Tasmanian cafe and Victorian bike path breach Coalition’s regional grant scheme | Australia news


A new cafe development in a key Tasmanian marginal seat and a $1m mountain bike path in Victoria were exempted from co-funding requirements under the Coalition’s $200m regional grants scheme in breach of the program’s guidelines.

One of the projects, in the marginal seat of Bass in Tasmania, received $365,000 for the total cost of a new cafe development on Flinders Island despite the department advising the ministerial panel the applicant had supplied “limited evidence” to support their case.

In another instance, a mountain bike club in Gippsland was awarded almost $1m for a new bike track and was exempted from providing matching co-funding even though its application was not properly assessed.

The revelations are included in a scathing report from the auditor general into the grants scheme, which has raised concern about the government approving funds for projects against the advice of the department.

In relation to the Gippsland project, the auditor found the department “did not provide any assessment advice to the panel on the case made by the applicant in support of its request”, despite recommending that the request be approved.

It also said that this briefing was not signed by the minister on behalf of the panel, with the department suggesting it was “superseded” by a later recommendation.

However, the auditor said that this later briefing did not ask that the panel approve the co-funding exemption request, even though the $976,950 bike track proposal at Hernes Oak was funded.

“So there is no record that the exemption request was approved.”

Under the program guidelines, applicants could apply for a co-funding exemption if they could demonstrate “exceptional circumstances”, with examples such as drought or disaster declaration and industry decline given.

It said it would be “rare” for the ministerial panel to approve exemptions.

The auditor general found that the department did not assess each exemption request against the program guidelines, nor did it provide a recommendation on each request to the ministerial panel that was consistent with any assessment that was undertaken.

Four of the 16 applications for co-funding exemption were granted, two of which were approved against the advice of the department. In total, the four projects were awarded $1.74m in grant funding.

Labor will target the Coalition over the grants scheme when parliament resumes this week, with the shadow infrastructure minister, Catherine King, calling on the deputy prime minister, Michael McCormack, to provide a “full explanation” of the ministerial panel’s approach.

“With the Gippsland project, the auditor general found the ministers approved the exemption without an assessment of the co-funding case and didn’t even properly sign the briefing.

“While a mountain bike park should be a positive for the people of the Latrobe Valley, this is a million dollars of taxpayer funds that should have leveraged at least another million dollars in private investment into Gippsland.”


King also questioned whether the panel had asked the proponents of the Tasmanian project if they could contribute any finance to the cafe development.

“This is hundreds of thousands of taxpayer funds going to what will be a privately run cafe without leveraging a cent of private investment,” King said.

“If a cafe proprietor isn’t prepared to stump a cent to back the project, why should the government?”

According to the proposal from the Flinders Island Tourism and Business organisation, the $365,000 grant will be used to build a cafe and community centre, along with an accommodation unit for the operator of the cafe.

“The outcomes of this project will contribute to economic growth and diversification, job creation and a sustainable community on Flinders Island,” the grant summary states.

The objective of the regional job and investment program was to create jobs in regional areas across five states. This included the Bowen Basin, tropical north Queensland and Wide Bay Burnett in Queensland; the north and south coast of New South Wales; South Australia’s Upper Spencer Gulf; Geelong, the Goulburn Valley and the Latrobe Valley in Victoria, and regional Tasmania.

The ministerial panel overseeing grants for the first three regions comprised Nationals Darren Chester and Michael McCormack and Liberals Michaelia Cash and James McGrath. For the remaining regions, the panel consisted of the LNP’s John McVeigh and National Bridget McKenzie – who replaced Cash.

The audit found the ministerial panel declined to fund 28% of grant applications recommended to them by the department, and approved 17% of applications that had not been recommended.

One of the companies to receive a $1m grant is currently being targeted by the corporate regulator for deregistration, while the project is losing money and unlikely to be complete for another two years.

The department has declined to comment on the merits of individual projects, and has refused to reveal which projects were approved by the ministerial panel against the advice of bureaucrats.



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