Department of State Development Annual...

www.statedevelopment.sa.gov.au

Department of State Development

Annual Report

P 2 DEPARTMENT OF STATE DEVELOPMENT ANNUAL REPORT 2015-16

DRIVING FORCE Creating Opportunities.

VISION South Australia – Globally Engaged.

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ANNUAL REPORT 2015-16



ABN: 83524915929

Level 4, 11 Waymouth Street Adelaide SA 5000

GPO Box 320 Adelaide SA 5001

DX 541

Telephone: +61 8 8226 3821 Email: [email protected] Website: www.statedevelopment.sa.gov.au

ISSN 2205-605X (print) 2205-6068 (electronic)

ISBN 978-0-9872018-6-7 (print) 978-0-9872018-7-4 (electronic)

1 JULY 2015 – 30 JUNE 2016

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Dear Ministers

I have the pleasure of submitting to you the Department of State Development Annual Report and financial statements for the year ended 30 June 2016. The report has been prepared in accordance with the requirements of the Public Sector Act 2009 and the Public Finance and Audit Act 1987.

Yours sincerely

Dr Don Russell Chief Executive Department of State Development 30 September 2016

HON KYAM MAHER MLC

Minister for Employment Minister for Aboriginal Affairs and Reconciliation Minister for Manufacturing and Innovation Minister for Automotive Transformation Minister for Science and Information Economy

Level 10 1 King William Street Adelaide SA 5000

HON JACK SNELLING MP

Minister for the Arts Minister for Health Industries

Level 9 CitiCentre Building 11 Hindmarsh Square Adelaide SA 5000

HON IAN HUNTER MLC

Minister for Water and the River Murray

Level 10 81-95 Waymouth Street Adelaide SA 5000

HON TOM KOUTSANTONIS MP

Minister for State Development Minister for Mineral Resources and Energy

Level 8 State Administration Centre 200 Victoria Square Adelaide SA 5000

HON MARTIN HAMILTON-SMITH MP

Minister for Investment and Trade Minister for Small Business

Level 13 State Administration Centre 200 Victoria Square Adelaide SA 5000

HON DR SUSAN CLOSE MP

Minister for Higher Education and Skills

Level 9 31 Flinders Street Adelaide SA 5000


CONTENTS

1 CHIEF EXECUTIVE’S FOREWORD 1

2 ABOUT THE DEPARTMENT 7

3 DELIVERING THE ECONOMIC PRIORITIES 13

4 ACHIEVEMENTS BY PROGRAM 19

Program 1: Office of the Economic Development Board 19

Program 2: Industry and Innovation 19

Program 3: Aboriginal Affairs and Reconciliation 20

Program 4: Science, Technology and Information Economy 21

Program 5: Arts South Australia 22

Program 6: Health Industries 22

Program 7: Mineral Resources and Energy 23

Program 8: Water Industry Technical and Safety Regulation 25

Program 9: Growing Small Business 25

Program 10: International Engagement, Trade, Migration and International Education 26

Program 11: Investment Attraction South Australia 26

Program 12: Employment and Skills Formation 27

5 ABBREVIATIONS 29

6 APPENDICES 31

6.1 Ministerial accountability 31

6.2 Legislation administered by the department 32

6.3 Management of human resources 34

6.3.1 Workforce diversity 34

6.3.2 Executives 35

6.3.3 Leave management 35

6.3.4 Performance development 35

6.3.5 Leadership management and development 35

6.3.6 Employment opportunity programs 36

6.3.7 Work health and safety and injury management 36

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CONTENTS

6.4 Reporting against the Carers Recognition Act 2005 37

6.5 Disability access and inclusion plans 37

6.6 Urban Design Charter 38

6.7 Reporting against the Whistleblowers Protection Act 1993 38

6.8 Regional Impact Assessment 38

6.9 Public complaints 38

6.10 Sustainability reporting 39

6.11 Fraud 40

6.12 Consultants 40

6.13 Overseas travel 46

6.14 Freedom of Information 46

6.15 Reconciliation statement 46

7 FINANCIAL STATEMENTS 49

8 LIST OF FIGURES/LIST OF TABLES 121


CHIEF EXECUTIVE'S FOREWORD1The 2015-16 financial year was the Department of State Development’s second year of transformation. It was a year when the department’s hard work began to deliver results.

Formed in 2014, the Department of State Development (DSD) brings together a number of functions to support and develop South Australia’s business and trade sectors, to create jobs and untap the economic potential of our State.

South Australia is in a crucial time of transition, from an age of traditional manufacturing and industries towards a future based on global connection and mobile, responsive industries and services. The development and exploration of our State’s unique products and talents has not yet been fully realised and this department has a responsibility to accelerate this process in an imaginative and connected way.

At the same time, the very real stresses placed on business, the workforce and communities during times of economic and industrial transition should not be underestimated. New doors need to be opened every week to offset those that might be closing.

DSD’s mandate - to build activity in resources and energy, industry and innovation, investment, trade and immigration, health industries, arts and Aboriginal affairs and reconciliation - means that South Australia needs the tools and resources to enter a new era that delivers employment and improved quality of life for all.

DSD continued to perform a primary role in realising the following economic priorities:

PRIORITY 1: Unlocking the full potential of South Australia’s resources, energy and renewable assets

PRIORITY 3: A globally recognised leader in health research, ageing and related services and products

PRIORITY 4: The Knowledge State – attracting a diverse student body and commercialising our research

PRIORITY 6: Growth through innovation

PRIORITY 9: Promoting South Australia’s international connections and engagement

PRIORITY 10: South Australia’s small businesses have access to capital and global markets

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1 CHIEF EXECUTIVE'S FOREWORD

A highlight of the 2015-16 financial year was the establishment of Investment Attraction South Australia (IASA). With its mission to attract new investors and businesses to South Australia and identify business development opportunities for the State, the agency had an outstanding start. Initially created on 1 October 2015 as a division within DSD, the agency became a separate entity on 1 April 2016.

In its first nine months, IASA assisted 11 companies, leading to more than $950 million worth of investment projects, which will create more than 3,900 direct and associated jobs in South Australia.

To make sure there is a skilled workforce that is ready to take on these newly created positions, the Employment and Skills Formation program provided Government subsidised vocational education and training to 86,300 people.

DSD is also charged with helping small businesses to establish, grow and be sustainable. The Small Business Workshop Program was launched and delivered across metropolitan and regional South Australia, with 75 workshops focusing on business fundamentals.

Through the Tradestart service, more than 100 companies were assisted and achieved more than $49.7 million worth of export sales and 16 new distribution agreements.

The department led a comprehensive program of inbound and outbound business missions throughout the year to grow international exports, the international education sector and maximise the benefits of skilled and business migration. About 280 businesses took part in outbound missions to China, India and South East Asia.

One particularly interesting project during 2015-16 was the Office of the Economic Development Board’s (OEDB) development of an industry plan for macroalgae (seaweed) harvesting. This growing industry aligns with South Australia’s natural advantages in growing both cultured and beachcast seaweed to satisfy the significant market for the commodity – estimated at $8 billion worldwide – and making South Australia the national leader in large-scale macroalgal aquaculture.

DSD also actively contributed to the remaining four priorities:

PRIORITY 2: Premium food and wine produced in our clean environment and exported to the world

PRIORITY 5: South Australia – a growing destination choice for international and domestic travellers

PRIORITY 7: South Australia, the best place to do business

PRIORITY 8: Adelaide, the heart of a vibrant state

TRADESTART ASSISTED MORE THAN 100 COMPANIESTO ACHIEVE MORE THAN $49.7 MILLION WORTH OF EXPORT SALES

AND 16 NEW DISTRIBUTION AGREEMENTS.

16$49.7MILLION



Additionally, the OEDB recognised the emerging business growth surrounding our ageing population. It identified 190 local companies, based on their potential to be part of the Ageing Well economy, by providing useful products and services that this rapidly growing market would buy.

Health Industries South Australia (HealthInSA) attracted a number of new projects. These included Micro-X to manufacture lightweight X-ray machines at Tonsley; Hydrix, a design house specialising in the development of sophisticated, safety-critical products; and Pfizer, which is completing a $21 million expansion of its facility in Thebarton, making Adelaide a global manufacturing hub for the production of medication used to treat complications of cancer.

The Aboriginal Affairs and Reconciliation division empowers Aboriginal people to have a stronger voice in decision-making across government and within communities, and provides leadership in the promotion of effective governance arrangements.

Highlights in 2015-16 included the implementation of Next Steps — Stolen Generations Reparation Scheme, which included individual reparations to South Australian members of the Stolen Generations. Other achievements included the development of a two-fold strategy to leverage opportunities for Aboriginal

The Industry and Innovation program made great advances in supporting existing communities and workforces currently in transition between traditional and emerging industries, including:

• the Regional Job Creation Grants Program, which began helping businesses in the Whyalla and Port Augusta regions that have been affected by the closure of Alinta Energy’s Leigh Creek coal mine and Port Augusta power stations;

• the Northern Economic Plan – a blueprint for economic development and social transformation in northern Adelaide – was launched in response to the upcoming closure of GM Holden and the subsequent effects on supply chain businesses; and

• an automotive workers’ strategy was launched to promote early career transition planning for affected workers.

Adelaide has been granted Smart City status from technology giant Cisco through the work of the Science, Technology and Information Economy program. As a result, Adelaide joined a select group of cities across the world such as Hamburg, Barcelona, Chicago and Dubai in being a ‘Lighthouse City’ – one that is increasingly capable of exploiting the Internet of Things for connectivity, industry and quality of life. In 2015-16 trials commenced on Smart City-Smart Parking, where a connected car park can notify smartphones of vacant spaces, and Smart Public Lighting that is responsive to movement and provides a safer environment while saving energy.

PFIZER CONSTRUCTING A NEW

$21MILLION EXPANSION OF THEIR FACILITY IN THEBARTON.

CISCO DECLARED ADELAIDE ITS FIRST LIGHTHOUSE CITY IN AUSTRALIA – JOINING OTHER MAJOR CITIES INCLUDING

BARCELONA, CHICAGO, HAMBURG AND DUBAI.

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The Employment and Skills Formation program’s WorkReady Jobs First Projects improve the work readiness of job seekers to transition people into employment.

In 2015-16, this program enabled 7,800 people, including young, Aboriginal, mature aged and people with a disability to participate in 100 projects developed with employers across metropolitan and regional South Australia.

The Mineral Resources and Energy program completed the construction of the new South Australia Drill Core Reference Library. The library hosts geological samples recovered from more than 130 years of exploration for minerals and energy resources, otherwise hidden beneath the land surface of South Australia. These irreplaceable samples represent valuable direct records of the geological materials retrieved from the depths of the crust and are a highly valued resource for geologists in industry, research, education and government.

employment and businesses from government procurement and build the capability of the Aboriginal business sector. In addition, there was the launch of the online registration site for South Australian Aboriginal businesses to finalise the development of the South Australian Aboriginal business register, Aboriginal Business Connect.

Arts South Australia worked to continue several crucial ongoing programs.

The State Library’s online collection was further expanded and programs to preserve the State Library’s digital collections continued. The ongoing installation of new technology also progressed, enabling the One Card library network to give borrowers access to many more books across the State.

Other Arts South Australia highlights included:

• TARNANTHI – Contemporary Aboriginal and Torres Strait Islander Art Festival attracted more than 310,000 visitors;

• The Music Development Office achieved national and international recognition for its programs and business model; and

• Adelaide was designated a UNESCO City of Music through collaboration with the Adelaide Festival Centre Trust and the Adelaide City Council.

EMPLOYMENT AND SKILLS - PROVIDED GOVERNMENT SUBSIDISED VOCATIONAL EDUCATION AND TRAINING TO

86,300 PEOPLE.

TARNANTHI – CONTEMPORARY ABORIGINAL AND TORRES STRAIT ISLANDER ART FESTIVAL ATTRACTED MORE THAN

310,000 VISITORS.



This program also released South Australia’s Copper Strategy, developed in collaboration with industry, research institutions and the community. The Copper Strategy aims to triple copper production in South Australia to a total annual output of one million tonnes over the next 15 years.

The range and diversity of DSD’s programs and initiatives are comprehensive in scope and ambitious in nature.

It has been challenging at times but the reward of extracting extra value from the opportunities that exist from having a wide range of relevant functions co-located in one department has made it worthwhile.

There is now a deeper understanding of the power of the linkages that live within the department and the scope to deliver better outcomes to improve people’s lives, strengthen communities and create business opportunities.

I congratulate and thank staff for their valuable contribution during 2015-16, and I look forward with anticipation to build on these efforts during 2016-17.

Dr Don Russell Chief Executive Department of State Development

THE COPPER STRATEGY AIMS TO TRIPLE COPPER PRODUCTION IN SOUTH AUSTRALIA TO 1 MILLION TONNES

OVER THE NEXT 15 YEARS.

NEXT

15 YEARS

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South Australia is in a crucial time of transition, from an age of traditional manufacturing and industries towards a future based on global connection and mobile, responsive industries and services. The development and exploration of our State’s unique products and talents has not yet been fully realised and this department has a responsibility to accelerate this process in an imaginative and connected way.Dr Don Russell Chief Executive Department of State Development


ABOUT THE DEPARTMENT2The Department of State Development (DSD) was established as a single agency to provide stewardship of South Australia’s economic transformation in a rapidly changing international and national environment.

DSD is responsible for the State’s growing resources and energy portfolio, its transformation to high-value manufacturing and the key areas of skills formation, employment and science.

We are charged with driving economic growth and creating jobs and are the lead agency for six of the 10 South Australian Economic Priorities:

• to unlock the full potential of SA’s resources, energy and renewable assets

• to become a globally recognised leader in health research and ageing

• to become the Knowledge State

• to encourage growth through innovation

• to promote our international connections and engagement

• to ensure our small businesses have access to capital and global markets.

We also are the lead agency for four of the seven priority projects identified by the Economic Development Cabinet Committee in 2015 for their importance in helping transform the South Australian economy. These include the Tonsley redevelopment, commercialising local ideas, international engagement and the Northern Economic Plan.

DSD was created on 1 July 2014 through the merger of the former Department for Manufacturing, Innovation, Trade, Resources and Energy and the former Department of Further Education, Employment, Science and Technology. Some functions from the Department of the Premier and Cabinet also were included: the Office of the Economic Development Board, Invest in SA, Arts South Australia and Aboriginal Affairs and Reconciliation.

DSD’s activities include:

• implementing the automotive transformation strategy for South Australia, supported by funding from the Australian Government’s Growth Fund

• working with other agencies to drive the State’s high-growth and high-value sectors, including minerals, resources and energy, information and communications technology, defence, agriculture and advanced manufacturing

• coordinating the State Government's engagement with small-to-medium businesses

• ensuring local firms have access to growing supply chain opportunities in sectors such as oil and gas, defence and aerospace

• developing trade opportunities and promoting the internationalisation of our economy.

By working with the business, education and arts sectors, the department develops and implements strategies and programs to facilitate international exports, grow our State’s share of the international student market, maximise the benefits of skilled and business migration and build on our heritage and creative culture and infrastructure.

We also lead cross-government policy development on Aboriginal affairs and Aboriginal economic development. This includes skills development, job creation, business development and sustainable employment for Aboriginal people, as well as support for Aboriginal young people and those living in regional and remote South Australia.

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2 ABOUT THE DEPARTMENT

DSD VISION

South Australia – Globally Engaged. DSD DRIVING FORCE

Creating Opportunities.DSD STRATEGIC GOALS• Building on strength

• New and innovative industries

• Skills and jobs for the future

• A place where people want to do business.

STRATEGIC ENABLERS

DSD is working to build a ‘No Wrong Doors’ culture that reflects our commitment to collaboration, to service excellence and to ensuring that industry, business and the community can make best use of the wide range of services we offer.

During 2015-16, a High Performing Agency Strategy was developed and adopted. This is a business improvement plan that sets out critical priorities for further improving our capability, performance and integrity. It provides a framework for taking individual and collective responsibility for improving outcomes. A High Performing Agency Reference Group oversees delivery of the strategy and supports the Executive Board by representing the collective view across the agency.

A revised business planning approach was also implemented during the year to further support our Strategic Directions 2015-18 and the State Government’s Economic Priorities. This has simplified our business planning processes to ensure our goals and objectives are better translated into measurable actions.

We believe that if we are clear about what we want to achieve, DSD can develop successful performance partnerships across divisions and government to provide seamless and exceptional services to South Australia.

STRATEGIC INITIATIVES 2015-16

SECURITY MANAGEMENT FRAMEWORK We reviewed our compliance with the requirements of the Protective Security Policy Framework (PSPF). A key recommendation was to improve the robustness of our overall security posture and compliance with the PSPF and develop an Agency Security Policy and Plan. A new policy and plan were launched and are available to staff on the DSD intranet.

SINGLE RECORDS MANAGEMENT SYSTEMWe began the roll out of a single Electronic Document and Records Management System (EDRMS) across the department. The One EDRMS project began a phased approach to introduce HP Records Manager (HPRM) as the central location for all records.

Expected to be completed by 30 June 2017, the single EDRMS will provide increased security, collaboration tools, tailored workflows and reduced duplication. It will also provide optimised agency-wide compliance with the Information Systems Management Framework (ISMF) and the State Records Act 1997.

OTHER ACHIEVEMENTS• Continued to build DSD’s Stakeholder Information Management Capability, including strengthening our Customer Relationship

Management System.

• Commenced development of a centrally coordinated Organisational Capacity Building Strategy, which aligns our learning and development opportunities with DSD’s strategic direction.

• Continued to implement recommendations from a business support services review of the Strategy and Business Services Division. The review determined how business services can and must operate to drive a ‘high performing agency’.



• DSD business areas actively embedded the Public Sector Values within their teams. Some great case study examples have been captured and made available to all staff.

• Developed a Complaints Management Policy and Procedure in accordance with DPC Circular 39: Complaints Management in South Australia. This included launching an internal complaints reporting system.

WHITE RIBBON ACCREDITED WORKPLACE DSD was awarded White Ribbon Workplace Accreditation in June 2016. This program recognises workplaces that are taking active steps to prevent and respond to violence against women. We are proud to have been assessed as having effectively demonstrated strong leadership, communication, HR policy development and training, to create a safer and more respectful workplace.

A DSD White Ribbon Working Group will now oversee a three-year operational plan to ensure ongoing sustainable behavioural change continues.

DSD has a zero tolerance policy against violence in the workplace and is working towards creating an organisational culture of gender equality and respectful relationships between employees. A staff survey revealed considerable improvement in staff awareness and behaviour change, with 90 per cent of respondents agreeing that DSD had shown a strong commitment towards addressing this issue.

PUBLIC SECTOR VALUES

In a rapidly changing environment, the South Australian Public Sector Values are critical to shaping the culture of our agency and the outcomes we deliver. The Public Sector Values provide a foundation for the way we do business, make decisions and interact with others:

• Service

• Professionalism

• Trust

• Respect

• Collaboration and Engagement

• Honesty and Integrity

• Courage and Tenacity

• Sustainability.

SOUTH AUSTRALIA’S STRATEGIC PLAN

South Australia’s Strategic Plan (SASP) guides individuals, community organisations, governments and businesses to secure the wellbeing of South Australians over the medium to long-term. SASP contains the community’s vision and goals; its 100 measurable targets reflect the State Government’s priorities.

The Department of State Development is the lead agency for 34 SASP targets:

• T3: Cultural vibrancy – arts activities

• T6: Aboriginal wellbeing

• T28: Aboriginal leadership

• T36: Labour productivity

• T37: Total exports

• T38: Business investment

• T41: Minerals exploration

• T42: Minerals production and processing

• T45: Total population

• T47: Jobs

• T48: Ageing workforce participation

• T49: Unemployment

• T50: People with a disability

• T51: Aboriginal unemployment

• T53: Aboriginal employees

• T54: Earning or learning

• T55: Apprentices

• T57: Broadband access

• T58: Online business

• T60: Energy efficiency – dwellings

• T61: Energy efficiency – government buildings

• T65: Green power

• T66: Emissions intensity

• T90: Share of overseas students

• T91: Non-school qualifications

• T92: STEM qualifications

• T93: Tertiary education and training

• T94: Venture capital

• T95: Industry collaboration, research and development commercialisation

• T96: Public research expenditure

• T97: University research income

• T98: Business research expenditure

• T99: Cultural engagement – institutions

• T100: Screen industry.

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BOARDS AND COMMITTEES

In July 2014, the Premier announced a large-scale reform of government boards and committees to abolish those that were no longer necessary and reform existing boards to create efficiencies, eliminate duplication and improve accountability. The reform process is currently underway. The following were DSD-supported boards that were in operation during 2015-16.

Premier Economic Development Board

Minister for Aboriginal Affairs and Reconciliation

Aboriginal Lands Trust

Commercial Development Advisory Committee

South Australian Aboriginal Advisory Council

State Aboriginal Heritage Committee

Minister for Manufacturing and Innovation Industries Development Committee

Minister for Automotive Transformation Automotive Transformation Taskforce Board

Minister for Science and Information EconomyBio Innovation SA Board

South Australian Science Council

Minister for the Arts

Adelaide Festival Centre Trust

Adelaide Festival Corporation Board

Adelaide Film Festival

Art Gallery Board

Australian Children’s Performing Arts Company (Windmill Performing Arts)

Carclew Youth Arts Inc. Board

Carrick Hill Trust

History Trust of South Australia

Jam Factory Contemporary Craft and Design Inc. Board

Libraries Board of South Australia

South Australian Country Arts Trust

South Australian Film Corporation

South Australian Museum Board

State Opera of South Australia Board

State Theatre Company of South Australia Board

Tandanya National Aboriginal Cultural Institute Inc. Board of Management

Minister for Health Industries Health Industries South Australia Advisory Board

Minister for Mineral Resources and Energy

Minerals and Energy Advisory Council

Resources Infrastructure Taskforce Steering Committee

Roxby Downs Advisory Reference Group

Technical Advisory Committee (Electricity and Gas)

Consumer Advisory Committee

Extractive Areas Rehabilitation Fund Project Assessment Panel

Electrical Act 1996 Assessors Panel

Gas Act 1997 Assessors Panel

Minister for Investment and Trade

International Engagement Advisory Board

Investment Attraction Advisory Board

Scope Global Pty Ltd Board

Minister for Higher Education and SkillsConstruction Industry Training Board

Training and Skills Commission


DEPARTMENT OF STATE DEVELOPMENT FUNCTIONAL STRUCTURE

The Department of State Development brings together functions and structures across government that focuses on driving economic growth and creating jobs.


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There is now a deeper understanding of the power of the linkages that live within the department and the scope to deliver better outcomes to improve people’s lives, strengthen communities and create business opportunities.Dr Don Russell Chief Executive Department of State Development


DELIVERING THE ECONOMIC PRIORITIES3

DSD is delivering key strategies towards unlocking the full potential of South Australia’s resources, energy and renewable assets. Strategies focused on supporting exploration and development and leveraging resource sector activity into new intellectual property, jobs and global business opportunities for mining services companies.

Achievements during 2015-16 include:

• Delivering on the high priority recommendations of the Roadmap for Unconventional Gas Projects in South Australia, with at least 116 of the 125 recommendations implemented in part or full.

• Launching the innovative South Australian Copper Strategy and Plan for Accelerating Exploration (PACE) Copper to accelerate exploration, develop innovative infrastructure and build industry and community capacity to more than triple future copper exports by 2030.

• Facilitating collaboration between industry and researchers to commercialise technology and innovation. The Mining and Petroleum Services Centre of Excellence co-funded 20 commercial and research initiatives in partnership with industry and the Commonwealth Government.

• Achieving $245 million in exploration and appraisal investment in the South Australian Cooper – Eromanga basins.

• Assisting 17 South Australian manufacturers and service companies to develop their capabilities and capacity to participate in resource sector supply chains through the PACE Supply Chain Development Program.

• Opening the new South Australia Drill Core Reference Library at Tonsley as a flagship of the resources and geoscience hub. This will focus on facilitating exploration opportunities to unlock the potential of South Australia’s resource wealth.

• Facilitating $82.2 million worth of contracts to South Australian based suppliers through the Industry Capability Network from approved and emerging resources and energy projects.

• Delivering a Low Carbon Investment Plan to further grow investment in renewable energy.

South Australia’s 10 Economic Priorities were developed by the State Government to unlock the full potential of South Australia as a place to do business, create jobs, develop industry and attract investment.

DSD has lead responsibility for six of the 10 priorities. The following sets out our activities and achievements under each of these six during 2015-16.

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PRIORITY

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THE NEW SOUTH AUSTRALIA DRILL CORE REFERENCE LIBRARY AT TONSLEY WILL FOCUS ON FACILITATING EXPLORATION OPPORTUNITIES TO UNLOCK THE POTENTIAL OF SOUTH AUSTRALIA’S RESOURCE WEALTH.

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3 DELIVERING THE ECONOMIC PRIORITIES

Health Industries South Australia (HealthInSA) is working with international companies to attract investment and create knowledge-intensive jobs in South Australia. In addition to developing business proposals, it is working to raise awareness of the value propositions that the State has to offer investors by attending and hosting significant life sciences conferences and expanding marketing activities.


• Attracting Micro-X to manufacture lightweight X-ray machines at Tonsley.

• Attracting Hydrix to Adelaide to offer a range of software and electronic product design services through all stages of engineering, development and certification.

• Brokering a partnership between The University of Adelaide and Trajan Scientific and Medical to help set up a R&D and manufacturing hub based on a new generation of specialty glass products. A separate relationship with Trajan is now being developed.

• Providing assistance to Pfizer for the $20 million expansion of its Thebarton facility.

• Attracting clinical research investments from overseas biotechnology companies.

• Leading delegations to Shandong, the United States of America, Europe and the United Arab Emirates.

• Appointing HealthInSA representatives in key overseas markets.

• Targeting key markets through marketing products that showcase our State’s regulatory advantages and attractive quality of life (translated into local languages), the expansion of a social media presence and the production of visuals, including a flyover of Adelaide BioMed City showcasing the precinct.

• Executing Memorandum of Understandings (MOUs) with overseas companies and organisations. In particular, an agreement signed with Piedmont in February 2016 will create international opportunities for local life sciences companies and promote the State as an investment destination.

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AN AGREEMENT SIGNED WITH PIEDMONT IN FEBRUARY 2016 WILL CREATE INTERNATIONAL OPPORTUNITIES FOR LOCAL

LIFE SCIENCES COMPANIES AND PROMOTE THE STATE AS AN INVESTMENT DESTINATION.



More than 32,000 international students were enrolled in South Australia as of December 2015 and the goal is to increase this to 35,500 in 2017. To help achieve this target, an International Education Action Plan was drafted and consulted on during the year.

DSD continues to assist local, national and international companies to work with researchers to develop commercial intellectual property (IP) and create jobs.


• Expanding support to four Cooperative Research Centres operating in areas of economic priority to enable greater interaction between researchers and companies, including placing researchers in industry environments.

• Partnering with global digital technology companies to benefit local start-ups and entrepreneurs and further build Adelaide as the ‘Smart Digital City’.

• Partnering with the Adelaide City Council and Cisco to open the ‘Adelaide Smart City Studio’ and help foster technology development to improve citizen and visitor interaction with the city and drive innovation by industry, local entrepreneurs and start-ups.

• Working with the private sector to develop new sources of venture capital to support the growth of innovative, early-stage, high-value technology companies.

• Prioritising State Government research to support the State’s economic priorities.

• Implementing the SA Commercialisation Fund, the Premier’s Research and Industry Fund and the new Research Consortia Program to help local businesses lead the nation in bringing new products and services to market.

• Continuing to help increase the number of science, technology, engineering and maths (STEM) students commencing undergraduate and postgraduate studies – from 11,200 in 2013 (baseline) to a projected 13,100 by 2017.

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CONTINUING TO HELP INCREASE THE NUMBER OF SCIENCE, TECHNOLOGY, ENGINEERING AND MATHS (STEM) STUDENTS

COMMENCING UNDERGRADUATE AND POSTGRADUATE STUDIES – FROM 11,200 IN 2013 (BASELINE) TO A PROJECTED 13,100 BY 2017.

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STEM13,100

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Innovation is one of the strongest enablers of economic growth and involves both business and government investing in exploring and developing new ideas. The department is supporting businesses in South Australia to develop new products and services, establish new markets and increase productivity and profitability, ultimately building a more sustainable economy and driving job creation.


• Supporting the development of roadmaps to identify future industry opportunities in key sectors such as photonics and assistive technologies.

• Supporting industry clusters in a range of key sectors, including water, defence, medical devices, the Internet of Things for mining and energy resources, and the creative industries, to increase collaboration and global competitiveness.

• Launching the Adelaide Gig City Program to provide access to gigabit speed broadband connections for start-ups and small-to-medium enterprises located in Adelaide’s innovation precincts.

• Continuing to raise the global profile of the Tonsley precinct with potential national and international investors.

• Continuing to deliver the Manufacturing Works strategy, including the Photonics Catalyst program, the Medical Technologies program and the NanoConnect program, as well as introducing the Big Data Connect program to support increased collaboration with researchers and the adoption of these new technologies by manufacturers.

• Stimulating innovation in small-to-medium enterprises and collaboration between private and public research providers through the Innovation Voucher Program.

• Facilitating contracts for South Australian suppliers in major public and private sector projects in the defence, infrastructure, resources and clean energy sectors, through the Industry Capability Network SA.

• Leading the implementation of the Northern Economic Plan, in partnership with local government, industry and the community. The plan aims to generate jobs, foster growing industries and support businesses to diversify and grow.

The Office of the Industry Advocate (OIA) continued to help the advanced services sector leverage opportunities for innovation by:

• amending the Industry Participation Policy to ensure growth and innovation objectives are incorporated into specific tender requirements; and

• fostering new policy changes by developing an 'Ideas Flow' register where businesses can post their particular ideas or solutions to the wide array of government requirements.

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THE NORTHERN ECONOMIC PLAN AIMS TO GENERATE JOBS, FOSTER GROWING INDUSTRIES AND SUPPORT BUSINESSES

TO DIVERSIFY AND GROW.



DSD promotes South Australia’s international connections and engagement, to generate more jobs from trade, foreign direct investment and immigration and to contribute to productivity growth.


• Delivering updated engagement strategies for India and China to coincide with the implementation of the South East Asia Strategy released in 2014-15. Consultation was also conducted on a new Europe Engagement Strategy.

• Continuing to drive growth in skilled and business migration numbers by achieving 2,439 nominations for general skilled migration visas during the year.

• Leading a comprehensive program of inbound and outbound business missions to grow international exports. About 280 businesses took part in missions to China, India and South East Asia.

• Fostering strong economic ties through the implementation of sister-state relationships. New agreements were signed with Rajasthan and West Java.

• Strengthening the State’s relationship with Shandong. This included organising the largest ever business mission to China in April 2016, with 181 business delegates in total.

• Providing high-level advice on reviews and negotiations of Free Trade Agreements (FTAs) with India, Indonesia and Singapore, as well as on multilateral agreements such as the Trans-Pacific Partnership and World Trade Organisation agreements (WTOs) on government procurement and services.

• Facilitating $49.7 million worth of sales from 52 companies, underpinned by 16 new distribution agreements established through the Tradestart service. More than 100 new companies signed up to the Tradestart network, of which 63 were aspiring exporters.

• Through Tradestart, supporting businesses to apply for the Export Partnership Program, which distributed $1.65 million to 75 businesses during the year.

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STRENGTHENING THE STATE’S RELATIONSHIP WITH SHANDONG. THIS INCLUDED ORGANISING THE LARGEST EVER

BUSINESS MISSION TO CHINA IN APRIL 2016, WITH 181 BUSINESS DELEGATES IN TOTAL.

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To help the State’s small businesses thrive on the global stage and capitalise on opportunities for growth, DSD is delivering key strategies and programs to achieve the priority objectives.


• Supporting 19 entrepreneurs to access funding to translate their good ideas and business plans into new high-value business through the SA Micro Finance Fund.

• Providing seed funding to university-based entrepreneurial businesses to further develop their product concepts and take them to market through the Venture Catalyst program.

• Helping businesses secure bank funding to bring forward their growth plans and accelerate job creation in the State, through the Unlocking Capital for Jobs program.

• Assisting small-to-medium businesses to access new markets and business opportunities through our inbound and outbound trade missions, building long-term economic partnerships with our key trading partners.

• Supporting more than 140 participants across the State to build their capabilities by attending business fundamentals workshops as part of the newly launched Small Business Workshop program.

• Launching a new Small Business Development Fund to support small business expansion in northern Adelaide. Grants of between $10,000 and $100,000 are available for existing businesses and up to $20,000 for start-ups.

• Helping 230 businesses to understand the key elements required to successfully export and connected them to available services and support through the ‘Access to Global Markets’ Forum.

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SUPPORTING 19 ENTREPRENEURS TO ACCESS FUNDING TO TRANSLATE THEIR GOOD IDEAS AND BUSINESS PLANS INTO NEW HIGH-VALUE BUSINESS THROUGH THE SA MICRO FINANCE FUND.


ACHIEVEMENTS BY PROGRAM4

PROGRAM 1 OFFICE OF THE ECONOMIC DEVELOPMENT BOARD

The Office of the Economic Development Board (OEDB) supports the Economic Development Board (EDB), providing a secretariat function as well as oversight and management of its assigned budget, including procurement and contracting management functions.


• Facilitating EDB members’ participation in key South Australian trade missions to Singapore, India, South East Asia and China and a visit by the Premier to the United States of America.

• Supporting the EDB’s Ageing Well Sub-Committee to pursue opportunities for South Australia to be recognised as a domestic and global leader in the Ageing Well sector. This included investigating a range of new initiatives to accelerate and expand the development of new industries and jobs to deliver world-class innovative goods and services to improve health outcomes and independent living.

• Assisting the EDB to investigate possible future industries of international scale that South Australia, through its own inherent endowments and careful strategic planning, could take a world leading position on in the years to come. As an example, the OEDB has been undertaking the ground work necessary to build an industry around macroalgae (seaweed) harvesting.

• Working closely with the Australian Academy of Technological Sciences and Engineering (ATSE) and South Australia’s universities to help ATSE develop a universal measure for gauging the level of engagement between a university and industry. This work has led in part to the development of a policy within the Commonwealth Government’s National Innovation and Science Agenda to introduce a clear and transparent measure of industry engagement when assessing university performance.

• Organising three business engagement sessions for the Nuclear Fuel Cycle Royal Commission and members of the State and national business community, following a request from the Commissioner, Rear Admiral the Honourable Kevin Scarce AC CSC RAN (Rtd). A formal submission based on the summaries of these sessions was then compiled and provided to the Royal Commission.

PROGRAM 2 INDUSTRY AND INNOVATION

The Industry and Innovation Division promotes the rapid transformation of business and industry in South Australia by developing the capacity of firms to introduce the business models and services needed to enter new markets. Through programs such as Manufacturing Works and Our Jobs Plan, the division supports South Australian businesses to increase their capability to compete in local and international markets.

Major activity during 2015-16 included the launch in January 2016 of the Northern Economic Plan (NEP), a blueprint to transform northern Adelaide with a focus on growth industries, community wellbeing and responsive governments. The plan was developed in partnership with local government, industry, and the community in response to the impending closure of GM Holden and the resulting effect on the automotive industry. The division’s NEP team is coordinating the implementation of the strategy, including performance monitoring arrangements.

To encourage community input into the NEP during its development, two Tele Town Hall events were held in October 2015 and June 2016. Overall, more than 24,000 residents took part by phoning in to listen to the conversation or speak with the Premier Hon Jay Weatherill MP or Automotive Transformation Minister Hon Kyam Maher MLC.

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4 ACHIEVEMENTS BY PROGRAM

The division also facilitated a new Memorandum of Understanding (MOU) between the State Government and local councils, with an allocation of $24.65 million to deliver initiatives under the NEP. The development of industry sector-led action plans with agreed, prioritised outcomes aimed at building regional strengths in food and agriculture, defence, tourism, construction and urban renewal, recreation and culture, also commenced.

To support the automotive manufacturing industry, the division assisted in the development and implementation of diversification strategies, with a particular focus on defence-related supply chains. It also launched a new automotive workers’ strategy to further promote early career transition planning for affected workers. At the end of June 2016, 1004 workers and their partners had registered for the Automotive Workers in Transition Program, which provides access to relevant skills and employment programs. This was an increase of 297 registrations from the previous year.

In addition, the Automotive Transformation Taskforce maintained a close relationship with automotive supply chain firms, conducting more than 300 industry visits. The Taskforce leveraged $1.7 million in support grants for industry through the Commonwealth Government’s Automotive Supplier Diversification program, providing a total of $4.5 million for new investment.

Following the decision by Alinta Energy to close its power stations in Port Augusta and its Leigh Creek coal mine, DSD led support for affected businesses in the region by delivering the Regional Job Creation Grants Program. Vouchers for up to $50,000 were provided to help businesses grow their profitability and employment through process improvement, innovation, developing new product and service offerings or entering new markets.

The division continued to build local industry capability and capacity in supply chains through the delivery of the Industry Capability Network SA (ICN SA), with a focus on the resources, defence, clean energy and infrastructure sectors.

In partnership with Renewal SA, the division also led the ongoing task of raising the global profile of the Tonsley precinct with potential national and international investors, targeting the industry sectors of mining, resources, clean technologies and renewable energy, health and medical technologies and sustainable construction. The team at Tonsley hosted a series of international delegations and conducted more than 30 tours with potential investors, including the precinct’s first overseas investment mission to Europe.

The Mining Industry Participation Office (MIPO) helped South Australian businesses build capability and gain access to minerals and energy resources supply chain opportunities through the Plan for Accelerating Exploration (PACE) Supply Chain Development Program. It supported 18 collaborative projects through and the Mining and Petroleum Services Centre of Excellence and 24 participant companies through the PACE program.

PROGRAM 3 ABORIGINAL AFFAIRS AND RECONCILIATION

The Aboriginal Affairs and Reconciliation (AAR) division provides strategic advice and leadership in whole-of-government Aboriginal Affairs policy, jointly leads the State’s participation in the Council of Australian Governments (COAG) Aboriginal Affairs agenda, and provides advice and guidance to government on appropriate consultation and engagement with Aboriginal stakeholders.

Working across the department, during 2015-16 AAR led the development of the State’s first Aboriginal Economic Participation Strategy. This focuses on creating opportunities for, and building the capacity of, the Aboriginal business sector and increasing Aboriginal employment in the public sector. Linking to the government’s broader economic agenda, the strategy recognises economic participation as a key driver of prosperity and wellbeing.

To complement this work, AAR partnered with Supply Nation to develop South Australia’s online register of Aboriginal businesses – Aboriginal Business Connect – and amended the Aboriginal Business Procurement Policy to make it easier for agencies to engage directly with businesses listed on Aboriginal Business Connect.

The division leads a range of projects aimed at strengthening the way government and Aboriginal people do business together. The Aboriginal Regional Authority Policy was developed to support Aboriginal leaders to work in partnership with government on key issues, and in 2015-16 the first expression of interest process was undertaken for Aboriginal organisations seeking to be recognised as Aboriginal Regional Authorities under the policy.

AAR has engaged Flinders University to deliver Aboriginal Nation (Re)Building workshops to provide Aboriginal leaders and senior public servants with the tools and ‘common language’ to work together, and Jawun, which creates opportunities for private and public sector employees to be seconded to work with Aboriginal communities and organisations.


AAR is responsible for driving the State Government’s Reconciliation agenda and during the year finalised the $11 million Next Steps – Stolen Generations Reparation Scheme, which provides for both individual and whole-of-community reparations. The individual reparations component opened for applications on 31 March 2016 and AAR is working with the Aboriginal community to develop the package of whole-of-community reparations.

The division supports the Minister for Aboriginal Affairs and Reconciliation in the administration of legislation within the Aboriginal Affairs and Reconciliation portfolio. In 2015-16, AAR supported the passage through Parliament of the Aboriginal Heritage (Miscellaneous) Amendment Act 2016, which will provide greater certainty for traditional owners and land use proponents. AAR also undertook consultation on the Anangu Pitjantjatjara Yankunytjatjara Land Rights Act 1981 and prepared amendments for Parliament.

AAR provides administrative support to the State’s three statutory landholding authorities in their oversight and management of more than 20 per cent of South Australia’s land mass. In 2015-16 it supported the establishment of the Commercial Development Advisory Committee, which advises the Aboriginal Lands Trust and the Minister on commercial activities on Trust land.

PROGRAM 4 SCIENCE, TECHNOLOGY AND INFORMATION ECONOMY

The Office of Science, Technology and Research (OSTAR) supports State productivity by providing the government with a strategic and coordinated focus in science, technology and information economy policy development and program delivery.

During 2015-16, the department invested in six new projects over two years through the Premier’s Research and Industry Fund, including initiatives to support the Investing in Science Action Plan. These projects supported innovation in industry sectors such as advanced manufacturing and medical technologies and healthcare. It also supported existing projects operating in the premium food and wine sectors.

OSTAR reviewed the Premier’s Research and Industry Fund and recommended the implementation of a Research Consortium Program to more effectively build capacity of the State’s existing centres of research excellence and support research commercialisation and innovative research addressing local and global challenges. Commencing in January 2017 and each year thereafter, this program will fund one large research project ($1 million per year for four years). Projects will focus on high impact collaborations between industry and research organisations, which address economic priority challenges and build State innovation capability.

The department continued to partner with global digital technology companies, leveraging their network infrastructure, product testing and production expertise, to benefit local start-ups and entrepreneurs and further build Adelaide as the ‘Smart Digital City’.

Smart City Parking, Smart Public Lighting and environmental monitoring pilots ran from November 2015 to June 2016 in Adelaide’s CBD (Pirie Street and Hindmarsh Square) to inform decisions regarding future-scaled deployments. Sensor driven LEDs replaced existing lighting to test power saving and smart control capabilities, and cameras monitored on-street parking to drive smart availability, payment and infringement services. The use of data collected from smart sensors set up across the CBD allows Adelaide City Council to prioritise and improve the efficiency of its services, thus making the city a more vibrant, cleaner and safer place to be.

In collaboration with the Adelaide City Council and Cisco, the ‘Adelaide Smart City Studio’ was opened, which will help foster technology development to improve citizen and visitor interaction with the city and drive innovation by industry, local entrepreneurs and start-ups.

Discussions with SABRENet and telecommunications companies set the stage to enable ultra-high speed broadband services to key innovation precincts across metropolitan Adelaide. State Government funding announced in the 2016-17 Budget will fund the Adelaide Gig City program to support existing innovators and attract interstate and local entrepreneurs and business with ‘bandwidth heavy’ ideas, products and services to Adelaide.

A comprehensive review of the South Australian innovation ecosystem was conducted and recommendations were made to guide future government investment to optimise the growth of innovation in South Australia. A key recommendation was the establishment of a major South Australia Commercialisation Fund to help develop new sources of venture and other risk capital to support the growth of our innovative, early-stage, high value technology companies. This initiative was funded as part of the 2016-17 Budget.

A Defence and Science, Technology, Engineering and Maths (STEM) Scholarship and Internship Program was delivered to enable tertiary students to focus their STEM studies on real-life defence industry projects and strengthen their work-ready skills and contemporary knowledge of defence industry needs.

A number of STEM policy reform priorities were identified in conjunction with the Department for Education and Child Development to strengthen STEM education and career pathways. OSTAR has been working with universities and schools to incorporate STEM industry engagement within teacher education programs.


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PROGRAM 5 ARTS SOUTH AUSTRALIA

The role of Arts South Australia is to ensure that the State capitalises on its economic opportunities, by providing funding and investment in creativity to support South Australian cultural institutions and practising professional artists, makers and presenters.

Managing the State Government’s investment in arts infrastructure was a major focus during 2015-16. Design work for the redevelopment of the Adelaide Festival Centre Precinct progressed and physical work will begin in the latter part of 2016. Procurement of new technical equipment for the theatres within the Adelaide Festival Centre also commenced. Remediation work of the Dunstan Playhouse roof shell and water proofing of the Space Plaza was completed and work commenced on infrastructure upgrades across the regional theatres in Mount Gambier, Renmark, Whyalla and Port Pirie. Design of the new set construction workshop at Adelaide Studios was finalised, with construction due to be complete by the end of 2016. Heritage restoration works at the State’s cultural institutions continued, with the east wing of the South Australian Museum completed.

The State’s major cultural institutions delivered a full program of exhibitions and events, achieving record attendances with landmark offerings. The Art Gallery of South Australia staged TARNANTHI – Contemporary Aboriginal and Torres Strait Islander Art Festival in October 2015, presented across 22 partner sites. TARNANTHI exhibitions ran until January 2016, attracting 310,000 visitors.

Online offerings play an important role in increasing the reach of the cultural institutions. The relaunched State Library website and History SA’s Adelaidia app continue to show solid growth in active users.

The State’s major festivals attracted record attendances and exceeded box office targets, delivering significant economic returns. The events provided a platform for our artists to showcase their work, and delivered employment outcomes for direct and indirect activities.

Adelaide was designated a UNESCO City of Music in December 2015 through a joint application by Arts South Australia, the Adelaide Festival Centre Trust and the Adelaide City Council. This recognises the State’s support for and engagement with music in all its diversity and genres, including events and organisations such as WOMADelaide, the Adelaide Symphony Orchestra, the Australian String Quartet and our many small-to-medium organisations and independent musicians. The State Government’s support through the Music Development Office continues to see results achieved within Australia and internationally for our musicians and the industry more broadly. South Australia is highly regarded across the country for the outcomes it has achieved in contemporary music.

Arts South Australia participated in a trade delegation to Shandong in March 2016 showcasing a taste of South Australian talent while meeting objectives under the Friendly Cooperation Action Plan, including the ongoing people to people exchanges and internships to support professional development and ongoing learning.

PROGRAM 6 HEALTH INDUSTRIES

Health Industries South Australia’s (HealthInSA) prime focus is to increase investment and employment in South Australia’s health and biomedical sector. Its work is guided by the government’s vision for the State to become a globally recognised leader in health research, ageing and medical services and products. It also directly contributes to DSD’s strategic goals of new and innovative industries, skills and jobs for the future and a place where people want to do business.

Throughout 2015-16, HealthInSA attracted investment from life sciences and clinical research companies to establish or expand operations in the State. This included:

• Attracting Micro-X to manufacture lightweight X-ray machines at Tonsley.

• Attracting Hydrix to establish in Adelaide to offer a range of software and electronic product design services through all stages of engineering, development and certification.

• Providing assistance to Pfizer for the $20 million expansion of their Thebarton facility.

• Brokering a partnership between The University of Adelaide and Trajan Scientific and Medical to help set up a R&D and manufacturing hub based on a new generation of specialty glass products. A separate relationship with Trajan is now being developed.

• Attracting clinical research investments from overseas biotechnology companies.

Building on this momentum and attracting greater investment in the focus areas of clinical trials, medical devices, medical technologies and pharmaceuticals will generate a critical mass and ensure HealthInSA is viewed as a credible partner for local and overseas companies in the health and life sciences.



In addition to developing business proposals, HealthInSA has worked to raise awareness of the value propositions that our State has to offer investors by delivering seminars, meeting investors by attending and hosting significant life sciences conferences, leading overseas delegations to Shandong, the United States of America, Europe and the United Arab Emirates, appointing HealthInSA representatives in key overseas markets and expanding marketing activities.

HealthInSA also engaged local stakeholders, including other government agencies, financial organisations and the institutions that make up Adelaide BioMed City, to support companies, leverage networks to attract investment and increase employment in the life sciences sector.

PROGRAM 7 MINERAL RESOURCES AND ENERGY

DSD’s support for the Mineral Resources and Energy sector focuses on unlocking the full potential of South Australia’s assets and maintaining the State’s reputation as a leading resource investment destination. Activities are co-ordinated across four divisions – Mineral Resources, Energy Resources, Energy Markets and Programs, and the Olympic Dam Taskforce. RenewablesSA, a former division under the program, transferred to the Low Carbon Economy Unit within the Department of the Premier and Cabinet in March 2016.

The Mineral Resources Division is responsible for driving mineral exploration, development and production to maximise the community’s net benefit from the State’s ownership of the rights to mineral resources.

The primary activities and achievements for 2015-16 include:

• Trialling new technologies to produce geoscience drilling data and analysis in near-real-time to enable investment decisions to be made in the field. The project was a collaboration between DSD’s world-leading Plan for Accelerating Exploration (PACE) initiative, industry stakeholders and the Deep Exploration Technologies Collaborative Research Centre.

• Completing the State’s largest and most detailed geophysical survey covering the under explored south west Coompana region, which provided new insights into the mineral exploration potential as a precursor to the release of new exploration areas.

• Opening the new South Australia Drill Core Reference Library in the Tonsley innovation district in February 2016. This award winning facility, built with latest technologies, will play a vital role in facilitating exploration opportunities.

• Undertaking extensive consultation on the proposed South Australian Multiple Land Use Framework, which will provide greater certainty for farmers, landowners, industry, agencies, communities and regulators and increase transparency and consistency in decision-making.

The Energy Resources Division is responsible for driving petroleum, gas, greenhouse gas storage and geothermal exploration, development and production, by attracting investment to maximise the community’s net benefit from the ownership of the rights to the State’s resources.

In December 2015, the Fraser Institute Global Petroleum Survey rated South Australia as being the best jurisdiction for upstream petroleum projects in the Oceania region and having the best fiscal regime in the world for upstream petroleum projects.

The State’s petroleum investment opportunities were marketed at key industry events, including the North American Petroleum Expo, the American Chamber of Commerce Energy Conference, the Australian Petroleum Production and Exploration Association Conference, and the American Association of Petroleum Geologists International Conference.

Other highlights during 2015-16 included:

• Improving environmental, social and economic outcomes through nation-leading legislation, regulation, policies and programs.

• Recommending new inclusions to the State’s Roadmap for Unconventional Gas Projects, including the expansion of the Industry Roundtable that informs potential new resource projects focused on discoveries in oil and gas.

The Olympic Dam Taskforce delivers innovative and transformative solutions to complex resource and investment projects for the State.

Key activities during the year included:

• Project managing Nyrstar’s Port Pirie Smelter transformation and the Targeted Lead Abatement Program for Port Pirie.

• Facilitating the Dry Creek Salt Fields closure project.

• Supporting the Steel Taskforce’s focus on improving operational sustainability and retaining jobs in Whyalla.

• Developing a state-wide magnetite export strategy.

• Working with BHP Billiton as it re-scopes the expansion of Olympic Dam.


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• Completing the financing arrangements for the $563 million Nyrstar Port Pirie Transformation project. This resulted in $291.2 million of State contingent support for the benefit of external financiers.

• Releasing South Australia’s Copper Strategy following extensive industry and community engagement. The plan aims to triple the State’s copper production over the next 15 years.

• Releasing a business case for solutions to bulk mineral export infrastructure in Spencer Gulf that identified three priority port locations in South Australia.

The Energy Markets and Programs Division provides policy advice and co-ordination of energy market reforms, including national reforms, sustainability, energy efficiency and renewable energy policy. It also assists households and small businesses through a range of policies, programs and services to improve energy efficiency and affordability and manages energy programs for the delivery of services.

Achievements for 2015-16 include:

• Awarding ZEN Energy a $1 million contract to install battery storage systems at Adelaide High School, the State Library of South Australia and the Art Gallery of South Australia. This will contribute to the development of ZEN’s manufacturing centre at Tonsley. The project will include a strong communications component to showcase the effectiveness of battery storage in managing electricity costs for commercial customers.

• Securing long-term contracts with Cowell Electric Supply Pty Ltd for the generation, maintenance and delivery of electricity to communities under the Remote Areas Energy Supplies (RAES) scheme, commencing 1 April 2016. The project also aims to increase Aboriginal employment and implement preventative maintenance measures to improve security of supply.

• Releasing a comprehensive new reference guide to help community workers provide better support to customers struggling with utility costs – in particular low income, vulnerable and disadvantaged households.

• Expanding the Retailer Energy Efficiency Scheme (REES) Priority Group to include vulnerable energy consumers who receive a referral from a registered financial counsellor, and working with the South Australian Financial Councillors Association to establish a referral process for households at risk of energy related financial stress to receive REES activities and audits.

• Completing a large scale trial to improve compliance with the energy efficiency requirements of the National Construction Code through the COAG Energy Council’s Buildings Committee.

• Commissioning research on best practice for international street lighting efficiency through the COAG Energy Council’s Equipment Energy Efficiency Committee to assist in its review of the AS/NZS 1158 road lighting standards.

• Launching a Government Buildings Energy Efficiency Investment Program requiring all government departments to investigate cost-effective energy efficiency upgrade opportunities in government-owned buildings.

During the year, an Upper Spencer Gulf and Outback Taskforce was established, led by DSD, in response to Alinta Energy’s decision to close its operations in Port Augusta and Leigh Creek. It assisted government to respond to the expected impacts on industry and provided support to the communities in the region.

The division also identified opportunities for real decreases in electricity prices in response to the Australian Energy Regulator’s Preliminary Decision and SA Power Networks’ Revised Regulatory Proposal, and provided advice to the Minister as part of its continuing engagement with the SA Power Networks’ revenue determination process.

The Office of the Technical Regulator (OTR) is responsible for the enforcement, compliance and promotion of technical and safety regulation and the monitoring and management of energy-related emergency events.

Throughout 2015-16, OTR closely monitored the gas, electricity and water industry across the supply chain and continued to take a constructive and cooperative approach to achieve the best possible safety outcome for the industry and community at lowest cost. Where necessary, appropriate enforcement and compliance action was taken to ensure the safety of gas, electricity and water installations, infrastructure and appliances, and any issues impacting on the safety of the gas, electricity or water supply were successfully dealt with on a case by case basis.

OTR continued to maintain South Australia’s safety record for incidents relating to gas, electricity and water supply. It also supported a number of targets of South Australia’s Strategic Plan, including bushfire preparedness, greater safety at work, and creating a competitive business climate through reduction of red tape and online business.

Prior to its transfer to the Low Carbon Economy Unit within the Department of the Premier and Cabinet, RenewablesSA’s key achievements during the year included delivering a Low Carbon Investment Plan to support the achievement of a $10 billion investment target in low carbon generation by 2025 and implementing Stage 1 of the Bioenergy Roadmap to map the State for bioenergy potential.



PROGRAM 8 WATER INDUSTRY TECHNICAL AND SAFETY REGULATIONS

DSD, through the Office of the Technical Regulator (OTR), regulates the water industry for compliance with the technical and safety provisions of the Water Industry Act 2012. In December 2014, it commenced the regulation of water and sewerage infrastructure through engagement and consultation with the water industry and other relevant government agencies.

The primary activities and achievements for 2015-16 included:

• Continuing a regulatory presence in regional areas through programed audits of on-site plumbing and equipment and consulting with industry and stakeholders, including running roadshows to provide information on changes to the Plumbing Code of Australia and the AS/NZS 3500 plumbing and drainage standard suite.

• Releasing a guidance document and holding information sessions to help water industry entities prepare a safety, reliability, maintenance, and technical management plan (SRMTMP) when formally requested. The department continues to seek streamlined regulatory processes for the water industry that reflect our commitment to provide effective regulatory frameworks by developing programs that improve the performance of businesses and key sectors.

• Advancing the electronic Certificate of Compliance project in consultation with the plumbing, gas and electrical industries. The project includes the development of a Drainage Plans Web Map, which will allow plumbers and property owners to locate existing sanitary drainage pipes within properties. Implementation is expected to be complete in the third quarter of 2016. Contractors will be provided with assistance to transition to the new system, with paper certificates expected to be phased out by 31 December 2017.

PROGRAM 9 GROWING SMALL BUSINESS

The Manufacturing and Small Business Unit within the Industry and Innovation division provides online self-help tools, resources and information, advice and support for business licensing, along with targeted business development training and workshops.


• Launching the Small Business Workshop Program, with 75 workshops on business fundamentals to be delivered across metropolitan and regional South Australia. The first 16 sessions attracted 144 participants.

• Partnering with Business SA, Regional Development Australia, Business Enterprise Centres, the Office of the Small Business Commissioner, industry associations and local councils to support the delivery of a range of business capability development programs and events.

• Supporting 19 companies to access seed or early stage capital, following the launch in March 2015 of the South Australian Micro Finance Fund, which encourages and supports innovative start-up or early stage firms to translate new ideas into business ventures.

• Providing more than 40 small business owners and managers with advanced business skills development training and access to business mentors to support their growth through the Coaching and Mentoring and South Australian Young Entrepreneurs schemes, delivered through Business SA.

• Launching the $10.5 million Small Business Development Fund to support start-ups and small businesses in northern Adelaide to grow and create jobs.

To ensure steelmakers and fabricators can compete fairly for local contracts against low quality imports, the Office of the Industry Advocate (OIA) led the Support our Steel initiative in February 2016 and provided support to a Steel Taskforce. The project was in response to Arrium’s voluntary administration and its potential impact on the steel industry in Whyalla.

Further support was provided through the introduction of a new State Government steel policy that mandated all future State Government construction builds use steel only from Australian-standard certified fabricators and mills. The OIA assisted more than 10 South Australian based steel fabricators via grants to progress through to Category 1 of the National Structural Steelwork Compliance Scheme.

In 2015-16, OIA also held a series of Meet the Buyer events, with more than 1200 people attending. A further 60 Aboriginal business representatives attended its inaugural Aboriginal Business event and 140 business owners and representatives attended its Supplying to Government workshops.

One of the objectives of the OIA is to support the development of the advanced services sector and leverage opportunities for innovation through State Government expenditure. Currently it is amending the Industry Participation Policy to ensure growth and innovation


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objectives are incorporated into specific tender requirements. To complement these policy changes, an 'Ideas Flow' register will be developed where businesses can post their particular ideas or solutions to the wide array of requirements by government.

PROGRAM 10 INTERNATIONAL ENGAGEMENT, TRADE, MIGRATION AND INTERNATIONAL EDUCATION

The International Engagement, Trade, Migration and International Education division supports sustainable economic growth by assisting South Australia’s industries to remain competitive both domestically and internationally.


• Launching the annual Investment and Trade Statement in February 2016, which aims to enhance South Australia’s appeal to investors and provides an overview of our achievements over the past year.

• About 280 businesses taking part in outbound missions to China, India and South East Asia.

• Organising the State’s largest ever business mission to China in April 2016, to coincide with the 30th anniversary of South Australia’s Sister State Agreement with Shandong. A delegation from Shandong is scheduled to visit Adelaide in September 2016.

As a result of the 2016 mission to China:

• More than 370 new business connections were made and 13 export deals valued at more than $5 million were completed.

• A further 130 export leads have the potential to create $50 million in new export opportunities.

• A website that features South Australian and Shandong businesses ready for investment was launched - SASD Connect.

• An agreement was signed with China Railway Group to work together on investment opportunities in South Australia, with a focus on mining.

Business missions to South East Asia were successful in strengthening the State’s connection with Malaysia, Thailand, Singapore, Vietnam, Indonesia and the Philippines, with more than 200 delegates involved. The department also supported a mission to India in August 2015, with 83 delegates. These missions were instrumental in finalising new sister-state agreements with Rajasthan and West Java, which will help to foster stronger economic ties.

A new Business Education Program was developed and delivered to better equip South Australian businesses for more effective commercial engagement with target markets. Fifteen sessions were held for more than 900 businesses, focusing on China, India, Indonesia, Vietnam, Philippines, Malaysia and Thailand.

A new Destination Adelaide plan was launched to increase the presence and recognition of BrandSA and StudyAdelaide in international markets, ultimately resulting in growth in international students studying in South Australia.

Through the Tradestart service, DSD assisted more than 100 companies and achieved more than $49.7 million worth of export sales and 16 new distribution agreements. This was an increase of 169 per cent compared to 2014-15.

The revamped Export Partnership Program continued, with $1.65 million worth of grants allocated to 75 businesses to help them engage with key trading partners.

The department also contributed directly to meeting the skills needs of the State’s employers by facilitating the nomination of skilled migrants and certification of employer-sponsored applications. During 2015-16, 2439 nominations were received for general skilled migration visas. Immigration SA introduced new State nomination pathways targeting high performing graduates from our universities and those with high points on the Australian Government’s migration points test.

PROGRAM 11 INVESTMENT ATTRACTION SOUTH AUSTRALIA

A highlight of the 2015-16 financial year was the establishment of Investment Attraction South Australia (IASA) as a stand-alone agency with a priority to attract foreign direct investment. Initially created on 1 October 2015 as a division within DSD, the agency became a separate entity on 1 April 2016.

In its first nine months, IASA assisted 11 companies with case management services and Economic Investment Fund grants. This will generate more than $950 million worth of investment projects for the State, which will create more than 3,900 direct and associated jobs.



PROGRAM 12 EMPLOYMENT AND SKILLS FORMATION

DSD has responsibility for policy, funding and operation of the State’s vocational education and training (VET) system; employment programs and services as well as regulating and administering the apprenticeship and traineeship system and providing policy advice and support for the State’s higher education institutions. This includes leading the State Government’s WorkReady and Jobs and Skills policies and the National Partnership Agreement on Skills Reform.

Commencing on 1 July 2015, the WorkReady policy aligns the department’s training, employment and skills initiatives with strategic industry needs and economic priorities. Individuals accessing publicly subsidised training have the best chance to successfully complete their qualification of choice, through the new Upfront Assessment of Need pre-enrolment process, which was trialled in 2015-16 and from 1 July 2016 will be implemented by all WorkReady Training Providers.

In early 2016 the Training and Skills Commission released its Report to Government on South Australia’s Industry Priority Qualifications (IPQ) across 18 industry sectors following unprecedented industry engagement. The IPQ is used to inform the department’s Subsidised Training List, which shows the range of courses that may be subsidised through WorkReady.

During 2015, government-subsidised VET was provided to 86,300 people in South Australia. WorkReady Jobs First projects supported 7,800 people, including young, Aboriginal, mature aged and people with disability to participate in more than 100 training and employment projects that were developed with employers across metropolitan and regional South Australia.

To maintain the high quality standards of our publicly-funded training system, 137 reviews of skills and employment services providers were completed during 2015-16. Additionally, graduate surveys or independent validation of assessment were conducted for 36 publicly funded courses. The department’s compliance activities are supported through its Memorandum of Understanding (MOU) with the Australian Skills Quality Authority.

More than 1,800 workers were offered assistance to gain or maintain work through the Retrenched Worker Program, which provides services to people affected by the closure of manufacturing non-automotive companies.

The Building Family Opportunities program, which addresses long-term unemployment, intergenerational family joblessness and economic disadvantage by providing intensive whole-of-life services, assisted 198 families (756 participants) and achieved 155 employment outcomes and 130 training outcomes.

A total of 21 vocational practitioners were supported through capability building activities relating to addressing the foundation skills needs of their students. The department worked in partnership with the Northern Adelaide State Secondary Schools’ Alliance to support 18 teachers and vocational practitioners improve their assessment practices for secondary school students.

The Knowledge Exchange Program continued to be implemented, including commencing a pilot Export Internship Program and the development of a new website in conjunction with StudyAdelaide to allow businesses to access internship opportunities. Additionally, work commenced on a base-line review of government activities in knowledge exchange.

A placement program was developed and implemented in conjunction with Flinders University’s existing Washington Internship Program to enable government departments to place highly-skilled public policy students for a period of 15 days. Two new scholarships were also developed – the Bob Such Memorial Scholarship (Flinders University) and the Graeme Hugo Memorial Scholarship (The University of Adelaide).

Under the Stronger Regional Policy, a Regional Summit was held in Mount Gambier in May 2016, with 120 representatives attending from the local area.



ABBREVIATIONS5AAR Aboriginal Affairs and Reconciliation

APY Anangu Pitjantjatjara Yankunytjatjara

ATSE Academy of Technical Science and Engineering

COAG Council of Australian Governments

CRM Customer Relationship Management System

DAIPs Disability Access and Inclusion Plans

DMITRE Department for Manufacturing, Innovation, Trade, Resources and Energy

EDB Economic Development Board

EDRMS Electronic Document and Records Management System

FTAs Free Trade Agreements

GEMS Greenhouse and Energy Minimum Standards

HealthInSA Health Industries South Australia

HPRM HP Records Manager

ICN SA Industry Capability Network SA

IPQ Industry Priority Qualifications

IASA Investment Attraction South Australia

IP Intellectual Property

ISMF Information Systems Management Framework

MIPO Mining Industry Participation Office

MOU Memorandum of Understanding

NAIDOC National Aborigines and Islanders Day Observance Committee

NEP Northern Economic Plan

OEDB Office of the Economic Development Board

OIA Office of the Industry Advocate

OSTAR Office of Science, Technology and Research

OTR Office of the Technical Regulator

PACE Plan for Accelerating Exploration

PIRSA Department of Primary Industries and Regions South Australia

PSPF Protective Security Policy Framework

RAES Remote Areas Energy Supply

RIAS Regional Impact Assessment Statement

REES Retailer Energy Efficiency Scheme

SASP South Australia’s Strategic Plan

SIEC Sustainable Industries Education Centre (TAFE SA)

STEM Science, Technology, Engineering and Maths

TVSPs Targeted Voluntary Separation Packages

VET Vocational Education and Training

WTOs World Trade Organisation agreements

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DSD’s mandate - to build activity in resources and energy, industry and innovation, investment, trade and immigration, health industries, arts and Aboriginal affairs and reconciliation - means that South Australia needs the tools and resources to enter a new era that delivers employment and improved quality of life for all.Dr Don Russell Chief Executive Department of State Development


APPENDICES66.1 MINISTERIAL ACCOUNTABILITY

The Department of State Development is accountable to the Premier and six Ministers in its role to facilitate the transformation of the South Australian economy by helping industry, business and communities identify and capitalise on opportunities for job creation and economic growth.

It promotes the potential for specific sectors – including minerals and energy resources, manufacturing, Aboriginal affairs, health and biotechnology and arts and culture – to boost South Australia’s credentials and appeal as a place to live, work, study and do business.

The department is accountable to:

HON JAY WEATHERILL MP Premier

HON KYAM MAHER MLC (Lead Minister for the Department of State Development) Minister for Employment Minister for Aboriginal Affairs and Reconciliation Minister for Manufacturing and Innovation Minister for Automotive Transformation Minister for Science and Information Economy

HON JACK SNELLING MP Minister for the Arts Minister for Health Industries

HON TOM KOUTSANTONIS MP Minister for State Development Minister for Mineral Resources and Energy

HON IAN HUNTER MLC Minister for Water and the River Murray

HON MARTIN HAMILTON-SMITH MP Minister for Investment and Trade Minister for Small Business

HON DR SUSAN CLOSE MP Minister for Higher Education and Skills

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6 APPENDICES

6.2 LEGISLATION ADMINISTERED BY THE DEPARTMENT

Minister Acts

Minister for Aboriginal Affairs and Reconciliation

Aboriginal Heritage Act 1988

Aboriginal Heritage Act 1979

Aboriginal Lands Parliamentary Standing Committee Act 2003

Aboriginal Lands Trust Act 2013

Anangu Pitjantjatjara Yankunytjatjara Land Rights Act 1981

Maralinga Tjarutja Land Rights Act 1984

Minister for Manufacturing and InnovationIndustries Development Act 1941

Port Pirie Smelting Facility (Lead-In-Air-Concentrations) Act 2013

Minister for the Arts

Adelaide Festival Centre Trust Act 1971

Adelaide Festival Corporation Act 1998

Adelaide Festival Theatre Act 1964

Art Gallery Act 1939

Carrick Hill Trust Act 1985

History Trust of South Australia Act 1981

Libraries Act 1982

South Australian Country Arts Trust Act 1992

South Australian Film Corporation Act 1972

South Australian Museum Act 1976

State Opera of South Australia Act 1976

State Theatre Company of South Australia Act 1972

Minister for State Development Economic Development Act 1993


Australian Energy Market Commission Establishment Act 2004

Broken Hill Proprietary Company’s Indenture Act 1937

Cooper Basin (Ratification) Act 1975

Electricity Act 1996

The Electricity Trust of South Australia (Torrens Island Power Station) Act 1962

Energy Products (Safety and Efficiency) Act 2000

Gas Act 1997

Table 1: Legislation administered by the Department of State Development


Minister Acts


Mines and Works Inspection Act 1920

Mining Act 1971

National Electricity (South Australia) Act 1996

National Energy Retail Law (South Australia) Act 2011

National Gas (South Australia) Act 2008

Natural Gas Authority Act 1967

Offshore Minerals Act 2000

Opal Mining Act 1995

Petroleum and Geothermal Energy Act 2000

Petroleum (Submerged Lands) Act 1982

Roxby Downs (Indenture Ratification) Act 1982

Stony Point (Liquids Project) Ratification Act 1981

Whyalla Steel Works Act 1958

Minister for Water and the River Murray Water Industry Act 2012

Minister for Small Business

Building and Construction Industry Security of Payment Act 2009

Retail and Commercial Leases Act 1995

Small Business Commissioner Act 2011

Minister for Higher Education and Skills

Construction Industry Training Fund Act 1993

Flinders University of South Australia Act 1966

TAFE SA Act 2012

Technical and Further Education Act 1975

Torrens University Australia Act 2013

Training and Skills Development Act 2008

University of Adelaide Act 1971

University of South Australia Act 1990

Vocational Education and Training (Commonwealth Powers) Act 2012

6 APPENDICES

Table 1: Legislation administered by the Department of State Development continued

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6 APPENDICES

6.3 MANAGEMENT OF HUMAN RESOURCES

6.3.1 WORKFORCE DIVERSITY

AGE AND GENDER PROFILE

DISABILITY

ABORIGINAL EMPLOYEES

Table 2: Number of employees by age bracket and gender

Table 4: Total number of employees with disabilities (according to Commonwealth Disability and Discrimination Act 1992 definition)

Table 3: Number of Aboriginal and/or Torres Strait Islander employees as at 30 June 2016

Table 5: Types of disability (where specified)

Age Bracket Male Female Total % of Total 2014 Workforce benchmark (%)

15-19 0 0 0 0 5.5

20-24 7 9 16 1.5 9.7

25-29 36 52 88 8.4 11.2

30-34 49 74 123 11.8 10.7

35-39 88 86 174 16.6 9.6

40-44 64 80 144 13.8 11.4

45-49 56 71 127 12.1 11.1

50-54 63 62 125 12.0 11.4

55-59 56 69 125 12.0 9.1

60-64 54 34 88 8.4 6.7

65+ 22 14 36 3.4 3.6

Total 495 551 1046 100 100

Male Female Other Total % of agency

8 10 0 18 1.7

Total % of agency SASP Target (%)

31 3 2

Disability Male Female Total % of agency

Physical 3 5 8 0.8

Intellectual 2 1 3 0.3

Sensory 2 1 3 0.3

Psychological/Psychiatric 0 0 0 0.0

Disability requiring workplace adaptation 8 10 18 1.7

The department has three per cent representation of Aboriginal employees, exceeding South Australia’s Strategic Plan (SASP) Target of two per cent.


6.3.2 EXECUTIVES

6.3.3 LEAVE MANAGEMENT

6.3.4 PERFORMANCE DEVELOPMENT

The department implemented a new performance management and development framework in June 2015. The framework aims to facilitate performance partnerships between managers and employees to agree on priorities, understand values and behaviour expectations and identify development needs. The approach includes regular performance conversations between managers and employees, with at least one formal plan and review conversation annually. The policy is built on a number of principles, that include strategic alignment, coaching for success, collaboration and teamwork, and leadership based on the public sector values.

Table 6: Executives by gender, classification and status

Table 7: Average days leave per full time equivalent employee

Table 8: Documented review of individual performance management

Ongoing Term Tenured

Term Untenured

Other (Casual)

Total

Classification M F X M F X M F X M F X M % F % X %

EXEC0A - - - - - - - 1 - - - - - - 1 100 - -

EXEC0F - - - - - - 1 - - - - - 1 100 - - - -

SAES-1 - - - - - - 34 18 - - - - 34 65 18 35 - -

SAES-2 - - - - - - 11 3 - - - - 11 79 3 21 - -

Total - - - - - - 46 22 - - - - 46 68 22 32 - -

Leave Type 2014-15 2015-16

Sick Leave 8.1 8.4

Family Carer’s Leave 0.8 1.0

Special Leave with Pay 3.7 1.2

Employees with… % Total workforce

A review within the past 12 months 28

A review within the past 6 months 2.2

A review older than 6 months 41.6

No review 56.2

6.3.5 LEADERSHIP MANAGEMENT AND DEVELOPMENT

Table 9: Leadership and management training expenditure

Training and development Total cost ($'000) % Total salary expenditure

Total training and development expenditure 1,226 1.1

Total leadership and management development expenditure 167 1.2

6 APPENDICES

The Premier’s Direction on Performance Management (which requires a review in the past six months) only came into effect as of 1 July 2016.

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6.3.6 EMPLOYMENT OPPORTUNITY PROGRAMS

GRADUATE PROGRAM

The department’s Graduate Program is underpinned by the Graduate Employment Strategy 2010-2015, both designed to address and refresh the department’s ageing workforce. This annual program provided skilled graduates with a career pathway into the department and the South Australian public sector.

Graduates participate in a structured program that includes rotational placements across the department’s business units and completion of a tailored development program. It has been designed to prepare graduates to secure further employment within the public sector at the end of their 24-month graduate employment experience.

6 APPENDICES

Table 11: Employment opportunity programs

Male Female

Apprentices, trainees and cadets 1 0

Aboriginal recruitment programs (includes Aboriginal traineeship programs) 0 0

Disability Employment Registers recruitment 0 0

Total 1 0

Table 10: Graduate numbers by gender

Male Female

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JOBS4YOUTH SA TRAINEESHIP PROGRAM

The department participated in the South Australian Government Jobs4Youth SA traineeship program, which aims to employ young people aged between 17 and 24 in the public sector.

6.3.7 WORK HEALTH AND SAFETY AND INJURY MANAGEMENT

Table 12: Work health and safety prosecutions, notices and corrective action taken

Table 13: Work health and safety performance (building safety excellence targets)

Number of notifiable incidents pursuant to WHS Act Part 3 5

Number of notices served pursuant to WHS Act Section 90, Section 191 and Section 195 (Provisional improvement, improvement and prohibition notices)

0

Number of prosecutions pursuant to WHS Act Part 2 Division 5 0

Number of enforceable undertakings pursuant to WHS Act Part 11 0

Total new workplace injury claims 28

Significant injuries – where lost time exceeds one working week (expressed as frequency rate per 1000 FTE)

7

Significant musculoskeletal injuries – where lost time exceeds one working week (expressed as frequency rate per 1000 FTE)

3

Significant psychological injuries – where lost time exceeds one working week (expressed as frequency rate per 1000 FTE)

2


Table 14: Agency gross workers compensation expenditure for 2015-16 compared with 2014-15

Expenditure 2015-16 ($'000)

2014-15 ($'000)

Variation ($) + (-)

% Change + (-)

Hospital – Inpatient 10 3 +6,908 +215.1

Hospital – Outpatient 0.5 0 +514 0

Income support 245 279 (34,688) (12.4)

Investigation 8 12 (3,591) (31.2)

Legal 28 17 +11,490 +68.9

Lump Sum – Non-economical Loss 148 28 +119,199 +420.3

Medical – Allied Health 66 30 +35,667 +118.7

Medical – Other Goods and Services 28 21 +7,398 +35.9

Medical Services 49 33 +15,977 +48.3

Other – Non-compensation 24 19 +4,325 +22.5

Other Goods & Services – Non-medical 10 5 +4,979 +100.2

Redemption of Medical Expenses 6 1 +4,450 +356

Redemption/Commutation of Income Support 212 286 (73,940) (25.8)

Rehabilitation > N/A N/A N/A N/A

Travel 7 1 +5,479 +396.6

Total Claim Expenditure 840,019 735,852 + 104,168 + 14.2

6.4 REPORTING AGAINST THE CARERS RECOGNITION ACT 2005

The department promoted the Carers Recognition Act 2005 on its intranet site to ensure all employees have an awareness and understanding of this information.

Carer information was also incorporated in the department’s online induction package and occurred through corporate services units across the department.

6.5 DISABILITY ACCESS AND INCLUSION PLANS

The South Australian Government has committed to ensuring that people living with a disability are able to contribute to, and participate in, all aspects of community life on an equitable basis. The government endorsed the introduction of Disability Access and Inclusion Plans (DAIPs) across departments and statutory authorities in accordance with a recommendation of the report Strong Voices: A Blueprint to Enhance Life and Claim the Rights of People with Disability in South Australia (2012-2020).

DSD will launch a new Disability Access and Inclusion Plan in late 2016. This plan is being developed in consultation with employees and will commit to improved physical accessibility, genuine inclusion and strategies to meet the service needs of people with disability. The payroll system has also been upgraded which allows for more inclusive declaration of gender and employees have access to update personal details (including disability status). Agency-wide forms are also being updated.

6 APPENDICES

During 2015-16, there were seven significant injuries. These consisted of three musculoskeletal injuries as a result of body stressing, two injuries related to work-related stress and two as a result of being struck by objects. Actions that were taken to prevent re-occurrences of these incidents include the provision of training relating to human relations and behaviour, hazardous manual task training and support provided through the employee assistance program.

> Relates to rehabilitation costs incurred outside the costs of Department of the Premier and Cabinet Injury Management Services.

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6.6 URBAN DESIGN CHARTER

The Urban Design Charter promotes the benefits of good urban design, embeds the principles of good urban design into government processes and records the South Australian Government’s commitment to good urban design. The department supports measures that ensure the State’s urban environment is internationally competitive, to attract and retain population and business investment.

The department contributes to good urban design through its work in developing the mixed-use precinct for innovative industries, research and development, education and training at Tonsley. In line with the 30-Year Plan for Greater Adelaide, Tonsley is designed to attract investment to the State and support employment growth, whilst helping new businesses to grow.

The adaptive reuse of the Main Assembly Building at Tonsley illustrates the State's commitment to building value through a sustainable development and high quality urban design. Tonsley is focused on achieving excellence in sustainable design and in June 2015 it was awarded the Green Building Council of Australia's 6-star rating as a sustainable community - a first in Australia.

Application of urban design protocols throughout the precinct coupled with regular design review through the Office of Design and Architecture ensures Tonsley will fulfil its promise of becoming a nationally and globally recognised innovation district.

The department’s new South Australia Drill Core Reference Library located in the Tonsley innovation district, opened in February 2016. The world-class facility integrates function with form and was designed using a principles based approach and guided by the Tonsley Urban Design Protocol. The Office of Design and Architecture has recognised it as a hub for innovation and excellence.

6.7 REPORTING AGAINST THE WHISTLEBLOWERS PROTECTION ACT 1993

The department has responsible officers for the purposes of the Whistleblowers Protection Act 1993 pursuant to Section 7 of the Public Sector Act 2009. The policy and procedures were reviewed as a result of the introduction of the ICAC Act 2012.

The department received no whistleblower related allegations during the year.

6.8 REGIONAL IMPACT ASSESSMENT

The Regional Impact Assessment Statement Policy is part of the State Government’s commitment to ensuring effective consultation and communication with rural and regional South Australia.

Introduced on 1 July 2003, the policy requires all government departments, agencies and statutory authorities to prepare and publish Regional Impact Assessment Statements (RIAS) before introducing significant changes to government services in rural and regional areas. The RIAS policy is administered by the Department of Primary Industries and Regions South Australia (PIRSA). The department did not submit any RIAS during 2015-16.

6.9 PUBLIC COMPLAINTS

A key component of the department’s strategic direction is a strong emphasis on being a high-performing agency and demonstrating a culture of service excellence.

In 2015-16, DSD implemented a complaints management policy and procedure, which adheres to the DPC Circular 13: Annual Reporting Requirements, DPC Circular 39: Complaints Management in South Australian Public Sector, the Australian Standard for Complaints Handling (AS IOS 10002-2006) and recommendations from the South Australian Ombudsman’s Audit of State Government Complaint Handling.

Concurrent with the development of the policy and procedure, the agency developed:

• A public facing online complaints and feedback form, giving South Australians greater accessibility to lodge a complaint in addition to traditional channels.

• An internal reporting tool to give business divisions within DSD a consistent way to respond to public complaints and undertake reporting requirements at various levels. This data is collated bi-annually across the agency.

As a newly established agency, this is the first year that DSD has implemented a consistent public complaints management approach. During 2015-16, a total of 36 formal public complaints were received. All complaints were responded to by either telephone or email. None of the complaints were made in relation to staff behaviour.

More than 88 per cent of complaints were responded to within the department’s target timeframe of 10 days. Complaints that were escalated to management level or required an external response involved a longer timeframe.

6 APPENDICES


6.10 SUSTAINABILITY REPORTING

DSD has undertaken a number of sustainability activities and initiatives throughout the year.

The State Government’s Tonsley redevelopment has been recognised as a world leader in environmentally sustainable design and building practices. It is Australia’s only urban renewal development to achieve 6 Star Green Star - Communities certification and is testament to the world-class sustainable design that has guided the redevelopment of the former Mitsubishi site. Launched by the Green Building Council of Australia in 2012, Green Star - Communities is Australia's only national, voluntary, rating system for community and precinct-wide developments.

In January 2016, Tonsley’s Main Assembly Building was awarded the 2015 World Architecture News (WAN) Award for Adaptive Reuse. More than 60 projects from around the world entered the awards and Tonsley was the only project from Australia in the final six.

TAFE SA’s Sustainable Industries Education Centre (SIEC) located within the Tonsley precinct incorporates various sustainable practices and principles throughout the design and construction process, and utilises these as an educational tool. The mechanical services design has achieved a 25 per cent reduction in energy consumption compared to the divested TAFE SA facilities.

Current and planned environmentally sustainable design principles featured across the Tonsley precinct include:

• The adaptive re-use of the Main Assembly Building which reused approximately 90,000 tonnes of carbon embodied in its original construction. Its rejuvenation has reused 90 per cent of the steel structure and over 70 per cent of the concrete slab, avoiding carbon emissions of a scale equivalent to the average annual emissions of 25,000 cars.

• A potential 3 MW solar array (solar power system) on the Main Assembly Building roof to produce affordable and sustainable energy for building tenants.

• Communications infrastructure providing the basis for a Smart Grid Energy system to further reduce energy costs and therefore reduce carbon emissions.

• Connected walking and cycling paths provide easy access to public transport.

• Spatial and energy efficiency is achieved using shared spaces, minimising recurrent costs.

• Use of standard dimensions and reusable materials in the construction and education processes reduce waste.

• A Building Management System at TAFE’s SIEC premise which:

- co-ordinates energy efficient lighting when the harvested daylight is insufficient

- controls radiant in-slab heating

- feeds information on evaporation in cooling towers to maximise energy savings through free cooling

- supports sustainability and reduce running costs through water sensitive urban design principles

- reclaims up to 660,000 litres of rainwater for non-potable demand and its collection.

Environmental sustainability initiatives were at the forefront of design solutions for the newly opened South Australia Drill Core Reference Library at Tonsley. This includes the use of materials with high thermal mass, minimising glazing to east/west and the selection of sustainable/low embodied energy materials. Natural ventilation and natural light are combined with efficient lighting and engineering systems to reduce energy consumption.

An integrated Building Management System has been incorporated into the library which controls security and access, CCTV and monitoring of lighting, heating, ventilation, and air conditioning, hydraulic, water and power to manage the run time of engineering plant and services. A photovoltaic system for electricity generation feeds back to the grid during periods of excess site generation.

6 APPENDICES

Table 15: Public complaints received by the Department of State Development during 2015-16

Category of complaints by subject Number

Service quality/delivery 6

Staff behaviour 0

Service access/processes/procedures 5

Other 25

Total complaints 36

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Consultancies below $10,000

Consultant Purpose of consultancy Number Total $’000

ABFA Pty Ltd Follow up and write up of the outcomes of a Strategic and Business Planning Workshop

ABFA Pty Ltd Design and implement an evaluation process to help divisions prioritise their project/service programs in line with the department’s strategic priorities

ACMS Pty Ltd Provide specialised advice in drilling and well operations

Alexander & Symonds Pty Ltd

Mining lease surveying services

Barbara Pocock Oversee implementation of the Ageing Well program

Bellajack Consulting Business engagement for the Northern Economic Plan

City of Salisbury Develop a business case to transform Technology Park to an innovation district

Deloitte Touche Tohmatsu

Draft a directives and work instructions related to handling of Cabinet documents

6 APPENDICES

Refrigerants used in the air conditioning systems are chlorofluorocarbons and hydrochlorofluorocarbon free, and all air conditioning systems are high efficiency to minimise energy consumption and therefore C02 emissions.

Low-e laminated glass is used throughout the building, which provides optimal year-round energy saving benefits by selectively filtering the sun's energy in summer and reducing heat loss in winter. A 25,000L in-ground tank collects water from the library roof, which is then re-used to flush toilets and irrigate garden beds and trees.

Other initiatives in place to reduce DSD's carbon footprint include paper and digital recycling; powering off computers when not in use; selecting electrical goods with a high energy star rating and bike-friendly facilities.

DSD leads the implementation of the Government Buildings Energy Strategy which aims to improve the energy efficiency of government buildings and reduce greenhouse gas emissions associated with their operation. This includes a commitment to a life cycle assessment methodology to ensure that sustainability features are factored into the evaluation of projects.

6.11 FRAUD

As part of its risk management framework, the department has implemented processes for identifying and responding to the risks of fraud, including any specific risks of fraud that have been identified, or account balances, classes of transactions or disclosures for which a risk of fraud is likely to exist.

The department has established an internal audit and risk management function through its Audit and Risk Management Committee. These functions will continue to be developed further to assist the department in meeting its strategic objectives.

The Internal Audit Plan, which is reviewed by the Audit and Risk Management Committee and approved by the Chief Executive, addresses a number of potential risk areas including internal controls over revenue, information and asset security and expenditure activity.

Complementing this work, the Director, Finance, is responsible for ongoing internal reconciling controls over department revenue and expenditure and liaises with the Manager of the internal audit function where abnormal variances are detected. The finance directorate also works closely with the internal audit function to oversee the implementation and monitoring of DSD’s Financial Management Compliance program.

No incidents of fraud were identified during 2015-16.

6.12 CONSULTANTS

Table 16: Consultants for the Department of State Development


Table 16: Consultants for the Department of State Development continued



Donald Maurice Dart Provision of specialist services relating to the engineering, technical and operational aspects of the Whyalla Port

Econsearch Pty Ltd Prepare economic data on state based mine expenditure profiles

Econsearch Pty Ltd Prepare economic data for the Upper Spencer Gulf region

Energy Efficient Strategies

Independent review and verification of information contained in the SA Water Heating Guide

Ernst & Young Victoria Park 'activation' workshop facilitation

Ethos Australia Pty Ltd Industry engagement workshop facilitation for the proposed Food Park

Fyfe Pty Ltd Provide advice on the Tonsley Governance Model

GPA Engineering Pty Ltd Expert statement regarding application of the Australian Pipeline standard, especially on risk and hazard engineering management to high pressure pipelines

Hughes Public Relations Public relations activities regarding opportunities for Small Business

Hughes Public Relations Advice on the use of various communication platforms to build awareness of the opportunities for Small Business

Hughes Public Relations Deliver a strategy for effective digital communications

Huntington Hyperspectral Pty Ltd

Development of HyLogger hardware and interpretative software - The Spectral Geologist (TSG)

Interface Consultants SA Preparation, facilitation, and write up of the Strategy & Business Services planning workshop

JBS & G Australia Pty Ltd Preliminary site investigation of a Thebarton property

KPMG Australia Workshop and report into the National Electricity Market

KRG Consultants Provide advice on the preparation of the industry consultation session for Low Carbon Investment

Paul Case Conduct a review on the administration of employment processes

Seymour Ventures Pty Ltd

Deliver a business planning workshop and develop a business plan for the Aboriginal Stakeholder Engagement team

Shannon Architects Architectural consultation on the State Theatre Company office fitout

South Australian Housing Trust

Facilitation of workshop on guardianship housing

T3PM Development of a high-level diagrammatic project plan for the Leigh Creek/Alinta initiative

Think One Team Facilitate strategic planning workshop

Think One Team International

Develop a Strategic Framework and coordinate a workshop on the Agency Narrative and Strategic Directions 2016

ThinkClimate Consulting Check facts for an article on nuclear value-chain markets

6 APPENDICES

P 42




ThinkClimate Consulting Review into the opportunities for a nuclear industry in South Australia

Three as One Consulting Pty Ltd

Provide advice on SA Node for the Cyber Security Growth Centre

Uniquest Pty Ltd Anthropological survey for the Mineral Systems Drilling Program

Virtual Ark Pty Ltd Initial advice on how State Government procurement might encourage and incentivise the private sector to collaborate and co-invest with government

Wallmans Layers Advice on the Tonsley Precinct Governance Model

Subtotal – Value of consultancies below $10,000 37 $159

Consultancies above $10,000


ABFA Pty Ltd Provide advice on industry sector research and role purpose

Acil Allen Consulting Conduct an evaluation of the department’s Market Development Planning Framework under WorkReady

Adelaide Research & Innovation

Undertake a comprehensive trade impact study for South Australia in relation to the China-Australia Free Trade Agreement

Advanced Focus Pty Ltd Develop a business analysis and strategic review of the Northern Advanced Manufacturing Industry Group (NAMIG) Concept2Creation program and identify a sustainable operating model and case for future government support

Advanced Focus Pty Ltd Review advanced manufacturing capabilities of participating programs in the Advanced Manufacturing Connect program

AECOM Australia Pty Ltd Deliver a strategic options study for Leigh Creek

ANZ Bank Provide advice and recommendations on the options available to government for commercial arrangements for the Whyalla Port

Applied Hybrid Energy Pty Ltd

Provide high-level strategic advice on resources and energy development in South Australia with a focus on energy prices and resources commodity strategies

ASIA Australis Provide specialist advice on China Investment Attraction Program

ASIA Australis Provide support for the Indonesian trade mission including advice on the in-county program and working with participating companies

Aurecon Conduct a compliance audit of Her Majesty's Theatre Building

Axessindia Consultancy Group

Promote the case for investment and trade with South Australia to major Indian corporates and business leaders

BDO Advisory (SA) Pty Ltd

Professional services in relation to the DSD Protective Security Plan

BDO Advisory (SA) Pty Ltd

Professional services in relation to client relationship management

6 APPENDICES





BRM Hayes QC Assist in the ongoing development, refinement and implementation of the India Trade, Investment and Migration Strategy

Brubrior Investments Pty Ltd

Provide strategic advice on achieving the best possible outcome for the State from the development of Olympic Dam, the Nyrstar Port Pirie Smelter Transformation project and the Resources Infrastructure Taskforce

Core Energy Group Report on the viability of providing additional capacity in the Yarcowie to Port Pirie pipeline

CSIRO Develop a recommended model for attracting a publicly funded research agency

Deloitte Access Economics Pty Ltd

Examine the contribution of international students to the South Australian economy and develop market analysis and growth projection for the top 30 source countries for international students

Deloitte Access Economics Pty Ltd

Provide social and economic impact advice in regards to the potential impacts of a range of scenarios for the future of Arrium's mining and steelworks operations in South Australia

Department of Primary Industries and Regions SA

Investigation by South Australian Research and Development Institute (SARDI) into commercial opportunities for a seaweed industry

Det Norske Veritas (Aust) Pty Ltd

Consult on field stress corrosion cracking integrity management as part of the independent review of high pressure gas pipeline in South Australia

Enrite Solutions Australia Pty Ltd

Provision of Salesforce Customer Relationship Management System and technical support services

Ernst & Young Independent review into the Unlocking Capital for Jobs program

Ernst & Young Investigation into a new model for attracting and retaining older workers in the public sector

Exactech Pty Ltd Provide advice on opportunities for Anangu Pitjantjatjara Yankunytjatjara (APY) businesses to compete for Government contracts

Fenix Performance Solutions

Provide commercial, financing and technical advice to the Steel Taskforce in regards to the future of steelmaking in Whyalla

Fenix Performance Solutions

Provide business and financial knowledge relating to the Nyrstar Port Pirie Smelter operation

Fraunhofer-Gesellschaft Develop a recommended model for attracting a publicly funded research agency

Frost & Sullivan Review into 16 potential new future industries for South Australia

Geointrepid Reprocessing of state-wide gravity data via anisotropic clustering and 3D fault network generation

GHD Pty Ltd Desktop mine rehabilitation option study

Glaeba (02) Pty Ltd Conduct an environmental audit for the Brukunga Mine Remediation program

6 APPENDICES

P 44




Golder Associates Pty Ltd Develop a groundwater flow and solute transport model

Greg Combet Pty Ltd Provide services as a Specialist Advisor to the Automotive Transformation Taskforce

Greg Mackie Report on investigating proposed merger of the boards of the Adelaide Festival Corporation and the Adelaide Festival Centre Trust

Gus Commercial Consulting Pty Ltd

Provide specialist technical advice in relation to Arrium, Alinta and Hillgrove initiatives

Ian Dixon Pty Ltd Provision of strategic partnering advice and facilitation support to engage with native title groups and other key stakeholders to identify collaborative solutions to improve the operation of the native title and Aboriginal heritage systems for mineral resources exploration in South Australia

Innovation Performance Australia

Provide Special Advisor services on industry policy

Innovation Performance Australia

Provide Special Advisor services on Advanced Manufacturing

IT Power (Australia) Pty Ltd

Feasibility study into the supply of solar energy to the township of Manna Hill

JBS & G Australia Pty Ltd Develop a functional model for SA Government to assess the commerciality and support options to progress proposed mining projects from concept stage to operation

JBS & G Australia Pty Ltd Prepare a desktop assessment of Whyalla steelworks remediation and environmental rehabilitation

John GG Morton Provide advice on the Petroleum and Geothermal Energy Act 2000 and regulatory activities

KPMG Facilitation of a Shaping the Future of SA Ageing Well program

KPMG Australia Undertake a feasibility study on the development of the Manufacturing Technology Centre

KPMG Australia Facilitation and promotion of a business engagement workshop for the Nuclear Fuel Cycle Royal Commission for entrepreneurs

Kylie Heneker Oversee the ‘Request for Information’ process inviting industries to put forward ideas for new tourism and other business ventures in the Leigh Creek region

Leonie Boothby & Associates Pty Ltd

Development of the Upper Spencer Gulf Social and Economic Transition Plan

Margaret Caust Map out existing bike economic assets and make a case that it is an economic sector that could, with greater support and recognition, have multiple benefits for the State, including jobs

Maywald Consultants Pty Ltd

Provide strategic advice to position and market South Australian water expertise internationally in support of the State’s wealth creation and international engagement aspirations

6 APPENDICES





Norman Waterhouse Assist in the continual refinement and implementation of initiatives within the South Australia - China Engagement Strategy

Peng Koon Chin Provide advice as an in-country Senior Adviser South East Asia, for the purposes of implementing the South Australian South East Asia Engagement Strategy

PPB Advisory Pty Ltd Provide specialist financial restructuring services for the Steel Taskforce

PPS Global Pty Ltd Provide support services for small business impacted by the Sampson Flat bushfires including developing business recovery plans

PPS Global Pty Ltd Provide strategic support services for Automotive Transformation to support the South Australian Our Jobs Plan strategy

PricewaterhouseCoopers Geospatial Economic Modelling for Northern Adelaide

PricewaterhouseCoopers Provide research on labour and comparative property analysis

PricewaterhouseCoopers Conduct robust commercial analysis and collect evidence that will assist the department to effectively engage with South Australian businesses on India market opportunities

Professor Alfred Huang AM

Provide assistance and advice on cultural and other requirements to engage effectively with the Shandong government

Redfire Investments Funds Completion and delivery of final report ‘Implementation Plan for a South Australian Commercialisation Fund’

Reseval Consulting Petro physical analysis of selected onshore wells of the Otway Basin to determine formation water

Robert I Thomas Provision of strategic advice for major projects – in particular the facilitation of the closure of the Ridley Salt Field; the Targeted Lead Abatement Program; and representing DSD on the Spencer Gulf Ecosystem and Development initiative

Rural Business Support Services

Deliver business counselling services to businesses affected by Sampson Bushfires

SA Centre for Economic Studies

Assessment of the economic impact of South Australia shifting the time zone

SA Water Corporation Engage with the community and stakeholders about Alinta Energy’s decision to close the Leigh Creek coal mine and Port Augusta power stations

Samantha Jane Wilkinson Provide support services for the Skills and Employment's organisational design project

Science to Manage Uncertainty

Workshop to explore the economic development potential of South Australia expanding its role in the microalgae value-chain

Sir Angus Houston Provide advice on the trade and investment activities contained within the South Australia-South East Asia Engagement Strategy and other international engagement strategies

6 APPENDICES

P 46

6.13 OVERSEAS TRAVEL

Details of overseas travel undertaken by department staff during 2015-16 are listed on the Department of State Development website. This information is published annually and can be accessed at www.statedevelopment.sa.gov.au/about-us/proactive-disclosure

6.14 FREEDOM OF INFORMATION

The Freedom of Information Act 1991 (the Act) provides the public and Members of Parliament a legally enforceable right of access to documents held by South Australian Government agencies, subject to certain restrictions that are prescribed within the Act.

In accordance with Section 9 of the Freedom of Information Act 1991, agencies must publish a current Information Statement every 12 months, with the preferred method being on the agency’s website.

The Information Statement for 2015-16 is available at www.statedevelopment.sa.gov.au/about-us/freedom-of-information

6.15 RECONCILIATION STATEMENT

The department’s Strategic Directions acknowledge Aboriginal people as the State’s first peoples and nations of South Australia.

The department has continued to work closely with Reconciliation SA and other State Government departments to achieve the government’s commitment to reconciliation.

RECONCILIATION ACTION PLAN

In 2016, DSD released a Reconciliation Action Plan, that was launched to coincide with the 8th anniversary of the National Apology. Each of the divisions within the department has a role to play in building and improving relationships and generating opportunities for Aboriginal people. The Reconciliation Action Plan outlines DSD’s commitment to reconciliation and the practical approach and actions we aim to take to contribute to the South Australian Government’s Reconciliation journey.




Spike Innovation Pty Ltd Review of entrepreneurship training in universities with a South Australian focus

SRK Consulting Review on the Leigh Creek closure

The Thomas Family Trust Provide expert mining and infrastructure advice on the development of business cases identified by the Resources Infrastructure Taskforce

The University of Adelaide Provide economic impact analysis on project proposals for the Economic Investment Fund

VTT Technical Research Centre

Develop a recommended model for attracting a publicly funded research agency

VTT Technical Research Centre

Investigation into industry development support, research and development services and a stocktake of what is currently available for food companies

Warner Family Trust No.2 Construct a public database that will describe the geological character, distribution and thickness of potentially commercial deep coal reservoirs in the SA Cooper Basin

Subtotal – Value of consultancies above $10,000 76 $4,442

TOTAL 113 $4,601

6 APPENDICES


DSD’s commitment to reconciliation includes:

• Implementing practical approaches to create sustainable results.

• Engaging and collaborating with Aboriginal people to deliver positive change.

• Ensuring all divisions within the department have at least one Reconciliation target.

• Reporting annually on our achievements.

RECONCILIATION WEEK

The department facilitated a variety of cultural activities and events enriched by both Aboriginal and non-Aboriginal employee participation to celebrate Aboriginal culture during 2015-16.

In keeping with the National Reconciliation Week ‘Our History, Our Story, Our Future’ theme, the department hosted key events during Reconciliation Week in partnership with other agencies:

• National Reconciliation Week Morning Tea – Commissioner for Aboriginal Engagement Frank Lampard OAM shared his reflections on the nation’s journey towards reconciliation and why it is important to make reconciliation part of our own individual stories.

• Reconciliation Workshop – in collaboration with Department for Communities and Social Inclusion, DSD staff discussed cultural competency and how Aboriginal people navigate government work and systems.

• Sprigg Lecture: Renewal and Reconciliation in the modern Museum – the South Australian Museum’s Professor John Carty explored some of his personal and intellectual revelations about Australian history; art history; Aboriginal culture and the evolving place of the SA Museum as a site of reconciliation in Australian society.

• Celebrating National Reconciliation Week in film – screenings of ‘Putuparri and the Rainmakers’ and ‘Another Country’ were held in collaboration with other agencies.

ANNIVERSARY OF THE NATIONAL APOLOGY

The department continued to recognise the importance of the Anniversary of the National Apology. Hosted by Reconciliation South Australia, the 8th Annual Anniversary of the National Apology to the Stolen Generations Breakfast was attended by DSD staff, key industry partners and members of the department’s Reconciliation Action Committee.

NAIDOC WEEK

Employees were encouraged to attend NAIDOC (National Aborigines Islanders Day Observance Committee) Week activities and events.

6 APPENDICES


FINANCIAL STATEMENTS7INDEPENDENT AUDIT REPORT

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016

STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2016

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016

DISAGGREGATED DISCLOSURES - EXPENSES AND INCOME FOR THE YEAR ENDED 30 JUNE 2016

DISAGGREGATED DISCLOSURES - ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2016

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

STATEMENT OF ADMINISTERED COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016

STATEMENT OF ADMINISTERED FINANCIAL POSITION AS AT 30 JUNE 2016

STATEMENT OF ADMINISTERED CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016

STATEMENT OF ADMINISTERED CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016

P 50

7 FINANCIAL STATEMENTS

P 52


P 54



The net result and comprehensive result are attributable to the SA Government as owner.

The movement in the net result is primarily due to a decrease in revenues from SA Government associated with a reduction in budgeted payments and carryover of expenditure from 2014-15.

The above statement should be read in conjunction with the accompanying notes.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2016

Note 2016 $’000

2015 $’000

Expenses

Employee benefits 5 117,821 117,504Supplies and services 6 78,580 79,823Depreciation and amortisation 7 31,267 31,667Grants and subsidies 8 528,337 538,094Net loss from disposal of non-current assets 18 8,597 1,656Other 9 3,816 5,408

Total expenses 768,418 774,152

Income

Fees and charges 12 52,100 61,175Industry license fees 13 6,816 6,667Sale of electricity 14 4,329 4,126Commonwealth 15 28,708 36,045Interest and investment 16 395 428Resources received free of charge 17 182 1,021Other 19 15,844 14,519

Total income 108,374 123,981

Net cost of providing services (660,044) (650,171)

Revenues from / payments to SA Government

Revenues from SA Government 20 641,280 686,720Payments to SA Government 20 (7,873) (14,861)

Net result (26,637) 21,688

Other comprehensive income

Items that will not be reclassified to net result:Changes in revaluation surplus 24 (3,321) 430Items that will be reclassified subsequently to net result when specific conditions are met:Changes in financial assets available for sale reserve 26 466 381

Total comprehensive result (29,492) 22,499


P 56

STATEMENT OF FINANCIAL POSITION



Note 2016 $’000

2015 $’000

Current assets

Cash and cash equivalents 21 107,115 172,225Receivables 22 10,213 32,045Non-current assets classified as held for sale 23 16,191 30,011

Total current assets 133,519 234,281

Non-current assets

Property, plant and equipment 24 944,031 961,888Intangibles 25 16,867 14,360Investments 26 6,950 6,484

Total non-current assets 967,848 982,732

Total assets 1,101,367 1,217,013

Current liabilities

Payables 28 26,836 122,032Employee benefits 29 10,875 10,527Provisions 30 395 314Other 31 7,428 6,526

Total current liabilities 45,534 139,399

Non-current liabilities

Payables 28 2,378 2,121Employee benefits 29 25,898 23,744Provisions 30 3,500 953Other 31 1,313 818

Total non-current liabilities 33,089 27,636

Total liabilities 78,623 167,035

Net assets 1,022,744 1,049,978

Equity

Retained Earnings 32 1,003,992 1,029,846Financial asset available for-sale revaluation surplus 32 4,346 3,880Revaluation surplus 32 2,668 5,989Contributed capital 32 11,738 10,263

Total equity 1,022,744 1,049,978

Total equity is attributable to the SA Government as owner

Unrecognised contractual commitments 33Contingent assets and liabilities 34




STATEMENT OF CHANGES IN EQUITY

All changes in equity are attributable to the SA Government as owner.


Note Retained earnings

$’000

Financial asset

available for sale

revaluation surplus

$'000

Revaluation surplus

$’000

Contributedcapital

$’000

Total$’000

Balance at 30 June 2014 16,152 - 5,559 - 21,711

Net result for 2014-15 22,351 - - - 22,351

Revaluation of land - - 430 - 430Change in financial assets available for sale revaluation surplus

- 381 - - 381

Total comprehensive result 2014-15 22,351 381 430 - 23,162

Contributed capital increases - - - 10,263 10,263Net assets received as a result of an administrative restructure

991,057 3,499 - - 994,556

Net assets transferred as a result of an administrative restructure

1,720 - - - 1,720

Balance at 30 June 2015 1,031,280 3,880 5,989 10,263 1,051,412

Prior period adjustments (1,434) - - - (1,434)

Restated balance at 30 June 2015 1,029,846 3,880 5,989 10,263 1,049,978

Net result for 2015-16 (26,637) - - (26,637)

Revaluation of buildings 24 - - (3,321) - (3,321)Change in financial assets available for sale revaluation surplus

26 - 466 - - 466

Total comprehensive result 2015-16 (26,637) 466 (3,321) - (29,492)

Contributed capital increases - - - 1,475 1,475

Net assets received as a result of an administrative restructure

35 (204) - - - (204)

Net assets transferred as a result of an administrative restructure

35 987 - - - 987

Balance at 30 June 2016 1,003,992 4,346 2,668 11,738 1,022,744


P 58


STATEMENT OF CASH FLOWS


Note 2016 Inflows (Outflows)$’000

2015 Inflows (Outflows)$’000

Cash flows from operating activities Cash outflows

Employee benefit payments (113,633) (116,493)Payments for supplies and services (115,839) (114,654)Payments for security deposits (4,373) (1,504)Payments for grants and subsidies (590,240) (492,312)Payments for paid parental leave scheme (235) (202)Other payments - (3,445)

Cash used in operations (824,320) (728,610)

Cash inflows

Fees and charges 66,820 78,258 Industry license fees 6,816 6,667 Sale of electricity 4,329 4,396 Receipts from Commonwealth 28,460 36,247 Interest and dividends received 393 428 Net GST recovered from ATO 22,195 12,740 Receipts for security deposits 5,358 34 Net receipts from paid parental leave scheme 260 212 Proceeds from the repayment of financial assistance - 15 Other receipts 15,429 15,561

Cash generated from operations 150,060 154,558

Cash flows from SA Government

Receipts from SA Government 641,280 686,720 Payments to SA Government (7,873) (14,861)

Cash generated from SA Government 633,407 671,859

Net cash (used in) / provided by operating activities 37 (40,853) 97,807

Cash flows from investing activities Cash outflows

Purchase of property, plant and equipment (35,344) (23,033)

Cash used in investing activities (35,344) (23,033)

Cash inflows

Proceeds from sale of property, plant and equipment 9,612 16,035

Cash generated from investing activities 9,612 16,035

Net cash used in investing activities (25,732) (6,998)

Cash flows from financing activities Cash inflows

Capital contributions from Government 1,475 10,263 Receipts from restructure activities - 48,660

Net cash generated by financing activities 1,475 58,923

Net cash provided by financing activities 1,475 58,923

Net (decrease) / increase in cash (65,110) 149,732

Cash as at the beginning of the period 172,225 22,493

Cash as at the end of the period 21 107,115 172,225



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,912

)(1

,600

)(6

6,32

0)(5

1,21

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,835

)(1

,265

)18

557

Reve

nues

from

/ pa

ymen

ts to

SA

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ernm

ent

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nues

from

SA

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ernm

ent

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- -

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ents

to S

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over

nmen

t -

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resu

lt(1

,912

)(1

,600

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6,32

0)(5

1,21

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,835

)(1

,265

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557


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e st

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ent s

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d be

read

in c

onju

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n w

ith th

e ac

com

pany

ing

note

s. Fo

r act

ivity

det

ail r

efer

to n

ote

4.



FOR

THE

YEA

R EN

DED

30

JUN

E 20

16

DIS

AG

GRE

GAT

ED D

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OSU

RES

- EX

PEN

SES

AN

D IN

COM

E CO

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ED

AC

TIV

ITY

9:G

loba

lly In

tegr

atin

g th

e SA

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nom

y

AC

TIV

ITY

10:

Indu

stry

and

Inno

vati

onA

CTI

VIT

Y 11

:A

bori

gina

l Aff

airs

an

d Re

conc

iliat

ion

2016

$’00

020

15

$’00

020

16$’

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$’00

020

15

$’00

0

Expe

nses

Empl

oyee

ben

efits

10,4

68

8,92

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955

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pplie

s and

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ices

6,91

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1,87

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reci

atio

n an

d am

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atio

n69

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0 82

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subs

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s5,

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,864

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disp

osal

of n

on-c

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s52

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er12

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154

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s23

,816

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me

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rges

771

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stry

lice

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- -

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of e

lect

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ved

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ser

vice

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0,92

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0,54

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1,83

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nues

from

/ pa

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nues

from

SA

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- -

- -

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to S

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nmen

t -

- -

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lt(2

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0,92

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8,07

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0,54

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1,83

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,610

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n w

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note

s. Fo

r act

ivity

det

ail r

efer

to n

ote

4.

P 62


FOR

THE

YEA

R EN

DED

30

JUN

E 20

16

DIS

AG

GRE

GAT

ED D

ISCL

OSU

RES

- EX

PEN

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D IN

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ED

Gen

eral

/ N

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ttri

buta

ble

Act

ivit

y To

tal

2016

$’00

020

15

$’00

020

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nses

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oyee

ben

efits

- -

117,

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rvic

es -

-78

,580

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,823

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tisat

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- -

31,2

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528,

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597

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3,81

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-76

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stm

ent

- -

395

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182

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ome

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108,

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641,

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r act

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4.


FOR

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DED

30

JUN

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16

DIS

AG

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AC

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n Ec

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4:A

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$’00

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P 64

FOR

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DED

30

JUN

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16

DIS

AG

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FOR

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DED

30

JUN

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16

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P 66


FOR

THE

YEA

R EN

DED

30

JUN

E 20

16

DIS

AG

GRE

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e 4.


Note 1 Objectives of the Department of State Development 68

Note 2 Summary of significant accounting policies 68

Note 3 New and revised accounting standards and policies 77

Note 4 Activities of the department 77

Note 5 Employee benefits expense 78

Note 6 Supplies and services 80

Note 7 Depreciation and amortisation expenses 81

Note 8 Grants and subsidies 81

Note 9 Other expenses 82

Note 10 Auditor’s remuneration 82

Note 11 Overseas representative offices 83

Note 12 Revenues from fees and charges 83

Note 13 Industry license fees 83

Note 14 Sale of electricity 84

Note 15 Commonwealth revenues 84

Note 16 Interest and investment revenues 84

Note 17 Resources received free of charge 85

Note 18 Net gain / loss from the disposal of non-current assets 85

Note 19 Other revenues 85

Note 20 Revenues from / Payments to SA Government 86

Note 21 Cash and cash equivalents 86

Note 22 Receivables 87

Note 23 Non-current assets classified as held for sale 87

Note 24 Property, plant and equipment 88

Note 25 Intangible assets 90

Note 26 Investments 91

Note 27 Fair value measurement 92

Note 28 Payables 93

Note 29 Employee benefits 94

Note 30 Provisions 95

Note 31 Other liabilities 95

Note 32 Equity 96

Note 33 Unrecognised contractual commitments 96

Note 34 Contingent assets and liabilities 97

Note 35 Transferred functions 98

Note 36 Remuneration of board and committee members 99

Note 37 Cash flow reconciliations 103

Note 38 Trust funds 104

Note 39 Events after the reporting period 105

Note 40 Transactions with SA Government 105

Note 41 Budgetary reporting and explanations of major variances between budget and actual amounts 107

Note 42 Financial risk management / Financial instruments 109

NOTE INDEX


P 68

OBJECTIVES OF THE DEPARTMENT OF STATE DEVELOPMENTNOTE 1

As the lead agency for six of the ten South Australian economic priorities, the Department of State Development is responsible for driving economic growth and creating jobs.

The department supports South Australia’s economic transformation under priorities of:

• unlocking the full potential of the state’s resources, energy and renewable assets

• a globally recognised leader in health research and ageing

• the Knowledge State – attracting a diverse student body and commercialising our research

• growth through innovation

• promoting our international connections and engagement

• ensuring our small businesses have access to capital and global markets.

The department brings together responsibility for the state’s growing resources and energy portfolio, the transformation to high-value manufacturing and responsibility for training, employment and skills initiatives and science. The department works in close partnership with business, the education sector, community and key stakeholders to harness South Australia’s expertise in innovation, skills development and industry transformation.

The department also provides leadership for cross-government policy development on Aboriginal affairs, reconciliation and Aboriginal economic development. This includes skills development, job creation, business development and sustainable employment for Aboriginal people, including support for Aboriginal young people and those living in regional and remote South Australia.

The department is also responsible for maximising the social and economic contribution made by the arts and driving opportunities to grow creative industries through innovation, as well as high-value technology sectors, including medical research and biotechnology.

Increasing the focus on innovation will be crucial to assisting all sectors move up the value chain through more advanced techniques and services.

The department also has responsibility for implementing the automotive transformation strategy for South Australia, together with the Commonwealth Government’s Growth Fund.

The department drives South Australia’s continuing high-growth and high-value sectors including minerals and resources, information and communications technology, advanced manufacturing and renewable energy. It also coordinates the State Government’s engagement with small-to-medium businesses, ensuring local firms have access to growing supply chain opportunities in sectors such as oil and gas, defence and aerospace.

The department further develops trade opportunities and the internationalisation of our economy. By working with the business and the higher education sectors it is building a smart future for South Australia.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESNOTE 2

A) STATEMENT OF COMPLIANCE

These financial statements have been prepared in compliance with section 23 of the Public Finance and Audit Act 1987.

The financial statements are general purpose financial statements. The accounts have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987.

The department has applied Australian Accounting Standards that are applicable to not-for-profit entities, as the department is a not-for-profit entity.

Except for AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities: which the department has early adopted, Australian Accounting Standards and interpretations that have recently been issued or amended but are not yet effective have not been adopted by the department for the reporting period ending 30 June 2016 (refer note 3).



B) BASIS OF PREPARATION

The preparation of the financial statements requires:

• the use of certain accounting estimates and requires management to exercise its judgement in the process of applying the department's accounting policies. The areas involving a higher degree of judgement or where assumptions and estimates are significant to the financial statements are outlined in the applicable notes.

• accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported.

• compliance with Accounting Policy Statements issued pursuant to section 41 of the Public Finance and Audit Act 1987. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, which have been included in this financial report:

a. revenues, expenses, financial assets and liabilities where the counterparty / transaction is with an entity within the SA Government as at reporting date, classified according to their nature. The threshold of $100 000 for separate identification of these items has not been applied;

b. expenses incurred as a result of engaging consultants;

c. employee targeted voluntary separation package information;

d. employees whose normal remuneration is equal or greater than the base executive remuneration level (within $10 000 bandwidths) and the aggregate of the remuneration paid or payable or otherwise made available, directly or indirectly by the entity to those employees; and

e. board / committee member and remuneration information, where a board / committee member is entitled to receive income from membership other than a direct out-of-pocket reimbursement.

The department's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets that were valued in accordance with the valuation policy applicable.

The Statement of Cash Flows has been prepared on a cash basis.

The financial statements have been prepared based on a twelve month period and presented in Australian currency.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2016 and the comparative information presented.

C) REPORTING ENTITY

The department is a government department of the State of South Australia, established pursuant to the Public Sector Act 2009. The Public Sector (Investment Attraction South Australia) Proclamation 2016, (dated 10 March 2016) declared the establishment of Investment Attraction South Australia (IASA) as an attached office of the Department of State Development effective from 1 April 2016. As at this date, 31 staff transferred to IASA as agreed between Chief Executives, pursuant to section 9 of the Public Sector Act 2009 (refer note 35).

The department is an administrative unit acting on behalf of the Crown.

The financial statements and accompanying notes include all the controlled activities of the department. Administered items are disclosed in the administered financial statements at the end of the controlled General Purpose Financial Statements. Except as otherwise disclosed, administered items are accounted for on the same basis and using the same accounting policies as for departmental items.

D) PRINCIPLES OF CONSOLIDATION

Scope Global Pty Ltd, which has a reporting date of 30 June, is controlled by the Minister for Investment and Trade. Its principal activity is to secure international contracts for work in vocational education and training.

Although the Minister has control over Scope Global Pty Ltd it is not considered part of the department’s operations. The department cannot influence the decisions of Scope Global Pty Ltd, nor can the department dominate the financial and operational policies of Scope Global Pty Ltd. Consequently, Scope Global Pty Ltd was not consolidated in the accounts nor disclosed as an Associate. The value of Scope Global Pty Ltd is shown in the Statement of Financial Position under Investments (refer note 26).

The Minister for Science and Information Economy has a 25% interest in SABRENet. SABRENet was registered on 28 September 2005 as a non-profit company limited by guarantee and has been recognised by the ATO as a tax exempt entity. The founding members are the three South Australian Universities and the South Australian Government. The objectives for which the company was established are to be a non-profit institution to further the use of advanced data networking for the conduct of research and education in South Australia


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for the benefit of South Australia and for the purposes of economic and social advancement in Australia generally. While the Minister has significant influence over SABRENet, the Minister’s interest in SABRENet is limited to the Minister’s use of SABRENet’s asset (the network). That is, the Minister receives no return for its interest in SABRENet. SABRENet is not accounted for using the equity method as the Minister does not have access to the residual assets of the entity.

E) TRANSFERRED FUNCTIONS

The Public Sector (Reorganisation of Public Sector Operations) Notice 2015, (dated 21 May 2015) declared that all employees employed in the business unit known as the Office of the Industry Advocate, an operational unit of the Department of the Premier and Cabinet, would transfer to the Department of State Development effective 1 July 2015 (refer note 35).

The Public Sector (Investment Attraction South Australia) Proclamation 2016, (dated 10 March 2016) declared the establishment of Investment Attraction South Australia (IASA) as an attached office of the Department of State Development effective from 1 April 2016. As at this date, 31 staff transferred to IASA as agreed between Chief Executives, pursuant to section 9 of the Public Sector Act 2009 (refer note 35).

Effective 4 April 2016, two staff were transferred to Defence SA as agreed between Chief Executives, pursuant to section 9 of the Public Sector Act 2009. Under this machinery of government change approved by Cabinet, responsibility for the space industry and space development sector, including preparations for the 68th International Astronautical Congress moved from the Department of State Development to Defence SA (refer note 35).

F) BUDGETED AMOUNTS

Budget information refers to the amounts presented to Parliament in the original budgeted financial statements in respect of the reporting period (2015-16 Budget Paper 4). Budget information has been included for the Statement of Comprehensive Income and for Investment Expenditure. These original budgeted amounts have been presented and classified on a basis that is consistent with line items in the financial statements. However, these amounts have not been adjusted to reflect revised budgets or administrative restructures / machinery of government changes. The budget process is not subject to audit. Budget information has not been included for the Statement of Financial Position or Statement of Cash Flows as the information in these statements are not budgeted for on the same basis and / or determined in a different manner to financial statement information.

G) COMPARATIVE INFORMATION

The presentation and classification of items in the financial statements are consistent with prior periods except where specific accounting standards and / or accounting policy statements has required a change.

Where presentation or classification of items in the financial statements have been amended, comparative figures have been adjusted to conform to changes in presentation or classification in these financial statements unless impracticable.

The restated comparative amounts do not replace the original financial statements for the preceding period.

H) ROUNDING

All amounts in the financial statements and accompanying notes have been rounded to the nearest thousand dollars ($’000).

I) TAXATION

The department is not subject to income tax. The department is liable for payroll tax, fringe benefits tax, goods and services tax (GST) and emergency services levy.

Income, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods or services is not recoverable from the Australian Taxation Office, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item applicable.

• receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as part of receivables or payables in the Statement of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the Australian Taxation Office is classified as part of operating cash flows.

Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to the Australian Taxation Office. If GST is not payable to, or recoverable from the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.



J) EVENTS AFTER THE REPORTING PERIOD

Adjustments are made to amounts recognised in the financial statements, where an event occurs after 30 June and before the date the financial statements are authorised for issue, where those events provide information about conditions that existed at 30 June.

Note disclosure is made about events between 30 June and the date the financial statements are authorised for issue where the events relate to a condition which arose after 30 June and which may have a material impact on the results of subsequent years. Refer to Note 39.

K) INCOME

Income is recognised to the extent that it is probable that the flow of economic benefits to the department will occur and can be reliably measured.

Income has been aggregated according to its nature and has not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

Revenues from SA Government

Appropriations from program funding are recognised as revenues when the department obtains control over the funding. Control over appropriations is normally obtained upon receipt.

Fees and Charges

Fees and charges are recognised as revenues upon invoice and mainly relate to mining and petroleum application fees, rental for Adelaide Festival Centre, licences, and recharges to TAFE SA.

Commonwealth Revenues

Commonwealth grants are recognised as revenues when the department obtains control over the funding. Control over grants is normally obtained upon receipt.

Recoveries

The department recognises other revenues from the partial and full recovery of costs associated with the delivery of programs.

Administered - royalty receipts

Royalty revenue relates to minerals and petroleum production and is collected pursuant to the Roxby Downs (Indenture Ratification) Act 1982, Whyalla Steel Works Act 1958, Mining Act 1971 and the Petroleum & Geothermal Energy Act 2000. Royalty revenue is recognised as income in the period when the timing and value of the receipt is certain.

Net gain on non-current assets

Income from the disposal of non-current assets is recognised when the control of the asset has passed to the buyer and has been determined by comparing proceeds with the carrying amount. When revalued assets are sold, the revaluation surplus is transferred to retained earnings.

Any gain / loss on disposal of non-current assets is recognised at the date control of the asset is passed to the buyer and is determined after deduction from proceeds of the asset at that time.

L) EXPENSES

Expenses are recognised to the extent that it is probable that the flow of economic benefits from the department will occur and can be reliably measured.

Expenses have been aggregated according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

The following are specific recognition criteria:

Employee benefit expenses

Employee benefit expenses include all costs related to employment including wages and salaries, non-monetary benefits and leave entitlements. These are recognised when incurred.

Superannuation

The amount charged to the Statement of Comprehensive Income represents the contributions made by the department to the


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superannuation plan in respect of current services of current departmental staff. The Department of Treasury and Finance centrally recognises the superannuation liability in the whole of government financial statements.

Depreciation and amortisation

All non-current assets, having a limited useful life, are systematically depreciated / amortised over their useful lives in a manner that reflects the consumption of their service potential. Amortisation is used in relation to intangible assets such as software, while depreciation is applied to tangible assets such as property, plant and equipment.

Assets' residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate, on an annual basis.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the time period or method, as appropriate, which is a change in accounting estimate.

Works of art controlled by the department have very long and indeterminate useful lives. Their service potential has not, in any material sense been consumed during the reporting period. Consequently, no depreciation has been recognised.

The value of leasehold improvements is amortised over the estimated useful life of each improvement, or the unexpired period of the relevant lease, whichever is shorter.

Land and non-current assets held for sale are not depreciated.

Depreciation / amortisation is calculated on a straight line basis over the estimated useful life of the following classes of assets as follows:

Class of asset Useful life (years)

Buildings 25-80

Leasehold Improvements Life of lease

Plant and Equipment 2-60

Intangibles / Software 3-10

Grants and subsidies

For contributions payable, the contribution will be recognised as a liability and expense when the entity has a present obligation to pay the contribution and the expense criteria are met.

All contributions paid by the department have been contributions with unconditional stipulations attached.

Resources provided free of charge

Resources provided free of charge are recorded as expenditure in the Statement of Comprehensive Income at their fair value and in the expense line items to which they relate.

Payments to SA Government

Payments to the SA Government relate to the return of surplus cash pursuant to the cash alignment policy and payments to the consolidated account for proceeds received from the sale of property.

M) CURRENT AND NON-CURRENT CLASSIFICATION

Assets and liabilities are characterised as either current or non-current in nature. Assets and liabilities that are sold, consumed or realised as part of the normal operating cycle even when they are not expected to be realised within 12 months after the reporting date have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.

Where asset and liability line items combine amounts expected to be realised within 12 months and more than 12 months, the department has separately disclosed the amounts expected to be recovered or settled after more than 12 months.

N) FINANCIAL ASSETS (INVESTMENTS)

In accordance with AASB 139 other financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss', 'held-to-maturity' investments, 'available-for-sale' financial assets, and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.



Available for sale financial assets

Certain shares held are classified as being available for sale and are stated at fair value. In accordance with Accounting Policy Framework IV – Financial Assets and Liabilities, Treasury and Finance has approved the measurement of Scope Global Pty Ltd by reference to the Equity Method prescribed by AASB 128 Investments in Associates, whereby the investor’s share of the investee’s profit or loss is recognised in the investor’s profit of loss. Gains and losses arising from changes in fair value are recognised directly in the financial assets available for sale revaluation surplus where it exists, until the investment is disposed of or is determined to be impaired. If there is a reduction in value arising from impairment it is recognised against the revaluation surplus where it exists. This category includes investments classified as ‘available for sale’ and any investments that do not fit the definitions for inclusion in any of the categories contained in AASB 139.

O) ASSETS

Assets have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position includes cash at bank and on hand.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

Cash is measured at its nominal value for Australian accounts while overseas accounts are measured using the exchange rate as per OANDA.com as at 30 June.

Receivables

Receivables include amounts receivable from goods and services, GST input tax credits recoverable, prepayments and other accruals.

Receivables arise in the normal course of selling goods and services to other government agencies and to the public. Receivables are generally settled within 30 days after the issue of an invoice or the goods / services have been provided under a contractual arrangement.

Collectability of receivables is reviewed on an ongoing basis. An allowance for doubtful debts is raised when there is objective evidence that the department will not be able to collect the debt. Bad debts are written off when identified.

Non-current assets held for sale

Non-current assets are classified as held for sale and stated at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. The condition is regarded as met only when the sale is highly probable and the asset's sale is expected to be completed one year from the date of classification.

Non-current assets relating to TAFE SA that will be transferred to Renewal SA (refer note 39) have not been disclosed as non-current assets held for sale because at the time of reporting, a reliable sale price has not been established. These assets are currently included in Property, Plant and Equipment (note 24).

Non-current assets classified as held for sale are presented separately from the other assets in the Statement of Financial Position.

Non-current assets

Acquisition and recognition

Non-current assets are initially recorded at cost, plus any incidental cost involved with the acquisition. Non-current assets are subsequently measured at fair value less accumulated depreciation which gives rise to a new fair value.

Where assets are acquired at no cost, or minimal cost, they are recorded at fair value in the Statement of Financial Position.

However, if the assets are acquired at no or minimal cost as part of a restructure of administrative arrangements then the assets are recognised at book value i.e. the amount recorded by the transferor public authority immediately prior to the restructure.

All non-current tangible assets with a value equal to or in excess of $10,000 are capitalised, with the exception of works of art. All works of art are capitalised irrespective of their value.

Revaluation of non-current assets

All non-current tangible assets are valued at fair value and revaluation of non-current assets or group of assets is only performed when its fair value at the time of acquisition is greater than $1 million and estimated useful life is greater than three years.

Every five years, the department revalues its land, buildings, leasehold improvements, works of art, core library and energy distribution and generation assets via an independent Certified Practicing Valuer.


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If at any time, management considers that the carrying amount of an asset materially differs from its fair value, then the asset will be revalued regardless of when the last valuation took place.

Non-current tangible assets that are acquired between revaluations are held at cost less depreciation until the next valuation, where they are revalued to fair value.

Any revaluation increment is credited to the asset revaluation surplus, except to the extent that it reverses a revaluation decrease of the same asset class previously recognised as an expense, in which case the increase is recognised as income. Any revaluation decrease is recognised as an expense, except to the extent that it offsets a previous revaluation increase for the same asset class, in which case the decrease is debited directly to the asset revaluation surplus to the extent of the credit balance existing in revaluation surplus for that asset class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amounts of the assets and the net amounts are restated to the revalued amounts of the asset.

Upon disposal or derecognition, any revaluation surplus relating to that asset is transferred to retained earnings.

Impairment

All non-current tangible and intangible assets are tested for indication of impairment at each reporting date. Where there is an indication of impairment, the recoverable amount is estimated. The recoverable amount is determined as the asset’s fair value less costs of disposal. However, there are instances where the asset is recorded at depreciated replacement cost as no market exists to obtain fair value. In these cases depreciated replacement cost is used. An amount by which the asset's carrying amount exceeds the recoverable amount is recorded as an impairment loss.

For revalued assets, an impairment loss is offset against the respective asset revaluation surplus.

Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either definite or indefinite. The department only has intangible assets with definite lives. The amortisation period and the amortisation method for intangible assets is reviewed on an annual basis.

The acquisition of or internal development of software is capitalised only when the expenditure meets the definition criteria (identifiability, control and the existence of future economic benefits) and recognition criteria (probability of future economic benefits and cost can be reliably measured) and when the amount of expenditure is greater than or equal to $10 000.

All research and development costs that do not meet the capitalisation criteria outlined in AASB 138 are expensed.

Where subsequent expenditure on intangible assets cannot be attributed to existing intangible assets, the expenditure is not capitalised but is classified as expenditure in the Statement of Comprehensive Income.

Fair value measurement

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the principal or most advantageous market, at the measurement date.

The department classifies fair value measurement using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements, based on the data and assumptions used in the most recent revaluation:

• Level 1 - traded in active markets and is based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at measurement date.

• Level 2 - not traded in an active market and are derived from inputs (inputs other than quoted prices included within level 1) that are observable for the asset, either directly or indirectly.

• Level 3 - not traded in an active market and are derived from unobservable inputs.

Non-financial assets

In determining fair value, the department has taken into account the characteristic of the asset (e.g. condition and location of the asset and any restrictions on the sale or use of the asset); and the asset's highest and best use (that is physically possible, legally permissible, financially feasible).

The department's current use is the highest and best use of the asset unless other factors suggest an alternative use is feasible. As the department did not identify any factors to suggest an alternative use, fair value measure was based on current use.



The carrying amount of non-financial assets with fair value at the time of acquisition that was less than $1 million or had an estimated useful life that was less than three years are deemed to approximate fair value.

Refer Note 23 to 27 for disclosure regarding fair value measurement techniques and inputs used to develop fair value measurements.

P) LIABILITIES

Liabilities have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard, or where offsetting reflects the substance of the transaction or other event.

Payables

Payables include creditors, accrued expenses, GST payable, employment on-costs and Paid Parental Leave Scheme payable.

Creditors represent the amounts owing for goods and services received prior to the end of the reporting period that are unpaid at the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations of the department.

Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of the reporting period and where an invoice has not been received.

The Paid Parental Leave Scheme payable represents amounts which the department has received from the Commonwealth Government to forward onto eligible employees via the department's standard payroll processes. That is, the department is acting as a conduit through which the payment to eligible employees is made on behalf of the Family Assistance Office.

All payables are measured at their nominal amount, are unsecured and are normally settled within 30 days from the date of the invoice or date the invoice is first received.

Employee benefits on-costs include payroll tax, Return to Work SA levies and superannuation contributions in respect of outstanding liabilities for salaries and wages, long service leave, annual leave and skills and experience retention leave.

The department makes contributions to several State Government and externally managed superannuation schemes. These contributions are treated as an expense when they occur. There is no liability for payments to beneficiaries as they have been assumed by the respective superannuation schemes. The only liability outstanding at reporting date relates to any contributions due but not yet paid to the South Australian Superannuation Board or external schemes.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement.

The department has entered into operating leases in relation to office accommodation and motor vehicles for its administrative and operating activities.

Operating Leases

Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets.

Financial guarantees

At the time a financial guarantee contract is issued, it is recognised as a contingent liability as it is not expected that the guarantee will be called upon. If there is a material increase in the likelihood that the guarantee may have to be exercised, the financial guarantee is measured at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

In determination of fair value, consideration is given to the following factors:

• the overall capital management / prudential supervision framework in operation

• the protection provided by the State Government by way of funding should the probability of default increase

• the probability of default by the guaranteed party

• the likely loss to the department in the event of default.

The department has reviewed its financial guarantees and determined that there is no material liability to be recognised for financial guarantee contracts as at 30 June 2016 (there was no material liability recognised for financial guarantee contracts in 2015).

Whilst no liability has been recognised for financial guarantee contracts, further note disclosures relating to financial guarantees are contained at note 34.


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Employee Benefits

These benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid. Long-term employee benefits are measured at present value and short-term employee benefits are measured at their nominal amounts.

Salaries and wages, annual leave, skills and experience retention leave and sick leave

The liability for salaries and wages is measured as the amount unpaid at the reporting date at remuneration rates current at reporting date.

The annual leave liability and the skills and experience retention leave liability is expected to be payable within 12 months and is measured at the undiscounted amount expected to be paid.

No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees is estimated to be less than the annual entitlement for sick leave.

Long service leave

The liability for long service leave is measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.

The estimated liability for long service leave is based on actuarial assumptions over expected future salary and wage levels, experience of employee departures and periods of service. These assumptions are based on employee data over SA government entities.

Expected future payments are discounted using market yields at the end of the reporting period on government bonds with durations that match, as closely as possible, the estimated future cash outflows.

The current portion of long service leave reflects the amount of long service leave expected to be taken in the next 12 months, based on historical data.

Provisions

Provisions are recognised when the department has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the department expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the reporting date. If the effect of the time value of money is material, provisions are discounted for the time value of money and the risks specific to the liability.

The workers compensation provision is an actuarial estimate of the outstanding liability as at 30 June 2016 provided by a consulting actuary engaged through the Office for the Public Sector. The provision is for the estimated cost of ongoing payments to employees as required under current legislation.

The department is responsible for the payment of workers compensation claims.

Q) UNRECOGNISED CONTRACTUAL COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES

Commitments include operating, capital and outsourcing arrangements arising from contractual or statutory sources and are disclosed at their nominal value.

Contingent assets and contingent liabilities are not recognised in the Statement of Financial Position, but are disclosed by way of a note and, if quantifiable, are measured at nominal value.

Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to the Australian Taxation Office. If GST is not payable to, or recoverable from, the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.



ACTIVITIES OF THE DEPARTMENT NOTE 4

The department has identified 11 broad activities that reflect the nature of the services delivered to the South Australian community. The activities and their objectives of the department are:

ACTIVITY 1: OFFICE OF THE ECONOMIC DEVELOPMENT BOARD

This activity is to support the Economic Development Board (EDB) by providing a secretariat function as well as oversight and management of its assigned budget, including procurement and contracting management functions.

ACTIVITY 2: EMPLOYMENT AND SKILLS FORMATION

This activity is to strengthen the economic prosperity and social wellbeing of South Australians through:

• strategic employment, skills formation and workforce development

• implementing the WorkReady and Jobs and Skills policies.

ACTIVITY 3: SCIENCE, TECHNOLOGY AND INFORMATION ECONOMY

This activity is to provide the government with a strategic and coordinated focus in science, technology and information economy policy development and program delivery, to support state productivity, and maximise economic benefit to the state.

ACTIVITY 4: ARTS

This activity is to ensure the state recognises and capitalises on economic opportunities arising from the diverse arts and cultural organisations, practitioners, events and physical assets in the state by developing programs that build on cultural heritage and creativity, and providing financial support to the creative industries.

ACTIVITY 5: HEALTH INDUSTRIES SA

This activity is to increase investment and employment in South Australia’s health and biomedical sector to achieve the government’s vision for the state to become a globally recognised leader in health research, ageing and related services and products.

ACTIVITY 6: MINERAL RESOURCES AND ENERGY

This activity is to unlock the full potential of South Australia’s resources, energy and renewable assets and maintain the state’s reputation as a leading resource investment destination.

ACTIVITY 7: OPPORTUNITIES FOR SMALL BUSINESS

This activity is to support small businesses to establish, grow and be sustainable by providing online self-help tools, resources and information, advice and support for business licensing, along with targeted business development training and workshops, and to support the role of the Small Business Commissioner.


NEW AND REVISED ACCOUNTING STANDARDS AND POLICIESNOTE 3

The department did not change any of its accounting policies during 2015-16.

Except for AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities: which the department has early adopted, Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by the department for the period ending 30 June 2016. The department has assessed the impact of the new and amended standards and interpretations and considers there will be no impact on the accounting policies or the financial statements of the department.

AASB 16 Leases will apply for the first time to the 30 June 2020 financial report. The standard will require the department to recognise all leased items in the statement of financial position as assets representing the value of items leased and as liabilities representing the expected future lease payments.

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ACTIVITY 8: WATER INDUSTRY TECHNICAL AND SAFETY REGULATION

This activity is to support the enforcement, compliance and promotion of technical and safety regulation of plumbing and equipment.

ACTIVITY 9: GLOBALLY INTEGRATING THE SA ECONOMY

This activity is to support sustainable economic growth by building on South Australia’s competitive advantages by facilitating investment, account management of key businesses, case management of major projects across the state, and management of trade, population and migration polices. It also contributes directly to meeting the skills needs of the state’s employers via nomination of skilled migrants and certification of employer applications to nominate skilled migrants.

ACTIVITY 10: INDUSTRY AND INNOVATION

This activity is to assist with the transformation of the state’s economy to utilise advanced technologies with innovative business and revenue models to build globally competitive high-value firms and activities. Through targeted programs such as Manufacturing Works, Our Jobs and Northern Economic Plan, this activity supports the state’s manufacturing and small business sectors to increase and build their capacity and capability to innovate, develop new products, and enter and compete in new markets.

ACTIVITY 11: ABORIGINAL AFFAIRS AND RECONCILIATION

This activity is to empower Aboriginal people to have a stronger voice in decision making across government and within communities, and provide leadership in the promotion of effective governance arrangements. The department provides whole of government policy advice and leadership, supports engagement with Aboriginal stakeholders through the provision of culturally appropriate advice to government, facilitates the protection and preservation of Aboriginal heritage and culture, and supports the state’s Aboriginal land holding authorities.

The disaggregated disclosure schedules present expenses, income, assets and liabilities information attributable to each of these activities for the years ended 30 June 2016 and 30 June 2015. The activities of the department are consistent with those reported in the 2015-16 Budget papers.

EMPLOYEE BENEFITS EXPENSENOTE 5

Note 2016 $’000

2015 $’000

Salaries and wages 84,253 83,601TVSPs (refer below) 256 4,332Long service leave 4,565 4,655Annual leave 8,138 7,281Skills and experience retention leave 296 647Employment on-costs - superannuation 10,311 10,043Employment on-costs - other 5,611 5,619Workers compensation 3,098 -Board fees 36 1,293 1,326

Total employee benefits expense 117,821 117,504


Workers compensation has increased primarily due to a change in the treatment of Seriously Injured Claims in the actuarial valuation. The methodology used in previous years allocated the liability of Seriously Injured Claims across agencies. In 2016 the liability for Seriously Injured Claims has been allocated to the agencies that hold these claims. An employee was injured in the workplace in 2012 which resulted in a greater than 30% body impairment which requires the department to provide income maintenance for the normal working life of the employee.


2016 Number of employees

2015 Number of employees

$141 500 - $145 000* n/a 3 $145 001 - $155 000 14 10

$155 001 - $165 000 12 9

$165 001 - $175 000 6 12

$175 001 - $185 000 7 9

$185 001 - $195 000 10 7

$195 001 - $205 000Δ 10 7

$205 001 - $215 000^ 6 4

$215 001 - $225 000^ 3 7

$225 001 - $235 000 2 3

$235 001 - $245 000 1 3

$245 001 - $255 000 1 1

$255 001 - $265 000 - 2

$265 001 - $275 000 2 1

$275 001 - $285 000 3 1

$295 001 - $305 000 - 2

$305 001 - $315 000 - 2

$315 001 - $325 000^ 2 3

$325 001 - $335 000Δ 2 -

$345 001 - $355 000 1 -

$375 001 - $385 000^ 1 3

$405 001 - $415 000 1 -

$455 001 - $465 000Δ 1 -

$505 001 - $515 000 1 -

$575 001 - $585 000^ - 1 $675 001 - $685 000Δ 1 -

Total number of employees 87 90

REMUNERATION OF EMPLOYEES

The number of employees whose remuneration received or receivable falls within the following bands:


Targeted voluntary separation packages (TVSPs) and early terminations 2016 $’000

2015 $’000

Amount paid during the reporting period to these employees:

TVSPs 256 4,332 Annual leave, LSL and SERL paid to those employees 61 1,305

Employment on-costs (payroll tax and Shared Services SA processing fees) 4 134

321 5,771

Recovery from the Department of Treasury and Finance - (3,861)

Net cost to the department 321 1,910

The number of employees who received a TVSP or early termination payment during 2015-16 was 4 (36).

The recovery from the Department of Treasury and Finance of $3.861 million in 2015 is reflected in the financial statements as Revenues from SA Government.

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Note 2016 $’000

2015 $’000

Accommodation and service costs 18,917 18,230Accounting and audit fees 381 405Communications and information technology 7,172 12,162Contractors 16,108 13,569Consultancies (refer below) 4,601 4,583Energy supply fuel and lubricants 5,651 6,488Lease incentive amortisation 31 (276) (240)Marketing 3,393 1,858Office administration expenses 9,316 9,086Overseas trade representation (1) 648 676Remote areas energy supplies (RAES) 1,117 1,945Shared service fees (2) 4,061 3,830Staff related expenses 2,177 2,266Travel and related expenses 5,314 4,965

Total supplies and services 78,580 79,823

Number 2016 $’000

Number 2015 $’000

Below $10,000 37 159 32 148 Equal or above $10,000 76 4,442 72 4,435

Total paid / payable to the consultants engaged 113 4,601 104 4,583

SUPPLIES AND SERVICESNOTE 6

The total supplies and services amount disclosed includes GST amounts not recoverable from the ATO due to the department not holding a tax invoice or payments related to third party arrangements.

(1) Represents payments made to Austrade relating to activities promoting South Australia.

(2) Represents payments to the Department of Planning, Transport and Infrastructure, Department of Primary Industries and Regions SA and the Department of the Premier and Cabinet for the provision of corporate support and project management services.

The number and dollar amount of consultancies paid / payable (included in supplies and services expense) that fell within the following bands:


* This band has been included for the purposes of reporting comparative figures based on the executive base level remuneration rate for 2014-15.

Δ This bandwidth includes employees that have received TVSP and (or) termination payments in 2015-16.

^ This bandwidth includes employees that have received TVSP and (or) termination payments in 2014-15.

The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. Remuneration of employees reflects all costs of employment including salaries and wages, TVSPs / early terminations, superannuation contributions, fringe benefits tax and any other salary sacrifice benefits. The total remuneration received by these employees for the year was $19.933 million ($18.757 million).

This table includes three employees that transitioned to Investment Attraction South Australia (IASA) on 1 April 2016.


DEPRECIATION AND AMORTISATION EXPENSES

GRANTS AND SUBSIDIES

NOTE 7

NOTE 8

2016 $’000

2015 $’000

Class of assistance Arts and Cultural 128,818 127,625TAFE SA 234,287 232,839Skills and Employment - VET Subsidies 52,852 79,587Skills and Employment - Other 43,616 46,786Resources and Energy 28,513 15,205Industry and Innovation 29,376 22,298Investment Attraction SA 2,931 -International Engagement, Trade, Immigration and Higher Education 2,777 7,581Aboriginal Affairs and Reconciliation 4,775 5,341Other 392 832

Total grants and subsidies 528,337 538,094

2016 $’000

2015 $’000

Libraries Board of South Australia 33,184 33,888 Adelaide Festival Centre Trust 17,454 17,098 Art Gallery Board 12,219 12,349 Museum Board 11,471 11,071 Country Arts SA 9,275 5,054 Adelaide Festival Corporation 8,367 8,207 Arts industry assistance 5,887 10,429 South Australian Film Corporation 5,758 4,760 History Trust of South Australia 5,608 5,327

2016 $’000

2015 $’000

Depreciation

Plant and equipment 2,175 2,849Buildings and leasehold improvements 27,126 26,755

Total depreciation 29,301 29,604

Amortisation

Intangible / software 1,966 2,063

Total amortisation 1,966 2,063

Total depreciation and amortisation expense 31,267 31,667

Further details of the Arts and Cultural grant recipients are as follows:


In 2016, DSD provided TAFE SA with funding of $234.3 million relating primarily to VET subsidies and structural support ($223.8 million), capital grant funding ($6.3 million) and TVSP support ($3.4 million).

In 2015, DSD provided TAFE SA with funding of $232.8 million relating primarily to VET subsidies and structural support ($221.2 million), capital grant funding ($5.4 million) and TVSP support ($3.4 million).

P 82

2016 $’000

2015 $’000

Arts Project assistance 3,454 2,772 Adelaide Symphony Orchestra 2,553 2,501 State Theatre Company of South Australia 2,528 2,507 Adelaide Fringe 1,619 1,685 State Opera of South Australia 1,579 1,551 Australian Dance Theatre 1,205 1,226 Jam Factory of Contemporary Craft and Design 1,106 1,204 Adelaide Film Festival 1,103 1,129 Tandanya 1,080 1,092 The Australian Children’s Performing Arts Company 1,040 1,102 Carrick Hill Trust 971 925 Disability Information & Resource Centre - 100 Other grants and subsidies 1,357 1,648

Total Arts and Cultural grants 128,818 127,625

OTHER EXPENSESNOTE 9

2016 $’000

2015 $’000

Bad and doubtful debts 403 479Donated assets - 1,598Asset derecognition 3,055 599Assets written down to fair value - Land and buildings held for sale 76 2,690Other 282 42

Total other expenses 3,816 5,408

AUDITOR’S REMUNERATIONNOTE 10

2016 $’000

2015 $’000

Audit fees paid / payable to the Auditor-General's Department relating to the audit of the financial statements

377 401

Total audit fees 377 401

No other services were provided by the Auditor-General’s Department.

Auditor’s remuneration costs are recognised in the Statement of Comprehensive Income and included in the balance of accounting and audit fees (refer note 6).

The increase in asset derecognition expense in 2016 is due to the derecognition of assets on Aboriginal lands to reflect that these assets are controlled by Aboriginal landholding authorities and not by the department.

GRANTS AND SUBSIDIES CONTINUEDNOTE 8



REVENUES FROM FEES AND CHARGES

INDUSTRY LICENSE FEES

NOTE 12

NOTE 13

2016 $’000

2015 $’000

Infrastructure recharge to TAFE SA 20,727 23,753Corporate services recharge to TAFE SA 136 2,341Mining and petroleum application fees, rentals and licences 21,735 21,497Rental income 5,860 6,421Immigration application fees 724 20Arts industry related fees 1,277 1,835Fees for services 18 4,213Contract administration 686 776Other 937 319

Total revenues from fees and charges 52,100 61,175

2016 $’000

2015 $’000

Industry license fees 6,816 6,667

Total Industry license fees 6,816 6,667

Industry license fees include license fees on electricity and gas and industry bodies in South Australia. Fees are determined by the Minister for Mineral Resources and Energy and are levied by the Essential Services Commission of South Australia.

The financial year ended 30 June 2015 includes residual costs relating to the Shanghai office closure and full year costs for the Jinan office.

The financial year ended 30 June 2016 includes full year costs for the Jinan office and additional support provided for the South Australian Governments trade efforts, including building on the South Australia-Shandong Province sister state relationship.

2016 $’000

2015 $’000

Operating expenses 569 386 Operating revenues 11 -Funds advanced to overseas offices towards operating expenses 460 396


OVERSEAS REPRESENTATIVE OFFICES NOTE 11

The following table provides a summary of the financial transactions for the reporting period for overseas offices.

The costs relating to overseas representation provided through Austrade are not included in the table below.

The reduction in revenue from fees and charges in 2016 is predominantly due to lower recharges to TAFE SA of $9.4 million. The reduction is due to lower infrastructure costs due to TAFE SA vacating office and campus sites and the transfer of information, communication and technology services from the department to TAFE SA including the transfer of employees.

P 84

COMMONWEALTH REVENUES

SALE OF ELECTRICITY

NOTE 15

NOTE 14

2016 $’000

2015 $’000

Grants

National Partnership Agreement on Skills Reform 27,419 32,020Tradestart 347 264Auslamp: Magnetotelluric Survey of the Western / Centre Gawler Craton 290 -Validation of a National Skills Professional Standards Framework 220 -Supplier Access to Major Projects Program - Domain Specialist - Water 149 114Municipal and Essential Services - Murputja and Watarru Power Station Fuel Contribution 110 181National Energy Efficiency Buildings 67 278Remote Indigenous Public Internet Access 57 155Greenhouse and Energy Minimum Standards (GEMS) Inspections 21 -Anangu Pitjantjatjara Yankunytjatjara (APY) Lands Regional Procurement Strategy 20 7Street Lighting Energy Efficiency Program 8 16TAFE Fee Waivers for Childcare Qualifications - 1,841Joint Group Training Program - 919Community Education Partnerships - Artists in Residence Initiative 2015 - 250

Total Commonwealth revenues 28,708 36,045

2016 $’000

2015 $’000

Sale of electricity - remote areas 4,329 4,126

Total sale of electricity 4,329 4,126

All Commonwealth funding received for the above listed programs was spent during the 2015-16 financial year, with the exception of the Validation of a National Skills Professional Standards Framework $0.220 million.

2015-16 COMMITMENTS

Commonwealth revenue of $0.220 million was received for the Validation of a National Skills Professional Standards Framework. This entire amount was not spent and a carry-over will be sought to fund 2016-17 commitments.

The sale of electricity revenue is electricity tariff charges to customers within the Remote Areas Energy Supplies (RAES) scheme.

INTEREST AND INVESTMENT REVENUESNOTE 16

2016 $’000

2015 $’000

Interest revenues 20 23Dividends received 375 405

Total interest and investment revenues 395 428



NOTE 18

2016 $’000

2015 $’000

Land and buildings

Proceeds from disposal 9,595 16,019Less: net book value of assets disposed (18,201) (17,361)

Total land and buildings (8,606) (1,342)

Plant and equipment:

Proceeds from disposal 17 16Less: net book value of assets disposed (8) (330)

Total plant and equipment 9 (314)

Total net loss from disposal of non-current assets (8,597) (1,656)

NET GAIN / LOSS FROM THE DISPOSAL OF NON-CURRENT ASSETS

OTHER REVENUESNOTE 19

2016 $’000

2015 $’000

Fuel tax credits 2,308 1,487Support for the regulation of Extractive Mining Operations 391 558Sponsorship revenues 2,418 1,511Recoveries 7,845 7,766Community Development Fund 1,250 1,250Other revenues 1,632 1,947

Total other revenues 15,844 14,519

The net loss on disposal in 2016 and 2015 predominantly relates to the sale of land and buildings deemed surplus to requirements following the establishment of the new Sustainable Industries Education Centre at Tonsley. Net losses on disposal occur due to the time between the valuation of assets and the sale or disposal.


RESOURCES RECEIVED FREE OF CHARGENOTE 17

2016 $’000

2015 $’000

Donated assets 182 1,021

Total resources received free of charge 182 1,021

P 86

NOTE 20

2016 $’000

2015 $’000

Revenues from SA Government:

Appropriations from Consolidated Account pursuant to the Appropriation Act 634,186 627,978Appropriations from the Governor's Appropriation Fund pursuant to the Public Finance and Audit Act - 36,360 Appropriations under other Acts 5,018 16,325Accrual Appropriation 2,076 6,057

Total revenues from SA Government 641,280 686,720

Payments to SA Government:

Return of surplus cash pursuant to cash alignment policy - 6,379Payments to consolidated account for sale of property 7,873 8,482

Total payments to SA Government 7,873 14,861

REVENUES FROM / PAYMENTS TO SA GOVERNMENT

Total revenue from Government consists of $609.329 million ($633.925 million) for operational funding and $24.857 million ($30.413 million) for capital projects.

In addition, an advance of $5.018 million ($16.325 million) was received pursuant to Treasurer's contingency. Contingency appropriation in 2015-16 included $3.411 million for TAFE SA TVSP reimbursement, $1.265 million for co-location of Office of Small Business Commissioner and Office of Industry Advocate. The remaining $0.342 million related to salary supplementation during 2015-16.

Payments were made to SA Government in relation to the sale of property for the sustainable infrastructure projects.

CASH AND CASH EQUIVALENTSNOTE 21

2016 $’000

2015 $’000

Deposits with the Treasurer – Operating Account 99,417 161,982Deposits with the Treasurer – Accrual Appropriation 7,611 10,034Deposits at call - overseas offices 84 205Other 3 4

Total cash and cash equivalents 107,115 172,225

DEPOSITS WITH TREASURER – OPERATING ACCOUNT

Includes cash securities held for mining and petroleum remediation in accordance with the Mining Act 1971 and the Petroleum and Geothermal Energy Act 2000 of $5.387 million ($4.407 million). The department only has claims to these funds if the licensee fails to perform its legislative requirements (refer note 31).

DEPOSITS WITH TREASURER – ACCRUAL APPROPRIATION

This balance relates to funds held in the Accrual Appropriation Excess Funds Account. The balance of these funds is not available for general use, i.e. funds can only be used in accordance with the Treasurer's / Under Treasurer's approval.

INTEREST RATE RISK

Cash on hand is non-interest bearing. Deposits at call and with the Treasurer earn a floating interest rate, based on daily bank deposit rates. The carrying amount of cash represents nominal value.



The $17.1 million reduction in accrued revenue is due primarily to amounts owing at 30 June 2015 from TAFE SA in relation to Skills for All payments ($12.9 million), recovery of ICT contract payments ($3.2 million) and cost recovery for Business Intelligence Program and Student Information System Revitalisation Program ($2.1 million).

MOVEMENT IN THE ALLOWANCE FOR DOUBTFUL DEBTS

The allowance for doubtful debts (allowance for impairment losses) is recognised when there is objective evidence (i.e. calculated on past experience and current and expected changes in client credit rating) that a receivable is impaired.

An allowance for impairment loss has been recognised in 'Other expenses' in the Statement of Comprehensive Income for specific debtors and debtors assessed on a collective basis for which such evidence exists.

2016 $’000

2015 $’000

Movements in the allowance for doubtful debts (impairment loss):

Carrying amount at the beginning of the period (1,855) (1,312)Decrease in allowance due to restructure activities - (104)Increase in the allowance (403) (476)Amounts written off - 37

Carrying amount at the end of the period (2,258) (1,855)

INTEREST RATE AND CREDIT RISK

Receivables are raised for all goods and services provided for which payment has not been received. Receivables are normally settled within 30 days. Trade receivables and accrued revenues are non-interest bearing.

Other than as recognised in the allowance for doubtful debts, it is not anticipated that counterparties will fail to discharge their obligations. The carrying amount of receivables approximates net fair value due to being receivable on demand. There is no concentration of credit risk.

a. Maturity analysis of receivables - refer to table in Note 42.

b. Categorisation of financial instruments and risk exposure information - refer to Note 42.

RECEIVABLESNOTE 22

2016 $’000

2015 $’000

Current

Receivables 5,952 10,416Allowance for doubtful debts (2,258) (1,855)GST input tax recoverable 3,706 3,667Prepayments 678 473Accrued revenue 2,028 19,176Other receivables 107 168

Total current receivables 10,213 32,045

Total receivables 10,213 32,045

NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALENOTE 23

2016 $’000

2015 $’000

Land and buildings 16,191 30,011

Total non-current assets classified as held for sale 16,191 30,011


P 88

Non-current assets relating to TAFE SA that will be transferred to Renewal SA (refer note 39) have not been disclosed as non-current assets held for sale because at the time of reporting, a reliable sales price has not been established. These assets are currently included in Property, Plant and Equipment (note 24).

2016 $’000

2015 $’000

Movements in the non-current assets classified as held for sale:

Carrying amount at the beginning of the financial year 30,011 7,500 Net assets transferred as a result of an administrative restructure - 41,090 Assets reclassified to assets held for sale 4,465 1,472 Disposals / transfers (18,209) (17,361)Assets written down to fair value (76) (2,690)

Carrying amount at the end of the financial year 16,191 30,011

VALUATION OF ASSETS HELD FOR SALE

Properties classified as held for sale were valued in accordance with the principles outlined in the note 2(O).


2016 $’000

2015 $’000

Plant and equipment

Plant and equipment at cost (deemed fair value) 7,123 7,289Plant and equipment at fair value 9,554 10,391Accumulated depreciation (6,648) (5,617)

Total plant and equipment 10,029 12,063

Building and leasehold improvements

Buildings and leasehold improvements at fair value 807,659 786,502Accumulated depreciation (53,789) (26,755)

Total buildings and leasehold improvements 753,870 759,747

Land

Land at fair value 168,981 172,226

Total land 168,981 172,226

Works of art

Works of art at fair value 5,271 5,240

Total works of art 5,271 5,240

Capital works in progress

Works in progress at cost 5,880 12,612

Total capital works in progress 5,880 12,612

Total property, plant and equipment 944,031 961,888

PROPERTY, PLANT AND EQUIPMENTNOTE 24


VALUATION OF WORKS OF ART

The valuation of works of art for the former DMITRE only, was performed by Theodore Bruce, an independent valuer, as at 9 May 2013. The valuer arrived at fair value based on recent market transaction for similar items.

The value of assets transferred on restructure are held at fair value based on the book value recorded by the transferor agency immediately prior to the transfer.

VALUATION OF LAND AND BUILDINGS

The valuation of land and buildings for the former DMITRE only, was performed by an independent Certified Practicing Valuer from Liquid Pacific Pty Ltd, as at 30 June 2014.

The valuer arrived at fair value using the market approach. The valuation was based on recent market transactions for similar land and buildings (non-specialised) in the area and includes adjustments for factors specific to the land and building being valued such as size, location and current use.

The valuer used depreciated replacement cost for specialised buildings, due to there not being an active market for such buildings. The depreciated replacement cost considered the need for ongoing provision of government services; specialised nature of the assets, including the restricted use of assets; size, condition, location and current use of the assets. The valuation was based on a combination of internal records, specialised knowledge and the acquisition / transfer costs.

The value of assets transferred on restructure are held at fair value based on the book value recorded by the transferor agency immediately prior to the transfer.

Plant and equipment

$’000

Building and leasehold

improvements$’000

Land$’000

Works of art$’000


$’000

Total$’000

Carrying amount at the beginning of the financial year 12,063 759,747 172,226 5,240 12,612 961,888

Additions 219 880 - 31 20,814 21,944Capitalisation 1,188 26,358 - - (27,546) -Revaluation decrement - (3,321) - - - (3,321)Asset derecognition (1,363) (1,692) - - - (3,055)Depreciation and amortisation (2,175) (27,126) - - - (29,301)Net assets transferred as a result of an administrative restructure

- 159 - - - 159

Assets received free of charge 182 - - - - 182Assets reclassified to assets held for sale (85) (1,135) (3,245) - - (4,465)

Carrying amount at the end of the financial year 10,029 753,870 168,981 5,271 5,880 944,031

RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT The following table shows the movement of property, plant and equipment assets during 2015-16


P 90

Plant and equipment

$’000


improvements$’000

Land$’000

Works of art$’000


$’000

Total$’000

Carrying amount at the beginning of the financial year 11,627 8,291 2,562 105 1,796 24,381

Additions 374 43 8,654 4 20,537 29,612Capitalisation - 30,135 - - (30,135) -Disposals (330) - - - - (330)Donated Assets (1,336) - - - (262) (1,598)Revaluation increment - - 430 - - 430Depreciation and amortisation (2,849) (26,755) - - - (29,604)Asset derecognition - (599) - - - (599)Net assets transferred as a result of an administrative restructure

4,563 748,605 161,072 5,131 20,676 940,047

Assets received free of charge 14 419 588 - - 1,021Assets reclassified to assets held for sale - (392) (1,080) - - (1,472)

Carrying amount at the end of the financial year 12,063 759,747 172,226 5,240 12,612 961,888

RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT ASSETS The following table shows the movement of property, plant and equipment assets during 2014-15


INTANGIBLE ASSETSNOTE 25

2016 $’000

2015 $’000

Internally developed computer software 18,044 16,308Accumulated amortisation (5,007) (3,418)Other computer software 1,548 1,792 Other accumulated amortisation (1,405) (1,392)Intangibles works in progress 3,687 1,070

Total intangible assets 16,867 14,360

The department has no contractual commitments for the acquisition of intangible assets.

IMPAIRMENT

There were no indications of impairment of intangible assets at 30 June 2016..


Intangibles / Software

$’000

Intangibles works in progress

$’000

Total$’000

Carrying amount at the beginning of the financial year 707 - 707

Additions - 3,034 3,034Capitalisation 2,749 (2,749) -Transfers - (148) (148)Depreciation and amortisation (2,063) - (2,063)Net assets transferred as a result of an administrative restructure 11,897 933 12,830

Carrying amount at the end of the financial year 13,290 1,070 14,360

The following table shows the movement of intangible assets during 2014-15

INVESTMENTSNOTE 26

2016 $’000

2015 $’000

Contributed capital in subsidiary company 400 400 Share of retained profit 100% 100%

Retained profits attributable to subsidiary company:

Balance at 1 July 6,484 6,103Change in financial assets available for sale revaluation surplus 466 381

Total investments as at 30 June 6,950 6,484

SCOPE GLOBAL PTY LTD

Scope Global Pty Ltd, which has a reporting date of 30 June, is controlled by the Minister for Investment and Trade. Its principal activity is to secure international contracts for work in vocational education and training.

The current investment value is an estimate of fair value and is based on unaudited financial statements as at 30 June 2016.


Intangibles / Software

$’000

Intangibles works in progress

$’000

Total$’000

Carrying amount at the beginning of the financial year 13,290 1,070 14,360

Additions - 4,473 4,473Capitalisation 1,856 (1,856) -Depreciation and amortisation (1,966) - (1,966)

Carrying amount at the end of the financial year 13,180 3,687 16,867

RECONCILIATION OF INTANGIBLE ASSETSThe following table shows the movement of intangible assets during 2015-16

P 92

FAIR VALUE MEASUREMENTNOTE 27

Note Level 2 $’000

Level 3 $’000

Total $’000

Recurring fair value measurements

Land 24 158,263 10,718 168,981 Plant and equipment 24 - 10,029 10,029 Buildings and leasehold improvements 24 2,092 751,778 753,870 Works of art 24 5,083 188 5,271

Total recurring fair value measurements 165,438 772,713 938,151

Non-recurring fair value measurements

Land and buildings held for sale 23 16,191 - 16,191

Total non-recurring fair value measurements 16,191 - 16,191

Total fair value measurements 181,629 772,713 954,342

The fair value of non-financial assets must be estimated for recognition and measurement or for disclosure purposes. The department categorises non-financial assets measured at fair value into hierarchy based on the level of inputs used in measurement.

Fair value measurements recognised in the Statement of Financial Position are categorised into the following levels at 30 June 2016.

The department had no valuations categorised into level 1.

Fair value measurements at 30 June 2016


Note Level 2 $’000

Level 3 $’000

Total $’000

Recurring fair value measurements

Land 24 161,508 10,718 172,226 Plant and equipment 24 - 12,063 12,063 Buildings and leasehold improvements 24 2,297 757,450 759,747 Works of art 24 5,083 157 5,240

Total recurring fair value measurements 168,888 780,388 949,276

Non-recurring fair value measurements

Land and buildings held for sale 23 30,011 - 30,011

Total non-recurring fair value measurements 30,011 - 30,011

Total fair value measurements 198,899 780,388 979,287

Fair value measurements at 30 June 2015

There were no transfers of assets between level 1 and 2 fair value hierarchy levels in 2016. The department's policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.


VALUATION TECHNIQUES AND INPUTS

Valuation techniques used to derive level 2 and 3 fair values are at note 25 and 27. There were no changes in valuation techniques during 2016.

The following table is a reconciliation of fair value measurements using significant unobservable inputs (level 3).

Plant and equipment

$’000


improvements$’000

Land $’000

Works of art

$’000

Total $’000

Opening balance at 1 July 2015 12,063 757,450 10,718 157 780,388

Acquisitions 219 880 - 25 1,124 Capitalised subsequent expenditure 1,188 26,358 - 6 27,552 Asset write down (1,363) (1,692) - - (3,055)Acquisitions through administrative restructure - 159 - - 159 Assets received free of charge 182 - - - 182 Revaluation decrement - (3,321) - (3,321)Transfer out of level 3 (85) (969) - - (1,054)

Closing balance at 30 June 2016 12,204 778,865 10,718 188 801,975

Gains / (losses) for the period recognised in net result:

Depreciation and amortisation (2,175) (27,087) - - (29,262)

(2,175) (27,087) - - (29,262)

Carrying amount at 30 June 2016 10,029 751,778 10,718 188 772,713

Reconciliation of fair value measurements – Level 3

The impact on 2015-16 net result was the depreciation and amortisation expense as disclosed.

2016 $’000

2015 $’000

Current

Creditors and accrued expenses 24,351 119,434Employee on-costs 2,485 2,598

Total current payables 26,836 122,032

Non-Current

Employee on-costs 2,378 2,121

Total non-current payables 2,378 2,121

Total payables 29,214 124,153

PAYABLESNOTE 28

The $94.9 million reduction in payables is predominantly due to large accrued expenses processed at the end of 2015 including Skills for All Training Fund expenses (approximately $66 million); State Drill Core Reference Library ($7 million); and other capital accruals ($4.9 million).

As a result of an actuarial assessment performed by the Department of Treasury and Finance, the proportion of long service leave taken as leave has increased to 40% from the 2015 rate of 37% and the average factor for the calculation of employer superannuation cost on-cost has changed from 10.3% in 2015 to 10.2%. These rates are used in the employment on-cost calculation. The change results in an increase of $0.070 million on the employee on-costs. The impact on 2017 and future years cannot be reliably estimated.


P 94

INTEREST RATE AND CREDIT RISK

Creditors and accruals are raised for all amounts due but unpaid. Sundry creditors are normally settled within 30 days.

Employment on-costs are settled when the respective employee benefit that they relate to is discharged. All payables are non-interest bearing. The carrying amount of payables represents fair value due to the amounts being payable on demand.

2016 $’000

2015 $’000

Current

Accrued salaries and wages 1,276 666Annual leave 7,709 7,718Long service leave 1,498 1,536Skills and experience retention leave 392 607

Total current employee benefits 10,875 10,527

Non-current

Long service leave 25,610 23,535Skills and experience retention leave 288 209

Total non-current employee benefits 25,898 23,744

Total employee benefits 36,773 34,271

EMPLOYEE BENEFITS NOTE 29

AASB 119 contains the calculation methodology for the long service leave liability. The actuarial assessment performed by the Department of Treasury and Finance has provided a basis for the measurement of long service leave.

AASB 119 requires the use of the yield on long-term Commonwealth Government bonds as the discount rate in the measurement of long service leave liability. The yield on long-term Commonwealth Government bonds has decreased from 2015 (3.00%) to 2016 (2.00%). The decrease in the bond yield, which is used as the rate to discount future long service leave cash flows, results in an increase in the reported long service leave liability.

The net financial effect of the changes in the current financial year is an increase in the long service leave liability of $1.668 million. The impact on future periods is impracticable to estimate as the long service leave liability is calculated using a number of assumptions – a key assumption is the long-term discount rate.

The actuarial assessment performed by the Department of Treasury and Finance left the salary inflation rate at 4% for long service leave liability and the salary inflation rate at 3% for annual leave and skills, experience and retention leave liability.



2016 $’000

2015 $’000

Current

Lease incentive 349 240Security deposits 5,392 4,407Unearned revenue 1,687 1,879

Total current other liabilities 7,428 6,526

Non-current

Lease incentive 2,927 2,156Accumulated amortisation - lease incentive (1,614) (1,338)

Total non-current other liabilities 1,313 818

Total other liabilities 8,741 7,344

PROVISIONS

OTHER LIABILITIES

NOTE 30

NOTE 31

2016 $’000

2015 $’000

Current

Provision for workers compensation 395 314

Total current provisions 395 314

Non-current

Provision for workers compensation 3,500 953

Total non-current provisions 3,500 953

Total provisions 3,895 1,267

Carrying amount at the beginning of the period 1,267 600

Additional provisions recognised as a result of restructure activities - 1,097 Increase / (decrease) in provisions recognised 2,745 (123)Reductions resulting from payments (117) (307)

Carrying amount at 30 June 3,895 1,267

A liability has been reported to reflect unsettled workers compensation claims. The workers compensation provision is based on an actuarial assessment performed by the Office of the Public Sector.

Workers compensation has increased primarily due to a change in the treatment of Seriously Injured Claims in the actuarial valuation. The methodology used in previous years allocated the liability of Seriously Injured Claims across agencies. In 2016 the liability for Seriously Injured Claims has been allocated to the agencies that hold these claims. An employee was injured in the workplace in 2012 which resulted in a greater than 30% body impairment which requires the department to provide income maintenance for the normal working life of the employee.

Lease incentive received from the building owner applied as a contribution towards fit-out costs (as per agreement) and amortised over the period of the lease (10 years), commencing December 2009.

Security deposits are received to ensure mine operators rehabilitate sites and comply with all statutory requirements on cessation of mining operations. Cash deposits are classified as security deposits. The value of securities held in the form of bank guarantees are


P 96

reflected as a contingent asset (refer note 34) as the department only has a claim on these funds if the mining operator fails to meet its legislative requirements.

Unearned revenue mainly includes payments of rent and annual regulatory fees received for the first year of a mining tenement (exploration licence, mining lease, miscellaneous purposes licence, retention lease are all mining tenements in accordance with the Mining Act 1971). This revenue is held as unearned revenue until the Minister officially approves the grant of the mining tenement.

Annual rent and regulatory fees are also held as unearned revenue at the renewal of a mining tenement. Once a renewal decision has been made and a memorial has been instrumented in the Mining Register the revenue is then recognised as revenue. Annual rent for mining leases, retention leases and miscellaneous purposes licences which are granted or renewed over freehold land is refunded at this point to the relevant freehold landowners.

Capital commitments at 30 June 2016 mainly relate to the Adelaide Festival Centre precinct project.

Capital commitments at 30 June 2015 relate to the State Drill Core Reference Library.

CAPITAL COMMITMENTS

Capital expenditure contracted for at the reporting date but not recognised as liabilities in the financial statements are payable as follows:

EQUITY

UNRECOGNISED CONTRACTUAL COMMITMENTS

NOTE 32

NOTE 33

2016 $’000

2015 $’000

Retained earnings 1,003,992 1,029,846Financial asset available for sale revaluation surplus 4,346 3,880Revaluation surplus 2,668 5,989Contributed capital 11,738 10,263

Carrying amount at 30 June 1,022,744 1,049,978

2016 $’000

2015 $’000

Within one year 6,202 15,551 Later than one year but not later than five years 1,271 -

Total capital commitments 7,473 15,551


Amounts disclosed include commitments arising from agreements with contractors, consultants, ICT contracts and grant recipients.

OTHER COMMITMENTS

Commitments for the payment of other contracts and grant agreements in existence at the reporting date but not recognised as liabilities are payable as follows:

2016 $’000

2015 $’000

Within one year 54,751 50,886Later than one year but not later than five years 117,935 118,203Later than five years - 320

Total other commitments 172,686 169,409


The department's operating leases relate to office accommodation and motor vehicles. Office accommodation is leased from the Department of Planning, Transport and Infrastructure - Building Management Accommodation and Property Services. The leases are non-cancellable with terms ranging up to 10 years with some leases having the right of renewal. Motor vehicles are leased from SAFA through their agent LeasePlan Australia with lease periods of up to three years.

The department’s lease as lessor relates to the Adelaide Festival Centre and Her Majesty’s Theatre leased to the Adelaide Festival Centre Trust. The lease is non-cancellable for 20 years with the right of renewal.

CONTINGENT ASSETS

Where specific conditions relating to a financial assistance grant are not met, the department may request the amount granted be repaid by the grantee. There are no known contingent assets arising from these present obligations as at 30 June 2016.

The department receives securities in accordance with Acts administered by the department for mining and petroleum. These are obtained to ensure that a mine operator rehabilitates a site and complies with all statutory requirements on cessation of a licence. The amount held as bank guarantees at 30 June 2016 is approximately $125 million ($127 million). The department only has a claim on these funds if the licensee fails to perform its legislative requirements.

OPERATING LEASE COMMITMENTS

Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities are payable as follows:

CONTINGENT ASSETS AND LIABILITIESNOTE 34

2016 $’000

2015 $’000

Department as lessee: Within one year

10,824 13,096

Later than one year but not later than five years 12,154 19,093 Later than five years 2,756 -

Total operating lease commitments 25,734 32,189

Representing: Cancellable operating leases 1,224 3,417 Non-cancellable operating leases 24,510 28,772


2016 $’000

2015 $’000

Department as lessor: Within one year

5,973 5,786

Later than one year but not later than five years 25,257 24,628 Later than five years 50,652 57,191


Representing: Non-cancellable operating leases 81,882 87,605



P 98

CONTINGENT LIABILITIES

Guarantees and Indemnities

The nature of activities that the department is involved in can create potential exposure to mining matters, which the department may be required to remedy in the future. The department has some potential outstanding litigation specifically resulting from interpretation of past mining practices and petroleum exploration.

Certain matters associated with contaminants such as contaminated land and hazardous materials have been identified and are managed in accordance with recognised standards. This includes the environmental liabilities of past mining practices where there is no longer an active licence. For new activities, it is a lease condition that rehabilitation be undertaken by the leaseholder before a lease is surrendered. The department's responsibility is to ensure that a lease is not surrendered before appropriate rehabilitation has occurred, thus minimising the likelihood of future environmental risks to government. At this time, the financial impact, if any, cannot be reliably estimated.

The Minister for Investment and Trade has provided a $3.0 million guarantee to Scope Global Pty Ltd which has not been invoked as at 30 June 2016.

The Minister for Higher Education and Skills has entered an agreement to provide Le Cordon Bleu with a 10 year interest free loan of $7.0 million conditional upon Le Cordon Bleu entering into a building contract for the development of Le Cordon Bleu's city training facility.

TRANSFERRED IN

Under the Public Sector (Reorganisation of Public Sector Operations) Notice 2015, from 1 July 2015 the Office of the Industry Advocate was transferred from Department of the Premier and Cabinet to the Department of State Development. This included nine employees and budget funding of $1.227 million.

The effective date of the transfer was 1 July 2015.

On transfer of the Office of the Industry Advocate, the Department of State Development recognised the following assets and liabilities:

TRANSFERRED OUT

Under the Public Sector (Investment Attraction South Australia) Proclamation 2016, from 1 April 2016 resources from Invest in SA, International Engagement, Industry and Innovation, Office of the Economic Development Board and the Office of Science, Technology and Research transferred to establish Investment Attraction South Australia.

The effective date of the transfer is 1 April 2016.

Under section 9 of the Public Sector Act 2009, from 4 April 2016, the Greater Europe project transferred to Defence SA to continue delivery of the State’s Aerospace Strategy and present research regarding the University sector / research and development / investment.

The effective date of transfer is 4 April 2016.

TRANSFERRED FUNCTIONSNOTE 35


Total$’000

Assets

Receivables 4 Property, plant and equipment 159

Total Assets 163

Liabilities

Payables 36 Provisions 1 Employee benefits 330

Total liabilities 367

Total net assets transferred (204)


REMUNERATION OF BOARD AND COMMITTEE MEMBERSNOTE 36

* In accordance with the Department of the Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board / committee duties during the financial year. In addition, members of Parliament who are members of boards or committees did not receive any remuneration.

^ Indicates a member entitled to remuneration but has elected not to receive payment.

# Peer assessment is integral to Arts South Australia’s grants and funding processes. As a result of the Boards and Committees Reform review recommendations, the Chairs of these peer review panels are appointed for fixed terms and peer assessors are co-opted on an as needs basis.

Aboriginal and Torres Strait Islander Development Program Peer Assessment Panel#

M Blackman (expired December 2015)F Blanch (expired December 2015)A Cobby-Eckermann (expired December 2015)M Collard (expired December 2015)

P Herzich* (expired December 2015)S Meagher* (Chair – expired December 2015)H Shearer (expired December 2015)

This panel has no members appointed as at 30 June 2016.

Art for Public Places Committee

S Lauren (appointed September 2015)F Mantelli (appointed September 2015)

T Marijana (Chair – appointed September 2015)

Audit and Risk Management Committee

C Dunsford (Chair)G Giannopoulos*P Heithersay*

W Einarson J HillA Reid*

Community Arts Peer Assessment Panel#

T C Hopprich (retired July 2015)M Rankin J Pike (Chair – expired December 2015)K E Annear (appointed July 2015)K J Lazaroff (appointed August 2015)

J T Pierce (expired December 2015)O E Allen (expired December 2015)S J Noonan (appointed August 2015)C M Kenneally (appointed July 2015)V M Sowry (appointed July 2015)

Contemporary Music Peer Assessment Panel#

T T Boakes (expired February 2016)L D Godson (expired February 2016)

D H Rankine (expired February 2016)

The panel has no members appointed as at 30 June 2016.


Defence SA $’000

IASA $’000

Total$’000

Liabilities

Payables 8 95 103 Employee benefits 62 822 884

Total liabilities 70 917 987

Total net assets transferred (70) (917) (987)

The following assets and liabilities were transferred to Investment Attraction South Australia (IASA) and Defence SA

Net assets assumed by the department as a result of the administrative restructure are the carrying amount of those assets in the transferor’s Statement of Financial Position immediately prior to transfer. The net assets transferred were treated as a contribution by the Government as owner.

P 100


Disability Arts Peer Assessment Panel#

L BeasleyT DoyleC Harris

S Lush* K MartinsenC Pickering (Chair)

Economic Development Board

R J Spencer (Chair)R I Chapman (Deputy Chair)T BurgessD W Garrard L JacobsR G Kerin D G Lloyd

T M MonroB A PocockL C Read N G Roos D E Russell* D S Thomas

Electricity Act 1996 Assessors Panel

The panel has no members appointed as at 30 June 2016 and is currently under review.

Electrical Technical Advisory Committee

This committee merged with the Gas Technical Advisory Committee to form the Technical Advisory Committee.

Extractive Areas Rehabilitation Fund Project Assessment Panel

This panel had no members as at 30 June 2016 and is due to be reformed following a review.

Gas Act 1997 Assessors Panel

The panel has no members appointed as at 30 June 2016 and is currently under review.

Gas Technical Advisory Committee

This committee merged with the Electrical Technical Advisory Committee to form the Technical Advisory Committee.

Health Industries South Australia Advisory Board

C M Butcher (Chair)N S BrooksbyW M Castell (resigned December 2015)S Solomon T J Soon J M White

R J Spencer J Weatherill* S L WesselinghB Hewitt* (resigned May 2016)D E Russell* J J Snelling*

Investment Attraction Advisory Board

R Chapman (Chair – appointed July 2015)J Griggs (appointed March 2016)W Muirhead* (appointed March 2016)J Nason (appointed March 2016)

G Raby (appointed March 2016)D Reynolds* (appointed March 2016)N Rowe (appointed March 2016)

The board transferred to Investment Attraction South Australia from 1 April 2016.

Literature Peer Assessment Panel#

A Solding (expired March 2016)C A Lefevre (Chair – expired March 2016)J Owen (expired March 2016)

R E Starke (expired March 2016)S N Franzway (expired March 2016)



Minerals and Energy Advisory Council

J Anderson (appointed July 2015)K Yates (Chair – appointed June 2015)D Carter (reappointed July 2015)A Cole^ (appointed July 2015)D Cruickshanks-Boyd (appointed July 2015)I Gould (reappointed July 2015)G Guglielmo (reappointed July 2015)P Carr (Deputy Chair – reappointed July 2015)K Presser̂ (appointed July 2015)

J Kuchel^ (appointed July 2015)P Holloway (reappointed July 2015)A Marsland-Smith^ (appointed July 2015)G McKenzie (reappointed July 2015)J McGill^ (appointed July 2015) A McCleary (reappointed July 2015)J Roberts (reappointed July 2015)B Woods^ (appointed October 2015)M Reed^ (appointed July 2015)

Organisations Assessment Panel#

A C Beare (Chair – expired December 2015)J S Covernton R J Hervey (expired December 2015)J Pierce

B L MacQueenR Myers (expired December 2015)C Reid (expired December 2015)

Performing Arts Peer Assessment Panel#

C N Anderson (Chair – expired March 2016) C Wellman Kelly (expired March 2016)C N Williams (expired March 2016)D P Vacirca (expired March 2016)H Kleinig (expired March 2016)

M D Gray (expired March 2016)P J Sheedy* (expired March 2016)T Booth-Remmers (expired March 2016)T M Crawford* (expired March 2016)


Reources Infrastructure Taskforce Steering Committee

B J Carter̂ (Chair)P Heithersay*D Garrard

D Hogben* (appointed March 2016)D E Thomas T Guglielmo

Roxby Downs Advisory Reference Group

W Cossey (Chair – expired September 2015)M Gall* (expired September 2015)P Heithersay* (expired September 2015)

N Jones^ (expired September 2015)P Holloway^ (expired September 2015)

The reference group has no members appointed as at 30 June 2016 and is currently under review.

State Aboriginal Heritage Committee

S R Sparrow L Wright (expired June 2016)Q L Agius Y D Agius R H Campbell M A Koolmatrie (appointed June 2016)K Thompson (appointed June 2016)

H L Richards (expired June 2016) K M Richards (expired June 2016) H F Smith A C Stuart (expired June 2016)V G Sumner P Miller (appointed June 2016)G Wingfield (appointed June 2016)

South Australian Aboriginal Advisory Council

S Williams (Chair)C Rigney (Deputy Chair – expired May 2016)S Blake* (expired May 2016)R King* (expired May 2016)T Larkin (expired May 2016)

J Bayliss* (appointed June 2016)R O Callaghan (appointed June 2016)G M Coulthard* (appointed June 2016) T Lloyd* T L Ritchie*


P 102


M-R Hopkins* S Waters (expired May 2016)M B Enalanga (Deputy Chair - appointed June 2016)

W Miller (appointed June 2016)A B Shannon (appointed June 2016)

South Australian Science Council

D EvansC PlewaM VermaK Scott

G Fincher L Read (Chair)K Reynolds M Westwell

Technical Advisory Committee (Electrical and Gas)

A Baehnisch*A Clarke^J Corbett*G Cox*R Donnelly^R Faunt* (Chair)J Gater̂B Jackson^G Michael^ T Sika*

R Mignone^ L Moore^S O’Loughlin^T Stantinon*R Struve*A Szacinski*T V Tran^T Tucker*D Buchanan^

Tonsley Precinct Steering Committee

T Burgess (Chair)D Russell*J Hanlon*R Murt*

C Stirling^ A Skull^ (appointed August 2015)G Whitbread^ (resigned August 2015)J Schnieder̂

Training and Skills Commission

A L Smith (reappointed December 2015)A Kittel (Chair)S K Myatt K HenekerJ NewlynA L NieuwenhuisR Bonner (appointed December 2015)M A O'Leary (Deputy Chair – reappointed December 2015)

L A Palmer D A Black (Deputy Member)J D Buchanan (Deputy Member)I W Curry (Deputy Member)L Inglis (Deputy Member – resigned January 2016)L M Maynard (Deputy Member – appointed March 2016)K A Thornton* (Deputy Member – appointed December 2015)

Training and Skills Development Act 2008 Assessor Panel

The function of the panel has transferred to the Industrial Relations Commission of South Australia, which forms part of the Attorney-General’s Department.

Visual Arts, Craft and Design Peer Assessment Panel#

C De Rosa (expired March 2016)C G Belfrage (expired March 2016)C J Taylor (expired March 2016)C R Orchard (expired March 2016)J A Clutterbuck (expired March 2016)

L Slade* (Chair – expired March 2016)M F Nikou (expired March 2016)P Kruger (expired March 2016)S Humphreys (expired March 2016)



2016 Number

2015 Number

$1 - $9 999 78 117 $10 000 - $19 999 6 2 $20 000 - $29 999 2 4 $30 000 - $39 999 7 8 $40 000 - $49 999 8 3 $50 000 - $59 999 1 6 $60 000 - $69 999 1 1 $80 000 - $89 999 - 1 $100 000 - $109 999 - 1 $130 000 - $139 999 2 -$140 000 - $149 999 - 1 $150 000 - $159 999 1 -

Total number of members 106 144

REMUNERATION OF BOARD MEMBERS The number of members whose remuneration received or receivable falls within the following bands is:

Remuneration of members reflects all costs of performing board / committee member duties including sitting fees, superannuation contributions, fringe benefits tax and any other salary sacrifice arrangements. The total remuneration received or receivable by members was $1.364 million ($1.396 million).

Unless otherwise disclosed, transactions with members are on conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same circumstances.

For the purpose of this table, the travel allowance paid to members has not been included as remuneration as it is considered to be a reimbursement of direct out-of-pocket expenses incurred by the relevant members.

2016 $’000

2015 $’000

Reconciliation of cash and cash equivalents at 30 June

Cash and cash equivalents disclosed in the Statement of Financial Position 107,115 172,225

Balance as per the Statement of Cash Flows 107,115 172,225

For the purposes of the Statement of Cash Flows, cash on hand and on deposit includes cash deposits which are used in the cash management function on a day-to-day basis.

CASH FLOW RECONCILIATIONSNOTE 37


P 104

2016 $’000

2015 $’000

Reconciliation of net cash (used in) provided by operating activities to net cost of providing services:

Net cash (used in) provided by operating activities (40,853) 97,807 Less revenues from SA Government (641,280) (686,720)Add payments to SA Government 7,873 14,861

Add / (less) non-cash items:

Depreciation and amortisation expense of non-current assets (31,267) (31,667)Amortisation of lease incentive 276 240 Asset derecognition (3,055) (2,690)Doubtful debts expense (403) (479)Resources received free of charge 182 1,021 Asset revaluation (76) -Donated assets - (2,197)Transfer in for administrative restructure 363 54,174 Transfer out for administrative restructure (987) (1,720)Loss from disposal and write down of non-current assets (8,597) (1,656)(Decrease) increase in receivables (21,429) 27,848 Decrease in other assets - (15)Decrease (increase) in payables 85,132 (101,261)Increase (decrease) in other liabilities (793) 884 Increase in provisions (2,628) (667)Increase in employee benefits (2,502) (17,934)


EXTRACTIVE AREAS REHABILITATION FUND

The Extractive Areas Rehabilitation Fund is credited with amounts by way of royalty on extractive minerals and is used for the rehabilitation of land disturbed by extractive mining operations. The funds collected are used to limit damage to any aspect of the environment by such extractive mining operations in addition to the promotion of research into methods of mining engineering and practice by which environmental damage might be reduced.

Aggregate details of the transactions and balances relating to this trust fund to year ended 30 June are as follows:

TRUST FUNDSNOTE 38

CASH FLOW RECONCILIATIONS CONTINUEDNOTE 37

2016 $’000

2015 $’000

Operations:

Revenue 2,780 2,415 Expenditure 710 1,702

Net operating surplus 2,070 713

Assets:

Cash at bank 21,841 19,799 Receivables - 8

Total assets 21,841 19,807



2016 $’000

2015 $’000

Liabilities:

Liabilities 7 43

Total liabilities 7 43

Net assets 21,834 19,764

Funds:

Balance of funds at beginning of period 19,764 19,051 Net receipts 2,070 713

Fund balance at 30 June 21,834 19,764

Commitments in place at 30 June 638 670

TRUST FUNDS CONTINUEDNOTE 38

As detailed within the 2016-17 State Budget Papers, the ownership of key TAFE SA properties will soon transfer from the department to Renewal SA.

An independent valuation of these properties is planned for completion in September 2016. The valuation will guide sales price negotiations and associated agreements between the department and Renewal SA. The department has not disclosed these assets as non-current assets held for sale because, at the time of reporting a reliable sale price has not been established.

EVENTS AFTER THE REPORTING PERIOD

TRANSACTIONS WITH SA GOVERNMENT

NOTE 39

NOTE 40

SA Government Non-SA Government

Total

Note2016

$’000 2015

$’000 2016

$’000 2015

$’000 2016

$’000 2015

$’000

ExpensesEmployee benefits 5 5,566 5,953 112,255 111,551 117,821 117,504

Supplies and services: 6 Accommodation and service costs 17,060 14,343 1,857 3,887 18,917 18,230 Accounting and audit fees 377 401 4 4 381 405 Communications and information technology 1,967 3,185 5,205 8,977 7,172 12,162 Contractors 1,038 779 15,070 12,790 16,108 13,569 Consultancies 11 - 4,590 4,583 4,601 4,583 Energy supply fuel and lubricants - - 5,651 6,488 5,651 6,488 Lease incentive amortisation - - (276) (240) (276) (240)Marketing 8 1 3,385 1,857 3,393 1,858 Office administration expenses 2,624 3,133 6,692 5,953 9,316 9,086 Overseas trade representation - 38 648 638 648 676 Remote areas energy supplies (RAES) - - 1,117 1,945 1,117 1,945 Shared service fees 4,061 3,830 - - 4,061 3,830 Staff related expenses 149 187 2,028 2,079 2,177 2,266 Travel and related expenses 1,916 1,549 3,398 3,416 5,314 4,965


P 106

TRANSACTIONS WITH SA GOVERNMENT CONTINUEDNOTE 40


Total

Note2016

$’000 2015

$’000 2016

$’000 2015

$’000 2016

$’000 2015

$’000

Depreciation and amortisation expense 7 - - 31,267 31,667 31,267 31,667

Grants and subsidies: 8 Arts and Cultural 108,541 107,608 20,277 20,017 128,818 127,625 TAFE SA 234,287 232,839 - - 234,287 232,839 Skills and Employment - VET Subsidies 228 421 52,624 79,166 52,852 79,587 Skills and Employment - Other 13,203 11,926 30,413 34,860 43,616 46,786 Resources and Energy 1,633 752 26,880 14,453 28,513 15,205 Industry and Innovation 6,192 7,999 23,184 14,299 29,376 22,298 Investment Attraction SA* 2,931 - - - 2,931 -International Engagement, Trade, Immigration and Higher Education

1,850 1,659 927 5,922 2,777 7,581

Aboriginal Affairs and Reconciliation - 148 4,775 5,193 4,775 5,341 Other 143 520 249 312 392 832

Other expenses: 9 Asset derecognition - - 3,055 599 3,055 599 Bad and doubtful debts - - 403 479 403 479 Donated assets - - - 1,598 - 1,598 Assets written down to fair value - Land and buildings held for sale

- - 76 2,690 76 2,690

Other 282 42 - - 282 42

Net loss from the disposal of non-current assets 18 - 13 8,597 1,643 8,597 1,656

Total expenses 404,067 397,326 364,351 376,826 768,418 774,152

* Relates to transfer of appropriation funding for Investment Attraction South Australia for 1 April to 30 June 2016.

IncomeRevenues from fees and charges 12 29,074 38,211 23,026 22,964 52,100 61,175Industry license fees 13 6,816 6,667 - - 6,816 6,667Sale of electricity 14 2,330 2,114 1,999 2,012 4,329 4,126Commonwealth revenues 15 - - 28,708 36,045 28,708 36,045Interest and investment revenues 16 20 23 375 405 395 428Resources received free of charge 17 60 41 122 980 182 1,021

Other revenues: 19 Fuel tax credits - - 2,308 1,487 2,308 1,487 Support for the regulation of Extractive Mining Operations

391 558 - - 391 558

Sponsorship revenues 145 - 2,273 1,511 2,418 1,511 Recoveries 3,391 5,415 4,454 2,351 7,845 7,766 Community Development Fund 1,250 1,250 - - 1,250 1,250 Other 423 1,502 1,209 445 1,632 1,947

Total income 43,900 55,781 64,474 68,200 108,374 123,981




Total

Note2016

$’000 2015

$’000 2016

$’000 2015

$’000 2016

$’000 2015

$’000

Financial assets

Receivables: 22 Receivables 1,632 2,259 4,320 8,157 5,952 10,416 Allowance for doubtful debts - - (2,258) (1,855) (2,258) (1,855)GST input tax recoverable - - 3,706 3,667 3,706 3,667 Prepayments - - 678 473 678 473 Accrued revenue 440 19,025 1,588 151 2,028 19,176 Other - - 107 168 107 168

Investments 26 - - 6,950 6,484 6,950 6,484

Total financial assets 2,072 21,284 15,091 17,245 17,163 38,529

Financial liabilities

Payables: 28

Creditors and accrued expenses 4,358 94,623 19,993 24,811 24,351 119,434 Employee on-costs 2,270 2,212 2,593 2,507 4,863 4,719

Other liabilities: 31 Lease incentive 1,662 1,058 - - 1,662 1,058 Security deposits - - 5,392 4,407 5,392 4,407 Unearned revenue - - 1,687 1,879 1,687 1,879

Total financial liabilities 8,290 97,893 29,665 33,604 37,955 131,497

TRANSACTIONS WITH SA GOVERNMENT CONTINUEDNOTE 40

BUDGETARY REPORTING AND EXPLANATIONS OF MAJOR VARIANCES BETWEEN BUDGET AND ACTUAL AMOUNTS

NOTE 41

Note Variance Ref

Original DSD

Portfolio Budget

2016 $’000

Adjusted for TAFE

SA and Reclasses

2016 $’000

Original DSD

Budget 2016

$’000

Actual 2016

$’000

Variance $'000

Statement of Comprehensive Income

ExpensesEmployee benefits 5 311,165 (202,091) 109,074 117,821 8,747Supplies and services 6 248,729 (174,447) 74,282 78,580 4,298Depreciation and amortisation 7 36,354 (4,087) 32,267 31,267 (1,000)Grants and subsidies 8 228,335 305,782 534,117 528,337 (5,780)Net loss from disposal of non-current assets 18 46 - 46 8,597 8,551Other 9 4,453 (4,453) - 3,816 3,816

Total expenses 829,082 (79,296) 749,786 768,418 18,632

The following are brief explanations of variances between original budget and actual budget amounts.

Explanations are provided for variances where variances exceeds the greater of 10% of the original budgeted amount and 5% of original budgeted expenses.


P 108

BUDGETARY REPORTING AND EXPLANATIONS OF MAJOR VARIANCES BETWEEN BUDGET AND ACTUAL AMOUNTS CONTINUED

NOTE 41

Note Variance Ref

Original DSD

Portfolio Budget

2016 $’000

Adjusted for TAFE

SA and Reclasses

2016 $’000

Original DSD

Budget 2016

$’000

Actual 2016

$’000

Variance $'000

IncomeFees and charges 12 127,819 (73,039) 54,780 52,100 (2,680)Industry license fees 13 - 9,428 9,428 6,816 (2,612)Sale of electricity 14 - 5,121 5,121 4,329 (792)Commonwealth 15 40,450 (10,186) 30,264 28,708 (1,556)Other grants and contributions 15,256 (15,256) - - -Interest and investment 16 600 600 395 (205)Resources received free of charge 17 - - - 182 182Other 19 8,438 (600) 7,838 15,844 8,006

Total income 191,963 (83,932) 108,031 108,374 343

Net cost of providing services (637,119) (4,636) (641,755) (660,044) (18,289)

Revenues from / payments to SA GovernmentRevenues from SA Government 20 649,586 - 649,586 641,280 (8,306)Payments to SA Government 20 (2,101) - (2,101) (7,873) (5,772)

Net result 10,366 (4,636) 5,730 (26,637) (32,367)

Other comprehensive income Items that will not be reclassified to net result:Changes in revaluation surplus 24 - - - (3,321) (3,321)Items that will be reclassified subsequently to net result when specific conditions are met:Change in financial assets available for sale revaluation surplus

26 - - - 466 466

Total comprehensive result 10,366 (4,636) 5,730 (29,492) (35,222)

The budget process is not subject to audit. Budget information refers to the amounts presented to Parliament in the original budgeted financial statements in respect of the reporting period (2015-16 Budget paper 4). These original budgeted amounts have been presented and classified on a basis that is consistent with line items in the financial statements. However, these amounts have not been adjusted to reflect revised budgets or administrative restructures / machinery of government changes.

EXPLANATION OF MAJOR VARIANCES FROM BUDGET - OPERATING

Explanations are not provided for operating as there was no variance that exceeds 5% of the original budgeted total expenses.

Variance Ref

Original DSD Portfolio

Budget 2016

$’000

Adjusted for TAFE SA and

Reclasses 2016

$’000

Original DSD

Budget 2016

$’000

Actual 2016

$’000

Variance $'000

Investing Expenditure SummaryTotal new projects 918 - 918 2,413 1,495Total existing projects (a) 57,033 (1,206) 55,827 21,047 (34,780)Total annual programs 8,380 (2,537) 5,843 3,514 (2,329)

Total investing expenditure 66,331 (3,743) 62,588 26,974 (35,614)




EXPLANATION OF MAJOR VARIANCES FROM BUDGET - INVESTING

(a) Total investing expenditure on existing projects was $34.8 million lower than original budget primarily due to:

• Underspend of $31.5 million which was carried over into 2016-17 relating to major construction work on the Adelaide Festival Centre Precinct project (the commencement of which was delayed while negotiations around the project were concluded);

• Underspend of $7.3 million on the Brukunga Mine project (the majority of which has been carried over into 2016-17 or reclassified to operating), partly offset by;

• Expenditure of $3.9 million on the State Drill Core Reference Library which was funded by an end of financial year carryover from 2014-15 which was approved in November 2015.

FINANCIAL RISK MANAGEMENT

Risk management facilitation is undertaken by the department’s Strategy and Business Services Division. The department’s risk management policy and procedures are drafted in accordance with the Risk Management Policy Statement issued by the Premier and Treasurer, relevant Treasurer’s Instructions and the Australian Risk Management Standard (AS/NZS ISO 31000:2009).

The department is exposed to financial risk – liquidity risk, credit risk and market risk. The department’s exposure to risk is insignificant based on past experience and current assessment of risk.

CATEGORISATION OF FINANCIAL INSTRUMENTS

Details of significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 2 Summary of Significant Accounting Policies.

Refer to the table below for the carrying amounts of each of the following categories of financial assets and liabilities: held-to-maturity investments; loan and receivables; and financial liabilities measured at cost.

LIQUIDITY RISK

Liquidity risk arises where the department is unable to meet its financial obligations as they fall due. The department is funded principally from appropriation by the SA Government. The department works with the Department of Treasury and Finance to determine the cash flows associated with its Government approved program of work and to ensure funding is provided through SA Government budgetary processes to meet the expected cash flows. The department settles undisputed accounts within 30 days from the date of the invoice or date the invoice is first received. In the event of a dispute, payment is made 30 days from resolution. The department’s exposure to liquidity risk is insignificant based on past experience and current assessment of risk.

The carrying amount of financial liabilities recorded in table below represent the department’s maximum exposure to financial liabilities.

FINANCIAL RISK MANAGEMENT / FINANCIAL INSTRUMENTSNOTE 42


P 110

(1) Receivable and payable amounts disclosed here exclude amounts relating to statutory receivables and payables. In government, certain rights to receive or pay cash may not be contractual and therefore in these situations, the requirements will not apply. Where rights or obligations have their source in legislation such as levy receivables / payables, tax equivalents, commonwealth tax etc they would be excluded from the disclosure. The standard defines contract as enforceable by law.

(2) Receivable amount disclosed here excludes prepayments. Prepayments are not financial assets as defined in AASB 132 as the future economic benefit of these assets is the receipt of goods and services rather than the right to receive cash or another financial asset.

CREDIT RISK

Credit risk arises when there is the possibility of the department’s debtors defaulting on their contractual obligations resulting in financial loss to the department. The department measures credit risk on a fair value basis and monitors risk on a regular basis.

The department has minimal concentration of credit risk. The department has policies and procedures in place to ensure that transactions occur with customers with appropriate credit history. The department does not engage in high risk hedging for its financial assets.

Allowances for impairment of financial assets are calculated on past experience and current and expected changes in client credit rating. Currently the department does not hold any collateral as security for any of its financial assets. Other than receivables, there is no evidence to indicate that financial assets are impaired. Refer note 22 for information on the allowance for impairment in relation to receivables.

2016 Contractual maturities

Category of financial asset and financial liability

Note Carrying amount /

Fair value$'000

Current$'000

Within 1 year$'000

1-5 years More than 5 years

$'000

Financial assetsCash and cash equivalents 21 107,115 - 107,115 - -Loans and receivable (1)(2) 22 5,829 - 5,829 - -Investments 26 6,950 - 6,950 - -

Total assets 119,894 - 119,894 - -

Financial liabilitiesFinancial liabilities at cost (1) 28 23,809 - 23,809 - -

Total 23,809 - 23,809 - -

2015 Contractual maturities

Category of financial asset and financial liability

Note Carrying amount /

Fair value$'000

Current$'000

Within 1 year$'000

1-5 years More than 5 years

$'000

Financial assetsCash and cash equivalents 21 172,225 - 172,225 - -Loans and receivable (1)(2) 22 28,910 - 28,910 - -Investments 26 6,484 6,484

Total assets 207,619 - 207,619 - -

Financial liabilitiesFinancial liabilities at cost (1) 28 118,431 - 118,431 - -

Total 118,431 - 118,431 - -


The following table discloses the maturity analysis of financial assets and financial liabilities.


The following table discloses the ageing of financial assets that are past due but not impaired and impaired financial assets.


Past due but not impaired

Carrying amount

$'000

Not past due and not

impaired$'000

Overdue for less than

30 days $'000

Overdue for 30-60 days

$'000

Overdue for more than

60 days$'000

Impaired financial

assets$'000

2016Cash and cash equivalents 107,115 107,115 - - - -Loans and receivables (1) 5,829 208 1,053 126 2,184 2,258 Investments 6,950 6,950 - - - -

2015Cash and cash equivalents 172,225 172,225 - - - -Loans and receivables (1) 28,910 24,212 569 621 1,653 1,855 Investments 6,484 6,484 - - - -

(1) Receivable amounts disclosed here exclude amounts relating to statutory receivables. They are carried at cost.

MARKET RISK

Market risk through interest rate or price fluctuations is immaterial.

SENSITIVITY DISCLOSURE ANALYSIS

A sensitivity analysis has not been undertaken for the interest risk of the department as it has been determined that the possible impact on profit and loss and total equity from fluctuations in interest rates is immaterial.


2016 $’000

2015 $’000

Expenses

Employee benefits 808 908Supplies and services 357 1,131Grants and subsidies 8,130 7,534Payment of royalties to the Consolidated Account 207,994 237,452Other 4,385 6,379

Total expenses 221,674 253,404

Income

Royalties 208,035 237,460Interest 677 821Other 4,158 6,454

Total income 212,870 244,735


Revenues from / payments to SA Government

Revenues from SA Government 9,536 8,649

Net result 732 (20)

Total comprehensive result 732 (20)

STATEMENT OF ADMINISTERED COMPREHENSIVE INCOME


The net result and comprehensive result are attributable to the SA Government as owner.



P 114

STATEMENT OF ADMINISTERED FINANCIAL POSITION

AS AT 30 JUNE 2016

2016 $’000

2015 $’000

Current assets

Cash 50,108 49,329Receivables 7,354 3,834

Total current assets 57,462 53,163

Total assets 57,462 53,163

Current liabilities

Payables 22,164 18,597Other 3 3

Total current liabilities 22,167 18,600

Total liabilities 22,167 18,600

Net assets 35,295 34,563

Equity

Retained earnings 35,295 34,563

Total equity 35,295 34,563

Total equity is attributable to the SA Government as owner.





STATEMENT OF ADMINISTERED CHANGES IN EQUITY

Retained Earnings $’000

Total $’000

Balance at 30 June 2014 168 168

Net result for 2014-15 (20) (20)

Total comprehensive result for 2014-15 (20) (20)

Equity acquired on restructure 34,415 34,415

Balance at 30 June 2015 34,563 34,563

Net result for 2015-16 732 732

Total comprehensive result for 2015-16 732 732

Balance at 30 June 2016 35,295 35,295

All changes in equity are attributable to the SA Government as owner.



P 116

2016Inflows (Outflows)

$’000

2015Inflows (Outflows)

$’000

Cash flows from operating activities Cash outflows

Employee benefits (808) (908)Payments for supplies and services (1,016) (1,627)Payments for grants and subsidies (8,130) (7,534)Payments for royalties to Consolidated Account (203,768) (240,652)Other payments (4,385) (6,379)

Total cash outflows (218,107) (257,100)

Cash inflows

Revenues from SA Government 9,536 9,725 Royalties receipts 205,123 233,629 Other receipts 4,227 8,767

Total cash inflows 218,886 252,121

Net cash provided by / (used in) operating activities 779 (4,979)

Cash flows from financing activities Cash inflows

Receipts on restructure - 36,540

Total cash inflows - 36,540

Net cash provided by financing activities - 36,540

Net increase in cash 779 31,561 Cash as at the beginning of the period 49,329 17,768

Cash as at 30 June 50,108 49,329


STATEMENT OF ADMINISTERED CASH FLOWS




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P 118

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2016

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2016

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244,

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ED




ABORIGINAL AFFAIRS AND RECONCILIATION

The Anangu Pitjantjatjara Yankunytjatjara (APY) Lands Taskforce is funded through appropriation from the Department of Treasury and Finance for the coordination and delivery of diversionary programs across the APY Land communities. The department also administers Commonwealth Government funding for projects on the APY Lands and other Aboriginal communities.

SMALL BUSINESS COMMISSIONER

Appropriation funding for the Office of the Small Business Commissioner is paid by the Department of Treasury and Finance to the department. The funding is then provided to the Office of the Small Business Commissioner which is a separate reporting entity. The amounts transferred to the Office of the Small Business Commissioner represent appropriation funding only and not the entire budget for the operations.

ROYALTIES

The department receives royalties levied on minerals and petroleum production on behalf of the State Government. Royalty receipts are collected pursuant to the Roxby Downs (Indenture Ratification) Act 1982, Whyalla Steel Works Act 1958, Mining Act 1971 and the Petroleum and Geothermal Act 2000. Royalty receipts are returned to the Consolidated Account in the month following collection.

NATIVE TITLE AGREEMENT

The department currently collects revenue via a levy equivalent to 10% of the total royalty payable for relevant petroleum royalty payers. This is offset by payments made to the respective Native Title Parties.

BANK OF TOKYO FUND

Relates to the transfer of funds in 2015-16 previously held by the Department of the Premier and Cabinet for the purpose of supporting cultural and social exchange between South Australia and Japan, to the department. The transfer of the fund from the Department of the Premier and Cabinet to the department aligns administrative responsibility of this account to Arts South Australia, a division of the department.

STOLEN GENERATIONS REPARATIONS SCHEME

The South Australian Government has established the Stolen Generations Reparations Scheme to recognise the grief, pain and loss experienced by Aboriginal communities, families and individuals; and to also support a range of proposals that can assist in the healing process. The Scheme includes provision for up to $6 million in ex-gratia payments to be made to individual members of the Stolen Generations.

P 120


BUDGETARY REPORTING AND EXPLANATIONS OF MAJOR VARIANCES BETWEEN BUDGET AND ACTUAL AMOUNTS

Variance Ref

Original DSDAdministered

Budget 2016 $’000

Actual 2016 $’000

Variance $'000

Statement of Comprehensive Income

ExpensesEmployee benefits 916 808 (108)Supplies and services 94 357 263Grants and subsidies 7,535 8,130 595Payment of royalties to the Consolidated Account (a) 289,734 207,994 (81,740)Other 5,784 4,385 (1,399)

Total expenses 304,063 221,674 (82,389)

IncomeRoyalties (a) 289,734 208,035 (81,699)Interest - 677 677Other 5,784 4,158 (1,626)

Total income 295,518 212,870 (82,648)

Net cost of providing services (8,545) (8,804) (259)

Revenues from / payments to SA GovernmentRevenues from SA Government 8,545 9,536 991

Net result - 732 732

Total comprehensive result - 732 732

The following are brief explanations of variances between original budget and actual budget amounts.

Explanations are provided for variances where the variance exceeds the greater of 10% of the budgeted amounts and 5% of budgeted total expenses.


EXPLANATION OF MAJOR VARIANCES FROM BUDGET - ADMINISTERED

a. Royalties are recognised as administered revenue and then paid to the Department of Treasury and Finance’s Consolidated Account. The royalty result for 2015-16 reflects a difficult operating environment for many operators.

Commodity prices continued to fall from the previous period: crude oil was down 44%, iron ore 30% lower and copper was 21% lower. During the period December 2015 to January 2016 all of the above mentioned commodities reached seven year lows. Other impacts that affected royalty revenue included the voluntary administration announcement by Arrium in April 2016, the coal mining operations at Leigh Creek closing and the announcement by Iluka that the Jacinth Ambrosia mine would be placed into care and maintenance.


LIST OF FIGURES/ LIST OF TABLES8

LIST OF FIGURES

Figure 1: DSD functional chart in 2015-16 11

LIST OF TABLES

Table 1: Legislation administered by the Department of State Development 32

Table 2: Number of employees by age bracket and gender 34

Table 3: Number of Aboriginal and/or Torres Strait Islander employees 34

Table 4: Total number of employees with disabilities 34

Table 5: Types of disability 34

Table 6: Executives by gender, classification and status 35

Table 7: Average days leave per full time equivalent employee 35

Table 8: Documented review of individual performance management 35

Table 9: Leadership and management training expenditure 35

Table 10: Graduate numbers by gender 36

Table 11: Employment opportunity programs 36

Table 12: Work health and safety prosecutions, notices and corrective action taken 36

Table 13: Work health and safety performance (building safety excellence targets) 36

Table 14: Agency gross workers compensation expenditure for 2015-16 compared with 2014-15 37

Table 15: Public complaints received by the Department of State Development 39

Table 16: Consultants for the Department of State Development 40

P 122

The 2015-16 financial year was the Department of State Development’s second year of transformation. It was a year when the department’s hard work began to deliver results.Dr Don Russell Chief Executive Department of State Development


Published September 2016.

No responsibility for any loss or damage caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia, or for any loss or damage arising from acts or omissions made, is accepted by the State of South Australia, their officers, servants or agents. Produced by the Department of State Development © September 2016. Content correct at time of printing.

www.statedevelopment.sa.gov.au


Level 4, 11 Waymouth Street Adelaide SA 5000

GPO Box 320 Adelaide SA 5001

T: +61 8 8226 3821 E: [email protected]

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