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UHVHDUFK VXVWDLQDELOLW\ LQQRYDWLYHVROXWLRQV SDUWQHUVKLSV © Primary Industries and Resources South Australia 2004 This work is copyright. Apart from any use as permitted under the Copyright Act 1968 (Cwlth), no part may be reproduced by any process without prior written permission from Primary Industries and Resources South Australia. Requests and inquiries concerning reproduction and rights should be addressed to the General Manager Communications and Marketing, PIRSA, GPO Box 1671, Adelaide SA 5001.

Distribution This report is only available online at this website.

Comments about this report are welcome and should be directed to:

Business Manager, Communications and Marketing Primary Industries and Resources South Australia Level 17, 25 Grenfell Street, Adelaide GPO Box 1671, Adelaide SA 5001 Phone National (08) 8226 0596 International +61 8 8226 0596 Fax National (08) 8226 0027 International +61 8 8226 0027 Email [email protected]

ISSN 1446-6309 (Online) Compiled by Communications and Market ing Hon Rory McEwen MP Minister for Agriculture, Food and Fisheries

Hon Paul Holloway MLC Minister for Mineral Resources Development

Hon Patrick Conlon MP Minister for Energy

Hon Trish White MP Minister for Science and Information Economy

Dear Ministers,

I am pleased to present the PIRSA annual report for the year ended 30 June 2004. The report has been prepared pursuant to the Public Sector Management Act 1995, in accordance with the Act’s accompanying regulations as well as the financial reporting requirements of the Public Finance and Audit Act 1987.

Jim Hallion Chief Executive Primary Industries and Resources South Australia 30 September 2004

3 Contents

Letter of transmittal ...... 3 Chief Executive’s overview...... 5 Organisation chart...... 7 Highlights ...... 8 The year ahead...... 13 PIRSA’s role...... 16 Practising sustainability...... 19 Performance review...... 22 Food South Australia ...... 22 Agriculture, Food and Fisheries ...... 24 SARDI...... 37 Minerals and Energy ...... 56 Commercial Projects ...... 77 Rural Solutions SA...... 78 Agency support...... 82 Financial performance...... 98 Appendixes 1 PIRSA ministerial responsibilities ...... 99 2 Occupational health, safety and injury management statistics ...... 103 3 Consultancies...... 104 4 Overseas travel...... 105 5 Freedom of Information...... 109 6 Statement of Aboriginal Reconcilia tion...... 111 7 Contacts...... 112 8 Financial statements ...... 114 Primary Industries and Resources South Australia ...... 114 Rural Industry Adjustment and Development Fund...... 151

4 Chief Executive’s overview

PIRSA has responded to international market forces and the challenges faced by our industries with innovative planning and improvements to its core business.

In this competitive environment, the agency is increasing the focus on sustainable economic development and ensuring PIRSA’s strategies are in line with the Government’s overall strategic agenda.

Importantly, our goals help realise the State Strategic Plan – an initiative of the Government to mark out the path for South Australia for the coming decade.

The Plan contains a number of initiatives and important targets for PIRSA. The Plan aims to increase exports to $25 billion by 2013. PIRSA has responsibilities for industry sectors and will contribute to improve resources exports, together with contributions of $7.5 billion for agri-food, $2.57 billion for wine. Achievements of these export contributions will be assisted through the State Food Plan, SA Wine Partnership Strategy and the State Resources Plan.

For the mining industry, the Plan for Accelerating Exploration was launched, to kick-start the industry to help lift mining exploration investment to $100 million per annum by 2007 and boosting annual mineral production and processing to $4 billion by 2020.

The South Australian Food Centre will receive $6.4 million over four years to develop and further South Australia’s food products. The South Australian Wine Industry Council will benefit from funding of $2 million over four years to develop and promote the wine industry.

In response to the Economic Development Plan to increase investment in commercial projects in South Australia, a Commercial Projects Division was established within PIRSA midyear, with some staff transferred into PIRSA from the former Department of Business Manufacturing and Trade.

In summer 2004 a major gas supply event resulted from a fire at the Moomba gas processing facility. The event was successfully managed by rationing of available gas and ensuring that the security of the main gas distribution system was preserved. PIRSA played a key role in managing gas supplies and keeping industry and the public informed during a challenging situation.

Over the next four years, $1.45 million will be spent on the development of a critical State Energy plan to achieve a secure, competitive and innovative energy sector in South Australia. Initiatives costing $450,000 will be implemented in response to the Electricity Demand Side Measures Task Force.

A program for sustainable development of South Australia’s fisheries and aquaculture has been made possible with $25.8 million over 5 years ($13.7 million State Government funding and $12.1 million partner funding) for Marine Innovation SA, an important program to be conducted by SARDI in collaboration with Finders University and other partners.

Essential farm business and resource management skills will be boosted through the FarmBis III program with $7 million allocated by the State Government over 4 years, for training within the farming industry.

Of particular focus is our ability to identify, manage and eradicate biosecurity risks.

PIRSA staff hosted a series of meetings across the state’s regional areas in March 2004 to educate meat and wool producers about the new National Livestock Identification Scheme (NLIS), effective from 1 July 2004.

PIRSA ANNUAL REPORT 2003–04 5 PIRSA tested emergency procedures to manage exotic disease, using avian influenza as the model. The Caulerpa taxifolia program, using freshwater inundation and clearing strategies, succeeded in eradicating this invasive pest in West Lakes.

PIRSA has begun a major review of the Mining Act 1971 to look at ‘best practice’ regulatory principles for sustainable development of the state’s mineral resources. It is expected that a new Bill will be introduced by the end of 2006.

New quarantine compliance agreements with the State’s horticultural industry have been well received. The Compliance Agreements are designed to stop uncertified produce being brought into the state and posing a risk to the fruit and vegetable industries.

The Plant Genomics Centre at the Waite Campus of the University of Adelaide was opened, establishing a new $9.2 million world class research and development centre for Australia’s bioscience industry.

The Central North farm Assistance Program, and a four-year program that achieved new farm diversification options and more sustainable systems and business practices, concluded with a public presentation of results at Orroroo.

South Australia’s virtual one-stop shop – Exporting SA – is now up and running and targets producers and buyers of SA goods and services.

Further changes are being implemented in the coming year designed to accelerate the agency shift from what was once a focus principally on farm/mine gate, to a greater emphasis on the whole value chain of our industry sectors, including processing, transport, storage and distribution/retail.

In the coming years we will keep on building strong partnerships and alignment with our industry sectors. We will also increase our capability to promote sustainable economic growth with particular emphasis on exports for the key industry sectors of food, wine, fibre, fisheries, aquaculture, livestock and grain.

PIRSA will continue to play an important role in South Australia’s growing reputation as a leader in business, innovation and diversity. I extend my thanks to PIRSA staff for their contributions to the success of the agency this year, and for their ongoing commitment and enthusiasm in ensuring our goals are attained.

Jim Hallion Chief Executive Primary Industries and Resources South Australia

PIRSA ANNUAL REPORT 2003–2004 6 Organisation chart (at 30 June 2004)

PIRSA ANNUAL REPORT 2003–2004 7 Highlights

PIRSA highlights for 2003–2004 are provided below.

Food South Australia • A summit of food industry leaders in March began updating SA’s State Food Plan 2004–2007. • Government services to the food industry were consolidated into PIRSA with inclusion of staff from the Department of Business Manufacturing and Trade on 1 January 2004. • The State Food Plan and Program 2001–2004 was delivered and the results evaluated by independent reviewers. • The State Food Plan 2004–2007 was developed at the State Food Plan Summit in March 2004 and endorsed by the Premier’s Food Council in June. • Development of a South Australian Food Centre was approved as the “next generation” of the partnership between the Food Industry and Government and the principal vehicle for deliverin g the State Food Plan 2004–2007. • A Regional Food Officer pilot program with Regional Development Boards was established and will be extended to all regions as part of the Food Centre during 2004.

Agriculture, Food and Fisheries • Biosecurity preparedness was significantly improved with an exercise in emergency procedures using Avian Influenza as the model. • Legislation to regulate the cultivation of GM crops passed through both houses of State Parliament, the Genetically Modified Crops Management Bill 2004. • PIRSA was instrumental in the development of a National Food Scorecard to provide benchmarks and map the food sector performance. • PIRSA’s drought response team developed Exceptional Circumstance funding proposals and implemented effective projects in rural communities. • The National Livestock Identification Scheme (NLIS) was launched to identify and trace cattle, from property of birth to slaughter. In the event of an exotic disease outbreak, NLIS will increase traceability of an infected animal. • Ovine Johnes Disease (OJD) meetings were held across regions in March to educated producers about new compulsory changes to OJD management. • A single fruit fly outbreak was detected this year. PIRSA staff responded with the eradication program, releasing several million sterile flies. • A new fisheries patrol boat for Whyalla has increased presence in Spencer Gulf. • Caulerpa taxifolia weed was eradicated from West lakes. • The Meat Hygiene Miscellaneous (Amendments) Bill 2004 was assented to by Parliament with the key change being the addition of retail butchers to the Act. • Draft management plans for sustainable use of the Marine Scalefish Fishery and the Lakes and Coorong Fishery were developed for public consultation. • Restructure of the commercial river fishery was completed with non-native species licences issued to implement State Government Policy to remove commercial net fishing in the Murray River and prohibit the commercial harvest of native species. • Sustainability assessments under the Commonwealth Environment Protection and Biodiversity Conservation Act (EPBC Act) were developed for rock lobster, abalone and giant crabs and approved by the Federal Minister for the Environment and Heritage. Further assessments were developed for pilchards, native scalefish and specimen shells.

PIRSA ANNUAL REPORT 2003–2004 8 • Innovative Solutions for Aquaculture Planning and Management project and the development of policies were commenced to assist in the ecological sustainability of the aquaculture industry in South Australia. • The South Australian Pork Industry Strategic Plan was launched, aiming to increase production volume by 50 per cent and the wholesale industry value to $396 million annually by 2010. • The Bill to repeal the Dried Fruits Act 1993 passed through Parliament. A Draft Bill to amend the Citrus Act 1991 was released for public consultation. • Updating of the Food Safety risk profile initiated the development of a ‘Strategic Action Plan for Food Safety in SA’s Primary Industries’. • The draft Primary Produce (Food Safety Schemes) Bill was released for public consultation in November 2003. In June 2004 the Bill had passed through the House of Representatives.

SARDI AQUATIC SCIENCES • Completed the first comprehensive survey of the benthic fauna of the Great Australian Bight, revealing a diverse and rich assemblage of invertebrate species. • Played a key role in the eradication of Caulerpa taxifolia from West Lakes, and continuing to assist with eradication efforts in the Port River. • The Adelaide Coastal Waters Study commenced, with the aim being to determine the likely causes of seagrass loss along our metropolitan coast.

CROPS • Cutting edge progress was achieved in the identification and mapping of new genes responsible for major diseases of wheat and barley. A resistance gene for crown rot in the wheat variety Kukri was mapped for the first time, as was the mapping of a gene for cereal cyst nematode tolerance in the variety Molineux. Other mapped wheat genes were for yellow leaf spot, pre- harvest spouting and sodium exclusion. In barley, genes were mapped for scald and spot form of net blotch. • A DNA-based soil test for crown rot was offered nationally for the first time to growers by the commercial root disease testing service, Predicta BTM. The test was also supported by the training of 300 agronomists who would provide national farm management advice to growers.

HORTICULTURE • Higher than expected sales of the SARDI fan were achieved through a licensing agreement with Croplands, were sold into New Zealand, USA, Brazil and the domestic market. New research and development opportunities in spray technology continue to evolve from this commercial partnership. • Summer fruit research programs confirmed development of handling protocols and consumer demand for ripe and ready-to-eat peaches and nectarines. Apricot and cherry breeding programs attracted high level of international and domestic interest from private companies for variety evaluation and exclusive licensing arrangements.

LIVESTOCK • Expression Profiling and Gene Discovery in the Wool Follicle funded by Australian Wool Innovation (AWI)/Meat and Livestock Australia (MLA) commenced, with some $800,000 in projects over three years. • The national Cooperative Research Centre for poultry was commenced. • The Australian Pork Limited-funded National Centre for Pork Industry Training and Education was established at the Roseworthy Campus. • In the Livestock Production Systems group, new research contracts attracted work in excess of $1million over the next three years. Along with the Struan Agricultural Centre, the group

PIRSA ANNUAL REPORT 2003–2004 9 demonstrated the technograzing system; a science-based grazing management of dryland pasture that could treble beef production per hectare, over currently accepted industry values.

SUSTAINABLE SYSTEMS • Major overseas germplasm collection missions in the Canary Islands, Spain and Azerbaijan strengthened the position of the SARDI Genetic Resources Centre as the leading temperate pasture germplasm collection in the southern hemisphere. • A new 5-year agreement was signed with Heritage Seeds for commercialisation of lucerne cultivars including leading lights SARDI 7 and SARDI 10. • Commenced the Cooperative Research Centre for Irrigation Futures and developed the first major project (Tri-state) focussing on salinity impact on Lower Murray horticulture.

Minerals and Energy MINERALS PIRSA highlights for 2003–2004 are provided below. • A new five-year $15 million initiative — the Plan for Accelerating Exploration, was announced in the May State Budget. • Two Indigenous Land Use Agreements for mineral exploration were signed with the Antakarinja and Arabunna native title claimants in December 2003. • The Geological Survey commenced the first Government geological mapping within the Anangu Pitjantjatjara Uankunytajra (APY) Lands, in over 30 years. This is the result of successful negotiation and working together with the APY people. • The Mining Act Review Steering committee produced an Issues Paper on possible changes to the Mining Act. • The PIRSA Tenement Management System went live in August 2003, almost 12 months ahead of schedule. • A draft discussion paper on fossil protection was finalised in June, jointly by the Department for Environment and Heritage (DEH) and PIRSA and referred to the Minister for Environment and Conservation as well as the Minister for Mineral Resources Development. • PIRSA was major sponsor for the highly successful South Australian Resources, Energy and Investment Conference held in May 2004.

PETROLEUM • The SEAGas Pipeline was commissioned on time and enables increased competition between gas basins and increasing security of gas supply. • A greater number of new petroleum field discoveries were made than in any other Australian State or Territory. • Sixteen native title access agreements were concluded for Cooper Basin, paving the way for programs worth $275 million.

ENERGY • Available gas was allocated in an efficient manner and limited the impact on the State after a serious failure of the gas processing facility at Moomba in January 2004. • The number of electricity and gas ‘road show ’ educational seminars was increased by 15%. The audit program found the seminars to have contributed to the improving level of compliance with requirements. • The energy efficiency program for low-income households was implemented by six community- based welfare organisations.

PIRSA ANNUAL REPORT 2003–2004 10 • South Australia’s first energy performance contract was signed for Transport SA’s head office building. With an overall contract value of $980,000, the guaranteed energy savings are just under $200,000 annually.

Commercial Projects • Commercial Projects team, jointly with industry and the Eyre Regional Board, is exploring improvements to Eyre Peninsula’s grain logistics chain to better service future wheat crops. • Business cases, outlining opportunities for value-adding minerals, were prepared for presentation to mineral industry majors within Australia and offshore. • Work continues with the SA Wine Council to develop offshore marketing strategies for small and medium enterprises. • Efforts continue to identify projects that significantly reduce current emissions problems, value add waste streams and significantly reduce costs for public infrastructure in the agriculture industry.

Rural Solutions SA • Developed a number of CD and paper based decision support products to assist industries and individual farmers • Provided a range of services to support the State’s Natural Resource Management (NRM) reform agenda. • Played a significant role in the management of native vegetation and of pest animals and plants, including support for Department of Water Land and Biodiversity Conservation (DWLBC) in a major biodiversity conservation and enhancement program in the State’s Upper South East. • Supported horticultural producers through provision of a range of value-added services in the areas of water use efficiency, water re-use, environmental management systems and supply chain integrity. • Expanded the HACCP Quality Assurance system from the wine industry to the grains industry. • Developed and introduced an integrated salinity management service, incorporating salt mapping and digital terrain modelling services. • Successfully completed trial biosecurity mapping initiatives in conjunction with the apple and pear industry. • Increased access to the lucerne seed export market through development of a protocol for phytosanitary inspections of lucerne crops. • Conducted starch analysis on vine roots for high profile customers like BRL Hardy Ltd’s “Banrock Station”. • Progressed towards NATA accreditation for the Loxton laboratory, and continued endorsement as an Environment Protection Authority accredited test provider. • Played a key role in assisting property owners to manage in drought affected areas of South Australia through completion of the Central NE Farm Assistance, assistance in preparation of exceptional circumstance applications, and practical farm and stock management advice. • Played a key role in the production and release of the State’s Port Industry Strategic Plan. • Improved sustainability and quality of life of ten indigenous communities through development and delivery of a holistic “Planning for the Future” program incorporating social, environmental, economic and cultural goals. • Signed a new Memorandum of Understanding with the Advisory Board of Agriculture to provide strategic planning, technical and innovation inputs to the Agricultural Bureau. • Contributed towards better management of crop nutrition and available soil moisture for more than 300 South Australian low rainfall farmers through delivery of “Your Soils Potential” program.

PIRSA ANNUAL REPORT 2003–2004 11 • Contributed to the management of a high level Iraq Ministry of Agriculture visit to this State, and progressing PIRSA’s position for future Iraq agricultural capacity rebuilding. • Delivered training in safe chemical use to a range of non-English speaking background growers.

Agency support • Implementation of a new, improved web-based financial reporting application that provides improved functionality and access to financial information for users. • Integral role developing nationally accredited training program for emergency communications. • Developed presentation for Global Windfarming conference in San Fancisco to attract investment to South Australia. • Based on South Australia’s food industry scorecard, five historical scorecards were developed for the national food industry, funded by the National Food Industry Strategy Ltd. • In recognition of the PIRRISK system, the Principal Adviser, Risk Management and Audit in PIRSA was awarded ‘ARIMA Risk Manager of the Year 2003’. • Reconfiguration of PIRSA accommodation in Port Lincoln to improve delivery of services, including the new Marina and Adelaide Place offices. • Launch of 'Mission Possible' an innovative online learning tool for PIRSA staff to enhance their awareness of sound procurement practices and the importance of applying such practices. • Development of a business financial framework and policies for use in divisions that have significant external revenues. • Preparations for a pilot of Corporate’s business reform initiative were completed. The proposed reforms are expected to improve the standard of services provided to customers across the agency. • The socio-economic impact of salinity levies was analysed for the Riverland. • Improvements continued to the agency’s Internet sites which provide information and services to customers. • Information technology infrastructure was replaced to support increasing requirements for business systems and communications. The refreshment of these assets will position PIRSA for the termination of the EDS outsourcing contract in July 2005. • Implemented a strategy to improve the uptake and quality of performance management practices in PIRSA • Improved Occupational, Health, Safety and Welfare (OHSW) performance with a reduction in the lost time injury frequency rate from 12.56 to 10.23 per million hours worked.

General • PIRSA Executive continued to meet in country regions, providing opportunities to see the results of policies or projects and get feedback from primary producers and other key stakeholders. • PIRSA continues to have a strong presence at the three major field days in the South East, Yorke Peninsula and Riverland. ‘Taste! South Australia’ showcased the state’s food and wine at the Royal Adelaide Show.

PIRSA ANNUAL REPORT 2003–2004 12 The year ahead

Food South Australia • Implementation of the SA Food Centre including Food Industry Development Officers working with regional food groups through Regional Development Boards. • Implementation of the State Food Plan 2004–2007 including a National Centre for Cold Chain Management with the SA Freight Council. • Integration of export development services with industry associations and with Austrade through a Memorandum of Understanding. • Implementation of Food / Wine / Tourism initiatives through a Memorandum of Understanding with the South Australia Tourism Commission (SATC).

Agriculture, Food and Fisheries • A Dairy Scheme (regulations) within the new Primary Produce (Food Safety Schemes) Act is expected to be implemented in August 2004, followed by a Meat Scheme and a Seafood Scheme bringing these into line with other food sectors. • Implementation of National Livestock Identification Scheme (NLIS) will enable the identification and trace ability of diseased sheep. This will provide a permanent whole -of-life electronic identification system that enables individual animals to be traced from property of birth to slaughter and improve SA’s biosecurity management system. • Management plans implemented for sustainable use of the Marine Scalefish Fishery and the Lakes and Coorong Fishery. • Review of non-native fishing activity to measure its impact on controlling European carp in the River Murray. • Implement recommendations from sustainability assessments across all major fisheries as required under the Commonwealth Environment Protection & Biodiversity Act in order to maintain export accreditation under the Act. • New Fisheries legislation prepared for introduction to Parliament in June 2005. • An on-going program will provide input to policy development arising from an environmental baseline study of existing aquaculture areas, research to gather scientific information on appropriate levels of aquaculture activity within a given area and ways to manage interactions between aquaculture and marine animals including fish health relationships and population interactions between farmed and wild fish. • Development of additional policies under the Aquaculture Act including the following: Broodstock Collection Policy; Translocation Policy; Marine Mammal Interaction Policy; Laura Bay Aquaculture Management Policy; Eastern Spencer Gulf Aquaculture Management Policy. • The Meat Hygiene regulations will be transferred to a scheme under the proposed Primary Produce (Food Safety Scheme’s) Act. • Government and industry will continue to work together to improve food safety systems and will focus on process control and risk reduction in the manufacture of smallgoods, poultry processing, production of un-pasteurised goat’s milk and harvesting of wild cockles and scallops.

SARDI AQUATIC SCIENCES Year one of the Marine Innovation South Australia (MISA) initiative was approved by the State Government with a total indicated budget of $25.8 million over the next seven years. This funding will be further levered to strengthen and/or develop new linkages between research providers, improve essential research and development infrastructure and support projects that will benefit a broad range of aquatic industries in South Australia.

PIRSA ANNUAL REPORT 2003–2004 13 CROPS The focus will be on delivering key outcomes from important national initiatives. These include barley and pea breeding, clarification of SARDI’s role in the new National Field Crop Eva luation Program, consolidation of SARDI’s new National Oat Breeding Program now incorporating Western Australia, and implementing the outcomes of a major review of low rainfall farming systems research and extension based at the Minnipa Agricultural Centre.

HORTICULTURE Development and commercial application of the use of ultra-violet light for the control of post-harvest spoilage organisms in a wide range of horticultural crops is an exciting new technology to come from highly successful experimental results obtained in the last year.

LIVESTOCK New management structures for discipline-based, rather than commodity-focussed units will be established with improved commercialisation of research applications. Through these structures, the livestock group plans to invigorate core research strengths and further develop key research resources. The group also plans to apply for new Cooperative Research Centre (CRC) initiatives to support work on animal nutrition and reproduction, as well as environmental influences on the expression of genes significant to livestock production.

SUSTAINABLE SYSTEMS Five new pasture cultivars are undergoing final seed multiplication and Plant Breeders Rights trials for release in 2004–2005. The sustainable systems area will focus on developing a more extensive capability in water resources and become a significant contributor towards the CRC Irrigation Futures. The group is also focused on building a Climate Applications capability on the Waite Research Precinct. The first step has been to develop a consortium including SARDI, DWLBC and the University of Adelaide as a core participant in the bid for a CRC in Climate Risk Technologies.

Rural Solutions SA • Grow commercial services within South Australia, nationally and internationally. • Investigate opportunities to provide additional services in the areas of water and salinity, food, and wine. • Position Rural Solutions SA effectively in the new Natural Resource Management (NRM) arrangements. • Enhance customer relationship management. • Grow organisational capacity and capability through strategic recruitment and development of our people. • Develop new products and services.

Minerals and Energy MINERALS The Plan for Accelerating Exploration for the mining industry was launched, aimed at helping treble mining exploration investment by 2007 and boosting annual mineral production to $3 billion by 2020. Over the next five years, $15 million has been allocated to achieve goals in areas such as balancing resource development with conservation and establishing drilling partnerships with industry. Over four years, $3.66 million will be expended to ensure increased compliance in exploration and production activities.

PIRSA ANNUAL REPORT 2003–2004 14 PETROLEUM AND GEOTHERMAL Over the next four years, competition and investment upturn in the petroleum and geothermal sectors will be facilitated with efficient and effective provision of services and regulations through one window to government. South Australia will be recognised as having made greater strides in securing conjunctive native title agreements and investment in geothermal and energy exploration than any other Australian jurisdiction.

ENERGY Over the next four years, $1.45 million will be expended on the development of a critical State Energy plan to achieve a secure, competitive and innovative energy sector in South Australia. The State Energy Plan will draw on the combined resources of many State Government agencies. Initiatives costing $450,000 will be implemented over four years in response to the Electricity Demand Side Measures Task Force.

Commercial Projects • The Commercial Projects team will continue to identify and facilitate strategic industry-wide initiatives that boost Gross State Product and exports, remove structural impediments to growth, expand job opportunities (particularly in areas of high unemployment) and reduce long-term demand for public infrastructure. • The Commercial Projects team will concentrate on identification of major investment opportunities that focus on value adding and exports. Facilitating and assisting with the early delivery and bringing forward of opportunities is an important part of the activities.

Agency support • A pilot of Corporate’s business reform initiative is expected to improve the standard of services to customers and will be tested with Rural Solutions SA during 2004–2005. Improved services to other divisions will follow after 1 July 2005. • An improved fixed asset recording system will be implemented to streamline the asset management processes and provide information on time. • It is intended to achieve wider adoption of the Triple Bottom Line reporting system. • An electronic service will be implemented so customers of the Agency can access information contained within their accounts and pay invoices via the Internet. • An electronic system for document and records management will be purchased from the South Australian Whole -of-Government Panel of products. • Planning will be undertaken for the South Australian whole -of-government future Information and Communication Technology contract transitions. • A review of the National Drought Policy will be completed. • An information package will be prepared on structural adjustments that will benefit the South Australian food and fibre industries. • A strategy will be put into operation for recruitment of indigenous people into the agency. • PIRSA has committed to achieve equal representation of women on boards and committees in relation to the State Strategic Plan. • Two Pulse surveys of PIRSA will be conducted to gather benchmark data for performance management and succession planning.

PIRSA ANNUAL REPORT 2003–2004 15 PIRSA’s role

Organisation The Department of Primary Industries and Resources South Australia (PIRSA) is a key government agency focused on sustainable economic development.

PIRSA delivers specialist services and advice with the potential to increase the prosperity of South Australians, to improve their quality of life and to ensure sustainable development of the State’s resource base for future generations. PIRSA delivers these services through locations across South Australia.

• PIRSA’s business is to optimise the return on South Australia’s natural assets by: • Fostering sustainable development of new and existing industries • Facilitating global competitiveness and innovative solutions • Building partnerships between industry, the community and government • Providing information and knowledge to help make the right decisions for themselves • Enabling the preservation of resources for future generations.

PIRSA’s composition was extended during the year to include the Commercial Projects team and several energy staff from the Department of Business, Manufacturing and Trade. This capability enables PIRSA to provide industry development services to wine, resources and energy sectors beyond the farm gate, fishery or mining operation and along the total value chain.

Some new structural arrangements followed the changes to PIRSA’s functional services and redesigned accountability. Support for the wine industry was aligned with agricultural services into the Agriculture and Wine Division. The creation of two new divisions, the Aquaculture Division and Fisheries Division, removed these functions from the former Agriculture, Food and Fisheries Group. These changes came into effect from 8 July 2004. From that date PIRSA comprises four industry and four enabling divisions, namely:

INDUSTRY DIVISIONS • Agriculture and Wine • Minerals and Energy • Aquaculture • Fisheries

ENABLING DIVISIONS • South Australian Research and Development Institute • Rural Solutions SA • Food SA • Commercial Projects

PIRSA’s corporate support requirements are provided through the Corporate Division.

Strategic context VISION • South Australia’s resources are appreciated. • Our people are enthusiastic, capable and inspired. • The future is exciting and full of promise.

PIRSA ANNUAL REPORT 2003–2004 16 • Focusing on results that share opportunities and provide for future generations.

BUSINESS Optimising return on the state’s natural assets by: • Fostering sustainable management and development of the food, fibre, minerals and energy sectors, • Facilitating global competitiveness and innovative solutions, • Building partnerships between industry, the community and government, • Providing information and knowledge to help people make the right decisions for themselves, and • Regulating to preserve the benefits for future generations.

VALUES PIRSA is an organisation that values people, commitment, integrity, empowerment and accountability, innovation, collaboration, customer service and achievement. These values drive the culture and style of the Agency.

OUTCOMES PIRSA will deliver these outcomes for South Australia: 1. Growth and development of innovative and internationally competitive primary, resource and energy based industries in South Australia, 2. Ecologically sustainable development of the primary industries, resources and energy sectors, 3. Prosperous and self-reliant regional communities that confidently respond to change, 4. PIRSA is a respected, credible and successful organisation.

STRATEGIC PRIORITIES To realise outcomes 1–3, PIRSA has undertaken programs and services with the following emphasis: • Industry development — provide support for industry and regional development that focuses on global market opportunities, • Innovation industry — promote and facilitate new and value-adding industry that builds on the states’ knowledge, infrastructure and innovation capability, • Risks and biological contaminant threats — successfully manage risks including biological and contaminant threats, to the environment, production efficiencies and market access, • Integrated policy framework, regulation and compliance — create through consultation, effective policy and regulatory frameworks to enhance industry and community confidence, • Ecologically sustainable development — enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles, • Remedial actions — harness community and government resources to rehabilitate degraded systems and sites, • Building community capacity — build capacity, leadership and global awareness in industry, and rural and indigenous communities, • Partnerships — negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development, • Access to information and services — improve industry and regional access to information that supports better business decisions.

To realise outcome 4, PIRSA subscribes to the following priorities: • PIRSA is a great place to work — we attract, develop and support our people; we provide a positive work culture, • We manage results — we manage our resources well; we provide leadership; our business processes are effective and efficient, • We grow and harness our knowledge — our knowledge is a key business asset,

PIRSA ANNUAL REPORT 2003–2004 17 • We build collaborative relationships with others — our success depends on building and maintaining our relationships with clients, stakeholders and the community.

OBJECTIVES PIRSA’s strategic plan is not prescriptive regarding corporate goals and objectives due to the diverse nature of the agency’s operations and responsibilities, and the difficulty of stating high-level objectives that have any meaning for any single PIRSA division. Instead it seeks to provide a clear statement of priorities that are important to the South Australian Government, PIRSA’s Chief Executive and Executive, and the many staff and stakeholders who have been consulted.

The plan acknowledges that divisions are in the best position to identify meaningful, practical objectives that will take PIRSA forward and towards delivering its outcomes. The PIRSA plan signals the agency’s priorities in both what is to be achieved and how those results are to be achieved. The latter describes the style and character of the organisation and the working relationships with stakeholders it wants to maintain or develop.

There is a continuing emphasis on industry development in response to global market signals and opportunities, and the ongoing needs to ensure that the state’s resources are not adversely impacted by those industries (acknowledging that mining and energy industries are extracting for community benefit, non-renewable resources). The scope of the plan continues coverage of simpler, integrated policy development, community development, response to emergencies, research and development and service delivery in its many forms.

PIRSA’s Strategic Analysis and Prioritisation Program is assisting the agency to align programs with its strategic directions and contribute to state economic development.

LINKS TO GOVERNMENT OBJECTIVES PIRSA’s strategic and operational planning processes ensure that the agency’s outcomes and outputs align with government objectives. Whole -of-government ministerial outcomes define PIRSA’s strategic plan and division plans. Division strategic plans reflect PIRSA’s strategic priorities and these define the programs, projects and services planned and executed by PIRSA divisions.

PIRSA collaborates extensively with other government agencies as projects are increasingly cross- government (for example Food South Australia).

PIRSA ANNUAL REPORT 2003–2004 18 Practising sustainability

PIRSA’s strategic focus combines financial, social and environmental aspects. Together these comprise a ‘triple bottom line’ performance approach, which is internationally recognised as a method of demonstrating sustainability.

PIRSA’s approach to sustainability applies equally to its external industry development focus as well as to its internal performance. In this way PIRSA seeks to ‘practice what it preaches.’

Over the past year PIRSA has developed and refined a comprehensive series of measures covering the agency’s financial performance, environmental impact and social wellbeing. These illustrate PIRSA’s ‘footprint’ along with future directions.

PIRSA’s approach to sustainability is evidenced throughout its operations, from its commitment to staff training and development support for volunteerism, support for community groups, environment and energy considerations in purchasing decisions to ways it reduces, reuses and recycles its waste. In particular: • Consideration is being given to identifying ‘preferred’ suppliers with certified sustainable practices as part of the procurement process, • Incorporating energy efficiency into criteria for assessing proposals for new or updated machinery and equipment, • Business activities are reviewed to identify opportunities to minimise waste, • Coordination of FISHWATCH volunteers to raise public awareness on various marine issues, • The PC donation program which transfers surplus PCs to community groups, • Changes to lighting, air conditioning and building management control technology at the Plant Research Centre.

SIGNIFICANT ENERGY MANAGEMENT ACHIEVEMENTS In parallel with the commitments made in the State Strategic Plan and Energy Efficiency Action Plan, PIRSA has continued implementing a range of initiatives to achieve a 15% reduction in energy consumption in buildings before 2010 and a 25% reduction by 2014.

An example of PIRSA’s energy management can be found at the SARDI Plant Research Centre at Waite. The Centre was designed from the outset to include built-in energy saving features such as the co-generation set, hot water storage and recycling, air conditioning economy modes (making maximum use of outside air), ice making and recycling of ice melt, a comprehensive building management system for fine control of major plant, and time schedule control of work area lighting in the centre’s under-plaza

Achievements in 2003–2004 include: • PIRSA’s leadership to the Moomba gas crisis and in particular management of the Government’s response to managing energy demand, • Capital investment in energy saving lighting devices at 25 Grenfell St, • Rewiring of light circuits at 101 Grenfell St to minimise usage of office lighting, • Replacement of 213 PC monitors with energy efficient TFT flat screens, • Establishment of a network of officers to promote energy saving measures within their respective areas, • A review of electricity metering at 25 and 101 Grenfell St to ensure results of energy saving initiatives are reflected in actual consumptio n levels for the agency.

PIRSA ANNUAL REPORT 2003–2004 19 Table 1 PIRSA’s performance against annual energy target

Expenditure Energy use Greenhouse gas emissions ($) (gigajoule) (tonnes of carbon dioxide) Energy consumption in buildings (leased/owned) 2000–2001 (base year)a 1 558 985 76 372 15 092 2003–2004b 1 558 947 65 449 13 890 Portfolio target c (2010) — 64 916 — Portfolio target (2014) — 57 279 — a Figures based on information available as at 21 August 2004 - due to varying billing cycles for different sites assumptions have been made based on previous billing period trends b The portfolio target (2010) meets the government’s undertaking of a 15% reduction in energy use in government buildings before 2010 c The portfolio target (2014) meets the government’s undertaking of a 25% reduction in energy use in government buildings within 10 years

Although energy consumption decreased by approximately 14%, expenditure reduced only marginally due to changes in electricity tariffs following entry into the National Electricity Market.

PIRSA’s vehicle fleet policy stipulates requirements to facilitate a reduction in greenhouse emissions through the use of alternative fuels. In this regard at 30 June 2004 compared to 30 June 2003, the number of gas/dual fuel vehicle s increased by 32 with a corresponding reduction of 32 petrol vehicles. This resulted in a 248.84 tonne reduction in greenhouse gas emissions.

PIRSA ANNUAL REPORT 2003–2004 20 Performance review

In this year’s annual report, performance is reviewed against PIRSA’s strategic priorities for key business divisions, except Food South Australia which is reviewed against year two of the four key initiatives of the State Food Plan and Program 2001–2004.

FOOD SOUTH AUSTRALIA The State Food Plan released in 1997 set a growth target of an annual industry value of $15 billion by 2010. The Food Scorecard measures the Food Industry’s progress towards this target. Since 1997 the Food Industry has grown at a rate above historical levels and remains above the historical growth rates despite a decline in 2002–2003 attributed to drought and other factors including rises in the value of $A, the SARS epidemic and international instability as a result of terrorism.

Figure 1 State Food Plan growth targets

16 Source: ScoreCard 2003

15 Target Growth Line 7.9% per annum 14

13

12 South Australian 11 Food Growth Challenge ($ billion) 10 2002/03=$8.9b 9 Actual Growth

8 Historical Trend Growth 4.9 % pa 7 Commencement of State Food Plan 6

1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10

STATE FOOD PLAN AND PROGRAM 2001–2004 The State Food Plan and Program 2001–2004 has been delivered and an independent review of its effectiveness was undertaken. It found that: • There was a fundamental positive change in industry perceptions in relation to government leadership and the image of the food manufacturing sector between 1997 and 2004. • The food industry’s understanding, confidence and willingness to pursue a range of development activities related to issues identified as high priority in the State Food Plan improved significantly between 2000 and 2004. • Industry leaders and program participants believed that the State Food Plan has had a significant impact on the four key areas targeted.

1. Value Adding to Commodity Products

The Food Industry in SA continued to experience growth in processed food turnover. The independent review found that the State Food Plan and Program 2001–2004 accelerated the shift from commodities to value-added products by boosting industry confidence. Particular examples highlighted in the review included the meat, seafood and dairy sectors.

PIRSA ANNUAL REPORT 2003–2004 21 2. Building Regional Industry Capacity and Capabilities

The review found that the State Food Plan and Program had a positive impact on the objectives of this initiative. It resulted in significantly increased business collaboration and enhanced service delivery, and played a moderate role in increasing the number of integrated demand chains in regional areas.

3. Global Competitiveness and Innovation

The review found that the State Food Plan and Program 2001–2004 also had a positive impact on the number of innovative food and beverage products, packaging and processes, and the number of SA food and beverage companies successfully accessing Federal funding programs. The plan and program had had a lesser influence on the level of capital investment in new product and process development.

4. New Export Development

The review concluded that the State Food Plan and Program had a significant impact on the number of companies successfully exporting and the volume and value of exports. The Food Industry ScoreCard shows that exports of processed foods from South Australia maintained steady growth since 2000– 2001. Drought, SARS, international political unrest and the strength of the $A are likely causes of a downturn in exports in 2002–2003. Nevertheless, SA outperformed the national average for exports during this period.

Food Industry ScoreCard The Food Industry ScoreCard is the key tool used by the South Australian Government and industry to provide up-to-date information to measure the performance of South Australia’s agrifood industry and track performance against the 2010 food target of $15 billion. The data analysed by the ScoreCard provides industry with critical benchmark information to identify opportunities and make comparative assessments of success.

The South Australian ScoreCard has been extended over the last two years to include 14 regions. These regional ScoreCards are completed each year at a desktop level, with more detailed field research occurring with several regions each year.

The ScoreCard team also initiated a project of developing a framework for triple bottom line reporting of the food industry. This extension to the existing ScoreCard will cover environmental and social dimensions of the food industry, including externalities and sustainable use of natural resources — water, land, air quality, packaging in regard to waste management, other environmental systems (e.g. ISO 14001); employment, skills development, wage levels and application of quality.

The South Australian ScoreCard system has also been chosen by the National Food Industry Strategy as a model for the national and other state food programs to measure and monitor the progress of their food industries. The ScoreCard team is consulting with all states in order to establish a uniform ScoreCard system through out the country.

TARGETS FOR 2004–2005 • Deliver the 2004–2005 Food Industry ScoreCard. • Complete detailed regional ScoreCards for four regions, subject to funding. • Promote and continue to build a framework that includes environmental and social indicators in the ScoreCards reporting system. • Assist the National Food Industry Strategy and interested states in developing their own food ScoreCards.

PIRSA ANNUAL REPORT 2003–2004 22 AGRICULTURE, FOOD AND FISHERIES

The Agriculture, Food and Fisheries Division incorporates the major groups providing services to the agricultural, fisheries and aquaculture sectors. These groups work in partnership with industries to enhance biosecurity measures, create innovative development and resource protection strategies; protect plant and animal resources from pest and disease threats; enhance the knowledge, skills and confidence of industries enabling them to compete in the global market place and provide support for the adoption of new technology to maintain competitiveness.

The division has responsibility for delivering industry development projects, regulatory and technical services, policy advice to the government and Minister for Agriculture, Food and Fisheries and developing legislation to support agricultural industries.

Agriculture, Food and Fisheries establishes strategy, policy and funding for significant government initiatives for the rural sector in Horticulture, Plant Health, Field Crops, Livestock, Animal Health, Rural Chemicals, Meat Hygiene and Emergency Management Coordination.

Rural Solutions SA, another division of PIRSA, delivers a number of the Division’s services.

Strategic priority 1 — INDUSTRY DEVELOPMENT — Provide support for industry and regional development that focuses on global market opportunities FIELD CROPS The High Protein Quality Wheat project is working with Orroroo farmers to add value to their wheat through the creation of frozen dough processed bakery products targeting the Japanese market.

In conjunction with the Eyre Peninsula Industry Development Board and Port Lincoln Tuna Processors, PIRSA’s Field Crops Group has developed a pre-cooked, ready-to-eat pasta and sauce dinner pack that is being marketed through national supermarket chains.

LIVESTOCK Major programs across the industry sectors have focussed on the development of strategic plans and directions for specific industries and implementation of identified initiatives.

Implementation of the Dairy Industry Strategic Plan has attracted funding support from a range of industry and government stakeholders. The Dairy Industry Development Board and industry are reviewing the targets and strategies to account for current economic difficulties facing the industry.

An Industry Implementation Committee has progressed the South Australian Pork Industry Strategic Plan by driving the roll-out of initiatives highlighted in the plan.

An industry-led Beef Development Team assisted by PIRSA has also developed a document focusing on strategic directions for South Australia’s beef industry.

The South Australian Sheep Industry is well placed for development over the next decade following release of a 10-year strategic plan. Key national bodies have welcomed this industry supported plan as it sets a framework for focused industry development activity into the future. The look @ Wool project that commenced in 2003–2004 is set to support industry development through growing prosperity and fostering creativity.

PIRSA assisted the Goat Industry Working Group in the development and launch of the South Australian Goat Industry Strategic Plan 2010 for the sustainable development of the goat industry.

PIRSA ANNUAL REPORT 2003–2004 23 A document highlighting the plight of the local egg industry and a way forward as a result of changes proposed for hen welfare was published. PIRSA has worked with industry to highlight the need for an adjustment package for the industry and looking at ways the industry can refocus and redevelop in the light of the changes.

WINE INDUSTRY The Premier chairs the South Australian Wine Industry Council and Mr Vic Patrick, Director - Viticulture with Beringer Blass Wine Estates has been appointed as Deputy Chair. In addition to the Premier, the Deputy Premier, the Minister for Agriculture, Food and Fisheries and the Minister for Trade and Regional Development also sit on the Council, which provides a forum for major issues facing the industry to be addressed directly with the relevant minister. There are 16 industry representatives on the council.

HORTICULTURE PIRSA produced a discussion paper on major growth opportunities for horticulture industries. This paper assembled information on market opportunities, competitiveness and international outlooks to help prioritise key opportunities.

In addition, PIRSA has worked with the Agricultural Research & Advisory Committees to determine the issues that are impacting on vegetable, potato and olive industry development and in conjunction with a range of industry members to review the SA Vegetable Industry Strategic Plan.

FOOD SOUTH AUSTRALIA The State Food Plan and Program 2001–2004 is to be replaced with the State Food Plan 2004–2007. The principal vehicle for delivering the objectives and targets outlined in the State Food Plan 2004–2007 will be the South Australian Food Centre which will involve a co-investment with industry for specific industry led market development programs.

TARGETS FOR 2004–2005 • Establish programs to increase the value-adding of SA Horticulture to achieve better returns and additional employment opportunities.

Strategic priority 2 — INNOVATION INDUSTRY — we promote and facilitate new and value-adding industry that builds on the States’ knowledge, infrastructure and innovation capability FIELD CROPS The Field Crops Program has been actively involved in two demonstration projects to support initiatives of the Premier’s Food Council toward a greater emphasis on value adding in the State. The program emphasis, is to encourage and provide resources to farmer groups to enable them to research and develop products for target markets, to develop linkages with potential market customers to identify key useful product attributes and identify possible funding sources.

HORTICULTURE PIRSA led a joint South Australia and Victorian program to develop an apple supply chain manual as part of a coordinated national program of apple industry training. There was a major focus on identifying new opportunities for organic products. This included a major international study of opportunities for organic wine, and linking existing producers of organic wine to major market opportunities.

The horticulture program also supported a range of industry development activities associated with establishment of a mint oil industry in the South East, improvement of strawberry cultivars, introduction of improved apple orchard systems and development of the seed potato industry.

PIRSA ANNUAL REPORT 2003–2004 24 FOOD SOUTH AUSTRALIA The State Food Plan and Program 2001–2004 is to be replaced with the State Food Plan 2004–2007. The principal vehicle for delivering the objectives and targets outlined in the State Food Plan 2004–2007 will be the South Australian Food Centre which will involve a co-investment with industry for specific industry led market development programs.

TARGETS FOR 2004–2005 • Develop and deliver reliable models of drainage from irrigated horticulture at farm and district levels.

Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — Successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access EMERGENCY RESPONSE PIRSA has conducted six training exercises, with other emergency response agencies and local government targeting response to emergencies in animal, plant or aquatic contexts. The simulation exercises have provided training and capability development to more than 50 PIRSA staff.

FIELD CROPS Anthracnose management Information detailing the market access arrangements for lupins within SA and into Victoria for the 2004–2005 harvest has been placed on the PIRSA website. The Eyre Peninsula Lupin Anthracnose Quarantine Zone will cease on 30 June 2004.

ANIMAL HEALTH National Livestock Identification Scheme (NLIS) Several significant milestones were achieved in the NLIS program, such as the introduction of legislation to implement NLIS-cattle on a mandatory basis in South Australia in early 2004. Nearly 900,000 NLIS devices were purchased by South Australian cattle producers following the introduction of a discount of 70 cents per device in February, sufficient devices to identify the state’s cattle herd.

The NLIS-Sheep and Goats Implementation Working Group has begun the process of implementation in South Australia. South Australia is on target to meet the Primary Industries Ministerial Council timelines for implementation of the National Livestock Identification System for cattle, sheep and goats.

MEAT HYGIENE AND FOOD SAFETY Food Safety Risk Formal assessments of pathogen management control were undertaken within poultry and smallgoods high-risk sectors, and a baseline microbiological study of the game meat (kangaroo) sector was completed. Assessments have identified process improvement opportunities for businesses and industry and should realise an overall reduction in risk within these industry sectors.

PIRSA assisted the Department of Human Services (DHS) in completing a joint food safety incident response plan to delineate responsibilities in the event of a food safety incident in SA. PIRSA will support the testing of the plan.

PIRSA’s Food Safety Program manages a voluntary certification and branding program for the oyster industry to provide assurance of high standards of food safety, which facilitates market access. Around 70 businesses had their food safety plans audited and certified by a third party provider contracted by the Minister in 2003–04.

PIRSA ANNUAL REPORT 2003–2004 25 PLANT HEALTH Fruit fly South Australia continues to maintain its fruit fly free status. A significant effort has been devoted during the past year to a strategy to communicate the message “don’t bring fruit and vegetables back into South Australia” to the South Australian travelling public. An outbreak of Queensland Fruit Fly was declared at Norton Summit in the Adelaide Hills in December 2003 following the discovery of an egg-bearing female fruit fly. The successful eradication response was critical in regaining the fruit fly free status for the Norton Summit area.

RURAL CHEMICALS National residue survey Investigated the cause and took action to improve chemical use and prevent future violations for seven chemical residue violations detected by the National Residue Survey monitoring of South Australian produce during 2003–2004.

MARKET ACCESS Accreditations for cattle producers in the European Union Cattle Accreditation Scheme (EUCAS) were maintained and 24 properties were audited to allow continued access to the EU market. PIRSA’s requirements for management of the EUCAS passed an audit by Australian Quarantine and Inspection Service (AQIS), the national coordinators of the scheme.

FISHERIES Caulerpa taxifolia Managed an eradication program for Caulerpa taxifolia, an invasive weed with implications to severely degrade fisheries and habitat, in West Lakes and the Upper Port River. The eradication program has involved the physical removal of a large area of seaweed in the Port River and the treatment of West Lakes by flooding with freshwater.

AQUACULTURE Market Access PIRSA involvement in scientific review of aquatic animal welfare issues both domestically and internationally will ensure that South Australia adequately addresses the issue which has the potential to threaten ongoing market access.

Surveillance The South Australian Shellfish Quality Assurance program has assisted in providing analytical services for potentially toxic algal blooms occurring outside aquaculture areas, and not related to aquaculture activities.

TARGETS FOR 2004–2005 • Model and advise the impacts of climate change on irrigation practices in the Murray Darling Basin. • Continue to implement the NLIS to enable the identification and trace ability of diseased sheep. • Review of non-native fishing activity to measure its impact on controlling European carp in the River Murray. • Gain greater recognition of the need for NRM Program support for primary producers who are the major custodians of the states natural resources, wildlife and landscape. • Continue eradication attempts for remaining Caulerpa taxifolia in upper Port River.

PIRSA ANNUAL REPORT 2003–2004 26 Strategic priority 4 — INTEGRATED POLICY FRAMEWORK, REGULATION AND COMPLIANCE — Create through consultation, effective policy and regulatory frameworks to enhance industry and community confidence REVIEWS OF LEGISLATION Barley Marketing Act A Barley Exporting Bill was introduced into Parliament on 30 June 2004 to avoid a competition policy payment penalty of $2.93 million from the 2003 assessment. To avoid the penalty it was necessary to pass new legislation to establish a barley export market-licensing scheme to commence on 1 July 2005.

Veterinary Practice Act 2003 The main difference from the existing Veterinary Surgeons Act 1985 is that non-veterinarians can now own veterinary practices. The Regulations are likely to be completed in August 2004 and the Act proclaimed before the end of 2004.

Meat Hygiene Miscellaneous (Amendments) Bill 2004 This amendment to the Meat Hygie ne Act 1994, passed by Parliament, increases the scope of the Act to include the retail processing meat and completes the recommendations of the National Competition Policy review of the Act. The Meat Hygiene regulations will be transferred to a scheme under the Primary Produce (Food Safety Schemes) Act.

Chicken Meat Industry Bill Following the passing of the Chicken Meat Industry Bill, the National Competition Council assessed the Act as having non-competitive aspects. After negotiation, an amendment to the Bill has been introduced to Parliament to address the perceived non-competitive aspects.

Fisheries Act 1982 PIRSA coordinated the continuing review of the Act. The Act Review Steering Committee provided a report containing 209 policy recommendations on recommendations for new fishing legislation to the State Government in August 2003. A Draft Consultation Bill is being prepared to address the issues raised by the Steering Committee.

Dried Fruits Act 1993 The Dried Fruit Act was repealed in June 2004. Arrangements have been made for the SA Dried Tree Fruits Association to deliver many of the services previously provided by the Dried Fruits Board. Assets of the Dried Fruits Board have been transferred to the SA Dried Tree Fruits Association to enable this to occur.

Citrus Industry Act 1991 Review of the Citrus Industry Act continued so that it will comply with National Competition Policy. The Citrus Industry Implementation Committee made up of representatives from the citrus industry supply chain was formed to help assist this process. A draft Bill to amend the Citrus Act was released for public consultation in March 2004.

REGULATORY POLICY FRAMEWORKS GENETICALLY MODIFIED CROPS Genetically Modified Crops Management Act 2004 and Regulations were proclaimed in April 2004 to regulate the cultivation of genetically modified food crops in the State for market purposes. A Genetically Modified Crop Advisory Committee will assist the Minister in its administration.

PIRSA ANNUAL REPORT 2003–2004 27 MEAT HYGIENE AND FOOD SAFETY Food Safety The Primary Produce (Food Safety Schemes) Bill was passed by Parliament, but proclamation will not occur until the new meat and dairy food safety schemes are finalised. This legislation provides for development of food safety schemes (regulations) with regulatory intervention in proportion to identified risks.

The accreditation of meat processors involves around 650 businesses submitting annual renewals and issuance of approximately 75 new accreditations.

FISHERIES Recreational Fishing Improved Fisheries stock management through high levels of voluntary compliance have been achieved by expanding the Fishcare Volunteer Program to 103 volunteers to new regional areas of the State. These volunteers made over 15,000 contacts with individual recreational fishers contributed 8,400 hours informing them of rules that apply to recreational fishing in South Australia. Fisheries officers also provide significant amounts of information/education to recreational fishers to enhance levels of voluntary compliance.

River Fishery Completed restructure of the Commercial River Fishery and renewed a limited number of licences in the non-native fishery for carp and bony bream.

Review of Northern Zone Rock Lobster Fishery The Northern Zone Rock Lobster Fishery moved to quota management arrangements commencing in the 2003–2004 season. The planning and implementation of a vessel monitoring system was completed as part of the new management arrangements aimed at optimising fishery sustainability. The compliance risk assessments for each fishery were reviewed in 2003–2004 and used as a key input into operational planning for the first year of quota management.

Marine Scalefish Fishery Completion of draft fishery management plans for the sustainable management and use of the Marine Scalefish fishery and Lakes and Coorong fishery.

Export Fisheries Approval of ecological assessments for South Australian rock lobster, abalone and giant crab fisheries by Commonwealth Minister for Environment and Heritage for an exemption for 5 years, allowing continued export of these fishery products. Submission of ecological assessment reports to the Commonwealth Department of Environment and Heritage on South Australia’s prawn, marine Scalefish, Lakes & Coorong, pilchards, blue crabs and seagrass fisheries.

AQUACULTURE A range of policies have been developed and brought into operation including Mandatory Provision (General) Policy, Aquaculture Cost Recovery Policy, Lower Eyre Peninsula Aquaculture Management Policy; Aquaculture Tenure Allocation Board Policy, Aquatic Animal Health Policy, Aquaculture Leasing and Licensing Policy, South Australian Shellfish Quality Assurance Program Policy, Aquaculture Environmental Management Policy, Aquaculture Resource Management and Ecologically Sustainable Development Policy.

Development of best practice aquaculture licence application has been implemented to improve the quality of applications to assist in competitive tenure allocation.

PIRSA ANNUAL REPORT 2003–2004 28 Zone policies, which identify potential new aquaculture areas, have been established following comprehensive scientific investigations. These identify new opportunities for the aquaculture industry investment and location in South Australia.

Enhancements to Fisheries Licensing and Monitoring System have been completed which will assist in the timely processing of license payments. A review of electronic payments has been completed.

Design of components within the Primary Industries Information Management System database has commenced to streamline aquaculture leasing and licensing services and to capture all relevant data ranging from environmental management and aquatic animal health standards.

FOOD SAFETY POLICY Premier’s Food Council The Premier’s Food Council Issues Group and related partnerships and task teams across government have developed food policy proposals that have been endorsed by the Premier’s Food Council for action in 2004–2005. These include development of environmental measures in the Food Industry ScoreCard, product integrity, integrated regional planning, skills formation in the food industry and an organic food industry strategy for South Australia.

Food Safety Incident Response Cabinet endorsed a ‘Strategic Action Plan for Food Safety in South Australia’s Primary Industries’ in 2004. The Action Pla n responds to outcomes of the PIRSA Food Safety risk profile and provides information and details activities, on food safety management in the South Australian primary industries sectors. The Plan demonstrates Government’s and industry’s commitment to min imising the risk of contaminated food originating from the primary industry sector, maps the achievements thus far, and highlights activities planned over the next two years.

COMPLIANCE SERVICES FISHERIES Fishwatch continued to use compliance risk assessment as the driver for annual operational planning. With the exception of the Northern Zone Rock Lobster (NZRL) fishery, risk assessments were reviewed with the assistance of the relevant Fishery Management Committee.

A Fishwatch initiative has seen the design and specification for a Fisheries Prosecution System in conjunction with Western Australian Fisheries. The system will lead to improved accountability and tracking of prosecution briefs and information reports, along with enhanced reporting capabilities. During 2003–2004 in excess of 50 prosecution briefs pertaining to fisheries matters were prepared for the Crown to consider, of which 33 are still pending. Compliance outputs for 2003–2004 include in excess of 18,000 non-commercial inspections, 1,600 commercial inspections and 19,000 awareness checks, which includes the commercial, non-commercial and processing sector.

PIRSA Fishwatch Officers are increasingly having to deal with higher levels of organised crime in illegal fishing activity associated with higher value species, such as abalone and rock lobster. Increased levels of offending from Victorian based syndicates has become evident in the last year. This increase is most likely attributable to the introduction of indictable offences and exclusion orders in Victorian legislation. This displacement of illegal fishing effort to South Australia creates a significant risk to wild fish stocks.

The policy framework and operational policy practices/procedures were developed to support the introduction of new quota management arrangements in the northern zone rock lobster fishery that included the use of a vessel monitoring system. The system enables monitoring of the position of vessels in terms of their compliance with licence conditions, assessment of the intensity of fishing in

PIRSA ANNUAL REPORT 2003–2004 29 various locations and provides a more cost effective approach which contributes to increased compliance with new regulatory arrangements.

AQUACULTURE An Aquaculture Site Visit Program has been initiated to promote understanding of, and adherence to, aquaculture licence conditions. The program includes both land-based and marine aquaculture facilities and has been designed to complement the existing compliance program.

FOOD SAFETY Over 400 audits of South Australian meat processors were completed to verify compliance with national standards, with a very high level of compliance. The Meat Hygiene Unit undertakes regulatory audits as well as recognising commercial auditing arrangements.

PLANT HEALTH Compliance PIRSA Plant Health program introduced new statewide quarantine requirements for imported horticultural produce. The new arrangements will improve the efficiency and effectiveness of compliance mechanisms and also increase industry’s responsibility for ensuring compliance with quarantine requirements.

Plant Health Operations continues to manage an Interstate Certification Assurance program to enable the export of horticultural produce to other states. Around 200 audits are conducted annually to verify ongoing compliance with established national protocols by the accredited exporting horticultural businesses.

PIRSA has established a compliance capacity, within the Plant Quarantine Inspection Service, with officers authorised under the Genetically Modified Crops Management Act 2004 to monitor any authorised uses of genetically modified food crops in the state for compliance.

PARTNERSHIPS PIRSA, in conjunction with DWLBC, provided a range of services to support the State’s Natural Resource Management Reform agenda such as those to INRM bodies including Landcare officers, coast and marine officers and planning, technical project management and administration support services. PIRSA has also provided nine NRM facilitation officers to improve the links between the community and State and Commonwealth Governments, and fulfilled transition support and agency representation roles for five of the eight INRM bodies.

TARGETS FOR 2004–2005 • Complete a review of the Fruit and Plant Protection Act 1992. • Dairy Scheme (regulations) within the new Primary Produce (Food Safety Schemes) Act is to be implemented in late 2004, followed by a Meat Scheme and a Seafood Scheme. • Recommendations implemented from sustainability assessments across all major fisheries as required under the Commonwealth Environment Protection & Biodiversity Act in order to maintain export accreditation under the Act. • New Fisheries legislation prepared for introduction to Parliament in June 2005. • Additional aquaculture policies developed under the Aquaculture Act 2001. • Improvement in food safety systems through Government and industry collaboration focussed on improvements to process control and risk reduction in the manufacture of smallgoods, poultry processing, goat’s milk, cockles and scallops. • Development of regulations under the Agricultural and Veterinary Products (Control of Use) Act 2002 will be finalised and implemented for responsible chemical use in the community and to underpin the marketing of South Australian agricultural produce as “clean and green”.

PIRSA ANNUAL REPORT 2003–2004 30 Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — Enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles LIVESTOCK Building Specifications for Farm Buildings In conjunction with Planning SA and industry, a Minister's Specification has been developed for "Concessions and additional requirements for farm buildings". These create concessions for farm buildings that have unique uses such as buildings housing poultry and pigs where special conditions apply for management of the animals and the presence of people.

Dairy Effluent Management PIRSA is facilitating a dairy effluent management program in the South East that involves input and joint funding from industry, PIRSA, Environment Protection Agency (EPA) and the South East Natural Resources Consulting Committee.

Developing Sustainable Rangelands PIRSA, in partnership with the Commonwealth Department of Agriculture, Fisheries and Forestry and the Outback SA Community Alliance, started a project that will support the further development of sustainable primary production in the state’s pastoral regions.

HORTICULTURE Horticulture sustainability A major national pilot project was launched to develop and implement strategies for introducing Environmental Management Systems (EMS) to horticulture businesses in the Mt Lofty Ranges. Focussed on the apple, cherry and wine grape industries, this program is developing “on farm” and regional EMS management systems.

FISHERIES Charter Boat Fishery Continued development of the charter boat fishery to enable formal management of this sector and allow for future assessments of the impact on fish stocks and contribution to regional tourism.

Aquaculture The three-year, $2 million program titled ‘Innovative solutions for aquaculture planning and management’ is currently underway and will be critical to the future development of the industry in South Australia, with possible national applications.

Aquaculture monitoring programs have been established for all industry sectors to ensure consistency and adequacy of monitoring data.

TARGETS FOR 2004–2005 • Develop and deliver management strategies for horticultural production in saline environments. • Increase the adoption of EMS programs in horticultural industry sectors.

PIRSA ANNUAL REPORT 2003–2004 31 Strategic priority 7 — BUILDING COMMUNITY CAPACITY — Build capacity, leadership and global awareness in industry, and rural and indigenous communities LIVESTOCK Rangelands initiatives PIRSA, the Commonwealth Department of Agriculture, Fisheries and Forestry and the Outback SA Community Alliance, established a project “Developing Sustainable Rangelands” to achieve an improved business focus and commitment to ongoing learning for land managers in pastoral areas of South Australia.

Adjustment and Drought Support The Livestock Industries Group has been contributing to on-farm programs, assisting farmers weather the drought in northern South Australia and in supporting policy areas such as applications for Exceptional Circumstances assistance.

RURAL COMMUNITIES AND EDUCATION FarmBis Farmers, fishers and land managers are attracted into management training through the FarmBis program. The program is jointly funded by the Commonwealth and South Australian Governments and attracted 33,000 applicants from July 2001 to April 2004. The success of the program in building risk management, natural resource management, financial, strategic and tactical planning skills has led to increased self-reliance among target groups.

FarmBis III, expected to begin in 2004–2005, is an incentive program to accelerate development of management competencies of primary producers and land managers through both skill and development activities and access to information. The targeted competencies are those required to build the international competitiveness and sustainability of South Australian primary industries.

Leadership The South Australian Rural Leadership Program ran its fifth program with a further 21 participants bringing the total number of participants to 99 since the program began in 1999. A further program of approximately 20 participants will be conducted in 2004. Participants leave the course with enhanced skills in leadership and networks with other community leaders.

Processes for Capacity Building A holistic “Planning for the Future” program was developed and delivered to 10 indigenous communities during the year. The program aimed to improve community sustainability and quality of life through a comprehensive planning process considering social, environmental, economic and cultural goals.

HORTICULTURE Building Regions with Horticulture delivered assistance to numerous businesses across six major horticulture regions through assisting with identification of new market and value adding opportunities.

A new community capacity building project was started on the Adelaide Plains. It is facilitating the delivery of a range of information, technical, training, new technology and environmental services to the region via the Virginia Horticulture Centre.

PIRSA ANNUAL REPORT 2003–2004 32 FISHERIES PIRSA Fishwatch continued to expand its successful Fishcare Volunteer Program into regional South Australia. During the year, new teams were established in Whyalla and Port Pirie. The Fishcare Volunteer program empowers local regional communities to actively encourage voluntary compliance with fisheries legislation.

FISHWATCH Recreational fishing Fishwatch Officers establish and maintain ongoing relationships with local government representatives, local both State and Commonwealth members of parliament, other South Australian government agencies, industry bodies, community organisations to enhance the delivery of the sustainable fishing message and facilitate access to influential community leaders within the rural and indigenous communities.

TARGETS FOR 2004–2005 • Implementation of FarmBis III will accelerate development of the management competencies of primary producers and land managers through both skill development activities and access to information to build the international competitiveness and sustainability of South Australian primary industries. • Complete the current and initiate a further Rural Leadership Development Program in 2005 to enhance the ability of rural communities to manage change.

Strategic priority 8 — PARTNERSHIPS — Negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development. LIVESTOCK Livestock Industry Development Boards Livestock industry development boards advise the Minister for Agriculture, Food and Fisheries on the strategic directions of, and government investment in, the livestock industries in South Australia.

The Wool and Fibre Industry Development Board sponsored the development of an industry 10-year strategic plan for the wool and sheep meat industries.

The Meat Industry Development Board supported the annual Meat Industry Awards for Excellence. The Board also support strategic planning across a range of industries with current focus on pork, egg, beef and sheep meat industries.

FIELD CROPS Grains Industry Reference Group Grains Industry Reference Group is a forum for a collaborative industry approach to resolve grains industry issues between government and industry stakeholders.

RURAL COMMUNITIES AND EDUCATION Advisory Board of Agriculture PIRSA, through its support of the Advisory Board of Agriculture and the Agricultural Bureau, assisted in the implementation of the Board's strategic plan that focuses on strengthening the board’s network and its benefits to farmers and government. The board has fostered young farmer recognition with the Lois Harris and Peter Olsen fellowships.

PIRSA ANNUAL REPORT 2003–2004 33 HORTICULTURE Native Food Industry The native food industry includes a number of groups within government and indigenous communities. PIRSA provides a secretariat service to the steering committee and is leading identification and development of specific native food products.

Agricultural Research and Advisory Committees Greater industry involvement in program development has been achieved through the establishment of agricultural research and advisory committees in the vegetable and potato industries

FISHERIES Fishery Management Committees Seven fishery management committees providing quality advice to the Director, Fisheries Policy, and Minister for Agriculture, Food and Fisheries on the sustainable management of their specific fisheries continued to operate in 2002–2003. A new chairperson was appointed to the Blue Crab Fishery Management Committee.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — Improve industry and regional access to information that supports better business decisions FIELD CROPS PIRSA invested in a project for training services and products for field crop development. Products delivered include the monthly Crop Report, maintenance of the Field Crops website and contributions to a new publication Grain Business in partnership with industry.

RURAL CHEMICALS The inFINDer Agrivet Chemical Information Service continues to provide up-to-date information on chemical handling and use to the rural sector. The CD based service has been enhanced with the addition of new features to make it easier to safely manage the storage of dangerous chemicals.

HORTICULTURE A major review of the PIRSA “Fact Sheet” portfolio was completed with 144 titles updated. Three new CDROM products are currently under development or in a late stage of negotiation, the Winter Cereal Management Guide, PIRSA Counter Disaster Operations Plans and Saltland Agronomy in the South East.

FISHERIES A network of 12 regionally based stations with more than 30 highly mobile fisheries officers providing significant access to services and information across the state. Fishwatch representation on Fisheries Management Committees to ensure that up-to-date, local information is shared with the committees, maintaining healthy relationships and leadership toward a compliant fishery.

AQUACULTURE The Aquaculture Act 2001 required the establishment of an aquaculture public register and this is now available on the Internet.

LIVESTOCK Livestock industries are able to access an increased range of data and information through the PIRSA website. This has included industry strategic plans relating to the Pork, Egg, Sheep, Goat and Dairy industrie s, listings of coming industry events and drought information. The PIRSA website now also carries increased technical and business information relating to a number of key projects.

PIRSA ANNUAL REPORT 2003–2004 34 Strategic priority 11 — WE MANAGE FOR RESULTS — we manage our resources well; we provide leadership; our business processes are effective and efficient The Agriculture, Food and Fisheries Division has undertaken business and project planning to produce a series of plans, which are aligned with PIRSA objectives, robust in content and useful in application. This has enabled the division to have a clear vision for the future with measurable targets .

PIRSA ANNUAL REPORT 2003–2004 35 SARDI

The South Australian Research and Development Institute (SARDI) is the South Australian Government’s principal resource for primary industries and related research and development and is a primary source of advice on state science and research policy. It was established to provide a better focus and direction for the state’s research capacity, to ensure that research outcomes are relevant and available to industry, that research and its management operate within commercial and industry standards and to increase South Australia’s national research and development profile and influence.

SARDI operates in five strategic research areas — Aquatic Sciences, Crops, Horticulture, Livestock and Sustainable Systems. Research and development services are provided to agribusiness, commercial enterprise, manufacturing and processing industries, natural resource conservation agencies, primary industries (agriculture, fishing and aquaculture), rural industry development corporations and State Government agencies.

Strategic priority 1 — INDUSTRY DEVELOPMENT — we provide support for industry and regional development that focuses on global market opportunities. AQUATIC SCIENCES In late 2003, Aquatic Sciences refined the structure of its research programs and a new program on product quality and value adding was established. This new program will deliver research that will enable both aquaculturists and wild fisheries participants (fishers and processors) to develop new product lines, diversify into new markets, improve the quality of their products and maximise the financial return from their activities to them, their community and the state.

Two projects into inland saline aquaculture were completed and, as a result of their success, substantial funding for further work was secured. A major National Action Plan for Salinity and Water Quality project, submitted through the Centre for Natural Resource Management, was approved that will provide $2.1 million for research to foster aquaculture use of groundwater from SA Riverland salinity interception schemes for aquaculture. The Commonwealth Department of Agriculture, Fisheries, and Forestry (DAFF) through the National Aquaculture Action Agenda and managed by the National Aquaculture Council will provide $60,000 over three years for SARDI to maintain the capability for extension of research into inland saline aquaculture opportunities to potential investors.

Abalone cryopreservation techniques were developed and disseminated to interested abalone aquaculture industry groups, as an outcome of a Fisheries Research and Development Corporation (FRDC) research project. These techniques will facilitate the southern Australian FRDC abalone selective breeding project managed by SARDI, which now administers more than 100 family lines on commercial farms in South Australia and Victoria.

An oyster processor / wholesaler survey for the FRDC project Reduction in Pacific oyster mortality by improving farming and processing technologies in South Australia was completed. As part of this project a method to measure stress in Pacific oysters was also refined and validated. The method will now be used in on-farm experiments to assess the effects of different handling activities on the performance of oysters so as to advise on optimal farm husbandry practices.

The SARDI Australasian Experimental Stockfeed Extrusion Centre at Roseworthy continued to play an important role in research directed at the development and optimisation of pelleted feeds for tuna. Different shaped pellets produced with the extruder have been used to assess the affect of pellet shape on apparent intake by tuna as part of the project Aquafin CRC – Southern Bluefin Tuna (SBT) Aquaculture Subprogram: development and commercial evaluation of manufactured diets. The experiment demonstrated that SBT ate significantly more flattened pellets compared to the traditional cylindrical pellet shape.

PIRSA ANNUAL REPORT 2003–2004 36 A new suite of SBT aquaculture Aquafin CRC research projects were approved focusing on the tuna industry's research priorities in nutrition, use of baitfish, environmental impacts, tuna metabolism, tuna health and product quality. SARDI Aquatic Sciences staff from several program areas are involved in these multi-disciplinary projects.

Four stock assessment reports, one for each zone and region of the fishery, were submitted to PIRSA Fisheries. These reports provide the basis for determining the Total Allowable Catch in the abalone fishery. For the first time in South Australia, the Southern Zone report included a preliminary assessment of the status of the blacklip abalone fishery utilising the recently developed national abalone model. These reports highlight deficie ncies in the information available for stock assessment. From 2004–2005 additional funding has been negotiated to address these research gaps on an ongoing basis.

In the past year, the Rock Lobster Subprogram has produced a number of reports that have provided vital information to the fishery. These include the Southern Zone and Northern Zone Rock Lobster Fishery Stock Assessments (2002–03 and a report on the status of Northern Zone Rock Lobster Fishery after 2003–2004 season). In addition, a draft of the Commercial Pot Fishery By-catch Report was presented to the South Australian Rock Lobster Fishery Research Subcommittee. A FRDC final report titled Development and assessment of methods to reduce predation of “pot caught” southern rock lobster (Jasus edwardsii) by Maori octopus (Octopus maorum) was completed and accepted. Several additional puerulus collectors were deployed into specific sites at Marion Bay on the Yorke Peninsula and Vivonne Bay on Kangaroo Island with the aim of improving the strength of current puerulus settlement datasets and contributing to the development of fishery assessment models for the Northern Zone.

Hydrographic data collected during sardine biomass surveys, analysed with new software, yielded insights into the variability of the upwelling system off the Eyre Peninsula. Upwelling intensity was shown to decrease from east to west along the South Australian coast and upwelled water, although detectable, does not reach the surface west of Streaky Bay. The results of this study will be submitted for journal publication in Geographical Research Letters.

Analysis of sardine and anchovy egg distributions, plankton biomass and seasonal measures of upwelling were combined with preliminary information on the diets of Southern Bluefin Tuna (SBT) to suggest that the reason juvenile SBT aggregate in the eastern Great Australian Bight is to feed on concentrations of lipid rich sardines. The results of this study have been accepted for the journal Fisheries Oceanography.

Estimates in 2004 of sardine biomass confirm continuing healthy recovery of the stock from the last mass mortality event. The spawning stock biomass estimate for 2004 is 292,000 tonnes, which is around 8% higher than the estimated biomass in 2003.

Stock assessment reports for 2001–2002 for the Spencer Gulf prawn fishery, 2002–2003 for the Gulf St Vincent Prawn Fishery and for the Blue Crab Fishery were completed. In addition, a status report for 2002–2003 for the West Coast Prawn Fishery was completed.

A stock assessment report for King George Whiting was also finalised. This report highlighted concerns of the status of the stock, which led to a review of the management protocol for the species. Indicators measured for this species suggest a decline in adult biomass since 1999.

The FRDC project Stock assessment models with graphical user interfaces for key South Australian marine finfish stocks was completed. This project produced models for garfish and snapper. These are used yearly for stock assessment, estimating biomass, population numbers, recruitment, and exploitation rate.

PIRSA ANNUAL REPORT 2003–2004 37 CROPS SARDI’s crops research program is committed to ensuring that grain producers throughout Australia remain competitive in local and export markets. New tools for the selection, analysis and manipulation of genes controlling agronomic yield and quality characteristics were produced. The program also developed improved cereal and pulse varieties, which enable high and sustainable on-farm productivity, and which meet increasingly stringent market quality product specifications. Full field evaluation of potential new varieties was carried out at over 100 sites, with around 40,000 field plots throughout South Australia, hastening the release of new crop varieties.

Crop Improvement Breeding programs advanced through the field testing of breeding lines across a wide range of production environments in the State. New varieties either released or about to be released, on the basis of performance data from trials include Kalka durum wheat, Maritime, a manganese efficient, cereal eelworm resistant tall feed barley and Capstan, a very high yielding cereal eelworm resistant dwarf feed barley, Speedee triticale, Farah faba beans, and two narrow-leafed lupin lines (WALAN2141 and 2118) with moderate anthracnose resistance and high yield potential. On the Eyre Peninsula, field testing aided the identification of wheat lines with favourable drought tolerance traits, barley lines with improved boron and drought tolerance and lines of break crop species (peas, beans, canola and mustard) better adapted to low rainfall conditions.

The Malting Barley Quality Improvement Program (MBQIP) of which SARDI is a member released three new malting barley lines from the University of Adelaide’s Waite program and the Victorian program, with plans to release four new malting varieties over the next two years. The new varieties are targeted to different regional environments in southern Australia with substantial increases in potential malting quality in addition to yield increases on farm.

Cutting edge progress was achieved in the identification and mapping of new genes responsible for major diseases of wheat and barley. A resistance gene for crown rot in the wheat variety Kukri was mapped for the first time, as was the mapping of a gene for cereal cyst nematode tolerance in the variety Molineux. Other mapped wheat genes were for yellow leaf spot, pre-harvest spouting and sodium exclusion. In barley, genes were mapped for scald and spot form of net blotch.

A DNA-based soil test for crown rot was nationally offered for the first time to growers by the commercial root disease testing service, Predicta BTM. The test was supported by the training of 300 agronomists who would provide national farm management advice to growers.

HORTICULTURE A national survey of soil, plant and crop management data was collected from growers in South Australia, Victoria, New South Wales and Western Australia as part of the project to understand the role of molybdenum in grape set/berry development in Merlot grapes. Seven field experiments were conducted in 2003–2004, to study the effects of rate and timing of molybdenum foliar sprays and rootstock on yield, growth, berry size/number and plant chemical composition.

A Horticultural Australia Ltd Summer Fruit in dustry funded project to supply ready-to-eat peaches and nectarines into Woolworth’s stores around Adelaide was undertaken. The outcomes of these trials and similar trials in Sydney in the first year led Woolworth’s to expand the commercial program to many stores in Melbourne, Sydney and Brisbane in 2004. SARDI developed a database application to monitor ripening operations and a draft advisory manual was produced as a basis for training future operators of peach and nectarine controlled ripening facilities.

SARDI Postharvest provided an ongoing temperature-monitoring project for the Cold Chain Working Group of the SA Freight Council. This project provides South Australian producers with the opportunity to temperature monitor the cold chain of their perishable products from the packing shed to their domestic or international destination. The producer is supplied with a summary report of

PIRSA ANNUAL REPORT 2003–2004 38 recorded temperature data and explanations of any irregularities that may be observed in the temperature recordings.

Analysis of the supply chain and packaging used for white washed potatoes in Australia was carried out to identify where improvements in handling procedures are required. A range of new packaging options were identified and sourced and will now be evaluated under simulated supply chain conditions.

A three-year project on carrot diseases including carrot virus Y was completed. The project was funded by Horticulture Australia Ltd and management strategies were developed to minimise the impact and infection of this disease in commercial crops. One field trial investigated fungicidal treatments for the control of seed borne Alternaria in carrots.

Early experimental results with new design ultraviolet lights have shown them to be extremely effective in the control of soft rot in potatoes. SARDI is working with the supplier of the lamps to further evaluate the technology for postharvest spoilage control in other crops and develop commercial systems for horticultural industries.

LIVESTOCK The poultry nutrition research team completed a variety of projects with broiler chickens and broiler breeder pullets for the Department of Plant Science, University of Adelaide, Eimeria Pty Ltd, Rural Industries Research and Development Corporation (RIRDC) Chicken Meat Program, Australian Research Council (ARC) Discovery Project, Poultry CRC, Grains Research and Development Corporation (GRDC) Premium Grains for Livestock Program and Inghams Enterprises Pty Ltd.

The pig nutrition group successfully completed two industry-funded projects to assess the effect of enzyme supplementation on growth rate, feed conversion ratio and of energy utilisation efficiency of sorghum or corn based diets for growing and finishing pigs. The group also completed a deer project aimed to define the salt tolerance level of fallow and red deer. A final report was delivered to the RIRDC.

The pig research group completed a study on the relationship between gilt age at the start of puberty stimulation and subsequent reproductive performance. The group also completed an Australian Pork Limited (APL)-funded on-farm study to evaluate the “Lloyd method” of gilt management and two digestibility trials assessing the nutritive value of wheat, barley and sorghum for pigs as a part of the National Feed Grains Program.

A new near infra-red (NIR)-based analytical service was launched under the name “eNIRgy” to provide measurements of digestible energy content of grains and hay for pig feed diet formulations. Developed in partnership with APL and GRDC, this service is available through the Pig and Poultry Production Institute (PPPI) Nutrition Laboratory or by sub-licence to companies with their own NIR capability.

Following SARDI research and suggestions industry has embarked on overcoming a deficiency in presale testing for identifying and assessing the risk of dark and medullated fibres in wool. Australian Wool Innovation has funded several projects, including one from SARDI, with this objective. Some of the early outcomes (Dark and/or Medullated Fibre Risk (DMFR) information system, improved / cheaper test method) are currently being implemented by the wool marketing industry. This effort is providing the first specifications on greasy wool lots for dark and medullated fibres to be made available to wool buyers in catalogues and presale test certificates.

In a Meat and Livestock Australia (MLA) funded project on Interaction between Merino genes and environment and their effect on prime lamb production, differential feeding of the whether progeny resulted in a final difference in liveweight of 14kg at 300 days of age.

PIRSA ANNUAL REPORT 2003–2004 39 Two trials as introductions to evaluating the economic impact of internal parasites on prime lamb productions systems were completed in the Southeast (Millicent and Struan). The Struan data indicated that the preparation of pastures by grazing with cattle in spring was successful in controlling internal parasites in prime lambs on irrigated pastures over summer.

A fertiliser experiment looking at responses of puccinellia pasture to various forms of applied nitrogen has been a great success, with very large responses in growth to moderate to high rates of urea and sulphate of ammonia. The next challenge is to apply economic modelling to these results to demonstrate the benefits of fertiliser use to the local farmers.

Results of a FRDC project indicate both green and cooked prawn products comply with national food safety standards. However, there is substantial variability in cooking/cooling and metabisulphite dipping that impact adversely on shelf life. Some retail samples had near-spoilage levels of bacteria. Opportunities for improvement were identified and included in the Final Report to Seafood Services (FRDC).

Food Standards Australia and New Zealand (FSANZ) issued a new mercury advisory statement on 18 March 2004 in relation to Southern Bluefin Tuna (SBT). SBT has been removed from this public advisory statement based on dietary modelling undertaken on 2002 data collected by SARDI, Tuna Boat Owners of South Australia (TBOASA) and the NRS. This development supports the TBOASA promotion of SA tuna and increases opportunity to gain a premium price.

The final report A HACCP based approach to food safety certification was accepted by Meat and Livestock Australia (MLA) and will be used in the Livestock Production Assurance scheme for Australian sheep, cattle and goat industries.

SUSTAINABLE SYSTEMS Climate Risk Frost during flowering or grainfill of wheat frequently causes severe crop loss. The Reducing the Impact of Climate Variability project focuses on agronomic practices that may reduce the extent of frost damage. Detailed measurements of temperature logged on an hourly basis show that clay spreading and rolling sandy soils produce warmer soil and crop temperatures. The treatments with warmer temperatures were associated with less visual frost damage and higher grain yields. Preliminary findings from 2002 and 2003 from the South Australian and Western Australian trials along with a detailed literature review were presented to producers at eight frost workshops and the South Australian No-Till Farmers Association (SANFA) conference, reaching more than 300 cereal producers. In response, some producers are trialing agronomic practices on their own farm and these will be monitored during 2004. Six core frost tria ls sites have been sown in SA during 2004: Mintaro and Hart in the Mid North, Karoonda, Lameroo & Parilla in the Southern Mallee, and Keith in the South East.

The cropping systems simulation model Agricultural Production Systems Simulator (APSIM) is being utilised to simulate the impact of climate change projections on wheat yields in South Australia and possible adaptations that farmers might make to manage the risks associated with a changing climate.

Sustainable Farming Systems The summer crop program is continuing with support from agribusiness companies Agrichem, Pioneer and Pacific seeds. SARDI’s involvement in summer crop-related activities has contributed to increased producer awareness of the benefits of including these crops into a farm system and consequently to increased areas devoted to forage sorghum in particular. The main end use forage sorghum is high quality summer fodder and export hay production.

PIRSA ANNUAL REPORT 2003–2004 40 Pastures The SARDI pastures group is active in all areas of pasture improvement from the initial collection of germplasm, through the introduction, breeding, evaluation, field-testing, commercialisation and finally demonstration of new cultivars. In 2003–2004 the group led two germplasm collection missions targeting new sources of genetic diversity of pasture plants in the Canary Islands and southern Spain as well as in Azerbaijan. A total of 1300 accessions were collected on these two missions. These will be introduced through quarantine and used as the basis for plant improvement in species such as lucerne, annual medics, subterranean and alternative clovers as well as a wide variety of grasses. In addition plant symbiotic bacteria (Rhizobium) are collected on these missions and improved through activities by the pasture group on the Waite Research Precinct.

Target areas include those affected by salt and waterlogging arising from dryland salinity as well as those impacted by adverse soils, particularly acidic soils with high levels of aluminium. Breeding highlights include world leading science outcomes in the area of screening technique development for abiotic stress tolerance in pasture plants, particularly acid and aluminium tolerance selection in lucerne. Other breeding outcomes include the selection of powdery mildew resistant medics and acid tolerant strains of lucerne rhizobium.

SARDI signed a five-year agreement with Heritage Seeds for commercialisation of lucerne cultivars. Through this partnership, Australian farmers will have access to quality cultivars, for example, SARDI 7 and SARDI 10 (launched in 2004) have experienced strong demand because of their strong performance across a wide range of environments.

Water Resources and Irrigation The recruitment of a Principal Scientist Water Resources and Irrigation will enable SARDI to develop a more extensive capability in water resources and become a significant contributor towards the CRC Irrigation Futures. First major project developed by the group is the Tri-state Project focusing on salinity impact on Lower Murray horticulture.

Strategic priority 2 — INNOVATION INDUSTRY — we promote and facilitate new and value-adding industry that builds on the States’ knowledge, infrastructure and innovation capability AQUATIC SCIENCES The project Aquafin CRC – SBT Aquaculture Subprogram: activity metabolism in live-held southern bluefin tuna (Thunnus maccoyii) successfully measured the metabolic rate of a free-swimming tuna using a mesocosm located off Port Lincoln. This is the first time in the world that the metabolic rate of a free-swimming tuna has been measured.

Research supporting the development of value-adding opportunities for the pilchard fishery has led to improvements in pilchard quality as measured at the processing factory. A small percentage of the 40,000 tonne catch is now being diverted from use as tuna feed to become recreational and professional fishing bait, and even food for human consumption. Each step in this chain returns a 300% increase in price to processors.

CROPS SARDI commenced a trial program with a biodiesel producer to investigate the potential of mustard in low rainfall areas as a feedstock for biodiesel production. Performance is also being assessed relative to canola; one experiment is located in the Murray Plains and the other on the upper Eyre Peninsula. Both experiments have had favourable growing conditions and yield potentials are high.

The new Australian Centre for Plant Functional Genomics was established and the new building at the Waite Research Precinct is completed. It is anticipated the large scale of the centre will make it an

PIRSA ANNUAL REPORT 2003–2004 41 international focal point for wheat and barley research, for overcoming key environmental stresses including drought, frost, and salinity.

HORTICULTURE During the last four years a new axial flow fan was designed and evaluated specifically for the spray applications in the viticulture industry, with support from Orlando Wyndham, Simeon McGuigan Wines, and a team of commercial manufacturers: Bolly Products (the Propeller Company), J. Packer Design, and Croplands Equipment Pty Ltd. The advantages of the new sprayer and fan include improved spray coverage and dose efficiency, increased work rate, reduced spraying costs and reduced off target deposition onto soil and spray drift.

Evaluation of the clonal Moorpark apricot variety collection was completed and two clones have been identified as superior performers (firm, high sugar, reliable croppers).

In the apricot breeding program, significant gains have been made in producing new apricot lines with improved fruit characteristics for the dried fruit industry including increased sugar content, firmer flesh at maturity, moderate to large fruit size, good drying quality, highly flavoured and highly productive.

The crossing of high sugar but poorly adapted Turkish and Syrian germplasm with traditional Australian cultivars and inter-mating of these selections over subsequent generations and the incorporation of European fresh fruit cultivar germplasm to improve fruit firmness is now showing impressive results.

The well-established and successful cherry-breeding program based at Lenswood that is responsible for releasing six new cherry varieties, namely, Sir Tom, Sir Don, Dame Roma, Sir Hans, Sir Douglas and Dame Nancy has produced some interesting new selections. Different architectural types including columnar and spur types as well as promising very early selections have been discovered.

LIVESTOCK The Nutrition Research Laboratory established a commercial service with Feedtest to assess grain and hay quality using Near Infrared Spectroscopy (NIRS).

Collaboration with scientists at the Agricultural University of Norway resulted in a publication with co-authors from three other countries (Norway, Spain and Uruguay) working on genetic material from different breeds of sheep. A sample of DNA was extracted from a Damara x Merino sheep family and sent to the Norwegian scientists who had characterised the DNA changes causing dominant black in a local sheep breed (Dala). The collaboration found that among the four breeds involved (Dala, Damara, Merino and Corriedale) the same DNA changes were found responsible for dominant black observed, apparently being conserved despite wide divergence over several thousands of years of domestication. This is the first pigment gene to be characterised in sheep.

SUSTAINABLE SYSTEMS The recently released cultivars SARDI 10 lucerne and Scimitar and Cavalier medics were introduced onto the market with great success. SARDI Rose, rose clover, has been contracted to a commercial agent this year after ten years of development. Five other new pasture cultivars are undergoing final seed multiplication and Plant Breeders Rights trials for release in 2004–2005.

TARGETS FOR 2004–2005 • Provide a great focus on key outcomes from barley and pea breeding. • International evaluation, marketing and breeding agreements linked to the SARDI tree crop breeding programs.

PIRSA ANNUAL REPORT 2003–2004 42 • Further development of the SARDI fan through research and development activities and evaluation of the technology on crops other than vines. • Testing and evaluatio n of ultra-violet light for the control of postharvest spoilage organisms on selected fruit and vegetable crops. • Development and implementation of new program encompassing a range of soil health issues for the sustainable production of high quality wine grapes.

Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — we successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access AQUATIC SCIENCES The invasive species subprogram has continued its involvement in Caulerpa taxifolia eradication research and monitoring. Following a range of experiments investigating the response of the alga to low salinities in 2002 and 2003, an eradication program, targeting the population of the alga in West Lakes was undertaken. Stormwater from the River Torrens was redirected into the lake, reducing its salinity to below C. taxifolia tolerances. There is growing confidence as to the success of the operation, which makes this probably the largest eradication of the weed that has been achieved anywhere using a single treatment.

The remaining population of C. taxifolia is largely contained within the upper reaches of the Port River. The invasive species subprogram has conducted detailed surveys of this infestation and investigated the effectiveness of salt treatment in eradicating patches of the alga. Further monitoring and research into C. taxifolia eradication will continue.

Negotiations commenced for the Inland Waters subprogram to be involved in a new proposed CRC. The Australasian Invasive Animals CRC will have a major focus on carp eradication.

CROPS Further releases of the parasitic flies used to control conical snails were made with more than 12,000 flies being released at 20 sites on Yorke Peninsula over a four-year period. Research is currently trying to establish the feeding behaviour of these flies. During the final year of the project it will be determined how well the released flies have established and dispersed.

The lentil industries in South Australia and Victoria have placed a high priority on research into the pest caterpillar Etiella that damages lentil production. The Grains Research and Development Corporation funded a research project, led by the SARDI Entomology Unit, into the behaviour and ecology of Etiella in lentil crops in south eastern Australia with a view to enabling farmers to make more informed decisions on treatments. Studies will assess the possible role of native hosts in the build up and survival of Etiella populations throughout the summer months.

A two-year funding agreement with Australian Wool Innovation and Meat and Livestock Australia has reinvigorated the project Delivery of biological control agents for broad-leafed weeds in temperate pastures. Biocontrol agents, flea beetle, crown and root weevils, were collected in South Australia and New South Wales and redistributed to release sites, including insects provided by CSIRO Entomology in Canberra and insects reared at the Waite Research Precinct.

Over the summer of 2003–2004 the effects of ginger root oil on the behaviour of sterile male Mediterranean fruit fly was tested. The results demonstrate that reproduction of treated flies will be more competitive than untreated flies and the treated sterile flies proved to be less attracted to standard fruit fly monitoring traps. These findings could significantly reduce the number of sterile flies released in the future and lower the cost of the sterile medfly release program.

PIRSA ANNUAL REPORT 2003–2004 43 A major breakthrough in the Field and Post Harvest Control of Snails in Citrus Program occurred with successful tracking of movement of the small brown snail, Microxeromagna armillata in the tree canopy. This snail can contaminate navel oranges that are exported to the USA and threaten the industry’s future access to that market. Snail tagging techniques were developed to assist growers to manage the risk of fruit infestation.

Pest management practices, through the Integrated Pest Management (IPM) extension program, are occurring on the Northern Adelaide Plains. Most notable is the 50% or more reduction in chemical use by 10 growers, including broad spectrum chemicals replacement with soft insecticides, horticultural oils and fewer treatments. Biological control will become viable and their main strategy with plans to invest in more modern greenhouse technology. The growers are co-operating on a market strategy through a program sponsored by the Virginia Horticulture Centre.

No fire ants were detected, indicating South Australia has remained free of this pest. The South Australian Fire Ant Surveillance and Awareness Program for the red imported fire ant (Solenopsis invicta ) continued into its third year with intensive surveys of high-risk areas such as airports, seaports, container depots, nurseries, transport companies etc. Ant samples were collected from 291 sites for the Waite Insect and Nematode Collection.

A model Disease Risk Index that predicts the risk of Blackspot (Ascochyta blight) in field peas has been developed to assist growers to identify the best practices for minimising yield losses. A critical issue in the success of disease prediction is the impact of soil sampling strategy on the test results.

A project to identify microorganisms responsible for natural suppression of soil-borne diseases, supported by GRDC funding, has focused on a CSIRO site at Avon in South Australia which has developed natural suppression of Rhizoctonia barepatch. Three groups of soil bacteria have been identified which suppress Rhizoctonia, take-all and Fusarium crown rot. A better understanding of disease suppression may lead to development of tests to predict and manage suppression and reduce the impact of the disease.

High Plains Virus (HPV) was found in SA, Victoria, ACT and Queensland at the end of 2003. The distribution mirrored that of Wheat Streak Mosaic Virus (WSMV) and it is assumed that HPV has therefore been in Australia for some time.

Following consultation with Plant Health, SARDI introduced a new system to manage restricted quarantine status materials at the Waite Research Precinct. This will increase biosecurity by explicitly defining what is required of researchers, simplify the process by removing current permit requirements, and allow accrediting of laboratories ‘in house’ to reduce costs.

The Australian Quarantine Inspection Service (AQIS) introduced a new pricing structure for their post-entry plant quarantine services on 1 March 2004, providing access to an annual $1 million ‘anti- smuggling’ subsidy for high risk commodities to all State facilities, including SARDI’s Waite Post Entry Quarantine Unit and applying to most cereals and pulse crops.

An electronic database for the South Australian Pathogen Host Index was completed for rapid access to information, aiding assessment of pathogen status for import/export certification.

LIVESTOCK China has been a significant market for Australian wheat and barley grain for the past 40 years (average annual trade $700 million). In 1998 China announced new conditions for wheat and barley imports requiring certification of freedom from the fungus Pyrenophora semeniperda, which causes ringspot in cereals. Grain exports to China were drastically affected – the disease is widespread in southern areas of Australia, but in Australia it is considered to be a minor pest of cereals and other grasses and of low economic importance. In April 2000, Biosecurity Australia and the Chinese quarantine authority (AQSIQ) signed a protocol under which the quarantine requirements for

PIRSA ANNUAL REPORT 2003–2004 44 P. semeniperda were suspended for three years during which collaborative research would be conducted to resolve the quarantine status of the fungus. Most of the research was conducted by SARDI livestock systems in collaboration with other groups. Research included determination of the chemical toxin, disease incidence in plants related to environmental conditions, and animal toxicity. In August 2003 the Chinese government completed their pest risk analysis in accordance with accepted international standards based on the research of this project, resulting in agreement being reached on a revised quarantine protocol for Australian Wheat and Barley Exports to China.

The research has been directly responsible for allowing trade in grain from southern Australia to China to continue unrestricted and represents benefits of hundreds of millions of dollars annually to the local economy.

Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — we enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles AQUATIC SCIENCES The Adelaide Coastal Waters Study has commenced after many years of planning and negotiation. In partnership with the University of Adelaide and Flinders University, SARDI is studying the effects of terrestrial inputs (such as stormwater runoff and sewage discharges) on seagrass ecosystems and key biota. An extensive series of surveys have been conducted to look at seagrass distribution, and to assess variations in water quality along the coast. Laboratory work has commenced to examine the effects of decreasing salinity on Amphibolis and Posidonia seagrasses.

Work was completed on the investigation of seagrass decline at Beachport, and the final report was submitted to the Coast Protection Board (CPB) in December 2003. This has shown that about 90% of the seagrass has been lost since 1950, which has resulted in substantial coastal erosion problems. Furthermore, this decline appears to be continuing and as a result, the CPB has instituted substantial efforts to halt the loss.

In late 2003, a project assessing the benthic fauna of the Great Australian Bight (GAB) was completed. A series of three reports were written on the Benthic Protected Zone of the Great Australian Bight Marine Park, these comprise of (1) literature review, (2) monitoring sustainable use and (3) pilot study for performance assessment. The project has contributed to SARDI’s knowledge of this important ecosystem and has revealed a diverse and rich assemblage of invertebrate species.

Trophodynamic and ecological monitoring work on eastern GAB ecosystems including analysis of fish, seabird and seal diets, and monitoring of seal and seabird reproductive success is continuing. A major focus has been the establishing of little penguin monitoring programs at Pearson, Troubridge and Reevesby Islands. Students based at SARDI Aquatic Sciences have been undertaking the first satellite tracking of little penguins. Little penguins were tracked at two populations (Pearson and Troubridge Isla nds) and results indicate some striking differences in the foraging range of penguins at these sites. These are likely to relate to regional differences in the distribution and availability of their main prey - small pelagic fish.

SARDI Aquatic Sciences has also contributed to the ecologically sustainable development of various fisheries throughout the state through the production of numerous stock assessment reports and research that has contributed to knowledge of targeted species. Further work on the various biotic and abiotic impacts of various aquaculture industries and other activities (eg dredging and dumping of spoil) has enhanced understanding of how these activities can be regulated to minimize their environmental footprints whilst supporting economic development.

PIRSA ANNUAL REPORT 2003–2004 45 CROPS The Revegetation by Design project hopes to change the community perception towards the maintenance of natural resources. Funded by the Australian Government’s Sustainable Regions Programme, the City of Playford, Rural Industries Research and Development Corporation (RIRDC), Horticulture Australia, and Envirofund, early results indicate that pest management can be improved by replacing weeds with native plants that do not harbour the pests or diseases of horticultural crops.

HORTICULTURE A CRC for Viticulture project that examined water use efficiency of rootstocks in the Riverland was completed and a project to improve the quality of Cabernet Sauvignon in the Murray Darling Basin was commenced. Beringer Blass and the Willunga Basin Water Company have both agreed to continue funding the reclaimed water experiment at McLaren Vale for the next three financial years.

LIVESTOCK SYSTEMS Livestock Systems contributed significantly to the project Sustainable Grazing on Saline Lands with a particular focus on perennial pastures for saline environments. A demonstration of salt tolerant pasture species were sown in early July, saltbush seedlings at the end of August, bluebush and saltbush seed at the end of September and a sub-tropical grass mix in mid-October. Most of the species germinated well but there have been widely varied responses of the various species to severe inundation during winter and early spring followed by rising salinity in early summer. Of particular interest now is to see how the perennial species survive over summer and the annual species regenerate after the break of the 2004 season.

TARGETS FOR 2004–2005 • Implement the outcomes of a major review of low rainfall farming systems research and extension based at the Minnipa Agricultural Centre. • Develop a new Gulfs Ecology subprogram which will integrate SARDI’s existing work in the gulfs, including the tuna environment projects, Adelaide Coastal Waters Study, and a current FRDC project in the Gulfs & Estuaries program on the fate of trawl discards, into a whole of ecosystem framework.

Strategic priority 7 — BUILDING COMMUNITY CAPACITY — we build capacity, leadership and global awareness in industry, and rural and indigenous communities AQUATIC SCIENCES In late 2003 the Robe Professional Fisherman’s Association and SARDI Aquatic Sciences were awarded the State Coastal Care Award for outstanding achievement in litter reduction innovation. The 2003 Annual Robe Litter Survey removed a total of 1372 kilograms of litter, the greatest amount collected in the surveys history.

HORTICULTURE The Cropwatch service that has been operating in the Riverland for a number of years was extended to the Southern Vales region in 30 September 2003. SARDI will provide technical support and interpretation information to the service for the coming season under the Grape and Wine Research and Development Corporation Regional Innovation and Technology Adoption grant that has been used to establish the service.

LIVESTOCK The National Centre for Pork Industry Training & Education which initiates the development of national approaches to pig industry skills training and tertiary education in pig science established a website at www.nationalporkcentre.com.au.

PIRSA ANNUAL REPORT 2003–2004 46 Strategic priority 8 — PARTNERSHIPS — we negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development AQUATIC SCIENCES South Australian Government approval was announced for Marine Innovation South Australia (MISA), an initiative that will link SARDI more closely to the University of Adelaide, Flinders University and the SA Museum. The MISA initiative will expand and extend the capacity and capability of all manner of marine science research in South Australia.

Negotiations commenced for the Inland Waters subprogram to be involved in two new proposed CRC’s. Australasian Invasive Animals CRC will have a major focus on carp eradication, while E- Water CRC will focus on optimising water use.

CROPS The partnership of Ausbulk and WDM Advertising commenced use of the new farming magazine 'Grain Business', that is sponsored by Ausbulk, to extend information to agribusiness and the farming community. The SA Field Crop Evaluation Program used the publication to distribute information on crop varietal choice and grain harvest performance during October 2003 to March 2004.

A new Southern Region Pulse Agronomy Project, involving South Australian, Victorian and NSW State Government agencies together with GRDC, was approved with $150,000 funding and will commence in July 2004.

Under the umbrella of the national oat breeding program that it manages, SARDI joined the Department of Agriculture Western Australia n oat breeding program, combining the management of hay and grain components into a single program.

A review of future options for the restructuring of barley breeding in southern Australia was initiated by WA Agriculture, SARDI, the University of Adelaide and the Grains Research and Development Corporation. A subsequent wider meeting of all states except Queensland and Tasmania, and including the GRDC, agreed to pursue a new national program and a business plan was developed on this basis. Future participation will be considered in October 2004 with the new program and structure implemented by I July 2005.

In May 2004, GRDC’s Program Manager reviewed the Eyre Peninsula Farming Systems project with SARDI Minnipa staff and co-operating farmers. The review included the project’s strategic directions, GRDC supported work that was successful or not, and priorities and plans for future developments. The review was timely for the Minnipa Agricultural Centre Committee. The Committee had prepared a new business plan and strategy, creating the Eyre Peninsula Farmers Foundation and a service-level agreement between the main stakeholders in the Centre’s research activities, the University of Adelaide and SARDI.

HORTICULTURE The “Cold Chain Centre” name has been registered and is currently operating under the SA Freight Council with funding support secured for the next three years under the Food SA program. A Memorandum of Understanding has been signed with the Singapore Manufacturers Federation on cooperation for the establishment of a similar centre in Singapore.

LIVESTOCK Results of the analysis in beef cattle of growth path and carcass quality to genetics show significant differences in carcass quality traits between breed types of the effect of increasing growth at different stages. This affects the value of carcasses required by different markets. This study now includes

PIRSA ANNUAL REPORT 2003–2004 47 collaboration between Struan, University of Adelaide, and BiometricsSA and has led to the University team becoming involved with South Korean scientists.

SUSTAINABLE SYSTEMS The Sustainable Systems group is cooperating with the Australian National University in Canberra, Charles Sturt University, University of Adelaide and Flinders Medical Centre in a GRDC-funded project which is looking to control cereal root diseases by way of biological control agents. Selected strains of Penicillium and Streptomyces bacteria are currently being tested and results to date have been promising.

TARGETS FOR 2004–2005 • Implement commercial partnerships for the delivery of alternate products or fruit trees into alternate markets derived from the outputs of the apricot and cherry breeding program. • Clarify SARDI’s role in the new National Field Crop Evaluation and Agronomy Program. • Consolidate SARDI’s new National Oat Breeding Program now incorporating WA. • The MISA initiative is an exciting development in marine sciences research in temperate marine systems. The flow of funding ramps up over the first four years and initial decisions on how and where to invest those funds across the indicated project areas need to be carefully considered to ensure that maximum leveraged funding is obtained. Time and effort invested in effective dialogue between all parties and stakeholders in this initiation phase will be critical to the ultimate legacy of MISA.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — we improve industry and regional access to information that supports better business decisions AQUATIC SCIENCES A workshop on shark – aquaculture interactions was facilitated for the annual Aquafin CRC Conference at West Lakes. Four tuna industry research newsletters were produced and a new web site for the Southern Bluefin Tuna Aquaculture Subprogram was developed.

SARDI hosted the 3rd Australian INVE Aquaculture live feeds workshop from 4-5 December 2003, attended by 24 hatchery technical staff from industry and research facilities across Australia.

A workshop on Marine Protected Areas Impact on Rock lobster Fisheries was held at SARDI in May 2004.

The WhitSim simula tion software, used to test fishery management strategies of monthly or spatial closure, maximum and minimum length for King George whiting, was updated and revised. These results served as a basis for decisions about enhanced regulation of the fish stock. The WhitEst stock assessment model was used to estimate stock indicators such as biomass, recruitment, and exploitation rate.

CROPS The Minnipa Agricultural Centre Foundation hosted its second annual field day in late August. A debate on no-till farming between the South Australian No Till Farming Association (SANTFA) and local farmers was a feature on the day. Discussions on the Centre conducting research into no-till farming led to a staff position that is jointly funded by SARDI and SANTFA.

HORTICULTURE A book by Phil Nicholas on vineyard soils, nutrition and irrigation was launched by the Minister for Agriculture, Food and Fisheries in Loxton on 11 May 2004.

PIRSA ANNUAL REPORT 2003–2004 48 A workshop for researchers and industry representatives from all the major citrus production regions of Australia was held at the Plant Research Centre in September 2003. The workshop was used to define the focus and direction of the Horticulture Australia Ltd funded citrus postharvest program for the next five years. SARDI has been the manager and key research supplier to this program for many years and will continue to have this role for the next five years.

A lemon production manual was prepared for web release in collaboration with NSW Agriculture.

A ‘Getting to Market' CD-ROM was developed for producers, farmers or anyone interested in improving the transport and distribution of their product. The CD-ROM provides an overview of the importance of transport and the impact it can have on product quality. Detailed information is provided through hundreds of Internet links to a range of sites that explore topics including product quality and handling, transport options and routes, management and paperwork, customs and quarantine, monitoring and regulatory requirements. The material has been quality checked and accredited for use as a training package support material by the Australian National Training Authority and will be widely distributed to training organisations and industry groups. Development of the CD- ROM was funded through FarmBis Australia and managed by the Transport Training Advisory Board and the Agriculture & Horticulture Training Council SA along with a steering committee from different agencies.

With the support of the Department of Transport and Urban Planning and the SA Freight Council, SARDI Horticulture developed a guide on Transport and Handling of Perishable Products in Remote Areas of South Australia. This publication provides information and recommendations to packers, transporters and distributors of perishables to remote regions in South Australia.

Work on the project Crop Management Tools for the French Fry Industry in the SE of South Australia has been completed and a handbook of Best Management Practices is being prepared.

Research on maturity indices over the past two seasons by the postharvest group formed the basis for the production of the Australian cherry colour guide which was released at the National cherry growers conference at Rowland Flat in August 2003.

LIVESTOCK A teaching package on pig science and production for use in schools across Australia has been written. This is currently being evaluated by a selected group of teachers.

As part of the National Centre for Pork Industry Training and Education activities a national network of schools participating in the “Pigs in Schools” program was established.

Two-week courses on intensive livestock management and on animal biotechnologies were delivered to University of Adelaide students in January/February 2004.

The pig research group organised the 1st Precision Poultry Farming (PPF) workshop in April 2004 and as a result of positive feedback funding for the 2nd PPF workshop was approved by the RIRDC/Egg Corporation. The conference is scheduled for November 2004.

The PIRSA/SARDI pig group conducted a series of post-mortem workshops for pig producers aimed at upgrading the skills of producers and their staff in doing post-mortems on dead pigs. The workshops included a demonstration on how to collect samples and tissues for laboratory analysis and sessions promoting biosecurity and the Pig Health Monitoring Service.

Approximately 150 people attended the Dairy Innovation Day held at Flaxley in March 2004. Feedback was generally very positive.

PIRSA ANNUAL REPORT 2003–2004 49 The latest results from the Selection Demonstration Flocks (SDF) were presented at the annual field day at the Turretfield Research Centre in March 2004. The field day was strongly attended by South Australian and interstate producers, and over 900 copies of the field day booklet are now mailed Australia wide.

A project for the University of New England and Sheep CRC to prepare an undergraduate lecture titled Dark and medullated fibres was completed.

The 2002-drop analysis for the South Australian Central Test Sire Evaluation (CTSE) was completed and the site report prepared and released at the CTSE Field Day. The Field Day to display the 2001, 2002 and 2003-drop progeny and their progeny was held in March 2004 at the Struan Agricultural Centre with 50 people in attendance.

SUSTAINABLE SYSTEMS Regular farm specific, district specific and general newsletters were produced as part of CRIMFA (Climate Risk Information Management Farmer Association). Presentations were also made to a number of agribusiness meetings and field days and 12 climate risk workshops were delivered (reaching an estimated 600 producers).

Four workshops were held with 80 wool producers in low rainfall rangelands which explained the climate science behind the Improved climate risk management in SA wool pastoral zone project and sought input from graziers on where and when they could use climate information. Outputs from seasonal climate forecasts were delivered via facsimile and email to these wool producers. A series of maps of the state were also prepared showing where and when seasonal climate forecasts have statistical skill. Analysis showed that late winter early spring was the most accurate forecasting period in the wool rangelands region. This has led to a focussed campaign on seasonal climate forecasts for late winter early spring in the wool rangelands region.

TARGETS FOR 2004–2005 • Increase collaboration with industry, other agencies, commercial partners, international scientists and organisations and agribusiness to enhance research and development programs and the delivery of meaningful and valuable results to clients.

Strategic priority 13 — WE BUILD COLLABORATIVE RELATIONSHIPS WITH OTHERS — our success depends on building and maintaining our relationships with clients, stakeholders and the community AQUATIC SCIENCES As part of the inland waters Murray River and Barrage Fishway Program a substantial collaboration has been developed with scientists at NSW Fisheries, Arthur Rylah Institute (DSE), Victorian Department Primary Industries, Queensland Department Primary Industries and Fishway Consultants. The collaborative approach has been encouraged by the Murray Darling Basin Commission (MDBC), which increases the scientific rigour of the study and enables an exchange of scientific skills and expertise that would benefit ongoing and future research and management in the Murray-Darling Basin.

As part of the Aquafin CRC funded projects on the environmental effects of tuna farming, a substantial collaboration has been developed with scientists from the CSIRO Marine Research and the Tasmanian Aquaculture and Fisheries Institute (TAFI). This has allowed information sharing between researchers investigating similar questions for tuna and salmon farming, allowing each group to learn from the experiences of the other. There has also been substantial interstate collaboration on Caulerpa research, especially with scientists at NSW Fisheries, aimed at developing more efficient techniques for eradicating this species.

PIRSA ANNUAL REPORT 2003–2004 50 The inland waters research project of controlling carp and other pest fish via pheromone attractants will engage the knowledge and expertise of scientists from the University of Minnesota (UOM), who previously developed pheromone attractants for sea lamprey and who recently identified 6 pheromones involved in carp reproduction. Part of the experimental study will be conducted by a SARDI scientist (carp ecology) in the UOM, USA. Research collaboration has been developed between the University of Minnesota, the USA Fish and Wildlife service, SARDI Aquatic Sciences and the Pest Animal Control CRC.

HORTICULTURE National collaborations occur in many of the SARDI horticulture research and development programs in achieving the best possible outcomes for the horticulture and viticulture industries in SA. Examples of on-going collaborations include: • Nationa l Horticulture Research Providers Network – Chief Scientist with all other state government agencies in Australia. • Riverlink – Various research scientists in active linkages and collaborative programs with other research agencies in the Riverland/Sunraysia region • AQL1 Monitoring - Working with perishable food companies nationally to provide temperature monitoring and interpretation services.

LIVESTOCK SYSTEMS The Livestock Strategic Research Area continues to develop the Livestock Systems Alliance with the University of Adelaide with joint funding being obtained in key areas such as the sheep genomics program supported by AWI/MLA.

Involvement in national CRC programs and national partnerships such as the National Dairy Alliance extended SARDI’s interactions with other agencies and industry groups throughout Australia. Commercialisation links with international partners also provided funding opportunities that helped support and develop key research capabilities to the benefit of South Australian producers and industries.

Staff from the livestock group participated in a number of state and national industry and community groups that helped provide an engagement and dialogue with stakeholders and the broader community. A number of field days and innovation days at SARDI’s research centres were held during the year to further provide such opportunities.

SUSTAINABLE SYSTEMS A collaborative project comprising researchers and advisors from DPI Victoria, SARDI and the University of Adelaide in partnership with farmer groups such as the Birchip Cropping Group, the Eyre Peninsula Farming Systems Group and the Southern Yorke Peninsula Alkaline Soils Group is now well underway. This trial program is looking at methods to better manage soils that have subsoils, which are “hostile” to crop production. In total four “core” sites have been established in South Australia and Victoria. The two managed by the SFS group are sited at Darke Peak on Eyre Peninsula and near Stansbury on Yorke Peninsula. Together these four sites cover environments ranging from 350-500mm rainfall and neutral sands to highly alkaline/sodic clay soils. A range of subsoil amendment strategies are being tested. One of the more novel strategies being tested is the placement of organic matter directly to the hostile subsoil.

PIRSA ANNUAL REPORT 2003–2004 51 MINERALS AND ENERGY The Minerals and Energy Division incorporates the Mineral Resources Group, Petroleum Group, Energy SA and the Office of the Technical Regulator.

Mineral Resources The Mineral Resources Group is a key group for facilitating mineral exploration and development and is focused on increasing the prosperity of South Australians by ensuring responsible development of South Australia’s mineral resources within a sustainable framework. It provides geoscientific and specialist services as part of a process to acquire and update geological, geophysical and engineering data. The group is also responsible for industry regulation, legislative development and review, policy development and provision of advice.

Strategic priority 1 — INDUSTRY DEVELOPMENT — Provide support for industry and regional development that focuses on global market opportunities PLAN FOR ACCELERATING EXPLORATION The Plan for Accelerating Exploration has been launched, aimed at kick-starting the industry to help treble mining exploration investment by 2007 and boosting annual mineral production to $3 billion by 2020. A total of $15 million has been allocated over the next five years to achieve goals in areas such as balancing resource development with conservation and establishing drilling partnerships with industry.

The Plan provides a framework of practical strategies that will change perception of prospectivity internationally. The practical result for South Australia is a quantum leap in private exploration expenditure leading to new mineral, oil and gas discoveries and the new generation of wealth and employment opportunities for South Australians,

STATE RESOURCES PLAN The State Resources Plan, a government initiative implemented in response to the Resources Task Force, has been in place for three years. It aims to at least double the real value and output of the mining and minerals processing sectors to the state’s economy by the year 2020, directly generating economic activity, employment and infrastructure development. The priority objectives are to: • Improve access to land for resource developments. • Stimulate vibrant resource exploration and investment through the provision of geoscientific information, advice and expertise. • Ensure a supportive, responsive government through the development of an effective, efficient legislative and policy framework. • Ensure effective planning for infrastructure development.

MINERALS INDUSTRY PERFORMANCE The Minerals Industry ScoreCard has been developed by PIRSA to undertake detailed comparative assessments of South Australia’s minerals industry performance, from exploration licence, to construction, production and onto refinement processing. The ScoreCard analyses over 25 mineral commodities, showing volumes, prices and values along the chain from exploration to capital expenditure, production, royalties, off-site processing and overseas exports. It measures the government expenditure on pre-competitive geoscientific data (primarily TEISA 2020 and PIRSA Geological Survey programs) and also looks at associated indicators of economic performance such as employment and capital investment.

South Australia’s mining and refining enterprises employ approximately 7300 people.

PIRSA ANNUAL REPORT 2003–2004 52 The total value of mineral production was $985 million in 2002–2003 with net off-site processing increasing to $1 billion. Overseas exports in 2002–2003 fell by slightly (1.2%) to $991 million.

South Australia attracted a significant increase in private company exploration expenditure throughout 2002–2003 reaching $36 million. Mineral royalty payments contributed $30 million to the state in 2002–2003. In addition to the direct 2.3% contribution of the mining industry to South Australia’s economy, the indirect contribution, particularly from the metals and other manufacturing sectors, is significant.

The Resource Development Team has formed implementation teams for One Steel Project Magnet, Minotaur/Oxiana’s Prominent Hill and WMC’s Olympic Dam Expansion. A number of meetings have now been held to map out the most efficient routes for development.

TARGETS FOR 2004–2005 The Plan for Accelerating Exploration focuses on eight key areas or ‘themes’. These are: • THEME 1: Balancing resource development with conservation. • THEME 2: Drilling partnerships with PIRSA and industry. • THEME 3: Establish a centre of excellence in exploring under cover. • THEME 4: From craton to basin: new geophysics. • THEME 5: Resource development and sustainable communities. • THEME 6: Baseline geochemical survey of key mineral areas. • THEME 7: Next generation data delivery. • THEME 8: SA Resources Industry Ambassador.

Each of these themes has a number of associated targets that can be viewed and downloaded at: www.minerals.pir.sa.gov.au/unlockingsa.

Key areas of South Australia targeted for immediate attention and consultation with stakeholders are: • The Gawler Craton – in particular its western and northern regions, • The Musgrave Block – within the Anangu Pitjantjatjara Yankunytjatjara (APY) Lands, • The Curnamona Province, • The Officer Basin (in part on APY and Maralinga Tjarutja Lands).

Strategic priority 2 — INNOVATION INDUSTRY — promote and facilitate new and value-adding industry that builds on the States’ knowledge, infrastructure and innovation capability REGOLITH SCIENCE The Cooperative Research Centre for Landscape Environments and Mineral Exploration (CRC LEME) directs research focussed on the application of regolith science to mineral exploration and environmental issues. Key outputs for the year were a summary and synthesis report on collaborative CSIRO/PIRSA investigations on metal dispersion at SA mineral prospects; regolith indicators to the presence of buried greenstone, as a potential host for nickel; and a reinterpretation of the geology of ancient river and coastal sediments on the Gawler Craton that resulted in renewed company exploration activity for heavy mineral sands. A two-day symposium held at University of Adelaide in November showcased the results of research by 22 postgraduate students involved in projects supported by CRC LEME. An experimental program of spectral logging 35,000 metres of drill hole samples at PIRSA’s Glenside Core Storage Facility using the prototype CSIRO “Hylogger” was jointly funded and managed by CRC LEME and PIRSA with support from Geoscience Australia.

PIRSA ANNUAL REPORT 2003–2004 53 TARGETS FOR 2004–2005 Projects to report in the coming year include: • The geochemistry and timing of gold dispersion into dune sand cover in the Central Gawler Gold Province • Maps of cover thickness over prospective basement rocks in the Callabonna sub-basin • "Hylogger" results on alteration and weathering mineralogy in gold and copper/gold mineral prospects in the Gawler Craton

Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access Brukunga Mine Site The Dawesley Creek diversion drain was successfully completed in June 2003. Achie ving stream flow around the mine workings had an immediate effect of moving the water quality towards the livestock standard set in the 1992 Australian and New Zealand Environment and Conservation Council (ANZECC) guidelines. Planning for the upgrade of the water treatment plant was progressed with the development of a process design specification to proceed design engineering, procurement and construction. Community consultation continued through the Brukunga Mine Site Remediation Board. (full details can be accessed at http://www.minerals.pir.sa.gov.au/brukunga)

ABANDONED MINES PROJECT Data from the Mine Summaries Database was integrated into MINDEP to provide a comprehensive database on abandoned mines. A Mines Inspection System was introduced to establish a priority listing for risk mitigation projects on mine sites on Crown Land. Inspection of 40 mine sites resulted in data on 314 hazards being added to the database.

TARGETS FOR 2004–2005 • Complete the review of the hazard inspection process and implement changes as required. • Complete a safety upgrade at Jupiter Creek and Chapel Hill Diggings which are sites managed by PIRSA. • Undertake a risk assessment of the “tourist” mine sites in South Australia and provide reports to the site managers. • Commence a desktop audit of mine sites on Crown Land to generate a priority listing of sites for initial appraisal.

Strategic priority 4 — INTEGRATED POLICY FRAMEWORK, REGULATION AND COMPLIANCE — create through consultation, effective policy and regulatory frameworks to enhance industry and community confidence Legislation and Policy A comprehensive review of the Mining Act is in progress. A Steering Group has been formed including members from industry, conservation organisations, as well as key government and community representatives.

Compliance Services A Tenement Management System (TMS) was completed and rolled out successfully, providing a comprehensive web-based data base system for mineral tenement management. Following the successful implementation of TMS, a quality management system called QTMS has been implemented to drive continuous improvement in the tenement management and regulation systems. The scope of the project includes all processes relating to all forms of mining and mineral exploration tenure.

PIRSA ANNUAL REPORT 2003–2004 54 Golden Grove Extractive Industry Management Plan PIRSA facilitated joint funding with industry and local government, to undertake the review of the Golden Grove Extractive Industry Zone Management Plan. A new Management Plan is to be completed by the end of 2004 providing security of tenure for the extractive industry operators and maintaining a valuable sand/clay resource for building material and glass manufacture. The cost of this Management Plan review will be approximately $20,000 and will be managed and funded by PIRSA’s Minerals and Energy Division.

TARGETS FOR 2004–2005 • An Issues Paper for the Mining Act Review will be released in September 2004 seeking comment from stakeholders and community groups.

Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles The Mineral Resources Group has published Interim Guidelines on Requirements for Mineral Exploration and Mining under the Native Vegetation Act and Regulations. The guidelines generally inform persons involved in mineral exploration and mining of changes to the law with respect to clearance of native vegetation under the Native Vegetation Act and the new Government policies as a result of the amended legislation.

Mine Operation Plan (MOP) Guidelines are being prepared, and Mining and Rehabilitation Program (MARP) Guidelines are being revised to assist mining operators to better integrate good environmental management practices into the general operation of their mines.

A project has commenced to restore the heritage and biodiversity of the former Chapel Hill and Jupiter Creek gold mining fields. The area is widely promoted as a regional attraction with unique flora and fauna, and used by bush walkers, fossickers, bird watchers and many others. This project is designed to improve visitor safety, protection and interpretation of the mining heritage and also to maintain the high biodiversity values of both reserves.

Due to concerns over the un-regulated collection of fossils and in recognition of the scientific value and community interest in fossil heritage a Fossil Working Group has been established to investigate and provide recommendations on fossil protection in South Australia. This group has representation from DEH and PIRSA as well as palaeontologists from the South Australian Museum and Flinders University. A public Discussion Paper on the Protection of Fossils in South Australia has now been finalised by the Fossil Working Group. The aim of the paper is to outline possible options for fossil protection and to seek stakeholder comment on those options.

Mining tenement operators were regulated to ensure compliance with legislative requirements, mining plans and environmental/rehabilitation lease conditions. Of 838 mine and quarry sites inspected, 94% complied with requirements and 68% of the 50 that were not in compliance have now been rectified. Of the mineral exploration sites inspected 84% were in compliance with approved conditions and rehabilitation requirements, with 67% of non-compliance cases resolved.

Rehabilitation inspections of opal field tenements outside of proclaimed precious stones fields have obtained a 75% compliance rate. A reduction compared to last year as a result of a previously acceptable rehabilitation process now found to be unacceptable and being refused. The Mining Association is addressing the rehabilitation process. Incident reporting procedures for the South Australian uranium industry operated throughout the year with a total of five reportable incidents reported. All incidents were at Olympic Dam. None resulted in environmental harm or injury to personnel. PIRSA played an active role along with the Environmental Protection Agency to monitor remedial actions arising from company and government investigations to ensure appropriate clean up and to reduce the risk of future incidents.

PIRSA ANNUAL REPORT 2003–2004 55 Strategic priority 6 — REMEDIAL ACTIONS — harness community and government resources to rehabilitate degraded systems and sites Extractive Areas Rehabilitation Fund Industry, mainly through the Extractive Industry Association, has been discussing responsibility for rehabilitation and a model for funding which involves a reduced role for the Extractive Areas Rehabilitation Fund (EARF) and miners planning and funding most rehabilitation directly themselves. A proposal to implement revised funding arrangements based on this approval is being considered by the Minister.

Strategic priority 8 — PARTNERSHIPS — negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development Gawler Craton Arc Linkage Grant Mineral exploration and geoscientific research in the Gawler Craton received a significant boost with the awarding of an Australian Research Council (ARC) Linkage Grant for a collaborative project to establish a tectonic framework for the Gawler Craton. Participants are the Continental Evolution Research Group in Geology and Geophysics at the University of Adelaide, the Australian Crustal Research Centre at Monash University and PIRSA’s Geological Survey Branch. The five-year project will receive $576,000 in ARC Commonwealth funding, with PIRSA contributing $291,000, bringing the combined research budget to $867,000. This level of support paves the way for successful mineral exploration programs on the Gawler Craton.

Plan for Accelerating Exploration Economic development in South Australia’s remote regions is particularly critical for the indigenous communities who speak for their country. This package aims to develop training and employment opportunities at the same time as ensuring their culture, families and communities remain strong. This initiative will ensure that the work that has already begun, particularly on the APY Lands, will be seen through to a successful outcome.

Musgrave Geological Mapping A geological survey program to increase mineral exploration and provide basic information for land management commenced within the Anangu Pitjantjatjara Yankantjara (APY) Lands. This is the first geological mapping to be conducted in the region by PIRSA for over 30 years and is the result of working in collaboration with APY Land Council and the newly formed Tjukurpa Law and Culture Group. The four areas to be mapped are located south of Kanypi and Nyapari Aboriginal Communities. Two Aboriginal field officers selected by the Traditional Owners will accompany PIRSA geologists to advise of culturally sensitive sites and assist with collection of field samples.

Indigenous Land Use Agreements Two Indigenous Land Use Agreements (ILUA’s) for mineral exploration in highly prospective areas of South Australia were successfully negotiated. The first ILUA, with the Antakarinja Native Title Claimants, was registered by the National Native Title Tribunal in May 2004. Two more Native Title Claimants Groups have agreed to negotiate in 2004. The second ILUA with the Arabunna Native Title Claimant is pending.

The Division of Minerals and Energy continues to support the statewide ILUA process, particularly the Mineral Exploration Template, and has maintained representation on the ILUA Negotiation Team. The division, together with the Principal Negotiator, ILUA Negotiation Team, is liaising with the Department of Aboriginal Affairs and Reconciliation in relation to mapping surveys and the proposed Mapping Caretaker, and will set up an administrative arrangement to ensure that the two agencies are

PIRSA ANNUAL REPORT 2003–2004 56 kept up to date with progress in those areas. The ILUA Negotiation Team will continue to pursue the possibility of amendments to the Aboriginal Heritage Act 1988 with support from the Div ision of Minerals and Energy

TARGETS FOR 2004–2005 • Drilling partnerships (theme outlined in A Plan For Accelerating Exploration) to be developed with industry ($2 million budget 2004–2005). • Release of Central Gawler Gold GIS data package. • Integration of ECW Connector into the South Australian Resources Information Geoserver (SARIG) to facilitate high-resolution image delivery over the web. • Release of seismic data package for data newly acquired in the Curnamona Pronvince and Gawler Craton.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — improve industry and regional access to information that supports better business decisions The timely delivery of low cost, high quality geoscientific information has been identified by PIRSA as one of three top priorities in the State Resources Plan to stimulate mineral exploration. In response to a sustained demand for data and information products by stakeholders, development of consolidated detailed State-wide data packages were completed and available on high capacity media. This resulted in an increase of 40% in data distribution, in line with PIRSA’s number one world ranking for geoscientific data availability (Fraser Institute).

Geoscientific Information Online – Minerals Website and SARIG The Minerals website has been created as a window for the mining industry and community to access the services. The restructured Minerals website has continued to facilitate improved data access, indicated by a 36% increase in web hits to 100,000 per annum. Further development of the SARIG continued, including doubling performance speeds, maintaining PIRSA’s position at the forefront of online data access and downloads. Promotion of SARIG at national and international geoscientific conferences continues to attract more online customers, with 10,000 new hits recorded and 55 new exploration licence applications lodged online.

Provision of Pre-competitive Data The South Australian Deep Crustal Survey, a joint initiative of Geoscience Australia and PIRSA, saw a combined team of geophysicists collect seismic data from three lines over the Gawler Craton and Curnamona Province – two of the State’s most prospective regions. Preliminary results show excellent reflectors that will produce considerable structural detail in the processed sections.

Central Gawler Gold Program is a multi-agency collaboration between PIRSA, Geoscience Australia and the Cooperative Research Centre for Landscape Environment and Mineral Exploration (CRC-LEME) to increase the prospectivity of the Central Gawler Craton. The key output of the program is the provision of new, high-resolution precompetitive data and information that will be utilised by stakeholders in exploration and other land use disciplines. Major outputs include a comprehensive Geoscientific Information System (GIS) of the province, a series of geology maps and a compilation of calcrete data.

The Broken Hill Exploration Initiative (BHEI) is a major collaborative research program involving PIRSA, universities, New South Wales Department of Mineral Resources and Geoscience Australia has continues to aim to increase mineral exploration in the southern Curnamona Province. This year a new detailed data package, incorporating over 60 layers of precompetitive data and information, has been produced.

PIRSA ANNUAL REPORT 2003–2004 57 Strategic priority 11 — WE MANAGE FOR RESULTS — we manage our resources well; we provide leadership; our business processes are effective and efficient A Mineral Resources Group Strategic Plan and a Marketing Plan are in place.

A whole of Minerals and Energy Division performance development system has been initiated and position descriptions are being defined for all staff within the Mineral Resources Group.

Strategic priority 13 — WE BUILD COLLABORATIVE RELATIONSHIPS WITH OTHERS — our success depends on building and maintaining our relationships with clients, stakeholders and the community PIRSA and Anangupitjanjatara Jankunyjatjara (APY) – Working Together The Geological Survey, in collaboration with other PIRSA groups, has been working with the APY to try to accelerate access for company exploration and PIRSA geoscientific activities. The appointment of an APY Liaison Officer and introduction of the Geoscience Anangu Youth Traineeship Program have resulted in the Mineral Resources Group and APY people working towards a greater understanding of their respective cultures.

The APY fact-finding tour of resources development took place during 13–21 July. The tour allowed key representatives of the APY lands to visit mining operations and indigenous organizations associated with mining in the Northern Territory, and develop a sense of awareness of the benefits to be derived from mining. In recognition of the importance of the tour, the participating APY members staged an Inma corroboree for the South Australian Government and mining industry in Adelaide. This was performed at the Festival Centre Amphitheatre on 16 October. After a formal welcome onto traditional Kaurna land by Kaurna Elder Josie Agius, the Minister for Mineral Resources Development spoke about the significance of this event in terms of the working relationship of APY, government and industry. The evening proceeded with a series of dances depicting the relationship between the APY and ‘manta’, the earth.

The Minerals and Energy Division provides executive and administrative support for a wide range of community and special interest groups, including: • Ministerial Council for Mineral and Petroleum Resources. • Chief Government Geologist Conference. • Indigenous Issues Subcommittee. • Resources Industry Development Board. • Yumbarra Ministerial Advisory Committee. • Olympic Dam Environment Consultative Committee. • Beverley Environment Consultative Committee. • Radiation Protection Committee. • Cross Agency Environment Issues Committee (Minerals and Energy, EPA, DEH). • Brukunga Minesite Remediation Board. • Mintabie Consultative Committee. • Far West Consultative Forum. • Aboriginal Heritage Forum.

TARGETS FOR 2004–2005 • Strengthen and expand ties with industry, community and government organisations. • Increase the level of funded, collaborative research in key areas for mineral exploration. • Complete the review of the Yumbarra Ministerial Advisory Committee. • Support government in renegotiating and implementing the Mintabie Town Lease.

PIRSA ANNUAL REPORT 2003–2004 58 Petroleum The Petroleum Group leads the facilitation of upstream petroleum and geothermal activities in the state. Since 1964 the total petroleum industry investment in South Australia in today’s dollars is $13 billion, concentrated largely in the Cooper and Otway Basins. The Petroleum Group’s mission is to efficiently realise South Australia’s petroleum and geothermal potential with the community’s support. The targeted outcomes are a well-regulated and well-respected resource industry that generates royalty income, community wealth and jobs through ecologically and economically sustainable development.

Figure 2, forecast exploration drilling in the state based on petroleum exploration licence and licence application work programs, illustrates the impact of new entrant explorers to the Cooper Basin, building from 2002. Work programs for new licences in the Cooper will take exploration drilling to record highs. The schedule excludes both field extension and development activities within the Santos operated production licences and appraisal/development wells to follow-up success in the new exploration areas. Exploration, development and production activity in South Australia will be sustained at high levels for years to come.

Figure 2 Forecast petroleum exploration drilling in the state based on PEL and PELA work programs.

Onshore South Australian petroleum exploration wells 100 100 Geothermal Increasing share of 90 Australian total Coal Seam Methane 80 80 Petroleum

SA Actuals 70

60 SA as % Total Onshore Australia 60

50

40 40

30

20 20 Number of onshore wells–SA

10 SA as % of total onshore Australia

0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year

PIRSA ANNUAL REPORT 2003–2004 59 Figure 3 shows oil exploration success rates for the Cooper Basin region, since exploration commenced. Oil exploration success rates are showing a dramatic increase as new entrants drill their current best prospects and Santos explore for new Eromanga oil pools over existing Permian-level gas fields.

Cooper Basin oil exploration success rate

60 Acrasia 1 50

40

30 Moomba 104 Strzelecki 3 20 Oil discovery count

10 Oil success rate since 2002 Oil success rate 0 0 100 200 300 400 500 Oil exploration well count

Strategic priority 1— INDUSTRY DEVELOPMENT — provide support for industry and regional development that focuses on global market opportunities Accelerating Exploration The Plan for Accelerating Exploration has been launched, aims to help treble mining exploration investment by 2007 and boost annual mineral production to $3billion by 2020. A total of $15 million has been allocated over the next five years to achieve goals in areas such as balancing resource development with conservation and establishing drilling partnerships with industry. Whilst most of the focus of this initiative will be on minerals, there are several components that will directly or indirectly influence petroleum and geothermal exploration and development investment.

Licensing A total of 19 petroleum licences of all types were granted during the year reflecting continuing active exploration in South Australia. In addition, the State is leading the way in exploration for geothermal energy, with a further eight geothermal exploration licences being granted this year. There may be more than 25 geothermal licences in the state by year-end 2004 and the 5-year work programs associated with these licences could exceed $310 million.

Four onshore exploration licences will be open for competitive work program bidding during 2004, one in the Cooper (CO2003–A, bid closed in July 2004), two in the Otway (OT2003–A and B, bids close in September 2004) and Cooper Block (02004–A, opened for bidding in September 2004 and closes July 2005).

Three new production licences were granted over fields in the Otway and Cooper Basins (the Ladbroke Grove/Hadselgrove South, Acrasia and Sellicks fields), reflecting the continued success rate

PIRSA ANNUAL REPORT 2003–2004 60 of exploration drilling in the State. A further two offshore exploration permits were granted in the Otway Basin following re-release of these areas for competitive bidding under the minimum guaranteed work program system. Currently a further two offshore areas in the Bight Basin are available for bids following re-release in May 2004. Bids close 30 September 2004. Tenement status for 2003–2004 is summarised in Table 2.

Table 2 Tenement status, 2003–2004 2003–2004 ONSHORE OFFSHORE TOTAL Preliminary Associated Speculative Exploration Production Pipeline Exploration survey facility survey Applications received 15 1 — 1 12 1 2 32 Applications withdrawn 3 — —————3 Applications on offer to grant 1 — ———— 23 Total applications under 50a —— — 1 — 2 53 consideration (year end) Licences/permits granted 8 3 — 1 12 1 2 27 Renewals granted — — 1 2 — — — 3 Variations approved 9 9 1 — — — 1 20 Suspensions 10 — ———— 414 Licences expired — — — — — 1 — 1 Licences surrendered — 1 — — 3 — — 4 Licences cancelled — — —————— Applications refused — — —————— Total licences current (year end) 48b 196 14 3 10 1 8 280 a Includes thirteen applications for coal seam methane and fourteen for geothermal energy. b Includes eleven exploration licences for geothermal energy.

TEISA Research Projects A major review of Officer Basin petroleum prospectivity commenced in 2003. Dr Peter Boult is applying workstation technology for the first time in the basin to review and remap available seismic data. Basement structure and tectonics were mapped by Leigh Rankine (Geointerp) and the report and GIS data are available as a CD dataset. This new assessment of magnetic, gravity and seismic data provides a basis to high-grade trends most likely to contain effective petroleum traps. Significant TEISA 2020 funding is also being directed towards seismic reprocessing for the Officer project.

Progress is being made on compilation of the Petroleum Geology of SA volume 5 Bight Basin, with four chapters now available for free download on the website.

Directions and priorities for PIRSA’s future petroleum prospectivity research have been developed by group geoscientists.

Promotion of Petroleum Exploration Opportunities SA upstream petroleum opportunities were promoted at the annual Australian Petroleum Production and Exploration Association (APPEA) Conference in Canberra in March and at the American Association of Petroleum Geologists (AAPG) Convention in Dallas in April 2004. Barry Goldstein travelled to Calgary and ran a successful free seminar on Australian Oil and Gas Opportunities before travelling to AAPG.

TARGETS FOR 2004–2005 • Successful implementation of the first year program of the Plan for Accelerating Exploration. Year One Petroleum Projects are primarily aimed at data management. Petroleum targeted research projects will commence in 2005–2006. • Effective promotion of SA upstream petroleum investment opportunities (including the CO 2004–A acreage release) at selected major industry conferences. • More new field petroleum discoveries in South Australia than in any other jurisdiction.

PIRSA ANNUAL REPORT 2003–2004 61 Strategic priority 2 — INNOVATION INDUSTRY — promote and facilitate new and value-adding industry that builds on the States’ knowledge, infrastructure and innovation capability The South Australian Government is leading Australia with expeditious and effective processing of activity approvals for geothermal energy. The last few months have seen a rush for licences to explore a variety of geothermal energy plays in the State. Geothermal exploration commenced in 2002 with the confluence of new technologies, for safer and reliable well operations at very high temperatures, and South Australia’s advantage of having the world’s hottest non-volcanic terrain in the Nappamerri Trough of the Cooper Basin.

Currently, there are 11 Geothermal Exploration Licences (GEL) with four proponents of generating electricity from hot rock geothermal energy: Geodynamic s, Scopenergy, Minotaur’s affiliate Petratherm and the Perilya/Green Rock Energy Joint Venture. The GELs cover 5,177 km2.

In addition, 15 applications for GELs covering 6718 km2 have recently been lodged with PIRSA by Scopenergy, Petratherm and a new geothermal explorer, Tasman Resources, up to the end of June 2004.

Geothermal licences and applications cover a diversity of geological provinces so a range of potential new energy sources and exploration models are being targeted and tested. If initial exploration is successful, the total potential investment in geothermal energy in SA over the next five years could reach over $310 million. Just one of the eleven current GELs has potential to contain hot rocks able to yield emission-free electricity equivalent to forty Snowy Mountains Hydro Schemes.

Geodynamics have progressed exploration the furthest so far in GEL98, successfully drilling Habanero 1 exploration well last year to 4421 m depth to access hot Big Lake Suite granites buried under the central Cooper Basin. The well was subsequently tested and overpressures were discovered in the granite, which was unexpected and significantly increased the likelihood of the resource being successfully exploited. Geodynamics will test the heat exchange capacity of the granite by drilling the Habanero 2 production well later this year.

Currently there are 14 Petroleum Explorations Licence Applications (PELA) under consideration for exploration rights to coal seam methane and/or in-situ gasification over coal deposits. Most of these are over coal deposits that have existing Mining Act 1971 leases. Amendments to both the Mining and Petroleum Acts are required before these licences can be granted, to ensure that pre-existing rights to coal are preserved. Some of these will also involve access negotiation in respect to native title issues.

The Australian School of Petroleum at the University of Adelaide continues to grow an international reputation for training residents and attracting world experts to Adelaide. The Petroleum Group funds the State Chair for Petrophysics and Reservoir Properties, currently held by Dr Richard Hillis. The Director Petroleum is a member of the National Centre’s Board and the Board of the Australian School of Petroleum. The Petroleum Geology Branch Manager serves on the ASP Geoscience Advisory Board.

TARGETS FOR 2004–2005 • Progress granting of exploration licences for coal seam methane resources. • Facilitate exploration and development of geothermal resources. • Facilitate national and international stature of the Australian School of Petroleum, University of Adelaide as a world-class incubator for innovative professionals of the petroleum industry. • More geothermal exploration licences in South Australia than in any other Australian jurisdic tion.

PIRSA ANNUAL REPORT 2003–2004 62 Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access The Petroleum Act 2000 requires industry to demonstrate management of environment risks, including natural, social and economic aspects risks, through statements of environmental objectives, providing efficient co-regulation of activities pursuant to multiple Acts.

TARGETS FOR 2004–2005 • Ensure that sta tements of environmental objectives and associated environmental impact research reports are lodged and assessed in a timely manner.

Strategic priority 4 — INTEGRATED POLICY FRAMEWORK, REGULATION AND COMPLIANCE — create through consultation, effective policy and regulatory frameworks to enhance industry and community confidence Effective and efficient consultation within government and timely and accurate policy advice to Ministers is provided for the full benefits to business and the community from the provisions of Petroleum Acts. Consultations included applications for licences in regional reserves and advice in respect of gas supply emergencies.

Native Title Negotiations The right to negotiate process resulted in a successful access agreement between the registered native title claimants, the applicants, and the Minister, for PELA 139 in the Officer Basin.

At 30 June 2004, the right to negotiate process was commenced and in progress in respect to PELA 151 in the Eromanga Basin.

Royalties Petroleum Royalties received in 2003–2004 totalled $46.74 million as distinct from an initial budget of $40.79 million.

Legislation Review Petroleum Act 2000 Amendments The number of amendments to the Petroleum Act and Regulations that have been identified in the past year have been finalised, and a discussion paper on these has been prepared to begin public consultation over the coming year.

Petroleum (Submerged Lands) Act 1982 amendments In December 2003, amendments were passed to the (Commonwealth) Petroleum (Submerged Lands) Act 1967 to establish the National Offshore Petroleum Safety Authority (NOPSA) from 1 January 2005. It is proposed to make mirror amendments to the South Australian Petroleum (Submerged Lands) Act 1982 to provide a consistent regulatory regime for South Australian coastal waters. All States/Territory are proposing similar amendments that will allow NOPSA to deliver a uniform national safety regulatory authority regime for Australia’s offshore petroleum industry, and provide for a consistent regulatory regime in their respective coastal waters.

New Explorer Education Education was proactively provided to new explorers working in South Australia. The aim is to maintain effective and efficient regulation of the Industry.

PIRSA ANNUAL REPORT 2003–2004 63 Annual Compliance Reports Compliance activities confirmed that all Petroleum licences were carrying out activities substantially in accordance with the Petroleum Act 2000.

Fifty one company annual reports were submitted and assessed in 2003–04. These reports can be accessed through the environmental register www.pir.sa.gov.au .

Compliance policy The compliance policy continued to be refined and trialed over the year. It is proposed to undertake full public consultation over the coming year to finalise a workable policy.

Commonwealth Working Groups The Petroleum Group regularly participates in various Commonwealth Government working groups, including the steering committee for the establishment of a Commonwealth Offshore Safety Agency and associated legislation. Further contributions include the national Petroleum Data Consultative Group, Commonwealth Sustainable Resources Subcommittee, the Commonwealth Integrated Oceans Management Working Group and the Otways Multiple Use Case Study.

TARGETS FOR 2004–2005 • Support the successful negotiation of a minimum of three more Native Title Access Agreements for petroleum activities. • Monitor action items identified in review of Santos’ fitness-for-purpose report. • Enforce and monitor implementation of independent recommendations for compliance with AS 2885 pipelines — gas and liquid petroleum, by Santos, Epic Energy and Origin Energy • Draft amendments to the Petroleum Act to identify and address implementation issues • Assist drafting of amendments to the Petroleum (Submerged Lands) Act 1982 to improve and ‘harmonise’ legislation for petroleum activities in all offshore waters. • Draft appropriate amendments to the Cooper Basin (Ratification) Act 1975. • Effectively administer exploration activity under all relevant legislation. • Collaborate with other states and territories and the Commonwealth in implementing a National Offshore Petroleum Safety Authority. • Drive and coordinate development of the State Energy Plan. • Facilitate development of a one-stop-shop for co-regulation of activities e.g. Petroleum Act, Environment Protection and Biodiversity Conservation Act 1999, Water Resources Act 1997.

Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles A research study of impacts of seismic operations on fauna was followed up with further field data acquisition on ants in the Cooper Basin to clarif y the length of time that temporary impacts from seismic lines can be measured. This study validated earlier study results that impacts are temporary and that ecosystems return to near natural conditions within one year.

TARGETS FOR 2004–2005 • Ensure that statements of environmental objectives provide the required degree of assurance to the community. • Review of Cooper Basin seismic SEO is completed and approved. • Follow-up study of ants as bio-indicators for ecologic recovery for drilling operations may be considered pending other priorities.

PIRSA ANNUAL REPORT 2003–2004 64 Strategic priority 6 — REMEDIAL ACTIONS — harness community and government resources to rehabilitate degraded systems and sites Remedial actions for petroleum related impacts are the responsibility of petroleum licensees. There have been no cases identified in the year which necessitated the government undertaking remedial works for past petroleum activities. A working group has completed an investigation of options for remediation of legacy Cooper Basin seismic lines where earlier practices have left visible scars on the landscape.

TARGETS FOR 2004–2005 • Ensure that companies have carried out required remedial work where necessary. • Implement agreed remediation options for legacy Cooper Basin seismic lines.

Strategic priority 7 — BUILDING COMMUNITY CAPACITY — build capacity, leadership and global awareness in industry, and rural and indigenous communities All reports on environmental incidents, pursuant to the Petroleum Act, can be accessed through PIRSA’s website.

Activities in licences granted pursuant to the Petroleum Act are required to follow processes to protect Aboriginal heritage before and during field operations. Compliance is co-regulated by PIRSA and the DEH.

Coongie Lakes Cabinet has approved a management proposal for future petroleum management options for the Coongie Lakes Control Zone. The proposed national park excludes petroleum, minerals and pastoral access. It also gazettes an area for competitive petroleum exploration and development. A substantial area has been set aside for pastoral access but not petroleum or mineral activities. Legislative and administrative mechanisms are being prepared to implement the management option.

TARGETS FOR 2004–2005 • Pending results of bidding for the CO 2003– A block around the Coongie Lakes area, participate in the RTN process to develop an access agreement and issue a PEL. • Sustain a policy of transparency in relation to regulation and industry operations. Implement an administrative policy to post all reports of serious incidents on PIRSA’s website as soon as practicable after submission.

Strategic priority 8 — PARTNERSHIPS — negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development Environmental Protection Agency The Petroleum Group initiated a review of the existing memorandum of understanding with the EPA. A final draft of the memorandum is being finalised with the authority, and development of an administrative arrangement implementing the requirements of the memorandum has commenced.

Industry and academic collaboration The Petroleum Group has continued the strong links with the Australian School of Petroleum at the University of Adelaide. Support continues for applied prospectivity research, including projects to evaluate faulty seals in the Otway Basin, CO2 sequestration, deepwater research analogues.

PIRSA ANNUAL REPORT 2003–2004 65 The report on research into hydrocarbon migration in the Cooper and Eromanga Basins, in collaboration with the University of Cologne and the University of Adelaide, has been finalised.

Dr Peter Boult continues research links with international fault seal specialists and experts for exploring for submarine slope systems, analogues for the deepwater Otway Basin.

TARGETS FOR 2004–2005 • Finalise administrative agreements with the Environmental Protection Agency and DWLBC.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — improve industry and regional access to information that supports better business decisions TEISA data capture Targeted Exploration Initiative SA (TEISA) funding is being directed towards seismic reprocessing for the Officer Basin project. Reprocessed data will be used to develop new interpretations of the petroleum prospectivity of the Officer Basin by Dr Peter Boult which will be promoted to the exploration industry.

Data Provision Improvements were made to the Petroleum Exploration and Production System (PEPS) database with new modules and upgrades to existing modules.

Access to Information The petroleum section on the PIRSA website has been restructured and ongoing improvements and updates made to make it easier for investors, explorers and non-government organisations to access information. A new section on Geothermal Energy is under development.

Key promotional CDs were updated and restructured. The 2004 edition of Petroleum Exploration and Development in South Australia was published and distributed at major industry conferences. New promotional/data CDs were prepared to attract new investors to the Otway and Cooper Basin acreage releases.

The Santos Joint Venture ‘value-added’ seismic and well data, in workstation format, is accessible by new Cooper Basin entrants. The data comprises 5000 2D-seismic lines and 1300 wells. The data sets were transcribed by PIRSA into suitable formats for loading into other workstation platforms.

Otherwise, geotechnical and associated data submitted by licensees continues to be validated, indexed and input into databases for future use by explorers. The SARIG web site now enables explorers and the community to readily access substantial amounts of spatial geotechnical data to facilitate petroleum exploration.

TARGETS FOR 2004–2005 • Improve electronic access to geological and geophysical data, petroleum regulatory information and tenement details, by industry. • Survey industry satisfaction of Petroleum Group promotional and regulatory performance in 2004–2005.

PIRSA ANNUAL REPORT 2003–2004 66 Energy

Energy SA and the Office of the Technical Regulator (OTR) facilitate the coordinated development and implementation of policies, legislative frameworks and regulatory responsibilities for the competitive, sustainable, safe and reliable supply and use of energy for the benefit of the South Australian community.

This is achieved through four key programs — 1. Safety, reliability and quality of energy supply and use; 2. Sustainable / Renewable Energy Policy and Programs; 3. Security of energy supply; and 4. The secure and reliable supply of electricity to remote communities.

PIRSA provides a one-stop shop for government’s activities in conventional, sustainable and renewable energy and energy regulation. Activities include assisting the community to adopt appropriate sustainable energy practices through: • The provision of easily accessible, comprehensive energy efficiency / safety information and advice. • Implementing specific priority energy efficiency programs. • Implementing a Government Energy Education and awareness program. • Administering various rebate programs to encourage the use of renewable energy. • Offering grants to encourage research and development of energy related projects. • Analysing the current and future demands for gas and electricity to ensure that South Australia has sufficient gas supply to meet future gas fuelled power generation needs. • Stimulating energy efficiency and demand management and cost savings in the Government, industrial and commercial business sectors to meet our commitments to the National Greenhouse Strategy. • Ensuring that reliable contingency plans are ready to deal with any shortfalls of petroleum products, gas or electricity supply to South Australia that may require regulatory intervention in the market. • Supplying electricity to designated non-indigenous remote South Australian communities not served by the state grid. • Providing a technical regulatory and compliance service to the Energy sector.

The statutory powers and functions of the Technical Regulator under the Electricity Act 1996, the Gas Act 1997 and the Electrical Products Act 2000 falls to the person appointed as the Technical Regulator under the above Acts. The person currently holding the statutory office of Technical Regulator also holds a Public Sector Management Act appointment as General Manager, Energy Regulation, Minerals and Energy Division.

To meet the South Australia’s commitment to the National Competition Policy agreements with respect to energy market reform, PIRSA administers the National and South Australian Gas access regime by administering the National Gas Pipelines Access (SA) Act 1977, and hosting the National Gas Pipelines Advisory Committee and The Code Registrar.

Strategic priority 2 — INNOVATION INDUSTRY — promote and facilitate new and value-adding industry that builds on the state’s knowledge, infrastructure and innovation capability State Energy Research Advisory Committee State Energy Research Advisory Committee (SENRAC) is a sub-committee of the Premier’s Science and Research Council. The Committee’s key role is to advise government on proposals for funding for

PIRSA ANNUAL REPORT 2003–2004 67 energy related projects. Seed funds are provided to commercialise new sustainable technologies or concepts which will increase the State’s share of resultant infant industries.

ERDC Wind Farm Inquiry The Environment, Resources and Development Committee of the South Australian Parliament, commenced an inquiry into wind-farming. An initial draft of the South Australian Government’s Submission was completed.

Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access Emergency Management Energy supply shortage events are managed within the OTR. In 2003–2004 a major gas supply shortage resulted from a fire at the Moomba gas processing facility. The event was successfully managed through rationing of available gas and ensuring that the security of the main gas distribution system was preserved. Rationing enabled gas distribution to continue resulting in two main benefits: • A significant safety risk was managed. Air that could have caused a fire or explosion was prevented from entering the distribution system. • Further delays in full reinstatement of the distribution system were avoided. The inclusion of air would have resulted in several weeks delay while it was purged air from the distribution pipelines.

Importantly, the gas distribution network was at risk of becoming become non-operational without Government intervention. Government action resulted in the available gas being distributed so as to minimised the economic disruption to the State’s commercial sector. The gas was also allocated to ensure there was no disruption to the State’s electricity supplies, an essential priority given the reliance on gas as a fuel for electricity generation. During the crisis, the efforts of the department significantly improved the overall safety and reliability of the gas distribution network and demonstrated a real capability to successfully manage gas shortage events.

TARGETS FOR 2004–2005 • Continue to monitor security of supply for gas, electricity and transport fuels, and to implement procedures to manage available supplies in the event of interruptions. • Continue to improve and update systems and procedures for improve efficiency and performance in all energy emergency response functions, for gas, electricity and petroleum products.

Strategic priority 4 — INTEGRATED POLICY FRAMEWORK, REGULATION AND COMPLIANCE — create through consultation, effective policy and regulatory frameworks to enhance industry and community confidence Technical Regulation and Compliance The OTR operates a safety and technical audit program across the gas and electricity industries. The program covers the full range of industries from energy supply to end-use. Audits have revealed the good safety performance of the gas and electricity supply industry, when compared with interstate results. The audit program has also identified a number of areas where industry safety, technical, reliability and maintenance programs needs to be improved. Rigorous application of safety requirements by the OTR continues to underpin South Australia’s excellent safety record within the utility industry.

A degree of non-compliance was identified within the gas and electrical installation industry. Education and legal enforcement was applied to remedy this issue. The OTR caused more than 1100

PIRSA ANNUAL REPORT 2003–2004 68 gas and electrical installations to be repaired. Comprehensive information sessions were conducted by the OTR Safety and resulted in increased awareness within the industry.

Audits for compliance of electrical appliances were conducted and revealed a number of breaches of safety requirements resulting in ‘stop sale’ and recall notices. Monitoring and enforcement prevented a number of unsafe appliances being purchased. The activities of the OTR led to the removal of some unsafe appliances from service.

Demand Side Management Energy SA continues to progress the Government's response to the Electricity Demand Side Measures Task Force. Of particular significance is the provision of technical support for interagency groups developing a Sustainable Energy Policy and investigations into options for a retailer demand side management scheme for South Australia. It has also played a role in providing technical and policy advice to the Essential Services Commission on demand-side management and embedded generation.

State Energy Plan State Energy Plan –SWOT assessments were conducted for potential alternative energy supplies, for emergency management and key demand issues, including electricity generation, energy efficiency and environmental mandates in relation to sustainability and greenhouse emissions.

Legislation A review of the Australian Government’s Renewable Energy (Electricity) Act 2000 was developed for cabinet approval the South Australian Government’s submission to the Review which advocated an increase in the Mandatory Renewable Energy Target to 4.5% so that a total of 15% of 2010 generation would be from renewable sources.

TARGETS FOR 2004–2005 • Commence the implementation of energy efficiency initiatives in line with the Government response to the Demand Side Measures Task Force. • Increase number of compliance audits by 10% compared to 2003–2004 results.

Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles Sustainable / Renewable Rebate Programs The Photovoltaic Rebate Program is a Commonwealth Government funded program which provides rebates for the installation of solar electricity systems. For the 2003–2004 financial year, 318 applications were approved, committing $1.49 million in funds. The combined installed capacity of the systems is 487 kW, which will generate approximately 800 MWH of electricity and save over 887 tonnes of CO2 per year. Since the commencement of the program in January 2000, over 850 systems have been installed equating to $5.5 million in rebates. These systems will generate over 2,000 MWH of electricity and save approximately 2,050 tonnes of CO2 per annum

The Solar Hot Water Rebate program provides rebates to the residential sector for the replacement of existing electric water heaters with new solar hot water systems that meet the scheme’s eligibility criteria. Approximately 2,522 rebates were given during the 2003–2004 financial year; resulting in around 6,800 tonnes of greenhouse gas emissions saved and 2,000 less electric water heaters installed by the community, reducing demand on the power grid.

The Renewable Remote Power Generation Program (RRPGP) provides rebates for renewable generation technologies to augment diesel generators for off-grid electricity generation. A total of 306 renewable energy systems are now being installed. The combined systems have 640kW of

PIRSA ANNUAL REPORT 2003–2004 69 photovoltaic capacity and 90kW in wind generation capacity. Each year this will save about 528,600 litres of diesel and reduce greenhouse gas emissions by 1,330 tonnes.

As a result of the programs the number of companies installing renewable energy equipment in South Australia has risen from five to 20.

Government Energy Management The Energy Efficiency Action Plan works to deliver the State Strategic Plan target to reduce energy use in Government buildings by 25% within 10 years, with an interim target of a 15% reduction before the year 2010. In 2002–2003 a saving of 2.4% against the base 2000–2001 year was achieved.

Industrial and Commercial Energy Management The Business Energy Efficiency program is designed to assist South Australian businesses with the adoption of sound energy management practices in the industrial and commercial sectors. Main activities are delivered in conjunction with key industry associations and include the provision of energy audits and feasibility studies, capacity building workshops and information provision service.

The Energy Efficiency Trade Fair is the premier forum for development of the energy services industry in the commercial, industrial and residential sectors in South Australia. Its goal is to foster uptake of sound energy management practices in South Australia in a way that is supported by a successful energy services industry.

This year the Trade Fair will be held at the Adelaide Convention Centre on 2 December 2004, as part of a series of "Business of Sustainability" events being supported by government. Energy SA has established a partnership with the Property Council, Business SA, the Capital City Project Office and the Australian Institute of Refrigeration, Air Conditioning & Heating to stage the event. Energy SA released sponsorship packages for the event in July 2004.

Residential / Community energy efficiency The Energy Friends initiative supports South Australian community organisations in offering householders practical advice and the motivation to decrease energy consumption, cut costs and, ultimately, to help reduce greenhouse emissions. PIRSA has trained 220 energy auditors and 15 trainers, as well as developing a number of auditing tools including a manuals and auditing kits. A self Audit Toolkit and self audit sheet were developed for distribution to local council libraries and civic centres. The self audit kits proved to be successful in this format with 30 kits available to 19 councils.

PIRSA implemented the Energy Efficiency Program For Low Income Households, partnering six welfare agencies to deliver 10,000 energy audits across South Australia in the next two years. Each household receiving an audit also receives an energy efficiency retrofit kit consisting of two compact fluorescent lamps, an AAA-rated showerhead and a draught excluder. All six welfare agencies are now able to offer their own ‘Energy Friends’ training to energy auditors.

PIRSA has implemented and continues serving the ‘reach for the stars’ program in South Australia. The program’s aims are to increase the promotion and sale of high efficiency energy appliances in order to reduce domestic appliance energy costs and greenhouse gas emissions. Seventy electrical retail stores are now involved in the program. Along with refresher training on the energy star labelling system and in store promotion, a bimonthly newsletter is emailed to these stores.

Community Partnerships PIRSA undertakes a government energy education and awareness program through community education programs, school energy programs and presence at community, government and industry events.

PIRSA ANNUAL REPORT 2003–2004 70 TARGETS FOR 2004–2005 • Implement the Energy Efficiency Program for Low Income Households to deliver 6,500 energy efficiency audits and retrofit kits and 500 ‘No Interest Loan Scheme’ arrangements for energy efficiency products. • Visit 25 Schools. • Undertake 500 Energy Friends Audits. • Train 100 Energy Friends Auditors. • Approve 2,600 solar hot water rebate applications.

Strategic priority 8 — PARTNER SHIPS — negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development Remote Area Energy Supply The Remote Area Energy Scheme (RAES) subsidises the supply of electricity to 13 approved remote townships. The State Government owns and operates (via contractors) nine small power stations and subsidises the supply of electricity in the remaining four.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — improve industry and regional access to information that supports better business decisions Energy Advisory services The Energy Advisory Centres provide direct service to around 10,000 people annually, which includes visitors, audience presentations, phone calls and emails. There are approx 180,000 web site visits and a distribution of approx 60,000 brochures/fact sheets.

PIRSA ANNUAL REPORT 2003–2004 71 COMMERCIAL PROJECTS

Commercial Projects assists the wider PIRSA to develop value adding and export opportunities beyond the farm gate or mining operations. The strategy incorporates industry and sector wide initiatives rather than assisting individual companies. Government support focuses on facilitation utilising limited, minor funding covering R&D, costing and detailing activities. Where a project develops into a major commercial opportunity, any support (Cabinet approved) would be directed towards the provision of related public infrastructure. In early stages some projects are subject to commercial or ASX confidentiality.

Commercial Projects continued with the resolution of industry issues such as aquaculture, wine, grains, timber, meat, dairy and horticulture, as well as being involved in water use strategies and value-adding to waste streams.

Strategic priority 1 — INDUSTRY DEVELOPMENT — Provide support for industry and regional development that focuses on global market opportunities Commercial Projects will continue to work with the SA Wine Industry Association to develop export strategies for small and medium enterprises in the SA Wine Industry with the aim of boosting exports by this section of the industry by up to $19 million pa by 2006–2007.

Strategic priority 2 — INNOVATION INDUSTRY — promote and facilitate new and value-adding industry that builds on the states’ knowledge, infrastructure and innovation capability Assist the mining industry to meet the State target of $2 billion turnover per annum and value adding of minerals by 2010, identifying commercial opportunities for value-adding and developing business cases for presentation to the local mineral industry and industry majors within Australia and offshore.

Assist the wine industry and a cross agency team identify priority initiatives for the wine sector that will enhance meeting the global target for the SA wine industry of $3 billion of exports by 2013.

Identify and cost ready for demonstration projects during 2004–2005 that promote sustainability, significantly reduce current emissions and odours, value add waste streams and go to significantly reduce the need and long term costs in providing public infrastructure in the agriculture industry including for abattoirs, intensive livestock husbandry and regional STED's.

Research and preliminary commercial negotiations on a $24 million project that would make use of Bolivar maturation ponds for growing out carp which go on to provide the base feedstock for a fishmeal plant of 10,000 tonnes per annum capacity, underpinning fishmeal supplies to the expanding aquaculture industry in South Australia.

In conjunction with industry and the Eyre Regional Development Board identify significant inefficiencies existing within the EP grain logistics chain from farm gate to Panamax (this region produces nearly a third of the State’s grain crop), with a view to identifying options for improvement.

PIRSA ANNUAL REPORT 2003–2004 72 RURAL SOLUTIONS SA

Rural Solutions SA is a government owned business that has a critical delivery role for PIRSA. The DWLBC is also a key stakeholder, utilising the services of Rural Solutions SA to deliver many of its programs. Other major customers include leading wine and food companies, national industry organisations, regional bodies, primary producers, rural community groups and government agencies in forestry, national parks, transport and trade.

In fulfilling its purpose to “add value to primary industries and their value chains, natural resource management and rural communities”, Rural Solutions SA blends economic, environmental and social considerations to suit the specific needs of its customers. It provides independent, diverse and integrated solutions that add value for its customers.

The services are broad but highly tailored including quality assurance programs to help satisfy export market requirements, environmental design and waste water management strategies, education programs in agricultural chemicals and grain crop management, long term strategic farm planning, from soil, plant and seed analysis and regional and community development strategies.

Rural Solutions SA employs more than 250 full-time rural based consultants who operate from approximately 27 locations across South Australia. This extensive regional network is a major asset in the delivery of both large state-wide programs and more localised regional projects.

Strategic priority 1— INDUSTRY DEVELOPMENT — we provide support for industry and regional development that focuses on global market opportunities • Sustainable management of intensive feedlot industries was supported through production of a CD focussing on effluent management and development of publications addressing ration feeding. • Rural Solutions SA’s Horticulture Team provided value added services in support of the State Food Plan, water use efficiency for Riverland irrigators, environmental management systems for apple and pear growers in the Mt Lofty Ranges, the Premier’s Wine Council, supply chain integrity, organics production and water re-use for wineries. • An integrated salinity management service, incorporating salt mapping and digital terrain modelling services, was developed and in troduced successfully to a range of customers. • A protocol for phytosanitary inspections of lucerne crops in the South East was developed by Seed Services Australia to increase access to the lucerne seed export market. • The Analytical Crop Management Laboratory continued to forge new ground in starch analysis on vine roots for high profile customers like BRL Hardy Ltd “Banrock Station”. • Rural Solutions SA consultants played a key role in the production and release of the State’s Pork Industry Strategic Plan, and continue to work closely with industry on supply chain integrity issues to compete in international markets. • Better management of crop nutrition and available soil moisture has been achieved for more than 300 South Australian low rainfall farmers through involvement in the “Your Soils Potential” program run by the Rural Solutions SA Field Crops Team. The program involved an in-depth review of oncoming sub-soil constraints to production.

TARGETS FOR 2004–2005 • Grow commercial services within South Australia, nationally and internationally. • Investigate opportunities to provide additional services in the areas of water and salinity, food, and wine.

PIRSA ANNUAL REPORT 2003–2004 73 Strategic priority 3 — RISKS AND BIOLOGICAL CONTAMINANT THREATS — we successfully manage risks including, biological and contaminant threats, to the environment, production efficiencies and market access • Our consultants continued to set national benchmarks in the delivery of practical HACCP quality assurance systems for supply chain integrity for horticulture producers and have expanded these programs into the grains industry. • Following the successful completion of a biosecurity mapping trial, Rural Solutions SA and the apple and pear industry have worked together to identify opportunities to expand the project more broadly across the industry in the Mount Lofty Ranges. • The Farm Chemicals Team successfully delivered training in safe chemical use to a range of non-English speaking growers.

Strategic priority 5 — ECOLOGICALLY SUSTAINABLE DEVELOPMENT — we enhance the capacity of community and industry to integrate, achieve and report against environmentally sustainable development principles • In conjunction with DWLBC, Rural Solutions SA provided services to support the State’s Natural Resource Management reform agenda. A number of services provided to Interim Natural Resource Management (INRM) bodies included landcare officers, coast and marine officers and planning, technical project management and administration support. Rural Solutions SA has also provided nine NRM facilitation officers to improve the links between the community and State and Commonwealth Governments, and fulfilled transition support and agency representation roles for five of the eight INRM bodies. • The Resource Protection and Development Team has delivered greenhouse abatement projects for Transport SA and the Office of Public Transport through plantings of indigenous species along railway corridors in the Adelaide environments.

TARGETS FOR 2004–05 • Position Rural Solutions SA effectively in the new RMA arrangements.

Strategic priority 6 — REMEDIAL ACTIONS — we harness community and government resources to rehabilitate degraded systems and sites The Resource Protection and Development Team has been actively involved in natural resource management, playing a significant role in the management of native vegetation and of pest animals and plants, and has supported DWLBC in a major biodiversity conservation and enhancement program in the State’s Upper South East.

Strategic priority 7 — BUILDING COMMUNITY CAPACITY — we build capacity, leadership and global awareness in industry, and rural and indigenous communities • The Livestock Team played a key role in assisting property owners to manage in drought affected areas of South Australia through completion of the Central NE Farm Assistance Program (on behalf of the State and Federal Governments), assistance in preparation of exceptional circumstance applications, and practical farm and stock management advice to prepare for the inevitable next drought. • A holistic “Planning for the Future” program was developed and delivered to 10 indigenous communities during the year. The program aimed to improve community sustainability and quality of life through a comprehensive planning process considering social, environmental, economic and cultural goals. • The Community Capacity Team provided a range of programs supporting indigenous communities in SA. The emphasis has been to personally relate to communities and influential members to

PIRSA ANNUAL REPORT 2003–2004 74 develop tailored economic and envir onmental programs that also incorporate culture and social dimensions. • Senior Rural Solutions SA Livestock Consultants were involved in managing a high level Iraq Ministry of Agriculture visit to this State, and progressing PIRSA’s position for future Iraq Agricultural capacity rebuilding.

Strategic priority 8 — PARTNERSHIPS — we negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development Rural Solutions SA has signed a new Memorandum of Understanding with the Advisory Board of Agriculture. This involves provision of strategic planning, technical and innovation inputs to the Agricultural Bureau.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — we improve industry and regional access to information that supports better business decisions A major review of the PIRSA “Fact Sheet” portfolio was completed and three CD ROM products are currently under development or in a late stage of negotiation, Winter Cereal Management Guide, PIRSA Counter Disaster Operations Plans and Saltland Agronomy in the South East. Public counter information and referral services were provided from 18 locations across South Australia.

Strategic priority 10 — PIRSA IS A GREAT PLACE TO WORK — we attract, develop and support our people

TARGETS FOR 2004–2005 • Grow organisational capacity and capability through strategic recruitment and development of our people. • Improve management of our people.

Strategic priority 11 — WE MANAGE FOR RESULTS — we manage our resources well, we provide leadership, our business processes are effective and efficient Significant progress has been made towards NATA accreditation for the Loxton laboratory, and continued endorsement as an EPA accredited test provider.

TARGETS FOR 2004–2005 • Develop new products and services.

Strategic priority 13 — WE BUILD COLLABORATIVE RELATIONSHIPS WITH OTHERS — our success depends on building and maintaining our relationships with clients, stakeholders and the community A Memorandum of Understanding was signed with DWLBC detailing arrangements for shared oversight and direction over the service delivery activities of Rural Solutions SA.

TARGETS FOR 2004–2005 • Enhance customer relationship management. • Develop a customer database. • Develop a “value for money” ethos.

PIRSA ANNUAL REPORT 2003–2004 75 AGENCY SUPPORT

The agency’s corporate support functions are provided by PIRSA Corporate Division. These functions cover information management, finance and business services, risk management and audit, communications and marketing, corporate strategy and policy, human resources and legal services which are provided through an outposted arrangement with the Crown Solicitor’s Office.

Early in 2004 the Corporate Division began a major business reform initiative to provide customer- focused services to other PIRSA divisions. Achieving this within a shared services environment will require some reform to PIRSA Corporate and formalised business relationships with other divisions.

The first stage of the business reforms included identification of the range of products and services presently delivered to Corporate’s customer base. Close liaison between Corporate and its customers resulted in detailed product and service descriptions and cost models.

A pilot of the business reform process will be tested during 2004–2005 with Rural Solutions SA, leading to agreed service standards for the products and services provided by the Corporate Division. On completion of the pilot the Corporate Division will be able to reach acceptable standards and accountability with its Customers.

The pilot phase will also guide establishment of like arrangements with all other agency divisions from 1 July 2005.

Strategic priority 7 — BUILDING COMMUNITY CAPACITY — build capacity, leadership and global awareness in industry, and rural and indigenous communities RURAL FINANCE AND DEVELOPMENT FarmBis is a Commonwealth and State Governments funded program that commenced in July 2001, providing financial support to assist primary producers improve their business management skills. The program budget is $16 million and was due to close on 30 June 2004, however it has been extended to 31 December 2004.

Grants for individuals and groups totaling $4.79 million were approved and committed during the year (see also Agriculture, Food and Fisheries and Rural Solutions SA).

TARGET FOR 2004–2005 • Develop community engagement model developed to assist industry and regional communities in long-term strategic planning. • Prepare a strategic plan for the regional irrigation group. • Triple Bottom Line ScoreCard will be established for the South Australian food industry.

Strategic priority 8 — PARTNERSHIPS — negotiate effective partnerships with industry, rural and indigenous communities, Commonwealth Government and local government for regional and industry development RURAL FINANCE AND DEVELOPMENT Rural Finance and Development’s (RF&D) aim is to support both State and Commonwealth Governments achieve their objectives by providing effective and efficient administration of financial assistance schemes and advice on rural finance issues.

PIRSA ANNUAL REPORT 2003–2004 76 Financial support is available for primary producers, fishers, land managers, processors and exporters through various schemes, which are designed to achieve a range of outcomes, ultimately with a view to achieving a prosperous primary sector.

Support includes grants to: • Undertake training to improve business management skills, • Prepare a comprehensive business plan, • Improve profitability through redevelopment, • Improve productivity and infrastructure, • Industry development, • Undertake research & development, • Drought relief support.

Table 3 During 2003–2004, RF&D approved 861 Grants and Loans totalling $9,360,680 (excluding grants made on behalf of DWLBC)

Number of Amount Approved Scheme Applications $ Approved Central North East 164 1,010,126 FarmBis 578 4,790,913 Exceptional Circumstances 42 576,176 Loans Cooperatives 1 200,000 RIADF 2 335,000 River Fishery 21 1,872,987 Rural Counselling 12 256,000 State Drought Assistance 41 319,478 TOTAL 861 $9,360,680

Many of the following programs are also discussed under Agriculture, Food and Fisheries, and Rural Solutions SA.

Central North East Farm Assistance Program The Central North East Farm Assistance program, funded by Commonwealth and State Governments, provided financial support for producers in the Central North East region of South Australia. The projects focus on improved business planning, improved profitability and sustainability, new enterprise evaluation and research and development.

FarmBis FarmBis is a Commonwealth and State funded program providing financial support to assist primary producers improve their business management skills.

Exceptional Circumstances Support Exceptional Circumstances Support funded by State and Australian governments, provides Interest Rate relief for pastoralists located the Central North East and Far North East pastoral regions of the State.

Loans to Cooperatives Loans to Cooperatives in South Australia engaged in the primary industries sector are able to access loans which will assist develop the business.

PIRSA ANNUAL REPORT 2003–2004 77 Rural Industry Adjustment and Development The Rural Industry Adjustment and Development Act 1985 provides for loans and grants to assist on-farm development and adjustment towards lifting productivity and to fund projects to benefit farmers and the farming industry.

River Fishery Funding was provided to assist individual license holders under the restructure of the Murray River fishery.

Rural Financial Counseling Funding was provided to 12 Rural Financial Counselling Services (14 counsellors) to assist with the provision of financial counselling and information to primary producers.

State Drought Assistance As part of the $5 million State Drought Assistance package announced by the Premier in October 2002 grants were made available for business support and community activities, targeted principally toward the pastoral and Mallee regions of the State.

TARGETS FOR 2004–2005 • Complete the review of the National Drought Policy.

Strategic priority 9 — ACCESS TO INFORMATION AND SERVICES — improve industry and regional access to information that supports better business decisions CUSTOMER SERVICES The number of visitors and phone enquiries to the Customer Services Reception Centre in 101 Grenfell Street continues to increase with sales of products and services exceeding budget estimates. Demand for PIRSA’S digital geoscientific data, through this outlet, has continued to increase with virtually all data now provided to clients in a digital format. All available digital data can be viewed on the South Australian Resources Information Geoserver (SARIG) website or by visiting the Customer Service Centre.

RECORDS MANAGEMENT The Document and Records Ma nagement Strategy (DARMS) project was approved by PIRSA Executive mid 2002. The objective of the strategy is to develop and implement a document and records framework comprising policies, guidelines, tools, induction and training programs, and technology to enable effective management of PIRSA’s information resource.

Project outcomes for 2003–2004 were the development of a Records Management Policy, which has been endorsed by Executive. Draft Business Activity Classification Scheme, functional requirements for an electronic records management system and Recordkeeping Metadata Standard have been prepared and will be taken to PIRSA Business Divisions for consultation and sign off.

SPATIAL INFORMATION Provision of spatial consulting services to PIRSA Divisions and other government agencies continued. Two major projects conducted for external clients were data processing, analysis, map and dataset production for the Land Services Group, DAIS “Valuation Accuracy and Relativity Project” and undertaking the “Interim Strategy for the Adoption of GIS Project”, also for the Land Services Group.

The Agency Spatial Data Library was successfully migrated to an Oracle database platform. This will enable more efficient access to the data by city and regional centres using web based map delivery tools. A further project was conducted to develop a pilot web based simple map service.

PIRSA ANNUAL REPORT 2003–2004 78 Hand held mobile computers using Geographic Information Systems (GIS) was promoted as an effective technology for spatial and non-spatial data capture for PIRSA business activities. Automated data collection forms were developed and training provided in the use of the technology for boat inspections and the monitoring of genetically modified crop sites.

INFORMATION TECHNOLOGY PIRSA Website The PIRSA website upgrade was completed in July 2003, providing an industry focus and improved search and navigation features. The improvement program continued into stage two with review and acquisition of a new content management system. eBusiness Online Projects PIRSA business divisions are increasingly adopting on-line service delivery models to support both internal and external customers. A number of projects were conducted to improve access to information including eRevenue, the first phase of which has delivered intranet access to PIRSA's accounts receivable information. Later stages of the project will provide this information via the Internet and provide our customers with the opportunity to pay invoices on-line. Ongoing improvements were made to PIRSA’s geoscientific information system and Tenements Management System. The Primary Industries Information Management System (PIIMS) was also enhanced to include support for recording spatial and textual detail of incidents on agricultural properties involving chemical residue, chemical trespass or pest and plant disease.

Information Technology Infrastructure PIRSA implemented a comprehensive infrastructure upgrade program during the 2003–2004 financial year, in line with the Information Management and Technology Strategic Plan approved by Executive. This program positioned the network to support future business needs, maintain its reliability and transition to the new infrastructure support arrangements. The program included the upgrade and replacement of site and core communications equipment, midrange file servers and file and print servers at all PIRSA sites.

PUBLISHING SERVICES A major review of Publishing Services was undertaken and produced a business plan designed to take the branch forward into 2005. The two cornerstones identified were a greater focus on fulfilling client requirements, and a restructure of the branch to assist in client focus and provide enhanced career opportunities for staff. The business plan and new staff classifications were approved in February 2003.

Publishing Services continued to prepare a wide range of products including interactive CDs, brochures, booklets, journals, technical reports, poster displays, audio-visual presentations and intranet material to support PIRSA divisions. The branch also contributed to process improvement reviews with Petroleum and Mineral Resources Divisions, and the findings will be applied to interactions with all clients.

COMMUNICATIONS AND MARKETING The focus on emergency and crisis communications continued during 2003–2004.

The Communications and Marketing team provided strategic input to the communications aspect of the program to eradicate the invasive Caulerpa taxifolia from West Lakes.

The unit was also actively involved in communications surrounding the South Australian and interstate impacts following the fire at the Moomba gas field in January 2004.

PIRSA ANNUAL REPORT 2003–2004 79 A milestone achievement was the lead role the unit played in the development of a national accreditation program for communication specialists who might be called on in the event of a major crisis.

The accreditation program will be rolled out to the States and Territories late in 2004 with the support of the federal Department of Agriculture, Fisheries and Forestry and funded by Animal Health Australia.

A number of important events held during the year further promoted PIRSA’s role as an economic development agency, including Taste! SA at the Royal Adelaide Show, major field days in key regional centres and the Rural Youth Reunion Rally at Clare.

The quarterly publication, Open Gate, continued to support the agency’s focus on improving the profitability of primary producers through the promotion of research and development, special projects and service delivery across industry sectors.

PIRSA also supported the state’s future leaders in primary industries with its sponsorship and participation in the Young Rural Ambassador program, in conjunction with the Agricultural Societies Council of SA.

TARGETS FOR 2004–2005 • Relocation of Coober Pedy and Mount Gambier staff to new accommodation to improve delivery of services and provide better working environments. • Continue to progressively implement the endorsed Document and Records Management Strategy across the Department. • Continue to develop a publishing environment that will assist PIRSA business units to present information in professional and attractive packages. • Further develop tools that will assist regional users to access spatially related data. • Continue to improve the PIRSA Internet site for industry and public access to information. • Improve regional and remote connection to PIRSA’s information technology network. • In collaboration with other South Australian government agencies, support the implementation of broadband networks for regional and remote sites. • Develop standards and infrastructure for the use of mobile computer devices by PIRSA staff in remote areas. • Develop a user-friendly web interface for accessing ScoreCard results.

Strategic priority 10 — PIRSA IS A GREAT PLACE TO WORK — we attract, develop, value and support our people; we provide a positive work culture Major activities are reported in the eight key result areas of the Commissioner for Public Employment Strategic Human Resource Management Framework.

A PLANNED WORKFORCE AND MONITORING AND REPORTING HR Strategic Plan PIRSA Executive endorsed a new Human Resources Strategy 2004–2006. The strategy clearly identifies the major challenges PIRSA faces in attracting, developing, retaining and managing the people it needs now and into the future for business success. The strategy comprises four key and four supporting goals which have been developed to enable HR to build on and extend its role and influence in shaping the future of the organisation and its people.

PIRSA ANNUAL REPORT 2003–2004 80 PIRSA Quarterly Workforce Report The compilation and tabling of the quarterly workforce report provides the key reference for PIRSA Executive to consider strategic workforce and human resources issues. Over the year the discussions focussed on key areas including; succession planning, leave management, remuneration management and employee conduct matters. These discussions have supported the development of policies and systems for improved HR management across PIRSA.

Labour Hire Contract In September 2003 the Labour Hire Contract was successfully implemented with a total of 14,532 casual labour hire hours reported for the year. This contract supports the business by providing access to a short-term labour market to meet incident responses and peaks in seasonal work.

RESPONSIVE AND SAFE EMPLOYMENT CONDITIONS Employee Assistance Program Three providers have been contracted to provide Employee Assistance Program (EAP) counselling support services since December 2002, with a review of the program scheduled for December 2004. EAP services are available to all staff, with a total of 61 EAP visits recorded for the year.

QUALITY STAFFING Capabilities based approach to recruitment and selection continues to be implemented. This has been supported by ongoing delivery of two-day training and development workshops, ongoing small group coaching, an update of the recruitment and selection intranet site and tools and an update of PIRSA’s Capabilities Dictionary. A total of 32 programs have been delivered since July 2001, catering to 400 participants, predominantly at the middle management classification levels.

A major procurement process was implemented for the supply of a full range of recruitment and selection services. The aim of this approach is to provide an expert panel of providers trained in PIRSA’s approach to further support PIRSA managers in best practice recruitment and selection processes. At 30 June 2004 the procurement evaluation process was in its final stages and roll out of the new contract and Recruitment and Selection Policy is planned for September/October 2004.

MANAGED PERFORMANCE A new strategy for improving the uptake and quality of performance management processes was implemented. The centrepiece of the strategy was a whole -of-agency survey that identified processes in place and relative strengths and weaknesses in current approaches. Strategies linked to areas identified for improvement are being developed and include three learning programs for managers that will be piloted in July/August 2004. Results of this survey have been distributed to PIRSA Divisions and local action plans to improve processes have been or are, under development. Additional surveys are planned for 2004–2005 and 2005–2006 to measure progress.

PLANNED HUMAN RESOURCE DEVELOPMENT PIRSA has continued to place a high priority in leadership development with six leadership and management opportunities offered during the year: Leadership for the Future, Women in Leadership, The Art of Management - HR Delegations, The OCPE Senior and Mid dle Manager Development Centres, Front Line Managers workshops and the Public Sector Mobility Program. Nearly half of the participants on the Leadership for the Future Program were senior staff from the DWLB, increasing understanding and collaboration between the Agencies. Further development of these programs will be undertaken in 2004–2005. The Performance Management and Development survey indicated that PIRSA staff have access to a broad range of on and off the job learning and development experiences. It further indicated that on the job learning activities had greater impact on staff development than off the job activities.

PIRSA ANNUAL REPORT 2003–2004 81 The percentage of training expenditure relative to total employee remuneration costs was 2.79%, an increase of 0.05% since 2002–2003.

The percentage of leadership and management expenditure relative to total employee remuneration costs was 1.4%, the same as 2002–2003.

PROTECTION OF MERIT AND EQUITY Work continued on addressing employment issues related to people with disabilities and indigenous employment. Refer the Equal Employment Opportunity section of this report.

The principles of merit and equity are incorporated into policies and the recruitment and selection process.

CONTINUOUS IMPROVEMENT Policy review Over the year reviews were undertaken in the key HR policy areas of recruitment and selection, remuneration, redeployment, ethics and casual employment. Ethics will be a major focus in 2004–2005 with the rollout of a specially developed management training program.

HR Excellence Award PIRSA received one of the inaugural awards for excellent HR practice offered by the Commissioner for Public Employment for its capabilities based recruitment and selection process.

Induction On-line The development of an on-line induction program will support a consistent approach for employee induction. Participants attending the May Introduction Day were provided the opportunity to pilot the program. Comments relating to the content, ease of use and usefulness will be used to refine the program.

HR Intranet A comprehensive review of the HR Intranet was completed with modifications made to content and structure to improve employee access and use. A user satisfaction survey is planned for 2004–2005.

CHRIS Development of additional electronic functionality continued during the year for leave on line, e- payslips and reporting. It is proposed that these will implemented progressively during 2004–2005 on the completion of successful testing.

HR Data Collection PIRSA was a key contributor to the development and testing of the whole of government HR Dataset. The dataset system was developed by OCPE to improve quality and efficiency for workforce data collection. PIRSA will continue to use this technology to improve reporting systems and processes.

PIRSA ANNUAL REPORT 2003–2004 82 EXECUTIVE EMPLOYMENT , STAFF EMPLOYMENT AND OTHER HUMAN RESOURCE MATTERS Persons 1430

FTE's 1334.39

Gender % Persons % FTE Female 39.09 37.04 Male 60.91 62.96

Number of persons separated 197 from the agency during the 2003–2004 financial year

Number of persons recruited 342 to the agency during the 2003–2004 financial year

Number of persons on leave 35 without pay at 30 June 2004

EMPLOYEES – NUMBER OF EMPLOYEES BY SALARY BRACKET Salary Bracket Male Female Total $0 – $38,000 153 218 371 $38,001 – $49,000 242 183 425 $49,001 – $64,000 288 127 415 $64,001 – $83,000 163 29 192 $83,001+ 25 2 27 Total 871 559 1430

Status STATUS OF EMPLOYEES IN CURRENT POSITION FTE's Short-term Long-term Ongoing contract contract Casual Total Female 295.43 58.05 126.93 13.89 494.3 Male 536.01 61.1 224.27 18.71 840.09 Total 831.44 119.15 351.2 32.6 1334.39 Persons Short-term Long-term Ongoing contract contract Casual Total Female 319 64 139 37 559 Male 539 62 227 43 871 Total 858 126 366 80 1430

PIRSA ANNUAL REPORT 2003–2004 83 Executives EXECUTIVES – NUMBER OF EXECUTIVES BY STATUS IN CURRENT POSITION, GENDER AND CLASSIFICATION Contract Ongoing Contract tenured untenured Total Classification Male Female Male Female Male Female Male Female Total EXEC0A 0 0 12 0 4 0 16 0 16 EXEC0B 0 0 3 0 1 1 4 1 5 EXEC0C 0 0 5 0 0 0 5 0 5 EXEC0F 0 0 1 0 0 0 1 0 1 TOTAL 0 0 21 0 5 1 26 1 27

Leave Management LEAVE – AVERAGE DAYS TAKEN PER FULL TIME EQUIVALENT EMPLOYEE Leave Type 2000–2001 2001–2002 2002–2003 2003–2004 Sick leave taken 5.15 5.14 5.4 5.4 Family carer's leave 0.04 0.06 0.1 0.5 taken Special leave with pay N/A N/A 1 0.4

Workforce Diversity NUMBER OF EMPLOYEES BY AGE BRACKET BY GENDER South Australian Age Bracket Female Male Total % of Total Workforce* 15 – 19 9 5 14 0.98 7.3 20 – 24 54 41 95 6.64 10.7 25 – 29 94 79 173 12.10 10.2 30 – 34 85 89 174 12.17 11.2 35 – 39 65 91 156 10.91 11.4 40 – 44 70 109 179 12.52 13.3 45 – 49 92 150 242 16.92 12.0 50 – 54 54 169 223 15.59 10.7 55 – 59 20 95 115 8.04 7.7 60 – 64 14 32 46 3.22 3.6 65+ 2 11 13 0.91 2.0 Total 559 871 1430 100.00 100.0

*As at March 2004 from ABS Supertable LM8

PIRSA ANNUAL REPORT 2003–2004 84 Indigenous Employees NUMBER OF ABORIGINAL AND/OR TORRES STRAIT ISLANDER EMPLOYEES Male Female Total % of Agency Strategic Benchmark* Aboriginal, 4 1 5 0.35 2.0 Torres Strait Islander

*Benchmark from State Strategic Plan

Cultural and Linguistic Diversity CULTURAL AND LINGUISTIC DIVERSITY Name Male Female Total % of Agency SA Community* Number of employees born 95 69 164 11.47 20.3 overseas Number of employees who 0 1 1 0.07 15.5 speak language(s) other than English at home

*ABS Publication Basic Community Profile (SA) Cat No. 2001.0

Disability NUMBER OF EMPLOYEES WITH ONGOING DISABILITIES REQUIRING WORKPLACE ADAPTATION Male Female Total % of Agency Total 21 11 32 2.24

Voluntary Flexible Working Arrangements NUMBER OF EMPLOYEES USING VOLUNTARY FLEXIBLE WORKING ARRANGEMENTS BY GENDER Leave Type Male Female Total Purchased leave 14 11 25 Flexitime 414 354 768 Compressed weeks 9 6 15 Part-time job share 8 22 30 Working from home 35 26 61

Note: These figures do not represent informally negotiated flexible working arrangements. Improvements in data collection and recording are planned for 2004–2005.

PIRSA ANNUAL REPORT 2003–2004 85 Training and Development DOCUMENTED INDIVIDUAL PERFORMANCE DEVELOPMENT PLAN % with an agreement negotiated within the past Salary Bracket 12 months $0 - $38,000 54 $38,001 - $49,000 45 $49,001 - $64,000 44 $64,001 - $83,000 42 $83,001+ 53

TRAINING EXPENDITURE AS PERCENTAGE OF TOTAL REMUNMERATION EXPENDITURE Target 2003–2004 Actual 2003–2004 Target 2004–2005 Total 3 2.93 3

Note: Data is currently not available by salary bracket.

EQUAL EMPLOYMENT OPPORTUNITY PROGRAMS

Youth Training Strategy The number of trainees employed this year remained steady at nine, with the main areas of employment in fisheries and administration. PIRSA will continue to promote the strategy in 2004–2005.

Aboriginal Recruitment and Development Strategy It is recognised that aboriginal employment is under represented in PIRSA. A specific strategy is currently being developed for designing a sustainable employment program for indigenous people based around the future workforce requirements of the agency. This will be tabled at PIRSA Executive in 2004–2005.

OCCUPATIONAL HEALTH, SAFETY AND INJURY M ANAGEMENT Occupational health, safety and welfare (OHSW) and injury management (IM) statistics are summarised in Appendix B.

This was a significant year for OHSW and IM with the recognition of a higher quality Injury Management service and continuing commitment to improving OHSW in PIRSA through the introduction of a number of initiatives.

Key highlights for the year include: • Improved Results PIRSA improved OHSW performance with a reduced number of lost time injuries from 28 in 2002–2003 to 23 in 2003–2004, with a consequential reduction in lost time injury frequency rate from 12.56 to 10.23 hours for each million hours worked. • Workcover and PIRSAFE Audits

PIRSA ANNUAL REPORT 2003–2004 86 Significant progress was made in implementing the new PIRSAFE functional audit, with a trial commencing in the Corporate Division. The audit process has been developed in close consultation with the WorkCover Corporation and on completion in May 2005 will position PIRSA as one of the first portfolio agencie s in government to be accredited against the current WorkCover Performance Standards. A number of strategies to support successful implementation of the audit have been developed, including an on-line audit program to improve data collection, analysis and reporting. The development of a module in the PIRSA “Art of Managing” program is planned to support PIRSA managers in understanding PIRSAFE and OHSW requirements. • Alignment to the risk standards The PIRSAFE system has been further aligned with the organisation’s risks management program by incorporating key aspects of the risk management standard within many of its procedures and internal audit processes. • PIRSA OHSW Consultative Forum The PIRSA peak OHSW Consultative forum has continued to run with successful quarterly meeting. At the end of 2003 the PIRSA health and safety representatives were invited to attend. Meetings for the coming year plan to encompass at least one regional visit to provide additional opportunity for the discussion of regional issues. • New OHSW and IM Targets PIRSA responded to a cabinet submission on improving performance in OHSW and injury management in the SA Public Sector. As a result, new ‘stretch’ targets were assigned to a number of OHSW and injury management areas. The se new targets will be included in the new PIRSA OHSW and injury management strategic plan for development later in the year. Reporting against these targets will occur as required and outcomes/results will be used to guide further improvements in the area.

OTHER MATTERS DISABILITY ACTION PLANS Strategy for Employment of People with a Disability The Promoting Independence Working party undertook a number of activities in support of the government’s commitment to promoting independence. Key outcomes inclu ded a review and improvement of properties and facilities to improve accessibility, the development of an awareness strategy and the introduction of an employment and training initiative for a person with a disability.

4th Progress Report on Implementation of “Promoting Independence: Disability Action Plans for South Australia 2003–04”. The following progress report provides results against the five key outcomes, including a rating on the extent to which the outcome has been achieved. The rating is a continuum of 1 through to 5, where Achievement level 1 represents the demonstration of awareness of basic responsibilities, to Achievement level 5 where the agency can demonstrate best practice.

OUTCOMES 1. Portfolios and their agencies ensure accessibility to their services to people with disabilities. • PIRSA’s Promoting Independence Working Party whose members are staff with, or experience in, disabilities has reviewed and further developed the action plan, with Executive endorsement expected shortly. • Awareness training specifically for PIRSA Property and Facilities staff was undertaken. • PIRSA Property and Facilities and OHSW staff have inspected most PIRSA sites with a view to addressing emerging DDA issues. • A Legislative Building Compliance Audit was completed this year and addressed issues of access for people with disabilities.

PIRSA ANNUAL REPORT 2003–2004 87 • Upgrading the Pt Lincoln office is well underway with the toilet and kitchen facilities now compliant and the front door access in progress. • Door handles have been replaced with lever handles at most sites also as a result of the legislative audit process for DDA and fire standard requirements. • PIRSA actively promotes and supports the Disability Recruitment Service. • In partnership with the Disability Recruitment Service, PIRSA developed a disability employment initiative. This involved a six-month training program for a person with a disability in a recognised skill shortage area. This PIRSA initiative has now been adopted by OCPE with all agencies encouraged to participate. • Several specific modifications have been and are being undertaken to accommodate employees with disabilities. • All Human Resource policies are continually reviewed and updated to include disability awareness and to promote positive practices. • Achievement level 3.

2. Portfolios and their agencies ensure information about their services and programs is inclusive of people with disabilities. • The PIRSA website has been constructed to web page standards and accessibility guidelines. PIRSA’s publicity and communication processes are designed to be user friendly to people with disabilities. • Clients requiring publications/information in an alternative format are accommodated on an individual basis. • PIRSA’s Promoting Independence Working Party has actively participated in the review and further development of PIRSA’s action plan which includes communication strategies. • PIRSA recognises that specific awareness training in the publications, communications and information management areas is further required and will be addressed in 2004–2005. • Awareness training was provided to Country Administrative Officers. These officers often have direct contact with the public. • Achievement level 2.

3. Portfolios and their agencies deliver advice or services to people with disabilities with awareness and understanding of issues affecting people with disabilities. • Awareness Training has been delivered to PIRSA’s Promoting Independence Working Party, Country Administrative Officers, Property and Facilities staff and Human Resource Practitioners. • An Awareness Training Strategy is being developed, in consultation with PIRSA’s Promoting Independence Working Party, with further training to commence late 2004. • Achievement level 3.

4. Portfolios and their agencies provide opportunities for consultation with people with disabilities in decision-making processes regarding service delivery and in the implementation of complaints and grievance mechanisms. • PIRSA’s Promoting Independence Working Party has reviewed the Action Plan that proposes further strategies, including awareness training, to assist with the inclusion of people with disabilities in the agency. • Human Resource policies currently provide for a complaints and grievance mechanism. The current practice for following up other complaints is managed at a local level. • Achievement level 2.

PIRSA ANNUAL REPORT 2003–2004 88 5. Each portfolio chief executive will ensure that their portfolio has met the requirements of the Disability Discrimination Act 1992 and the Equal Opportunity Act 1984. • The Promoting Independence Working Party has reviewed PIRSA’s Disability Action Plan. All human resource policies and guidelines are inclusive of people with disabilities. • Access to buildings has been audited and discussed with the Department for Administrative and Information Services. • Achievement level 2.

TARGETS FOR 2004–2005 • Art of Management Module implemented for budgeting and strategy.

Strategic priority 11 — WE MANAGE FOR RESULTS — We manage our resources well; we provide leadership; our business processes are effective and efficient BUDGET STRATEGY The Budget Strategy unit provided support to the agency’s annual budget cycle. This includes assisting business units to develop new proposals, preparing Cabinet submissions for the Budget Strategy Cabinet Meeting, Budget Bilateral papers and preparation of the agency’s Portfolio Statements released with the Budget.

Other activities undertaken during the year include the provision of financial statements for various industry funds (e.g. the Riverland Wine Industry Fund), the annual financial statements for the agency, financial assessments (e.g. business cases and board papers) and the development of changes required to internal management reports to reflect the government’s net lending/borrowing requirements.

BUSINESS IMPROVEMENT The focus for the Business Improvement unit is to value-add, identify and facilitate improvement projects for the business units in the Finance and Business Services Branch. A framework for driving continuous improvement change was implemented. This framework is supported by the use of recognised quality tools and strengthened by the introduction of templates and documented processes currently under development.

BUSINESS SERVICES A Strategic Property Review was undertaken and provided to Department of Administration and Information Services (DAIS) in accordance with a series of Cabinet approved recommendations. Action plans were developed to ensure that PIRSA is well positioned to strategically manage its property and facilities resources in line with present and emerging servic e delivery requirements.

Launch of 'Mission Possible' providing an innovative online learning tool designed to engage PIRSA staff in learning to enhance their awareness and understanding about how sound procurement practices can be applied, as well as the importance of applying such practices.

PIRSA regional and metropolitan sites inspected to raise staff awareness on energy management and security. Energy consumption data for 2003–2004 was collected and compared to the baseline data of 2000–2001 (see ‘Practising Sustainability’).

The Security Review Team is currently establishing policy documents and assessing the capital works required to enhance the safety and security for PIRSA staff and customers. Security works have been completed at the Port Augusta, Lenswood and Loxton offices.

PIRSA ANNUAL REPORT 2003–2004 89 FINANCE SERVICES Debtor Management A review of debtor management policies and procedures was conducted to identify issues and actions required to improve performance in debtor management. In March, PIRSA’s Debt Management and Recovery Policy was updated and approved incorporating new and improved processes that will contribute to improving debtor information and performance.

Provision of financial services to Department of Trade and Economic Development In April, the Department of Trade and Economic Development (DTED) selected PIRSA to provide a range of financial services. Financial systems and processes were established to enable the service provision to commence on 1 July 2004.

Financial Systems Development and testing of a new web based accounts receivable system (PIRSA Payments Plus) continued. An intranet version was released to PIRSA staff in March that enables users to access and view customer records on line. The Internet version will enable on-line services to PIRSA customers that includes access to their invoice, statement and personal account details, ability to change their personal details and enable payment facilities over the Internet. It is anticipated that the customer functionality will be available from November 2005.

A new improved web-based financial reporting application (Cognos) was implemented and made available to financial reporting users in June. Improvements include the ability for finance managers throughout PIRSA to run non-standard financial reports, drill through capability down to accepted transaction level, and for financial data to include other modules of the financial system (accounts payable, accounts receivable and assets). Development of non-standard reporting will continue in 2004–2005.

CORPORATE STRATEGY AND POLICY Corporate Strategy and Policy Branch operates four program areas to enhance the effectiveness and efficiency of PIRSA as an economic development agency. The primary role of the Corporate Strategy and Polic y Branch is to provide PIRSA with a policy framework and strategy development process that enables planning in PIRSA for resource allocation and strategic decision-making. The framework also guides choices about programs in order that PIRSA’s impact in facilitating sustainable economic development is maximised. The development and use of sophisticated economic models to measure the impact of PIRSA programs on South Australia's regional and State economies is an integral part of the services provided by the Branch.

Corporate Strategy and Policy Branch plays a key-enabling role across all PIRSA Divisions, supporting their industry-based planning and understanding of disciplines that enhance the strategic focus of the Agency.

Highlights for the year include: • ScoreCard Development – development of the SA Food and SA Minerals ScoreCards for 2002–2003. Also establishment of the Triple Bottom Line Food ScoreCard for South Australia as well as the National Food ScoreCard and Sunraysia ScoreCard. • Economic Analysis – economic support in development of 2004–2005 budget, analysis in support of The Living Murray First Step decisions, an investigation of proposed changes to mineral royalties and analysis of the Socio-economic impact of Salinity Levies upon the Riverland region. • Strategy Development – provision of analysis and strategy tools for the State Food Plan 2004–2007, analysis for the Wine Partnerships Strategy and sociological analysis of proposed

PIRSA ANNUAL REPORT 2003–2004 90 structural adjustment to the food industry. Alignment of PIRSA’s priorities to the State Strategic Plan and with National Competition Policy principles. • Project Support – to Thinker-in-Residence Maire Smith, to the Domestic Energy and Water Survey (State Supplementary), towards drafting of the National Drought Policy, to reviews of the Chicken Meat Act and Barley Marketing Act and scope of the National Benchmarking project.

RISK MANAGEMENT AND AUDIT The Risk Management and Audit function is structured to provide a strategic approach to risk management, and is being integrated within the agency’s quality management and strategic planning framework. Operational responsibility for identifying and managing risks resides with the business divisions.

Risk Management Approach PIRSA adopts a risk management framework and reporting system to ensure that whole -of-agency risks and opportunities are identified, analysed and appropriate management strategies implemented. This risk management approach assists PIRSA mitigate the potential risks and maximise the opportunities in achieving its strategic and operational objectives. The deployment of this approach is through the PIRRISK risk management system. The PIRRISK system incorporates the Risk Management Standard AS/NZS 4360:1999.

The key focus of PIRRISK is to assist management and staff to make informed decisions, encourage knowledge sharing and develop a formal risk management plan. This enables divisions to understand the risks and opportunities PIRSA faces in an environment of constant change. PIRSA Executive, Agriculture, Food and Fisheries, Minerals and Energy, SARDI, Rural Solutions SA and PIRSA Corporate have conducted workshops to develop ‘risk profiles’ using this approach. Food South Australia has commenced deployment of the approach.

PIRSA Risk and Audit Committee The PIRSA Risk and Audit Committee members include PIRSA senior managers, an independent committee member and representatives from the Auditor General’s Department in an observer role. The committee’s charter was updated during the year, accepted by the committee and approved by the Chief Executive. The committee assists the PIRSA Executive in fulfilling its governance responsibilities in relation to the management of PIRSA.

The PIRSA Risk and Audit Committee met on four occasions during the year.

ARIMA Risk Manager of the Year The Principal Adviser, Risk Management & Audit in PIRSA was awarded the ARIMA Risk Manager of the Year award for 2003 by the Association of Risk & Insurance Managers Australasia (ARIMA) and covers both public and private sectors. The ward was in recognition of the PIRRISK system that was developed and successfully implemented within PIRSA.

TARGETS FOR 2003–2004 • Implementation of electronic functionality that will enable PIRSA customers to access their account information and pay their accounts via the Internet. • Implement an improved fixed asset management and reporting. • Establish a Triple Bottom Line ScoreCard for the minerals sector. • Develop a model for benchmarking industry competitiveness. • Establish a measurement and review strategy for the Accelerating Exploration Initiative.

PIRSA ANNUAL REPORT 2003–2004 91 Strategic priority 12 — WE GROW AND HARNESS OUR KNOWLEDGE — our knowledge is a key business asset INFORMATION MANAGEMENT The sharing of information and knowledge is seen an essential part of daily activities, improving PIRSA and the quality of services provided. This was emphasised through the Internet Improvement Project and development of an Information Management and Technology Strategic Plan in 2002–2003. Provision of electronic collaboration facilities to assist PIRSA in providing a knowledge- sharing environment with its customers was an important theme when developing the plan and a project was commenced to scope the extent of a collaborative environment.

TARGETS FOR 2004-2005 • Undertake analysis and administration of the Domestic Energy and Water State supplementary survey. • Prepare an information package on structural adjustments that will benefit the South Australian food and fibre industries.

PIRSA ANNUAL REPORT 2003–2004 92 FINANCIAL PERFORMANCE Financial overview

Tables 4 to 6 and Figures 4 to 6 provide summaries of the Statement of Financial Performance, the Statement of Financial Position and the Statement of Cash Flows that compare the budget for 2003–2004 with the results for 2003–2004 and the results for 2002–2003. The detailed financial statements reflecting the actual results for 2003–2004 are presented in Appendix 8.

Table 4 and Figure 4 Summary Statement of Financial Performance Budget Actual Actual 2003–2004 2003–2004 2002–2003 $’000 $’000 $’000 $million Expenses from ordinary activities 185 042 186 066 179 803 Budget Actual Revenue from ordinary activities 81 554 79 262 76 722 200 180 Net cost of services 103 488 106 804 103 081 160 Revenues from SA Government 107 633 107 877 111 299 140 120 Net result before restructuring 4 145 1 073 8 218 100 Decrease in net assets due to 80 - 5 147 8 505 administrative restructuring 60 40 20 Net result after restructuring 4 145 (4 074) (287) 0 Expenses Revenues Revenues from Government

Table 4 shows PIRSA’S net cost of services was over budget by $3.3 million. Approximately $2.6 million of this amount is due to the classification of revenue relating to the transfer of certain functions from the Department of Trade and Economic Development. This amount was included in the budget as government revenue, however in the actual results it has been classified as revenue from restructuring in accordance with accounting standards and policy statements issued by the Department of Treasury and Finance.

PIRSA’s overall financial performance was under budget by $1.5 million after adjusting for the impact of the above restructure revenue ($2.6 million) and taking into account net under expenditure in investing activities ($2.0 million).

Ordinary expenses were $1.0 million higher than budget due to a combination of higher employee expenses ($2.7 million), higher grants and subsidies ($1.7 million), lower supplies and services ($1.5 million), and lower other expenses ($1.9 million).

The restructure expenditure of $5.2 million during the year consisted of the transfer of cash ($7.3 million) to the Department of Water, Land and Biodiversity Conservation relating to Sustainable Resources functions transferred on 1 May 2002, the transfer of cash and plant and equipment to Essential Services Commission of South Australia ($0.1 million) on 1 July 2003 and the transfer of cash, non current assets and employee entitlements from the Department of Trade and Economic Development ($2.2 million) on 1 January 2004.

PIRSA ANNUAL REPORT 2003–2004 93 Table 5 and Figure 5 Summary Statement of Financial Position Budget Actual Actual 2003–2004 2003–2004 2002–2003 $’000 $’000 $’000 $ million Budget Actual Current Assets 82 573 77 056 75 670 140 Non Current Assets 121 518 120 870 125 948 120 100 Total Assets 204 091 197 926 201 618 80 Current Liabilities 15 603 16 288 14 861 60 Non Current Liabilities 29 126 30 494 31 539 40 Total Liabilities 44 729 46 782 46 400 20 0 Net Assets 159 362 151 144 155 218 Current Non Current Non Current assets were $5.5 million lower than budgeted due to lower receivables ($2.4 million) and a lower than budgeted cash balance ($3.2 million).

Non current assets were $0.6 million lower than budget mainly due to disposals of land and plant and equipment. Land at the Cleve District Office and Naracoorte was disposed as title to these assets was transferred to the Minister for Environment and Conservation during 2003-04.

Total liabilities were $2.1 million above budget largely due to an increase in employee benefits comprising long service leave $1 million and annual leave $0.8 million.

Table 6 and Figure 6 Summary Statement of Cash Flows

Budget Actual Actual 2003–2004 2003–2004 2002–2003 $’000 $’000 $’000 Cash flows from operating activities Payments (177 188) (210 001) (188 209) $ million Budget Actual Receipts 81 746 108 753 99 529 250 Net cash flows from Govt 107 512 107 877 111 299 Net cash provided by operating 12 070 6 629 22 619 200 activities Cash flows from investing and financing activities 150 Payments (7 153) (5 307) (8 374) Receipts 5 800 5 111 6 496 100 Repayment of Borrowings (4 017) (3 007) (4 606) Net cash used in investing and (5 370) (3 203) (6 484) borrowing activities 50 Net increase/(decrease) in cash held 6 700 3 426 16 135 Cash at 1 July 64 484 64 484 48 349 0 Cash at 30 June 71 184 67 910 64 484 Payments Receipts Cash from Net Govt investing/ financing

Operating activities in the statement of cash flows vary with the results shown on the statement of financial performance in relation to accrual accounting for both revenues and expenses. In addition, receipts and payments in respect of the goods and services tax are included in the actual results on a gross basis but on a net basis in the budget.

Actual payments for operating activities ($33 million higher than budget) include GST payments of $28 million and restructuring payments of $5 million both of which were unbudgeted. Receipts ($27 million higher than budget) include $28 million of GST receipts and input tax credits.

Payments for investing activities were lower than budgeted mainly due to timing delays in expenditure on Brukunga mine rehabilitation, power stations, and remedial work on the pipelines at the South Australia Aquatic Sciences Centre at West Beach.

PIRSA ANNUAL REPORT 2003–2004 94 INDEPENDENT AUDITOR REPORT

Appendix 8 contains the 2003–2004 Independent Auditor Report of the Auditor-General which includes a qualification to the financial report in regard to two matters. These matters relate to Cash at Bank and a Complete and Accurate General Ledger.

Cash at Bank

The cash at bank qualification relates to reconciliation issues in the PIRSA bank account dating back over the last five years. In June 2004 after protracted negotiations and validations of figures with the Department of Treasury and Finance, transactions were effected to establish for the first time, an accurate balance in the PIRSA Westpac bank account based on information from history. Consequently, it has been only in the last 3 months that PIRSA has been able to prepare a year to date reconciliation between the bank account and the general ledger containing the financial information of the agency.

In performing these new reconciliations, there are a number of outstanding reconciliation differences that are material in total and will require substantial work to rectify.

Complete and Accurate General Ledger

The Audit report states that PIRSA has not maintained a complete and accurate general ledger on an accrual basis. One specific matter raised in the report is the opening balance of accumulated surpluses. This matter is believed to be related to the matters raised in regard to cash at bank.

In order to resolve these matters a project team has been formed with a target completion date of 28 February 2005. This involves reconstructing bank reconciliations and financial statements from 1999 to identify and resolve all outstanding differences.

In addition, a review of finance operations will be conducted in October 2004 by an independent accounting firm to report on and recommend any further actions that may need to be undertaken in regard to the matters raised by the Auditor-General.

Property, plant and equipment assets

PIRSA owns and manages property, plant and equipment assets valued at $106 million, including a number of large research centres across the State. PIRSA has an ongoing need for investment in building, equipment and information technology to produce its agreed service delivery outcomes. Figure 7 illustrates that the agency’s largest investment is in property assets at 78%.

In 2003–2004 the total value of property, plant and equipment decreased by 3.3% from $110 million in 2002–2003. The decrease of $3.7 million is mainly attributable to the disposal of properties at the Cleve District Office and at Naracoorte and depreciation.

PIRSA ANNUAL REPORT 2003–2004 95 Figure 7 Property, Plant and Equipment as at 30 June 2004

Land $17.4 million

Buildings $66 million Land Plant and 16% Plant and equipment $23.0 million equipment 22%

Buildings 62%

Major projects

Biosecurity The Biosecurity Fund provides financial support in the event of outbreaks of fruit fly, plague locusts and other biological threats, which come within the responsibility of PIRSA. As a result, PIRSA has a core role in responding to a wide-range of incidents resulting from pest and disease incursions which threaten production systems and market access. The cost of implementing biosecurity incident response activities is minimal compared to the potential financial losses that could be incurred by the State’s plant and animal industries in the event of unchecked biosecurity outbreaks.

Expenditure relating to biosecurity incidents during 2003–2004 was less than in 2002–2003, and was due principally to a reduction in fruit fly outbreaks compared to the previous year and a reduction in expenditure for State Ovine Johnes Disease (OJD) arising from a reduction in destocking activity and in the increased use of vaccinations as part of OJD control.

Notwithstanding this, there have been major expenditures during 2003–2004 including State Ovine Johnes Disease, Fruit Fly, and scientific investigation and monitoring associated with Caulerpa taxifolia.

Table 7 shows a comparison in biosecurity expenditures over the last four financial years.

Table 7 Biosecurity Expenditure

2000–2001 2001–2002 2002–2003 2003–2004 $'000 $'000 $'000 $'000

Fruit fly 3 123 3 039 1 592 1 129 Ovine Johnes Disease 2 603 2 987 2 142 657 Branched Broomrape* 1 236 2 100 151 0 Grasshopper/locust 6 627 40 12 18 Caulerpa taxifolia 0 0 1 090 185 Other 292 622 733 509 13 881 8 788 5 720 2 498 *Responsibility transferred to Department of Water, Land and Biodiversity Conservation.

PIRSA ANNUAL REPORT 2003–2004 96 Farmbis II The Farm Business Improvement Program (Farmbis II) commenced on 1 July 2001 and is a jointly funded program between the Commonwealth and State Governments. The aim of the program is to increase profitability, competitiveness and sustainability of farm business enterprises through farmer participation in business management training. During 2003–2004 the program incurred expenditure of $2.9 million in grants, coordination, communication, management and administration costs. The Farmbis ll program has been extended and will conclude on 31 December 2004.

TEISA2020 (Targeted Exploration Initiative South Australia) During 2003–2004 expendit ure of $1.33 million was incurred as part of the TEISA2020 program. The program assists the provision of low cost pre-competitive exploration data to accelerate the discovery of new mineral and petroleum resources throughout South Australia. TEISA2020 continues the approach adopted by its precursors, the TEISA four year initiative 1998–2002 and the South Australian Exploration Initiative (SAEI) in 1992–1996. The geoscientific data accumulated during these government sponsored initiatives continues to influence exploration activity in South Australia as indicated by an increase in mineral exploration expenditure of approximately $40 million for 2003 from $36.9 million for calendar year 2002. In 2003–2004 TEISA funding contributed to the conversion of exploration data to digital formats now required by industry, provision of new data on regolith cover and petroleum research to reduce critical exploration uncertainties.

Contracting Out Arrangements

In 2003–2004, PIRSA let a contract to The Gribbles Group Ltd for the provision of a veterinary diagnostic service to the livestock (including apiary and aquatic) industries which provides data on the incidence of and control of diseases and residues in South Australia. This data is then used to minimise the incidence of diseases or residues in livestock or livestock products.

In 1996 Cabinet approved the outsourcing of the state veterinary laboratory (VETLAB). In 2003, following the expiry of the original contract on 30 June 2002, Cabinet approved for veterinary diagnostic services to continue to be provided in this manner based on the following: • the on-going requirement for on-site services • the importance of consolidated and continuous services • the expense and escalating recruitment and human resource management difficulties associated with re-establishment of a State-operated facility.

The contract with The Gribbles Group Ltd is for a five year term with a total value of $4.3 million (or $860,000 per annum).

Account payment performance Treasurer's Instruction 11 (Public Finance and Audit Act 1987) requires all undisputed accounts to be paid within 30 days of the date of the invoice or claim unless there is a discount or a written agreement between the agency and the creditor. As indicated in Table 8, PIRSA paid 82 per cent of all invoices in 2003–2004 on time. This compares with 83 per cent of all invoices paid on time in 2002–2003. The agency is monitoring performance on a monthly basis and continues to target areas and suppliers with a high level of invoices paid over 30 days through increased awareness and education.

Table 8 Account payment performance

Particulars Accounts paid Amount paid Number % $’000 % Paid by the due date 47 242 82 411 722 94 Paid within 30 days or less from the due date 7 296 13 17 017 4 Paid more than 30 days from the due date 3 091 5 8 797 2

PIRSA ANNUAL REPORT 2003–2004 97 Contracting out arrangements

Fraud detection Formal and structured risk management processes have been adopted across key areas of the Department. The objective of these activities has been to integrate risk management into the normal business of the Department. To facilitate these activities, comprehensive risk reviews have been undertaken and the results documented.

During 2003-2004, there was one instance of suspected fraud and the matter is currently being referred for further investigation.

PIRSA ANNUAL REPORT 2003–2004 98 Appendixes

APPENDIX 1 PIRSA MINISTERIAL RESPONSIBILITIES Legislation The principal legislation, for which PIRSA has administrative responsibility for, through the Minister for Agriculture, Food and Fisheries, Minister for Mineral Resources Development, Minister for Energy and Minister for Science and Information Economy, is listed below. Many of these Acts are supported by Regulations, Notices and Indentures or Directions in some instances.

AGRICULTURE, FOOD AND FISHERIES AGRICULTURE Agricultural and Veterinary Chemicals (South Australia) Act 1994 Agricultural Chemicals Act 1955 Barley Marketing Act 1993 Barley Exporting Bill 2004 Biological Control Act 1986 Branding of Pigs Act 1964 Brands Act 1933 Chicken Meat Industry Act 2003 Chicken Meat Industry (Arbitration) Amendment Bill 2004 Citrus Industry Act 1991 Dairy Industry Act 1992 Dried Fruits Act 1993 Fruit and Plant Protection Act 1992 Genetically Modified Crops Management Ac t 2004 Impounding Act 1920 Livestock Act 1997 Meat Hygiene Act 1994 Meat Hygiene (Miscellaneous Amendments) Bill 2004 Noxious Insects Act 1934 Phylloxera and Grape Industry Act 1995 Poultry Meat Industry Act 1969 Primary Industry Funding Schemes Act 1998 South Australian Meat Corporation Act 1936 South Australian Meat Corporation (Sale of Assets) Act 1996 Stock Foods Act 1941 Stock Medicines Act 1939 Veterinary Surgeons Act 1985 Veterinary Practices Act 2003 Wheat Marketing Act 1989 Wine Grapes Industry Act 1991

FISHERIES Fisheries Act 1982

AQUACULTURE Aquaculture Act 2001

MINERALS AND ENERGY MINERAL RESOURCES Broken Hill Proprietary Company’s Indenture Act 1937

PIRSA ANNUAL REPORT 2003–2004 99 Broken Hill Proprietary Company’s Steel Works Indenture Act 1958 Mines and Works Inspection Act 1920 Mining Act 1971 Offshore Minerals Act 2000 Opal Mining Act 1995 Roxby Downs (Indenture Ratification) Act 1982

PETROLEUM Cooper Basin (Ratification) Act 1975 Petroleum Act 2000 Petroleum (Submerged Lands) Act 1982 Santos Limited (Regulation of Shareholdings) Act 1989

ENERGY Gas Pipelines Access (South Australia) Act 1997 Natural Gas (Interim Supply) Act 1985 Natural Gas Pipelines Access Act 1995 Petroleum Products Subsidy Act 1965 Stony Point (Liquids Project) Ratification Act 1981 Office of the Technical Regulator Electricity Act 1996 (parts of this Act are administered by the Treasurer) Electrical Products Act 2000 Gas Act 1997 Natural Gas Authority of South Australia Natural Gas Authority Act 1967

PIRSA CORPORATE Primary Producers Emergency Assistance Act 1967 Rural Industry Adjustment and Development Act 1985

OTHER ACTS In addition, PIRSA has limited administrative functions under the following Acts that are committed to other ministers.

Electricity Act 1996 Fisheries Act 1995 (Vic.) Fisheries Management Act 1994 (NSW) Fisheries Management Act 1991 (Cwlth) Fish Resources Management Act 1994 (WA) Harbours and Navigation Act 1993 Historic Shipwrecks Act 1976 (Cwlth) Historic Shipwrecks Act 1981 National Parks and Wildlife Act 1972 Petroleum Products Regulation Act 1995 Petroleum (Submerged Lands) Act 1967 (Cwlth)

Legislative changes Legislative changes are summarised below and discussed in detail under ‘Performance review, strategic priority 4’.

ACTS REPEALED Dried Fruits Act 1993 Fisheries (Gulf St Vincent Prawn Rationalisation) Act 1987

PIRSA ANNUAL REPORT 2003–2004 100 2.1 ACTS WHOSE REPEAL RECEIVED ASSENT FROM PARLIAMENT DURING 2003–2004 BUT WERE NOT PROCLAIMED BY 30 JUNE 2004: Branding of Pigs Act 1964 Brands Act 1933 Poultry Meat Industry Act 1969 Veterinary Surgeons Act 1985

3. ACTS PASSED, PROCLAIMED OR AMENDED DURING 2003–2004 Chicken Meat Industry Act 2003 Dairy Industry Act 1992 Genetically Modified Crops Management Act 2004 Livestock Act 1997 Veterinary Practices Act 2003

3.1 BILLS INTRODUCED INTO PARLIAMENT IN 2003–2004 BUT NOT PASSED Barley Exporting Bill 2004 (introduced into Parliament 30/6/04) Chicken Meat Industry (Arbitration) Amendment Bill 2004 (introduced into Parliament 30/6/04) Meat Hygiene (Miscellaneous) Bill 2004

Reviews of legislation PIRSA continued to review many of the Acts, particularly with respect to National Competition Policy (NCP) principles. NCP reviews were completed for the Barley Marketing Act, Meat Hygiene Act, Fisheries Act, Mining Act, Opal Mining Act and Mines and Works Inspection Act.

Administered items PIRSA administers but does not control the following funds on behalf of the Commonwealth Government, the Minister for Agriculture, Food and Fisheries, Minister for Mineral Resources Development, Minister for Energy and Minister for Science and Information Economy. These funds are not recorded in the agency’s operating statement or statement of financial position as the agency does not have any discretion to deploy the resources for achievement of its own objectives.

Adelaide Hills Wine Industry Fund Apiary Industry Fund Cattle Industry Fund Energy Management Task Force Fisheries Research & Development Fund Grains Industry Levy Fund Gulf St. Vincent Prawn Fishery Levy Langhorne Creek Wine Industry Fund Marine Scalefish Industry Fund McLaren Vale Wine Industry Fund Natural Gas Authority Photovoltaic Rebate Program Pig Industry Fund Renewable Remote Power Generation Program Riverland Wine Industry Fund SA Water Corporation (community service obligation payment) Sheep Industry Fund Agricultural Research Services Aquaculture Lease Rehabilitation Fund Aquaculture Resource Management Fund Dairy Industry Fund

PIRSA ANNUAL REPORT 2003–2004 101 Deer Industry Fund Egg Industry Deregulation Fund Extractive Areas Rehabilitation Fund Minister’s salary and allowances Samcor Fund administered

Authorities STATUTORY Statutory authorities associated with primary industries and resources and regional development and within the ministers’ areas of responsibility are listed below. PIRSA provides relevant advice and assistance to these. Asterisks indicate those bodies (agencies) which have their own staff and other resources.

• Alpaca Advisory Group • Apiary Advisory Group* (ended November 2003) • Aquaculture Advisory Committee • Aquaculture Tenure Allocation Board • Board of Examiners for Mine Managers • Cattle Advisory Group • Citrus Board of South Australia* • Dairy Authority of South Australia* • Deer Advisory Group • Fishery management committees (Abalone, Blue Crab, Inland Waters, Marine Scalefish, Northern Zone Rock Lobster, Southern Zone Rock Lobster, Spencer Gulf, West Coast and Gulf St Vincent Prawn) • Goat Advisory Group • Horse Industry Advisory Group • Meat Hygiene Advisory Council • Phylloxera and Grape Industry Board* • Pig Advisory Group • Sheep Advisory Group • Veterinary Surgeons Board*

OTHER There are many non-statutory authorities on which PIRSA is represented. Significant ones are discussed under ‘Performance review’ (e.g. Premier’s Food Council, industry development boards and the Advisory Board of Agriculture).

PIRSA ANNUAL REPORT 2003–2004 102 APPENDIX 2 OCCUPATIONAL, HEALTH, SAFETY AND INJURY MANAGEMENT STATISTICS 2003–2004 2002–2003 2001–2002 1 OHS legislative requirements

Number of notifiable occurrences pursuant to OHS&W Regulations 011 Division 6.6 Number of notifiable injuries pursuant to OHS&W Regulations 200 Division 6.6 Number of notices served pursuant to OHS&W Act s35, s39 and s40 0 7 0

2 Injury Management legislative requirements

Total number of employees who participated in the rehabilitation 18 20 11 program Total number of employees rehabilit ated and reassigned to alternative 032 duties Total number of employees rehabilitated back to their original work 9 12 6

3 WorkCover Action Limits

Number of open claims as at 30 June 63 63 58

Percentage of workers compensation expenditure over gross annual 0.90% 0.79% 1.00% remuneration 4 Number of injuries

Number of new workers compensation claims in the financial year 56 58 66

Number of fatalities, lost time (F) 0 0 0 injuries, medical treatment only (MTO) 33 30 46 (LTI) 23 28 20 Total number of whole working days lost 688 n.a. n.a.

5 Cost of workers compensation

Cost of new claims for financial year $281,582 $135,201 $135,243

Cost of all claims excluding lump sum payments $256,188 $256,105 $352,712

Amount paid for lump sum s42 $261,524 $163,300 $161,160 payments s43 $104,738 $95,853 $182,006 (s42, s43, s44) s44 nil nil nil Total amount recovered from external sources (s54) nil $55,845 $7,952

Budget allocation for workers compensation 429,156 $362,490 $444,701

6 Trends

Injury frequency rate for new lost-time injury/disease for each million 10.23 12.56 8.28 hours worked Most frequent cause (mechanism) of injury Body Stressing Muscular stress - Muscular stress lifting, carrying while handling or putting down objects objects Most expensive cause (mechanism) of injury Body Stressing Muscular stress Muscular stress while lifting, while lifting, carrying or carrying or putting down putting down objects objects 7 Meeting the organisation's strategic targets

Refer to narrative Refer to Refer to narrative narrative

PIRSA ANNUAL REPORT 2003–2004 103 APPENDIX 3 CONSULTANCIES In 2003–2004, 32 consultancies were engaged by PIRSA for a total expenditure of $444 166.

CONSULTANT PURPOSE VALUE CONSULTANCY FEES BELOW $10 000 A total of 16 consultancie s were engaged. Subtotal $36 176

CONSULTANCY FEES BETWEEN $10 000 AND $50 000 EconSearch Pty Ltd Economic impact of Drought Water Restrictions $45 455 The Allen Consulting Group Provide program management and expert economic $41 938 advice to NGPAC Precise International P/L To undertake a quality review of the Tenement $40 817 Management System Wendy Davidson Enterprises State Food Plan Evaluation Project $35 123 Connell Wagner Professional engineering advice $22 000 GEI Consulting Engineers Preliminary site assessment/modelling of energy $21 230 delivery Twin Rocks Enterprises Market Development Finfish & Shellfish $20 000 EconSearch Pty Ltd Economic impact analysis of aquaculture activities $20 000 within SA Standards Australia Aust Quality Control – Business Excellence $19 812 Review Valcorp Australia P/L Valuation of PIRSA owned land and buildings and $17 100 core library samples for preparation of 2002-2003 financial statements Marilyn McCarthy & Associates To provide advice on staff, position descriptions $15 127 etc Extractive Industries Assoc SA Golden Grove extractive review $14 005 Allen Arthur Robinson & Provide legal advice on the National Gas access $12 121 Hedderwicks code to NGPAC CSIRO Development of Web Access Generic tools to $12 000 access Geoscientific Data nationally McPhee Andrewartha Employee Counselling services $11 364 Subtotal $348 092

CONSULTANCY FEES OVER $50 000 TCG Provision of specialised R&D commercialisation $59 898 services Subtotal $59 898 Total $444 166

PIRSA ANNUAL REPORT 2003–2004 104 APPENDIX 4 OVERSEAS TRAVEL Overseas travel by PIRSA employees for the period 1 July 2003 to 30 June 2004 is summarised below. In 2003–2004, 56 overseas visits were made by PIRSA employees, for a total agency cost of $277,615.

PIRSA’s financial support for overseas visits varied from full payment (salary plus on-costs, fares, necessary living expenses, registration fees etc.) to nil. In the latter instance there are generally two categories. All costs, including salary, are either externally funded or the monies are recouped through charging consultancy fees.

EMPLOYEES DESTINATION PURPOSE AGENCY COSTa, b FOOD SOUTH AUSTRALIA 1 Singapore, Followed up on recent, and planned for future, trade activities with Dairy Farm $7 838 Malaysia, Indonesia International/Cold Storage and met with Singapore based agents of participating SA Food and Beverage companies. 1 Singapore, Finalised preparations and attended official launch of the Amazing Australia $5 573 Malaysia platform in Tanglin Marketplace and met with senior executives and buyers in the Malaysia markets. 1 Singapore, Thailand Undertook a range of in-market activities in relation to NTUC Fairprice Australian $5 068 Pavilions project. Subtotal $18 479

AGRICULTURAL, FOOD AND FISHERIES Animal Health 1 Chile Attended the triennial conference of ISVEE (International Symposium on $5 756 Veterinary Epidemiology and Economics). 1 Indonesia Led a team of state veterinary epidemiologists to assess and develop a $6 319 comprehensive surveillance program to aid in controlling the epidemic of highly pathogenic avian influenza in Indonesia. Aquaculture 1 Ireland, USA Visited US shellfish growing areas and their QA programmes and attended 5 th $3 670 International Conference on Molluscan Shellfish Safety in Galway, Ireland. Fisheries 1 South Africa To ensure the illegal fishing vessel Viarsa was brought back to Aust to enable an $1 600 investigation of breaches of the Commonwealth Fisheries Management Act to be conducted. Industry Development 1 UK, Netherlands Facilitated and guided the Value Adding Potato Tour. $3 072 Subtotal $20 417

RURAL SOLUTIONS SA 1 Spain, Netherlands Study tour of Spanish A1 and attended 5 th International Conference on Boar $2 747 Semen Preservation. 1 UK, Netherlands Participated in the Value Adding Potato Tour and sourced information to guide $9 145 further development of project work in this area. 1 Brazil Delivered a lecture at the 2 nd International Symposium on Goat and Sheep for $184 Meat Production. 1 Spain Represented PIRSA as part of an Australian Delegation attending the private $7 747 sector conference in conjunction with the United Nations Iraq Donors Conference. 1 UK, Italy, Hungary Attended 8 th International Symposium on Integrating Canopy, Rootstocks and Nil Environmental Physiology in Orchard Systems; undertook short study tour looking at recent developments in high -density orchard production systems and research. 1 USA Attended the 2nd Rebuilding Iraq Conference in Washington. $8 591 Subtotal $28 414 a Includes salary component. b Some overseas travel incurs no agency cost (see notes at start of table).

PIRSA ANNUAL REPORT 2003–2004 105 EMPLOYEES DESTINATION PURPOSE AGENCY COSTa, b SOUTH AUSTRALIAN RESEARCH AND DEVELOPMENT INSTITUTE (SARDI) 1 USA Attended the BIO2004 Conference and Exhibition in San Francisco. $13 000 Aquatic Sciences 1 Brazil Invited to attend as key presenter at a workshop and panel member for a $7 454 roundtable at the International Coastal Symposium; visited with research colleagues at the Uni of Sao Paulo. 1 China Commercial promotion of aquaculture products, technologies and training $2 806 produced or developed in South Australia. Crops 3 Denmark, Attended the 11 th International Rapeseed Congress in Copenhagen, Denmark and $20 485 Germany, UK visited the German company Raps GbR’s overseas facility to train them in their requirements and methodologies. 1 England, UK Attended and presented a paper from the SARDI Integrated Snail Management Nil Project at the “Slugs and Snails – Agricultural, Veterinary and Environmental Perspectives” Symposium in Canterbury, Kent; visited numerous researchers and consultants. 1 Thailand Participated as presenter at a Workshop in Thailand concerning the production of $1 016 national collections of plant pathogens. 1 UK, Switzerland, Attended and presented a paper at the ‘Slug and Snails: Agricultural, Veterinary Nil Germany and Environmental Perspectives’ Symposium in the UK; visited with several European research groups in Switzerland and Germany. 1 India Attended the 6th Plant Growth Promoting Rhizobacteria (PGPR) Workshop. Nil 1 Mexico Assessed and discussed wheat germplasm development project set up in $1 800 collaboration with Richard Trethowan, Principal Wheat Breeder, CIMMYT, Mexico. 1 Brazil Delivered a lecture to the Brazilian Oat Meeting on “Doubled haploid breeding: Nil the challenge for oats”. 1 China Invited to speak at and organise symposium for the XVth International Plant Nil Protection Congress “ Biological control of vegetable crops”. 1 USA Attended 5 th Meeting of the Working Group on Fruit Flies of the Western $2 510 Hemisphere held in Florida; visited the US Dept of Agriculture’s Subtropical Horticulture Research Station; visited one of the world’s leading sterile fly release facilities in Tampa; visited leading researcher in the area of Ginger Root Oil and fruit fly mating in Hawaii. 2 France Participated in the “Legumes in agriculture and the impact of genomics” $4 710 conference which is a combination of the “5th European Conference on Grain Legumes” and the “2nd International Conference on Legume Genomics and Genetics”; gave an oral presentation of the results of SARDI research on Botrytis Grey Mould of lentils; visited the Institut National de la Recherche Agronomique at Rennes to continue development of predictive model for blackspot of peas. 1 France Attended the 4th Joint INRA-RRI Gut Microbiology Symposium, and visited Nil INRA, Unit for Ecology & Physiology of the Digestive Tract. 1 China Invited to represent Australia, as one of two oat experts, at the International Oats $1 389 Development Strategy Workshop and participated in evaluating potential expansion of oat production and its impact on agricultural ecology in the Baicheng district. Horticulture 1 USA, Denmark, Attended the 11 th International Rapeseed Congress in Copenhagen, Denmark and $3 786 France, Spain visited collaborating scientists in France, USA and Spain. 2 Canada, USA Attended the Prunus Breeders Conference in Summerland BC, Canada and visited $6 487 plant breeders in California, USA. 1 USA Attended and orally presented a paper at the 4 th International Symposium on $3 547 Irrigation of Horticultural Crops held at the University of California; met with key industry personnel at California State University and Kearney Agricultural Centre to exchange technical and scientific information re vine performance and irrigation strategy; met with Dr Terry Pritchard, Water Management Specialist for the University of California, Dept of Land Air and Water Resources. 1 France, UK Attended The Eucarpia (European Assoc of Plant Breeders) Conference held once $2 600 every 4 years. 1 Italy Attended the 14 th Meeting of the International Council for the Study of Virus and $2 546 Virus-Like Diseases of Grapevine. 1 Morocco, USA Attended International Citrus Conference (ICC) in Morocco; held on-site $9 906 discussions with leading citrus scientists at the University of California and examined field experiments at Lindcove Field Station.

PIRSA ANNUAL REPORT 2003–2004 106 EMPLOYEES DESTINATION PURPOSE AGENCY COSTa, b 1 UK, Japan Awarded a Churchill Trust Fellowship to study the genetic background of sweet $8 080 cherry. 1 Germany, Italy, Invited tour of Viticultural Regions to improve SARDI’s knowledge of new $3 030 France fungicide chemistries, management of pesticides and residues, resistance management and application techniques. 1 Singapore, USA Further developed international commercial collaboration opportunities for $14 398 SARDI with the development and delivery of a perishable Food Handling Logistics Training Course in Singapore; explored opportunities for collaborative evaluation and breeding program with Burchell’s Nursery in California, USA; attended BIO2004 Conference in San Francisco. 1 USA, UK, France Attended and presented paper on ‘Primary bud necrosis in Australian vineyards’ at $3 518 the 7 th International Symposium on Grapevine Physiology and Biotechnology in Davis, California; attended 55th Annual meeting of the American Society of Enology and Viticulture in San Diego, California; met with various Professors in France. Livestock Systems 4 Papua New Guinea Undertook ACIAR funded project: established live bird feed testing facility, Nil trained PNG staff to operate and maintain the facility, conducted research and supervised extension staff activities; evaluated local feeds and formulate rations; conducted on-station feeding trials; demonstrated use of appropriate rations on- farm. 1 Norway Presented an invited paper at the 14 th European Symposium on Poultry Nutrition $1 431 held in Lillehammer, Norway, and also toured the Centre for Feed Technology at the Agricultural University of Norway. 1 USA One-day visit with Livestock Entomology group at Uni of Arkansas for $1 095 discussions on fly control on poultry farms; three days at Uni of Minnesota to work on identification of parasitic wasps and worked on a paper ‘Efficient sampling systems for assessing louse burdens in experimental studies with sheep lice’. 1 France Invited as a technical expert to contribute to the formulation of OIE Standards on $1 250 Animal Welfare. 1 Japan, Korea, As the Principal Investigator on two separate FRDC and Aquafin/CRC funded $1 381 China, Hong Kong applications, attended meetings with senior Asian regulatory agency (CODEX/FAO committee members) staff and researchers involved in residue testing, including dioxin testing of imported SA fish and pork. 1 USA Attended International Embryo Transfer Society (IETS) Conference 2004 and $1 792 visited with Professors from Dept of Animal Biology, Colorado State University. 1 Solomon Islands Undertook an ACIAR funded visit to the Solomon Islands to determine the $1 762 feasibility of establishing a project to improve the use of local feed resources in village poultry and pig rations. 1 Japan, Taiwan, To gain a deeper technical understanding of the justifications for cross-carcase $1 671 Thailand, Hong composite sampling approach used for tuna in Japan and obtain current market Kong access information for seafood in export markets. 1 USA, Canada Attended the BIO2004 International Biotechnology Conference and Exhibition in $16 430 San Francisco and furthered negotiations with Semex Alliance, Canada in relation to future collaborative opportunities in Dairy Genetics & R&D. Sustainable Systems 4 China Attended planning meeting and inspected field trials as part of ACIAR $6 085 international project “Lucerne adapted to adverse environments in China and Australia”. 1 South Africa Workshop to develop collaborative projects with Africa. $800 1 Canary Island, Collected seeds of a wide range of pasture plants as part of an international plant $6 000 Spain germplasm collection mission. 1 USA Participated in international workshop “Decision Support Systems for Seasonal to $1 950 Interannular Climate Forecasting” in California. Subtotal $154 715

PIRSA ANNUAL REPORT 2003–2004 107 EMPLOYEES DESTINATION PURPOSE AGENCY COSTa, b MINERALS AND ENERGY Mineral Resources 1 Peru, Chile Attended course covering major ore deposit styles of South America. $6 716 1 Canada Attendance and promotional display at Prospectors and Developers Assoc of $11 183 Canada meeting and various additional promotional meetings/presentations to promote mineral exploration in SA. 1 Canada Secondment to Inco Ltd for work at Voisey’s Bay Nickel Mine. $36 095 Subtotal $53 994

RISK MANAGEMENT AND AUDIT 1 USA Attended RIMS 2004 Conference as a prize for winning ARIMA Risk Manager of $1 632 the Year for 2003.

Subtotal $1 632 TOTAL $277 615

PIRSA ANNUAL REPORT 2003–2004 108 APPENDIX 5 FREEDOM OF INFORMATION Information statement The following information is published pursuant to Section 9 of the Freedom of Information Act 1991 (“the Act”).

Freedom of Information The Act extends as far as possible the rights of the public to obtain access to documents held by the Government, and to ensure that records held by government concerning the personal affairs of members of the public are not incomplete, incorrect, out of date or misleading.

The Act encourages disclosure of information to the public, subject to restrictions within the Act to protect legitimate agency, public and private interests.

Agency’s structure and functions A number of changes to the structure and operation of PIRSA came into effect from 8 July 2004. From that date PIRSA comprises four industry and four enabling divisions, namely:

INDUSTRY DIVISIONS • Agriculture and Wine • Minerals and Energy • Aquaculture • Fisheries

ENABLING DIVISIONS • South Australian Research and Development Institute • Rural Solutions SA • Food SA • Commercial Projects

PIRSA’s corporate support requirements are provided through the Corporate Division.

Ways in which the functions of the agency affect members of the public PIRSA has a prime role in promoting economic growth with a particular emphasis on exports for the key industry sectors of food, wine, fisheries, aquaculture, fibre, livestock and grain. The agency also has a major indirect effect on the general public by creating jobs and wealth through advice, encouragement and regulation of various primary industries and resources.

Arrangements that enable the public to participate in the formulation of the agency’s policies PIRSA has a diverse range of industry boards and committees upon which there is external participation.

The agency’s policy documents PIRSA’s policy documents can be broadly defined into the following areas: Financial • Human Resources − OHS&W − Work related policies • Information Technology • Procurement • Risk Management

PIRSA ANNUAL REPORT 2003–2004 109 The following documents are also held within the agency: Corporate files containing correspondence, memoranda, minutes, etc, regarding all aspects of the agency’s operations Procedures and guidelines prescribing the way various activities are to be performed Personnel files relating to PIRSA employees Accounting and financial records relating to the administration of the Department Contracts

Documents that are available for purchase from the agency The following documents are made available for purchase from the agency, by contacting Customer Services, Ground Floor, 101 Grenfell Street, Adelaide: • Publications • Scientific papers • Technical reports • Conference and seminar proceedings • Books and theses • Extension and technical publications • Popular articles • Research reports

Documents that are available from the agency free of charge The following documents are made available free of charge from the agency and are available by contacting the individual divisions or Customer Services: • Brochures • Pamphlets • Posters • Information packs • Policy documents • Administrative instructions • Internet − downloadable education resources − community group presentations − media releases − Prime Time, PIRSA’s quarterly newsletter.

Accessing documents As a general rule, the nearest office of the agency (as listed in the Adelaide and various country White Pages) can assist with applying for documents.

Making a freedom of information application Application forms to request information under the Freedom of Information Act, or to request amendment of personal records, can be obtained by contacting the Freedom of Information Coordinator on the address as listed below, or by accessing an application form via the State Records website http://www.archives.sa.gov.au/foi/forms.html

An application for access lodged under the Freedom of Information Act costs $23.10, payable to the agency, and processing charges may also be incurred. In certain cases, a reduction of fees and charges may apply. An application for amendment of personal records is free of charge.

All Freedom of Information enquiries and requests should be addressed to: Freedom of Information Co-ordinator, Primary Industries and Resources South Australia, GPO Box 1671, ADELAIDE SA 5001

PIRSA ANNUAL REPORT 2003–2004 110 APPENDIX 6 STATEMENT OF ABORIGINAL RECONCILIATION PIRSA acknowledges Aboriginal Reconciliation under its ‘Strategic Directions’ objectives of building community capacity and effective partnerships with indigenous communities. PIRSA Executive has endorsed the use of Welcome/Acknowledgement Statements at major events.

A Reconciliation network has been established within PIRSA, and an Aboriginal Employment Strategy is being developed.

In July 2003, PIRSA led an Anangu Pitjantjatjara Yankunytjatjara (APY) Executive tour to Northern Territory mining sites, to demonstrate empathetic and sustainable mineral resources developments, to which the APY Council responded by performing ‘Manta Inma’ (the Earth Corroboree) to non- indigenous government and resource industry leaders.

PIRSA actively supports the economic development of Aboriginal communities, through a Rural Solutions SA Indigenous Communities Program to develop sustainable community enterprises based on indigenous cultures (eg., horticultural development of indigenous species at Murray Bridge), through granting a shellfish aquaculture lease and offering technical assistance to the Port Lincoln Aborigina l Community Council, through facilitating agreement on the granting of mineral exploration licences with employment and investment conditions, and through assisting the start-up of an Aboriginal enterprise at Whyalla to service the mining industry.

PIRSA has located an APY Mining Liaison Officer at Umuwa to ensure that all mineral and petroleum exploratory and development work has the agreement of the APY Council and is culturally sensitive, and has engaged two Aboriginal field officers, selected by the traditional owners, to advise of culturally sensitive sites and assist with sampling during agreed geological mapping of the APY Lands.

PIRSA is a funding partner for the Tjukurpa Anangu Pitjantjatjara Yankunytjatjara Law & Culture Aboriginal Corporation (TAPY). TAPY will fund the Tjilipi’s (elder men and Traditional Owners) to provide cultural training for Anangu youth, cultural awareness programs for non-Anangu people working on the APY Lands, and to develop sacred site avoidance and protection programs.

PIRSA sponsored two Wiltja scholarships for Pitjantjatjara students to participate in a ten-week component of the Geoscience Course for Mineral Exploration Field Technicians at Onkaparinga TAFE, integrated into their Year 12 studies, in late 2003. PIRSA also sponsored a table for Anangu students from Wiltja to attend the 2004 Reconciliation Youth Ambassadors Ball. PIRSA is collaborating to develop a TAFE-Wiltja traineeship course specifically for remote Indigenous South Australian youth to gain training in Drilling, Spatial Information Systems and Land and Environmental Management for employment in resources development projects.

PIRSA ANNUAL REPORT 2003–2004 111 APPENDIX 7 CONTACTS Primary Industries and Resources South Australia Level 17, Grenfell Centre 25 Grenfell St, Adelaide GPO Box 1671, Adelaide SA 5001 Phone (08) 8226 0222 Fax (08) 8226 0476 Website http://www.pir.sa.gov.au

PIRSA has around 50 offices distributed across the state and Adelaide metropolitan area. The 2003–04 list was on PIRSA’s website and in the Adelaide and various country White Pages. At 31 August 2004:

Inquiry Contact Phone, fax and location Minister for Agriculture, Food and Rory McEwen MP phone(08) 8226 0322 Fisheries fax (08) 8226 0316 Level 17, Grenfell Centre, 25 Grenfell Street, Adelaide Minister for Mineral Resources Paul Holloway MLC phone(08) 8303 2500 Development fax (08) 8303 2597 Level 9, Terrace Towers, 178 North Tce, Adelaide Minister for Energy Patrick Conlon MP phone(08) 8226 1210 fax (08) 8226 0844 Level 12, SGIC Building, 211 Victoria Square, Adelaide Minister for Science and Information Trish White MP phone(08) 8303 0940 Economy fax (08) 8303 0950 Level 12, Roma Mitchell House, 136 North Tce, Adelaide Chief Executive Jim Hallion phone(08) 8226 0168 Chief Executive fax (08) 8226 0320 Level 17, Grenfell Centre, 25 Grenfell Street, Adelaide Food South Australia Susan Nelle phone(08) 8226 0585 Executive Director fax (08) 8226 0188 Level 16, Grenfell Centre, 25 Grenfell Street, Adelaide Agriculture and Wine Don Plowman phone(08) 8226 0310 A/Executive Director fax (08) 8463 3363 Level 9, 101 Grenfell Street, Adelaide Fisheries Will Zacharin phone(08) 8226 2318 Executive Director fax (08) 8226 0434 Level 14, Grenfell Centre, 25 Grenfell Street, Adelaide Aquaculture Ian Nightingale phone(08) 8226 0261 Executive Director fax (08) 8226 0330 Level 14, Grenfell Centre, 25 Grenfell Street, Adelaide South Australian Research and Rob Lewis phone(08) 8303 9401 Development Institute (SARDI) Executive Director fax (08) 8303 9403 Plant Research Centre, Gate 2B, Hartley Grove, Urrbrae Minerals and Energy Paul Heithersay phone(08) 8463 4153 Executive Director fax (08) 8463 4155 Level 7, 101 Grenfell Street, Adelaide Rural Solutions SA Locky McLaren phone(08) 8226 0285 Executive Director fax (08) 8463 3336 Level 16, Grenfell Centre, 25 Grenfell Street, Adelaide PIRSA Corporate Geoff Knight phone(08) 8226 3368 Deputy Chief Executive fax (08) 8226 0299 Level 17, Grenfell Centre, 25 Grenfell Street , Adelaide Communications and Marketing Kaye Noske phone(08) 8226 0338 A/General Manager fax (08) 8226 0027 Level 17, Grenfell Centre, 25 Grenfell Street, Adelaide Commercial Projects Leon Byass phone (08) 8226 0004 Executive Director fax (08) 8226 0060 Level 16, Grenfell Centre, 25 Grenfell Street, Adelaide

PIRSA ANNUAL REPORT 2003–2004 112 PIRSA ANNUAL REPORT 2003–2004 113 APPENDIX 8 FINANCIAL STATEMENTS Primary Industries and Resources South Australia

PRIMARY INDUSTRIES AND RESOURCES

STATEMENT OF FINANCIAL PERFORMANCE

For the year ended 30 June 2004

2004 2003 Note $' 000 $' 000 EXPENSES FROM ORDINARY ACTIVITIES Employee expenses 5 88,714 82,518 Supplies and services 6 64,024 63,186 Depreciation and amortisation 7 6,703 5,977 Grants and subsidies 8 22,547 19,336 Borrowing costs 617 870 Net loss from disposal of assets 9 454 522 Other 10 3,007 7,394 Total Expenses from Ordinary Activities 186,066 179,803

REVENUES FROM ORDINARY ACTIVITIES User charges and fees 12 35,643 29,702 Advances and grants 13 30,453 30,124 Interest 14 4,162 4,086 Sale of goods 15 4,037 4,001 Other 16 4,967 8,809 Total Revenues from Ordinary Activities 79,262 76,722

NET COST OF SERVICES FROM ORDINARY ACTIVITIES 106,804 103,081

REVENUES FROM SA GOVERNMENT Revenues Persuant to Appropriation Act 2003 17 107,877 111,299

NET RESULT BEFORE RESTRUCTURING 1,073 8,218

Decrease in Net Assets due to Administrative Restructuring 33 (5,147) (8,505) NET RESULT AFTER RESTRUCTURING (4,074) (287)

NON-OWNER TRANSACTION CHANGES IN EQUITY Increase in the Asset Revaluation Reserve - 18,533 TOTAL CHANGES IN EQUITY INCLUDING THOSE RESULTING FROM TRANSACTIONS WITH STATE GOVERNMENT AS OWNER (4,074) 18,246

PIRSA ANNUAL REPORT 2003–2004 114 PRIMARY INDUSTRIES AND RESOURCES

STATEMENT OF FINANCIAL POSITION

As at 30 June 2004 2004 2003 Note $' 000 $' 000 CURRENT ASSETS Cash 18 67,910 64,484 Receivables 19 5,404 7,514 Inventories 20 3,234 3,532 Other 24 508 140 Total Current Assets 77,056 75,670

NON-CURRENT ASSETS Receivables 19 10,863 13,893 Investments 21 2,657 1,625 Property, plant and equipment 22 106,320 109,985 Intangibles 23 746 390 Capital works in progress 231 - Other 24 53 55 Total Non-Current Assets 120,870 125,948

Total Assets 197,926 201,618

CURRENT LIABILITIES Payables 25 6,231 6,483 Employee Benefits 26 6,854 5,552 Borrowings 27 443 602 Provisions 28 316 383 Other 29 2,444 1,841 Total Current Liabilities 16,288 14,861

NON-CURRENT LIABILITIES Payables 25 1,962 1,726 Employee Benefits 26 17,084 15,029 Borrowings 27 9,094 11,742 Provisions 28 732 1,023 Other 29 1,622 2,019 Total Non-Current Liabilities 30,494 31,539

Total Liabilities 46,782 46,400

NET ASSETS 151,144 155,218

EQUITY Accumulated surplus 122,897 121,725 Asset revaluation reserve 20,286 20,286 Committed grants reserve 5,961 11,207 General reserve 2,000 2,000

TOTAL EQUITY 30 151,144 155,218 Commitments 32 Contingent Assets and Liabilities 34

PIRSA ANNUAL REPORT 2003–2004 115 PRIMARY INDUSTRIES AND RESOURCES

STATEMENT OF CASH FLOWS

for the year ended 30 June 2004 Actual Actual 2004 2003 Note $' 000 $' 000 CASHFLOWS FROM OPERATING ACTIVITIES Cash Outflows Employee expenses (85,201) (79,231) Supplies and services (66,251) (62,629) Grants and subsidies (22,039) (19,336) Restructuring payments (4,724) (8,772) Borrowing costs (688) (971) GST payments on purchases (27,541) (9,841) Other (3,557) (7,429) Total Outflows from Operating Activities (210,001) (188,209) Cash Inflows Receipts from Government 107,877 111,299 Receipts from customers 37,942 37,193 Sales 4,037 4,001 Advances and grants 30,453 30,124 Interest received 4,295 4,083 GST receipts on receivables 24,683 6,048 GST input tax credits 3,528 12,363 Other 3,815 5,717 Total Inflows from Operating Activities 216,630 210,828 Net Inflows from Operating Activities 36 6,629 22,619 CASHFLOWS FROM INVESTING ACTIVITIES Cash Outflows Purchase of property, plant and equipment (3,072) (5,758) Loans advanced to the rural sector and industry (886) (1,609) Investments (952) (610) Payment of lease liability (397) (397) Total Outflows from Investing Activities (5,307) (8,374) Cash Inflows Loans repaid by the rural sector and industry 4,260 5,633 Proceeds from the sale of property, plant and equipment 651 63 Total Inflows from Investing Activities 4,911 5,696 Net Outflows from Investing Activities (396) (2,678) CASHFLOWS FROM FINANCING ACTIVITIES Cash Outflows Principal repaid to Treasury/SAFA (3,007) (4,606) Total Outflows from Financing Activities (3,007) (4,606) Cash Inflows Borrowings from Treasury 200 800 Total Inflows from Financing Activities 200 800 Net Outflows from Financing Activities (2,807) (3,806) NET INCREASE IN CASH HELD 3,426 16,135 CASH AT 1 JULY 64,484 48,349 CASH AT 30 JUNE 18 67,910 64,484

PIRSA ANNUAL REPORT 2003–2004 116 Total 454 617 4,967 4,037 4,162 3,007 6,703 30,453 35,643 22,547 64,024 88,714

Services Facilitation and Fisheries) (Agriculture, Food

186,066

79,262

106,804

103,081 m 11 – Program 12 – Coordination and 617 793 - 16 4,138 5,420 8,688 31,376 496 11,006 927 19,055 7,654 12,321 10,676 15,096 Advice (Agriculture, Food and Fisheries) Services Regulation and Fisheries) State Resource - (Agriculture, Food 833 - - - 8 155 8,037 149 22 439 996 2,346 7,041 5,081 7,362 and Fisheries) (Agriculture, Food - Information Services 3,082 1,115 - 28 5 2,547 5,736 37,605 1,230 1,295 9,431 17,088 28,174 14,910 25,596 Facilitation (926) 1,999 454 3,891 1 20,788 13,027 - 77,122 3,204 3,774 39,706 27,408 37,416 43,208 33,932 Services (Energy) (Energy) and Advice Coordination - 3 87 - 11 18 151 1,211 10,584 5,862 22 1,478 3,484 9,106 1,213 8,477 (Energy) Services Regulation State Resource - (1) - - - - 152 - 283 - 4 152 42 131 238 698 (Energy) Services Information - 2,812 - 3 - - - 1,266 1,543 3,007 - 36 1,040 195 1,931 449 Program Schedule of Revenue and Expenses Resources Facilitation PRIMARY INDUSTRIES AND RESOURCES Development) Services (Mineral - - 12 ------608 223 5 108 608 260 788 Resources Development) Advice (Mineral - 34 - 34 - - - - - 2,279 599 14 864 2,245 802 2,400 Coordination and Resources Regulation Development) State Resource Services (Mineral 61 5 - - - - 61 - 996 - 51 14 142 935 784 684 8,753 8,173 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 $' 000 Resources Information Program 1 – Program 2 – Program 3 – Program 4 – Program 5 – Program 6 – Program 7 – Program 8 – Program 9 – Program 10 – Progra Development) Services (Mineral 5,256 4 25 - 3 - - 5,228 5,135 - 79 68 1,226 (121) 3,758 (574) Total Revenues from Ordinary Activities 281 Other 183 Other 78 Net loss from disposal of assets - Sale of goods 88 Interest - Advances and grants 60 User charges and fees 55 Total Expenses from Ordinary Activities 9,034 Borrowing costs - Grants and subsidies 271 Depreciation and amortisation 105 Supplies and services 2,622 Employee expenses 5,853 REVENUES FROM ORDINARY ACTIVITIES NET COST OF SERVICES FROM ORDINARY ACTIVITIES 30 JUNE 2004 NET COST OF SERVICES FROM ORDINARY ACTIVITIES 30 JUNE 2003 EXPENSES FROM ORDINARY ACTIVITIES PIRSA ANNUAL REPORT 2003–2004 117 PRIMARY INDUSTRIES AND RESOURCES

Notes to the Financial Statements

1. Department Purpose and Funding The Department of Primary Industries and Resources (the Department) is a key government agency focused on sustainable economic development.

The Department delivers specialist services and advice with the potential to increase the prosperity of South Australians, to improve their quality of life and to ensure the sustainable development of the State’s resource base for future generations. The Department delivers these services through locations across South Australia.

The Department’s business is to optimise the return on South Australia’s natural assets by: z fostering the sustainable development of new and existing industries; z facilitatingglobal competitiveness and innovative solutions; z building partnerships between industry, the community and government; z providing information and knowledge to help people make the right decisions for themselves; z regulating to preserve resources for future generations.

The principal sources of funds for the Department’s programs consists of monies appropriated by Parliament, research grants from Industry Research Corporations, licence receipts, Commonwealth grants and trading operations.

2. Summary of Significant Accounting Policies 2.1 Basis of Accounting The financial statements represent the operations of the Department for the year 1 July 2003 to 30 June 2004.

This financial report is a general purpose financial report.

The accounts have been prepared in accordance with applicable Australian Accounting Standards, Statements of Accounting Concepts, Urgent Issues Group Abstracts and Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 .

The accounts have been prepared on the accrual basis of accounting and have been prepared in accordance with the historical cost convention, except for certain assets which are measured and reported at fair value.

The audit of the Department has identified problems with the general ledger operations which the Department is addressing but had not resolved at the time of finalising the financial statements. The problems relate to the accounting treatment of certain items in the general ledger in previous financial years, impacting on closing balances as at 30 June 2004.

2.2 The Reporting Entity The Department produces both Departmental and Administered financial statements. The Department's financial statements include the use of assets, liabilities, revenues and expenses controlled or incurred by the Department. The administered financial statements (included as a schedule to the Department's Financial Statements) include the revenues, expenses, assets and liabilities which the Department administers on behalf of the State Government, the Commonwealth Government, private sector organisations and other State Government Departments.

PIRSA ANNUAL REPORT 2003–2004 118 PRIMARY INDUSTRIES AND RESOURCES

In the process of reporting on the Department as a single unit, all internal transactions have been eliminated in full. The Department is an Administrative Unit created on 23 October 1997 under the Public Sector Management Act 1995.

Trust Funds The Department has received monies in a trustee capacity for trusts as set out in Note 35. As the Department performs only a custodial role in respect of these monies, and because the monies cannot be used for achievement of the Department’s objectives, the revenues and expenditures are only disclosed by way of note and are not brought to account in the Department's financial statements.

2.3 Transferred Functions Several functions of the former Department of Business Manufacturing and Trade (now the Department of Trade and Economic Development) were transferred to the Department on 1 January 2004. These functions were the Reinvest SA function of the administrative unit relating to primary production, the Food Team in the Centre for Innovation, Business and Manufacturing, the support function for the Wine Industry Council and the Energy function of the State Infrastructure Division. The gas related economic function of the Business and Financial Services Group, Minerals and Energy Division and the functions of the South Australian Independent Pricing and Access Regulator (SAIPAR) were transferred to the Essential Services Commission of South Australia (ESCOSA) on 1 July 2003.

In addition, cash held by the Department relating to functions transferred to the Department of Water, Land and Biodiversity Conservation (DWLBC) on 1 May 2002, was transferred on 18 June 2004.

The amounts of assets, liabilities, revenues and expenditures relating to all transferred functions are set out in note 33.

2.4 Comparative Figures Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.

2.5 Rounding All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000).

2.6 Taxation The Department is not subject to income tax. The Department is liable for payroll tax, fringe benefits tax, goods and services tax, emergency services levy, land tax equivalents and local government rate equivalents.

In accordance with the requirements of UIG Abstract 31 ‘Accounting for the Goods and Services Tax (GST)’, revenues, expenses and assets are recognised net of the amount of GST except the amount of GST incurred by the Department as a purchaser that is not recoverable from The Australian Taxation Office is recognised as part of the cost of acquisition of an asset or as part of an item of expense. Receivables and payables are stated with the amount of GST included.

PIRSA ANNUAL REPORT 2003–2004 119 PRIMARY INDUSTRIES AND RESOURCES

2.7 Revenues and Expenses Revenues and Expenses are recognised in the Department’s Statement of Financial Performance when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

Revenues and Expenses have been classified according to their nature in accordance with Accounting Policy Statement 13 'Form and Content of General Purpose Financial Reports' and have not been offset unless required or permitted by accounting standards.

Revenue from fees and charges is derived from the provision of goods and services to other South Australian government agencies and to the public. This revenue is driven by consumer demand.

Advances and grants have been recognised as revenue when received.

The sale of goods is reported as gross sales revenue. The cost of sales is not separately disclosed due to the nature of these operations (sales are mainly for information purposes or occur as a result of by-products of research farms), the immaterial amounts involved and the expenditure allocations are not readily available (eg water consumption expenditure is shared between research activity and sale of goods activity). Revenue from the disposal of non-current assets is recognised when control of the asset has passed to the buyer. Resources received/provided free of charge are recorded as revenue and expenditure in the Statement of Financial Performance at their fair value. Goods and services received free of charge are recorded as such with the revenue being separately disclosed. Resources provided free of charge are recorded at their fair value in the expense line items to which Grants are amounts provided by the Department, to entities for general assistance or for a particular purpose. Grants may be for capital, current or recurrent purposes and the name or category reflects the use of the grant. The grants given are usually subject to terms and conditions set out in the contract, correspondence, or by legislation.

2.8 Revenues from/Payments to SA Government Appropriations for program funding are recognised as revenues when the Department obtains control over the assets. Control over appropriations is normally obtained upon their receipt and are accounted for in accordance with Treasurer’s Instruction 3 'Appropriation'. Where money has been appropriated in the form of borrowings, the Department has recorded a liability to the Treasurer (borrowings) and an asset loan receivable (loans to the rural sector). Amounts appropriated to the Department for transfer to eligible beneficiaries in accordance with legislation or other authoritative requirements are not controlled by the Department and therefore not recognised as revenues, but are reported as revenues in the Administered Financial Statements Schedule. Similarly, the amounts transferred, are not recognised as expenses, but are reported as administered expenses in the Administered Financial Statements Schedule.

2.9 Current and Non-Current items Assets and liabilities are characterised as either current or non-current in nature. The Department has an operating cycle of twelve months, therefore assets and liabilities that are realised as part of the normal operating cycle are classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.

2.10 Cash

PIRSA ANNUAL REPORT 2003–2004 120 PRIMARY INDUSTRIES AND RESOURCES

For the purposes of the Statement of Cash Flows, cash includes cash at bank and deposits at call that are readily converted to cash and are used in the cash management function on a day-to-day basis. Cash is measured at nominal value.

2.11 Receivables Trade receivables arise in the normal course of selling goods and services to other agencies and to the public. Trade receivables are payable within 30 days. Trade debtors greater than 120 days in arrears at balance date are assessed each year and provision is made for any doubtful accounts. In addition, a general doubtful debt provision amounting to five percent of the balance of the outstanding loan portfolio is provided for each year. This level was determined in 1997-98 by the Rural Finance and Development Steering Committee and it is reviewed each year. Reviews of individual loan balances are also undertaken and specific provisions are created where appropriate.

2.12 Inventories Inventories (other than self generating assets such as livestock and produce) are measured at the lower of cost and net realisable value on an item by item basis, as illustrated in Note 20.

The Department controls several types of assets at the reporting date that meet the definition of self-generating and regenerating assets as defined by AASB 1035 ‘Self-Generating and Regenerating Assets’. Livestock has been brought to account at net market value in the Statement of Financial Position. Crops, orchards and vineyards are grown primarily for research purposes but also have a commercial element and have been valued at net market

2.13 Non-Current Asset Acquisition and Recognition Assets are initially recorded at cost or at the value of any assets transferred, plus any incidental cost involved with the acquisition. Where assets are acquired at no value, or minimal value, they are recorded at their fair value in the Statement of Financial Position. If however, the assets are acquired at no or nominal value as part of a restructuring of administrative arrangements then the assets are recorded at the value recorded by the transferor prior to transfer.

The Department capitalises all non-current physical assets with a value of $2,000 or greater in accordance with Accounting Policy Statement 2 'Asset Recognition'. Amounts less than $2,000 are expensed in the period incurred.

2.14 Valuation of Non-Current Assets In accordance with Accounting Policy Statement 3 ‘Revaluation of Non-Current Assets’, revaluation of non-current assets only applies to assets, or group of assets, when it's fair value at the time of acquisition is greater than $1 million and estimated useful life is greater than three years. The Department obtains independent valuations every three years. The next valuation process is due to occur during 2005-06, however, 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.

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(i) Land and Buildings Land and buildings were independently valued by Valcorp Australia Pty Ltd as at 30 June 2003, on the basis of fair value as defined in AASB 1041 'Revaluation of Non-Current Assets'. Buildings include ‘infrastructure’ which represents roads, fencing, signage etc.

Land and buildings that are acquired between revaluations are held at cost until the next valuation, where they are revalued to fair value.

(ii) Leasehold Improvements Leasehold improvements are brought to account at cost and are revalued in accordance with the valuation processes outlined above.

(iii) Core Trays Core Trays were independently valued by Valcorp Australia Pty Ltd at 30 June 2003.

(iv) Plant and Equipment In accordance with Accounting Policy Statement 3 'Revaluation of Non-Current Assets' all plant and equipment below the revaluation threshold are deemed to have been revalued to their fair values immediately following recognition at cost.

Plant and equipment that are acquired between revaluations are held at cost until the next valuation, where they are revalued to fair value.

2.15 Lease Incentives under Non-Cancellable Operating Leases On 1 August 1998, the Department, through the Department for Administrative and Information Services, entered into a 10 year non-cancellable operating lease over part of a property located at 101 Grenfell Street, Adelaide.

The fit-out costs for this leased property were met by the lessor. In accordance with Urgent Issues Group Abstract 3 ‘Lessee Accounting for Lease Incentives under a Non-Cancellable Operating Lease’, this fit-out has been treated as a lease incentive giving rise to both an asset and a liability being the cost of the fit-out. The asset is amortised over the period of the lease and the liability is reduced through lease payments over the term of the lease.

2.16 Works in Progress Works in progress relate to costs associated with the construction of a new acid water treatment plant at the Brukunga Mines.

2.17 Intangible Assets The Department has developed software internally. The software is capitalised when the expenditure meets the definition and recognition criteria of an asset and when the amounts of expenditure are greater than $2,000.

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2.18 Depreciation and Amortisation of Non-Current Assets All non-current assets having a limited useful life are systematically depreciated over their useful lives in a manner which reflects the consumption of their service potential. Amortisation is used in relation to intangible assets, while depreciation is applied to physical assets such as property, plant and equipment. The estimated useful lives of buildings and items of plant and equipment valued in excess of $1 million are reassessed every three years by an independent valuer as part of the valuation process described in note 2.14 above.

Leasehold improvements are amortised on a straightline basis over the period of the lease (ten years).

Depreciation / amortisation for non current assets is determined as follows:

Class of Asset Depreciation Method Years Buildings and Infrastructure Straight Line 20 – 70 Plant and equipment Straight Line 3 – 20 Intangibles Straight Line 1 – 4 Leasehold improvements Straight Line 10

2.19 Payables Payables include creditors, accrued expenses and employment on-costs. 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. All amounts are measured at their nominal amount and are normally settled within 30 days in accordance with Treasurer's Instruction 8 'Expenditure for Supply Operations and Other Goods and Services' after the Department receives an invoice. Payables include expenses consequential to employment but which are not employee benefits, such as superannuation contributions and payroll tax, with respect to outstanding liabilities for salaries and wages, long service leave and annual leave. The Department makes contributions to several superannuation schemes operated by the State Government. These contributions are treated as an expense when they occur. There is no liability for payments to beneficiaries as the South Australian Superannuation Board (SASB) has assumed these. The Department has recorded a liability for outstanding employer superannuation contributions payable to the South Australian Superannuation During the year the Department paid $7.9 million ($8 million) to the Department of Treasury and Finance towards the accruing government liability for superannuation in respect of its employees.

2.20 Employee Benefits These benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid. 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 of sick leave.

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

PIRSA ANNUAL REPORT 2003–2004 123 PRIMARY INDUSTRIES AND RESOURCES

The liability for annual leave reflects the value of total annual leave entitlements of all employees as at 30 June 2004 and is measured at the nominal amount.

A liability for long service leave is recognised, and is measured as the current value of payments to be made in respect of employees with seven or more years service up to the reporting date. This base provides a reasonable approximation of the present value of the estimated future cash outflows to be made for these entitlements and is consistent with Accounting Policy Statement 9 'Employee Benefits'.

2.21 Provisions A liability has been reported to reflect unsettled workers compensation claims. The workers compensation provision is based on an actuarial assessment performed by the Public Sector Occupational Health and Injury Management Branch of the Department for Administrative and Information Services.

2.22 Reserves The General Reserve for Rural Finance and Development was established to cover unforeseen losses which may arise from the Rural Industry Adjustment and Development Fund loan portfolio. The amount in the reserve is reviewed annually by The Rural Finance and Development Steering Committee.

The Committed Grants Reserve for Rural Finance and Development was established to provide for grant commitments which are committed but not advanced as at the end of the financial year.

3. Changes in Accounting Policies

3.1 Impact of Adopting Australian Equivalents to International Financial Reporting Standards Australia will be adopting Australian equivalents to International Financial Reporting Standards (AIFRS) for reporting periods commencing on or after 1 January 2005. The Department will adopt these standards for the first time in the published financial report for the year ended 30 June 2006.

In accordance with Treasurer’s Instruction 19 'Financial Reporting', the Department's Chief Executive is responsible for ensuring that the annual financial statements comply with Generally Accepted Accounting Principles (GAAP). The Department has analysed the exposure drafts issued by the Australian Accounting Standards Board (AASB) and has identified a number of potential issues that may need to be addressed. The Department is developing a plan to manage the transition to the new standards. The plan will require the major areas of accounting and reporting differences resulting from adoption of z the new standards; z potential changes required to financial systems; and z key dates for monitoring and reviewingprogress.

The Department is using the Model Financial Report for SA Government entities developed by the Department of Treasury and Finance (DTF) and keeping abreast of changes in Accounting Standards, Treasurer’s Instructions and Accounting Policy Statements (APS) by attending exposure draft reference group meetings (facilitated by DTF) and information forums organised by the DTF and professional accounting bodies.

PIRSA ANNUAL REPORT 2003–2004 124 PRIMARY INDUSTRIES AND RESOURCES

3.2 Expected differences in accounting policies Changes in Accounting Policy A major change is the treatment of accounting policy changes under IFRS. These will now apply retrospectively except for specific exemptions in accordance with AASB 1 'First-Time Adoption of Australian Equivalents to IFRS'.

Non-Current Asset Acquisition and Recognition The Australian equivalent to IAS 16 'Property, Plant and Equipment' is proposing that non-current assets be revalued on an individual basis (as opposed to current class basis). It is anticipated an APS will continue to require revaluation on a class basis and current thresholds (greater than $1m and estimated useful life is greater than 3 years) will continue to apply.

Intangible Assets In accordance with the revaluation thresholds in APS 3 'Revaluation of Non- Current Assets', internally developed software are recognised at cost, which are deemed to have been revalued to their fair values immediately following recognition at cost. The new AASB 138 requires recognition at original cost where this can be reliably reconstructed or, at fair value where the software is traded in an active market. As the Department's internally generated software is not traded in an active market, it will be recognised at original cost.

Employee Benefits Employee benefits payable later than 12 months from year-end will be measured at present value rather than at nominal amounts.

Self Generating and Regenerating Assets The new accounting standard AASB 141 requires biological assets to be measured at fair value less estimated point of sale costs from initial recognition of the biological assets up to the point of harvest, other than when fair value cannot be measured reliably on initial recognition. The Department currently measures self generating and re-generating assets at market value.

The proposed standard contains increased disclosure requirements such as presentation of information relating to the changes in the carrying amount of livestock between the start and end of the financial reporting period. There are also specific requirements for accounting for government grants related to biological assets. These will be required to be measured at fair value less estimated point-of-sale costs.

These requirements will increase the Department's disclosure requirements and record-keeping to ensure all information is captured. The Department will be implementing new processes and procedures to ensure the relevant information is captured.

PIRSA ANNUAL REPORT 2003–2004 125 PRIMARY INDUSTRIES AND RESOURCES

4. Programs of the Department

The Program Schedule provides details of expenses and revenues applicable to the programs of the Department. Information about the Department’s programs is set out below and in the Program Schedule. The major change from the 2002-03 program presentation is the separation of Agriculture, Food and Fisheries and is consistent with Ministerial responsibilities and the portfolio structure.

Program 1 – Information Services (Mineral Resources Development) The focus for this class of service delivery is on services for generation, synthesis and dissemination of information and technology for the Minerals and Petroleum division of the Department.

Program 2 – State Resource Regulation Services (Mineral Resources Development) The focus is on services that are required to regulate the use of and protect the State’s natural and productive resources. These services are the responsibility of the Department through either legislative responsibilities or Cabinet policy for the Minerals and Petroleum division of the Department.

Program 3 – Coordination and Advice (Mineral Resources Development) The focus is on coordination of whole-of-government initiatives or services as well as policy advice and development for and on behalf of the Minister for the Minerals and Petroleum division of the Department.

Program 4 – Facilitation Services (Mineral Resources Development) This program class includes facilitation services that establish strategic alliances and strategies in the areas of wealth, health, welfare, safety, sustainability or self-reliance of industries, enterprises or communities for the Minerals and Petroleum division of the Department.

Program 5 – Information Services (Energy) The focus for this class of service delivery is on services for generation, synthesis and dissemination of information and technology for the Energy division of the Department.

Program 6 – State Resource Regulation Services (Energy) The focus is on services that are required to regulate the use of and protect the State’s natural and productive resources. These services are the responsibility of the Department through either legislative responsibilities or Cabinet policy for the Energy division of the Department.

Program 7 – Coordination and Advice (Energy) The focus is on coordination of whole-of-government initiatives or services as well as policy advice and development for and on behalf of the Minister for the Energy division of the Department.

Program 8 – Facilitation Services (Energy) This program class includes facilitation services that establish strategic alliances and strategies in the areas of wealth, health, welfare, safety, sustainability or self-reliance of industries, enterprises or communities for the Energy division of the Department.

Program 9 – Information Services (Agriculture, Food and Fisheries) The focus for this class of service delivery is on services for generation, synthesis and dissemination of information and technology for the Agriculture, Food and Fisheries division of the Department.

Program 10 – State Resource Regulation Services (Agriculture, Food and Fisheries) The focus is on services that are required to regulate the use of and protect the State’s natural and productive resources. These services are the responsibility of the Department through either legislative responsibilities or Cabinet policy for the Agriculture, Food and Fisheries division of the Department.

PIRSA ANNUAL REPORT 2003–2004 126 PRIMARY INDUSTRIES AND RESOURCES

Program 11 – Coordination and Advice (Agriculture, Food and Fisheries) The focus is on coordination of whole-of-government initiatives or services as well as policy advice and development for and on behalf of the Minister for the Agriculture, Food and Fisheries division of the Department.

Program 12 – Facilitation Services (Agriculture, Food and Fisheries) This program class includes facilitation services that establish strategic alliances and strategies in the areas of wealth, health, welfare, safety, sustainability or self-reliance of industries, enterprises or communities for the Agriculture, Food and Fisheries division of the Department.

PIRSA ANNUAL REPORT 2003–2004 127 PRIMARY INDUSTRIES AND RESOURCES

2004 2003 $' 000 $' 000 5. Employee Expenses Salaries and wages 70,361 66,668 TVSP (refer below) (1) 1,452 - Annual leave 998 1,185 Long service leave 2,524 2,327 Employment on-costs 13,085 12,072 Board fees 294 266 88,714 82,518

(1) TVSP expenses for 2002-03 were not separately brought to account in employee costs therefore for comparative purposes, this amount is not included. The cost for 2002-03 was $819 000. 2004 2003 $' 000 $' 000 Targeted Voluntary Separation Packages TVSPs paid to employees during the reporting period 1,452 819 Recovery from the Department of the Premier and Cabinet 1,083 728 Annual Leave and Long Service Leave accrued over the period 539 408

Number of employees that were paid TVSPs during the reporting period 18 11

Employee Remuneration Packages The number of employees whose total remuneration package was $100 000 Number of Number of or more in relation to the reportingperiod was as follows: Employees Employees $100 000 - $109 999 11 10 $110 000 - $119 999 55 $120 000 - $129 999 74 $130 000 - $139 999 24 $140 000 - $149 999 31 $150 000 - $159 999 2- $160 000 - $169 999 12 $170 000 - $179 999 31 $180 000 - $189 999 13 $250 000 - $259 999 -1 $260 000 - $269 999 1- 36 31

During the year, 2 employees who transferred to the Department as a result of government administrative arrangements, had remuneration exceeding $100,000. In relation to these employees, the full year total remuneration amounting to $0.260million was included in the calculation of this remuneration note. This remuneration included $0.128million paid by this Department and $0.132million paid by the transferor department.

Total remuneration received by the above employees was $4.763 million ($4.1 million).

Average number of employees during the reporting period: On average, the Department employed 1271.12 (1256.20) full time equivalents (FTEs) throughout the reporting period.

PIRSA ANNUAL REPORT 2003–2004 128 PRIMARY INDUSTRIES AND RESOURCES 6. Supplies and Services 2004 2003 $' 000 $' 000 Professional services (1) 13,006 13,135 Operational and administrative costs (2) 19,061 16,728 Utility and property costs 6,459 6,964 Computing costs 5,184 4,735 Travel 3,978 3,372 Vehicle and equipment operating costs 2,500 2,231 Adverse events (3) 1,414 4,767 Telephone calls and rental 2,001 2,224 Staff training and development 1,806 1,764 Operating lease costs 7,818 7,905 Workers compensation expense 73 (808) Other 724 169 64,024 63,186 (1) Includes consultancies costs which are further broken down below. (2) Includes Audit fees paid/payable to the Auditor-General (refer note 11). (3) Expenditure on ad-hoc emergencies that affect the agricultural and fisheries sectors (eg fruit fly and State Ovine Johne's disease). Employee costs associated with adverse events are not disclosed separately but are included in Note 5.

The number and dollar amount of Consultancies paid/payable that 2004 2003 Number $' 000 $' 000 Below $10,000 16 36 80 Between $10,000 and $50,000 15 348 237 Above $50,000 160 323 444 640

7. Depreciation and Amortisation Depreciation Buildings and infrastructure 2,006 2,008 Plant and equipment 3,456 3,205 Core Trays 633 59 6,095 5,272 Amortisation Leasehold improvements 397 397 Software 195 292 Amdel Loan 16 16 608 705 6,703 5,977

8. Grants and Subsidies

Rural Finance and Development 9,843 7,024 Other State and Local Government agencies 845 852 Private Sector 11,859 11,460 22,547 19,336 The major Grant Programs paid during the year were: FarmBis 2,227 3,516 Riverland Rural Partnership Program 626 820 River Fishery Structural Adjustment 2,349 789 Central North East Farm Assistance Program 1,471 648 Drought Relief Assistance Scheme 1,078 468 Exceptional Circumstances Drought 2003 552 170 Roxby Downs Council 525 600 Remote Areas Energy Scheme 3,978 3,729 Collaborative programs 2,193 2,329 Solar Hot Water System Rebates 1,783 1,596 Other 5,765 4,671 22,547 19,336

PIRSA ANNUAL REPORT 2003–2004 129 PRIMARY INDUSTRIES AND RESOURCES 2004 2003 9. Net Loss from Disposal of Assets $' 000 $' 000 Land and Buildings Proceeds from disposal 135 - Net book value of assets disposed 521 23 Net loss from disposal of land and buildings 386 23

Plant and Equipment Proceeds from disposal 516 126 Net book value of assets disposed 584 625 Net loss from disposal of plant and equipment 68 499

Total Assets Total proceeds from disposal 651 126 Total value of assets disposed 1,105 648 Total net loss from disposal of assets 454 522

10.Other Guarantee Fees 32 41 Contributions to external bodies 3,270 4,070 Other (295) 3,283 3,007 7,394

11.Auditor's Remuneration Audit fees paid/payable to the Auditor-General's Department included in Supplies and Services 228 194

12.User Charges and Fees Fishing licences (1) 10,811 9,556 Mining and petroleum application fees 445 456 Pastoral rents (2) - 674 Gas and electricity licence fees 1,450 2,829 Remote Areas Energy Scheme electricity sales 1,101 1,002 Mining and petroleum rentals 5,814 4,970 Consultancy and service 13,777 8,247 Other licences 832 362 Seed analysis and certification 713 969 Inspection and registration 540 458 Other 160 179 35,643 29,702 (1) Represents costs recovered from the Fisheries Research and Development Fund and Aquaculture Resource Management Fund for the administration of licences. (2) Pastoral rents received in 2002-03 relate to the Sustainable Resources Group which are no longer part of the Department.

13.Advances & Grants The Department received contributions from various funding sources as detailed below, expressly for the purpose of undertaking specific projects. 2004 2003

Grants Unexpended Grants Unexpended Received Expenditure Grants Received Expenditure Grants $'000 $'000 $'000 $'000 $'000 $'000 Commonwealth Grants 5,561 4,487 1,074 4,386 4,372 14 State Grants 3,654 4,332 (678) 3,835 3,514 321 Industry Grants 21,238 20,133 1,105 21,903 19,946 1,957 30,453 28,952 1,501 30,124 27,832 2,292

PIRSA ANNUAL REPORT 2003–2004 130 PRIMARY INDUSTRIES AND RESOURCES The above contributions are allocated to a large range of projects involving the Commonwealth, other state departments and industry groups. In 2004, the larger projects were as follows: 2004 2003 Grants Unexpended Grants Unexpended Received Expenditure Grants Received Expenditure Grants $'000 $'000 $'000 $'000 $'000 $'000 Grains Industry 5,807 5,807 - 6,724 6,213 511 Farmbis II 3,947 2,896 1,051 1,959 1,959 - Fisheries Industry 1,945 1,909 36 1,522 906 616 Aquafin CRC 1,500 1,500 - 800 800 - Horticulture Industry 1,425 1,425 - 1,765 1,765 - Gas Industry Regulation 1,242 1,173 69 - - - International Wool Secretariat 764 739 25 - - - Central Northeast Farm Assistance P 757 757 - - - Sheep Industry 664 664 - 1,946 1,346 600 Exceptional Circumstances/Drought 516 516 - 733 733 - All other projects 11,886 11,566 320 14,675 14,110 565 30,453 28,952 1,501 30,124 27,832 2,292

2004 2003 $' 000 $' 000 14. Interest Loans to the rural sector 1,047 1,393 Deposits lodged with the Treasurer 3,115 2,693 4,162 4,086

15.Sale of Goods Plants 12 8 Livestock 1,255 784 Publications, books, maps and compact discs 419 637 Milk 856 933 Fruit and vegetables 178 248 Cereals 606 625 Wool and skins 317 359 Other 394 407 4,037 4,001

16.Other Revenue Seed royalties 466 587 Government Employment Scheme recoups 63 198 Recognition of property, plant and equipment previously expensed - 1,660 Reimbursements of salaries and project costs 3,243 2,671 Revenue in-kind 66 1,183 Reduction in provision for doubtful debts 154 244 Other 975 2,266 4,967 8,809

17.Revenue from SA Government Appropriations from Consolidated Account pursuant to the Appropriation Act 2003 107,877 111,299 107,877 111,299

18.Cash Deposits with the Treasurer 67,984 64,556 Cash held in imprest account and petty cash (74) (72) 67,910 64,484 Deposits with the Treasurer Includes Accrual Appropriation Account and Surplus Cash Working Account balances. With the implementation of the cash alignment policy, it is anticipated there will be a reduction in the level of cash at 30 June 2005.

PIRSA ANNUAL REPORT 2003–2004 131 PRIMARY INDUSTRIES AND RESOURCES As at balance date, the Department was unable to complete the reconciliation between the Westpac bank account cash balance and the General Ledger bank account. Prior to June 2004, it was only possible to reconcile monthly cash movements in the General Ledger with the monthly movements in the bank account as the balance in the Westpac bank account excluded the Department’s opening cash balance when the Department’s bank account was established in 1999 and included monies relating to the Consolidated Account in regard to royalty collections. In June 2004 the Department of Treasury and Finance effected transactions to establish a reconstructed bank balance based on history that for the first time enabled a year to date account balance reconciliation to be performed. In creating this balance, the closing position in the Westpac bank account did not reconcile to the General Ledger. The variance, including controlled, administered and trust fund monies, is material and the amount of the variance relating to controlled cash (if any) has not been able to be identified. Investigations are continuing to identify and correct the imbalance and enhance procedures to ensure that future reconciliations are carried out accurately and on a timely basis.

2004 2003 19.Receivables $' 000 $' 000 Current Trade accounts receivable 1,712 4,011 Less: Provision for Doubtful debts 352 500 1,360 3,511 GST Receivable 1,063 1,733 Accrued interest on loans and deposits 673 806 Other accrued revenue 1,182 - 2,918 2,539

Loans receivable 1,126 1,464

5,404 7,514 Non Current Loans receivable 11,638 14,690 Less: Provision for doubtful debts 775 797 10,863 13,893

20.Inventories Current Livestock (at net realisable value) 2,311 2,184 Publications and maps (at net realisable value) 849 540 Plants and related items (at cost) 21 22 Publications and other finished goods (at cost) - 440 Other (at cost) 53 346 3,234 3,532

21.Investments Investments in Shares 2,657 1,625

During the year the Department purchased 842 231 (1 624 680) $1 ordinary shares in Australian Grain Technologies (AGT) Pty Ltd, a joint venture entity involved in researching to assist wheat breeding programs. This department holds twenty five percent of the issued capital of the entity. The purchase consideration for these shares consisted of a mixture of cash, leased facilities, plant and equipment, and intellectual property rights transferred to AGT. The Department holds joint control along with the University of Adelaide and Grains Research and Development Corporation. The Department’s shareholding has been recognised at cost and equity accounts have not been prepared due to the materiality of the balance.

Other investments include the purchase of 189 800 $1 shares in Provisor Pty Ltd, a grape and wine research company. The Department's shareholding in Provisor does not give it controlling interest in the company. This investment is also recorded at cost.

PIRSA ANNUAL REPORT 2003–2004 132 PRIMARY INDUSTRIES AND RESOURCES 2004 2003 $' 000 $' 000

Carrying amount at 1 July 1,625 - Cash contribution 952 458 Leased facilities 80 48 Plant and equipment - 544 Intellectual Property - 575 Carrying amount at 30 June 2,657 1,625

22.Property, Plant and Equipment Land: At fair value 17,384 17,481

Buildings and infrastructure: At fair value 70,520 69,374 Less: Accumulated depreciation 6,190 3,359 64,330 66,015 Leasehold improvements: At fair value 3,971 3,971 Less: Accumulated amortisation 2,349 1,952 1,622 2,019 Core trays: At fair value 10,778 10,763 Less: Accumulated depreciation 633 - 10,145 10,763 Plant & Equipment At fair value 44,249 44,282 Less: Accumulated depreciation 31,410 30,575 12,839 13,707 106,320 109,985

Reconciliation of property, plant and equipment

Total Buildings and Leasehold Plant and Land Infrastructure Improvements Core Trays Equipment $'000 $'000 $'000 $'000 $'000 $'000 Carrying Amount 1 July 2003 17,481 66,015 2,019 10,763 13,707 109,985 Additions - 203 - 15 2,565 2,783 Disposals (97) (424) - - (584) (1,105) Depreciation/amortisation expense - (2,006) (397) (633) (3,456) (6,492) Acquisition/(Disposal) through Administrative Restructuring - - - - 24 24 Other Movements - 542 - - 583 1,125 Carrying Amount at 30 June 2004 17,384 64,330 1,622 10,145 12,839 106,320

PIRSA ANNUAL REPORT 2003–2004 133 PRIMARY INDUSTRIES AND RESOURCES 2004 2003 23.Intangibles $' 000 $' 000 Software Computer software 1,801 1,250 Less: Accumulated amortisation 1,055 860 746 390 Intangibles were included in the Plant and Equipment totals in 2002-03. The carrying amounts of plant and equipment have been adjusted to disclose intangibles separately. 2004 2003 $' 000 $' 000

Carrying amount at 1 July 390 777 Additions 551 - Amortisation expense (195) (387) Carrying amount at 30 June 746 390

24.Other Assets Current: Worker's compensation recoveries 17 17 Prepayments 491 123 508 140 Non-Current: Worker's compensation recoveries 53 55 561 195

25.Payables Current: Creditors 1,071 1,843 Accrued expenses 2,685 2,494 Accrued interest on borrowings 181 252 Commonwealth excise funding 50 15 Employee on-costs 2,244 1,879 6,231 6,483 Non-Current: Employee on-costs 1,962 1,726

26.Employee Benefits and Related On-costs 2004 2003 (a) Employee Benefits $' 000 $' 000 Current: Accrued Salaries and Wages 876 266 Annual Leave 5,451 4,683 Long Service Leave 527 603 6,854 5,552 Non-Current: Long Service Leave (1) 17,084 15,029

23,938 20,581

(1) The large increase in the Department's long service leave liability compared to 2002/03 is the result of the department performing an audit on all employee leave balances. This audit, identified that Leave balances as at 30 June 2003 were incorrect mainly due to the implementation and changeover to a new payroll system. The leave balances have been corrected for 30 June 2004.

(b) Employee Benefits and Related On-costs 2004 2003 Current: $' 000 $' 000 Accrued Salaries and Wages On-costs included in payables - current (note 25) 156 46 Provision for employee benefits - current (note 26A) 876 266 1,032 312

PIRSA ANNUAL REPORT 2003–2004 134 PRIMARY INDUSTRIES AND RESOURCES 2004 2003 $' 000 $' 000 Annual Leave On-costs included in payables - current (note 25) 885 760 Provision for employee benefits - current (note 26A) 5,451 4,683 6,336 5,443

Long Service Leave On-costs included in payables - current (note 25) 61 69 Provision for employee benefits - current (note 26A) 527 603 588 672 Non-Current: On-costs included in payables - non-current (note 25) 1,962 1,726 Provision for employee benefits - non-current (note 26A) 17,084 15,029 19,046 16,755

Aggregate Employee Benefits and Related On-costs 27,002 23,182

27.Borrowings (a) Borrowings consists of: Indebtedness to SA Government Financing Authority 7,487 10,427 Indebtedness to the Treasurer 1,996 1,851 Indebtedness to Department of Trade and Economic Development (formerly Department for Business Manufacturing and Trade) 54 66 9,537 12,344

(b) Balance of Borrowings Outstanding Classifications: Current 443 602 Non-Current 9,094 11,742 9,537 12,344

28.Provisions Current: Provision for Workers Compensation 316 383 Non-Current: Provision for Workers Compensation 732 1,023

1,048 1,406

Carrying amount at 1 July 2003 1,406 2,214 Decrease in the provision 358 808 Carrying amount at 30 June 2004 1,048 1,406

29.Other Current: Unearned Revenue 2,444 1,841

Non Current: Lease incentive 1,622 2,019

4,066 3,860

PIRSA ANNUAL REPORT 2003–2004 135 PRIMARY INDUSTRIES AND RESOURCES 2004 2003 $' 000 $' 000 30.Equity Accumulated surplus 122,897 121,725 Asset revaluation reserve 20,286 20,286 Committed Grants reserve 5,961 11,207 General reserve 2,000 2,000 151,144 155,218

Accumulated surplus Balance at 1 July 2003 121,725 120,922 Operating surplus 1,073 8,218 Decrease in net assets due to administrative restructure (5,147) (8,505) Transfers from reserves 5,246 1,090 Balance at 30 June 2004 122,897 121,725

Asset revaluation reserve Balance at 1 July 2003 20,286 1,753 Revaluation increment land - 7,724 Revaluation increment buildings - 2,014 Revaluation increment core trays - 8,795 Balance at 30 June 2004 20,286 20,286

Committed grants reserve Balance at 1 July 2003 11,207 12,297 Transfers to accumulated surplus (5,246) (1,090) Balance at 30 June 2004 5,961 11,207

General reserve Balance at 1 July 2003 2,000 2,000 Balance at 30 June 2004 2,000 2,000

31.Financial Instruments (a) Terms, conditions and accounting policies (i) Financial Assets Cash is available at call and is recorded at nominal value. Receivables are raised for all goods and services provided for which payment has not been received. Receivables are normally settled within 30 days. (ii) Financial Liabilities Creditors and accruals are raised for all amounts billed but unpaid. Sundry creditors are normally settled within 30 days.

(b) Credit risk The Department's maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognise financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the Statement of Financial Position.

(c) Interest rate risk The Department's exposure to interest rate risk, which is the risk a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate on those financial assets and financial liabilities, is as follows:

PIRSA ANNUAL REPORT 2003–2004 136 PRIMARY INDUSTRIES AND RESOURCES Weighted average/ Fixed interest maturing in effective Floating 1 year or over 1 to 5 More than 5 interest rate interest less years years Non interest rate bearing 2004 Total 2003 Total Percent $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial assets Cash 5.10 67,910 - - - - 67,910 64,484 Receivables - 673 - - - 3,605 4,278 6,050 Investments - - - - - 2,657 2,657 1,625 Loans to Rural Sector 7.44 - 5,753 4,959 777 84 11,573 15,157 Loans other - - - - - 416 416 200 68,583 5,753 4,959 777 6,762 86,834 87,516 Financial liabilities Borrowings 5.84 - 5,996 3,291 250 - 9,537 12,344 Payables - 181 - - - 8,012 8,193 10,050 181 5,996 3,291 250 8,012 17,730 22,394

(d) Net fair value Financial instruments are valued at the carrying amount as per the Statement of Financial Position which approximates the net fair value. The carrying amount of financial assets approximates net fair value due to their short-term to maturity or being receivable on demand. The carrying amount of financial liabilities is considered to be a reasonable estimate of net fair value.

32.Commitments 2004 2003 $000 $000 Commitments under non-cancellable operating leases at the reporting date are payable as follows: Not later than one year 4,208 4,273 Later than one year and not later than five years 9,489 12,427 Later than five years 135 524 13,832 17,224

Operating leases relate to property, which are non-cancellable leases, with rental payable monthly in advance. Contingent rental provisions within the lease agreements allow for the review of lease payments every two years. Any changes in lease payments would be based on market rates. Options exist to renew the leases at the end of their terms.

33.Restructuring of Administrative Arrangements Net Expenses from Restructuring of Administrative Arrangements The net revenues/(expenses) relating to the restructuring of Administrative arrangements recognised in the Statement of Financial Performance are shown below. 2004 2003 $000 $000 Department of Trade and Economic Development 2,234 - Essential Services Commission of South Australia (ESCOSA) (108) - Department of Water, Land and Biodiversity Conservation (DWLBC) (7,273) (8,650) Office for Regional Affairs - 65 Energy SA - 80 (5,147) (8,505)

PIRSA ANNUAL REPORT 2003–2004 137 PRIMARY INDUSTRIES AND RESOURCES During the reporting period, assets and liabilities amounting to $4.7 million and $0.447 million respectively were transferred to (from) the Department as summarised below. Transferred to Transferred Transferred ESCOSA to DWLBC from DTED 1.7.03 18.6.04 1.1.04 Total Assets: $000 $000 $000 $000 Cash (104) (7,273) 2,653 (4,724) Plant and equipment (4) - 28 24 (108) (7,273) 2,681 (4,700) Liabilities: Employee Entitlements - - 447 447 - - 447 447 Net Assets (108) (7,273) 2,234 (5,147)

Summary of Total Revenues and Expenses from Ordinary Activities for the period of 1 July 2003 to 30 June 2004 for the Activities Transferred to the Department DTED PIRSA Total 1.7.03 to 1.01.04 to 31.12.03 30.6.04 $000 $000 $000 Revenue 903 2,234 3,137 Expenditure 899 1,818 2,717 Result 4 416 420

34.Contingent Liabilities and Contingent Assets Contingent Assets The Department owns intangible assets consisting of intellectual property. These include core samples provided by the mineral and petroleum industries, which are stored by the Department, and research developed in house or in conjunction with industry. These assets are not recognised in the financial statements due to difficulties in determining reliable fair values.

Contingent Liabilities The nature of activities that the Department is involved in can create potential exposure to environmental, fisheries and petroleum matters, which the Department may be required to remedy in the future. The Department has some potential outstanding litigation in a number of these areas, 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. Work is progressing to determine any liabilities that may be associated with this role. At this time, the financial impact cannot be reliably estimated.

35.Trust Funds The Trust Funds of the Department are:

Pleuro Pneumonia Fund This Fund consists of monies belonging to all State Governments and the Federal Government. The Fund is controlled by the Standing Committee of Agriculture and all expenditure is subject to the approval of the Chairman. Funds are to be used principally for publication of the history of the Pleuro Pneumonia Eradication Campaign and are held in a Section 21 Deposit Account.

PIRSA ANNUAL REPORT 2003–2004 138 PRIMARY INDUSTRIES AND RESOURCES Extractive Areas Rehabilitation Fund This Fund is credited with amounts by way of royalty on extractive minerals and is used for the rehabilitation of land disturbed by mining operations. The funds collected are used to limit damage to any aspect of the environment by such 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 these Trust Funds for the year ended 30 June are as follows:

Extractive Pleuro Areas Total Pneumonia Rehabilit- Fund ation Fund 2004 2003 Operations $000 $000 Receipts 3 1,118 1,121 1,054 Less: Expenditure - 629 629 834 Net Receipts 3 489 492 220

Funds Balance of funds 1 July 68 4,014 4,082 3,862 Add: Net receipts 3 489 492 220 Fund Balance 30 June 71 4,503 4,574 4,082

Commitments in place at 30 June - 1,123 1 ,123 1,223

2004 2003 36.Cashflow Reconciliation $000 $000 Reconciliation of Cash – Cash at year end as per Statement of Cash Flows 67,910 64,484 Statement of Financial Position 67,910 64,484

Reconciliation of Net Cost of Services to Net Cash provided by Operating Activities :

Net Cost of Services from Ordinary Activities (106,804) (103,081) Appropriation from government 107,877 111,299 Decrease in net assets due to restructuring (5,147) (8,505) Non-cash items: Depreciation and amortisation 6,703 5,977 Loss on disposal of assets 454 522 Other movements in property, plant and equipment (1,125) (1,660) Doubtful debts expense (154) (244) Restructuring expenses 423 (267) Other non-cash items (589) (1,183) Changes in Assets / Liabilities (net of restructure transfer) Decrease in receivables 1,920 16,060 (Increase) Decrease in inventories 298 (42) Increase in other assets (366) (128) Increase (Decrease) in payables and provisions (374) 2,175 Increase in employee benefits 2,910 1,696 Increase in other liabilities 603 - Net Cash provided by Operating Activities 6,629 22,619

PIRSA ANNUAL REPORT 2003–2004 139 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

STATEMENT OF FINANCIAL PERFORMANCE

For the year ended 30 June 2004

2004 2003 Note $' 000 $' 000

REVENUES FROM ORDINARY ACTIVITIES Revenues from Government A5 91,086 81,520 User charges and fees A6 13,947 13,113 Advances and grants A7 4,307 5,101 Interest 323 304 Levies collection A8 1,541 431 Commonwealth rebates A9 4,766 3,950 Natural Gas revenue 191,186 237,324 Royalties 75,177 81,565 Other revenues A10 2,125 478 Total Revenues from Ordinary Activities 384,458 423,786

EXPENSES FROM ORDINARY ACTIVITIES Employee expenses A11 294 244 Supplies and services A12 18,186 14,957 Grants and subsidies A13 90,383 82,010 Commonwealth rebates A14 3,238 3,997 Levies Payments A15 894 1,099 Payment to Cooper Basin Gas Producers 191,186 237,326 Payment of Royalties to Consolidated Account 75,177 81,520 Interest Payments - 44 Other expenses 5 5 Total Expenses from Ordinary Activities 379,363 421,202

OPERATING SURPLUS 5,095 2,584

TOTAL CHANGES IN EQUITY INCLUDING THOSE RESULTING FROM TRANSACTIONS WITH STATE GOVERNMENT AS OWNER 5,095 2,584

PIRSA ANNUAL REPORT 2003–2004 140 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

STATEMENT OF FINANCIAL POSITION

For the year ended 30 June 2004

2004 2003 Note $' 000 $' 000 CURRENT ASSETS Cash A16 28,428 12,036 Receivables A17 2,448 451 Total Current Assets 30,876 12,487

Total Assets 30,876 12,487

CURRENT LIABILITIES Payables A18 14,167 279 Advances A19 600 600 Other liabilities 103 - Total Current Liabilities 14,870 879

NON-CURRENT LIABILITIES Advances A19 1,237 1,837 Borrowings A20 - 97 Total Non-Current Liabilities 1,237 1,934

Total Liabilities 16,107 2,813

NET ASSETS 14,769 9,674

EQUITY Accumulated surplus 14,769 9,674

TOTAL EQUITY A21 14,769 9,674

PIRSA ANNUAL REPORT 2003–2004 141 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

STATEMENT OF CASH FLOWS

For the year ended 30 June 2004

2004 2003 Note $' 000 $' 000 CASHFLOWS FROM OPERATING ACTIVITIES Cash Outflows Employee expenses (291) (244) Supplies and services (17,389) (14,849) Grants and subsidies (89,083) (82,010) Commonwealth rebates (3,238) (3,997) Payment of Royalties to Consolidated Account (63,286) (81,520) Levies payments (894) (1,099) Payment to Cooper Basin Gas Producers (191,186) (237,326) Interest - (44) Other expenses (5) (5) Total Outflows from Operating Activities (365,372) (421,094) Cash Inflows Revenues from Government 91,015 81,520 User charges and fees 13,947 13,455 Advances and grants 4,307 5,101 Interest 314 304 Levies Collection 1,541 431 Commonwealth Rebates 4,766 3,950 Natural Gas Revenue 191,186 237,324 Royalties 75,177 81,565 Other revenues 111 493 Total Inflows from Operating Activities 382,364 424,143 Net Inflows from Operating Activities A22 16,992 3,049 CASHFLOWS FROM FINANCING ACTIVITIES Cash Outflows Repayment of advances to PIRSA (600) (600) Total Outflows from Financing Activities (600) (600) Net Outflows from Financing Activities (600) (600)

NET INCREASE IN CASH HELD 16,392 2,449 CASH AT 1 JULY 12,036 9,587 CASH AT 30 JUNE 28,428 12,036

PIRSA ANNUAL REPORT 2003–2004 142 Total

Funds 90,383 5 5,095 191,186 4,766 191,186 75,177 3,238 75,177 Royalties Other 187 1,541 1,926 2,125 50 1,621 - 19 323 321 6,048 - 1,970 267 1,431 91,086 12,326 - - - 1,196 12,138 - 159 894 38 4,307 272 294 - - CSO Subsidy SA Water Corporation ------75,177 ------75,177 Energy und 16 - Fund 17 - Fund 18 - Fund 19 - Task Force Management - - - 89,535 - 1,138 - 146 90,819 ------SA Gas Natural uthority A - - - - - 2,021 - (330) ------1,691 - - - Photovoltaic Rebate Fund ------191,186 ------191,186 - Fund Power Remote Generation Renewable ------1,100 - - 2,737 - - - 1,637 - - - - - Fund Marine Industry Scalefish ------428 - - 2,029 - - - 1,601 - - - - - Fund Industry SA Apiary - - 39 12 2 38 - - (9) ------Fund delaide Industry A Hills Wine - - 28 - 7 15 - 20 ------Fund - - 99 70 1 11 - 19 ------Wine Industry McLaren Vale Fund Wine Industry Riverland - - 222 170 2 16 - 38 ------ADMINISTERED ITEMS SCHEDULE Langhorne Creek Wine - - 508 491 15 12 - 20 ------Industry Fund - - Fund Fisheries Development - - 116 100 6 17 - 5 ------Research and - - Program Schedule of Administered Revenues and Expenses for the year ended 30 June 2004 Fund SA Pig Industry - - 376 - - - - 329 10,895 - - - - 10,942 ------Fund Prawn Gulf St Fishery Vincent - 42 10,942 117 503 186 81 15 50 1,601 1,637 191,186 2,021 90,673 75,177 1,948 379,363 - 24 - 71 42 - - 211 ------158 - - Fund Industry SA Cattle - 97 - - 1 - - - 98 ------Grains Industry - 87 8 5 130 921 - (450) ------252 1 Levy Fund - - 21 ------870 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 2,392 1,365 477 98 253 11,271 122 523 224 100 35 41 2,029 2,737 191,186 1,691 90,819 75,177 3,918 384,458 1,522 735 927 - Industry Fund 1 - Fund 2 - Fund 3 - Fund 4 - Fund 5 - Fund 6 - Fund 7 - Fund 8 - Fund 9 - Fund 10 - Fund 11 - Fund 12 - Fund 13 - Fund 14 - Fund 15 - F SA Sheep Levy Fund 1,354 - - - - 11 - - 630 ------735 - - - it) c fi e (D s s t s us l e s s s urp rants 2,168 g dS n ere t s s ee expense i y n i 143 altie m y ppropriatio dvances and Commonwealth rebate Total Revenues ADMINISTERED EXPENSES: Emplo Commonwealth rebate Levies collection - Fisheries licence Total Expenses Payment of Royalties to Consolidated Accoun Natural Gas revenu Ro Other revenuesCommonwealth levie 15 Fisheries licence Fees and levies 151 Grants & SubsidiesPayment to Cooper Basin Gas Producers - - Interest 58 ADMINISTERED REVENUES: Supplies and services 1,496 Other expenses 5 A A Ad Total

funds 14,769 16,107 30,876 14,870 1,237 600 2,448 14,270 28,428 1,237 Royalties Other 3,231 5 3,236 5 - - 2,036 5 1,200 - CSO Subsidy SA Water Corporation - 11,891 11,891 11,891 - - - 11,891 11,891 - Energy und 16 - Fund 17 - Fund 18 - Fund 19 - Task Force Management - 2,158 2,158 2,158 - - - 2,158 2,158 - SA uthority A 1,294 165 1,459 165 - - 311 165 1,148 - Natural Gas Photovoltaic Rebate Fund 402 - 402 - - - - - 402 - Fund Power Remote Generation Renewable 1,492 - 1,492 - - - - - 1,492 - 4 Fund Marine Industry Scalefish 452 - 452 - - - - - 452 - Fund Industry SA Apiary 46 2 48 2 - - - 2 48 - Fund delaide Industry A Hills Wine 161 5 166 5 - - 1 5 165 - Fund Industry McLaren Vale Wine 19 2 21 2 - - - 2 21 - Fund Wine Industry Riverland 38 2 40 2 - - - 2 40 - ADMINISTERED ITEMS SCHEDULE Fund Industry Langhorne Creek Wine 106 2 108 2 - - - 2 108 - Fund Program Schedule of Administered Assets and Liabilities for the year ended 30 June 200 Fisheries Development 25 2 27 2 - - - 2 27 - Research and Fund SA Pig Industry 3,260 11 3,271 11 - - 42 11 3,229 - Fund Prawn Gulf St Fishery Vincent 1,547 2 1,549 2 - - 26 2 1,523 - Fund Industry SA Cattle 21 - 21 - - - - - 21 - Grains Industry Levy Fund 2,462 5 2,467 5 - - 21 5 2,446 - 618 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Fund (662) 1,855 1,193 1,237 Fund 1 - Fund 2 - Fund 3 - Fund 4 - Fund 5 - Fund 6 - Fund 7 - Fund 8 - Fund 9 - Fund 10 - Fund 11 - Fund 12 - Fund 13 - Fund 14 - Fund 15 - F SA Sheep 875 - 875 - - - - - 875 - Industry Levy : : ables & accruals 18 y 144 NET ASSETS ADMINISTERED LIABILITIES: Current Liabilities Non-Current Liabilities Total Liabilities Total Current Liabilities Total Assets Advances 600 Receivables 11 Total Non-Current Liabilities ADMINISTERED ASSETS: Current Assets: Cash Pa Advances 1,182 1,237 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

Notes to the Administered Items Schedule

A1. Department Purpose and Funding The Department administers, but does not control, certain resources on behalf of the South Australian Government, the Commonwealth Government, private sector organisations and other State Government Departments. These activities are classified as administered items as the Department has no control over these monies and is unable to use the monies to achieve its own objectives.

The principal sources of funds for the Department’s administered programs consists of monies appropriated by Parliament, licence receipts, Commonwealth grants and rebates, fees and levies, Royalties and Natural Gas Revenue.

A2. Summary of Significant Accounting Policies A2.1 The Reporting Entity The reporting entity is disclosed in note 2.2 in the Department's Financial Statements.

A2.2 Basis of Accounting The Administered Items Financial Statements schedule represents the operations of the Department in respect of Administered Items for the year 1 July 2003 to 30 June 2004. Unless otherwise stated, the policies outlined in Note 2 of the Department's financial statements apply to the Administered Items Financial Statements Schedule.

A3. Changes in Accounting Policies Impact of Adopting Australian Equivalents to International Financial Reporting Standards The impacts disclosed in the Departmental Financial Statements also apply to the Administered Items Schedule.

A4. Administered Funds of the Department

The Program Schedules provide details of expenses, revenues, assets and liabilities applicable to the administered funds of the Department. Information about the Department’s administered funds is set out below.

Fund 1 – SA Sheep Industry Fund The South Australian Sheep Industry Fund was established by Regulations under the Primary Industry Funding Schemes Act 1998. The primary purposes of the Fund are to fund the operations of the South Australian Sheep Advisory Group (SASAG), make payments of financial assistance to farmers in line with the Regulations, undertake projects as advised by SASAG and assist in the maintenance of the dog fence.

Fund 2 – Grains Industry Levy Fund Two voluntary levies are collected from grain producers under the Commonwealth Wheat Marketing Act 1989 . A three-cent levy is collected and returned quarterly to the South Australian Farmers Federation. A thirteen-cent levy is collected and returned quarterly to the South Australian Grains Industry Trust fund.

PIRSA ANNUAL REPORT 2003–2004 145 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

Fund 3 – SA Cattle Industry Fund The South Australian Cattle Industry Fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 1 July 2000. The primary purposes of the fund are to undertake programs relating to cattle, cattle products or any other aspect of the cattle industry. It also pays outstanding claims for compensation made or pending against the Cattle Compensation Fund under the repealed Cattle Compensation Act 1939, pays reasonable expenses of the Cattle Advisory group and pays expenses of administering the fund.

Fund 4 – Gulf of St Vincent Prawn Fishery Levy Under the Gulf of St Vincent Prawn Fishery Rationalisation Act 1987, one licence-holder was charged with a debt and required to repay the debt together with interest into this Fund. This debt was written off by Department of Treasury and Finance in September 2003.

Fund 5 – SA Pig Industry Fund The South Australian Pig Industry Fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 1 October 2001. The primary purposes of the fund are to undertake research, investigations or other programs relating to pigs, pig products or any other aspect of the pig industry. It also pays outstanding claims for compensation made or pending against the Swine Compensation Fund under the repealed Swine Compensation Act 1936, pays reasonable expenses of the Pig Industry Advisorygroup and pays expenses of administering the fund.

Fund 6 – Fisheries Research & Development Fund Under the Fisheries Act 1982 , all commercial licence fees received by the Department must be paid into this fund.

Fund 7 – Langhorne Creek Wine Industry Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 14 June 2001. The primary purposes of the fund are to promote the Langhorne Creek wine industry, undertake research and development and encourage communication and co-operation between participants in the Langhorne Creek wine industry.

Fund 8 – Riverland Wine Industry Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 14 June 2001. The primary purposes of the fund are to fund representation of growers in regional, State or national wine industry forums, fees for the affiliation of the Riverland Wine Grape Growers Associations (RWGGA) with regional, State or national wine industry forums and fund the reasonable operating and management expenses of the RWGGA.

Fund 9 – McLaren Vale Wine Industry Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 5 June 2003. The primary purposes of the fund are to promote the McLaren Vale wine industry, undertake research and development and encourage communication and co-operation between participants in the McLaren Vale wine industry.

Fund 10 – Adelaide Hills Wine Industry Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 8 August 2003. The primary purposes of the fund are to promote the Adelaide Hills wine industry, undertake research and development and encourage communication and co-operation between participants in the Adelaide Hills wine industry.

Fund 11 – SA Apiary Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 31 January 2001. The primary purposes of the fund are to undertake programs relating to the apiary industry or apiary products or any other aspect of the apiary industry, pay reasonable operating and management expenses of the Apiary Industry Advisory Group (AIAG) and pay expenses of administering the Fund.

PIRSA ANNUAL REPORT 2003–2004 146 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

Fund 12 – Marine Scalefish Industry Fund This fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 16 January 2003. The primary purposes of the fund are to make payments to organisations which represent the marine scalefish industry in relation to the promotion, development and environmental management of the industry and make payments for other purposes to benefit the marine scalefish industry. Fund 13 - Renewable Remote Power Generation Fund This is a Commonwealth program administered for the State by Energy SA with the aim to encourage greater utilisation of renewable energy in South Australia. The fund provides rebates to replace or augment diesel generators with renewable generation technology.

Fund 14 - Photovoltaic Rebate Fund This is a Commonwealth program administered for the State by Energy SA with the aim to encourage greater utilisation of renewable energy in South Australia. The fund provides rebates for grid-connected or stand-alone systems on residential and community buildings. Fund 15 – Natural Gas Authority SA This fund was established to purchase natural gas from gas producers and sell to Terra Gas and Origin Energy. This fund provides an important link in the State's gas supply chain and facilitates dialogue between the producers, retailers and the pipeline contractors. Fund 16 – Energy Management Task Force EMTF Central Fund receives contributions from all States and is used to fund projects involving energy efficiency and greenhouse gas reduction measures approved by the national body.

Fund 17 – SA Water CSO Subsidy The Department receives appropriation to make an annual payment to SA Water representing Community Service Obligations for the provision of country water and wastewater services. Fund 18 - Royalties The Department receives royalties levied on minerals and petroleum production on behalf of the State Government. The royalties received are deposited into the Consolidated Account.

Fund 19 - Other Funds This is the total of all other administered funds including the payment of the Minister's salary and allowances, the ongoing costs of administering Samcor records management and enquiries since sale of the entity to the private sector in 1997 as well as the following funds: Agricultural Research Services Fund Commonwealth funds for Natural Heritage Trust (NHT) projects which are then paid out to external bodies or to departmental NHT projects as well as miscellaneous administered funds.

Aquaculture Lease Rehabilitation Fund Provides funds to clean-up and rehabilitate aquaculture lease sites when obligations under the lease are not complied with by the leasee. Contributions by the lessee to the fund are set by the Minister. SA Deer Industry Fund The South Australian Deer Industry Fund was established by Regulations under the Primary Industry Funding Schemes Act 1998 on 1 September 2002. The primary purposes of the fund are to undertake research, investigations or other programs relating to deer, deer products or any other aspect of the deer industry. It also pays outstanding claims for compensation made or pending against the Deer Compensation Fund under the repealed Deer Keepers Act 1987, pays reasonable expenses of the Deer Industry Advisory group and expenses of administering the fund.

Egg Industry Deregulation Fund Provides compensation to egg producers as a result of the deregulation of the egg industry.

PIRSA ANNUAL REPORT 2003–2004 147 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE

2004 2003 $' 000 $' 000 A5. Revenues from SA Government Appropriations from Consolidated Account pursuant to the Appropriation Act 90,819 81,313 Appropriations under other Acts 267 207 91,086 81,520

A6. User Charges and Fees Fishing licences 12,326 12,263 Fees and Levies 1,621 850 13,947 13,113

A7. Advances and Grants Energy Management Task Force 1,691 2,061 Pig Industry 159 176 Cattle Industry 252 250 Sheep Industry 2,168 2,612 Aquaculture Resource Management 30 - Agricultural Research 7 2 4,307 5,101

As at 30 June 2004, grant programs have been fully expended with the exception of the Sheep Industry and Pig Industry Funds which have have unspent grants of $271,000 and $118,000 respectively. 2004 2003 $' 000 $' 000 A8. Levies Collection Commonwealth Levy Collection 1,477 424 Organisation for Economic Co-operation and Development Report Levy 64 7 1,541 431

A9. Commonwealth Rebates Renewable Remote Power Generation 2,029 1,634 Photovoltaic Rebate Claims 2,737 2,316 4,766 3,950

A10. Other Revenue Reimbursements of salaries and project costs 57 28 Other 2,068 450 2,125 478

A11. Employee Expenses Salaries and wages 271 216 Employment on-costs 2 - Board fees 21 28 294 244

PIRSA ANNUAL REPORT 2003–2004 148 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE 2004 2003 $' 000 $' 000 A12. Supplies and Services Professional services (1) 2,193 1,728 Operational and administrative costs 3,794 2,410 Distribution of licence and lease fees (2) 12,137 10,754 Audit fees 29 24 Travel 27 38 Communication expenses 1 2 Staff training and development 5 1 18,186 14,957

(1) Includes consultancies costs which are further broken down below. (2) Represents the distribution of licence and lease fees from the Fisheries Research and Development Fund and the Aquacultural Resource Management Fund to the fishing industry and the Department.

The number and dollar amount of Consultancies paid/payable that 2004 2003 No. $'000 $'000 Below $10,000 21 54 78 Between $10,000 and $50,000 20 463 436 Above $50,000 8 1,439 1,080 1,956 1,594

A13. Grants and Subsidies Grants Adelaide Hills Wine Industry Fund 70 - McLaren Vale Wine Industry Fund 170 - Cattle Industry Fund 5 - Langhorne Creek Wine Industry Fund 100 97 Riverland Wine Industry Fund 491 543 Marine Scalefish Industry Fund 12 50 SA Water Corporation CSO Subsidy 89,535 81,320 90,383 82,010

A14. Commonwealth Rebates

Renewable Remote Power Generation Program 1,601 1,832 Photovaltaic Rebate Claims 1,637 2,165 3,238 3,997

A15. Levies Payments

Commonwealth Levy Payments 832 1,099 Organisation for Economic Co-operation and Development Report Levy 62 - 894 1,099 A16. Cash Deposits with the Treasurer 28,428 12,036 28,428 12,036

PIRSA ANNUAL REPORT 2003–2004 149 PRIMARY INDUSTRIES AND RESOURCES - ADMINISTERED ITEMS SCHEDULE 2004 2003 $' 000 $' 000 A17. Receivables Current Trade accounts receivable 2,348 436 2,348 436 Accrued interest on loans and deposits 24 15 Other accrued revenue 76 -

2,448 451 A18. Payables Current: Creditors 8 255 Royalties payable to the Consolidated Account 11,891 - Accrued expenses (1) 2,268 24 14,167 279

(1) Liabilities for employee benefits annual leave, long service leave and related on-costs are taken into account in the Departmental Financial Statements. 2004 2003 $' 000 $' 000 A19. Advances Current: Advances 600 600 600 600 Non-Current: Advances 1,237 1,837 1,237 1,837

A20. Borrowings Indebtedness to Department of Treasury and Finance - 97 - 97

The borrowings in 2002/03 were associated with the Gulf St Vincent Prawn Fishery Contribution and were written off by the Department of Treasury and Finance in September 2003. 2004 2003 $' 000 $' 000 A21. Equity Accumulated surplus 14,769 9,674 14,769 9,674 Accumulated surplus Balance at 1 July 2003 9,674 7,090 Operating surplus 5,095 2,584 Balance at 30 June 2004 14,769 9,674

A22. Reconciliation of Net Cost of Services to Net Cash provided by Operating Activities : Operating Surplus 5,095 2,584 (Increase) Decrease in receivables (1,997) 357 Increase in payables and provisions 13,888 108 Increase in other liabilities 6 - Net Cash provided by Operating Activities 16,992 3,049

PIRSA ANNUAL REPORT 2003–2004 150 3,56$$118$/5(3257± 

3,56$$118$/5(3257±  RURAL INDUSTRY ADJUSTMENT AND DEVELOPMENT FUND

Statement of Financial Performance for the year ended 30 June 2004

2004 2003 Note $’000 $’000 EXPENSES FROM ORDINARY ACTIVITIES: Grants 3 799 1 160 Doubtful debts expense 4 123 31 Interest on borrowings 1 1 Administration 5 60 83 Audit Fee 6 5 5 Total Expenses 988 1 280

REVENUES FROM ORDINARY ACTIVITIES: Interest revenue 7 876 850 Other revenues 9 10 - Total Revenues 886 850 NET COST OF SERVICES (102) (430) NET DEFICIT FROM ORDINARY ACTIVITIES (102) (430) TOTAL CHANGES IN EQUITY OTHER THAN THOSE RESULTING FROM TRANSACTIONS WITH THE STATE GOVERNMENT AS OWNER (102) (430)

Statement of Financial Position as at 30 June 2004

2004 2003 Note $’000 $’000 CURRENT ASSETS: Cash 16 14 632 13 930 Loans 8 380 347 Receivables 10 180 206 Total Current Assets 15 192 14 483

NON-CURRENT ASSETS: Loans 8 1 368 2 207 Total Non-Current Assets 1 368 2 207 Total Assets 16 560 16 690

CURRENT LIABILITIES Borrowings 11 12 12 Payables 6 5 5 Employee benefits and related costs 12 - 3 Total Current Liabilities 17 20

NON-CURRENT LIABILITIES Borrowings 11 41 54 Employee benefits and related costs 12 - 12 Total Non-Current Liabilities 41 66 Total Liabilities 58 86 NET ASSETS 16 502 16 604 EQUITY: General Reserve 2 000 2 000 Committed Grants Reserve 13 1 077 4 992 Accumulated Surplus 13 425 9 612 TOTAL EQUITY 14 16 502 16 604

PIRSA ANNUAL REPORT 2003–2004 154 RURAL INDUSTRY ADJUSTMENT AND DEVELOPMENT FUND

Statement of Cash Flows for the year ended 30 June 2004 2004 2003 Inflows Inflows (Outflows) (Outflows) Note $’000 $’000 CASH FLOWS FROM OPERATING ACTIVITIES: Interest on loans to Rural Sector 182 188 Interest on deposits lodged with Treasurer 720 663 Grants (799) (1 160) Administration expenses (75) (81) Interest expenses (1) (1) Other expenses (5) - Other revenue 10 - Net Cash (used in)/ provided by Operating Activities 15 32 (391)

CASH FLOWS FROM INVESTING ACTIVITIES: Loans advanced to the Rural Sector - (800) Loans repaid by the Rural Sector 683 535 Net Cash (used in)/provided by Investing Activities 683 (265)

CASH FLOWS FROM FINANCING ACTIVITIES: Principal repaid to the Department for Trade and Economic Development (13) (12) Net Cash used in Financing Activities (13) (12) NET INCREASE/(DECREASE) IN CASH HELD 702 (668) CASH AT 1 JULY 13 930 14 598 CASH AT 30 JUNE 16 14 632 13 930

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. Establishment of the Fund and Purpose

The Rural Industry Adjustment and Development Fund (RIADF) is established under the Rural Industry Adjustment and Development Act, 1985. The primary purpose of the Fund is to provide loans and grants, at Ministerial discretion, to develop a farm, make adjustments to farming methods or to undertake a project or research for the benefit of farmers.

2. Statement of Accounting Policies

(a) Basis of Accounting

The financial statements are prepared in accordance with Statement of Accounting Concepts, applicable Australian Accounting Standards, Urgent Issues Group Consensus Views and Treasurer’s Instructions issued pursuant to the Public Finance and Audit Act 1987. The statements have been prepared in accordance with the historical cost convention using the accrual method of accounting.

The audit of the Department of Primary Industries and Resources has identified problems with the general ledger operations which support the Rural Industry and Development Fund Financial Statements. The Department is addressing the problems but had not resolved them at the time of finalising the Rural Industry and Development Financial Statements. The problems relate to the accounting treatment of certain items in the general ledger in previous financial years, impacting on closing balances as at 30 June 2004.

(b) Employee Benefits and Related Costs

The Department of Primary Industries and Resources (the Department) administers the operations of the RIADF through the Rural Finance and Development (RF&D) Unit.

PIRSA ANNUAL REPORT 2003–2004 155 In 2003-04 the RF&D Unit changed its accounting policy with respect to administrative costs. Previously a percentage base of 8% on RF&D employee benefits and related on costs was applied.

However in 2003-04 a fixed cost of $75 000 has been applied with respect to RF&D employee benefits and related on costs. This change resulted from a review of the allocation of the administrative costs undertaken in 2003-04. It has been determined, that a fixed amount applied to the fund reflects more accurately the administrative costs. This fixed amount will be assessed each year.

(c) Provision for Doubtful Debts

A general provision is calculated at 5 percent of the total loans to the rural sector. In addition any specific doubtful debts are assessed each year and a provision created if appropriate.

(d) Recognition of Revenue

Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. Revenue is recognised when it is earned.

(e) Financial Instruments

Financial Assets Cash comprises cash on hand and deposits at call with the Westpac Banking Corporation. Interest revenues are recognised as they accrue.

Receivables are reported as amounts due, less the provision for doubtful debts.

Financial Liabilities Payables are recognised for goods and services that have been supplied but have not been paid as at 30 June 2004. Payables are recorded at cost and are normally settled within 30 days.

(f) International Harmonisation

Australia will be adopting Australian equivalents to International Financial Reporting Standards (AIFRS) for reporting periods commencing on or after 1 January 2005. The Rural Industry Adjustment and Development Fund will adopt these standards for the first time in preparing the financial statements for the year ended 30 June 2006. It is not anticipated there will be any material impact in regard to the presentation of financial statements for the Fund.

3. Grant Funding comprises payments for the following activities: 2004 2003 $'000 $'000 Primary Industries Marketing and Development - 500 Livestock Markets 200 200 Industry Development Board for Value Chain Analysis - 97 Industry Development Board for Horticulture Building Regions - 71 Industry Development Board for Field Crops Grains Eye Opener - 65 Industry Development Board for Lamb - 60 Primary Industries - Kangaroo Island 43 49 Industry Development Board for Horticulture 38 38 Measuring Sustainability and Structural Adjustment 73 21 Structural Adjustment Project 100 16 Inland Aquaculture Association of SA 15 15 Industry Development Board for Seafood - 14 SA Wine and Brandy Industry Association - 14 Industry Development Board for Sustainable Industries Rangelands 80 - Industry Development Board for Better Beef SA Project 50 - Industry Development Board for Meat 20 - Industry Development Board for Dairy 100 - Industry Development Board for Wool 80 - 799 1 160

PIRSA ANNUAL REPORT 2003–2004 156 4. Provision for Doubtful Debts

Movements in the provision for doubtful debts during the year were: 2004 2003 $’000 $’000 Balance 1 July 2003 135 1 321 Less: Bad Debt written off in 2002-03 - 1 217 Add: Adjustment to provision in 2003-04 (43) 31 Add: Bad Debt to be written off in 2004-05 166 - Balance 30 June 2004 258 135

5. Administration

A fixed amount of $75 000 has been allocated for 2003-04 as RIADF administration expenditure.

In 2002-03 it was determined as a result of a study undertaken in 2001-02, that 8 percent of RF&D employees time was spent on administering the RIADF. Accordingly, 8 percent of the total Rural Finance and Development unit administration expenses, as calculated by the Department, was recognised in the financial statements (Refer Note 2(b) for change in policy detail).

6. Audit Fee

Represents audit fees paid/payable to the Auditor-General’s Department for auditing the 2003-04 financial statements.

7. Interest revenue 2004 2003 $’000 $’000 Interest received on loans to Rural Sector 148 172 Interest received on deposits lodged with the Treasurer 728 678 876 850

PIRSA ANNUAL REPORT 2003–2004 157 8. Loans to the Rural Sector 2004 2003 $’000 $’000 Balance 1 July 2 689 3 641 Add: Advances during the year - 800 Interest Capitalised 182 188 2 871 4 629 Less: Principal Repayments 865 723 Bad Debt written off in 2002-03 - 1 217 Gross Loans to Rural Sector 2 006 2 689 Less: Provision for Doubtful Debts Specific 166 - General 92 135 Net Loans to Rural Sector 1 748 2 554

Current Loans 566 365 Less: Provision for Doubtful Debts 186 18 Net Current Loans 380 347

Non-Current Loans 1 440 2 324 Less: Provision for Doubtful Debts 72 117 Net Non-Current Loans 1 368 2 207

9. Other Revenues

Other revenues represent partial recovery of an amount written off in 2002-03.

10. Receivables 2004 2003 $'000 $'000 Accrued interest on loans to Rural Sector 118 152 Accrued interest on deposits with Treasurer 62 54 180 206

11. Borrowings

Represents borrowings from the Department of Trade and Economic Development.

12. Employee Benefits and Related Costs 2004 2003 $’000 $’000 Current Annual leave - 2 Long service leave - 1 - 3 Non-Current Long service leave - 12 - 12

PIRSA ANNUAL REPORT 2003–2004 158 In 2003-04 the Rural Finance and Development adopted an accounting policy for costs related to administering operations of the RIADF. The percentage based allocation of total RF&D Employee benefits and related costs, as used in the previous years, no longer applies to RIADF. A fixed amount of $75 000 has been allocated for 2003-04 as RIADF administration expenditure.

13. Committed Grants Reserve

The Committed Grants Reserve was established to provide for grant commitments which as at 30 June 2004 had not been advanced. During 2003-04 an amount of $3 915 000 was transferred from the Committed Grants Reserve to Accumulated Surplus.

14. Equity Committed Accumulated Grants General Surplus Reserve Reserve Total $'000 $'000 $'000 $'000 Balance at 1 July 9 612 4 992 2 000 16 604 Net deficit from ordinary activities (102) - - (102) Transfer to/from reserves 3 915 (3 915) - - Balance at 30 June 13 425 1 077 2 000 16 502

15. Reconciliation of Net Cost of Services to Net Cash used in Operating Activities

2004 2003 $’000 $’000 Net Cost of Services (102) (430) Doubtful Debts Expense 123 31 Change in Assets and Liabilities Decrease (Increase) in Receivables 26 1 Increase (Decrease) in Payables - 5 Increase (Decrease) in Employee benefits and related costs (15) 2 Net Cash used in Operating Activities 32 (391)

16. Cash at Bank

The Rural Industry and Development Fund monies are maintained within the Department’s controlled Westpac Bank Account. As at balance date, the Department was unable to complete the reconciliation between the Westpac bank account cash balance and the General Ledger bank account.

Prior to June 2004, it was only possible to reconcile monthly cash movements in the General Ledger with the monthly movements in the bank account as the balance in the Westpac bank account excluded the Department’s opening cash balance when the Department’s bank account was established in 1999 and included monies relating to the Consolidated Account in regard to royalty collections.

In June 2004 the Department of Treasury and Finance effected transactions to establish a reconstructed bank balance based on history that for the first time enabled a year to date account balance reconciliation to be performed. In creating this balance, the closing position in the Westpac bank account did not reconcile to the General Ledger. The variance, including controlled, administered and trust fund monies, is material.

Investigations are continuing to identify and correct the imbalance and enhance procedures to ensure that future reconciliations are carried out accurately and on a timely basis.

PIRSA ANNUAL REPORT 2003–2004 159 17. Additional Financial Instruments Disclosure

(a) Credit Risk The Rural Industry Adjustment and Development Fund’s maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the Statement of Financial Position.

(b) Interest Rate Risk The Rural Industry Adjustment and Development Fund’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate on those financial assets and financial liabilities, is as follows:

2004 Weighted Average/ Fixed interest maturing in Effective Non- Interest Floating 1 year or 1 to 5 More than Interest 2004 2003 Rate Interest less years 5 years Bearing Total Total Percent $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets: Cash 5.10 14 632 - - - - 14 632 13 930 Receivables: Interest on deposits 5.10 62 - - - - 62 54 Interest on loans 6.90 118 - - - - 118 152 Loans to Rural Sector 6.90 - - 1 255 413 80 1 748 2 688 Total 14 812 - 1 255 413 80 16 560 16 824

Financial Liabilities: Borrowings RF&D 7.00 - - 53 - - 53 66 Payables - ----5 5 5 Total --53-5 58 71

(c) Net Fair Value The carrying amounts of financial assets and liabilities at the reporting date all approximate their net fair values.

PIRSA ANNUAL REPORT 2003–2004 160 3,56$$118$/5(3257±  3,56$$118$/5(3257±  3,56$$118$/5(3257±