9 June 2020

Mr Grant Hehir
Auditor-General
Australian National Audit Office
GPO Box 70
Canberra ACT 2601
Via email: grant.hehir@anao.gov.au

Dear Mr Hehir

Community Development Grants

We refer to our earlier request for your office to undertake a review of the Community Development Grants program (see letter dated 14 February 2020 - attached).

Your response advised that you would consider the request when developing the ANAO 's 2020-21 workplan. We have now seen the draft workplan and were disappointed that the Community Development Grants (CDG) program has not been included.

We refer you to the analysis of the program recently undertaken by Michael Pascoe:
https://thenewdaily.com.au/news/2020/05/25/michael-pascoe-community-development-grants-scandal/
https://thenewdaily.com.au/finance/finance-news/2020/06/01/community-deveIopment-grant-pascoe/

These articles confirm our concern that the CDGs were allocated on the basis of political expedience, rather than merit, and were used to secure Coalition seats during the 2019 election campaign. Earlier reports indicated that approximately 80% of grants awarded in the lead up to the 2019 election went to key seats the Coalition hoped to win or maintain. Pascoe's analysis also indicates that CDG funding was used to meet an unrelated election commitment of a PET scanner at the Darwin Hospital.

The ANAO's 2018 report into the administration of the CDG program found that the Department failed to adequately assess the benefits or outcomes of projects recommended for funding . There is nothing to indicate that this shortcoming has been addressed.

We remain concerned by the use of the funds for what appears to be improper purposes of securing electoral gains by influencing voting in key seats. Significantly, the program is expected to continue until 2026. Without review, the skewed and potentially unlawful application of the funds will continue.

We ask that you reconsider including a review of the decision-making process under the CDG program as part of the ANAO 2020-21 Workplan.

Yours sincerely,

Larissa Waters
Greens Senate Leader
Spokesperson on Democracy

Janet Rice
Greens Senator for Victoria
Spokesperson on Infrastructure

Attach: Letter to ANAO, 14 February 2020
Michael Pascoe articles, The Grants Scandal Vastly Bigger than #Sportsrorts, 25 May 2020 and
I Was Wrong: The COG Rorts are Worse Than I Thought, 1 June 2020.

14 February 2020

Mr Grant Hehir
Auditor-General
Australian National Audit Office
GPO Box 70
Canberra ACT 2601
Via email: grant.hehir@anao.gov.au

Dear Mr Hehir

Re: Community Development Grants

We refer to recent media reports in relation to the Community Development Grants. (“More regional grants splashed on Coalition targeted seats”, The Age, 13 February 2020, Attachment A).

The articles reports that, according to analysis by Nine News, 84 of the 99 grants approved between December 2018 and the election in May went to seats the Coalition either held or was aiming to win from Labor or independents. These included:

• Eight grants in Braddon (TAS)
• Three grants in Corangamite (VIC)
• Three grants in Corangamite Flinders (VIC)
• Two grants in Mayo (SA)

These numbers indicate that allocations may have been made on a political rather than merit basis. There are indications that the Government may have moved applications between grant programs at their own discretion, rather than complying with published guidelines, including redirecting projects from the Community Development Grant programme to the Community Sport Infrastructure grant programme (Attachment B).

We are concerned that the Minister may have acted outside the scope of his Ministerial powers if he took into account irrelevant considerations (such as how marginal a seat was), or acted for an improper purpose (such as seeking to secure electoral gains), or in a biased manner by favouring projects based on Coalition electoral priorities.

We ask that you please investigate the decision-making process under this program, and the conduct of any relevant parties in relation to this matter.

We note that there are concerns about the legality of this conduct under Criminal Code Act 1995 142.2 (1)(b)(i) Abuse of public office. Under that provision, a Minister commits an offence if they “engage in any conduct in the exercise of the official’s duties as a [Minister] dishonestly obtaining a benefit for himself or herself or for another person”.

The conduct could also contravene Commonwealth Electoral Act 1918 326(2)(a) – Bribery, “A person shall not, with the intention of influencing or affecting any vote of another person give or confer, or promise or offer to give or confer, any property or benefit of any kind to that other person or to a third person”.

In addition to reviewing probity issues relating to the grant process, we would welcome your views on the legality of the Minister’s conduct and ask that you refer any criminal behaviour you identify during your investigation to the appropriate authorities.

Yours sincerely,

Larissa Waters
Greens Senate Leader
Spokesperson for Democracy

Janet Rice
Greens spokesperson for Sport, Agriculture & Rural Affairs, and Infrastructure

Attachment A: “More regional grants splashed on Coalition targeted seats”, The Age, 13 February 2020

Attachment A refers to an article published in the Age newspaper titled Call for probe on regional grants program.

Attachment B - Senate orders for production of documents—Sport—Community Sport Infrastructure Program—Communication between offices—Order of 5 February 2020—Letter to the President of the Senate from the Minister for Youth and Sport (Senator Colbeck), dated 13 February 2020, responding to the order and raising a public interest immunity claim, and attachments. Page 58, available here.