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While the government’s $660 million fund had no eligibility criteria, a press release was deemed ‘relevant authority’. By Karen Middleton.

Car park slush fund among worst breaches

Alan Tudge (left) and Michael Sukkar at the Croydon railway station car park in 2019.
Credit: AAP / David Crosling

In the lead-up to the 2019 federal election, the Morrison government committed more than $600 million to building 47 commuter car parks at suburban railway stations in four state capitals – all in vulnerable seats.

There were no merit or eligibility criteria, no published guidelines, no cost–benefit analyses and no significant consultations before the sites were chosen, other than with Liberal MPs and candidates who would spruik them at the poll.

During an Australian National Audit Office examination of the fund set up to pay for the projects, the Department of Infrastructure, Transport, Regional Development and Communications conceded that 10 of the proposed sites were not actually attached to railway stations at all.

The audit office’s study of the Commuter Car Park Fund, published this week, strongly criticises the government for how projects were selected.

It also blasts the department for inappropriate assessment and monitoring, extremely sloppy record-keeping and an overall approach that was “not designed to be open or transparent”.

The depth of the described failures in planning, design, governance and accountability exceed those documented in the office’s investigations into the controversial $102.5 million community sports infrastructure grants program. They are certainly also significantly worse in dollar terms than the tenfold overpayment for land in Sydney’s Leppington Triangle – involving the same department – that was documented earlier this year.

“I’ve probably read too many auditor-general’s reports by now,” says Geoffrey Watson, SC, former counsel to the New South Wales Independent Commission Against Corruption and a director at the Centre for Public Integrity. “I’ve never read one as scathing as this. The language is very strong … This is one of the more serious breaches that they’ve seen.”

Labor’s Infrastructure spokesman Andrew Giles described the report’s findings as “sports rorts on steroids”.

The report examines the process for selecting 47 car park sites, bundled into 44 projects, between January and July 2019. The decision-making spanned the May 2019 federal election and included seven sites announced during the election campaign itself. Of the 47 projects, 77 per cent were in Coalition seats. Another 10 per cent were in six seats that the Coalition hoped to win.

The car park fund is a subset of the larger Urban Congestion Fund, which was established in the 2018-19 budget. Starting at $1 billion, the congestion fund was boosted to $4 billion in the following year’s budget – just over a week before the election was called.

Due to the fund’s structure, the government argues it is not a grants program and is therefore exempt from the usual Commonwealth grants and procurement rules.

The formal selection of sites began in January 2019. Prime Minister Scott Morrison and his ministers produced the list, which did not include any of 26 sites the department had initially proposed.

One selected site was in Western Australia, five in Queensland, 11 in NSW and 30 in Victoria. The Victorian sites were concentrated in a clutch of vulnerable Liberal-held seats in Melbourne’s south-east. The audit report noted that this was despite traffic studies diagnosing the city’s congestion problem as greatest in the north-west, along with population growth.

The report found that organisations expert in congestion, urban growth and parking needs were not consulted. The states were also not consulted, despite the law requiring that they act as delivery agents for the federal funds.

There was only patchy adherence to the requirement that proponents set milestones and report on them in writing. The Urban Congestion Fund’s own principles, including that projects be small, co-funded with other governments and driven by evidence, appear to have been largely ignored.

Departmental record-keeping was so poor, the audit office says, that there was no comprehensive central database, and it had to access 72 separate email accounts to piece together what happened.

Geoffrey Watson says the most basic of proper processes were not followed. “The bureaucrats in this case haven’t even given us a sufficient paper trail to pull apart the minister’s decisions.”

Watson says the findings are a reminder that officials must respect public money. “There’s a public trust reposed in public officials, including ministers and politicians, as to how they use public money,” he says. “If money is being misused that is allocated for a political rather than a public purpose, that’s a breach of that public trust. In extreme cases, that could amount to misconduct in public office – which is a criminal offence.”

The report found that consultation on project sites occurred at the political level, with discussions limited to Liberal senators, MPs from 23 Liberal-held seats and Liberal candidates in six target seats.

The audit office describes the sequence of events. It says that in November 2018, minister Alan Tudge asked for a briefing on establishing a “park-and-ride” facility. He asked specifically how many car parks could be funded for $250 million.

The department couldn’t fix on a number but provided a summary of 19 projects that state governments had announced and another eight promised by the federal opposition.

Based on legal advice it had obtained on August 28 – the same day Alan Tudge took over as minister for Cities, Urban Infrastructure and Population – the department said the federal government could legally fund a car park “attached to a railway facility”.

This was because it could constitute an “inter-modal transport facility” to transfer passengers or cargo from one mode of transport to another.

As long as this was the case – and the transport included road or rail – it would be legal under the National Land Transport Act, which provided the legislative basis for the scheme.

The audit office revealed that 10 of the selected projects were more than 130 metres from a railway station and were “not attached or readily attachable to that station”.

It found one of two options recently approved for scoping at a site in Woy Woy, in the NSW Central Coast marginal Liberal seat of Robertson, is 600 metres from the station.

Pressed by the audit office in February this year, the department sought more advice on what a minister should consider in deciding if a project was eligible.

“This is a question that would have been better resolved before project assessment had commenced,” the report observed.

In April, the department replied that the original advice “provided no indication that being ‘attached’ to the railway station was a factor in determining eligibility”. It quoted the Macquarie Dictionary definition of a “facility” as being something that “makes possible the easier performance of any action”, adding “with no reference to being attached”.

The car park approval process began formally on January 10, 2019, when then minister Alan Tudge chose the first 11 sites.

In the lead-up to the April 2 budget that year, Morrison unveiled two more proposed projects for which there were no documented selection processes. They were simply announced out of the blue.

During its investigation, the audit office queried these additions.

“There is precedent established by the Department for the Prime Minister and Cabinet [sic] that a media announcement by the Prime Minister constitutes relevant authority to progress a project,” the department replied.

In the budget, the government revealed it was establishing the Commuter Car Park Fund from which these and other projects were to be funded. By then, the number selected was 13.

On April 10, the day before Morrison called the 2019 federal election and sent the government into caretaker mode, another 27 projects worth $389 million were selected.

The April 10 date is significant because once a caretaker period begins, no decisions may be taken that will bind future governments.

Those decisions took the total value to $538 million – more than the car park fund contained.

During the election campaign, Morrison and his colleagues announced seven more sites.

The government won another term in office on May 18, 2019.

On July 5, Morrison signed a letter authorising funding for the seven campaign announcements, valued together at $87 million. This took the number of projects to 47, totalling $625 million.

In this year’s budget, a further $87.8 million was committed to car parks, including three already announced projects that received funding boosts because they couldn’t be delivered on their agreed budgets. Another $5 million project in Melbourne was also added.

As of this month, the total value of proposed projects stands at $660.4 million.

The report reveals the auditor and the department clashed over a range of issues, including the department’s categorisation of “election commitments”.

The department insisted these included both the seven sites announced during the campaign and the 27 sites announced on April 10. This is apparently because decisions that are deemed election commitments carry a lesser obligation in terms of departmental due diligence.

In their written responses to the audit office, both the department and its now minister, Paul Fletcher, insisted that the April 10 projects were election commitments.

The department has rejected much of the audit office’s criticism but said it had accepted all recommendations.

“These 34 projects are considered to be election commitments by the government and are treated as such by the department,” departmental secretary Simon Atkinson wrote.

“Once projects have been announced by the government, the role of the Department is then to implement the projects consistent with relevant legislation.”

Atkinson’s letter insisted the audit office’s “failure to recognise this … may leave readers of the report without a full understanding of what happened in this program”.

Fletcher told the audit office that the department was correct. “This is because the projects were committed to publicly as part of the election campaign, and these are to be delivered as election commitments,” he wrote.

He said the government’s decisions were designed to “optimise long-term transport options in all our major cities”.

Neither the department nor the minister acknowledged that the reason governments rush to make decisions before the caretaker period begins is precisely to ensure they are formal, funded measures and not just election promises.

In a statement, the department said it had “a long history of operating in line with the highest standards of integrity and ethics and is committed to strengthening processes and ensuring best-practice administration”.

The National Growth Areas Alliance, the local government peak body covering outer urban growth areas, was blunt in its assessment.

“The lack of transparency, consultation and strategic thinking in the rollout of the fund has resulted in missed opportunities to deliver much-needed projects in an efficient and timely way,” it told the audit office.

Parking Australia, representing car park owners, said it was “not asked to be part of the identification of the potential sites” and was “sceptical about how some of them would be delivered”. It said parking experts could have identified viable sites and likely barriers, had they been asked.

When the audit office finished its inquiry this year, only two of the 47 car parks had been built. Three more were under construction – two in Victoria and one in WA. All three had been existing state government projects. One is now being fully funded by the Victorian government.

Six other car parks had been cancelled due to unviable proposals – something not fully assessed before approval – with funding for four reallocated to new sites. Another 28 were in varying stages of assessment. The final 11 – totalling $175 million – had not yet been assessed. A total of $76.5 million had been paid out, from a fund of more than $600 million.

Geoffrey Watson says the audit report demonstrates the government has prioritised public announcement – in an election context – over planning, design, proper process and accountability.

He says it also underlines the need for a properly configured and empowered national integrity commission.

“I find it incredibly ironic that this report emerges in the very same week that Bridget McKenzie is reappointed to cabinet,” Watson says, referring to the Nationals’ senate leader, who was forced out of the ministry early last year over the sports rorts affair.

“It also tells you something,” Watson continues. “That there are no consequences … I just find that incredibly sad.”

This article was first published in the print edition of The Saturday Paper on Jul 3, 2021 as "Car park slush fund among worst breaches".

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