Ms O'CONNOR - Minister, if you go to the annual report, page 15, full time equivalent employees and, first of all, I note the enormous contribution that PAHSMA makes not just to Tasmania but also to the Tasman Peninsula economy. I'm very thankful for that. It does appear that there has been some reduction in staffing over the course of the first six months of this year in January, or have I misread that?
Is it correct that there has been a reduction in full time equivalent staff members at PAHSMA? Is this as a result of COVID-19, or is it part of the organisational transformational review or both?
Mr JAENSCH - Thank you for the question. My understanding is that through COVID the Government provided additional support to PAHSMA to assist the retention of casual and seasonal employees during that period. PAHSMA worked with the State Service Management Office and CPSU to ensure that fixed term and casual employees continued to be paid. I'm advised that all fixed term and casual contracts were honoured until their end dates.
Over the period there has been a reduction in overall staffing numbers. I understand that's to do with positions concluding or resignations during that period as well, rather than an organisational reprofiling but I'd ask maybe the CFO or the CEO, whoever's best positioned.
Mr NELAN - I'm more than happy to answer that question. The cessation of the fixed term and casual contracts over time, ended around December, that was the last person whose position was guaranteed through the coverage of those wage costs by the Government. We are a seasonal business, so at this point in time, we are re engaging casual workforces for the expected lift in visitation post 15 December. So, yes, the reduction that you see was purely those casual and fixed term employees who would have ended their employment and then as the season comes back in, we would re engage.
Ms O'CONNOR - Thank you, Mr Nelan. Page 30 of the annual report outlines the $10 million equity injection for this past financial year from the State Government. The 2020 21 State Budget provides for $8 million for repaying COVID-related debt; $4 million for the conservation program, and $3 million for the visitor and interpretation centre at the Cascade Female Factory. I'm having some difficulty reconciling the figures in the annual report and the State Budget. Maybe the Chief Financial Officer, through you minister, could help us understand.
Mr JAENSCH - You've just made Mr Nelan very happy, thank you very much, Ms O'Connor. I'd be happy for him to answer the question.
Mr NELAN - Thanks for the question. There is an element of $2 024 000 which was received from the Commonwealth Government towards the construction of the Female Factory History Interpretation Centre. It wasn't a capital grant; it was treated as an equity contribution to PAHSMA by the Government and it came through the State Government. That's why that's $10 million.
Ms O'CONNOR - Minister, I note that executive remuneration has increased quite a bit since the 2019-20 annual report and it appears that it's largely due to a termination payment, as well as a reorganisation of the executive team. Can you confirm that? Moving forward, do you have a view on whether the restructure that we were talking about before, the transformational review, is likely to cost more, less or about the same as the previous executive remuneration bill?
Mr JAENSCH - There was a final payment made as part the resignation and departure of Stephen Large. I am advised that it was executed in accordance with the instrument of appointment as a full and final payment at the conclusion of the instrument of appointment, and there were no other additional payments made. I defer to the Chair, who oversaw that process and he may also be able to comment on the anticipated cost structure of the proposed further steps of the transformation that is still to play out. Mr O'Brien?
Mr O'BRIEN - Thanks, minister. Yes, I can comment on both. Stephen left PAHSMA at the beginning of November. He was temporarily replaced by Jane Harrington, who was the director of CNI as we sought a replacement, a new CEO. That's eventuated in the appointment of Jonathan.
As the minister has noted, Stephen was a long term servant of PAHSMA and a very successful one, and given his long tenure, his annual leave and long leave provisions or payment entitlements, made up quite a bit of the termination payment that was noted in the annual report.
In answer to the question on the thinking on the cost of the executive moving forward, the answer to that is that it will cost more moving forward because we have put into place a couple of extra positions, courtesy of the transformational review. One is of a temporary nature, and that is the transformation manager, as it is not seem to be an ongoing role. It would be in place for the coming couple of years whilst we finalise the transformation process.
We have also made permanent David Nelan's position as CFO. In the years preceding David's appointment, we had people in acting capacities for the CFO. So, David's permanent tenure will likewise increase our costs moving forward. As a result, the answer to your question, will it cost more? Yes, it will cost more. Our hope, and our plan, is that it is a more effective structure identified in the review process that should lead us to a better functioning executive that is able to deliver on what we need for PAHSMA in the coming five to ten years.
Ms O'CONNOR - Thank you for that. I would have thought that an investment in a full time Chief Financial Officer was a good investment.
Mr JAENSCH - I happily agree.
Ms O'CONNOR - Minister, just having a look again at the annual report. It appears that there are two executive positions in Human Resources since March this year, Jennifer Goulding as Human Resources Manager and Carol Armstrong in Human Resources Transformation Manager. I gather that is the position that we heard about earlier. Are you able to explain the overlap? So, Carol Armstrong is that two-year position for someone who is the transformation manager.
Mr JAENSCH - Grant, could you please confirm?
Mr O'BRIEN - Yes, I can, minister. Carol was the Human Resources Manager for PAHSMA and she has transitioned to become the transformation manager, and Jenny Goulding has taken the place of full-time Human Resources and Culture Manager for PAHSMA. There has not been an overlap; there has just been a transition in roles.
Ms O'CONNOR - I'm interested in understanding the TASCORP loans that have been taken out by PAHSMA. This year's statement of financial position has two TASCORP loans listed as liabilities - one for $2.9 million, the other for $3 million. Were those loans sought and secured during the COVID-19 period? We heard before that the state Government gives an equity injection and then PAHSMA pays some of the TASCORP loan back. It's an interesting system. When were those loans taken out? What were they for? What's the repayment plan?
Mr NELAN - There was $3 million of what we call bond loans, which are a fixed-term loan. One matures in 2022, I think that's for $1 million; and another $2 million matures the next year. We can't pay those out because they stem from a few years ago. We also have a come and go, like an overdraft facility, which is where the funds I think you're referring to, the $2.9 million -
Ms O'CONNOR - The $2.9 million, yes.
Mr NELAN - When we pay our wages or pay our operating costs and we don't have the revenues, we draw funds into our working account from those loan borrowings effectively creating an overdraft. Then when the equity injection comes in, we clear that out. It's retrospective, based on expenditure as it has occurred.
Ms O'CONNOR - You're confident that the capacity to pay the loans is assured and this is not going to be a debt legacy hanging over the head of PAHSMA preventing it from doing other important work?
Mr JAENSCH - You will see from -
Ms O'CONNOR - There's a legacy loan and an overdraft.
Mr JAENSCH - You will see from the figures that the revenue has been cut in half by the past couple of years. You can see that where it was previously the ratio to debt obligations looks quite healthy.
This $20 million is in anticipation that this is going to be a major disruption to the business and that it's not going to be over straight away. It's going to be a number of years in the trading out. We don't know what the future looks like. This was a way of the Government providing a level of certainty and security to the business.