Labor's Dodgy Clipsal Contract

The Hon. D.W. RIDGWAY (Leader of the Opposition) ( 15:22 ): Yesterday, I very happily gave some students from St Therese School a tour of Parliament House. One of the first things I teach students on these tours is that parliament is modelled on the Westminster system. One of the core principles of this system is ministerial accountability. Perhaps the ministers of this Labor government need to come on a tour of Parliament House with me to learn about their ministerial accountability. It is an absolute disgrace that no minister has come forward to comment on the government's dodgy Clipsal contract. 

This story has been manifesting for more than a week now and the minister ultimately responsible, minister Bignell, has not released a written statement, let alone appeared for public comment. Every time there is a good news story in tourism, minister Bignell puts himself front and centre in the media. However, when taxpayers and small businesses are being ripped off, he is nowhere to be seen. Whatever happened to ministerial accountability? 

It is unacceptable for the minister to be there for the good times but, when the going gets tough, minister Bignell gets going. Only last month, minister Bignell happily stood in question time for four minutes answering a Dorothy Dixer in the House of Assembly about the Clipsal. He stood there for four minutes and pumped up his tires and even had the gall to say: 

It's tremendous to see a record figure of $65.6 million of economic benefit into the South Australian visitor economy. We must remember that that money trickles through the taxis, through the hotels and through our retail shops and restaurants, and it is very important in terms of creating jobs and sustaining jobs. 

He said this knowing full well that South Australian businesses had been ripped off and many may have to shed jobs. I have a letter in my possession from the minister acknowledging the fact that he knew Elite Systems was in financial trouble and had entered external administration on 27 May. 

Mr Bignell knew these businesses were not going to get paid as unsecured creditors, yet just over one month later he had the audacity to stand in parliament as an elected member and talk up the event which has so far left South Australian small businesses and taxpayers, I might add, $1.7 million out of pocket. Mr Bignell must come out of hiding and address this issue. There are at least nine small South Australian businesses that we know of that are out of pocket. They deserve an answer from the minister. This government knows nothing about ministerial accountability. 

By way of chronology, the South Australian Motor Sport Board signed a $1.5 million contract with a Victorian company called Elite Systems in April 2015. At this point, minister Bignell was the minister responsible. As of 30 June 2015, the minister made the decision to abolish the Motor Sport Board and the Clipsal event management was transferred to the South Australian Tourism Commission. I might add that the opposition expressed some concern with this, but nonetheless we supported the abolition of the Motor Sport Board but did retain the tourism commission board. When it did transfer to the tourism commission, minister Bignell was the responsible minister. 

We have been told that in August 2015 the South Australian Tourism Commission became aware that Elite Systems was in financial trouble. The contract commenced on 14 December 2015. The Victorian company, Elite Systems, subcontracted a host of South Australian small businesses that did the right thing. They did the work that they were asked to do, they paid their workers, but they never ever got paid by Elite Systems. There are nine companies that we know of that are collectively owed over $1 million. On top of this, we know taxpayers of South Australia are owed more than $650,000. 

On 27 May 2016, Elite Systems entered into external administration. The state government has failed in their due diligence. How can a company enter external administration within five months of the contract starting date, or offer a six-year contract? To date the government has refused to compensate these small South Australian businesses and has not provided any details around their due diligence and the process that ensued. The SATC has released a statement to that effect; that is, 'We are not responsible for Elite's third-party arrangements and these companies should have conducted their own due diligence.' 

These small businesses understandably relied on the fact that Elite Systems had a brand new contract, a six-year contract with the state government, a contract with the Crown. That is all that small businesses should need and the onus is on the state government to conduct thorough due diligence. A simple Google search would have shown a chequered past of one of the company directors, Mr Lea Adams, who was in court in the UK for a previous business failing. The government and Mr Bignell are attempting to wipe their hands of this. 

The Westminster system and the fundamental principle of ministerial accountability says the buck stops with the minister. Mr Bignell must offer to compensate these small South Australian businesses. If he will not, then he should at least have the guts to come out of hiding and explain himself.