To:
Hon Steven Marshall MP
Premier of South Australia
This annual report is to be presented to Parliament to meet the statutory reporting requirements of the Public Sector Act 2009 and the Public Finance and Audit Act 1987 and meets the requirements of Premier and Cabinet Circular PC013 Annual Reporting.
This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.
Submitted on behalf of the Defence SA by:
Richard Price
Chief Executive
Contents
Key strategies and their relationship to SA Government objectives
Agency programs and initiatives and their effectiveness and efficiency
Legislation administered by the agency
Other agencies related to this agency (within the Minister’s area/s of responsibility)
Employment opportunity programs
Agency performance management and development systems
Work health, safety and return to work programs of the agency and their effectiveness
Work health and safety and return to work performance
Strategies implemented to control and prevent fraud
Executive employment in the agency
Financial performance of the agency
Section B: Reporting required under any other act or regulation
Reporting required under the Carers’ Recognition Act 2005
Section C: Reporting of public complaints as requested by the Ombudsman
Summary of complaints by subject
Appendix: Audited financial statements 2017-18
Section A: Reporting required under the Public Sector Act 2009, the Public Sector Regulations 2010 and the Public Finance and Audit Act 1987
Agency purpose or role
Defence SA is South Australia’s lead government agency for all defence related matters.
The agency’s mission is to grow the defence industry and strengthen the Australian Defence Force’s presence in the state. Working closely with defence and industry, Defence SA targets investment and expansion opportunities, drives and supports the delivery of major defence projects and facilities, and pursues the location of additional Defence units and capabilities in the state.
Defence SA aims to support the Australian Government’s strategic defence policy. This is through increased local industry participation, ensuring that a highly skilled, industry-ready workforce is in place, and the necessary infrastructure exists to underpin defence projects.
Defence SA is working towards capturing further defence-related work opportunities for South Australian businesses in the shipbuilding, cyber and systems, space and defence science and research domains.
The South Australian Space Industry Centre (SASIC) was launched in September 2017. This marked the creation of the nation’s first dedicated centre to grow the local space economy and create future high-tech jobs.
The Defence SA Advisory Board (the Board) provides high-level strategic and policy advice. This promotes the growth of Defence and defence industries. The Board also advocates on behalf of the state on defence and defence industries issues.
Objectives
- Advocacy and support: in collaboration with the Australian Government, Defence and industry, Defence SA works to ensure the required workforce, skills, and infrastructure are available to capitalise on the emerging defence industry opportunities.
- Shipbuilding: to ensure South Australia maintains its position as the nation’s centre for warship and submarine building and sustainment.
- Cyber and systems: to position South Australia as a centre of excellence for cyber capability and processing, exploiting and disseminating intelligence.
- Defence science and research: to position South Australia as a national leader in developing intellectual property.
- Space: to position South Australia as the nation’s space industry centre.
Key strategies and their relationship to SA Government objectives
| Key strategy | SA Government objective |
| Creating a sustainable and export-ready defence industry. | The South Australian Government is focussed on creating more jobs for South Australians. |
| Developing South Australia’s space ecosystem. | The South Australian Government is committed to developing a culture of innovation and entrepreneurship through growth industries including space. |
| Attraction of additional defence companies to South Australia and support of sustainable defence industry growth. | The South Australian Government is creating an environment where businesses from emerging industries, including defence and space, can invest, expand and create more jobs. |
| Ensuring South Australia is able to meet the workforce and skills demands of the defence industry to deliver major Defence projects. | The South Australian Government is committed to ensuring South Australians have the skills and are job-ready for key growth industries including defence. |
Agency programs and initiatives and their effectiveness and efficiency
| Program name | Indicators of performance/effectiveness/efficiency | Outcome for South Australia |
| Investment attraction and industry development | In 2017-18, Defence SA provided support to Becker Helicopters to establish a new operating base in Whyalla. This will create 80 jobs and train 100-200 international students.
Defence SA provided support to Raytheon Australia to establish their Centre for Joint Integration in South Australia. This will create over 350 new FTE positions by 2028. With support from the Defence SA Advisory Board, Defence SA continued its advocacy campaign. This aims to maximise Australian industry participation, develop sovereign industrial capability and ensure the creation of the highly-skilled workforce required for future maritime programs. In 2017-18, Defence SA hosted nine high profile diplomatic and industry delegations. This included those in relation to shipbuilding projects. These visits aim to maximise South Australian supply chain opportunities associated with the Future Submarine, Future Frigate and Offshore Patrol Vessel programs. In August 2017, Defence SA hosted the third Defence SA Cyber Ready Forum. The forum focussed on cyber security requirements for small to medium enterprises and ensuring they are ready to undertake Defence opportunities. The event was attended by 92 participants from government and industry. In September 2017, Defence SA led the state’s participation at the Pacific International Maritime Exposition. The event showcased South Australia’s maritime capabilities. It also created opportunities for collaboration in the maritime sector. Participants on the Defence State stand included 21 local industry participants, four universities and TAFE SA. This was a 17% increase in participation from the previous event in 2015. |
Defence SA’s industry attraction and industry development activities support the creation of new jobs and a highly-skilled workforce.
The development of the defence industry is crucial to the state’s transition to a high-tech advanced manufacturing economy. |
| South Australian Space Industry Centre | The South Australian Space Industry Centre (SASIC) was launched in September 2017.This was prior to the International Astronautical Congress (IAC) that was hosted in Adelaide.
The SASIC exhibition stand at the IAC included 14 local industry participants, three government organisations and four educational institutes. The state continued to advocate for the creation of a national space agency. This effort was rewarded in September 2017 when the Australian Government announced that an Australian Space Agency would be created from 1 July 2018. In September 2017, the South Australian Government launched the $4 million Space Innovation Fund. The Fund incorporates space scholarships and the space incubator and accelerator programs. In May 2018, five South Australians were awarded scholarships to undertake further overseas study. The space incubator program will commence in 2018-19 after UniSA was selected to administer the program. South Australia signed three international collaboration agreements with the Italian Space Agency (ASI), German Space Agency (DLR) and the UAE Space Agency. Other opportunities were explored with NASA, the French Space Agency (CNES), Japanese Space Agency (JAXA) and other international private companies and research agencies. The South Australian Government signed a Memorandum of Understanding with the ACT and Northern Territory Governments for collaboration in the space industry. In 2017-18, SASIC hosted two South Australia Space forums. The April 2018 forum achieved a record attendance of more than 300 participants. |
The space industry is a high-value, high-growth sector with the potential to create jobs and opportunities for South Australian workers.
International collaboration is a key activity in developing the industry. The Space Innovation Fund supports the development of young South Australian space entrepreneurs. |
| Defence Innovation Partnership | In January 2018, the Defence Innovation Partnership was formalised. The Partnership is an agreement between the South Australian Government, Defence Science and Technology and the state’s three universities – University of South Australia, Adelaide University and Flinders University.
A key component of the Defence Innovation Partnership is the Collaborative Research Grants program. In June 2018, $600,000 in grants were awarded to the first round of recipients. Four projects were funded involving researchers from South Australia who will partner with researchers and industry from Australia and around the world. They will deliver research projects that are relevant to supporting the Australian Defence Force. |
The Defence Innovation Partnership was established to facilitate research and development collaboration. It will also create jobs and economic growth in South Australia. |
| Skills and workforce development | Defence SA is leading a four-year whole-of-government Workforce and Skills Strategy. The strategy will provide a framework for engaging collaboratively with the Australian Government, industry and educational institutions to promote the opportunities that exist. It will also provide responsive and meaningful curriculum and qualifications to those who aspire to join the industry. | South Australian workers are able to take advantage of the Defence projects that are happening in the state. This includes $89 billion of naval shipbuilding programs. |
| Techport Australia | In May 2017, a Memorandum of Understanding was signed to transfer the state-owned Techport and its assets to the Australian Government for $230 million.
Tranches 1 and 2 of the transfer were completed in 2017-18. This enabled the Australian Government to commence infrastructure construction at the shipyard ready for future ship and submarine builds. The shipyard construction project will create up to 600 local jobs. |
$230 million returned to the South Australian Government for the sale of Techport. |
Legislation administered by the agency
Nil.
Organisation of the agency
As at 30 June 2018, Defence SA operated with the following business units:
Corporate Services
Defence and Industry
Strategy, Skills and Intergovernmental Relations
South Australian Space Industry Centre
Defence Innovation Partnership
Other agencies related to this agency (within the Minister’s area/s of responsibility)
Nil.
Employment opportunity programs
| Program name | Result of the program |
| Aboriginal Employment Program | A new program was established to provide the opportunity for participants to gain experience in administrative, office and work management. This assists participants to pursue a career in the South Australian public sector. A successful applicant commenced the program in May 2018. |
| Space Industry Internship Program | The South Australian Space Industry Centre sponsors an intern from a local or international university for a period of up to three months. The program enables them to gain a deeper understanding of the space industry and connect with space industry professionals. Three interns completed the program in 2017-18. |
Agency performance management and development systems
| Performance management and development system | Assessment of effectiveness and efficiency |
| Staff Performance Management and Development System | All non-executive staff participate in an annual performance review process linked to training and development. This involves goal setting, a half-yearly review and an annual review. As at 30 June 2018, 100% of non-executive staff had completed an annual review. |
| Executive Performance Agreements | All SAES executives have developed an annual performance agreement with the Chief Executive. This involves goal setting, a mid-term review and an end-of-cycle review. As at 30 June 2018, 100% of executives had completed the end-of-cycle review. |
| Chief Executive Performance Agreement | The Chief Executive completed the goals and objectives component of the annual performance agreement with the Premier in January 2018. Due to the change in Government, as at 30 June 2018 the Chief Executive’s end-of-cycle review is still to be finalised. |
Work health, safety and return to work programs of the agency and their effectiveness
| Program name and brief description | Effectiveness |
| Review of WHS systems | Following the sale of the Techport Australia Common User Facility on 30 November 2017, the agency WHS system was reviewed to reflect the change to a predominately office-based organisation. |
| Mental Health First Aid | Defence SA appointed two Mental Health First Aid Officers who have completed accredited training. This complements the existing Employee Assistance Program. Senior management have also received training on mental health first aid. |
| Organisational wellbeing | Staff sessions were held to discuss organisational wellbeing. This resulted in the implementation of a ‘Working well together’ program. |
| On-line WHS training | Defence SA participated in a whole-of-Government proof-of-concept trial for on-line WHS training. This included ‘Health Safety and Wellbeing’ and ‘Respect at Work’ modules. |
Work health and safety and return to work performance
| 2017-18 | 2016-17 | % Change (+ / -) |
|
| Workplace injury claims | |||
| Total new workplace injury claims | 2 | 1 | + 100% |
| Fatalities | 0 | 0 | 0% |
| Seriously injured workers* | 0 | 0 | 0% |
| Significant injuries (where lost time exceeds a working week, expressed as frequency rate per 1000 FTE) | 0 | 0 | 0% |
| Work health and safety regulation | |||
| Number of notifiable incidents (WHS Act 2012, Part 3) |
0 | 0 | 0% |
| Number of provisional improvement, improvement and prohibition notices (WHS Act 2012 Sections 90, 191 and 195) | 0 | 0 | 0% |
| Return to work costs** | |||
| Total gross workers compensation expenditure ($) | $11,481 | $0 | n/a |
| Income support payments – gross ($) | $3,635 | $0 | n/a |
*number of claimants assessed during the reporting period as having a whole person impairment of 30% or more under the Return to Work Act 2014 (Part 2 Division 5)
**before third party recovery
Data for previous years is available at: https://data.sa.gov.au/data/dataset/whands-defencesa
Fraud detected in the agency
| Category/nature of fraud | Number of instances |
| N/A | 0 |
Strategies implemented to control and prevent fraud
During 2016-17 the Fraud and Corruption Policy and associated procedures were reviewed and updated with ongoing reviews scheduled every two (2) years.
All staff completed the SA Public Sector Code of Ethics refresher training during November and December 2017. Fraud awareness training was conducted in February 2018.
The Audit and Risk Management Committee met quarterly in 2017-18 to monitor the Fraud Control Framework.
Data for previous years is available at: https://data.sa.gov.au/data/dataset/fraud-detection-defencesa
Whistle-blowers’ disclosure
| Number of occasions on which public interest information has been disclosed to a responsible officer of the agency under the Whistle-blowers’ Protection Act 1993 | 0 |
Data for previous years is available at: https://data.sa.gov.au/data/dataset/whistle-blower-defencesa
Executive employment in the agency
| Executive classification | Number of executives |
| EXEC0A | 1 |
| SAES1 | 7 |
Data for previous years is available at: https://data.sa.gov.au/data/dataset/executive-employment-defencesa
The Office of the Commissioner of Public Sector Employment has a data dashboard for further information on the breakdown of executive gender, salary and tenure by agency.
Consultants
The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken and the total cost of the work undertaken.
| Consultancies below $10,000 each | ||
| Nil | N/A | 0 |
| Subtotal | 0 | |
| Consultancies above $10,000 each | ||
| Ernst & Young | Commercial structures supporting the Naval Shipbuilding Plan | $99,800 |
| Nova Professional Services Pty Ltd | Report to enable rapid establishment of a Space Innovation Environment | $29,360 |
| duMonde Group | South Australia space campaign | $25,000 |
| Subtotal | $154,160 | |
| Total all consultancies | $154,160 | |
Data for previous years is available at: https://data.sa.gov.au/data/dataset/consultants-defencesa
See also the Consolidated Financial Report of the Department of Treasury and Finance http://treasury.sa.gov.au/ for total value of consultancy contracts across the SA Public Sector.
Contractors
The following is a summary of external contractors for amounts above $10,000 that have been engaged by the agency, the nature of work undertaken and the total cost of the work undertaken.
| Contractor | Purpose | Value |
| Alexander and Symonds Pty Ltd | Survey Services | $23,066 |
| ASC Shipbuilding Pty Ltd | Time Lapse Photography | $27,767 |
| Aurecon Australasia Pty Ltd | Civil Engineer / Design services | $43,057 |
| Birdon Pty Ltd | Dredging Services | $411,072 |
| BOC Limited | Common User Facility Operations and Maintenance | $12,170 |
| Costplan Pty Ltd | Cost Estimation Services | $10,335 |
| Covaris Pty Ltd | Maintenance Strategy Reviews | $17,229 |
| Dematec Automation Pty Ltd | Common User Facility Operations and Maintenance | $35,214 |
| Engie Fire Services Australia Pty Ltd | Common User Facility Operations and Maintenance | $12,336 |
| Fabrication and Welding Specialists Australia Pty Ltd | Temporary Operational Staff | $36,040 |
| Frazer-Nash Consultancy Ltd | Feasibility Study | $18,900 |
| Gardner Denver Industries Pty Ltd | Common User Facility Operations and Maintenance | $12,590 |
| Hays Specialist Recruitment (Australia) Pty Ltd | Temporary Operational Staff | $34,719 |
| Innovation Performance Australia Pty Ltd | Professional Services | $36,443 |
| jtwo solutions Pty Ltd | Architect / Design | $16,644 |
| Landscape Construction Services Pty Ltd T/As LCS Landscapes | Landscape Maintenance and Construction | $119,332 |
| Moto Projects Pty Ltd | Project Management | $57,483 |
| PricewaterhouseCoopers | Skills Study & Workshop | $67,624 |
| R McLachlan Developments Pty Ltd | Project Management | $34,715 |
| RCR O’Donnell Griffin Pty Ltd | Common User Facility Operations and Maintenance | $12,640 |
| Redbikini Pty Ltd | Marketing and Associated Services | $46,270 |
| Showpony Advertising | Marketing and Associated Services | $43,391 |
| Solstice Media Ltd | Marketing and Associated Services | $38,500 |
| Sydac Pty Ltd | Feasibility Study | $24,118 |
| Tonkin Consulting Pty Ltd | Civil Engineer / Design services | $13,420 |
| University of Adelaide (SA Centre for Economic Studies) | Economic Impact Studies | $10,910 |
| Van Den Berg Design Team Pty Ltd | Exhibition Stand Design and Construction | $265,088 |
| W-H Commercial Pty Ltd | Project Management | $139,365 |
Data is available at: https://data.sa.gov.au/data/dataset/contractors-defencesa
The details of all South Australian Government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website here.
The website also provides details of across government contracts here.
Financial performance of the agency
The following is a brief summary of the overall financial position of the agency. The information is unaudited. Full audited financial statements for 2017-18 are attached to this report.
Defence SA is a government agency of the state of South Australia, established pursuant to the Public Sector Act 2009. Defence SA operations are funded predominantly via appropriation. Prior to 30 November 2017, some external revenue was generated through the provision of services and facilities to the Australian Government and third party users of the Techport Australia Common User Facility.
In May 2017 the South Australian Government reached agreement with the Australian Government to transfer all Techport Australia assets and infrastructure to the Australian Government in 2017-18 for an agreed price of $230 million. Settlement of the first tranche of assets was completed on 10 August 2017 with a consideration of $20 million. Tranche two was settled on 30 November 2017, with the state receiving the remaining $210 million.
Defence SA’s net cost of providing service for the 2017-18 financial year was $12.942 million, $9.3 million less than the original budget. The reduced cost was primarily a result of a change in accounting treatment for the disposal of the Techport Australia assets. To comply with Australian accounting standards, the assets were revalued to the sale price and an impairment loss of $11.5 million recognised in 2016-17. As a consequence, loss on disposal of $6.8 million and depreciation expense of $3.7 million budgeted for 2017-18 did not eventuate.
Following disposal of Techport Australia in 2017, Defence SA operations are focused on the attraction of Defence and defence industry to the state, including the emerging sectors of science and technology, cyber and space. Defence SA’s expenditure will reflect this change in activity and will comprise agency operating costs together with payment of commitments for industry assistance grants established over recent years.
Other financial information
Nil
Section B: Reporting required under any other act or regulation
Reporting required under the Carers’ Recognition Act 2005
The Carers’ Recognition Act is deemed applicable for the following: Department of Human Services, Department for Education, Department for Health and Wellbeing, Department of State Development, Department of Planning, Transport and Infrastructure, South Australia Police and TAFE SA.
Section 7: Compliance or non-compliance with section 6 of the Carers Recognition Act 2005 and (b) if a person or body provides relevant services under a contract with the organisation (other than a contract of employment), that person’s or body’s compliance or non-compliance with section 6.
Defence SA is not required to report under the Carers’ Recognition Act 2005.
Section C: Reporting of public complaints as requested by the Ombudsman
Summary of complaints by subject
| Public complaints received by Defence SA | |
| Category of complaints by subject | Number of instances |
| Nil | 0 |
Data for previous years is available at: https://data.sa.gov.au/data/dataset/public-complaints-defencesa
Complaint outcomes
| Nature of complaint or suggestion | Services improved or changes as a result of complaints or consumer suggestions |
| N/A | N/A |
Appendix: Audited financial statements 2017-18
Download the Audited financial statements 2017-18
