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A $100 million grants program, established by the government ahead of the 2019 election, was restricted to 25 preselected projects, most of them in key seats for the Coalition. By Karen Middleton.

Environment grants awarded by invitation only

Former Environment minister Melissa Price.
Credit: AAP Image / Lukas Coch

A $100 million environmental grants program, created ahead of last year’s federal election, had no eligibility guidelines and was open only to 25 specified projects that had already been chosen and announced as campaign promises – most of which were in seats held or targeted by the Coalition.

There was no transparent selection process for the Environment Restoration Fund, and no information about who selected the listed projects. Some approved grantees have told The Saturday Paper they received surprise calls before the election telling them they were being awarded money without having lodged any formal application. Some say they had been asking for support for years. They were instructed to fill in the paperwork only after being notified of their selection.

The guidelines for applying for these grants were not published until November last year, seven months after the fund was announced in the budget.

When they finally came, instead of describing an open and competitive process – the government increasingly prefers non-competitive, selective grants programs – there was no process evident at all.

Rather, replacing the usual eligibility and selection criteria was an appendix listing the 25 predetermined projects. The list included the organisations that would deliver them and how much each would receive. The appendix noted that the organisations, most of which had already been announced as recipients, had to be invited to apply for a grant.

Recipient organisations declined to comment publicly this week, citing concerns that they would not get the money.

Details of the fund’s arrangements emerged as the government refused repeated demands from Labor and the crossbench to produce documents relating to Prime Minister Scott Morrison’s internal investigation of the so-called sports rorts scandal.

Senator Bridget McKenzie’s much-criticised handling of the sports grants program and subsequent ministerial resignation have increased the focus on the way grants are managed right across government.

In the case of the Environment Restoration Fund, the 25 nominated projects account for $23.3 million of the $100 million allocated to the fund over four years. The Environment Department has confirmed the fund is also being used to finance six other projects not on the list, which will protect the black cockatoo in Western Australia and hooded plover chicks in South Australia. These projects, worth $3.1 million in total, were announced by then Environment minister Melissa Price in the run-up to last year’s election.

Of the 25 projects first listed, only three have been funded, 10 months after Coalition MPs made their pre-election promises. These are koala rescue projects in Queensland, which were funded as the bushfire crisis exploded in December.

The department has revealed that the remaining 22 projects will be funded within the next two weeks. It also said that dozens more, based on further election promises, have been approved.

“A further 29 projects worth $36.06 million have been identified and approved and are being delivered through a mixture of discretionary grants, direct procurement and Commonwealth to State funding arrangements,” a departmental spokesperson said in a written statement responding to questions from The Saturday Paper.

“The majority of these projects were also announced during the 2019 election. A further $8.8 million for projects that will provide safe havens for threatened species was also announced during the 2019 election and the guidelines for these projects are currently being developed.”

Details of the new projects and recipients are as yet undisclosed, along with the selection criteria.

All up, the projects account for about $70 million of the fund, leaving another $30 million still to be allocated and three years in which to spend it.

The department has confirmed the fund is dedicated to paying for election promises. “Most of the funding in the first two years of the program is allocated to delivery of election commitments,” the spokesperson said. “Decision on the use of unallocated funding in the out-years is a matter for government.”

The three koala-focused projects that have thus far received funding are run by Australia Zoo in Beerwah, the Currumbin Wildlife Hospital on the Gold Coast and the Brisbane-based Queensland RSPCA. Each of them received $1.1 million, including GST.

A spokesman for the RSPCA told The Saturday Paper his organisation lodged an application in December. He later amended this to say it had been required to apply “by the end of November”. He declined to provide the precise date or to say who had invited the application, describing the details as confidential.

The government’s GrantConnect website indicates the grant was approved on December 4 and took effect on December 12. The grants to Currumbin Wildlife Hospital and Australia Zoo were approved the same day – December 4 – and took effect on December 13 and 15, respectively.

The Currumbin Wildlife Hospital was invited to apply by local MP Karen Andrews, the minister for Industry, Science and Technology, after the hospital had requested federal support for many years.

Australia Zoo did not respond to The Saturday Paper’s questions.

The biggest single recipient among the 22 other approved organisations is the Central Coast Council in New South Wales. It has been allocated a total of $5.3 million in three grants: $300,000 each for the Clean4Shore program to remove litter from waterways and for water quality improvement in the Gosford coastal lagoons, and $4.7 million to restore the banks and foreshore of the Tuggerah Lakes estuary.

Lucy Wicks, the Liberal member for Robertson, announced the projects during the election campaign. She held on to her marginal seat in the May 18 vote.

A spokesperson for the council said it “is waiting for the outcome of the applications in relation to each of these programs”, adding, “Central Coast Council submitted the applications to the Environment Restoration Fund by the closing date of 12 December 2019.”

The Environment Restoration Fund is the latest in a series of grant programs with selection processes that have come under public scrutiny, both before the May election and since. The questions being raised are more about the process of allocating the grants than the quality of the projects receiving them.

Many programs require applicants to be recommended by their local MP and invited to apply. Another in the Environment portfolio, the Communities Environment program, provided $22.65 million to be handed out in grants – $150,000 to each of the 151 federal electorates, with all applications by invitation.

A list provided by the Environment Department reveals that as of February 10, 1054 projects had been approved, each valued at between $2500 and $20,000.

Scrutiny of the billions of taxpayer dollars being handed out in federal grants increased after the Australian National Audit Office published a scathing assessment last month of a program that Bridget McKenzie oversaw, the Community Sport Infrastructure grants.

The audit report said the program demonstrated “distribution bias” in favour of the Coalition’s electoral interests – something Prime Minister Morrison says a review by Phil Gaetjens, head of the Department of Prime Minister and Cabinet, rejected.

This week, Labor, the Greens and some crossbenchers tried to force the publication of that report by attempting to restrict the government’s senate leader, Mathias Cormann, from performing his duties in the chamber until it was produced.

Labor’s senate leader, Penny Wong, condemned the government for refusing to table the Gaetjens report, the legal advice relating to the funding program and a leaked colour-coded spreadsheet that categorised projects by electorate and political party.

“They are trashing our democracy in the way they are dealing with this disgusting political cover-up,” Wong said on Wednesday. “… This is all about protection of the prime minister, who is up to his neck in the sports rorts scandal. Well, I’ve got some news for the government: it’s too late. It’s too late for a cover-up when you’ve already been caught.”

Government ministers defended the decision to keep the documents secret. Cormann said the Gaetjens report was a cabinet-in-confidence document not suitable for release.

He slammed Labor for trying to restrict him in parliament and said it would set a bad precedent.

“A government majority in the house of representatives could remove the leader of the opposition from his chair at the table for three weeks and prevent him from asking questions, similar to what this motion is seeking to do to me as the leader of the government in the senate,” Cormann said. “It would be completely inappropriate and we would never do it because, unlike those opposite, we respect the institution of the parliament. We all understand that this is a political stunt. The fact that Labor is proposing and supporting this motion reflects very badly on all of you.”

Despite having put her signature to the motion, One Nation’s Pauline Hanson and her colleague Malcolm Roberts withdrew support for it at the last minute. Centre Alliance’s Rex Patrick had signed it on his party’s behalf but his colleague Stirling Griff abstained unexpectedly.

“I support the senate being provided with at least summary details of the Gaetjens report but am not supportive of actions designed to humiliate any member of parliament,” Griff said afterwards.

“The motion had no consequences for government. If any penalty for non-disclosure related to government business, I would have been more receptive to considering it. But sending a minister off to effectively a naughty chair and stopping him doing his job is plainly a personal attack.”

He said Centre Alliance supported a senate inquiry into the sports grants, and this was the “primary mechanism” to gather the required information.

That inquiry began on Thursday afternoon, hearing first from Auditor-General Grant Hehir and his colleagues.

He and auditor Brian Boyd said the prime minister’s office had advocated for particular projects but had no greater success than any other minister. They repeated their view that the program was politicised and said there were “dozens of versions” of the colour-coded spreadsheet with no records of how or why decisions were made. Boyd said the spreadsheet went “back and forth” between McKenzie’s and Morrison’s offices.

Labor senator Katy Gallagher pressed Hehir and Boyd on the links between McKenzie’s decisions and Morrison’s office.

“In the end, the evidence in front of us was the minister made all of the decisions,” Hehir said.

Government senators Matt Canavan and Eric Abetz queried the findings on legal authority. The auditors responded that Sport Australia and the Health Department should have obtained legal advice, but didn’t. Neither did the auditor, reporting only that there was no evidence of legal authority.

“There was no legal advice before you to indicate the minister lacked the legal authority,” Canavan suggested.

“No,” Hehir acknowledged.

Eager to blame any process problems on officials, not politicians, Morrison and the government will chalk that up as an early win.

This article was first published in the print edition of The Saturday Paper on Feb 15, 2020 as "Granting privileges".

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