The Sale, Purchase & Leasing of Government Land

September 18, 2018

17 May 2018 

 

The Hon. J.A. DARLEY (14:57): I seek leave to make a brief explanation before asking the Leader of the Government questions regarding the sale, purchase and leasing of government land.

 

Leave granted.

 

The Hon. J.A. DARLEY: The current Minister for Health recently made a statement that the previous government proposed to sell the site of the former Repatriation General Hospital for much less than market value. There is a proliferation of agencies such as the department for environment, water and natural resources, the Department of Planning, Transport and Infrastructure, the Department of Treasury and Finance, and possibly others, that all undertake buying, disposing and leasing of land on behalf of the government. This results in a duplication of services and resources as each agency needs qualified property staff to undertake these tasks. Merging the services will result in savings to the taxpayer. My questions are:

 

1. Can the minister advise which departments have their own property purchase, disposal and leasing sections?

 

2. Can the minister advise how many people are in each of these sections and the total salaries of all staff combined?

 

3. Has the government given consideration to consolidate all activities in relation to the purchase, sale and leasing of state government property into one agency such as Renewal SA, formerly the Land Management Corporation?

 

4. Has the government undertaken any work to see what savings could be achieved if this is done?

 

5. If not, will the government undertake this exercise?

 

The Hon. R.I. LUCAS (Treasurer) (14:58): I thank the honourable member. That's an excellent question and certainly the answer as to the detail of the question is that I will take it on notice and bring a reply back to the house as expeditiously as possible. The honourable member, given his background, makes good sense in terms of the potential for greater coordination in terms of handling these sorts of processes within government. Certainly my recollection of governments past was that there was a comprehensive Land Management Corporation-led role on behalf of former governments in relation to the sorts of issues the honourable member has raised.

 

If that's not the case now, and the honourable member's question certainly infers that that isn't the case now, then I will get that answer for the member and bring it back. The notion of centralised coordination management of processes in relation to some of these issues, at least on the surface of it, to me, makes good sense. It is certainly consistent with practice some years ago in relation to the disposal of government assets. We will consider the issues the member has raised and bring back a reply.

 

___________________________________________________________________________________

 

Answer to Question 

 

18 September 2018 

 

The Hon. R.I. LUCAS (Treasurer): I have been advised of the following:

1. The Department for Education has a Property Services team which deals with the acquisition, disposal and leasing of real property required for public education services throughout the state. The Minister for Education is the registered proprietor of over 1,000 properties and is party to approximately 500 leases, licences and joint use agreements which require management and monitoring on an ongoing basis.

 

In accordance with Premier and Cabinet Circular 114 – Government Real Property Management, the Department for Education engages Renewal SA to arrange for the disposal of surplus properties and the acquisition of property when required. The department's Property Services team liaises with Renewal SA to arrange the appropriate approvals required from the Minister for Education as part of the acquisition and disposal process; however Renewal SA is responsible for the work associated with the acquisition and disposal of property for the department.

 

In accordance with Premier and Cabinet Circular 018 – Government Office Accommodation Framework, the Department for Education is required to have all corporate leased office accommodation negotiated and managed by the Department of Planning, Transport and Infrastructure (DPTI). The Department for Education's Property Services team liaises with DPTI to arrange appropriate approvals required to secure the department's leased accommodation both within the Adelaide CBD, metropolitan and regional South Australia.

 

The Department of Planning, Transport and Infrastructure's (DPTI) has advised the following:

 

Property Purchase

 

DPTI undertakes its own property purchasing when required but rarely purchases property and has no resources dedicated to property purchasing.

 

DPTI is unaware which other agencies have property purchasing powers or undertake property purchases.

 

Property Disposal

 

Disposal of Property across government is controlled via Premier and Cabinet Circular PC114—Government Real Property Management (PC114).

 

DPTI is one of few agencies authorised to dispose of property under PC114.

 

DPTI is aware that Renewal SA and the Department of Treasury and Finance (DTF) (Market Projects Group) for specific assets, also have authorisation for property disposals.

 

Property Leasing

 

Leasing of Property across government is controlled via Premier and Cabinet Circular PC018—Government Office Accommodation Framework (PC018) for office accommodation.

 

DPTI is the managing agency for the whole of government office accommodation leasing (i.e. as a centralised function) ensuring coordinated participation in the market and avoiding agencies unknowingly competing for the same accommodation.

 

In regard to the State Government's urban development agency Renewal SA, I can advise this agency was responsible until 30 June 2018 for the lease, sale, acquisition and disposal of property in the following three ways:

 

Firstly, property under the direct ownership of Renewal SA.

 

Secondly, in terms of Premier and Cabinet Circular 114 (known as 'Government Real Property Management'), Renewal SA is and remains responsible for the purchase and disposal of real property on behalf of the majority of State Government agencies.

 

The following government entities are among those that have exemptions under PCC114 and can therefore manage the sale and disposal of their own property:

 

Department of Environment, Water and Natural Resources (which manages Crown land);

 

Department of Planning, Transport and Infrastructure (which manages numerous major infrastructure projects that typically involve land transactions);

 

Defence SA;

 

Forestry SA;

 

SA Water;

 

HomeStart Finance; and

 

South Australian Housing Trust.

 

Thirdly, Renewal SA was responsible through administration arrangements for the sale and disposal of properties under the ownership of the South Australian Housing Trust.

 

It is important to note that this third arrangement–that is, the one between Renewal SA and the Housing Trust–ended on 1 July 2018 with the establishment of the state government's new Housing Authority. This new statutory corporation has taken over responsibility from Renewal SA for the management of Housing Trust assets, including their lease, sale, acquisition and disposal.

 

For the avoidance of any doubt, Renewal SA remains responsible for the lease, sale, acquisition and disposal of property under its direct ownership as well as the purchase and disposal of property on behalf of other agencies under Premier and Cabinet Circular 114.

 

2. The Department for Education's Property Services team is comprised of 5.0 FTE staff, with a total annual salary cost of $488,000 in 2017-18.

 

The Department of Planning, Transport and Infrastructure's (DPTI) has advised the following:

 

Property Purchase

 

DPTI have no dedicated resources for government property purchases and rarely purchases property.

 

Property Disposal

 

DPTI has two award level staff dedicated to managing the DPTI Property Disposal function inclusive of Government Employee Housing (GEH), Rail Commissioner and other DPTI annual disposal programs.

 

Property Leasing

 

DPTI is responsible for the centralised whole of government office accommodation leasing function and has four award staff dedicated to the leasing function.

 

In regard to the number of people involved in these three streams of activity and the associated salary costs across Renewal SA, I can advise the following:

 

Firstly, in regard to the lease, sale, acquisition and disposal of property directly owned by Renewal SA, the agency employs a total of nine staff (8.4 FTEs) dedicated to these functions with a total annual salary bill of $920,007.

 

Secondly, in regard to Renewal SA's activity under Premier and Cabinet Circular 114, three staff (2.6 FTEs) are currently employed with a total annual salary bill of $235,233.

 

Thirdly, in regard to the administration of Housing Trust properties previously undertaken by Renewal SA and transferred from 1 July 2018 to the new South Australian Housing Authority, this function involves a total of 12 staff (11 FTEs) with an annual salary bill of $618,509.

 

3. The Department of Planning, Transport and Infrastructure's (DPTI) has advised the following:

 

Property Purchase

 

DPTI have previously identified in a joint paper with Renewal SA in 2016 that the across government purchasing function should be captured under PC114 as a centralised function;

 

This was primarily as a coordination function to ensure rationalisation of existing government owned property and to prevent unnecessary purchasing of property where government already owns property.

 

The compulsory acquisition function is a completely separate function and operates under the Land Acquisition Act 1969.

 

Property Disposal

 

This function is already centralised across government under PC114 and predominantly under the Minister for Transport, Infrastructure and Local Government.

 

Property Leasing

 

This function is already centralised across government under PC018 for office accommodation under the Minister for Transport, Infrastructure and Local Government.

 

I can further advise the establishment of the new Housing Authority is still in its early days and while Renewal SA staff formerly involved with Housing Trust property were transferred under machinery of government changes to the new Housing Authority, final staff numbers and associated salary costs are still being worked through.

 

4. The Department of Planning, Transport and Infrastructure's (DPTI) has advised the following:

 

As the property disposal and office accommodation leasing functions are already centralised via government policy, this has already been actioned.

 

There is room to centralise the property purchasing function, but this is more a property usage efficiency issue rather than a savings issue.

 

5. The Department of Planning, Transport and Infrastructure's (DPTI) has advised the following:

 

Refer to the answer under question 4

 

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