, or is it some figure in between? Someone at that table must know.
The Hon. J.D. LOMAX-SMITH: Perhaps someone at that table might have asked that question in last year's budget estimates, because it appears—
The Hon. I.F. EVANS: Last year, you hadn't dumped the WorkCover levy, minister, with due respect. So, asking this question last year wouldn't have made any sense at all.
The CHAIR: Member for Davenport, this is not a time for debate. It is a time for questions.
The Hon. I.F. EVANS: It is a pretty simple question, Madam Chair.
The Hon. J.D. LOMAX-SMITH: As a point of clarifica¬tion, it might be worth taking us back to Thursday 21 September 2006. All of these savings were outlined at that point: $16.9 million over four years—as part of local management, schools will manage their workers compensa¬tion obligations. It was defined then.
The Hon. I.F. EVANS: That was part of the $170 million, I understand, minister. As that has now been dropped, what is the new figure?
The Hon. J.D. LOMAX-SMITH: We will still continue to reform the workers compensation system and, hopefully, we will still make some savings.
The Hon. S.W. KEY: My question relates to Budget Paper 4, Volume 2, page 9.6: 2007 08 Targets/2006 07 Highlights, and also (the reference is program 1): Early Years Education and Care (Birth to Preschool) program, on page 9.10. What progress has been made with the government's agenda in the early childhood services area and, in particular, with regard to children's centres?
The Hon. J.D. LOMAX-SMITH: I thank the member for Ashford for her question. Since the release of the government's Early Children's Services report `The Virtual Village' in 2005, significant progress has been made. For some years South Australia has been a leader in early childhood education and care. We are the only state that offers fully funded universal preschool, and the release of the report and the subsequent action that has been taken only elevates our standing in this area. Our children's centres are also leading the nation in providing integrated care and education from birth to year 7. Significant steps have been taken since the release of the report, including the establish¬ment of an interministerial committee into early childhood development and the development of 20 children's centres, and the recent residency of leading early childhood develop¬ment expert, Fraser Mustard, as our Thinker in Residence has helped us to distil and formulate further views in this area.
Our Early Years literacy program has also been progress¬ing well, with 575 families accessing the Learning Together program, a program that is having amazing benefits not only for children but also in helping parents improve and under¬stand the benefits of literacy. We have seen training programs across the state for teachers, additional one on one support for students, the roll-out of the Reading Recovery program, and new early childhood coordinators appointed to districts. The children's centres are a major initiative of the government and they are progressing well. Centres at Enfield, Elizabeth Grove, The Parks, Hackham West and Keithcot Farm are already operational and providing a fantastic service to the local communities.
I am pleased that an additional $5.5 million has been added to the $23.3 million allocated for children's services so that community development managers can be appointed for all centres. I will soon be making an announcement about the location of the final five children's centres after extensive consultation with local communities. All other centres are either in construction or in the process of undergoing a feasibility study in community consultation. The government has made a strong commitment to the early years across a number of portfolios, and we will continue to work hard as we know that the first five years of a child's life are vital to a child's successful development.
Ms CICCARELLO: My question is from Budget Paper 4, Volume 2, page 9.7: Targets 2007 08, Highlights 2006-07. Minister, what progress is being made with the Education Works initiative?
The Hon. J.D. LOMAX-SMITH: I thank the member for Norwood for her question because I know this initiative has caused some interest in her electorate as well. Education Works is building on our commitment to public education as a driver for all young people to achieve their best. While we have invested significantly in maintaining our existing school infrastructure, the reality is that we have ageing school buildings, with about 75 per cent of our schools over 25 years in age. There has also been a demographic change, and these factors have impacted on schools.
Across Australia families are smaller while some of our schools are today in the wrong location because local demographics have changed over the years.
All these factors impact on the quality of our school infrastructure and the opportunities and choices we can offer young people. Education Works is building six new schools at an estimated total cost of $134 million in partnership with private industry. These are proposed for three areas in the metropolitan area, namely: Enfield-Gepps Cross-Northfield, Playford-Smithfield Plains, and Woodville Gardens-Mansfield Park. In addition we are reinvesting up to $82 million in reconfigured schools. The school communities have been invited to examine facilities and services and consider whether they can be more effectively aligned and services delivered. This may include restructuring, amalga¬mating or even closing some schools to enable reinvestment of savings into reshaped schools and services. Of course, no school will be closed without the support of the local school community.
Whilst the focus is on buildings, Education Works is not only about bricks and mortar; we have also been working with communities over the last eight months to look at how we can ensure that children have more opportunities to achieve their best. We cannot afford to have our schools and preschools stagnate and young people lose opportunities because we did nothing. At this stage, all 17 schools and preschools involved in stage 1 have voted to close, and we have had a request from an additional school that was just outside our original catchment zone to be part of the project. Therefore we have the support of 18 school and preschool communities for the building of the six new schools. We have been consulting extensively with those communities and we are now investigating the preferred locations and finalising the education briefs for the new schools.
We have asked all school communities to look at where they are in their local demographics, and we are currently getting expressions of interest from school communities about stage 2 of the Education Works initiative. These expressions of interest will be considered before more detailed work occurs on these proposals. This is a major reform agenda for our school infrastructure, the biggest in 30 years, but it is certainly not just about improving facilities and buildings; it is about providing more opportunities so that every young South Australian can reach their full potential.
Ms FOX: I refer to Budget Paper 4 Volume 2, pages 9.6 and 9.7—2007-08 targets, 2006-07 highlights. What is the government doing to slow the drift of enrolments from public to private schools?
The Hon. J.D. LOMAX-SMITH: The Rann government's commitment to investing in public schools and education is building confidence back into the public system where the previous Liberal government was intent on ripping the heart out of public education. Through this government's major investment in literacy, its commitment to smaller class sizes, and this massive Education Works initiative, we are reducing the drift from public to private school enrolments.
Under the previous Liberal government 13 300 students exited our public schools from the time the Liberal Party took office in 1993 until it left in March 2002. Whilst there is still a drift to the private system, this has slowed dramatically to a mere trickle. The estimated enrolment decline in 2007 is 0.1 per cent compared with a decline of 0.6 per cent in 2006 and 1 per cent in 2005. This is a significant achievement and a direct result of this government's focus on school retention and its major investment in public education, which ensures that every young South Australian has access to the highest quality education throughout their life.
The Hon. I.F. EVANS: I refer to Budget Paper 4 Volume 2, page 9.37. Given the government's backflip on charging schools an extra WorkCover levy (which was to save $16.9 million over four years) which was to be directed into education, which programs will now not be undertaken as a result of that decision or how will those programs that were to be funded from the savings as a result of the workers compensation reforms now be funded?
The Hon. J.D. LOMAX-SMITH: I will ask the CE to respond to that question.
Mr ROBINSON: The decision has just been taken not to pursue the levy system which would have amounted to $7 million in a full year and $3.5 million in the first half of the next calendar year (this coming financial year). The department will be managing its total budget of $2.141 billion and attempting to come in right on target with that figure which was released in the budget. However, we will not achieve $3.5 million worth of savings in the coming financial year from any levy for workers compensation.
We will continue to have discussions with school princi¬pals, employee representatives and other interested parties, because we want to make sure that we get people back to work as quickly as possible after they have been on workers compensation. We also want to make sure that we reduce the number of cases that come into the system in the first instance, so part of the process will be to try to get some efficiencies without having an upfront levy or rebate scheme of the kind that was being discussed before this decision was made. We will pursue those matters and manage the total planned programs within the total budget allocation for the department.
The Hon. I.F. EVANS: As a supplementary, I am unclear from that answer. If the government is not going to require the department to find the $16.9 million savings that were to come from workers compensation reform, the previous answer makes no sense, as the government would not have to worry about going through the process that the CE has just outlined because the savings would not be required. Will the minister clarify whether savings of $16.9 million are still required of the department?
The Hon. J.D. LOMAX-SMITH: The reality for the member for Davenport is that we do have a system whereby there has been extensive consultation. The suggestion that was put as a way of reducing the expenses from our workers compensation system was one that was put through a consultation process that went through 17 meetings. Unlike some previous governments that made decisions that have never been consulted upon—such as closing schools—we did have extensive consultation. The original proposal that was put by the department involved a 1 per cent levy and a rebate for high achievement; and, on top of that, there were some red tape cutting initiatives. There were also some issues about notification.
There was also some discussion about additional profes¬sional support for principals and assistance in return to work programs. There was a whole range of issues, but the bottom line is that schools must achieve targets in terms of the government's overall safety in the public sector strategy. Any responsible employer would seek to reduce costs in their workers compensation liability. However, the other side of that purely financial desire is a humane one, a proper and decent one, whereby as employers we would not want our staff to be injured in the workplace. We would want them to be treated respectfully. We would expect them to be coun¬selled and returned to work promptly, because what is apparent is that, the longer the hurt and the disruption occurs and the longer someone is out of the workplace, the more stressful and difficult it becomes and the more difficult it is to get a placement.
The reality is that the reform of the workers compensation system as a policy initiative and a humane and proper system has to occur and the department will not resile from that. Whether we can achieve savings is yet to be proven. The reality is that all the stakeholders said that they would suggest that there were ways we could make significant savings. They said that they understood where there were bottlenecks and problems and that they would carry on talking. The initial initiative would not have taken place until next year. The government has made it quite clear, and the Premier has said quite lucidly, plainly and matter of factly:
It is still our belief that the way in which workers compensation is run in our schools needs reform. We admit that our attempt at a solution would unreasonably impact on school communities. This will save schools having to find $17 million in their budgets in the next four years.
We are talking about $17 million in a $2 billion budget. We will make every attempt for humane and proper purposes to reduce our workers compensation liabilities,and that is the right thing for our staff.
The Hon. I.F. EVANS: I refer to the same budget line. Using your own words that this will save schools having to find nearly $17 million in their budgets in the next four years, does today's decision mean that the government is committed to finding the nearly $17 million of savings from areas in education other than schools' budgets?
The Hon. J.D. LOMAX-SMITH: As our budget stands at the moment, every child gets $3 606 more than when your party was in government. Every child receives more services. We have introduced counsellors into primary schools. We have reduced class sizes. We have introduced literacy programs. We have initiated an agenda in early childhood about which your party would not have dreamt. Your party (the opposition) and various opposition spokespeople have ridiculed our initiatives such as the Premier's reading challenge. They have ridiculed any discussion about school retention and engagement. They have ridiculed the idea of lifting the school leaving age. They have ridiculed the idea of a new and reformed future SACE, and they have dragged the chain because they have been in denial.
They were in denial about the capital works backlog. They have been in denial about the initiatives that are necessary in civil society for early childhood development. They have been in denial about the initiatives required to skill our workforce and our young people. They never drilled down into the data. They never bothered to question that only 55 per cent of year 8 students reached a year 12 certificate. They never questioned that the school retention numbers had fallen dramatically during their time in government. They never considered the disconnect between unemployed youth and a skills shortage. They never even discussed a skills shortage. We actually have a Prime Minister who says that it is wrong to keep children in education—
The Hon. I.F. EVANS: You will have to come back in and correct that.
The Hon. J.D. LOMAX-SMITH: —and school any longer. They have ridiculed everything we have done. I think that they are in a very weak position now to criticise our massive investment in education, our massive reform agenda and our massive building strategy.
The Hon. I.F. EVANS: I refer to the same budget line. My third question in this segment is: does the minister now accept that the nearly $17 million in savings proposed through the workers compensation reform would have had to come from schools' budgets for curriculum resources and student services that are used to employ extra staff, SSOs and teachers?
The Hon. J.D. LOMAX-SMITH: I have to say that I am surprised that the member is unaware of the support his party gave to the government regarding the reforms to the materials and services charge system. In fact, the materials and services charge can only cover the costs of essential items and services needed by students for their studies.
The Hon. I.F. EVANS: I didn't mention a services charge.
The Hon. J.D. LOMAX-SMITH: You were talking about fees; you mentioned fees.
The Hon. I.F. EVANS: No, I didn't. I will repeat the question for you, minister. Does the minister now accept—
The Hon. J.D. LOMAX-SMITH: I am afraid you do mumble. Could you say it clearly?
The Hon. I.F. EVANS: I did not mention fees.
The Hon. J.D. LOMAX-SMITH: I am sorry, could you say it clearly then?
The Hon. I.F. EVANS: Certainly. Does the minister now accept that the nearly $17 million in savings proposed through workers compensation reform would have had to come from school budgets for curriculum resources and student services that are used to employ extra staff, SSOs and teachers?
The Hon. J.D. LOMAX-SMITH: Thank you; I am sorry, I misheard you. The levy that was proposed was a proposal for discussion. It was never the final shape or form of the way that savings initiatives would have panned out. We have gone through, as I said, a very extensive discussion period. It was clear that the amount of the levy could have been adjusted quite significantly and it was under discussion with the interest groups. The sums were always speculative and not based on a final state of the way the levy would have been implemented. The numbers that have been bandied around have clearly not been accurate.
The other issue is that it is pure nonsense to suggest that staff would have to be sacked because of this levy, even if it had been at the maximum level of 1 per cent. The reality is that the staffing formula within our schools is set down within a range of enterprise agreements. We have formulae that relate to class sizes (which are significantly smaller, I might add, than when the member's party was in government). There is a significant number of counsellors and literacy experts and significant input from behaviour management specialists—who are all staff who were never employed, never dreamt of and never sought by the previous government: in fact, the implementation of those programs and the extra resources being put into schools, as I said, have been ridiculed by those in opposition. So, the idea that there would be a reduction in staffing is a nonsense, because the staffing is set. It is part of our agreement and our staffing model for schools, and it is funded.
The Hon. S.W. KEY: My question relates to investment in education, and I refer to Budget Paper 4, Volume 2, page 9.6, `Targets and highlights'. The minister has told the estimates committee that there has been an increase of $3 606 per student. Can the minister provide some more details about that increase and indicate from when it is being calculated?
The Hon. J.D. LOMAX-SMITH: Education is clearly the key for young South Australians to gain skills, and it has been a continuous and pivotal platform for the government. I am pleased that the member has mentioned the increase of $3 606. The difference between the 2006 07 and 2007 08 budget is a $708 increase, which amounts to 6.7 per cent in the last year. The 2007 08 budget increases total expenditure by $127.2 million, compared to the 2006 07 budget. We have provided an additional $5.5 million for the children's centres and an additional $4.7 million for the trade schools. This year, $54.9 million is invested to deliver the latest instalment of our 14 per cent pay rise.
Since being elected, $665 million has been invested by the government into school infrastructure. In addition to this massive investment, there is the $216 million Education Works initiative. This budget provides funds to continue our Security Grants program, our Solar Schools program and our Ecologically Sustainable Development program and provides $31.4 million, in conjunction with the commonwealth government, for 14 new major capital projects in schools and preschools. In toto, $47.7 million will be spent on all school capital projects in the 2007 08 financial year. A further $10 million is being invested this year from the Rann government's $35 million Early Years Literacy program, providing mentoring, reading recovery programs and early intervention.
As a government, we understand that we need to invest more in those students with additional needs. Equity does not always mean equal treatment. Total funding of $142 million a year is allocated to support some of our most needy students: those with disabilities and additional needs. This includes the additional funding of $24.1 million in 2006 07 to support growth in the number of students with additional needs in our schools. Some $10 million is also provided in 2007 08 to help support 68 000 students across the state who receive the School Card allowance. This ongoing investment in education and children's services in the state highlights our commitment to improving the education opportunities for all South Australians, so that every child can reach their full potential.
Ms CICCARELLO: My question relates to Budget Paper 4, Volume 2, page 9.6: 2007 08 Targets/2006 07 Highlights. What is the government's plan to reform education and care legislation?
The Hon. J.D. LOMAX-SMITH: I thank the member for Norwood for that question: I know that she has been interest¬ed in our legislative reform. We have made a commitment to reforming education to ensure that we have the best possible system for young children and people in South Australia. The reform agenda set out for education, care and children's services over the next two years will be significant, and will transform the education and care sectors. The first stage of these reforms is well under way. It includes amending the Senior Secondary Assessment Board of South Australia Act to underpin the future South Australian Certificate of Education and to amend the Education Act to raise the compulsory education age to 16 years, meaning that young people must be engaged in school, training or work until they turn 17.
It is important that the changes to the SSABSA act are made quickly so that the new SSABSA board can be in place in plenty of time to oversee the implementation of the future SACE, which will begin in 2009. Proposed changes to the Education Act, rather than just lift the leaving age to 17, will put in place an increased compulsory education age requiring all 16 year olds to be in approved learning, training or work. This can include normal school activities, participation in approved non school based programs, such as an apprentice¬ship or traineeship, TAFE courses, enrolment in a trade school or other registered training organisation or, if a 16 year old has obtained substantive employment, they can apply for an exemption.
I will be working closely with education stakeholders over the next 12 months to put the required operational arrangements in place so that this change can apply and be in place from 1 January 2009. Consultation has been occurring with stakeholders on both these pieces of legislation over the past six months, with the intention to bring the draft bills into the house for debate before the end of this session.
Ms FOX: My question relates to physical education, and I refer to Budget Paper 4, Volume 2, page 9.6: 2007 08 Targets/2006 07 Highlights. With one in four young people classified as obese, what is happening in schools to teach students about healthy lifestyles?
The Hon. J.D. LOMAX-SMITH: The Rann government acknowledges that healthy bodies support healthy minds, and physical activity is an integral component of the school curriculum. South Australian students have a range of options in addition to the normal school based physical education classes, which include swimming and water safety and team based sports. This year, students also have the oppor¬tunity to take up the new Premier's Physical Activity Challenge. This challenge, for which $1.68 million was allocated over four years, has already inspired more than 10 500 students in more than 200 schools to be involved, and many of the students have already completed the first four weeks of the physical challenge, and will receive a medal at the end of the year.
Of these students, any who complete a further six weeks will ensure that their schools are recognised for their achievement, with the top achieving schools in the running for equipment prizes. The challenge will be complemented by a further injection of $1.55 million over four years to support the introduction of mandatory healthy food guidelines in school canteens. All government schools and preschools must comply with the mandatory healthy eating guidelines, which were introduced this year, by the end of the 2008 school year.
Mandating the Eat Well SA schools' and preschools' healthy eating guidelines builds on the work already happen¬ing in schools and preschools across the state in the fight to control obesity. While school canteens will be the focus of this policy, the food standards will also apply to vending machines, school excursion camps, and events such as sports days. The guidelines are also included in the curriculum, and students will learn about nutrition, food hygiene and safety. Controlling obesity does not stop at the school gate. A combination of physical activity and healthy food both at home and at school will ensure that we are helping our children to have the best opportunities in life.
The Hon. I.F. EVANS: I refer to Budget Paper 4, Volume 2, page 9.37. The unions have called off the pro¬posed industrial action tomorrow on the basis that the government outline all the cuts for the next three years. Can the minister outline all the proposed cuts for the next three years to the house that she has and will be outlining to the union?
The Hon. J.D. LOMAX-SMITH: I think the member for Davenport is still confused. The budget savings to which he refers were in the 2006 07 budget, not in this year's.
The Hon. I.F. EVANS: So, there are no budget savings in this budget? Is that what you are trying to tell us?
The ACTING CHAIR (Hon. S.W. Key): Member for Davenport, I ask you to direct your questions through the chair.
The Hon. I.F. EVANS: Through you, Madam Acting Chair, is the minister trying to tell us that there are no savings in this budget?
The Hon. J.D. LOMAX-SMITH: I cannot say it more plainly; I will say it once more. The budget savings to which the member refers are in the 2006-07 budget, not in this budget.
The Hon. I.F. EVANS: My third question is the same question put in a different way. What is the budget saving for this year?
The Hon. J.D. LOMAX-SMITH: The budget savings which are listed are the impact of the 2006 07 budget. It is the budget line to which you refer.
The Hon. I.F. EVANS: Madam Acting Chair, is the minister trying to tell us that in all the budget papers there is no figure for budget savings for this year? That was the question. What is the budget saving amount for this year?
The Hon. J.D. LOMAX-SMITH: I realise how difficult the budget papers are to read, but you have quoted the page which you referred to, page 9.37. You have quoted the only line that, to my knowledge, explains what you are trying to ask, and I have answered the question.
The Hon. I.F. EVANS: If it is the only line in the budget to your knowledge and the only line in the budget to my knowledge, then we agree on that. So, Madam Acting Chair, why can the minister not answer the question?
The ACTING CHAIR: I just remind the member for Davenport to direct his questions through the chair.
The Hon. I.F. EVANS: I just did.
The ACTING CHAIR: Then you did. This is not an opportunity for open dialogue. I know that it is an informal session in that we are sitting down, but I think that that is as far as the informality goes. A much stricter chair is coming back.
The CHAIR: I understand, member for Davenport, that you enjoyed three questions while I was away. Member for Ashford, do you have any further questions?
The Hon. S.W. KEY: My question is in regard to school infrastructure. I refer to Budget Paper 4, Volume 2, page 9.9—Investing payment summary. Can the minister tell the committee what programs are available to schools in the 2007 08 budget to improve their school infrastructure?
The Hon. J.D. LOMAX-SMITH: The government's record on school infrastructure speaks for itself. Since being elected, we have spent $665 million on our school infrastruc¬ture. In addition, we have announced our $216 million Education Works initiative, the biggest reform agenda for our school infrastructure in 30 years. The government has spent record levels on school infrastructure since being elected. We have provided an additional $2 million per annum on school maintenance since the former Liberal government was in power, lifting the annual maintenance budget to $12 million. We have introduced a $17 million Better Schools program and the $25 million School Pride program. During the 2007 08 financial year, $47.7 million will be spent on 113 ongoing school and preschool capital projects across the state.
There has been $31.4 million worth of new projects at 14 schools and preschools have been announced in collabor¬ation with the federal government. In addition, we have announced a $36 million maintenance program over three years, which will provide $12 million annually to schools and preschools for maintenance priorities. As well as all these ongoing major initiatives, the $1.25 million Solar Schools program will continue. We have already provided funding to 112 schools to install solar power, and are well on our way to achieving our target to solar power 250 schools by 2014. Our ecologically sustainable development grants, worth $1 million annually, will continue to be rolled out. Already, 300 schools have achieved their targets in water conservation, and more than 50 have achieved their targets in energy conservation.
These grants will help our schools achieve the South Australian State Strategic Plan target, which means that money can be spent on educating our children rather than paying for electricity bills, and we can help South Australia achieve its goals of becoming world renowned for being clean, green and sustainable.
On top of this, our $5 million Security Grants program will continue to be rolled out and our capital works assistance scheme will also continue. This program helps schools provide state of the art gymnasiums and halls. It is impos¬sible to deny that since being elected we have provided additional funding to deal with the backlog of maintenance that we inherited. Our ongoing infrastructure funding program, coupled with our comprehensive Education Works initiative, demonstrates this government's commitment to ensuring all students have the best facilities in which to learn.
Ms CICCARELLO: My question is from Budget Paper 5, Capital Investment Summary, page 43. Minister, can you provide an update on the measure being introduced by this state government to improve student safety on school buses?
The Hon. J.D. LOMAX-SMITH: Given the tens of thousands of journeys these school buses have made every year over many years right across the state, our buses have an outstanding safety record. Each year the department invests more than $25 million in transporting children to state schools. Since being elected to office, the state government has purchased 56 new buses for the 300 strong government owned fleet. National research estimates that, relative to school bus travel, a child's risk of death or injury is seven times greater if travelling by private car, 31 times greater if walking and 228 times greater if cycling. School bus travel, quite rightly, is considered by experts to be one of the safest forms of transport available for children.
In August 2006, the state government introduced a significant change in policy which will assist in maintaining the outstanding safety record of school bus travel into the future. A key element of this policy change is the phasing in of high standard lap sash seatbelts (the same as those used in cars) as school buses are replaced, as well as other compre¬hensive safety and comfort measures including reinforced floors to prevent seats being torn from the floor in an accident, new guidelines and an education strategy to require students to wear seatbelts, rollover strength to prevent the roof collapsing in the event of a rollover, lights that flash as the bus stops for students to board and alight, a uniform yellow colour for all government owned school buses and rear signs telling passing motorists to slow to 25 km/h, as well as air conditioning.
This change in policy heralded the start of a new area in regional school bus travel. While this will be an expensive and lengthy exercise, we still would be only the second state in Australia to begin to phase in seatbelts in all school buses along with Western Australia. Private operators will be required to tender for school transport services that meet the new safety standards, including the need for seatbelts to be fitted when their contracts expire.
In addition to ensuring that all new buses are equipped with enhanced safety features, the process of retrofitting seatbelts to 53 existing buses within the DECS fleet is well underway and proceeding to schedule. I understand that, through the generosity of the Masonic Foundation and the public of South Australia, there have been contributions which have allowed the cost of retrofitting four of these buses to proceed.
As a result of this government's policy change, Orroroo Area School and Cummins Area School will both have a new medium bus with seatbelts. A further two new medium buses with seatbelts will soon be sent to Kangaroo Island Community Education at Parndana campus. Penong Primary School, Wudinna Area School, Karkoo Primary School, Jamestown Area School, Miltaburra Area School, Browns Well Area School, Cummins Area School, Port Neill Primary School and Karcultaby Area School have each received a small bus fitted with seatbelts. Schools that will soon receive a bus fitted with seatbelts include East Murray Area School, Hincks Avenue Primary School in Whyalla, Tumby Bay Area School, Mount Compass Area School, Ceduna Area School, Karoonda Area School and Streaky Bay Area School.
Equipping all school buses with seatbelts will take some time as was the case with the introduction of seatbelts in cars. However, the state government has taken action to address an issue that was neglected for years under the previous Liberal government.
Ms FOX: My question relates to junior primary class sizes, and it refers to Budget Paper 4, Volume 2, Programs 2 and 3, page 9.8. How is the state government improving junior primary education through reducing class sizes?
The Hon. J.D. LOMAX-SMITH: The member for Bright's question is pertinent because the government has made significant investments in the early years of children's lives and we have made this one of our main priorities in both education and health. The report, The Virtual Village, was a significant undertaking that was the result of massive consultation within the community. It confirmed that investment in the early years of schooling reduces the risk of failure at school and antisocial behaviour, which can be difficult and costly to turn around as children get older. Smaller class sizes give teachers greater opportunity to provide individual attention and tuition to children. Smaller classes mean those children's special needs, learning difficulties and talents can be identified and addressed early.
Smaller classes also mean that problems do not go unnoticed until years later when intervention strategies can be less effective. Smaller class sizes in the critical years give children the best possible start to their schooling. The JP160 teacher scheme allocates additional junior primary teacher salaries and SSO time to reduce class sizes and improve literacy and numeracy outcomes in schools. In the index of educational disadvantage categories 1 to 3, the early years scheme is an initiative to reduce class sizes in the early years of schools with an index of educational disadvantage in categories 4 to 7. This additional funding provided by the government for early years education ensures that no junior primary school class need be greater than 21 in category 4 and 24 in categories 5, 6 and 7 based on the agreed February enrolment of the school year.
We have also implemented our $35 million Early Years Literacy Plan. This plan requires every primary school to develop a literacy implementation plan and special training for every preschool to year 3 teacher. It also provides the equivalent of 125 teachers across primary and preschools to focus intensively on literacy improvement. Under the previous Liberal government, junior primary classes were staffed at a ratio of one teacher for every 26 students. We have reduced the average size of reception to year 2 classes in state schools to 19 students in 2006. In 2006, the state's most disadvantaged schools had an average junior primary class size of 15 students.
At the start of 2007 we delivered on our commitment to further improve early years education by further reducing class sizes in year 3. The 2006-07 state budget provided an additional $32.1 million to fund an additional 100 year 3 teacher salaries over four years. This reduced year 3 class size of 30 students by up to eight a class in the most disadvan¬taged schools and by a minimum of four students in all schools. A total of 364.1 junior primary teacher salaries were provided to schools at the start of the 2007 school year under the Rann Labor government's class size reduction initiatives. Supporting our teachers and reducing class sizes means that our children get the best start to their schooling to achieve their full potential and to have the skills and values they need for a better future.
The CHAIR: At the Chair's discretion the member for Mitchell has asked to put a bracket of questions, and I am pleased to accommodate him. The member for Mitchell.
Mr HANNA: My first two questions relate to major resource variations, Budget Paper 4 Volume 2, item 9.37. The first question relates to the press release put out by the minister on 14 June, which specified a number of possible areas of savings or cuts and a total figure of about $170 million to be saved over four years. I will give the minister the information. The press release to which I referred said that there were to be total savings of $170 million over four years, and it specified the number of items, such as the WorkCover levy, efficiency dividend, and so on.
The specified items added up to about $104 million per year. In what manner might the efficiency dividend of $36 million over four years be achieved, and how on earth might the unspecified $66 million over four years be achieved by schools?
The Hon. J.D. LOMAX-SMITH: I think that those details are best answered by Mr DeGennaro. The budget for education is around $2 billion, and there are various ways that processes could be restructured, but these are really manage¬ment issues.
Mr DeGENNARO: We intend to undertake an ongoing review process within the Education Department with the stakeholder groups to identify improvements in our oper¬ations and processes to achieve the efficiency gains which we need to achieve and which were set out in last year's budget in that particular line.
Mr HANNA: My second question is to test the impact of those savings or cuts in a particular school. I have a leaked memo, apparently, from Hamilton Secondary College, which specifies the impact on that school. I am happy to provide the minister with a copy of this memo to facilitate an answer which she might bring back later rather than deal with it now. However, in summary, the seven points in the memo refer to a $7 million WorkCover levy cut with an impact of $80 000 to the school; $7 million from surplus to teachers (here an impact of $20 000 on the school); $1.8 million savings on energy use (here an impact of $40 000 per annum on the school; $0.7 million savings on water use for the school (this would be an impact of around $4 000 per annum); cuts to programs such as Be Active, etc., could amount to around $35 000 for the school; cuts to grants by $2 million (impos¬sible to quantify); and $7.4 million for SASIF interest, which would be a cut of around $43 000 for the school. As I say, I am happy to provide this leaked memo to the minister and look forward to her bringing back a reply to test the veracity of this information for the benefit of the school.
The Hon. J.D. LOMAX-SMITH: One of the problems when you go into a process of consultation, as we have done, is that people jump to conclusions and extrapolate from the information they are given to a scenario which, in many cases, is not accurate. Clearly, there are misconceptions and misunderstandings in the list the member for Mitchell has read out. In particular, let us discuss the impact of water and electricity savings. We have State Strategic Plan targets in these areas. We are asking business to reduce water usage, and wise and sensible domestic users are trying to do the same.
As a government, we have set targets across all parts of the public sector. Schools should not and cannot regard themselves as being separate from those initiatives. One of the ways we promote sustainability in our schools is not only through the curriculum but also with grants to the schools for initiatives to improve the sustainability. Some of that, of course, relates to solar power in schools. I think we aim to get 250, and we are on track for that. Also, we have a target of reducing water and energy consumption. As the honourable member will appreciate, expenses for water and power come from the state government as part of the entitlement of the schools.
If we say that the target is to reduce the use of water by 25 per cent, the initiative we implement to make that occur will be to reduce the funding allocated to the water charges by that amount. I am pleased to tell the member for Mitchell that already 300 schools have reached their targets which means that, because they have reached the target, those 300 schools will not have a cut in their resourcing. This is not actually a penalty they will feel because they have achieved the goal. To date, 50 schools, as I understand, have achieved the electricity targets. Again, they will not feel the impact of a cut because they are living within that target aspiration.
So many of those ideas for budget savings are achiev¬able, and properly so. In fact, I think we know what every parent would say if asked, `How would you like the government's money to be spent in your school? Would you like the government's resourcing to go on electricity bills or would you prefer to have a new SACE system or a children's centre or more art or more music—or whatever?' I think that all parents would say, `Let's not waste money, let's put it into education.' The whole initiative for us is to invest in educa¬tion. So the bottom line is that we have spent more money. We have spent more money on programs, on teachers, on smaller classes, and any savings have been reinvested. So this is not cuts. This is a massive reinvestment program, a massive reform agenda, underpinned by new money, but also redirecting funds in a better way. I cannot imagine a parent who would rather have injured teachers or water wastage or power cost wastage, rather than the money going into children. That is the goal. These are driven by the desire for reform.
Mr HANNA: My third question is in relation to the highlight specified in item 9.7 of Volume 2 regarding the Education Works initiative. I would particularly like the minister to give us a comprehensive update on the plans for the public private partnership development of a new school site, including queries such as the amount that government might be expected to pay on the lease, if there is continuing private ownership of the land, whether the government would be obliged to purchase the land at the end of the lease if that is the arrangement, and who would be responsible for ongoing maintenance on site if indeed the land is held in private hands.
The Hon. J.D. LOMAX-SMITH: Can I thank the member for his question. There is a scant budget line in there. We are still in the early days of these negotiations. This is a massive investment in education in our state. $216 million overall will be invested in, firstly, the six new schools but then, in addition, the subsequent phase. The subsequent phase of investment will not be part of a PPP agenda, only phase 1 which is for the six large new school sites. For the moment all I can say is that we predict that the value of those schools will be $134 million. But the exact shape of the tendering, the documentation, the design and the lease payments has not been resolved, because we have not worked through the issue that far.
The Hon. J.D. LOMAX-SMITH: I will ask Mr Robinson to comment.
Mr ROBINSON: Obviously there are several stages in the triple P process. The first stage, which has been com¬pleted, was to have a round of community consultations leading up to a gauging of the interest in the school communi¬ties that were identified for those six super schools, to see whether the parents and school communities in those areas were interested in progressing in one of these triple P new school proposals. As you are probably aware, that process has been finished. Some 17 schools initially were identified and held a vote and a majority of parents in each case—overwhelming in most cases—voted in favour of coming into the arrangements. An additional school canvassed the minister about being involved and it has also been involved in the triple P process.
The stage that we are currently in now is in developing the design specifications, through further consultation with the schools involved and their school communities, about the educational parameters for those schools and what the new schools need to include. That process will be used to develop the specifications that will be given to the marketplace so that the different consortia can form and put in an expression of interest in the process. So that is the stage we are up to at the moment. This is a long term project. The schools will not be opening until 2010 or 2011. The stage we are up to now is developing the specifications ready to go to the marketplace.
Mr HANNA: I have a supplementary question, if I may, Madam Chair.
The Hon. J.D. LOMAX-SMITH: May I make a suggestion that instead of going to government questions we could proceed with questions from the other side of the chamber.
The CHAIR: Thank you, minister. A clarification, member for Mitchell?
Mr HANNA: Whether there is any plan at all for extending an education works type initiative to the southern suburbs.
The Hon. J.D. LOMAX-SMITH: Can I just say that there is nothing I would like more but at the moment that is not on the agenda. What I do perceive as being highly likely is that there will be some expressions of interest that are quite attractive and viable from southern suburbs schools, and of course we would look upon those favourably, because at the moment most of the activity has been in the northern suburbs.
The Hon. I.F. EVANS: I refer to Budget Paper 4, Volume 2, page 9.26. The minister has been claiming that there has been a 25 per cent reduction in workers compensa¬tion costs: can you advise what the costs were last year and what the costs are this year?
The Hon. J.D. LOMAX-SMITH: I did say earlier that the number of open claims had reduced, but the actual cost is variable, and I understand the cost per claim has now increased because, of course, the salaries have gone up. Can you just repeat the exact detail of your question?
The Hon. I.F. EVANS: I am trying to establish how much the department spends each year on workers compensa¬tion. You have previously said on radio there has been a 25 per cent cost reduction.
The Hon. J.D. LOMAX-SMITH: That is an error if I said that. I said there was a 25 per cent reduction in open claims.
The Hon. I.F. EVANS: The question still stands: how much does the department spend each year on workers compensation?
The Hon. J.D. LOMAX-SMITH: I think I said there was a 25 per cent reduction in open claims.
The Hon. I.F. EVANS: Today you said that, but on radio you have been saying 25 per cent of costs. Regardless, how much does the department spend each year on workers compensation?
The Hon. J.D. LOMAX-SMITH: No, no, I just thought I would correct that: if I did say a reduction in costs, it is a reduction in open claims, because the costs have risen because the salaries have risen and, therefore, absences cost more money. I am informed that the claims in 2005 06, which is the last year I have figures available for, were $22.96 million.
The Hon. I.F. EVANS: I am a bit confused about these figures. Relating back to the previous question: the annual report, under `Employee Benefit Costs', refers to `Workers Compensation: consolidated $18.935 million for 2006; DECS, $18.906 million'; and, for 2005, `$40.501 million from consolidated and $40.488 million from DECS'.
The Hon. J.D. LOMAX-SMITH: If you would like to ask a question of the expert on workers compensation, I am very happy for that to occur, but we do not have the information from the annual report here to interrogate because we are in estimates.
The Hon. I.F. EVANS: You have just given us an answer that the cost of workers compensation is about $22 million, or $20 million—rough enough—and your annual report does not reflect that. I am trying to establish how these figures are actually calculated.
The Hon. J.D. LOMAX-SMITH: I will look into it.
The Hon. I.F. EVANS: Am I right in assuming that, in the workers compensation costs as reported, there is a small component over and above DECS funded by consolidated somehow? The DECS component appears to be about 95 or 96 per cent—almost 100 per cent of the cost. Then there is this small extra component from consolidated. Does anyone know how that works?
The Hon. J.D. LOMAX-SMITH: We will take that question on notice.
The Hon. I.F. EVANS: Minister, can I ask you this question on the same budget line as a supplementary? For a year you have been advocating reform to workers compensa¬tion to reduce costs, and today I am asking you what is the cost, and you do not know. I am not sure what we are to make of that.
The Hon. J.D. LOMAX-SMITH: I would have thought any employer who was acting honourably would want to reduce the pain and suffering and loss of work. It is good practice in any business.
The Hon. I.F. EVANS: I refer to the same budget line, page 9.26. As part of the government's WorkCover reforms, you are proposing to ask schools not only to pay a 1 per cent levy on salaries but also to pay for the replacement of injured teachers for the first four weeks. Is that reform still—
The Hon. J.D. LOMAX-SMITH: Excuse me, I think you are talking about something that was ruled out this morning. I think you are living in the past.
The Hon. I.F. EVANS: That is what I am clarifying. What was ruled out this morning? The 1 per cent levy was ruled out. What I am asking is: under the reforms that will now go forward, will the school still have to find the payment for the replacement of injured teachers for the first four weeks?
The Hon. J.D. LOMAX-SMITH: The actual shape of the reforms is still going to be determined, but what has been ruled out is the financial cost. That has been described repeatedly. I have repeated what the Premier said, and those savings will not have to come out of the school budgets.
The Hon. I.F. EVANS: Minister, following that answer, was it your understanding that included in the cost savings of $6.9 million was the cost of schools finding the replacement for injured teachers for the first four weeks?
The Hon. J.D. LOMAX-SMITH: This was only a discussion, and the way it was shaped was never finalised because the consultation was still in progress, and the whole shape of the package has only been partially described by the elements; but this is not delineated in the budget papers. Mr DeGennaro can explain it to you because you seem to be very interested in this matter, but there is no actual budget line that defines this because you are talking about the 2006 07 budget papers.
The CHAIR: Minister, do you want Mr DeGennaro to provide supplementary—
The Hon. J.D. LOMAX-SMITH: In the hope that it might clarify, because I am unable to answer the question in any way because it is related to a question from last year's budget paper, and we have described the answer repeatedly. He does not like the answer. Because he does not like the answer does not mean that I can give him a different one.
The CHAIR: Mr DeGennaro.
Mr DEGENNARO: As the minister has said, the levy has been ruled out; the schools covering the first four weeks of lost time is ruled out, and any other financial cost has been ruled out, and that occurred through the Premier's announce¬ment this morning.
The Hon. I.F. EVANS: With reference to the same budget line, does the government intend to proceed with the requirement that schools be asked to cover the extra costs of the placing of unplaced teachers resulting from this increase from 15 to 30 days per term?
The Hon. J.D. LOMAX-SMITH: There has been a significant reduction in unplaced teachers. Those costs are reducing because we have appointed many of those teachers to permanent positions.
The Hon. I.F. EVANS: I'm sorry; I couldn't hear anything.
The Hon. J.D. LOMAX-SMITH: I was explaining that there was a budget line that referred to savings that might have been generated by dealing with unattached teachers. These teachers were permanently employed but not appointed to a school. Over the last few months we have made signifi¬cant progress in the appointment of teachers.
The Hon. I.F. EVANS: My question was: is it the minister's intention to change the system so that schools which currently have to pay for 15 days will now have to pay for 30 days?
The Hon. J.D. LOMAX-SMITH: I am confused as to whether you are talking about unattached teachers or workers compensation.
The Hon. I.F. EVANS: I am asking about unplaced teachers.
The Hon. J.D. LOMAX-SMITH: I will ask Mr De Gennaro to answer.
Mr De GENNARO: I think the question is about the unattached teachers measure. Our discussions with the stakeholder groups are not yet completed and no decision has been taken or proposal put to the minister. The line in last year's budget related to unattached teachers. We have been talking to stakeholder groups about ensuring that unplaced teachers who are able to be put into schools are placed in online positions in schools which are funded positions—and we are still completing those discussions.
The Hon. I.F. EVANS: I refer to the same budget line. In her answers today, the minister has indicated that she still expects schools to take on a more proactive role in managing their workers compensation obligations. Will the minister explain how she expects schools to do that without incurring more costs and what she actually expects of schools. She said in her media release today that principals have been telling her that there are savings to be made. Perhaps the minister can enlighten us as to how that can occur without incurring extra costs for schools, now that she has ruled out those extra costs.
The Hon. J.D. LOMAX-SMITH: It is clear that there are many ways to improve the workers compensation system. We have received several suggestions and we are working on the reforms that we can initiate. Clearly there is a range of suggestions about red tape, better coordination of rehabilita¬tion support, better assistance in schools, and there are also some documentation issues through some schools failing to notify of claims, and that must be resolved. Clearly, we will continue to work with principals and unions on this initiative.
The Hon. I.F. EVANS: I refer to the same budget line—workers compensation.
The Hon. J.D. LOMAX-SMITH: There is no budget line for workers compensation.
The Hon. I.F. EVANS: That is interesting, because I was going to ask the minister that very question. There is a budget line for employee expenses. That is why I went back to the annual report because I thought somewhere the workers compensation costs of the department must be reported, and lo and behold they are in the annual report. Why there is no budget line so that we can monitor it I am not sure, given the minister's interest in this issue.
I note that, according to the annual report, the workers compensation costs, which are reflected in the budget papers somewhere in the expense line, have gone down from $32 million in 2003, $34 million in 2004 and $40 million in 2005 to $18.9 million in 2006. I can only assume from those figures that somewhere within the department it has saved $21 million on workers compensation in the last year (between 2005 and 2006). I am not quite sure how I should read that. Is that the level of claims? It makes no sense to me.
The Hon. J.D. LOMAX-SMITH: We will take that question on notice.
The Hon. I.F. EVANS: The whole reporting of this workers compensation issue in the document is unclear.
The Hon. J.D. LOMAX-SMITH: As a former minister, the member will know that the minister plays no part in the way that these reports are set out. They are formulated by higher powers.
The Hon. I.F. EVANS: Will the minister explain the difference between the 2005 figure of $40.488 million from DECS and $18.9 million?
The Hon. J.D. LOMAX-SMITH: I will take the question on notice.
The Hon. I.F. EVANS: Out of 20 officers and a minister, no-one knows?
The Hon. J.D. LOMAX-SMITH: It is easy to attack the staff.
The Hon. I.F. EVANS: I am not attacking the staff. The minister knows that she can invite her staff to answer a question at any time. I am not attacking the staff; I just cannot understand why she does not ask one of her staff to answer.
The Hon. J.D. LOMAX-SMITH: I think the Chair has been fairly generous in allowing you to talk about the annual report. We are not here to be interrogated about the annual report; we do not have it historically, archivally and going back over several years at our fingertips.
The Hon. I.F. EVANS: I refer to Budget Paper 4 Volume 3, page 9.9. Why is the expenditure on minor works reduced to $3 million?
The Hon. J.D. LOMAX-SMITH: That is a charming question. Every time we have a new opposition spokesperson for education, they ask the same question. This is almost like an omnibus question. It comes up every year, and the answer is always the same. It relates to the classification of minor works. I understand this classification confuses the opposi¬tion, because it asks this question every year. I will ask Ms Riedstra to answer it.
Ms RIEDSTRA: The reference to minor works in the investment payment summary on page 9.9 refers to capital works projects. The investment payment summary is a summary of Budget Paper 5, the Capital Investment State¬ment, pages 39 to 43. The Capital Investment Statement lists all new works and all other projects that have a budgeted cash flow of more than $300 000 in 2007 08. Projects with a cash flow of less than $300 000 are combined under the category `small projects' shown on page 43 as $591 000. Referring to the investment payment summary at page 9.9, the amount for small projects has been transferred to the other minor works category at the bottom of the table. The definition here of other minor works is those capital works with a cash flow less than $300 000 in 2007 08.
The Hon. I.F. EVANS: In relation to Budget Paper 3, page 2.18—Education Works or the superschools—what different staffing arrangements, facilities or curricula will these new schools have compared with an existing school of the same size?
The Hon. J.D. LOMAX-SMITH: The existing schools of the same size are relatively few within our state, but staffing formulas are set down. One of the great advantages and opportunities in our Education Works investment strategy (which is the biggest capital investment for maybe 30 years) is that, first, it allows teachers to teach within their areas of expertise, instead of being in a smaller school where they might have to teach out of their expertise and specialty. Secondly, it also allows teachers to have professional opportunities within a larger school. It certainly means that, where our teachers are rare and in short supply, we will utilise their skills more effectively. The school ratios in terms of class sizes are set down and will not change. There will be the same number of children in classes because we regulate that and it is a commitment to have small class sizes.
The significant change will be the opportunity to ensure that specialist teachers teach within particular areas of expertise. At the moment, there is no intention to have any change in the staffing schemes in place across the state, but we are discussing the matter with the unions and the school communities, because clearly there will be different oppor¬tunities in terms of the way specialist subjects might be taught. There will be economies of scale, so that there might be opportunities to have special interest schools and, depending on the location of the school, there will be opportunities to be involved in the trade schools initiative. Certainly, the most exciting things are the new buildings, the sustainability, the massive investment and avoiding the maintenance backlogs of the old schools, but the really significant issue with these schools is the educational outcomes and opportunities for children.
I think that is why the community has taken to them so readily and been so enthusiastic and voted to be part of these schemes. Parents are very smart and they can see that there are real educational advantages in having schools of a larger scale and a larger size, and particularly being part of this massive new Rann government initiative.
The Hon. I.F. EVANS: For the record—and you mentioned the operational costs of the 18 schools that will not exist—all those savings (maintenance, ground watering and all those sorts of things) will stay within the DECS budget?
The Hon. J.D. LOMAX-SMITH: The issue about the savings is one to which people are attracted, but clearly it is a better use of resources to be consolidated on site. In terms of the savings, I think that some of the savings are related to inefficiencies within the system, let me say. It is clearly a less efficient way to run a school when it is smaller.
The Hon. I.F. EVANS: Sorry, I am a bit slow, minister; you might have to put it in big words for me. I misunder¬stood, I think. I asked whether all the ongoing operational savings from the 18 schools that you are closing will stay within the DECS budget.
The Hon. J.D. LOMAX-SMITH: Every year we have increased the DECS budget, so whatever savings have occurred have been less than the increased expenditure. As I have said, $3 606 more per student on average, which is a very significant investment in education.
The Hon. I.F. EVANS: I refer to page 2.18 of Volume 3. Under this line in last year's budget papers it showed under public-private partnership payments of $9.56 million in 2008 09 and $13.07 million in 2009 10.
What are the figures now for 2008 09, 2009 10, 2010 11 and 2011 12, how much of these are consultancy pay¬ments and how much are payments to the private sector for the public private partnership?
The Hon. J.D. LOMAX-SMITH: I am afraid that we do not have last year's budget, so we cannot see those figures before us.
The Hon. I.F. EVANS: I will ask the question in a different way. Last year there were itemised payments for public private partnerships. What I am asking is: what are the figures in the budget for the payments for the public private partnership as part of the Education Works strategy?
The Hon. J.D. LOMAX-SMITH: I will say it again: we do not have last year's budget before us. We can talk about the figures that we have, and Mr De Gennaro can say what we have before us. However, we are not able to interrogate and interpret the member's version of the numbers from last year.
The CHAIR: Minister, I think the member is referring to Budget Paper 3.
The Hon. I.F. EVANS: That is what I said.
The CHAIR: I did not catch that, and the minister also may not have. Not everything is being picked up between you and your microphone, member for Davenport.
The Hon. J.D. LOMAX-SMITH: Is the member referring to page 2.19?
The CHAIR: Budget Paper 3, page 2.18. Is that correct, member for Davenport?
The Hon. I.F. EVANS: Yes, that is right: Education Works.
The Hon. J.D. LOMAX-SMITH: Sorry, I still did not quite hear. I presume the member means page 2.19, `Memo¬randum items—measures prior to the 2007 08 budget'; is that the line?
The Hon. I.F. EVANS: No, I mean `Education Works is a key strategy in improving schooling outcomes', and so on, on page 2.18. Education Works is being funded through a public private partnership. The minister has been telling us about it for the last half an hour. I am asking for the payments which were recorded in last year's budget but which, for some unknown reason, have disappeared this year.
The Hon. J.D. LOMAX-SMITH: The member is interrogating a line of text. Mr De Gennaro may be able to answer the question.
Mr De GENNARO: Last year's budget contained expenditure for the PPP process and an estimate prepared by Treasury of the PPP payments at that point. Those provisions were made in last year's budget for the anticipated stream of annual payments for the PPP project, and they were an estimate at that time. What the payments will be is subject to the PPP process that Mr Robinson described earlier. We had an estimate made of those payments in last year's budget, and that was published last year.
The Hon. I.F. EVANS: I refer to the same line. What is the estimate of the payments this year? Have the estimates changed?
The Hon. J.D. LOMAX-SMITH: I think there is some confusion. We are not building the buildings this year.
The Hon. I.F. EVANS: You were not building them last year either, minister, but you put figures in your budget.
The Hon. J.D. LOMAX-SMITH: It is quite a long lead time, and there is nothing further in the budget statements on these pages to interrogate. I think the member has to under¬stand that we are about to engage in a very technical public private partnership, and it would be quite improper for us to reveal anything and breach those issues before they have been published to the market. It would create significant confusion. There are issues that cannot be discussed openly because we are about to be involved in a commercial negotiation.
The Hon. I.F. EVANS: I do not understand that, Madam Chair. They put figures in last year's budget, and the same commercial factors applied. What is the difference this year? If they were prepared to put them out last year and give them 12 months more to prepare with the figures, what is the difference this year? All I am asking is whether the figures are still valid: are they still the current estimate?
The CHAIR: Which figures, member for Davenport?
The Hon. I.F. EVANS: The figures which were in last year's budget, which refer to page 2.18, the Education Works strategy and how it is being funded, Madam Chair. The Hon. J.D. LOMAX-SMITH: There is no further information available.
The CHAIR: I cannot find the figure. I find education—
The Hon. I.F. EVANS: You do not have to find a figure: you just have to find a line that relates to it, and Education Works is the subject that is funded by a PPP.
The CHAIR: However, member for Davenport, as I heard your question, it was whether the figures that were in last year's budget were valid. It is difficult for the minister to respond—
The Hon. I.F. EVANS: No, I was asking for an update on the figures, and I reached the point of trying to get something out of the minister that might indicate where they are in their estimate. I am trying to protect your schools, Madam Chair; I would hate them to be closing down south.
The Hon. J.D. LOMAX-SMITH: I think everyone knows that this government does not close schools.
The Hon. I.F. EVANS: Yes, sure. I refer to Budget Paper 3, page 2.19. I am not sure that I am reading this correctly, but there seems to be a $13 million reduction in the trade school project through a lower infrastructure require¬ment. Can the minister explain that?
The Hon. J.D. LOMAX-SMITH: Yes, I can explain that. The trade school initiative is a very significant initiative and part of our School to Work Program. We, of course, have also been implementing an increase in the age of compulsory education. We have reformed the SACE and we have made a commitment to build 10 trade schools for the future. That commitment was in the 2006 07 budget, but it relates to several other strategies. The commitment was $28.4 million, and we have been involved in significant further work on the initiative in conjunction with industry, training experts and DFEEST.
So, the Trade Schools of the Future Project now includes significant investment for brokering students into school based apprenticeships and higher level traineeships. There is an operating budget involved, and the additional $4.7 million will be allocated to operating costs of the trade schools. The new model for the 10 trade schools and the additional investment will provide the best possible opportunities for young people to become skilled and move into sustainable employment.
The Hon. I.F. EVANS: I could not hear part of that, minister, so excuse me if you have covered this point. As I read it, there will now be $2.9 million of additional operation¬al support. It is unclear whether that is just a one off or whether that is an annual ongoing figure.
The Hon. J.D. LOMAX-SMITH: It is recurrent funding, and it is 4.7 in the out years.
The Hon. I.F. EVANS: So, it is 2.9 this year and 4.7 every other year for 10 schools?
The Hon. J.D. LOMAX-SMITH: I think it is just ongoing, operating at the level of 4.7, as I understand it.
The Hon. I.F. EVANS: As I understand it, we have a $4.7 million operational cost recurrent for the 10 schools. That is $470 000 a school per year. What staffing allocation are these trade schools getting?
The Hon. J.D. LOMAX-SMITH: I will ask Mr Robinson to define how many staff will work in the new schools.
Mr ROBINSON: The $24.8 million that was announced last year will be allocated over four years, including last year—2006 07 to 2009 10. The difference now is that, of that $24.8 million, $16.486 million over that period is for the operating costs of the program, and $8.3 million is for the infrastructure investment in the schools. From 2010 11 onwards, there is an additional $4.722 million, which will be ongoing, to assist with the operational costs of the program.
Essentially, what will happen in the 10 trade schools, which will be government schools or a partnership of more than one in some cases, is that there will be two full time officers, who are drawn from industry and who will work with local employers to broker opportunities in apprentice¬ship placements in the local area for the students. The trade school will be a hub with neighbouring high school students able to access this service through the trade school itself. Students will need to have a part time job with an employer in the area of their trade in order to be enrolled in a school based apprenticeship, and that will be in a whole range of trades in the certificate III level, in particular, and other high skill certificate III and IV areas. So, there will be two people in the schools who will negotiate those places, working with Australian apprenticeship centres to sign up apprentices with employers, and working with TAFE and other vocational educational and training providers to provide the off the job technical training required for those students.
Schools will themselves offer some rudimentary training, and students will then be able to do the more advanced training in their apprenticeship through properly constituted registered training organisations, such as TAFE, which already has facilities and staff in the different trade areas. This is a different approach to the Australian technical college model, where they are building new facilities from scratch and offering a limited number of trades to their students. These students will be able to access the full range of trades available from across the training system, pending the availability of those training workplaces with local employers.
The Hon. I.F. EVANS: On a point of clarification, I thought I heard you say that, from 2010, there is an extra $4 million or so. What is it between now and 2010?
Mr ROBINSON: The total is $24.8 million for the initiative, which was announced in last year's budget for the four years beginning 2006 07. That is the total amount of funding for the next four years. As I said, there is $16.486 million in operating costs and $8.314 million in infrastructure costs to establish and commence the operation of the trade schools. After that four year period, which begins in 2010 11, there will be $4.722 million for the operating cost of the trade schools continuing each year into the future.
The Hon. I.F. EVANS: The way I understand it is that, essentially, the operation will be about $400 000 to $500 000 a year ongoing per school. There are 10 of them—$4.7 million; that is about $470 000. So you will have two apprenticeship brokers, essentially, working out of them. That is about $120 000. Who actually teaches them their trade, or are they not taught the trade at school at all? So, the school is a shopfront. I am trying to work it out. From the building industry, I am trying to work out exactly how this will work. What will be taught at these trade schools?
The Hon. J.D. LOMAX-SMITH: I think the member for Davenport does not understand the concept that we are suggesting. The issue about retaining young people in education is that they should work towards their senior SACE certificate, and that they should be involved in literacy, numeracy and other subjects within the school. The school based apprenticeship scheme, the school retention and engagement strategy and the skills to work agenda is to recognise that the days are gone when young boys left school at 12 and went into a full time apprenticeship. The reason for that is multifactorial. One element, of course, is that parents do not want their children to leave school at 12. It is no longer appropriate, as my father did, to leave school at 12 to go into an apprenticeship. Also, employers do not want younger, unqualified students going into work. The want maturity, employability and good literacy and numeracy skills.
In fact, many of the trades training courses require a level of numeracy that would shock many people in this room. Whenever I have been into a trade-based training organisation and looked at the mathematics they have done, I actually think that it is of a very high level and a level of intellectual engagement that the old tradies would have been surprised by. These days many of those classical trades are IT based and, very significantly, require high level mathemat¬ics. So, the need is to get year 11 at least, and preferably year 12, and to have some SACE certificates as a prerequisite for ongoing training. The opportunity of a trade school, of course, is that those young people who might otherwise have dropped out will, we hope, stay at school longer, but they will be given a real life experience that will be life changing, which is not just providing the low level certificates that they might get in the usual VET in Schools system but will be industry focused, job outcome focused and sustainable employment focused so that the young person will spend most of their time as a school student with a more flexible SACE system and more individual capacity to shape the SACE that they take, and they will be spending only a small proportion of their time on job competencies and in the workplace.
We believe that in the future this will be the most important way to do it, and I have every confidence that industry sectors will want to be engaged in recruiting these young people because they will be employable, focused and job ready, and they will have already started their apprentice¬ship which will cut down the training time, so that when they leave school they are ready to go. For a community like ours which is underperformed in this area, we are now really shining the spotlight on the issue of senior secondary education and making sure that everybody knows that the purpose of education is not just to go to university, making sure that everybody knows that a trade, a skill and an apprenticeship does not turn you into a second class person, and making sure that parents know that this is a credible and decent course for them to follow. I think this is one of the most important reforms we have undertaken, and I am very confident that, with the experience of our CE and the cooperation of DFEEST, these young people will not be doing third or second-rate VET courses in schools, the best that we can deliver—it is never as good as in the work force: they will be receiving the best available from either a TAFE, a registered training organisation or on the job training for real jobs, real life and real opportunities.
The Hon. I.F. EVANS: I again refer to page 2.18 of Budget Paper 3. The Education Works strategy involves the closing of 18 schools, and those sites are obviously going to be sold. Last year it was identified that there would be $31 million of income from land sales, $6 million last year. What is the budget amount this year for land sales, and which sites are proposed to be sold?
The Hon. J.D. LOMAX-SMITH: We have not deter¬mined where our Education Works schools will be built. Some of those schools may be on currently owned land. Some of them may be built on land which is the subject of an exchange from another department. Some of them might be built on land which is the subject of a land swap or an arrangement with a local council. We are very flexible about these issues. Our only motive and our only driver is to get the best location for the community and to make sure that it is delivering for the demographic and the community that is part of the change. We have no proposal to sell any of this land yet. There is a long way to go.
In particular, in terms of those new schools that will be built, we have given an absolute commitment to the existing schools that they will not be allowed to go into decline. I am particularly keen to make sure they maintain their enrolments and that they maintain their capital works agenda because we have an obligation for those three years' worth of senior secondary students who will never be the beneficiaries of our new program and who need to have their lives and their last years of schooling looked after. So, talk of selling the schools now is actually quite premature. Clearly, in the long run, where land is surplus to requirements, we would sell land. I do not know that we would want to land bank inner suburban land, but that would have to be done following consultation. Clearly, there might be planning changes by the local council, and clearly that is a long way down the track. So, there are no sales out of Education Works this year.
The Hon. S.W. KEY: I move:
That the time for sitting of the committee be extended beyond 6 p.m.
Motion carried.
The Hon. I.F. EVANS: I refer to the same line again. Given the minister's answer, how did the department establish that it could budget $31 million worth of income from land sales?
The Hon. J.D. LOMAX-SMITH: Clearly, it was an estimate based on the information that was available.
The Hon. I.F. EVANS: Given that answer, what is the estimate for land sales this year and was the $6 million achieved last year, or was no land sold last year as part of it?
The Hon. J.D. LOMAX-SMITH: There was land sold last year but I do not have the details here and I am not sure it is in the budget documents. I will ask Ms Riedstra to comment.
MS RIEDSTRA: There were land sales in 2006 07. They were not related to Education Works.
The Hon. I.F. EVANS: What were the land sales?
MS RIEDSTRA: There was a portion of Woodville Primary School, Price Primary School, Aberfoyle Park Primary School and the west campus of the Christies Beach High School.
The Hon. I.F. EVANS: Can Ms Riedstra, if the minister allows, advise us how the $31 million was arrived at?
The Hon. J.D. LOMAX-SMITH: I believe it was a calculation related to an estimate.
The Hon. I.F. EVANS: Is the estimate based on housing value, or how is the value established?
You are selling a school site, which will have ovals and everything else. Do they value it in the $31 million as a development site, as in housing, or do they just put in the site and the capital value of the school as it stands?
The Hon. J.D. LOMAX-SMITH: We believe that the figures were an estimate delivered by Treasury. I am informed that was how the number was derived.
The Hon. I.F. EVANS: I refer to the same line. A figure of $4.689 million has been identified as an operational saving this year out of the Education Works Strategy. There is a figure of $10.9 million next year and $16 million the year after. Can the minister describe how those operational efficiencies are made as part of the Education Works Strategy, and can she also advise whether the $16 million is an ongoing recurrent amount?
The Hon. J.D. LOMAX-SMITH: I am informed that the honourable member is referring to stage 2, which is not the new school building PPP program.
The Hon. I.F. EVANS: Will the minister explain to me then how the operational savings are made as part of stage 2?
The Hon. J.D. LOMAX-SMITH: We have called for expressions of interest from school communities that believe their school community will be better served with a different school configuration. Some schools have amalgamated, some schools might combine their leadership team, and some schools might collocate child-care services. There is a range of ways. Also, we have the strategy for re-investment. If the schools do not volunteer, the strategy does not get implement¬ed.
The Hon. I.F. EVANS: I am sorry, I missed that?
The Hon. J.D. LOMAX-SMITH: Stage 2 is not one that is driven by the government, it is one that requires expres¬sions of interest. Communities come forward and ask what things might be happening to their community. It is one that is community driven.
The Hon. I.F. EVANS: But the minister is confident after budget of $16.07 million in 2009-10 on a voluntary program?
The Hon. J.D. LOMAX-SMITH: Our view is that the communities are very interested in these programs. We have had quite significant interest in what might occur locally in many communities. If the community does not come forward, the savings will not be generated and will not be re-invested.
The Hon. I.F. EVANS: The minister can take this question on notice, but will she provide me with a breakdown of how those operational savings I have mentioned are calculated? The minister can take that on notice and provide it in due course, but it seems odd to me that you can budget $30 million worth of operational savings on a voluntary program but, when the member for Mitchell asked you about any extension of the program, it was very unclear as to what was happening. You must be fairly confident to have $30 million worth of operational savings in the budget.
The Hon. J.D. LOMAX-SMITH: I know that this is difficult to explain, but what we do know is that, as I recall, in the past 10 years, we have lost 24 000 children between the ages of five and 18. We predict that, in the next 10 years, we will lose 26 000 children, and that is the overall number of children in South Australia. We are talking about a 50 000 drop in child numbers in South Australia because of later marriages, smaller families and reduced population numbers generally. A loss of about 50 000 is very significant in terms of our education infrastructure. It does not reflect anything about public/private drift. I am talking about fewer children.
One can look at some of our big secondary schools. I have a friend who went to Enfield high who describes it when it had 1 500 children; now it has barely 200. That is a demo¬graphic shift. The honourable member will realise that a floor area calculation is within the education department, and we calculate that between 25 and 40 per cent of our schools is excess to need. At a conservative level, we would say that we have 25 per cent too much floor space. The way that figure was calculated was on an assessment of how much space we have.
The CHAIR: Minister, can I clarify that you are certain of the figure to which the member for Davenport referred? If you intend to provide any further response, I want to be sure before we leave here that we are clear.
The Hon. J.D. LOMAX-SMITH: We have not answered it because I think what the honourable member was getting at was how we calculated the potential savings out of Education Works 2.
The Hon. I.F. EVANS: I do not think that the minister has answered it. I am happy for the officers to go away and send me a detailed brief, or I can ask questions when I next have a face to face brief with the officers. It seems to me that if you can nail a figure of approximately $30 million, then somewhere someone in the department has a list.
The Hon. J.D. LOMAX-SMITH: I am sorry, what was the line of the honourable member's questioning? No, there is no list, but I spoke of 50 000 fewer children, which I find a really startling number. I was actually quite shaken when I was first told of that number, because it seems quite shocking and does explain some of the challenges in educa¬tion, not to mention the massive maintenance backlog we inherited or the age of our schools which are mostly over 25 years, and not to mention the fact that a significant number of schools were built for much larger student cohorts. You begin to realise that we must do something very significant if we are going to maintain the quality of our infrastructure. Mr Robinson has some comments to make.
Mr ROBINSON: This is an estimate based on an overall figuring around a potential, if you like, take-up of Education Works stage 2.
It is very much an estimate because of the nature of the process. We have issued an expression of interest process across the state to all the regions, and we have asked our regional directors to work through the school principals, and to start working with local communities to see if there is an interest in those communities about consolidating schools and increasing the size of a new school to make the programs more viable. South Australia has a lot of small schools because of the concentration of the population in the Adelaide area, and there are quite a lot of small schools in regional centres and in some urban areas that are quite close to each other. However, they are getting smaller every year because of that demographic change that the minister mentioned.
However, we are not driving the process in any individual site in any predetermined way. We are asking people to explore the interest, to have people examine what is happen¬ing in their local area and whether they think the current arrangements, or some future arrangement, would be better for the education of their children, and then people are starting to come back with proposals which can then be considered on their merits. Some of those proposals might require a reinvestment of capital to consolidate an existing site so that it can accommodate a neighbouring school, and then that other school might close, but that would only occur after a full process of consultation, and after the governing councils of each school were able to poll all the parents of that school to see if there was a majority in favour of going ahead. So, it is a very interactive process, it is being driven by what people want to do on the ground, and those estimates are a potential of what might occur. However, I can assure the committee that the reality will end up being different because it is dependent on so many local decisions that are yet to be taken. The process of asking people to consider this, and for people to start having their discussions, is just commencing.
Mr PEDERICK: My question refers to Budget Paper 4, Volume 2, page 9.6, `Targets 2007 08'—children's centres. I believe there will be a new children's centre in Murray Bridge. What consultation has taken place or will take place? Initially it was to be located at Fraser Park, as promised, or is it moving to Murray Bridge South school as a measure to save $2 million?
The Hon. J.D. LOMAX-SMITH: We are not involved in cost saving measures, and we have a commitment to putting a children's centre in Murray Bridge. This has been a long tale of consultation and discussion with the communi¬ties involved. Six years ago a review of early childhood services was undertaken in Murray Bridge South. That was before the government announced its review of early childhood services, and our subsequent response involved an investment in early childhood development and, in particular, building co located, integrated children's centres.
Fraser Park Primary School had been chosen as a site for an early learning centre at that time, and funding was approved for the project. An early learning centre is not the same as the early childhood development centre co located integrated services that we are proposing. In 2005, when we announced our proposal for the 10 children's centres which are early childhood development centres with co located health, families and communities, and education services on the same site, with early intervention and treatment, it seemed logical to expand the project at Fraser Park Primary School and turn that into one of our new era of children's centres. This would include relocating Murray Bridge South Kinder¬garten to the Fraser Park Primary School site.
We performed a full feasibility study, which is part of our normal process before embarking on a major capital works program, and this feasibility study, which by then was the second consultation, uncovered a number of concerns with the Fraser Park Primary School site. One was the presence of significant asbestos and ageing buildings, combined with a significant decline in enrolments. Enrolment studies have shown many parents bypass Fraser Park Primary School to attend other schools, including the Murray Bridge South Primary School. Incidentally, the enrolments at Fraser Park Primary School in 2002 were 131, and I understand last year were just over 70.
All these reasons suggest we need to find another location in Murray Bridge for the children's centre. We do not want to put good money into an investment that will not be good for the community, and we need to think where the services will be best placed for the future community. We are absolutely committed to the children's centre in Murray Bridge. As I have said, the money is committed for Murray Bridge. The people deserve, and we want to build, a children's centre there. So, we are now embarking on a feasibility study at Murray Bridge South Primary School before making a final decision on the location, when we have all the results of that study.
Initial conversations with the broader community indicate Murray Bridge South Primary School could be a better location. It has an enrolment of 275, which is not in decline. Murray Bridge South Primary School is also in close proximity to the high school and thus has strong links, and these perhaps could be made with an opportunity to have a B to 12 service as a possibility in Murray Bridge in the future. Therefore, at the moment we are working on this project and, of course, the local member should have ongoing input and consultation within that process.
Mr PEDERICK: Just a follow up question, and I refer to the same budget line. Does the minister have any idea when that final decision will be made and which side of this coming Christmas that will be?
The Hon. J.D. LOMAX-SMITH: I am mindful that the community has been engaged in multiple consultations and it has been very difficult, so I would like it to be as soon as possible.
Mr ROBINSON: We are expecting the final centres to be announced in the not too distant future. We want to complete the work before we have a final announcement, but we are expecting it to be in the not too distant future.
The Hon. I.F. EVANS: I refer to Budget Paper 4 Volume 2, page 9.9. The formatting of your investment payment summaries has changed from last year to this year. I am just trying to understand where the Education Works money is in this year's investment payment summary. I am assuming it is in the `works in progress—other works in progress' budget line. Can you advise me how much is in the 2007 08 budget for Education Works?
The Hon. J.D. LOMAX-SMITH: These are specific school projects and this does not include Education Works, I am informed.
The Hon. I.F. EVANS: This is where I am confused, because last year, in the investment payment summary, you did include Education Works to the tune of $7.3 million. We know that you are talking about a $216 million program and that $134 million is a made-up value of what you think it might be worth one day—and there is $80 odd million doing something else.
The Hon. J.D. LOMAX-SMITH: You might disparage it, but we are investing in education; we are rebuilding schools. I think that this has to be the biggest program of investment. We are putting $134 million into new schools and $82 million in our Education Works stage 2: 20 children's centres, $23.3 million; 10 trade schools, $24.8 million; and $31.4 million of announced capital works program, as well as ongoing money of $47.7 million on 113 ongoing school and preschool capital projects, not to mention $36 million in our asset maintenance program over three years. There is a significant amount of building going on.
The Hon. I.F. EVANS: Thank you for those figures. I refer to the same line. Can you advise the committee why there was $7.3 million for Education Works in last year's investment payment summary and there is nothing in this year's investment payment summary; or is there money in this year's investment payment summary but it is just not identified anywhere?
Mr DeGENNARO: Through the minister, last year's budget contained estimates and, as described earlier, Educa¬tion Works part 2—so not the new super schools but the invitation to schools to consider the type of reinvestment and reconfiguration they might want to talk about and bring forward. That estimate was made last year. The invitation to consider whether they wished to come forward in a voluntary process was issued to schools earlier this year. They have been invited to consider what their communities might put forward in terms of how their sites might be reconfigured or combined. The proposals would be the basis for the invest¬ment that would go in.
Last year there was the estimate. The invitation has been issued earlier this year and, through our Education Works team, we are working with sites on the ideas that they are bringing forward.
The Hon. I.F. EVANS: Sorry, Madam Chair, but that does not explain to me—and due respects to the officer— why the minister could put a figure in last year's investment summary and you cannot put a figure in this year's. Surely, if you have done all that work to have a figure for last year and you have been working really hard over the past nine months, there must be a figure that you can put in this year's. Let me also ask this so that I am absolutely crystal clear: is it the advice to the committee that there is no money in the investment payment summary relating to Education Works in this year's budget?
The Hon. J.D. LOMAX-SMITH: I will refer that again to Mr DeGennaro. I do not believe that there is a line.
Mr DeGENNARO: Through the minister, last year's budget contained provision for reinvestment of $82 million. The strategy announced that there was a total of $82 million available for reinvestment—Education Works stage 2. In the materials and the statements issued in September of last year, it was clear that an invitation would be issued to schools and preschools to consider the opportunities they would have to reconfigure and improve their educational provision and to come together with other sites to provide a better service. Out of those proposals, the efficiency gains and the effectiveness gains that would occur would be the basis for the reinvest¬ment of $82 million. An estimate was made in general terms last year. That invitation has been issued to sites and, through our Education Works team, we are working with those sites to progress and firm up the ideas that they are bringing forward as communities. It is an entirely voluntary process and that is the policy that is being implemented. The estimate last year was a part of that $82 million figure, and $82 million is still available within the totality of the budget to reinvest into schools as they come forward.
The Hon. I.F. EVANS: Why is there not a line that shows last year's expenditure of $7.3 million with a zero figure allocation for this year's budget? There is a whole range of figures within the budget documents showing a budget figure last year with zero expenditure—your trade school expendi¬ture is a classic example. In this line, you have budgeted $7.3 million last year and you have spent not a cent, and there is no budget line reflecting that and I cannot understand why the change of format.
The Hon. J.D. LOMAX-SMITH: The member for Davenport might not like the way the budgets are presented but I think it is consistent and you do not repeat what was put in last year's.
The Hon. I.F. EVANS: Can the minister explain why the trade school figure of $2.9 million, which was shown last year as a budget item and was not spent, is in the budget this year as $2.9 million, with a zero expenditure? Why was the same format not used for the investing statement?
The Hon. J.D. LOMAX-SMITH: I cannot explain why Treasury documents in the budget are printed in the way in which they are: it just is so. The member might not like it, but neither he nor I are in a position to change it.
[Sitting suspended from 6.30 to 7.30 p.m.]
Membership:
Mr Griffiths substituted for Mr Pengilly
The Hon. I.F. EVANS: I refer to Budget Paper 3, page 2.19, `Education Works' (the same page we have been using all night). In last year's budget there was a figure of $3 million for Education Works for the implementation team and project support. I am wondering what the figure is in this year's budget because, again, Treasury has changed the configuration. Can the minister tell us how much is in the budget this year for the Education Works implementation team and project support, and the names and titles of the officers involved and which agency they come from? I understand it might be a mixed project team between Treasury and education.
The Hon. J.D. LOMAX-SMITH: I think the member's question is: who are the officers involved? Is that what he is asking?
The Hon. I.F. EVANS: I am asking what is the budget amount this year for the Education Works implementation team, the officers involved and which agencies they come from.
The Hon. J.D. LOMAX-SMITH: Is this page 2.18, still relating to Education Works as a key strategy?
The Hon. I.F. EVANS: That is right.
The Hon. J.D. LOMAX-SMITH: The Chief Executive discussed where we are in the process. Clearly, the financial issues will be managed through Treasury officers, and the education brief plans will be managed through the education department. This is a cross-portfolio initiative, requiring Treasury and DECS to work together.
The Hon. I.F. EVANS: I understand that. Can the minister provide to the committee the names and titles of the officers involved, which agencies they are from and the cost this year of that implementation team?
The Hon. J.D. LOMAX-SMITH: I think it is beyond the realms of possibility to expect a minister to name all the staff involved in projects.
The Hon. I.F. EVANS: But it is possible for the minister to say, `I will take it on notice and provide it to you.'
The Hon. J.D. LOMAX-SMITH: We can do that. However, you cannot expect a minister to know the names of all the officers in a department.
The Hon. I.F. EVANS: I did not ask that. I am happy for the minister to take the question on notice and provide the information to me. Sometimes one might just want to get the information eventually, not necessarily tonight.
The CHAIR: I will clarify exactly what it is that the member for Davenport seeks. Is it the immediate project team—all the officers in all the schools who are involved, who are developing the proposals—or is there some specific thing that the member is seeking? I hear the minister, and I think she is looking at a very broad—
The Hon. J.D. LOMAX-SMITH: I think the problem is that the team will change as different schools are involved. There will be principals, coordinators and district directors. It is a fairly broad spectrum question.
The Hon. I.F. EVANS: Let me clarify it for the chair—because the minister did not seek clarification. I will ask the question as of today's date. What is the amount in this year's budget for the Education Works implementation team, bearing in mind that last year there was a $3 million figure? As of today's date, can the minister provide the names and titles of the officers involved and which agencies they are from? I am happy for the minister to take the question on notice and write to me about it.
Mr ROBINSON: There are two different processes. The PPP process, which is the Education Works stage 1 around the six super schools (as they are called), is one set of processes that involves work by ourselves and Treasury.
The Education Works stage 2, the process where we are doing another level of consultation out there, is a much broader exercise. I am taking your question to refer to the Education Works stage 1 around the triple P process; is that correct?
The Hon. I.F. EVANS: That is correct.
Mr ROBINSON: We will take that on notice, and supply you with the names of all the people who are in the project team and the budget for this financial year for that project team's work.
Membership:
Mrs Geraghty substituted for Ms Fox.
The Hon. I.F. EVANS: I refer to the same budget line. Has the government received any advice or done any estimates that the government's Education Works strategy will require fewer teachers and/or school service officers under the existing staffing formula?
The Hon. J.D. LOMAX-SMITH: I have answered before that there are staffing formulas in place. There is no question that, by having a larger school, you would have a lesser ratio or larger class sizes. That is not how the education depart¬ment works.
The Hon. I.F. EVANS: I refer to the same budget line. Following on, can you put a figure on the amount of budget savings made as a result of that? Has the department done any estimates?
The Hon. J.D. LOMAX-SMITH: The staffing formulas are fixed, so we are not saving money by having larger class sizes or less teachers.
The Hon. I.F. EVANS: So if there are less teachers you are not saving money?
The Hon. J.D. LOMAX-SMITH: I have explained before that the staffing ratio is fixed.
The Hon. I.F. EVANS: If you accept that there are going to be `less teachers'—and I think they were the words you just said, that there's going to be `less teachers'—
The Hon. J.D. LOMAX-SMITH: When did I say there were less teachers?
Mr GRIFFITHS: About 15 seconds ago.
The Hon. I.F. EVANS: You just used it. Not 15 seconds ago did you say `less teachers'.
The Hon. J.D. LOMAX-SMITH: No, there are not less teachers.
The Hon. I.F. EVANS: So there will be the same number of teachers teaching at the one school as there are for six? Is that what you are saying to the committee?
The Hon. J.D. LOMAX-SMITH: I think you are trying to get to a situation where you are suggesting that there will be larger class sizes or less teachers in a larger school, and that is not what I said happened. I said there was ratio of teachers to children. I can understand that if you have a small school with 10 children you might be extrapolating to the view that there are over resourced to the point where they have no economies of scale. Clearly, there are regional and remote schools that are very small, and have a higher cost per capita and a higher staffing ratio per capita, because you cannot have part-teachers. But that is not the situation that we are in. We are not talking about multiple, tiny schools; we are talking about moderate sized schools with a ratio that is fixed within our enterprise agreements.
The Hon. I.F. EVANS: I will ask it this way then—same budget line, Madam Chair. Are there any expected savings on salaries as a result of the reduction from 18 schools down to six under the Education Works strategy and, if so, what are the estimates?
The Hon. J.D. LOMAX-SMITH: I think I see what you are getting at—because your questions are oblique and not actually to the point.
The Hon. I.F. EVANS: A bit like the budget papers.
The Hon. J.D. LOMAX-SMITH: I suspect that what you are trying to get at is whether there will be less principals. Well, of course there will be.
The Hon. I.F. EVANS: And will there be less teachers? And has there been any estimate of the budget savings? That is what I am asking. We know there will be less principals, but will there be less teachers—
The Hon. J.D. LOMAX-SMITH: Principals are teachers and, clearly, there will be less principals if there are no longer 18 schools.
The Hon. I.F. EVANS: Outside of principals, will there be less teachers?
The Hon. J.D. LOMAX-SMITH: I suspect that the ratio will have to be fixed in the future. I imagine that it may be possible to have one teacher less. Who knows? But the reality is that the formulas are fixed. We have a commitment to keeping class sizes small. The question you are asking is creative and imaginative, and hypothetical, and I do not believe that it can be answered.
Mr ROBINSON: Essentially, if there is a secondary school with 200 students in it, one that has 600 students will have three times as many teachers as the 200. Obviously, at the margin there may be a situation where at a school there might be a slight difference in the number of teaching staff across a new site, as opposed to an old site. But, basically, with the schools that we are talking about there is going to be the same teaching force as was in the component parts. But there might be more efficiency in the leadership side for the principals. Of course, there could be at the margins some efficiencies in the support staff. There is a set formula for each size of school, and it goes on student numbers. Student numbers will determine the staffing level in the new schools as they do in the schools now.
The Hon. I.F. EVANS: I refer to the same budget line. So that I have it crystal clear, will all of the savings, both initial and ongoing, from the government's education works be going to the education portfolio, or will any of the savings be returned to consolidated revenue?
The Hon. J.D. LOMAX-SMITH: Are you still taking about teachers?
The Hon. I.F. EVANS: I am talking about savings under Education Works, both initial and ongoing.
The Hon. J.D. LOMAX-SMITH: The Education Works process will clearly have some economies of scale. They will be more efficient schools to run. What is important is that almost every element of the school will be cheaper in terms of maintenance, because they will be new schools without the maintenance backlogs. There will be efficiencies in terms of energy and water use, because these schools will be built to higher levels of sustainability principles. There will be savings in terms of ongoing management of the school. Clearly, there will be less principals. That will allow us to invest more money in other areas.
The Hon. I.F. EVANS: I understand all of that, minister, but, just so that I am crystal clear, all of the savings, initial and ongoing, stay in the education portfolio, or do any of them go to consolidated revenue?
The Hon. J.D. LOMAX-SMITH: I will ask Mr DeGennaro to explain this to you, because although I have said it several times you do not seem to understand it.
Mr DeGENNARO: The budget papers last year made it clear that any gains or efficiencies were being reinvested. Last year, from memory, the four year net growth in expendi¬ture was $76 million. After all the gains and efficiencies there was an increase in expenditure, and that continues to be the case.
The Hon. I.F. EVANS: Is that the case up until 2009 10, or does that continue on every year after that as well, or does it change after 2010?
The Hon. J.D. LOMAX-SMITH: I do not think we can predict what will happen hypothetically in the term of the next government. The current budget only is the one that we can interrogate.
The Hon. I.F. EVANS: They do show 2010-11 in the forward estimates, so I thought I would ask the question, minister, given that you have predicted what is going to happen in the next government. So I am wondering whether you will allow the officer to clarify whether that continues. Once the buildings are built and the capital works side of it is finished there will be ongoing operational savings, then there will be a rental payment or a lease payment to some finance group—whoever the PPP project is with.
Do those ongoing savings, or any part of them, go to the education portfolio or back to consolidated revenue? That is what I am trying to establish.
The Hon. J.D. LOMAX-SMITH: The State Strategic Plan targets—for instance, for energy savings—will be locked in at 25 per cent of current usage in the current schools, but when we build a new school there will be a different baseline. It will be hard to suggest that there will still be a 25 per cent reduction because that will be a new school with different workings, so a lot of those projected forward savings cannot be calculated on the basis of a new school because it does not have a budget at the moment that we can look at.
The Hon. I.F. EVANS: On the same budget line, let me understand the picture we have painted here for the past three hours just so that I understand what we are saying. Last year you trotted out a budget that did have estimates for the forward payments to the PPP: you had made that calculation, and you had made the calculation of the budget savings, and all that was forward projected last year. Nine or 10 months down the track, the government is coming in and saying, `Now we actually cannot project'. Not one of you could tell us tonight the payments that were going to be proposed, even though they were in last year's budget and not this year's budget, and now you cannot tell us the savings. That does not make any sense to me, given that you have been working on it for at least an extra nine months from last year. You must know what the operational savings are from closing the 18 schools, because you have all their costs; you know what their savings are. The simple question is: under your model—and it is a model that you are designing, not I—do all the savings go to education or can some of them go back to consolidated revenue? What is the model? That, essentially, is the question.
The Hon. J.D. LOMAX-SMITH: I can understand why you would want to undermine a project which was investing in schools—
The Hon. I.F. EVANS: That is an unfair reflection, minister.
The Hon. J.D. LOMAX-SMITH: —and building new products and infrastructure. I can understand that you would find it hard to support reform through the process. But the issue about the schools is that we are talking about investing and building new schools. There will clearly be some operational savings to do with electricity and water; clearly, there will be fewer principals, but the staffing formulae and the way they operate will be exactly the same as other schools of similar size. There will be no particular difference. I expect that they will be cheaper to run because they will be new buildings, so although there will be overall the same funding model of staff, the overheads will undoubtedly be cheaper. But to project what those savings might be in terms of overheads, I think is asking rather too much.
The Hon. I.F. EVANS: Let's forget the projections, even though they were estimated last year. Let's go to the principle. As to the model you are designing, will the savings (both initial and ongoing) all stay with education or will some of them go back to consolidated revenue?
The Hon. J.D. LOMAX-SMITH: This is an investment strategy with more money each year going into education.
The Hon. I.F. EVANS: On the same line, can the minister give us an update on the finance model (the PPP model) that the government is considering for the Education Works strategy?
The Hon. J.D. LOMAX-SMITH: I think that it has already been explained by the CE how the PPP is going to operate and how we are planning it ahead. I think that question has been answered.
Mr GRIFFITHS: I apologise for the fact that I am not aware of the line number, but my question relates to the aquatics programs. As you are aware, I have written to you and spoken to you several times about this. I know that an announcement was made today, but I have been contacted by the aquatics centre in my electorate. Can the minister clearly explain the decision and what that will mean to the 11 aquatics centres in South Australia?
The Hon. J.D. LOMAX-SMITH: First, there is no budget line for aquatics, so you are right not to mention one. It is not identified in the budget and it is not a designated strategy within our documents. The review that was per¬formed over the past eight months has been completed. It has passed through the department CE's office, and there will be some reforms, but those reforms are not ready to announce yet; it will be in the next few days.
The Hon. I.F. EVANS: I will ask a question on the same topic now that that matter has been opened. Is the minister prepared to make the report public and, if not, why not? Can the minister advise us how much the review cost to do and what budget line paid for it?
The Hon. J.D. LOMAX-SMITH: There is no budget line for these programs; they are internal programs. We have a policy whereby we will look at all of the programs through the department, and I think it is fair to say that there is a very strong sense of conservatism within the community at large, and they believe that reviewing or examining any program is problematic because there may be a chance of change.
We have had massive reform, not only for the things I discussed earlier tonight but also there have been enormous changes in the community and in education generally. Some of the programs we have examined in the last year have been programs that have been in place for 30 years. Some of those programs have been unchanged for 30 years. I think it quite appropriate that, in the 21st century, the department should go through a review process, looking at what we do and looking at how we do business to see whether we can do it more efficiently, effectively and economically.
Certainly, we have a very crowded curriculum. Teachers and principals generally make a case for there to be reviews and examinations of what we do. Many teachers would like us to clear out our curriculum and make less material. Last year we started a process looking at aquatics and music, and that was an internal departmental process—part of day to day business. I would have thought it quite responsible for the department to review the processes that are carried out. We have approximately 170 000 children and approximately 20 000 staff, and some of the programs have been in place for a long time. I am very pleased that we have now reviewed two areas. The decision has not yet been made about what will be implemented. It has not been signed off on by me, but that review work has been completed by the department. There is no budget line.
The Hon. I.F. EVANS: Is the minister's advice to the committee that no decision has been made?
The Hon. J.D. LOMAX-SMITH: No. I said that the process has not been signed off on by me.
The Hon. I.F. EVANS: Has the decision been made then?
The Hon. J.D. LOMAX-SMITH: Well, the decision has not been made because I have not signed off on the reviews.
The Hon. I.F. EVANS: Now the minister has confirmed that a decision has not been made. Will the minister explain why I am getting emails from aquatics program staff saying that the program has been saved? Has any officer from the department contacted them saying that the matter has been saved?
The Hon. J.D. LOMAX-SMITH: This morning under questioning, the Premier said that the view that aquatics and music were to be cancelled was not true, that there were reviews and that the programs were not being cancelled.
The Hon. I.F. EVANS: Will the minister advise whether there has been any communication to those departmental staff involved in the aquatics program advising them of an outcome?
The Hon. J.D. LOMAX-SMITH: Of course not. The outcome has been the same we have spoken of for the past eight months. There is misinformation about programs, and there has been a lot of talk about a review being a preliminary to cancelling programs. I have consistently said that decisions have not been made, but we are reviewing the programs, and that is true. We are not cancelling programs: we are review¬ing them.
Mr GRIFFITHS: My understanding was that, in the 2006 07 financial year, the minister indicated that this would be reviewed in terms of a saving in future years of $6 million. Certainly that is the figure community groups involved with aquatics programs have mentioned to me. They say that they are at threat because of that value over the forward estimate period.
The Hon. J.D. LOMAX-SMITH: There is no question. If one looks at the budget savings measures in last year's budget one can see that there is no mention of aquatics.
The Hon. I.F. EVANS: That is a little hard to tell because you must think that an efficiency dividend of that amount could mean anything.
Mr ROBINSON: As soon as the review was announced about aquatics, an assumption was made by many people that that meant the program was going to be cut. There has never been any statement saying that the program was to be cut. A review has been undertaken to look at the future of the program, to look at how effective it is and to look at where it goes from here. Many people have assumed that it was to be cut and have started campaigning around the notion that it was to be cut. As you know, just having a review of the activity has caused people to conclude something that is just not the case. I think that people have been premature about assuming that a review means that a program will be discontinued or cut back.
Mr GRIFFITHS: I think we must recognise that the review was more than just an internal assessment of the future of the program. The community at large was invited to comment. I am aware of thousands of signatures on petitions received on this matter. It is a very emotive issue within the community and it is one the community intends to fight very strongly for. These programs, as I understand it, are at risk of closure at the end of term 2, with no surety of their continuing into term 3, and people want to know where their future lies.
The Hon. J.D. LOMAX-SMITH: It is fair to say that we do have consultation with the public. Certainly, as I under¬stand it, a lot of interesting views were personally expressed to me in the letters I received and also when I visited schools. Some of the insights into different ways things were done in different parts of the state were interesting in the submissions to me that I read. Clearly, the honourable member would want us to consult. I do not think the honourable member is saying that we should have a review and not receive public comments. That would not be his thought, I am sure. The honourable member would want us to receive public com¬ments, yet we cannot seem to have the public comment without the assumption that we are going to cut a program. It is a very difficult position. You want to consult, yet it results in a level of hysteria.
Mr GRIFFITHS: I made my comments on the basis that it appeared to me from the comments of the minister and the officer that it was an internal review only. I want to reinforce the fact that the community had been invited to provide feedback on this issue.
The Hon. J.D. LOMAX-SMITH: Absolutely. We are not arguing with that. Clearly, if you are looking at a program, it is good to get everyone's views. That is not in dispute.
Mr GRIFFITHS: It appears that it is just the timing of the announcement about the future that is in dispute.
The Hon. J.D. LOMAX-SMITH: There is also some confusion. We employ many staff, and if you change their work practices you might well go into negotiation, but we do not have any record of having sacked staff.
The level of misinformation is actually quite unfortu¬nate for the staff involved, because that has probably made them more distressed than they need be.
Mr GRIFFITHS: I have made no accusation of staff being sacked, but I am aware that, out of about 200 (or a fraction over) of the number of staff involved in the aquatics program, only eight will have some guaranteed future employment, depending upon the decision.
The Hon. J.D. LOMAX-SMITH: The reality is that, as an employer and as an education service, we have the right to review our processes. The notion that you should never review anything is a very conservative one because it means that we have to carry on with the status quo. This morning I said that those programs have been in place for 30 years and were in place before the modern fax was common, let alone the mobile phone—and there are not many things that you do in the world which have gone on unchanged since before the fax was invented. I think it is true to say that schools have changed, cars have changed and even local government has changed. It has been around a long time and to suggest that as an organisation we should never review a program is a nonsense: we have an obligation to do so.
We also have an obligation to look at a range of programs we do and to see how best we can serve the community, because when you do have reforms across the system and you have a culture which wants progressive improvement, which seeks to do things better and which seeks to spend money better, you need to review what you are doing and ensure programs are running smoothly and effectively and that they deliver. I really am surprised that the opposition would not want us ever to review anything. I cannot believe that is really true.
Mr GRIFFITHS: I have not said that.
The Hon. J.D. LOMAX-SMITH: I know; I did not believe it was true. I would never think that of you; you are a progressive.
Mr PEDERICK: In light of the minister's answer, I guess she would have viewed the report, even though it is not signed off. Can she guarantee that in some way, shape or form aquatics and music programs will survive?
The Hon. J.D. LOMAX-SMITH: I can guarantee that we will have some reform, but it would be unthinkable to imagine education in South Australia without music, and it would be unthinkable that we would not have some form of aquatics program. Certainly those programs are part of the curriculum, and many young people involved in SACE subjects are involved in those areas. These are areas which are used by mainstream schools, specialist schools and special schools. I think that the idea that we would abolish music is like saying we would abolish Christmas.
The Hon. I.F. EVANS: In the reforms which you will announce in the next couple of days in relation to both aquatics and music, is any extra cost likely to impact on families as a result of those reforms?
The Hon. J.D. LOMAX-SMITH: There is nothing in the budget relating to this.
The Hon. I.F. EVANS: That was not the question.
The Hon. J.D. LOMAX-SMITH: That was the answer.
The Hon. I.F. EVANS: I understand that. You have taken questions on music and aquatics now for 20 minutes and I am asking whether any of the proposed changes will have an impact on cost to those students.
The CHAIR: Member for Davenport, the minister did initially indicate that it was not a budget line and that it was not identified as a special program or target in any way. She has generously used this opportunity to provide information for the benefit of the committee, but it really is up to her as to how far she wants to go with answering this line of questioning which does not relate to the payments before us in any direct way.
The Hon. J.D. LOMAX-SMITH: Madam Chair, Mr DeGennaro has some additional information relating to a previous question. May I seek leave to have him insert the response into the record?
The CHAIR: Is this in relation to this matter or another matter?
The Hon. J.D. LOMAX-SMITH: Another matter.
The CHAIR: This is providing information in relation to an earlier question for which that information is now available?
The Hon. J.D. LOMAX-SMITH: Yes, thank you.
The CHAIR: I am very happy for Mr DeGennaro to provide that on your behalf.
Mr DEGENNARO: Through the minister, there was a question about the annual report and workers compensation. I believe the reference was to page 152 of the DECS annual report wherein two figures were cited: a movement in the provisions figure for 2005 of $40 488 000, and a movement in the provisions figure for 2006 of $18 906 000. Those figures relate to workers compensation liability in the DECS balance sheet. That liability is based on actuarial assessments and calculations. They are undertaken by Treasury and provided to agencies to value various liabilities, particularly workers compensation. That annual report and those figures reflect the actuarial valuation of those workers compensation liabilities. The result of the process in 2005 was that there needed to be an increase in the provision for workers compensation liability (the $40.488 million) and, in the following year, there was an increase of $18.906 million. That is an actuarial assessment of the liability.
That is different from the claims cost that we pay each year. The information is on the public record: it is page 152 of the annual report. The figures I have just cited are the result of the actuarial assessment of the outstanding liability for workers compensation.
The Hon. I.F. EVANS: Given the answer that the officer has just provided (and I thank him for that because I think, on any assessment, it is confusing), perhaps the minister could advise the committee on which budget line the workers compensation cost to the department is reflected? In the expense lines, if you look at page 9.26 by way of example, on the employee benefits and costs it mentions salaries, wages, annual and sick leave, long service leave, payroll tax and superannuation, but not workers compensa¬tion. I am interested to know where it is in the budget. It must be there somewhere. One assumes you pay a cost for workers compensation and I am just trying to find in—
The Hon. J.D. LOMAX-SMITH: I thought it was usual for the members to cite the budget line, not to ask to be given a budget line. We will take it on notice.
The Hon. I.F. EVANS: I will ask it this way then: will the minister confirm that the WorkCover expenses are in the expense line called `other expenses'?
The Hon. J.D. LOMAX-SMITH: I will ask Mr DeGennaro to answer in which line within the budget he believes it can be identified.
Mr DEGENNARO: Through the minister, page 9.26 has a line under `expenses' called `other expenses' in the 2007-08 budget of $31.039 million. That figure contains the workers compensation costs.
The Hon. I.F. EVANS: Will the minister advise how much of the $31.039 million under `other expenses' is workers compensation expenses?
The Hon. J.D. LOMAX-SMITH: We will have to take that on notice.
The Hon. I.F. EVANS: I will make a request for the minister to consider and I will write to the Treasurer about this. I do not think your agency is the worst agency within government in relation to workers compensation; there is a group called police and a couple of others that have some problems. But it just makes sense to me that, if the reforms you wish to make in workers compensation are to be properly analysed, there should be a separate line for workers compen¬sation, because it must be a significant cost to the agency. We have spent two hours tonight running around this issue trying to establish where it is. It seems to me that, in future, it would make a lot of sense to have a separate stand-out line for workers compensation.
If the government is serious about reforming workers compensation within the public sector, exposing those agencies which need to work harder at it would be in everyone's best interests. I do not think your agency is the worst by a long shot, but it is a nonsense to have no workers compensation line as such.
The Hon. J.D. LOMAX-SMITH: The department will be touched to hear such kind words. Can I thank you.
The Hon. I.F. EVANS: I have got to ask it; I am sorry. Given the minister's previous answer, can anyone explain why last year there was only $1.5 million budgeted for other expenses, which includes WorkCover—workers compensa¬tion costs?
The Hon. J.D. LOMAX-SMITH: Yes, I think we can explain that.
Mr DeGENNARO: You will see the actual numbers change through the years. You will see that the 2005 06 actual number is 24.692 million, the estimated result number is 29.949 million, and the 2007 08 budget number is 31.039 million. They are all on the same calculation basis. The 2006 07 budget figure of 1.569 had a different classification basis, which we have reformed for the estimat¬ed result. So, the 2005 06 actual number has got a consistent classification of treatment of workers comp in the other expenses line, as have the estimated result and the 2007 08 budget figure. The 2006 07 budget figure treated workers compensation costs that year and for that budget number in the salaries and wages area, rather than in the other expenses. So, for the 2006 07 budget figure the workers comp was in the salaries and wages line, rather than in the other expenses line. That is why that number is out of kilter. It is an account¬ing treatment difference.
The Hon. I.F. EVANS: Now it is clear we all understand it, Madam Chair. It is becoming consistently clear to all of us.
The CHAIR: We do, and if we look at the salaries line we can almost see that reflected.
The Hon. I.F. EVANS: I bet you the bloke in Treasury who designed that got a promotion.
The CHAIR: He could have given us a note.
The Hon. J.D. LOMAX-SMITH: I think it was required by Treasury.
The Hon. I.F. EVANS: That is a Treasury design if ever there was one.
The CHAIR: Having got that sorted out, does the member for Davenport have other questions?
The Hon. I.F. EVANS: Yes, we do, actually. I refer to Budget Paper 4, Volume 2, page 9.17. This is in regard to resource entitlement statements, and all schools have them. I just want to clarify that the resource entitlement statement document that I have been given from my local schools show that in the standard salary rates they already include leave loading, superannuation, payroll tax, WorkCover and long service leave. So, therefore my question to you, minister, is: are not schools already being charged a WorkCover charge against their resource entitlement statement, and was not any proposal that you consulted on about charging a further WorkCover levy doubling up? Are they not already paying or being charged, in effect, through the resource entitlement statement?
The Hon. J.D. LOMAX-SMITH: The resource entitle¬ment statement is a peculiar art. It is difficult to comprehend when you first see it.
The Hon. I.F. EVANS: Treasury designed it, minister.
The Hon. J.D. LOMAX-SMITH: Yes; but it is explic¬able. I think Mr DeGennaro will explain to you again why it is an `in/out' calculation, as he puts it.
Mr DeGENNARO: Through the minister; first, the government has determined that there will be no workers compensation levy charge on schools, as was announced this morning. Resource entitlement statements calculate the base number of students at a school and the number of staff to which a school is entitled. We convert the number of staff into a dollar value by applying a standard cost to each staff member—and that includes salary, long service leave, annual leave and other costs, payroll tax costs and an amount for workers compensation. That is the amount that we provide as a standard cost for each staff member and it is also the amount we charge the school, irrespective of the actual salary of the teacher.
So, no matter what the level of salary of a teacher, we provide the same dollar amount for each teacher and we charge out the same amount, and the same teacher is still in the school. So, for our purposes, it is just to turn the number of teachers allocated to a school into a sum for the purposes of costing. When a school buys a teacher they pay that standard sum. If they buy teachers on top of their entitle¬ments, through whatever local decisions they are making, that is the charge. If they are running vacant positions they receive that standard cost as a cash entitlement. It is a standard cost devised in order to have a standard sum for each teacher for every school and not reflect variances in different pay rates or on-costs of teachers.
The Hon. I.F. EVANS: If the minister allows it, can the officer advise at what rate the resource entitlement statement is charged for workers compensation?
The Hon. J.D. LOMAX-SMITH: I think this relates to the accounting scheme of `dollars in, dollars out'. It is not a real charge. Mr DeGennaro will explain it again.
The Hon. I.F. EVANS: On the resource entitlement statement there is a salary cost and an on-cost component. The on-cost component is not broken down, and I am trying to establish what charges are being made against the resource entitlement.
The Hon. J.D. LOMAX-SMITH: Mr DeGennaro is about to explain it to you.
Mr DeGENNARO: The standard costs are advised to all schools. I have explained the standard costs going in and the standard costs being charged out to associations and others, because the same question has been asked. It is entirely a round robin between schools and DECS central office accounting. It has no impact on the number of teachers in the school; it is just a standard cost that we fund schools and then charge back out. So, if a teacher is there for a full year there is no financial impact upon the school at all. I need to add that all workers compensation costs are paid centrally by the department; schools do not pay those costs.
The Hon. I.F. EVANS: Let me put it another way, because I am new to this game; I have only been in this portfolio eight weeks and do not have the benefit of your experience. My understanding is that an assistant principal coordinator level 2 is, under the resource entitlement statement, charged $100 123. The principal level 2 is not paid that; they are paid something less than that. The difference between what they are paid and the charge is the on-cost. I accept that all schools are paid the same. I am asking what percentage of the on-cost component is workers compensa¬tion. Is it charged at 2 per cent, 3 per cent, 5 per cent, 1 per cent?
The Hon. J.D. LOMAX-SMITH: It is a misunder¬standing of the funding.
Mr DeGENNARO: The schools are not paying for long service leave or payroll tax. What the school—
The Hon. I.F. EVANS: But the resource entitlement statement is charged that, isn't it?
The Hon. J.D. LOMAX-SMITH: The resource entitle¬ment statement is not a charge to the school; it is an alloca¬tion.
The Hon. I.F. EVANS: Okay, it is allocated against the resource entitlement statement.
Mr DeGENNARO: Through the minister—
1
The Hon. I.F. EVANS: Let me just clarify it for the minister. The minister's own document states:
The 2007 standard salary rates have been adjusted to reflect the new enterprise agreements, salary increases and variations in the average salary for each category. The 2007 standard salary rates include leave loading, superannuation, payroll tax, WorkCover and long service leave oncosts.
At what rate has WorkCover been included?
Mr DeGENNARO: Another way to look at that resource entitlement statement is to remove the dollar column and just allocate a principal. The dollars have no bearing on the allocation of staff. It is in order for DECS to identify the total cost of the allocation of staff. We pay salaries and payroll tax centrally. Schools are funded based on the number of staff entitlements they have. Schools are not paying the costs of long service leave, payroll tax and workers compensation. It is an attribution to try to get to a standard cost for staff members in a school.
The Hon. I.F. EVANS: Okay. I will come about it a different way.
The CHAIR: The member for Davenport may need to go to a SASSO training program for governing council members if we are to have any chance of his understanding this.
The Hon. I.F. EVANS: I have actually been on a number of school councils—six, from memory. A lot of school councils contact me and say, `What does this mean?' They are very upset that the department might have been double dipping with the WorkCover proposal. If the minister allows, can the officer advise us what is the percentage of oncosts that is charged in total that makes up the salary paid and the salary allocated to the resource statement?
The Hon. J.D. LOMAX-SMITH: I do not think the member has listened. This is an attributed value for a staffing model: it is not an oncost.
The Hon. I.F. EVANS: What is the attributed value of the oncost? What is the percentage? Somewhere in the depart¬ment there must be a document that says a teacher gets the salary and the department will allocate an oncost to that salary against the resource entitlement statement, and a breakdown of that oncost will be allocated.
The Hon. J.D. LOMAX-SMITH: We cannot give you a more specific answer because you are asking a question that will not accept the response we keep giving you. We will write down the answer and see whether that is any better. We will take the question on notice and try to explain but, failing that, the chair is correct, SASSO does have some really good training programs.
The Hon. I.F. EVANS: Well, I will ask another question if that is the sort of answer the minister wants to give. I will give you a specific example, and you can provide an answer in writing, minister. Let's take the position of assistant principal, level 2. In the resource entitlement statement for 2007, the standard rate for that position is $100 123. Can the minister please advise in writing how much of that amount is allocated to leave loading, superannuation, payroll tax and WorkCover (it is referred to as WorkCover in the minister's own document, not workers compensation, so I will use WorkCover), and how much is allocated to long service leave oncosts within that figure? Can the minister also advise whether those rates are consistent for all positions referred to on page 33 of the resource entitlement statement?
The Hon. J.D. LOMAX-SMITH: The answer is the same as the last time. It does not matter what the headline figure is, the answer will be the same.
The Hon. I.F. EVANS: Minister, I do not know whether you are charging 30 per cent, 10 per cent or 5 per cent overhead. As minister how do you know whether you are getting good value for your workers compensation dollar unless you know what allocation you are making against the resource entitlement statement?
The Hon. J.D. LOMAX-SMITH: These are attributions for the cost of a teacher in the resourcing entitlement—
The Hon. I.F. EVANS: Will the minister agree to provide in writing answers to the questions I have just provided?
The Hon. J.D. LOMAX-SMITH: Three questions ago I explained that we will take it on notice and write down an explanation so you can understand the resourcing entitle¬ment system, and we will try to explain it. The same answer has been given to each of the questions. You had a headline figure of a different sort of teacher. You had a principal 1 and a principal 2, and someone else.
The Hon. I.F. EVANS: It is the same example every time.
The Hon. J.D. LOMAX-SMITH: It does not matter which starting point you have, the answer will be the same, and we will write it down.
The Hon. I.F. EVANS: Will that include the question I asked one or two questions ago, not three questions ago?
The Hon. J.D. LOMAX-SMITH: We will write it down.
The Hon. I.F. EVANS: For that question?
The Hon. J.D. LOMAX-SMITH: It is the same question.
The Hon. I.F. EVANS: But, for that specific question, will you write it down?
The Hon. J.D. LOMAX-SMITH: It is the same question.
The Hon. I.F. EVANS: Will you write it down for that specific question?
The CHAIR: Order! The minister has undertaken to provide information that she believes addresses the questions asked, and she will do so by 7 November. Is that correct, minister?
The Hon. J.D. LOMAX-SMITH: Absolutely.
The Hon. I.F. EVANS: Sorry, 7 November? Seventh of what date?
The CHAIR: It is 7 September.
The Hon. I.F. EVANS: September. I though you said November.
The CHAIR: Sorry, I did say November but I meant September.
The Hon. I.F. EVANS: The minister accused me of not listening, but I thought I heard that. Again, on the same budget line—
The Hon. J.D. LOMAX-SMITH: Which budget line was that?
The Hon. I.F. EVANS: It is 9.17.
The Hon. J.D. LOMAX-SMITH: That is a page, not a line.
The Hon. I.F. EVANS: Budget Paper 4, Volume 3.
The Hon. J.D. LOMAX-SMITH: But which line?
The Hon. I.F. EVANS: The expense line.
The Hon. J.D. LOMAX-SMITH: There are several.
The Hon. I.F. EVANS: That is right; pick one. Minister, you sat here and said to us that WorkCover is under other expenses. How do I know what is under other expenses?
The Hon. J.D. LOMAX-SMITH: Well, I do not know what the question is and, if I do not know what the question is, I cannot guess which line it is.
The Hon. I.F. EVANS: If you let me ask the question, you can tell me.
The Hon. J.D. LOMAX-SMITH: No, it is your job to tell us the line: it is not my call.
The Hon. I.F. EVANS: I am telling you it is under employee wages and salaries costs, and that is in relation to 10 year tenure. Does the minister support the continuation of the 10 year tenure system, and does the minister guarantee to keep it?
The Hon. J.D. LOMAX-SMITH: I cannot find a line that says employee wages.
The CHAIR: It is not related.
The Hon. J.D. LOMAX-SMITH: And it is unrelated to anything in the budget.
The Hon. I.F. EVANS: Hang on a minute. The teachers are paid salaries and wages based on—
The Hon. J.D. LOMAX-SMITH: A normal budget line which says salaries and wages.
The Hon. I.F. EVANS: There is not a budget line that says salaries and wages—
The CHAIR: Order! The question—
The Hon. I.F. EVANS: I just want to check it, because I reckon in a state budget there will be a budget line that says salaries and wages.
The CHAIR: Order! The question as I heard it was related to the tenure system, which is not related to salaries and wages.
The Hon. I.F. EVANS: Actually, it is, Madam Chair. You have been an industrial officer in your time, and you know that, as industrial conditions change, the salaries and wages costs change and therefore it will have an impact on salaries and wages. That is why I am asking a question under that line. Are you seriously saying I cannot ask a question on 10 year tenure in this budget?
The Hon. J.D. LOMAX-SMITH: There is no budget line which says wages and salaries on page 9.17.
The CHAIR: I think a question relating to changes and conditions is one for question time.
The Hon. I.F. EVANS: We will go to page 9.26, minister. We have found a line that says salaries and wages. I am asking: does the minister support the 10 year tenure process and guarantee to keep it?
The Hon. J.D. LOMAX-SMITH: There is nothing to do with tenure in a wages budget line.
The CHAIR: The question is not an estimates question. It is a question that can be asked in the house at any time. That sort of information can be sought of the minister as a general question. It does not specifically relate to estimates.
The Hon. I.F. EVANS: I will ask it this way, then. In the expenses of your department, there are costs associated with the administration of the placement of teachers. Do you think you would save much money in those costs—any money—if the 10 year tenure system was abolished?
The Hon. J.D. LOMAX-SMITH: That is a hypothetical question and unrelated to a budget line.
The Hon. I.F. EVANS: Madam Chair, I cannot believe that you are going to disallow a question on a matter that is clearly within the budget somewhere. This is not a criticism of the minister. I understand you cannot go down to every detail of every industrial agreement in the budget, but everyone knows industrial agreements affect salaries and wages. There have been media reports that the government is in negotiations with the union to have appointment for life and abolish the 10 year tenure. If you are denying the opposition the opportunity to ask questions here on that process, I think that is unfair and ridiculous.
So, I ask you to again rule whether I am able to ask a question on that matter, because in every one of the budget sections—R to 2, 3 to 7, 8 to 12—there are costs for the administration of the 10 year tenure system, but they are not identified line by line and neither they should be. However, you must be able to ask questions on the cost of administering the teacher placement system.
The CHAIR: Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. The overarching purpose of estimates is to query the budget. It is not to ask any question relating to the operation of any agency or any government policy and so on. The minister has assured us that there is not a specific line. The minister has answered the question as it relates to these budget papers, on my understanding, which the minister may wish to confirm. The fact that there is not an item relating to it in this budget paper simply means there are other oppor¬tunities for you to ask that question and not this one. Does the minister wish to add anything?
The Hon. J.D. LOMAX-SMITH: This relates to industrial relations, and the cost of employing teachers is not likely to be different on whatever tenure they are employed. There is no budget line that relates to the cost of employing teachers or their tenure. It is not relevant to a debate on budget lines.
The Hon. I.F. EVANS: So, there is no cost in the budget of administering the 10 year tenure system?
The Hon. J.D. LOMAX-SMITH: Industrial relations issues are a different matter and not related to the budget lines.
The Hon. I.F. EVANS: It is wrong; she's on the record. On page 9.17 of volume 3, under `expenses', which includes employees' benefits and costs, can the minister advise how many employees are involved in administering the placement system of teachers?
Mr ROBINSON: All the teaching staff are permanent employees of the department. As alluded to before, people are employed at different levels in the system. We have some contract staff as well, but the bulk of the teaching staff are permanent employees and the costs associated with those staff essentially are the same, irrespective of their tenure in any one school. This is about a process where after 10 years they go to a different school, but each year in the system there will be quite a lot of turnover between schools and staff will move from one school to another and there is a whole overarching cost associated with administering that system. It will be very impractical to be able to identify any precise figure on the administration of one small element of a total staffing system.
The Hon. I.F. EVANS: I understand that, with due respect to the officer. I did not want to ask that question but I was trying to establish how much you expect to save by abolishing the 10 year tenure system. There are media reports that you are negotiating that with the union, and clearly there would be a document somewhere in the agency saying, `Have we got a deal for you minister: we can save you X, Y, Z dollars.' I was trying to establish it.
There would be a big cost saving if the department abolished the 10-year tenure placement system.
The Hon. J.D. LOMAX-SMITH: Can I just say, Madam Chair, that this is going off on a tangent about something that does not exist, is not on the policy agenda and is nothing that is tangible or—
The Hon. I.F. EVANS: Not being negotiated or dis¬cussed?
The Hon. J.D. LOMAX-SMITH: It is not anything that I have ever discussed. The reality is that, if the member for Davenport were the minister, it might be his policy agenda. However, this is an irrelevancy and does not match a budget line. It is not a budget saving. It is not a budget proposal. It is not delineated in any of the budget documents, and it is totally irrelevant.
The CHAIR: Do you have anything to add, minister? The Hon. J.D. LOMAX-SMITH: I think that Mr DeGennaro understands where this issue came from, because it was raised in one of the discussions he had with some stakeholders.
Mr DeGENNARO: In discussion with stakeholders about unattached teachers, and through a series of meetings, we have been talking through the processes of placing teachers. In one of those discussions, we talked conceptually about the 10-year rule. However, that was on the basis that there was no policy proposal, no recommendation, no advice to the minister and, indeed, no endorsement or approval from the minister for any change in the existing policy. So, it was a discussion with stakeholders about the concept and the generality of the 10-year rule. However, we did it as a department in a general discussion in consultation with stakeholders. Again, I confirm and repeat that the minister has never been advised of, endorsed or approved that concept or that proposal.
The Hon. I.F. EVANS: I refer to page 9.20 of Budget Paper 4, Volume 2. This question is in relation to the government's claiming to fund students to certain levels. I am trying to establish how exactly these figures are established. It might seem basic to you and the officers, but I want to try to clarify exactly how these figures are established. The way I understand it is that year 11 and 12 students are funded to the tune of $14 665; years 8 to 10 to $13 748; years 3 to—
The Hon. J.D. LOMAX-SMITH: Did you say page 9.20?
The Hon. I.F. EVANS: I am coming to that.
The Hon. J.D. LOMAX-SMITH: You are talking about something that is not on that page.
The Hon. I.F. EVANS: I do not want to give you six pages, so I have given you just one as a reference by way of example. There are four different funding levels of students in the budget documents so, rather than giving you four pages, I have given you one as a reference. I will explain the question. For years 8 to 10 it is $13 748 per student; for years 3 to 7 it is $10 800 per student (which is the page I referred to); and for years R to 2 it is $11 783 per student. I note that the language is careful in that it refers to `school students'. I want to check whether these costs I have quoted include any of the sub-programs of 1.1, which is early childhood educa¬tion and care, birth to preschool, or sub program 1.2, the preschool services. I assume that they are not school costs and therefore not included in those calculations.
The Hon. J.D. LOMAX-SMITH: Do you include preschool in formal schooling costs?
The Hon. I.F. EVANS: I want to make sure that, when the budget documents talk about years R to 2, those costs do not include any of the students in preschool. I know that it is a simple question and that logic says that they should not; I am just making sure that they do not.
The Hon. J.D. LOMAX-SMITH: That is right. The problem is that the preschool debate is confused, because in some places it is called `prep' and in others it is called `preschool' or `reception', whereas our preschool is the year two years before year 1.
However, I understand that in some states preschool is the year before year 1. It is very confusing, but you are quite right: in South Australia preschool is two years before year 1 or one year before R.
The Hon. I.F. EVANS: On the same budget line, the budget papers say that the government, on average, spent $11 204 per student. Is that figure calculated in exactly the same way as the average expenditures per student in 2001 02? If not, how are the calculations different? The minister keeps referring to a 2001 02 figure, so I just want to make sure that we are comparing apples with apples.
The Hon. J.D. LOMAX-SMITH: Some of the 2001 02 figures are not apples. Clearly, the department has had a different configuration, so that some of the staffing numbers or a whole range of overall budgets that you might wish to quote are clearly not in the same category because DETE existed before DEFEEST and DECS, but I understand that these costings have been properly audited.
Mr ROBINSON: Yes. The figures you are talking about—there is a figure for R-3, one from 4-7 and one from 8-12. Those figures reflect the overall costs per student in the system for providing different stages of schooling in South Australia.
The Hon. I.F. EVANS: The 2004 Australian Productivity Commission's report on education states:
Expenditure data presented for the 2004 report onward are not directly comparable with data presented in earlier reports for three reasons:
1. Data presented in the 2003 and earlier reports included recurrent grants made by the Australian government for capital expenditure.
2. They excluded notional user cost of capital. . . for state and territory governments.
3. Data presented in the 2001 and earlier reports were recorded using cash based accounting principles.
These changes mean that reported expenditure by the Australian government in 2001 02 to 2003 04 on both government schools and all schools will be lower than in 2001 and earlier years, and expenditure by state and territory governments on government and all schools will be higher. Do any of the figures that the government is using—the $11 204 per student, the extra $708 and the $3 606 more being spent per student now than in 2000 01—include a notional user cost of capital and, if so, what is the amount in each of those figures?
The Hon. J.D. LOMAX-SMITH: It does not matter which way you cut the issue. We have significant numbers of extra teachers in junior primary schools and we have smaller class sizes. We have a $35 million literacy program, a $10 million behaviour strategy, we have trade schools, SACE and children's centres. Whichever way you look at it, there is more money going into education. It does not matter how you compare year by year, but each year more dollars go in. That is irrefutable. There is no area for negotiation or argument. Every year more money goes into capital works. Even the maintenance budgets have gone up, and the project costs have been very generous in terms of school pride strategies and better school strategies that we have had over the years. So, unequivocally, there has been more money going into education. I am informed that all those numbers have gone through the right accounting process. As you will realise, this is quite technical and I will have to take the advice of the people in Treasury about these numbers, but I have every reason to believe that they are accurate.
Mr DeGENNARO: Our budgets are accrual based. These program cost estimates are based on the accrual budget and, therefore, there will be an element of depreciation, and that is a proxy for the using up of assets. The Productivity Commission uses other methodology, which is not what budgets are based on. I just confirm that our cost of programs here includes the depreciation aspect, which reflects the consumption of assets.
The Hon. I.F. EVANS: The minister has claimed that the government is spending $3 606 more per student this year than in 2001 02. The minister made comments to the effect that there were some differences in the 2000 01 calculation because of the structure of the department.
The Hon. J.D. LOMAX-SMITH: I was just explaining that you cannot compare all the figures directly, because there were different structures. Clearly, when you look at some of the data in our annual reports, it is difficult to quantify the number of executives, the number of staff, the buildings or the assets because, of course, the department was split. However, the numbers to which I referred have been calculated through Treasury, and I can only presume that they are accurate, because they have been checked many times.
The Hon. I.F. EVANS: I accept the fact that the minister may think they are accurate, but if they are not comparable, as she has just said, I question their value. I have no doubt that Treasury is saying to the minister that there is $3 606 difference in spending, but if one cannot directly compare the method of calculation of the figures, what is the value of them?
The Hon. J.D. LOMAX-SMITH: I think that you might wish to undermine the investment. You might wish to portray the education department as having not received funds. You might like to deny that we have invested money in children's centres. You could be a denier of the fact that we are building trade schools. You can claim that we are not reviewing SACE. You can suggest that we have not employed more junior primary teachers. You can claim that we have not invested in the junior primary sector and the birth to five age range. You could suggest that we have not introduced the Premier's reading strategy. But it would not be true: it patently has occurred. It does not matter which way you attack it: the money has gone into the department.
The Hon. I.F. EVANS: I have never made any of those statements, but it was an entertaining minute. How much of the extra $708 figure that the minister is using is simply the increased cost of the enterprise bargaining agreement?
The Hon. J.D. LOMAX-SMITH: I was asked that question last year, and the fact remains that I think it was a 14½ per cent enterprise agreement over the cycle, and there was a 38 per cent increase in funding. So, clearly, salaries play a part. However, the salaries are only a lesser part of the equation. I am informed that the enterprise bargaining agreement accounts for $54.9 million out of an increase of 127.20 over last year.
The Hon. I.F. EVANS: So, that is about 40 per cent. I cite page 9.17 as a reference, but it is not that relevant. I again raise the issue that we talked about before the dinner break of the `floating teachers', as the minister described them in her press release of 14 June.
I am trying to establish what you mean by `floating teachers'. Are they totally made up of temporary placed teachers? If not, what else are you including in the description of `floating teachers'?
The Hon. J.D. LOMAX-SMITH: I think you are referring to matters in last year's budget.
The Hon. I.F. EVANS: There are still floating teachers in the system this year.
The Hon. J.D. LOMAX-SMITH: But they are not part of the budget—
The Hon. I.F. EVANS: They are not budgeted for in this budget? Is that what you are saying?
The Hon. J.D. LOMAX-SMITH: They are not listed as an item here.
The Hon. I.F. EVANS: Neither are permanent teachers; and neither are principals; and neither are school SSOs. They are all under `salaries and wages'. So, pick a salaries and wages figure; the question is the same. It was page 9.26, I think, before. In there somewhere is a figure for a floating teacher, however you describe them. I am just trying to establish precisely what you mean by floating teacher.
The Hon. J.D. LOMAX-SMITH: The matters were part of the budget announcement last year.
The Hon. I.F. EVANS: And they are carried forward to this year, are they not?
The Hon. J.D. LOMAX-SMITH: There is no specific issue in here that can be highlighted.
The Hon. I.F. EVANS: Do any of the salary and wages go to what you would describe as floating teachers?
The Hon. J.D. LOMAX-SMITH: Elements within that number comprise all of the employees.
The Hon. I.F. EVANS: Including floating teachers?
The Hon. J.D. LOMAX-SMITH: That is our employee list.
The Hon. I.F. EVANS: What does the minister mean when she describes `floating teachers', as she did in her press release of 14 June this year?
The Hon. J.D. LOMAX-SMITH: They are the same as those in the September press release. They were the unat¬tached teachers, the number of which we are fortunately reducing by appointments in schools.
The Hon. I.F. EVANS: Are they totally made up of temporary placed teachers, or are there other descriptions that you would put in there?
Ms EVANS: There is a small number, who are permanent teachers within our service for various reasons, including geographical reasons and particular curriculum specialities, who are unable to be placed in a permanent position. They are sometimes placed in schools in a supernumerary position, or, sometimes, where they are full-time teachers, placed against a part-time position, and central office picks up their salary for the top up. These numbers vary throughout the year. I think that that is what the minister is referring to as floating teachers.
The Hon. I.F. EVANS: Schools such as Adelaide High School and North Adelaide Primary School have written to me, concerned that you are going to change the system in relation to these teachers and ask the schools to pick up more of the cost. Is that being ruled out as part of today's an¬nouncement, or is that still up for negotiation?
Mr ROBINSON: The discussions that have been held with stakeholders have included this issue. Schools get an allocation, as we have been talking about before, to cover the cost of staff, based on their overall student numbers. We are having discussions with stakeholders about reducing the number of unattached teachers, so they are placed in the available jobs that exist in the system. We will have fewer unattached teachers in the system and all of the teachers gainfully placed in a school. So, when schools say they are going to have a cost, it is not really an additional cost; it is about taking one of these unplaced teachers instead of another teacher from the ranks of available teachers. So, it is about ensuring that these unplaced teachers all have a permanent placement in a school, rather than remaining as an unattached teacher, which involves a cost, but there is also a productivity loss to us because they are not teaching fully if they are in that situation.
The Hon. I.F. EVANS: Just so that I can write back to Adelaide High School and allay their fears, Adelaide High School has written to me saying:
Unplaced teachers: Increased costs to schools (from 15 to 30 TRT days per term), 19 000 extra on 2007 figures— $38 000 in total per year.
Would I be correct in writing back to them and saying that there is actually going to be no extra cost?
The Hon. J.D. LOMAX-SMITH: I think it would be worth mentioning that the matters you are describing are from last year's budget. There is no budget line attached to them this year. They are not mentioned in the budget documents; however, there is a process of consultation going on and that process will continue.
The Hon. I.F. EVANS: In relation to the energy and water savings that you are also consulting on—
The Hon. J.D. LOMAX-SMITH: Also last year's budget savings.
The Hon. I.F. EVANS: Also carried forward in this year's budget figures.
The Hon. J.D. LOMAX-SMITH: Related to the budget documents?
The Hon. J.D. LOMAX-SMITH: Is the minister honestly saying to the committee that nowhere in the budget documents are there estimates of the savings announced last year—the figures do not carry them; there are no savings from last year?
The Hon. J.D. LOMAX-SMITH: As far as I know there is no mention of water and electricity savings in the budget.
The Hon. I.F. EVANS: I understand that, but the reality is that, if savings were announced last year to go over four years, I think it is a fair assumption that in the budget figures there are estimates of the savings, and I am only trying to ask the question on behalf of Adelaide High School. I am quite happy to write back saying that you would not accept the question, if that is the decision of the minister. I am just trying to establish how this is going to work, because Adelaide High School—and this would be of interest—has written saying that in relation to energy it is being consulted that schools may be expected to reduce consumption by about 25 per cent on the 2001 usage. What they say about implica¬tions for the Adelaide High School is that it will be a $40 000 per year extra cost if the reduction target cannot be met. The letter further states:
The school is used after hours by the School of Languages and we have no control over their use of power and water. Since 2000 01, all the classrooms have been air-conditioned and the ovals have been refurbished. A fourth oval is being developed—
at the extra cost of $40 000. I am wondering how you are going to make adjustments. Are you going to do this school by school based on what improvements have been made to the school since 2000 01?
The CHAIR: The member for Davenport, again, you have not identified a budget line and I remind you that this is not an opportunity for asking questions on any matter relating to the operation of the department. The minister may be able to provide information but she may also welcome a letter from you on the matter to which she might reply in the normal course of events. Minister, are you able to provide any information at the moment?
The Hon. J.D. LOMAX-SMITH: I think that I have described the energy and water savings target previously. This was, as the member knows, the same issue; it was in last year's budget. Clearly, there are still consultations going on about achieving these targets, and there are grants available—grants going to many schools.
The Hon. I.F. EVANS: Does that come out of the grant line?
The Hon. J.D. LOMAX-SMITH: There are grants available. I explained the ESD grants, and those sorts of grants will go to schools to allow them to have energy audits and some minor refits. Some of the schools you have named have applied for those grants.
The Hon. I.F. EVANS: One last question on the tempo¬rary placed teacher: if schools are staffed on a formula, who pays for the temporary placed teacher placed at the school?
The Hon. J.D. LOMAX-SMITH: I will ask Ms Evans to answer that.
MS EVANS: The vast majority of our teachers go into online positions. So, even though they might be permanent, they are placed in temporary positions that are actual vacancies and, therefore, funded by the school.
The Hon. J.D. LOMAX-SMITH: I place on the record one matter. I said earlier that I thought the EB was 14.5 per cent. I understand that it was only 14 per cent. I am sorry; I make a correction. The enterprise agreement from 2005 to 2007 was 14 per cent, not 14.5 per cent.
The Hon. I.F. EVANS: I want to ask a question about a matter about which I wrote to the minister in relation to guidance officers. This comes under `salaries and wages', because it relates to a back payment.
The CHAIR: The honourable member is drawing a very long bow. The minister may be able to provide some information, or it may be something she will reply to in due course.
The Hon. I.F. EVANS: This relates to salaries and wages, and I thought that, being a strong industrial officer, you would back me on this, Madam Chair. Why does the minister believe that all former guidance officers grade 2 employed by the Education Department as at October 1991 should not have been treated equally as a group when the government advised them that for reclassification purposes they would, and why does the minister believe that all former guidance officers grade 2 employed by the Education Department as at October 1991 should not receive back pay for the period 1 October 1991 to the date of the individual separation, and adjustment to the individual superannuation payout and an adjustment to the individual separation packages?
To explain it further to the committee, in October 1991 the position of guidance officer grade 2, through award restruc¬turing, was implemented into the professional services stream at PSO2 level. Applications for reclassification to PSO3 were submitted in September 1992. In September 1993 they were advised that the appeal was not approved. In October 1993 a review of the reclassification decision was requested by the guidance officers. They were told by the then commissioner of public employment that their application would be heard as a group.
They appealed to a tribunal. An independent consultant's report was commissioned, and that report stated:
The remuneration at PSO3 level would be a fair and reasonable outcome at award restructuring. . . the group has been treated as a whole and it would be inappropriate to consider them on a case-by-case basis.
The committee should be aware that 11 officers have received back pay and six officers have not.
The CHAIR: That was a very interesting question, but I cannot see that it is relevant to estimates. Nevertheless, the minister may care to respond.
The Hon. I.F. EVANS: It will have to come out of the salaries and wages line if they pay it.
The CHAIR: My question to the minister is: why did Flaxmill get 17 copies of The Mouse That Roared and Lonsdale Heights get only 15? It is an equivalent question. The minister may care to answer.
The Hon. J.D. LOMAX-SMITH: This is a fascinating archival issue, and it really exposes the member for Davenport as a frustrated industrial advocate. I must com¬mend him for his enthusiasm in retrieving this matter after it has been through various iterations in the time when his party was in government. It is still a matter where there is clearly disagreement. However, it is an industrial matter and not appropriately discussed in estimates.
The Hon. I.F. EVANS: Is the minister prepared to meet with representatives of the group concerned to try to resolve the matter?
The Hon. J.D. LOMAX-SMITH: Absolutely not.
The Hon. I.F. EVANS: Fair enough. That says some¬thing.
The CHAIR: And, minister, can you tell me how many books Lonsdale Heights is getting?
The Hon. I.F. EVANS: Madam Chair, you can treat this with humour, but these people have been dudded. These people have been dudded, and I am allowed to ask the question.
The CHAIR: That is the issue. It is not an estimates question. There are other avenues for you to raise this matter with the minister.
The Hon. I.F. EVANS: You go back through estimates and look at the questions that have been allowed over the years, and that is clearly within the gamut.
The CHAIR: Member for Davenport, this is not an estimates question. Please proceed with estimates questions.
The Hon. I.F. EVANS: Minister, you have mentioned today your WorkCover announcement, and I think we have established that workers compensation is in the budget. You mentioned the schools having to meet targets as laid out in the strategy, Safety in the Public Sector 2007 to 2010.
Will the measures of the success of it be done on a global basis or will it be done site by site? How will they be judged against those targets. For instance, some of the targets are: total new workforce injury claims to reduce the number of all claims by 20 per cent or more in new claims by 2009 10 from the base year 2005 06; from the base year 2005 06 to reduce by 20 per cent or more all new claims frequency. What I am trying to establish for the schools is whether that will be judged site by site or will you take a global sweep of the department?
The Hon. J.D. LOMAX-SMITH: The phrase `global' has a slightly idiosyncratic term in education circles, but the department takes its workers compensation responsibilities seriously. As an employer of a very large workforce, it is our responsibility to reduce injuries, hardship and illness. I think that, as a large employer, we take our obligations, properly, very seriously and we would want to achieve the targets across government and we will strive to do that.
The Hon. I.F. EVANS: In relation to Safety in the Public Sector, which you are now tying all schools to—
The Hon. J.D. LOMAX-SMITH: Which budget line is it?
The Hon. I.F. EVANS: It is under `Other expenses'. Workers compensation is under `Other expenses'. We established that earlier, you might recall, except for the 2005 06 year where it was only $1.5 million because Treasury did it differently, but for 2004 05, 2006 07 and 2007 08, it is in the `Other expenses' line. I am trying to establish the difference between the number of claims and new claims frequency?
The Hon. J.D. LOMAX-SMITH: We will take that on notice.
The Hon. I.F. EVANS: That is what I thought you would do, because I could not understand it either.
The Hon. J.D. LOMAX-SMITH: While the honourable member is considering a budget line, we might bring forward that answer from Ms Evans, who can explain that succinctly.
Ms EVANS: The number of claims, the number of open claims or live claims, might be of long duration. The number of new claims, the new claims frequency is just the new claims that come on.
The Hon. I.F. EVANS: That is my point, with due respect to the officer. In this document called `Safety in the Public Sector' to which all the schools will now be tied, it has two objectives: one is about new claims frequency and the other one is about new claims. I am trying to work out the difference. I think you have just advised us that they are the same.
Ms EVANS: Sorry, I misunderstood your question.
The Hon. I.F. EVANS: Are they the same?
Ms EVANS: No, they are not the same.
The Hon. I.F. EVANS: What is the difference between new claims and new claims frequency?
Ms EVANS: I think I will take this on notice.
The Hon. I.F. EVANS: Minister, I refer to the funding per student on pages 9.24 and 9.25. The way I understand the $14 665 figure is that you take the total expenditure of sub program 3.3—$274.905 million—and divide it by the number of students—23 307—to get a figure of $14 665. Those calculations do not work out in any of the sub programs that identify government funding per student. I am wondering how the department establishes the figure of $14 665 on page 9.25. The reason I think that it is the sub program cost divided by the students is that footnote (g) says that that figure is derived from the total sub program cost divided by the number of students. I am not sure how they have reached that figure because, unless my calculator is wrong on all three of them, none of the figures match.
The Hon. J.D. LOMAX-SMITH: Perhaps you are using the wrong ones.
The Hon. I.F. EVANS: What numbers should I have been using, rather than those in the budget papers, minister? Do not tell me they are not in the budget papers.
The Hon. J.D. LOMAX-SMITH: No, they are, but you are miscalculating. Mr DeGennaro will explain.
MR DeGENNARO: What we do in putting together the Portfolio Statement, as you will see on page 9.24, is to provide the net cost of the sub program. Again, this is a Treasury requirement in compiling a portfolio statement. The net cost of the sub program is published and that is the revenue minus expenses, so it is the net cost of the program. Note (g) shows that the calculation of the total funding for government schools per student is based on the total sub program cost. It is the gross expenditure divided by the number of students; whereas, on a previous page, the net cost is the net cost of the program to the government. The calculation uses a total sub program cost, a gross expenditure, which is the logical thing to do, as that is what is expended in relation to students in those schools in those year levels, divided by the number of students in those year levels.
The CHAIR: Is that as the result of accrual accounting?
The Hon. I.F. EVANS: Sorry, Madam Chair, what line number is that? I am just wondering which line number accrual accounting is in the budget.
The CHAIR: It is understanding the difference between the net and the gross.
The Hon. J.D. LOMAX-SMITH: Sub indices.
The CHAIR: No answer? When Mr DeGennaro was explaining the difference between the net and the gross—the total cost, at least—my question was as to why those are different. Is that a different accounting treatment?
The Hon. J.D. LOMAX-SMITH: No, it is not.
Mr DeGENNARO: The total sub program cost, which is note (g), and divided by the number of students, is the total expenditure which is obviously spent on schools and year levels, divided by the number of students. That is the total expenditure. It is not an accounting matter, it is a gross expenditure number. The net costs of a program offset revenues. Net cost is the net cost to the government, but the gross expenditure, divided by students, is what is calculated for their spend per student.
The CHAIR: Thank you.
Mr DeGENNARO: Which is the right figure. That is what is spent on students for their education.
The CHAIR: Thank you.
Mr GRIFFITHS: As an extension of the answer provided on that question (and using the trusty little calculator on my phone) it would appear to me that the two figures multiplied actually come to $341 million. Therefore, can you confirm there is actually $67 million in income across this sub program line to give a net cost?
The Hon. J.D. LOMAX-SMITH: We do not have a pocket calculator so, if you are suggesting we check it, we cannot do that. We will have to take it on notice.
The Hon. I.F. EVANS: In Budget Paper 4, Volume 3, page 9.14, I note that expenditure has dropped from $102.447 million to $93.243 million, even though you have 20 more attendances this year than last year. Will the minister explain that?
The Hon. J.D. LOMAX-SMITH: Can I just confirm you are on page 9.14 related to preschool services?
The Hon. I.F. EVANS: I think I am.
The Hon. J.D. LOMAX-SMITH: Is that so?
The Hon. I.F. EVANS: Yes, I believe so.
The Hon. J.D. LOMAX-SMITH: Could you repeat the question, please?
The Hon. I.F. EVANS: Last year you spent $102.447 million, that is 2005 06 actual. This year your budget is $93.243 million, so roughly a $9 million reduction in expenditure. The attendances in 2005 06 were 15 230, the attendances this year are 15 250, so you are expecting more attendances for $9 million less. I am just wondering what the explanation is.
The Hon. J.D. LOMAX-SMITH: I think it is a budget¬ing change. Perhaps it is best if Mr DeGennaro explains it to you. It is a different accounting treatment of the overheads.
Mr DeGENNARO: The first point to make is that there is absolutely no change in service delivery in this sub program 1.2, preschool services. What occurred over those years, 2005 06 actual to 2006 07 budget, 2006 07 estimated result and 2007 08, is a number of changes. I will go through some types of changes. Between the actual and the 2006 07 budget numbers—so between the $102 447 number and the $108 877 number on page 9.14—there were changes in accounting data improvements, so we are continually improving our accounting measurement. There were changes in interest recorded against this sub program, and there were changes in policies around interest that agencies notionally received on accounts held at Treasury. There was a grant paid in the 2005 06 figures but not in the 2006 07 budget, so there are numbers which go both ways here. Wage increases flowed through.
There was a one off book grant payment in the 2006 07 budget, which was not in the 2005 06 actual payments, and there were other minor variations. So, those sorts of changes reconcile the 102 to 108. Between 108 and 91 there has been a change in the apportionment of overheads. With the 2005 06 actual number, the 2006 07 estimated result number and the 2007 08 budget number, they are based on the same allocation model, whereas the 2006 07 budget figure had not been based on that new apportionment process, which was based on the 2005 06 actuals. So, there has been an account¬ing recording improvement which has caused variations in this. That is the general explanation of that number. To give a more detailed explanation we would need to take it on notice.
The Hon. I.F. EVANS: I might have misheard: did you mention interest?
Mr DeGENNARO: Between agencies and Treasury, agencies have cash balances in special deposit accounts. Up to a certain time—and I would have to go back and check the records of when it occurred—agencies received notional interest on their cash holdings in Treasury. That was changed. There was no change in expenditure authorities or net expenditure but what occurred, from memory, is that Treasury changed the interest earning and that then changed the appropriations. So, that was an internal change between agencies and Treasury, but that does affect the allocations across programs. So, the explanation is a number of move¬ments and changes in expenditures but also changes in the accounting data, which is captured, and changes in the allocation of overheads across all programs.
The CHAIR: Anything to add, minister?
The Hon. J.D. LOMAX-SMITH: I do not think there is any more response that can be given to that question.
The Hon. I.F. EVANS: I refer to page 9.15. I am just interested in the interest and other finance costs that have gone from $93 million in 2005 06 to, essentially, $200 million this year. I assume that is simply made up of increased borrowings.
Mr DeGENNARO: This relates to the Capital Works Assistance Scheme (CWAS). There have been changes in the payments that the department makes on that scheme and, again, ii is an allocation against this program, so it is a subset of the total Capital Works Assistance Scheme.
The Hon. I.F. EVANS: So that whole line is simply the Capital Works Assistance Scheme?
Mr DeGENNARO: Yes. Again, there is the apportion¬ment of costs across programs but there has been a reduction in interest payments in the Capital Works Assistance Scheme in 2005-06 and then there was apportionment across pro¬grams. Essentially, there have been no material changes in that line. In 2005-06 there was a low interest payment and then we recorded a more standard sum in the following budgets.
The Hon. I.F. EVANS: I was going to ask you about that because the year before, 2004-05, the interest was again around the $200 million mark, and I could not work out why it went from $200 million to $93 million to $187 200.
The Hon. J.D. LOMAX-SMITH: It is a cycle of borrowing.
Mr DeGENNARO: Again through the minister, this is $93 000 and $200 000; not $200 million.
The Hon. I.F. EVANS: My apologies. I have some omnibus questions to read in, if the minister is happy with that, and then we can call it a night—unless the government wants to ask any more questions. The omnibus questions are as follows:
1. Will the minister provide a detailed breakdown of the baseline data that was provided to the Shared Services Reform Office by each department or agency reporting to the minister, including the current total cost of the provision of payroll, finance, human resource, procurement, records management and information technology services in each department or agency reporting to the minister, as well as the full-time equivalent staffing numbers involved?
2. Will the minister provide a detailed breakdown of the expenditure on consultants and contractors in 2006-07 for all departments and agencies reporting to the minister listing the name of the consultant and contractor, cost, work undertaken, and method of appointment?
3. For each department or agency reporting to the minister how many surplus employees are there as at 30 June 2007 and, for each surplus employee, what is the title or classification of the employee and the total employment cost of the employee?
4. In the financial year 2005-06 for all departments and agencies reporting to the minister what underspending on projects and programs was not approved by cabinet for carry-over expenditure in 2006-07?
5. For all departments and agencies reporting to the minister, what is the estimated or actual level of under-expenditure for 2006-07 and has cabinet already approved any carry-over expenditure into 2007-08? If so, how much?
6. What was the total number of employees with a total employment cost of $100 000 or more per employee and also, as a subcategory, what was the total number of employees with a total employment cost of $200 000 or more per employee for all departments and agencies reporting to the minister as at 30 June 2007; and, between 30 June 2006 and 30 June 2007, will the minister list the job title and total employment cost of each position with a total estimated cost of $100 000 or more (a) which has been abolished; and (b) which has been created?
7. For the years 2005-06 and 2006-07 will the minister provide a breakdown of expenditure on all grants adminis¬tered by all departments and agencies reporting to the minister listing the name of the grant recipient, the amount of the grant, the purpose of the grant and whether the grant was subject to a grant agreement as required by the Treasurer's Instruction No. 15?
8. For all capital works projects listed in Budget Paper 5 that are the responsibility of the minister, would the minister list the total amount spent to date on each project?
I would like to thank the minister and officers for their conduct during the estimates committee.
The CHAIR: Minister, are you able to provide those responses?
The Hon. J.D. LOMAX-SMITH: We will take those questions on notice and provide answers together with other departments. I would also like to thank the officers as well as yourself, Madam Chair, the officers of parliament and members of the government and the opposition who attended. Thank you for your time. I am delighted that the member for Davenport showed some interest in this year's budget and particularly looked at the trade schools. His retrospective interest in last year's budget is noted.
The CHAIR: I also thank the advisers. There being no further questions, I declare the examination of the proposed payments completed.
ADJOURNMENT
At 9.25 p.m. the committee adjourned until Thursday 28 June at 11 a.m.
