Rampant rorts in the regions: how it happens

by | Dec 9, 2021 | Government

A little administrative juggling, and an unlikely set of funding proposals magically turns into reality, writes Jommy Tee in his continuing series on regional grants.

Watching Senate estimates can be a dull and soul-destroying experience. However, occasionally, as on a day late in the parliamentary year when officials from the Department of Infrastructure appeared, it can be illuminating.

On that day, October 25, both the secretary, Simon Atkinson, and deputy secretary, Dr Rachel Bacon, gave evidence about the Building Better Regions Fund (BBRF). Behind the polish of this public-service presentation could be detected the rampant political interference by the ministerial panel that oversees the program.

Michael West Media (MWM) has previously outlined the corrupt process where 161 grants worth $165 million were manipulated by the ministerial panel overseeing BBRF Round 3 and Round 4 and heavily skewed to Coalition seats.

Round 5 grants worth $300 million were announced in early October. Not surprisingly the grants were heavily skewed to government seats by the ministerial panel that interferes in the awarding of the grants, despite the evidence of government officials.

First, let’s turn to the secretary’s evidence. Labor’s Senator Murray Watt tried to drill down into the opaque process of the advice that the department provided to the ministerial panel. The secretary responded:

… it may be in the nature of our advice into the cabinet deliberations, which, ordinarily — I think it is in the public interest for us to be able to do that in a way that remains private for governments of all persuasions going forward.

An extraordinary statement from the head of a department that oversees among others the rorted Community Development Grants, Urban Congestion Fund, and Commuter Car Park Fund.

What goes on in the grant bubble, needs to stay in the grant bubble. Best for the public not to know. Well, let’s prick that bubble.

The Butterfly Effect – the small change that shreds accountability

Between Round 4 and the most recent Round 5 of the BBRF, a very small internal administrative change was made. A change that has profound impact — the “Butterfly effect”.

As we previously reported departmental advice to the minister for earlier rounds of the BBRF was present on colour-coded spreadsheets: green (high scoring eligible projects recommended by the department) and orange (lower scoring eligible projects not recommend for funding).

When a project was promoted from the orange list at the expense of one from the green list, it was a ministerial overturn — a euphemism for political interference.

Ministers are required by the Commonwealth grant guidelines to report annually to the minister for finance when they overturn departmental advice and/or award grants in their own electorates — it is a nano-particle of accountability in an otherwise opaque system. 

Even this breadcrumb of transparency is kept out of the public domain with BBRF Round 3 and 4 grant overturns only becoming available via an FOI request.

So what was the change? A simple but cunning one — the orange list was folded into the green list, creating a single list of eligible projects but now with no departmental recommendations.

The change, together with the ministerial discretion (see Section 8.1 of the BBRF grant guidelines) embedded in the program, provided the ministerial panel an open book to play grant gods with public money.

And as is likely to transpire — without even having to report on their dirty work via the annual reporting requirement to the minister for finance.

Plausible deniability

The deputy secretary of the department was quick to counter the opposition’s line of questioning, giving evidence that for Round 5 no projects were approved by the ministerial panel that weren’t already recommended by the department. 

Given that 112 projects were overturned by ministers in Round 3 (pre-election) grants, and 49 projects in Round 4 (post election) grants, the idea that the panel would turn over a new leaf and not interfere at all in Round 5 stretches credulity. However, when looked through the prism of the Butterfly Effect it is technically correct, albeit misleading and deceptive.

The cat was let out of the bag when Dr Bacon suggested that previous annual reporting had provided too much information to the Minister for Finance, and went further than the grants guidelines require.

Dr Bacon said that it was now “continuous improvement” to “improve the wording” when complying the annual reporting requirement and change the wording so that the ministers could wholeheartedly report that not a single grant was overturned.

If you cut through the argle-bargle you are left with the beigeification of ministerial manipulation. 

We put detailed and specific questions to the department, seeking clarification on the evidence presented at Estimates. 

Specific questions on the change of advice to the ministerial panel, it’s genesis and motivation for the change, future annual reporting contents to the Minister for Finance, were not answered. A departmental spokesperson did, however, say:

“As in previous rounds, Building Better Regions Fund Round 5 is an open, competitive and merit-based program that was assessed against publicly available, robust program guidelines by the Business Grants Hub in the Department of Industry, Science, Energy and Resources to ensure the most worthy projects receive funding.

The Ministerial Panel did not select any projects for funding against the department’s recommendations, and all projects selected for funding were assessed as eligible and value for money by the Business Grants Hub”.

MWM has seen a list of the both approved and non-approved applicants for Round 5, their respective scores and rankings, so we will reveal the extent of the ministerial manipulation in our next instalment.

Jommy Tee is a long-time career public servant, having worked in the policy development field for 25+ years as well as an independent researcher interested in politics, current affairs, and Nordic noir.

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