Projects judged most worthy of regional grants miss out in Coalition-held seats

Sarah Martin Chief political correspondent
Photograph: Lukas Coch/AAP

Not one of the top eight projects recommended for funding under the government’s regional grants program was successful across a swathe of Coalition-held seats in Queensland.

The revelation comes as the government resists a Senate order to release documents relating to its administration of the scandal-ridden regional jobs and investment packages (RJIP), suggesting it may claim public interest immunity.

According to departmental information supplied to the auditor general, none of the eight project applications that were assessed in the Wide Bay-Burnett region by the department as being the most worthy were awarded funding by the ministerial panel overseeing the scheme.

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The Wide Bay-Burnett region, which covers the four Coalition-held seats of Wide Bay, Fairfax, Hinkler and Flynn, was also the area where two known political donors received grant funding, meaning the projects were preferred over at least eight higher-ranked projects without explanation.

While the top-ranked projects scored between 81 and 87 out of a possible 100 according to the merit-based scoring system used by the department, they were all overlooked for less worthy projects.

The lowest ranked application that was approved for funding had a score of just 58 out of 100, placing it among the worst on the department’s ranking list at 56 out of 61 projects assessed for the region.

As reported in Guardian Australia, Teys Australia Murgon Pty Ltd, an LNP donor, received $267,406 towards a $567,406 expansion of its beef cattle hide processing facility in Murgon “to enable increased production throughput, resilience in the marketplace, and employment opportunities”.

According to the Queensland Electoral Commission, Teys Australia has given $25,930 to the Liberal National party since 2018.

Another donor, Nolan Meats Pty Ltd, received a $5m grant towards a $10m meat processing expansion to double production capacity from 550 to 1,100 cattle per day.

Nolan Meats disclosed a $3,000 donation to the LNP in November 2017.

Guardian Australia is not suggesting that the political donations represent a quid pro quo for taxpayer-funded grants. It is also not known how these two projects were scored by the department, or whether they were among those that were recommended.

Labor has indicated it will continue to pursue the Coalition over the grants scheme, which was the subject of a scathing federal audit, and which may yet be examined by parliament’s audit committee.

The ministerial panel which made the funding decisions at odds with the department’s recommendations predominantly claimed that the reason for rejecting their advice was because the scoring system had “overstated” two criteria in the merit assessment process, according to the auditor general.

In most cases this related to the criteria outlining “the level of net economic benefit” of the project for the business and the region, including job creation, and the “value for money” test.

But the auditor general found that in cases where ministers wanted to award funding to applications that had not been recommended, they claimed it was these same criteria that had been “significantly understated”.

Crucially, the auditor general said that the ministerial panel meetings that overturned the recommendations were not attended by departmental officials and were not minuted, and the projects were never independently re-scored before being awarded funding.

The ministerial panel that decided the grants in Wide Bay-Burnett was chaired by the then infrastructure minister, Darren Chester, and comprised the deputy prime minister and Nationals leader, Michael McCormack, and the Liberal senators James McGrath and Michaelia Cash.

The department and McCormack’s office are refusing to release details of which projects were funded against the advice of the department, nor which projects missed out even though the department wanted them to be funded.

A spokeswoman for McCormack told Guardian Australia that the “significant majority” of RJIP projects approved were in line with advice provided by the department.

“However it is the responsibility and role of the panel to make considered decisions, not to just ‘tick and flick’ departmental recommendations,” she said.

“The government does not disclose information relating to individual project scores, recommendations, or applicant information as many applications contain information that is commercial in confidence.”

According to the auditor general’s report, the ministerial panel declined to fund 28% of grants recommended by officials, and approved 17% of projects that had not been recommended to them.

In total, there were 132 applications where the panel’s ultimate funding decision differed from the departmental recommendation.

Related: Wollongong dog breeder given $205,000 for aquaculture project under regional grant scheme

Last week, Guardian Australia revealed the Coalition awarded a $205,000 grant to a dog breeder to build an aquaculture project on the south coast, with the venture to be funded by raising $5m in “aqua token” cryptocurrency that offered a return to investors based on the price of fish. The project has stalled.

Another project in the same electorate received $750,000 while possibly trading insolvent, and in another instance, a grant in north Queensland was provided to a bus and ferry project that is losing money and is unlikely to happen for two more years.

The auditor general has also revealed that two projects that were granted co-funding exemption were given the reprieve in breach of the program’s guidelines.

Labor’s shadow infrastructure minister, Catherine King, called on the government to release documents relating to the scheme.

“It’s clear from the audit and subsequent media coverage that Coalition ministers did not administer this program transparently and in accordance with their own guidelines,” she said.

“Michael McCormack must release the documents as ordered by the Senate and provide a full explanation of the ministerial panels’ approach.”