Ministers must show reasons for pork-barrelling: grants report
Ministers must give written reasons for approving taxpayer-funded grants
By SMH’s Alexandra Smith
7 May 2022
Ministers must give written reasons for approving taxpayer-funded grants, according to the state’s two top public servants in a new report sparked after several damaging pork-barrelling scandals.
All grants must also be publicly available on a central website, including any record of a minister deviating from the advice of public servants, the review of grants administration in NSW says.
Premier Dominic Perrottet ordered a review of his government’s processes for awarding taxpayer-funded grants after former premier Gladys Berejiklian’s appearance at a corruption inquiry reignited controversy over pork-barrelling in marginal seats.
“Taxpayers expect the distribution of public funds will be fair – I share that expectation,” he said.
In one of his first moves as premier, Perrottet commissioned NSW Productivity Commissioner Peter Achterstraat and head of Department of Premier and Cabinet Michael Coutts-Trotter to review how grants are handled.
Their report, quietly released on Saturday, includes 19 recommendations for how grants should be administered and assessed. It said the NSW government spends about $4 billion on grants each year.
“These recommended measures provide safeguards against poor governance and improper process,” the report says.
“Importantly, they do not sideline elected representatives from grants administration. Rather, they ensure that ministerial decisions are accompanied by clear, detailed, and timely reasons that are open to public and parliamentary scrutiny.”
One of the most controversial funds for the government has been the Stronger Communities Fund, in which the vast majority of $250 million in funding went to councils in Coalition-held electorates leading up to the last election.
An upper house inquiry into the fund found there was no application or assessment process for the scheme, and the eligible councils were the ones who were identified by the government as being so.
In a scathing audit of the Stronger Communities Fund released earlier this year, NSW Auditor-General Margaret Crawford said Berejiklian was advised in a 2018 briefing note that her staff was working to “get the cash out the door in the most politically advantageous way.”
Berejiklian and her then-deputy John Barilaro determined the bulk of grants to 24 councils from 2018 to 2019 in consultation with other Coalition MPs.
Perrottet said the NSW government would consider the recommendations and respond in the coming weeks.
“The public can then make a well-informed judgement about whether these decisions are consistent with the public interest and provide value for money,” Perrottet said.
“Grants are a significant part of the way the government supports communities and individuals – from COVID responses, to sports fields, to flood recovery, to small business assistance – it is an important way we work to deliver outcomes for the people of NSW.”
“But all grants are ultimately funded by public money, and so it’s critical we also make sure they are administered fairly, effectively and transparently.”
Before her evidence to the anti-corruption commission, Berejiklian said voters may not be comfortable with pork-barrelling, but all governments used it “from time to time”.
She stuck to her views when she faced the Independent Commission Against Corruption, insisting the allocation of public money to electorates was often done to “curry favour” with voters to win elections.
“At the end of the day, whether we like it or not, that’s democracy,” she told ICAC.
Perrottet said he had never shared Berejiklian’s stance on pork-barrelling.
“Whatever community you are in you should have access to the best healthcare, the best education, the best public transport,” Perrottet said after Berejiklian’s ICAC appearance.
The Opposition, which has introduced a bill to NSW parliament to overhaul the grants handling process, said the government should adopt the report and implement the recommendations in full ahead of any new grants being decided.
NSW Labor leader Chris Minns said: “Most of the recommendations in this report are in line with Labor’s bill and principles.
“This is also an opportunity for Dominic Perrottet to end the historic culture of pork barrelling in the Liberal-National government.”
NSW Government GRANTS program a rort
Berejiklian oversaw program to issue (NSW) council grants ‘in the most politically advantageous way’
$252 million council grants program lacked integrity
The state government’s controversial $252 million council grants program lacked integrity and applied no merit-based assessment in awarding 96 per cent of funds to Coalition-held electorates.
In a scathing audit of the Stronger Communities Fund, NSW Auditor-General Margaret Crawford said former premier Gladys Berejiklian was advised in a 2018 briefing note that her staff were working to “get the cash out the door in the most politically advantageous way.”
Ms Berejiklian and her then-deputy John Barilaro determined the bulk of grants to 24 councils from 2018 to 2019 in consultation with other Coalition MPs.
The Auditor-General found there was “little or no basis” for how they awarded grants, with the only record of their approval a series of emails from their staff.
Ms Crawford said the 2018 briefing note to Ms Berejiklian indicated that the allocation of funds to almost entirely government-held seats was likely deliberate.
The Stronger Communities Fund was first announced in 2016 to assist councils affected by forced council amalgamations. However, the guidelines were changed in June 2018, meaning funds could be distributed to councils, regardless of whether they had merged.
In her audit published on Tuesday, the Auditor-General said the then-local government minister distributed the funds, but only approved projects at two of the 24 successful councils.
Ms Berejiklian repeatedly denied she was the decision-maker in the grants program while in office, however the audit found she identified 41 projects for $142 million in funding, more than half the total spent.
Staff in Ms Berejiklian’s office were later found to have breached the State Records Act by shredding and deleting key documents relating to the program.
Ms Crawford said round two of the program rewarded councils that worked “constructively” with government during the amalgamations. This was interpreted in a briefing note to Ms Berejiklian as councils that “did not take legal action against us”.
The audit also described “deficient” guidelines for the program that were not used to select projects.
“We cannot rule out that deficiencies in the guidelines were an attempt to avoid accountability for and transparency over the government’s decision … to assist councils that supported the merger process.”
Ms Crawford made recommendations including for a new grant administration model based on ethical principles and a requirement for any ministerial override to be documented.
Metropolitan councils for which mergers were ultimately abandoned – that did not take the government to court – were Waverley, Burwood, City of Canada Bay, Hornsby Shire and City of Ryde.
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Four of the five councils received grants valued between $2.4 million to $2.6 million, while Hornsby Shire alone controversially received $90 million to transform a disused quarry into a park.
The audit also examined the Regional Cultural Fund, finding then-arts minister Don Harwin overruled independent recommendations by bureaucrats in almost one quarter of grants.
It follows an upper house inquiry into the program last year, which found it was deliberately devised to accommodate pork-barrelling and punish councils who objected to mergers before the 2019 state election.
Premier Dominic Perrottet in November ordered a review into grants programs in NSW as part of a commitment to ensure confidence in the expenditure of public money.
Asked on Tuesday whether he could assure people that he would not engage in pork barrelling at the next state election, Mr Perrottet said he had zero tolerance for the practice in his government.
“I’ve made it abundantly clear to every single one of my ministers – they are the ones responsible for the decision-making in relation to those grants programs and the outcomes,” he said.Mr Perrottet added that community projects such as new netball courts in regional parts of NSW would not have been built without grants.
Opposition special minister of state John Graham called on the government to support Labor’s grants bill through the lower house when Parliament resumes.
“Without the government backing that bill, the scandals that the Auditor-General refers to could happen again.”
Upper house Greens MP David Shoebridge said the government could not hide from the “harsh findings” of the Auditor-General.
“Premier Perrottet must now take up reforming the dodgy grants scheme as soon as parliament returns next week. This cannot wait for another report and yet more delay.“
