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Questions remain about the allocation of bushfire relief funds after the Black Summer fires. But as new minister Bridget McKenzie takes over the programs, there is also increasing concern the money is being used for pork-barrelling. By Mike Seccombe.

Bridget McKenzie and bushfire recovery grants

Cobargo resident John Aish walks through a destroyed home in the town, as bushfires continued to ravage NSW in January 2020.
Credit: Reuters / Tracey Nearmy

The Black Summer bushfires across Australia ended more than 18 months ago, so why is the government getting around to considering grants for urgent recovery projects only now?

That was the question from Tim Ayres, chair of a senate inquiry into the preparation and planning for, response to and recovery from the fires.

Speaking to bureaucrats at a hearing last week, Ayres noted the guidelines for Black Summer recovery grants, to be administered by the Morrison government’s new National Recovery and Resilience Agency (NRRA), were only published on July 1. Applications for funding opened three weeks later, on July 22.

He asked how many had been received, but the bureaucrats couldn’t tell him because the scheme had been operating for only five days. Then Ayres referred to a copy of the guidelines for grant applicants and noted the use of the word “urgent”.

“How,” he asked, “do you set out what an urgent project is? What does ‘urgency’ mean in that context?”

Dr Ilse Kiessling, the executive director of recovery programs and evaluation for the NRRA, said she was unfamiliar with the part of the guidelines Ayers was referring to and did not have a copy with her.

Her recollection was that while “at one point” there was reference to immediate recovery needs in the guidelines, through a process of “refinement … we certainly have intended that the grants are available to people who have been impacted by bushfires for medium to longer-term recovery needs”.

To jog her memory, Ayres read from the guidelines.

A project could receive funding, he read, if it involved “making urgent repairs to, or replacing, community utilities or infrastructure damaged or destroyed in the bushfires”.

It was also eligible if it involved “giving urgent assistance to members of the community who continue to suffer the effects of having been displaced by the bushfires”.

Said Ayres: “I ask about it because we are 18 months down the track. The existence of funding for urgent or immediate, rather than the medium-term and long-term issues that you’ve also pointed to, indicates that there is still an enormous amount of demand for urgent short-term fixes to community and individual problems that haven’t been met through the existing funding sources, doesn’t it?”

“That is correct,” Kiessling said, although she disputed the senator’s follow-up point, that it showed the government had been slow getting money down to some in urgent need.

“Senator, I might point out that the Black Summer bushfire recovery grants … follow considerable amounts of support that have been provided to bushfire communities over the last 18 months. That includes around $2.4 billion worth of bushfire recovery support, of which around about $1.7 billion is from the National Bushfire Recovery Fund. The bushfire recovery grants are just one element of an array of measures…”

It is true: in response to the bushfires, there is a bewildering series of different pots of money, administered through various grant programs, with varying guidelines, by a changing line-up of agencies interacting across all levels of government. All of it quite opaque, even to those whose business it is to try to clarify.

At another point in proceedings, one of the bureaucrats, talking about the “funding profile of the Preparing Australia Program”, veered into an explanation of its “inter-related” operation with something called the Emergency Response Fund and “a number of initiatives we have under way”.

Ayres cut him off. “It is almost too complicated for a mere mortal to understand from outside,” he said.

Matt Lloyd-Cape, director of policy and research for the progressive think tank Per Capita, who gave evidence to the inquiry the same day, expressed similar frustration.

“Even after months of research, we found it very difficult to find publicly available sources of information on how much had been spent and where,” he said.

His team had been forced to cobble together estimates by trawling through Hansard records, federal budget statements and public announcements by ministers.

That material showed the disbursement of funds had been too slow. Of the $566 million Disaster Recovery Payments fund, intended to provide immediate short-term assistance to families burnt out or otherwise critically affected by the fires, only 43 per cent had been spent after 10 months.

“Currently, the NRRA website says that the total distribution of this fund is $288 million, which is around 51 per cent of the emergency funding made available to families, so that shows that the actual rate has slowed,” he said.

“There are many people going in the middle of their second winter now living in sheds and shipping containers, while there are hundreds of millions of dollars in emergency funding sitting idle.”

Lloyd-Cape also criticised the “opaque” criteria for the allocation of some of the programs. “They didn’t seem to be based on community needs or on the merits of individual projects,” he said.

The $448 million Local Economic Recovery and Complementary Projects (LER) program provided the clearest example. As of February, 77 per cent of the money had been allocated to New South Wales, with just 6 per cent to Victoria, 8 per cent to Queensland and 9 per cent to South Australia.

Of that NSW money, only about 1 per cent had gone to Labor-held electorates, he said, citing the example of the Labor-held Blue Mountains area, which lost 100 buildings and an estimated 2600 jobs to the fires but received no grants.

“In contrast, Wagga Wagga received $40 million,” he said, “which at the time was around 18 per cent of the entire nationally distributed funds.”

Lloyd-Cape suggested pork-barrelling and pointed the finger at the NSW government.

He wasn’t the first. Back in February, when the initial grants were made under the scheme, the mayor of the Blue Mountains, Mark Greenhill, made similar points about the malapportionment of the LER grants. Since then, his council has received some $15 million under a second round of funding, announced on June 30.

“While we’re grateful, it has to be remembered that a lot of businesses went to the wall long ago, a lot of jobs were lost long ago,” he tells The Saturday Paper. “It took just too long. The administration of the grants was left to the state, which shamelessly pork-barrelled, leaving Labor seats out, while handsomely funding conservative ones.

“We were told that our first round of projects didn’t meet the guidelines. But there were no guidelines. In fact, when the deputy premier was asked in an upper house inquiry to provide the guidelines, he provided a media release with some points in it. But that was it.

“In the second round it seemed the Commonwealth took a greater interest in the administration. The impression I got [from talking to federal bureaucrats] was that the feds were embarrassed about how it was managed.”

Given the evidence of malapportionment of the first round of LER grants, and also the Morrison government’s track record of using other grants schemes as pork barrels – for sporting facilities, commuter car parks et cetera – there is ongoing suspicion about the allocation of bushfire recovery money.

On July 2 Labor’s Murray Watt – who has been trying for months to understand the complexities of the various programs by questioning bureaucrats in senate estimates – submitted written questions to the minister for Emergency Management, seeking a full list of projects in NSW approved under the second round of LER grants, broken down in various ways, including by federal electorate.

He was told the National Recovery and Resilience Agency did not consider federal electorates in the LER funding process. But the opposition remains sceptical, as do others.

It is a scepticism fuelled in part by changes made following a recommendation by last year’s Royal Commission into Natural Disaster Arrangements, which said the federal government should better integrate the alphabet soup of agencies that work on disaster response, recovery and preparedness.

Three months ago, Morrison announced the establishment of the National Recovery and Resilience Agency, which would “bring together the former National Drought and North Queensland Flood Response and Recovery Agency and the National Bushfire Recovery Agency, including the $2 billion National Bushfire Recovery Fund”.

The change in structure brought a change in leadership. The national co-ordinator of the Bushfire Recovery Agency, former Australian Federal Police commissioner Andrew Colvin, was replaced by a new “co-ordinator-general”, Shane Stone. Stone is a former chief minister of the Northern Territory, a deeply political right-wing operator.

A month after making that change in personnel, Morrison made another, even more contentious one: he reshuffled his ministry, moving David Littleproud out of the Emergency Management portfolio.

Littleproud was replaced by National Party senator Bridget McKenzie, who had previously left cabinet following the sports rorts scandal.

Not surprisingly, the Labor opposition has asked pointed questions about her new role – Watt and Ayres in their respective committees, and Senator Don Farrell in the first question time of the new sittings this week.

Farrell’s query was quite simple: how many discretionary grant programs was McKenzie responsible for in her new role?

Over five minutes, McKenzie reeled off a confusing range of programs for which she or Stone were the ultimate arbiters. Among them was the new $280 million Black Summer Bushfire Recovery Grants program – the one mentioned at the top of the story, for which the bureaucrats seemed not to know the guidelines.

“The minister for Emergency Management and National Recovery and Resilience – that would be me – is the decision-maker,” she said.

Then she moved on to the LER program – the one under which her NSW colleagues pork-barrelled conservative electorates.

“Whilst it is within my purview,” McKenzie said, “the co-ordinator-general and state governments are the final decision-makers on that one.”

As to the totality of “budget allocations” involved, she was unsure. “I will have to get back to you.”

She ended her answer with this: “I think the heart of your question, senator, might actually been going to ministerial discretion in a Westminster democracy. As I’ve said on the public record, ministerial discretion is absolutely key to how our government functions. Ministers should take the advice and recommendations of departments and agencies and then exercise ministerial discretion appropriately, and my ministerial discretion, in other programs I’ve administered, resulted in a fairer outcome for Australian taxpayers.”

This is a curious assessment of McKenzie’s discretion in other programs. In sports rorts, for instance, the Australian National Audit Office found she had ignored bureaucratic assessments of applications and used her ministerial discretion, and a colour-code spreadsheet of electorates, in allocating some $100 million in grants to electorates that were overwhelming Coalition held or targeted.

Members of the Labor opposition are not the only parties concerned that disaster-recovery funds will be used for political ends.

Helen Haines, the independent federal member for Indi, complained on Wednesday that the latest round of bushfire recovery funding grants were not awarded based on merit or need.

“The eligibility criteria of the Black Summer Bushfire Recovery Grants Program did not reflect the impact on the areas of Indi hit hard by the fires,” her media release noted. “Some of the worst-hit areas of Indi are, in effect, on equal footing with places that were not touched by the Black Summer bushfires.”

She said the grant program gave McKenzie wide discretion over the allocation of money, and worried about how she would use it, given that the “sports and car park grant funds resulted in money being sent to marginal electorates instead of the most worthy recipients”.

Under previous bushfire recovery regimes, Haines said, the allocation had been made with clear guidelines and close engagement with local communities. “That’s not the case now.”

Lloyd-Cape echoes her concerns. “The lack of transparency around disaster recovery expenditure is typical of this government. It’s pretty shocking and to me it’s part of a broader issue. It builds on the sports rorts affair, the car parks issue.”

Interestingly, in late June, the audit office released a report into the operation of the National Bushfire Recovery Agency (NBRA) under Andrew Colvin’s leadership, and found it to have been “largely effective”.

But it added a caveat: “However, Local Economic Recovery and Complementary Fund projects will extend beyond the life of the NBRA and the ongoing oversight and evaluation arrangements for the program in the new National Recovery and Resilience Agency are not yet clear.”

It would seem, though, that Bridget McKenzie made them pretty clear this week: she will distribute money any way she sees fit. 

This article was first published in the print edition of The Saturday Paper on Aug 7, 2021 as "Smoke and mirrors".

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Mike Seccombe is The Saturday Paper’s national correspondent.