Sneaky Reef hand-out a half-a-billion-dollar symptom of broken government

by Michael West | Aug 3, 2018 | Energy & Environment, Government

What was ticking through the mind of Malcolm Turnbull when he pledged the best part of half a billion dollars to the small fossil-fuel-funded charity which is the Great Barrier Reef Foundation?

Reliably, the media has been diverted on matters of greater import – such as the antics of Emma Husar, Bill Shorten’s fictional leadership crisis and the way Malcolm Turnbull eats a meat pie.

The question of the Great Barrier Reef Captain’s Call however goes to a deep problem of government, that politicians forget they are the stewards of taxpayer money; that this is not their money to fork out willy-nilly to party donors and mates.

Yet, finally, a head of steam is gathering in the media since the story first broke here in the aftermath of the Federal Budget in May.

Great Barrier Reef: funding links to climate sceptics and political donors

We now know, thanks to a Senate Inquiry, that the GBRF did not ask for this $444 million. The PM offered it to the Foundation in return for its chairman agreeing to a “series of collaboration principles” which would lead, at some point, to a “partnership”.

There are many among us who would relish the opportunity to be gifted $444 million – six years of funding upfront, with no due diligence, no performance benchmarks or commitments as to how it might be spent – in return for a verbal commitment to a set of unspecified “collaboration principles”.

We also now know the deal was struck on April 9 at a private meeting in Sydney between the PM, his Environment and Energy Minister Josh Frydenberg and the chairman of Great Barrier Reef Foundation John Schubert.

What else do we know?

  • There was no tender process, no grant application.
  • The $444 million grant was not solicited.
  • The money has been safely plonked in the bank accounts of the Foundation.
  • Counter to earlier reports, the Secretary of the Department of Environment, Finn Pratt, was not present at the meeting of April 9.
  • Scientific bodies such as CSIRO, Great Barrier Reef Marine Park Authority and the Australian Insitute of Marine Science (AIMS) were overlooked. They appear to have been taken by surprise by the sheer magnitude of a grant to an organisation with six staff.
  • Three directors of the Foundation refused to give evidence to the Senate inquiry scrutinising deal. Despite being offered five dates to appear, they cited travel commitments, medical appointments, board meetings and other unspecified engagements; although they – the organisation’s chair John Schubert and board members Grant King and Paul Greenfield – subsequently agreed to appear.
  • The Department gave evidence to the Senate that the grant was made on the grounds of “previous knowledge of the GBRF”, which runs counter to earlier claims by Minister Simon Birmingham that the government had conducted due diligence.

The GBRF deal therefore is a stinker. There is no indication the Foundation will use the money unwisely but it further undermines the credibility of government that Foundation backers are heavily-weighted in the resources sector and the likes of Peabody Energy and Exxon have been linked to funding climate sceptic bodies.

Unsolicited approach

Further, the corporations behind the charity are prominent political donors who skew their donations in favour of the Liberal National Party coalition.

Newstart payments have not risen in real terms in 24 years and, as the cost of living rises, some 800,000 Australians are struggling to cover their basic needs. Couple this with the government’s push to drive through its unfunded $65 billion package of corporate tax cuts and this deal is an extremely “bad look”.

The Australia Institute said yesterday the foregone revenue from business tax cuts would be the equivalent of employing 8450 nurses, 7610 secondary school teachers or 6310 police. The progressive think tank estimates Rio Tinto alone would benefit to the tune of $7.7 billion. Rio is one of the GBRF backers.

The deal is an even worse look when you consider that the corporate partners Google, Qantas and Lendlease have all been outed by for aggressive tax practises. It Big Four partners, Deloitte, KPMG and PwC are the architects globally of multinational tax avoidance and Exxon and Origin Energy have also been pinged for unacceptable tax avoidance.

When a sale is not a sale – Origin Energy’s unreal unrealised gain

Foundation chairman John Schubert was formerly boss of Esso Australia. According to Tax Office transparency data, Exxon paid zero income tax on almost $25 billion of income over three years (and it plans on paying none in the foreseeable future). There is no scintilla of a suggestion here that Schubert has acted inappropriately. Since Esso, he has had a distinguished career as chief executive of Pioneer and has had various board positions, among them BHP and the Business Council.

He must be ruing the association with such an unseemly gift from government now but who amongst us would turn down $444 million for their charity with few if any strings attached, upfront?

Exxonmobil Australia Pty Ltd

So what we have is yet another transfer of wealth from taxpayers to some of the world’s most profitable corporations and partnerships. It is a cross-subsidy moreover which was concocted “on-the-fly”, $444 million in exchange for unspecified “collaboration principles”.

In tinkering about the internet preparing for this story we discovered the Commonwealth of Australia is a donor to the RAND Corporation in the US. Recent reports detail the government’s pledge of a lazy $12 million in taxpayer funds to free-market US think tank, the United States Study Centre. The Centre has links to the Murdoch and Turnbull families.

It would be useful to compile a list of these sorts of deals to favoured parties. Suffice to say that it happens on both sides of politics although the Coalition is more of a culprit than Labor. Further, hand-outs tend to happen at the end of political terms. That is, with the election looming next year, we can expect a slather of grants as assorted government departments look to expend their budgets (so as to keep their funding up in the next round of government).

Where is the taxpayer in all this? Completely helpless, that’s where. With the media pre-occupied over prurient speculation as to whether backbencher Emma Husar executed a “Sharon Stone” manoeuvre or not, ordinary citizens have few mainstream voices to go into bat for their real interests, that is good government.

It is little wonder there is a growing disenchantment with the political and media classes. Hostage to their various agendas and distracted by salacious gossip and tribal politics, they have dropped the ball. Tbough the story has finally been picked up by various outlets.

Meanwhile, all sorts of rent-seekers are winning the upper hand and winning million in taxpayer hand-outs.

So what was going through Malcolm Turnbull’s mind when he made his Captain’s Call? It makes Tony Abbott’s “Knights and Dames” call look rather quaint. Turnbull has to navigate the tricky waters of the more ideological sectors of his party, the demands of the business lobby and more moderate party members. It would appear that, in a failure of judgement he has given $444 million of our money to the GBRF in order to control the narrative over the Reef.

That is, he wants to look ecologically responsible by slotting a large chunk of money to the Reef but he wants also to control how the money is spent and keep criticism of Reef management contained by giving that money, and the power it delivers, in the hands of his party’s political allies. And it is blowing up spectacularly in his face, as it ought. Another blow to democracy, another triumph for corporatocracy.

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Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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