As Bridget McKenzie’s resignation brings about a surge in the Coalition’s conservative wing, new analysis confirms the bias of the sports grants program. By Karen Middleton.

Bridget McKenzie falls on sports grants sword

Former Nationals deputy leader Bridget McKenzie in the senate on Wednesday.
Former Nationals deputy leader Bridget McKenzie in the senate on Wednesday.
Credit: AAP Image / Mick Tsikas

When Scott Morrison secured the resignation of Bridget McKenzie this week, he rejected criticism of the sports grants program she had overseen. The breach was in failing to declare a conflict of interest – not an issue with the system.

But further analysis by University of New South Wales academic Sharron O’Neill of the funding program confirms 60 per cent went to Coalition electorates and 31 organisations received multiple grants, the biggest beneficiaries being in seats where two ministers and a veteran Liberal MP were under threat.

The Australian National Audit Office’s scathing report on the grants program – which found it was politically biased and had no legal basis – revealed the administering agency, Sport Australia, wanted a limit of one grant for each applicant. But the grant guidelines – and apparently the minister – didn’t allow for the restriction.

The multiple grants mean 11 recipients secured totals that exceeded the $500,000 per-grant cap – and the two biggest received double that.

The largest allocation, which involved three grants totalling $1.1 million, went to Maroondah City Council, which spans the Victorian electorates of Deakin and Menzies. Liberal incumbents Michael Sukkar and Kevin Andrews faced serious challenges at last year’s election but retained their seats.

The Northern Grampians Shire Council, in Education Minister Dan Tehan’s Victorian seat of Wannon, secured $1 million in two $500,000 grants, both awarded in the final funding round, just a month before the election.

Another big recipient was Penrith City Council in the marginal Liberal-held Western Sydney seat of Lindsay, which secured five separate grants totalling $850,000. The Penrith grants were for lighting at a softball field, amenities blocks at three soccer fields and $500,000 for floodlights and access paths at a sports ground used for touch football, Oztag and cricket.

The forced resignation of Bridget McKenzie has failed to avert further scrutiny of the controversial grants, which now face a senate inquiry after Labor and the crossbench used their combined numbers in parliament to establish it.

The inquiry will seek to scrutinise the grants in detail and any role played by other ministers, including Prime Minister Scott Morrison and his staff.

One Liberal observed to The Saturday Paper this week: “Bridget was following orders. There’s no doubt about it.”

A new examination of the grants by O’Neill, an associate professor of accounting, has also revealed anomalies in the published totals for the grants program and amounts paid to various organisations. Her analysis queried the total value of the grants program – which the government described as $100.6 million – when the allocations by state and territory only added up to $100.273 million, a discrepancy of approximately $327,000. Sport Australia has now acknowledged that the lower figure is correct and is amending its information to reflect that.

A list reflecting grants actually transferred shows that about $11.6 million is yet to be paid.

McKenzie’s Sunday afternoon resignation set off a chain of events within both the parliament and the government, sparking a ministerial reshuffle and a new round of brawling over climate change.

On Monday night, cabinet minister Matt Canavan quit his Resources portfolio to support what became a failed attempt by former Nationals leader Barnaby Joyce to oust his successor, Michael McCormack, the next day.

Canavan revealed he also faces an inquiry over his failure to declare his membership of the North Queensland Cowboys rugby league club. The club had received a loan through the Northern Australia Infrastructure Facility, which Canavan oversaw.

By week’s end, Queensland Nationals backbencher Keith Pitt had replaced Canavan as minister for Resources and Northern Australia and added Water to the portfolio. The Nationals’ new deputy leader, David Littleproud, added McKenzie’s former Agriculture portfolio to his existing responsibilities for Drought and Emergency Management, with natural disasters becoming a cross-portfolio responsibility. Victorian National Darren Chester stayed in Veterans’ Affairs and Defence Personnel but he and the portfolio were elevated into cabinet.

While McCormack’s victory spared Scott Morrison from having to renegotiate the Coalition agreement and manage relations with a returning – and far more outspoken – deputy prime minister in Joyce, it created its own set of political challenges.

The failed leadership bid triggered a new conservative insurrection in the Coalition party room. Joyce and Canavan led a pro-coalmining group warning against further action on climate change, as city-based MPs and protesters encircling Parliament House demanded exactly the opposite.

The Coalition upheaval also coincided with a surprise leadership change in the Australian Greens, after Senator Richard Di Natale announced on Monday he was quitting politics to spend more time with his wife and young sons. The 10-member parliamentary party elected its only lower house MP, Adam Bandt, to replace him. Queensland senator Larissa Waters will lead in the senate and share deputy party leadership with Tasmanian Nick McKim.

Bandt immediately vowed to redouble the Greens’ efforts to pressure the government and opposition on climate change, including confronting their leaders more directly in the chamber in which he and they sit.

“People are angry and anxious because it is clear that the government does not have the climate emergency under control and has no plan to get it under control,” Bandt said after his elevation.

In forcing Bridget McKenzie to quit, Morrison sought to contain criticism of her conduct to a conflict-of-interest issue involving the undisclosed membership of a gun club that received a $36,000 grant.

That sidestepped the core issue of what the Australian National Audit Office found was political bias in the Community Sports Infrastructure grants program, raising questions about other grants programs and whether the government intends to do the same again.

Asked to investigate McKenzie’s conduct, the secretary of the prime minister’s department, Morrison’s former chief of staff and political adviser Phil Gaetjens, reported back on Sunday that he found no problem with the grants program.

Gaetjens contradicted the independent auditor-general, who said the program displayed clear “distribution bias”, targeting seats the Coalition needed to win, and had no evident legal basis.

“While there may be differing views about the fairness of the process, the minister used the discretion she was afforded,” Morrison said on Sunday, saying McKenzie had not breached ministerial standards in that respect.

When parliament resumed in earnest on Wednesday, after a day of bushfire condolences, the Labor opposition tried to have parliament demand the government fund all projects that Sport Australia had approved but McKenzie had rejected. The government used its numbers to block the move.

“This government is shambolic,” Anthony Albanese said later. “It’s moving from one mess to another … all concerned about itself and politics and not concerned about the national interest.”

On Wednesday evening, McKenzie made a narrowly cast apology in the senate, saying she was sorry for not disclosing her gun club membership. She disclosed four other club memberships she had neglected to list on her register of interests.

“I’ve chosen to fully disclose all my memberships to the senate on this day to ensure complete transparency both to the senate and to the broader Australian community,” McKenzie said. “… I regret any confusion caused concerning my declaration of interests, and I apologise to each and every one of my fellow senators for my transgression with regard to the register of interest.”

She did not apologise for her handling of the grants program.

The UNSW analysis of the grants reveals a series of inconsistencies. These include what appeared initially to be an overpayment to the Sunshine Coast Regional Council in billionaire Clive Palmer’s former seat of Fisher.

Records published by Sport Australia indicate the council has received $625,902 when it was awarded $500,000. The Saturday Paper understands the extra amount relates to part of a $157,400 grant made to the Maroochydore Rugby Union Club in the same electorate, which the club has asked the council to administer.

The remainder of the combined grants is yet to be paid.

Adding to the confusion, The Saturday Paper has confirmed that the original compulsory project completion deadline of June 30, 2019, was set aside when assessing applicants in both the second and third funding rounds, offered as late as April. This is despite it having remained an official eligibility requirement in the grants program guidelines.

Projects in rounds two and three were given no firm deadlines for completion. Some projects remain incomplete, nine months later.

In parliament, the opposition attacked the government on both the grants and its handling of the bushfire crisis and climate change.

In his bushfire condolence speech on Tuesday, Michael McCormack echoed some concerns of the climate-change sceptics in his ranks. “I fully accept that climate conditions and changes are an important part of this,” he said. “No, there is no single cause for these fires. There is absolutely no justification for trying to turn these events into something that they’re not … I stress again the actions of arsonists warrant strong discipline to discourage a repeat of such dangerous, antisocial and life-threatening behaviours.” He said the fires were not unprecedented.

Home Affairs Minister Peter Dutton added his voice too. “I don’t see huge points of difference in our party room,” he told ABC Radio National. “… We’re experiencing hotter weather, longer summers. But did the bushfires start in some of these regions because of climate change? No. It started because somebody lit a match.”

Their comments contrast with evidence NSW Rural Fire Service Commissioner Shane Fitzsimmons gave to a state parliamentary inquiry on August 29 last year, quoting the most current statistics on the cause of fires in NSW for 2018-19. He said burning off – legal and illegal – accounted for 21.6 per cent, lightning 7.6 per cent and arson just 1.3 per cent.

Morrison confirmed he would establish a royal commission into the bushfires, appointing former Defence Force chief Mark Binskin to head it. The inquiry’s draft terms of reference include the statement that the changing global climate is affecting Australia’s ability to respond to natural disasters.

“The royal commission assumes that our climate has changed – and there is climate change,” Morrison told Channel Nine’s Today on Wednesday. “The issue is what you do about it, the practical actions that keep people safe, and emissions reduction, land clearing, all of these things are critical to that.” He said the government “won’t be bullied into higher taxes or higher electricity prices”. “What we’ll do is take practical action that deals with these challenges.”

Asked on Wednesday what he had learnt about leadership from the political challenges of this summer, Morrison was succinct: “Always to listen, always to show up and always put Australians first.”

This article was first published in the print edition of The Saturday Paper on February 8, 2020 as "Unsporting behaviour".

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Karen Middleton is The Saturday Paper’s chief political correspondent.

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