Lack of clarity on due diligence for GBR Foundation grant is a major concern

Today’s Courier-Mail includes opposing opinion pieces on the Turnbull government’s controversial $444 million grant to the Great Barrier Reef Foundation, which according to the author of the first opinion piece, Foundation Managing Director Anna Marsden, is the “lead charity” for the reef. The opposing opinion piece by Simon Black of Greenpeace Australia summarises the legitimate concerns that have been expressed over the wisdom of granting so much money without a tender process to a small not-for-profit, one which at the time had around six full-time and five part-time employees. Black reminds us that Foundation MD Anna Marsden once compared the grant to winning lotto. While the government rightly observes that it isn’t the first government that has granted such a large amount of money without a competitive process, that of course doesn’t excuse it. It is akin to the young child’s defence that whatever he or she did is OK because Jack or Sally did it also.

Moreover, I am particularly concerned that the grant appears to have been inserted into the budget process late in the day, and was not subjected to several months of scrutiny from central agencies (Treasury, Finance, Prime Minister and Cabinet) and Expenditure Review Committee ministers. A strong giveaway of the lack of appropriate scrutiny given to the grant is the obfuscation in the answers provided in the Senate Budget Estimates hearings in May. NSW Senator Jenny McAllister asked very pertinent questions of Finance Minister Cormann at Estimates, which the minister had to take on notice (see Question on Notice 23 May 2018):

Senator McALLISTER: I might pick up on some of those issues around the payment to the Great Barrier Reef Foundation. When was Finance first consulted on the proposal?
Senator Cormann: This is a proposal that is part of the budget process. I’m quite happy to take on notice consideration of the date as to when this was first considered. But you would, of course, appreciate that, consistent with convention, I’m not going to be at liberty to reveal the content of cabinet deliberations or deliberations of cabinet subcommittees.
Senator McALLISTER: Would it first have been brought to the Department of Finance’s attention before Christmas, as part of the portfolio budget submission?

McAllister was rightly trying to determine whether the grant would have been subjected to several months of rigorous scrutiny, or due diligence you may say, that many other budget proposals would have been subjected to. The answer eventually provided to the question Minister Cormann took on notice wasn’t illuminating:

It is a longstanding practice not to disclose information about the operation and business of the Cabinet, including details of matters that may have been raised in meetings of the Cabinet, as to do so could potentially reveal the deliberations of the Cabinet, which are confidential.

This was a disappointing response, especially considering government ministers and staffers regularly brief journalists on matters considered by the Cabinet (e.g. see this AFR report). It is the positions taken by ministers on Cabinet matters that are rightly confidential, to ensure ministers can debate vigorously in the Cabinet. With the possible exception of some national security issues, there is a strong public interest in knowing what matters are considered by Cabinet and when they are considered.

Since that question-on-notice response was provided, some important information regarding the timing of the development of the $444 million grant has been provided by Minister Frydenberg, particularly that the grant was discussed with the Foundation over the period 9 April to 22 April, following agreement from ERC, which was first presented with the idea of a “partnership” with the Foundation in March  (see this Guardian Australia report). It certainly appears that the development of the grant was rushed. Further information on the process underlying the awarding of the grant would be highly desirable.

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