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Secret documents show Dominic Perrottet’s office gave millions to a private project in the seat of a National Party defector, against advice and without the relevant department’s involvement. By Rick Morton.

Exclusive: Millions siphoned against Treasury advice

New South Wales Premier Dominic Perrottet in question time last week.
New South Wales Premier Dominic Perrottet in question time last week.
Credit: AAP / Wolter Peeters

Less than a month after New South Wales Port Macquarie MP Leslie Williams sensationally quit the National Party to join the Liberals, the defector was in direct conversations with then treasurer Dominic Perrottet’s office about a controversial $5 million grant to a private nursing home in her electorate.

The building project – for a new community centre, as part of a wider redevelopment of the St Agnes’ Care and Lifestyle facility in the coastal town that gives the state seat its name – was not part of any NSW government program. It was not on the radar of any official, or recommended by bureaucrats. Senior Treasury officials warned the state government’s powerful expenditure review committee (ERC) that the funding made no sense and should not be supported.

Instead, exactly one week after Leslie Williams forwarded details of the aged-care company’s development application to Perrottet’s ministerial staff, the $5 million grant was approved by the ERC, which was led by Perrottet and then premier Gladys Berejiklian.

The money was not new funding. It had to be found from elsewhere in the Health budget. As the coronavirus pandemic raged, the $5 million was taken from the Department of Health’s general spending budget and handed to St Agnes’ Care and Lifestyle for capital works on land owned by the Roman Catholic Church Diocese of Lismore. At the time, the-aged care operator had $34.7 million “cash on hand” and had received $3.1 million in federal JobKeeper funds.

The funding proposal that went to the ERC was blunt in its assessment of the project. Under the heading “risks, sensitivities and any other issues”, Treasury officials wrote that the grant was “not supported”.

The document prepared for the review committee said: “The proposal provides financial support for the establishment of a private residential aged-care facility. Given funding and regulation of aged care is a matter for the Commonwealth government, and the benefits accrue to the private residents and operator of the facility, the need for government support is unclear.”

As it happens, the decision had already been made. Hours before the ERC meeting actually took place, public servants were given the job of writing a press release for the announcement.

A week later, on October 27, 2020, Berejiklian was in Port Macquarie posing for a ceremonial sod-turning at the development site next to newly minted Liberal MP Leslie Williams. The official press release, now absent from the NSW government directory but still hosted by Williams on her MP website, includes quotes from the then premier and her treasurer.

“Port Macquarie has one of the highest prevalence rates of dementia in NSW and this state-of-the-art facility will offer transformational care for the elderly,” Berejiklian said.

And from Perrottet: “We expect this unique project, which is a NSW first, to create hundreds of jobs in the health, building and construction industries on the mid-North Coast.

“The aged-care sector is poised to grow substantially in NSW, contributing to jobs growth and the economy but as Covid events have shown us, quality of care is paramount.”

The ERC brief from Treasury did not put a figure on the jobs created, noting only that it was “TBD” or “to be disclosed”.

Williams, naturally, was thrilled. At the time, she said: “The NSW government’s investment will help build the community centre in the village, which houses all the social amenities that make this facility unique.”

St Agnes’ Care and Lifestyle chief executive Adam Spencer remarked that “both Ms Williams and the premier have been very supportive of this project”.

 

When Leslie Williams quit the National Party, it was reported she couldn’t accept her leader’s stance on koala protection and the ensuing ransom. She released a statement on Sunday, September 20, 2020, following an ugly feud in which then deputy premier John Barilaro threatened to blow up the Berejiklian government over a planning policy designed to preserve the animals’ habitat. Barilaro said publicly that he and several senior National Party MPs would move to the crossbench in protest over the policy.

“The NSW Liberals and Nationals have delivered unprecedented investment across the Port Macquarie electorate and to put this in jeopardy and hold the premier and the government to ransom during this Covid-19 pandemic was unnecessary, unhelpful and frankly politically reckless and unreasonable,” Williams said at the time.

“The events of the past week have represented a further example of a course of conduct and dealing that has once again effectively been condoned and failed to be addressed.

“My community deserves to be represented in parliament by members and leaders that are focused on their needs and their aspirations and they rightly expect to have policy overshadowing politics.”

When asked about the switch, Berejiklian was frank. “Look, I would much prefer that she come to the Liberal Party than sit on the crossbench, that goes without saying,” she said. “At least it maintains the numbers the government has in our ranks.”

Williams did not respond to detailed questions from The Saturday Paper, addressing the timing of discussions regarding the St Agnes’ Care and Lifestyle capital works grant and whether they preceded her departure from the National Party.

What is clear from the time line of events is that the government, with negotiations handled out of the then treasurer’s office, moved quickly to rush through the $5 million in funding. This raised eyebrows internally.

Many National MPs were furious at Williams. Hers was the fourth seat the party had lost under Barilaro’s leadership, although the electorates of Lismore, Murray and Barwon went to Labor and the Shooters, Fishers and Farmers Party.

When Barilaro travelled to Port Macquarie in December the same year, he announced the Nationals would field a candidate in the seat, making it a three-cornered contest. But Barilaro went further and accused the Liberal Party of “actively” trying to “woo” Leslie Williams.

“The National Party has every right to stand up when we are betrayed. The Liberal Party were at the table actively, actively wooing Leslie to join,” he said.

“There is no doubt the Liberal Party has questions to answer about poaching a candidate.”

Barilaro said the defection was “weeks and weeks, if not months in the making” and alluded to discussions with senior NSW Liberals that he said confirmed a plot to secure Williams as a Liberal MP.

Barilaro resigned from parliament last year, following Gladys Berejiklian’s departure as premier. Berejiklian left politics in the wake of an Independent Commission Against Corruption investigation into the awarding of grants to the state seat of Wagga Wagga while she was in a secret relationship with its then MP, Daryl Maguire.

In that case, as with the Port Macquarie money, the projects came before the ERC without an identified source of funding. Bureaucrats were initially unsure who was responsible for administering the cash. In phone taps, Berejiklian told Maguire that would not be a problem: “I can overrule them.” Famously, she also said: “I’ll throw money at Wagga. Don’t you worry about that.”

It is understood the National Party grudge remains over the Williams defection and that senior figures are brainstorming deals to increase representation of the party in the lower or upper house.

The threat of a three-cornered contest in Port Macquarie is considered leverage in any potential bargain.

 

This week, a spokesperson for NSW Treasury said the $5 million grant for St Agnes’ Care and Lifestyle at Port Macquarie “was approved as part of the NSW government’s Covid-19 economic stimulus package and announced in October 2020”.

More than 15 months after the “shovel-ready” project was pitched to Perrottet’s office, however, building work has not yet begun. It was due to start last month and on current estimates the works would not be completed until the middle of next year.

Treasury referred further questions to NSW Health, which was given no information about the merits of the project at the time except for a one-page cost breakdown from St Agnes and a PowerPoint presentation with glossy photos of the proposed new facility.

For its part, Health said it does collaborate with the Commonwealth on aged-care matters, although it pointed to a clinical outreach service funded by the federal government and delivered by the state.

“While aged care is a federal responsibility, NSW Health and the Commonwealth Department of Health work collaboratively to support the aged-care sector to ensure the clinical and welfare needs of residents are paramount,” a spokesperson said in a statement.

“The collaboration between governments is particularly important to support aged residents in rural and regional areas.

“In October 2021, an additional $6.5 million in funding was announced by the Commonwealth government from the Building Better Regions Fund towards the construction of 12 homes to house 93 residents.”

According to St Agnes’ Care and Lifestyle’s more detailed project costing from the late September feasibility and assessment report, the total price tag for the Emmaus Memory Support Community Centre and residential properties is less than $30 million. More than one-third of this value has been secured from one-off government grants at both the state and federal level.

As treasurer at the time, and chair of the expenditure review committee, Dominic Perrottet was required to approve pre-budget announcements with a value of $5 million or more.

The now premier did not respond to questions put by The Saturday Paper but referred inquiries to the new treasurer, Matt Kean, and long-serving Health Minister Brad Hazzard. Neither responded before deadline.

On October 27, 2020, the same day the capital grant for the nursing home in Port Macquarie was announced, Leslie Williams and Gladys Berejiklian revealed a “multimillion dollar” upgrade for Hastings Secondary College as well. The koalas had their moment, too: the premier announced 6000 square metres of land was being “gifted” to the Port Macquarie Koala Hospital. Weeks later, ahead of the November budget, money was set aside for a new ambulance station at Lake Cathie.

The Saturday Paper is not suggesting these announcements are connected to Williams’ decision to join the Liberal Party. But they speak to the way politics works in NSW. Both Berejiklian and Barilaro are on record saying pork-barrelling is just how business is done.

Even so, funding recipients are usually assessed on their merits by public servants charged with ensuring value for money. When politicians ride roughshod over established processes it raises new questions about the dark arts of power, who wields it, and why?

This article was first published in the print edition of The Saturday Paper on February 26, 2022 as "Exclusive: Millions siphoned against Treasury advice".

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Rick Morton is The Saturday Paper’s senior reporter.

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