Mr Grant Hehir

Auditor-General

Australian National Audit Office

GPO Box 707

CANBERRA ACT 2601

By email: grant.hehir@anao.gov.au

12 April 2023

Dear Mr Hehir,

Additional information - Referral of Round 6 of the Mobile Black Spot Program to the Australian National Audit Office

I write to provide you with additional information relevant to my referral to you of 29 March 2023 regarding the allocation of grant funding under Round 6 of the Mobile Black Spot Program.

I note that in previous reports the ANAO has drawn attention to the need for grant Guidelines to be published in relation to all Programs.

The Grant Guidelines for Round 6 of the Mobile Black Spot Program dated January 2023 state at 2.2.3 that the Department has undertaken a "detailed analysis" of the 54 locations to receive funding. As you are aware, every single location in this Round was selected by the Minister for Communications. The document then states that there are three different categories of funding for the 54 locations, based on the Department's analysis. It advises that the categorisation of the sites can be found at Appendix A.

Appendix A sets out the "Target Locations and Issue Descriptions." This Appendix includes a column titled "Specific areas with coverage issue (if known)".

Remarkably, for 20 of the locations on the Minister's list, the column headed "Specific areas with coverage issue (if known)" is blank. This clearly suggests that the Department has not been able to identify the specific area with the coverage issue.

It should be noted that this is not a criticism of the Department. It has been handed a list of sites by the Minister and it has sought to then understand the specific issue in the location. For 20 of the sites, it has not been able to do so.

It is difficult to understand how a site can be properly placed into one of the three funding categories if the Department has not actually been able to identify the specific area with the coverage issue.

Again, this is not a criticism of the Department. The Minister has forced it into the unenviable position of seeking a post-hoc rationale for the choice of her list of sites. For 20 of the sites, it is evident from the Grant Guidelines that this has not been

possible.

As you know, s. 2.2 of the Commonwealth Grant Rules and Guidelines 2017 sets out key principles for grants administration. Those principles include "robust planning and design", and "achieving value with relevant money". It is clear, in my view, that Round 6 of the Mobile Black Spot Program does not comply with these principles.

I appreciate your consideration of these important matters, and look forward to your response.

Yours sincerely,

Hon David Coleman MP

Shadow Minister for Communications

Mr Grant Hehir

Auditor-General

Australian National Audit Office

GPO Box 707

CANBERRA ACT 2601

By email: grant.hehir@anao.gov.au

29 March 2023

Dear Mr Hehir,

Referral of Round 6 of the Mobile Black Spot Program to the Australian National Audit Office

I write to request that the Australian National Audit Office (ANAO) undertake an investigation under s.25 of the Auditor General Act 1997.

On 2 February 2023 the Albanese Government announced that applications had opened for Round 6 of the Mobile Black Spot Program - the Improving Mobile Coverage Round (IMCR).

I have very serious concerns about the conduct of the Government in relation Round 6 of the Mobile Black Spot Program, and request that the ANAO conduct a full investigation into its design and administration.

As you are aware, the Mobile Black Spot Program is designed to assist regional and rural communities that are experiencing difficulties with mobile reception. The Program provides funds for the construction of telecommunications towers and other facilities to improve mobile reception. Since the launch of the Program in 2014, more than 1,200 sites around Australia have received funding.

Round 6 of the Mobile Black Spot Program has concerning characteristics which warrant a thorough review by the ANAO.

In an interview with Radio 2GB on 22 March 2023, the responsible Minister, Hon. Michelle Rowland MP, made a number of admissions of fact in relation to the administration of Round 6. It is clear, in my view, that Round 6 of the Program was designed for political purposes and represents a misuse of taxpayer funds.

Characteristics of Round 6 include:

• Every single one of the 54 locations to receive funding under the Program was personally chosen by the Minister
• None of the locations were chosen based on Departmental advice
• Of the 54 locations chosen by the Minister, 74% were in Labor electorates, despite Labor only representing 1/3 of non-metropolitan electorates
• Of the 27 locations chosen by the Minister in New South Wales, all 27 were in Labor electorates. In this context I note that the Minister is also the President of the Labor Party in New South Wales

It is impossible to argue that 74% of the need for mobile coverage in regional Australia is in Labor electorates. Plainly it is also impossible to argue that 100% of the need for mobile coverage in regional New South Wales is in Labor electorates.

Under the Public Governance, Performance and Accountability Act 2013, Ministers are required under s.71(1) to be satisfied that expenditure is "a proper use of relevant money". It is very difficult to see how the politically biased expenditure in Round 6 complies with this section of the Act.

If communities were not on the list chosen by the Minister, they were precluded from applying. There are many communities in regional Australia that are in great need of improved mobile coverage. Some of these communities have a particularly urgent need for improved mobile services given their susceptibility to emergencies such as bushfires. If a bushfire-affected community were not on Minister Rowland's personal list of sites for Round 6, they were not allowed to apply.

As you would be aware, s 6.2 of the Commonwealth Grant Rules and Guidelines 2017 sets out key principles for grants administration. It is clear that Round 6 is inconsistent with these principles in several respects. The Principles call for robust planning and design in grants programs, and for grants programs to achieve value for money and have strong governance and accountability standards. It is self­-evident that Round 6 of the Mobile Black Spot Program did not comply with these Guidelines.

I would be very happy to discuss these issues further with you and your office, and look forward to your response.

Your sincerely,

Hon David Coleman MP

Shadow Minister for Communications