NSW Treasurer Daniel Mookhey has accused his predecessor of “pork-barrelling at the public’s expense”.Michael Quelch and Jessica Hromas
Tabled in state parliament on Wednesday morning,the report warned the scheme risked the state’s AAA credit rating and the previous government had conducted “no business case or other economic analysis” before it announced its plan to use billions of dollars in proceeds from the partial sale of the WestConnex motorway to fund the scheme.
It revealed wide-ranging probity issues with the fund,including during its design,when officials in the NSW Treasury Department were only given a week to develop the grants program before it was publicly announced by then-premier Gladys Berejiklian and then-treasurer Dominic Perrottet.
The $5 billion fund was split into three streams between government agencies,local councils and community groups. The largest,a $3 billion allocation open to NSW government agencies,was subject to a series of guidelines established by the NSW Treasury at “considerable effort”.
However,the auditor found that “in most cases,the advice was not followed by the then-treasurer” Matt Kean,and no documentation was kept to explain the changes.
Of 27 projects funded under that part of the grants scheme,one-third,valued about $1.1 billion,were assessed as having “low or moderate merit”.
While the audit was less critical of the $1.6 billion community projects,it also pointed to examples where Kean had intervened to add additional funding to local government areas in an apparent bid to balance out where money was allocated.
In one example,however,the auditor found Kean’s office requested that an Olympic ice rink upgrade in the Canterbury LGA be given $17.7 million. The request was made on the same day Labor made an election commitment to pay for its own upgrade of the rink.
“This is part of the reasons why that government lost[the election] … The public is sick and tired of politicians playing politics with their money.”
NSW Treasurer Daniel Mookhey
Another five other schemes in the Canterbury-Bankstown LGA received the same score as the ice rink project but did not receive funding,the report found.
The auditor-general also found that the scheme had risked the state’s AAA credit rating,something the then government “did not have sufficient regard to” during the design of the fund.
WestInvest was announced by the then-Berejiklian government in September 2021,and was funded using revenue from the $11.1 billion sale of WestConnex.
Despite being announced as a way to inject post-pandemic economic stimulus into western Sydney through a range of local projects,the auditor found decisions about which local government areas were eligible for funding were not based on any documented rationale.
“NSW Treasury advised these decisions were made by the then-treasurer’s[Perrottet] office,” the report stated.
Consequently,claims made in media releases and the program’s public guidelines “that western Sydney was affected by the COVID-19 pandemic more severely than other parts of Sydney and regional NSW” were unsupported by evidence or analysis,the report concluded.
‘Serious questions’ raised
NSW Treasurer Daniel Mookhey on Wednesday criticised his predecessor,Kean,over the fund,calling it a “classic of the genre” of “pork-barrelling at the public’s expense”.
“This is part of the reasons why that government lost[the election],” he said. “The public is sick and tired of politicians playing politics with their money.”
The report,he said,“raises serious questions” about the design of the fund,and he called for Kean to “offer the public an explanation” about the findings.
However,the auditor’s report also noted the Minns government had directed funds to programs that had not been subject to scrutiny.
Before the election last March,Labor said it would re-direct funds from the $3 billion tranche of the program to schools and hospitals in western Sydney. The auditor-general found it did so in 17 cases,but in 15 of those it failed to compile business cases “as required by government rules”.
Mookhey defended that decision,saying it was based on a commitment before the election and that business cases would be in place before the funds were allocated.
In response,Kean accused Mookhey and the government of hypocrisy,raising Labor’s redirection of funding as having “breached the NSW assurance and integrity guidelines” to fund “15 projects in Labor seats”.
Kean dismissed concerns about the potential lost of the state’s triple A credit rating,saying:“I was always going to prioritise the people of Western Sydney over European ratings agencies – and if I had my time again,I would do exactly the same thing.”
Concerns about the “integrity of the design of the program” should be directed towards the Department of Premier and Cabinet and the Treasury,Kean said,saying “it’s up for them to discuss those things”.
