‘Legitimate questions’ over whether Govt saw full uni merger business case

Deputy Premier Susan Close has joined the Premier in admitting to not having seen the full business case for merging the universities of Adelaide and South Australia, amid questions about whether anyone in the Malinauskas Government read it before committing nearly $450m of taxpayer support.

Jul 04, 2023, updated Aug 07, 2023
Photo: SA Parliament livestream

Photo: SA Parliament livestream

Soon after Premier Peter Malinauskas admitted on Monday that he had not read the full business case for a merger before committing $444.5m of taxpayer funding, Close was questioned at a budget estimates hearing.

Close, who has ministerial responsibility for higher education within the industry, innovation and science portfolio, also revealed that she had not received the full business case.

Opposition education spokesperson John Gardner asked: “Has the minister read the business case that was prepared by the universities in relation to informing their decision to proceed with the merger?”

Close replied: “There is a feasibility study… that went to the two councils that contains all of the case and a significant amount of commercial-in-confidence material.

“I have not received that full document.

“However, there was a significant amount of material that was part of what went to the councils that also included commercial-in-confidence material that was provided to the government.”

That information, Close said, was provided “in the context of preparing the questions about the funding package” that the government announced over the weekend.

“That material, because it still contains a high degree of commercial in-confidence material, cannot be released,” she said.

The two universities announced on Saturday night that they had approved the controversial union, after developing a business plan for “Adelaide University” to open by January 2026.

The state government and universities say Adelaide University would educate more than 70,000 students and add $500m to the state’s economy a year.

The university councils only received the full business case for consideration last week, but approved it within days. Both universities say full details will be kept under wraps, due to commercial considerations, and they will only publicly release a summary.

The Malinauskas Government – which strongly backed amalgamation and would have re-established a merger commission of inquiry had the universities not “voluntarily” approved it – committed $444.5m to support the merger via perpetual investment funds, land purchases and $30m for measures attract international students.

Close told the estimates hearing that she understood “very clearly why there are questions about what government has seen and what we have been able to digest in the ways in which we have been able to make decisions”.

“They are legitimate questions,” she said.

Deputy Premier Susan Close in estimates on Monday. Photo: SA Parliament livestream

Gardner later asked Close: “I appreciate the minister says she has not been given the document that was given to the councils the other night. Has anyone in government been provided with that business case?”

Close replied: “That document, I do not know how much it overlaps with the material that we have because I have not, by definition, seen it.

“It was a document that was provided to the councils because they have a fiduciary duty to make a decision about what is in the interests of their institution.

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“So it is quite likely that it would have material that was shaped for the purpose of considering each individual university’s future, and they may not have been the same document.”

The Opposition claimed on Tuesday that it showed “no one from Government ever saw” the business case for the new university merger.

“Yesterday’s revelations have underscored why a parliamentary inquiry into (the merger) is so important, and why all sides of politics are supporting it,” Gardner said in statement.

“It will do the work Labor should have done before they botched their own process so badly.”

The Opposition is supporting an Upper House select committee inquiry to examine the legislation required to establish a new university.

The government wants to pass the legislation by the end of the year, with the Premier and the universities warning the Upper House over the weekend not to use a committee inquiry to delay passage of legislation.

If the Opposition votes against a merger in the Upper House, the government will likely have to convince crossbenchers SA-Best to support the legislation. SA-Best MLC Frank Pangallo told InDaily last week he was currently opposed to the proposal.

Close said the legislation to establish a new university would be released for public consultation in August. It is likely to contain details about the new institution’s powers, functions and governance structure.

She also backed the universities’ decision not to release the full merger business case.

The Opposition and Greens have called for its release as part of the committee inquiry process.

But Close said the universities had “mapped out a plan to grow substantially” and it was “not in our collective interest for them to compromise the way in which they to do that”.

She also argued releasing the business case in full “might facilitate competitors taking advantage of the transition time”.

“It is, however, legitimate that the people of South Australia understand that the government has been able to assess the merits of the argument, that a larger institution would be of merit for South Australia, and also some of the detail that sits behind the rationale for each of the elements of the funding package,” she said.

“It is very easy to distil, ‘Have you seen a thing called a business case and, if you haven’t, then how can you make this decision?’

“If you take each of those elements separately, I am satisfied that we have seen sufficient information, sufficiently of weight and justified, to justify proceeding with draft legislation for consideration by parliament… and also to justify a package of support for the new university.”

Close said the government’s funding support is “a relatively small amount of money that is simply expenditure now and a significant amount that is about facilitating what we believe is strategically important to the future of the state”.

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