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Following criticism over its ‘sports rorts’ program, the government is directing millions of dollars to Coalition target electorates under schemes without merit-based requirements. By Karen Middleton.

Millions more for sports grants hidden in budget

The federal government is continuing to pour millions of dollars into local sports grants favouring Coalition electorates, despite an auditor-general’s rebuke earlier this year about political bias.

The amount of funding for the sport program, which is within the Health portfolio, was not disclosed anywhere in this year’s budget papers. The Health Department has confirmed the allocation is $12.38 million for the community development grants sport program, already assigned and to be spent over the next seven months.

More than $200 million has already been spent via various programs during the past 13 months fulfilling election promises to upgrade sports facilities, most of which favoured Coalition target seats.

The program’s only mention in the October 6 budget was a five-word reference to its existence, buried in the department’s supplementary portfolio budget statement.

The same was true of a separate $144.2 million three-year funding allocation for the female facilities and water safety stream program, established last year. This program is mentioned on the same page and only by its eight-word title. The Health Department says this is because they were included “in previous budget contexts”.

Both programs were the subject of questioning at a parliamentary inquiry into the administration of sports grants in August.

This week, former New South Wales auditor-general Tony Harris told the same inquiry he wished public servants were less reticent to advise ministers when decisions were inappropriate or unlawful.

He said he had been aware of “problems” with grants under successive governments for close to three decades.

“It’s unfortunate that ministers believe that if they make grants to the electorate, they will be able better to buy their vote,” Harris said. “It’s a pity that they think that way but it’s a greater pity that they act that way.”

In August, the department told the committee that 125 grants had been approved under the community development grants sport program since the federal election. Together, they were valued at $45.31 million.

The Saturday Paper has cross-referenced the list it provided with two other departmental grant lists tabled in the senate, and with individual contract details published on the government’s online grants portal.

The list provided to the committee appears to understate the full cost of the grants by about $2 million, with some grants having 10 per cent goods and services tax added when contracts were signed, and other grants not included in the list at all.

Some grant recipients are also named differently in the online grant records compared with the various lists.

Prominent barrister and director of the Centre for Public Integrity Geoffrey Watson, SC, warned that sloppy record-keeping in grants programs risked payments going to the wrong recipients or being used on unapproved projects. “If you haven’t got records,” he asked, “… how can you check?”

Watson, a former counsel assisting the NSW Independent Commission Against Corruption, condemned the lack of transparency in government grant allocation.

“When you’re talking about the allocation of public money, there should be some sort of criteria in place, published and followed,” he told The Saturday Paper. “These are not discretionary payments. They’re actually supposed to be awarded for a purpose.”

The community development grants, managed by the Health Department, were originally part of the similarly named main grants program in the Department of Infrastructure. But last year, the government cleaved off 124 sports-related projects and shifted them to the newly created program in Health. The department said some Health funding had to be added to the Infrastructure funding to pay for them. It said the list ended up as 125 because four projects were transferred from the female facilities stream, one was removed because the organisation had shut down and two were removed “as they were already funded under other programs”. This suggests the government views its various funding programs as interchangeable.

The Health Department outlined the specific funding for both programs in response to questions from The Saturday Paper this week. Most projects are in marginal, Coalition-held or target seats.

The Health Department confirmed the government had already spent $131.7 million in female facilities funding, of which $118 million went on 12 swimming pool upgrades promised ahead of last year’s federal election, including $10 million for the harbourside pool at Milsons Point in the seat of North Sydney. Other projects include $20 million and $25 million respectively for pools in the Perth-based seats of Swan and Pearce. All are Liberal-held seats, with Swan and Attorney-General Christian Porter’s seat of Pearce both marginal.

The department said projects valued at more than $2 million – including all of the swimming pool upgrades – were approved by the Minister for Youth and Sport, Richard Colbeck, who replaced the Nationals’ Bridget McKenzie in the job earlier this year.

A departmental official approved all other projects after the government selected them.

The commitments for the 12 pool projects promised more than a year ago were signed on July 1, the first day of the current financial year. The department confirmed the $131.7 million paid for projects promised during the election campaign. There is $18 million left in the fund that is yet to be allocated.

These programs are separate from and different to the Community Sports Infrastructure Grant Program, which was the subject of the auditor-general’s scathing report in January. That was a merit-based competitive grant program and the auditor focused on the fact that the then minister, Bridget McKenzie, had intervened to overrule departmental decisions, instead favouring grants in Coalition target seats ahead of last year’s election.

The more recent allocations have been made under restricted programs in which there is no competitive merit-based process. The government simply nominates the projects, enabling it to still favour target seats.

It is difficult to say definitively exactly how much the government has spent on local sports grants since the federal election, because the same kinds of grants are being made through a range of different funds across several portfolios.

Along with its part of the now-split community development grants program, the Infrastructure Department also manages the Stronger Communities Programme, which funds similar sports facilities upgrades, as does the Building Better Regions Fund, which received a $200 million budget boost. Unlike the others, Building Better Regions has a competitive grant process. The Safer Communities Fund, within the Home Affairs Department, has also financed sports-related projects. It received an extra $35 million for the next three years, although the budget papers did not stipulate an annual breakdown. The government argued the spending did not need to be appropriated – and as such did not need to be detailed – because it was being funded from the confiscated proceeds of crime. Its application process is also by government nomination.

This week, Home Affairs told The Saturday Paper that $1.2 million of that was available this financial year, $15 million next year and $14.8 million in 2022-23 – which is when the next election is due. Another $4 million is available the following year. The department said eligibility requirements had “not been finalised”.

The main Community Development Grants Programme received an extra $102.8 million in the budget, $75.3 million this financial year.

Of that, $41.55 million has been spent in the month since, including $15.95 million on projects in the seat of Mayo, which covers the Adelaide Hills, Fleurieu Peninsula and Kangaroo Island regions and is held by Centre Alliance’s Rebekha Sharkie.

Sharkie claimed credit for the windfall after Centre Alliance agreed to support the government’s controversial university funding bill, which raised the cost of some degrees and was passed two days after budget day. She had previously called the proposed rises “grossly unfair”.

“These legislative reforms are by no means perfect but overall, Centre Alliance recognises what the government is trying to achieve,” Sharkie said of the decision.

Other parties accused her party of selling out.

Sharkie’s electorate funding, part of a $40 million overall budget boost for Mayo, includes $14.7 million for sports facilities’ upgrades.

A further $2.5 million was awarded to establish an Adelaide Holocaust museum, for which Centre Alliance senator Stirling Griff was among the advocates. Another $3.5 million went towards a similar museum in Brisbane. During the recent Queensland election campaign, the state Liberal National Party promised to match it, if it won government.

There was $100,000 to establish an Australian Army Cadet Unit in Kenmore, Brisbane, also funded prior to the Queensland election, and $23 million for a stadium in Rockhampton. The federal government announced the stadium funding during the Queensland election campaign, with the One Nation leader, Senator Pauline Hanson.

The federal opposition has asked the auditor-general, Grant Hehir, to investigate the stadium grant. Hehir has said he is considering revisiting the whole Community Development Grants Programme, last audited in 2018, but has not formally included it in his forward schedule.

He is developing new methodology to examine the ethics of how agencies manage government programs, concerned his focus over the past five years has neglected this part of his mandate.

To date, Hehir’s Australian National Audit Office has carried the burden of scrutinising programs across government and has uncovered several anomalies this year that have embarrassed the government, including the $30 million overpayment for a piece of land around the site of the planned Western Sydney airport.

This week, the government finally unveiled its proposal for a national integrity commission, but was immediately criticised because it would block tipoffs from whistleblowers and conduct most investigations in secret.

The proposed commission would have two streams. In the law-enforcement stream, scrutinising police and other law-enforcement agencies, it would have the discretion to hold public hearings, the government arguing that transparency is most important when those enforcing the law are accused of bending or breaking it.

But the public sector stream, which would cover politicians and their staff along with all government agencies including contractors, would not have public hearings.

“The government’s position is to not repeat some of the mistakes at a federal level that have occurred at a state level,” Porter said of the risk that reputations could be trashed by allegations later proved to be unfounded.

“…We’ve been very clear that we have to find the right balance between preserving people’s liberties and rights in the criminal justice system that have existed for hundreds of years and having an extremely powerful investigative body. And the ultimate public hearing for matters that would be the subject of public investigation is a court.”

Porter said the Commonwealth integrity commission would have greater powers than a royal commission. Its officers would have the power to compel evidence, arrest people and seize property, tap phones and assume false identities.

But only specific officials could refer alleged corrupt practices to the commission, not whistleblowers directly.

Geoffrey Watson says it is “completely untrue” to suggest the proposed body would be more powerful than a royal commission.

“The conditions that are imposed in relation to the public sector are just hopeless,” says Watson. He says an inability to examine retrospectively would put current controversies involving federal ministers out of reach.

“This is a whitewash,” Watson says. “This is worse than not having an integrity commission.”

Labor, the Greens and several senate crossbenchers all condemned the lack of public hearings and vowed to force changes.

Porter had argued the release of the long-awaited draft bill was delayed because the government had “more immediate priorities” during the Covid-19 pandemic.

That may be true, but it was not too busy to hand out millions in sports grants, including from a fund managed by the Health Department.

This article was first published in the print edition of The Saturday Paper on Nov 7, 2020 as "Millions more for sports grants hidden in budget".

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