Chapter 10 - Atherton Tablelands Sustainable Region Advisory Committee
10.1
The Atherton Tablelands Sustainable Region Advisory
Committee (ATSRAC) was the subject of a large
amount of evidence given to the Committee in the course of this inquiry.[734] The evidence from members of the
Atherton Tablelands community was overwhelmingly negative, and focused on
perceptions of conflict of interest arising from the composition of ATSRAC,
concerns that approved projects did not meet the SRP guidelines, the lack of
transparency of the application process and allegations of misplaced regional
priorities.
10.2
This chapter examines the Committee's
concerns with the structure and operation of ATSRAC,
using several projects as examples. Evidence received by the Committee
regarding the Cradle Coast SRAC highlighted the contrast between the two
advisory committees. Therefore, the Cradle Coast SRAC's
composition and operation are discussed as a counterpoint throughout this
chapter.
Background
10.3
The Committee heard that ATSRAC
has little credibility with members of the community because of the number of
projects that had failed or been viewed as unworthy, a belief that program
criteria were not applied consistently and lack of transparency of processes.[735]
10.4
The evidence suggested that, rather than contributing
to the development and economic recovery of the Atherton Tablelands region, the
Sustainable Regions program had introduced a wedge into the community. Dr
Geoffrey Stocker
provided the following observation:
In my opinion the
system of grants used by the Commonwealth DRAP [Dairy Regional Assistance
Program] and ATSRAC programs in an endeavour to support
disadvantaged communities such as those on the Atherton Tableland, has not in
general had the desired effects. Indeed they have been so divisive that some
have not taken up approved grants while others proudly proclaim that their new
businesses were established without government funding.[736]
10.5
The Committee heard that Ms
Riggs, Executive Director of Regional
Services, DOTARS, had expressed some reservations about the regional benefits
of projects recommended for SR funding by ATSRAC:
What strikes me as I look at the projects that have been
supported in the Atherton region is that it is hard to see how
a number of smaller projects contribute to a more sustainable future, viewed on
a regional basis. I can see that each of them has merit at an individual level
for a very small part of the Tableland, but I cannot see how the committee has
brought those together into a strategic view of a platform for a more
sustainable future.[737]
10.6
ATSRAC's
broad regional priorities, which are reproduced below, are comparable to those
of the other SRACs (discussed in the previous chapter). The fact that the
Committee did not receive any evidence of SRP projects on the Atherton Tablelands
that had broad community support suggests that problems may have emerged from a
lack of local ownership of the priority setting process, a lack of ability
among ATSRAC members and staff to recognise
and promote suitable projects, the poor or inconsistent application of program
guidelines and community perceptions about the politicisation of the committee.
Committee composition
10.7
Many of the submitters'
and witnesses' concerns focused on the
presence on ATSRAC of the mayors of each of
the four local government areas—Mayor Jim Chapman of Atherton Shire, Mayor Anne
Portess of Herberton Shire, Mayor Mick Borzi of Mareeba Shire and Mayor Ray
Byrnes of Eacham Shire. ATSRAC had only two
other members—initially Mr Peter McDade (then ATSRAC
Chair), a former officer of the Queensland Department of Primary Industries
based in Brisbane; and Professor Bob Beeton, of the School of Natural and Rural
Systems Management at the University of Queensland, also based in Brisbane.[738]
10.8
The ATSRA committee's
membership, which lacks locally based industry and community representatives,
would appear to conflict with the following statement in the SRP guidelines
that SRACs should have a broad-based membership:
Each region is led by a locally based Sustainable Region
Advisory Committee (SRAC) comprising business, community and local government
members.[739]
10.9
As discussed in the previous chapter, DOTARS declined
to provide advice regarding the process by which SRAC members are selected and
appointed, although Mr McDade gave evidence to the Committee that he was
approached around August 2001 by Ms Wendy Armstrong, an adviser to the Hon John
Anderson MP, then Minister for Transport and Regional Services, and offered the
position. He believed he had been selected because of his involvement with many
Atherton Tableland industries through his former role with the Queensland
Department of Primary Industries in industry deregulation and registering
primary producer cooperatives. [740]
10.10
The four mayors'
membership of the committee evolved from a previously existing taskforce, which
had aimed to bring together the four shires of the Atherton Tablelands region
to address strategic development issues.[741]
Mayor Chapman gave evidence
that there had been no consultation process prior to the appointment of ATSRAC—the
mayors simply received a written offer of appointment.[742]
10.11
Mr McDade
told the Committee he had believed his and Professor
Beeton's
presence would ensure the independence and rigour of ATSRAC.[743] However, there was a clear
perception among those who gave evidence to the Committee that ATSRAC
had been appointed for the mayors to 'look at
how to spend this $18 million' and divide it
up between the shires.[744] For
example, Dr Stocker
stated:
The makeup of the...committee, especially the dominant presence of
the four local Mayors, was bound to introduce at least a suspicion of
parochialism into deliberations.[745]
10.12
Mr Blanckensee,
long-term chair of Far North Queensland ACC, took over from Mr
McDade as ATSRAC chair in late 2004. He told
the Committee that at the start of the SR program, he believed the mayors
attempted to break the money down between their shire boundaries 'rather
than looking at what was required across the whole tablelands to build a strong
region'.[746]
10.13
The Committee notes that ultimately, responsibility for
the composition and functionality of the ATSRAC
board rests with the minister who appointed it. The Committee also recognises
the difficult position of the mayors, who were elected to represent their shire
but required, as members of ATSRAC, to subsume
the interests of the shire under a strategic view of regional benefit. However,
these tensions may not have been problematic had ATSRAC
been appointed with a more balanced membership.
10.14
Evidence to the Committee regarding the process for
appointing another SRAC contained similar concerns—that the SRAC was 'appointed
by the Federal Government and was not representative of the range of views and
interests of the North Coast Community'.[747]
10.15
Several witnesses suggested a more appropriate
structure for ATSRAC would have included
successful local businesspeople with a strong knowledge of the dominant local
industries. Views diverged on whether some elected representatives should be
committee members, but the inclusion of industry representation to ensure a
more strategic approach was a common theme. [748]
Cradle
Coast SRAC model
10.16
In contrast, the Cradle Coast SRAC, located in
north-west and western Tasmania,
has been successfully accepted by the community and no contentious SRP projects
appear to have emerged from the region. This seems to be mainly due to the
structure and operating processes of the Cradle Coast Authority, which forms
the basis of the Cradle Coast SRAC. Mr Roger
Jaensch, chairman of Cradle Coast SRAC, told
the Committee that the Cradle Coast Authority is a joint authority under the
Local Government Act of Tasmania and is owned and funded by the nine local
government councils of north-west and western Tasmania.
10.17
The nominees for the independent board are selected on
the basis of skills relevant to the region in the areas of agriculture,
industry, commerce, education, tourism and local government.[749] Industry and community members of
the board are appointed through a public nomination process and two positions
are appointed from nominations by member councils and general managers.[750]
10.18
Mayor Roger
Chalk of Waratah-Wynyard Shire Council, one
of the Cradle Coast Authority shareholder councils, informed the Committee that
the Authority had evolved from a regional organisation of the nine councils
represented by the nine mayors. He said it had been a very political
organisation and lacked cohesion for addressing regional issues—therefore the
councils established the Authority in 1999 to take a cohesive approach to
addressing the economic difficulties the region was experiencing.[751]
10.19
When the region was announced in 2001 as one of the
sustainable regions, the Cradle Coast Authority proposed to the minister that
the Authority would be an appropriate body to take on the role of advisory
committee, rather than duplicating its structure and functions by creating a
separate SRAC. The minister appointed the Authority board as the advisory
committee for the region, with the addition of one member of ACC Tasmania.[752]
10.20
The Committee considers the Cradle Coast SRAC structure
a good model for ATSRAC and other SRACs,
particularly given that it evolved from a previous council of mayors and
balances local government representation with business expertise.
Regional priorities
10.21
As discussed in the previous chapter, each SRAC was
required to develop a set of regional priorities, which form part of the
assessment criteria for SRP applications. These priorities were to be developed
in conjunction with the local community through various means including
community meetings.
10.22
ATSRAC's
Action Plan and Prospectus are available from the Sustainable Regions website.[753] The prospectus provides a framework
for government and private investment in the region and the action plan
outlines the objectives of the program, the regional priorities and the role of
ATSRAC.[754]
The Atherton Tablelands regional priorities, as outlined in ATSRAC's
Action Plan, state that ATSRAC will support
projects that:
- Have clear long term
outcomes that are sustainable;
- [Have] Clear objectives that address local priorities and for
which progress can be measured;
- Encourage the development and retention of intellectual
property within the Region;
- Encourage the local development of tourism;
- Contribute to the development and maintenance of a “Tableland”
brand;
- Improving [sic] community wellbeing;
- Build on earlier projects (ie, from the former Mayoral
Taskforce); are synergistic with parallel projects; lead to new job creation;
see projects as a capital investment leading to enduring benefits...that will be
sustained and retained within the Region; develop the enthusiasm, skills and
optimism of the Region’s youth; and address gaps in community capacity in areas
of community need;
- Build youth enterprise in the Region;
- Utilise and enhance the Region’s amenity and modern life style
choices; and
- Consider large projects in the context of the 2010 Regional
Plan for Far North Queensland.[755]
10.23
Mr McDade
told the Committee that the Action Plan was developed by an ATSRAC
subcommittee chaired by Professor Beeton
in association with the Atherton Neighbourhood Centre. The subcommittee used
data from various government departments and the expertise of some people who
had done 'research on the history of the
tableland and some of the more current issues that were being developed'.[756]
10.24
The Committee is concerned that a document upon which
the initial allocation of $18 million of taxpayers'
money depended was essentially developed by summarising preceding studies of
the tableland. There seems to have been little in the way of real consultation
or community input to the document, as required under the program.
Dissatisfaction with the community
consultation process
10.25
Mr McDade
described the public consultation process on the draft document as including a
round of six public meetings to which industry leaders were invited and the
release of the draft document through the ATSRAC
office, council offices and the Tableland Economic Development Corporation.
Changes were made as a result of the consultation. [757]
10.26
A number of people gave evidence that they had attended
initial community meetings at the start of the SRP and were dissatisfied with
the approach taken by ATSRAC in developing the
regional priorities. For example, Dr Stocker
told the Committee that the initial community forums were a case of 'sit
down and look at this and go away' without any
opportunity for discussion of the issues. He also expressed concerns that ATSRAC's
strategic plan was developed by a consulting firm and was not seen as the
community's vision.[758]
10.27
Similar concerns were expressed by a submitter in
relation to Far North East New South Wales (FNENSW) SRAC's regional priority
setting process, which involved a vote at community consultation meetings,
advertised as 'information sessions'. Ms
Alicia Cameron
claimed that the process by which priorities were determined was 'easily
distorted to suit particular interests' and 'was in no way reflective of
broader community priorities or needs'.[759]
Allegations of misplaced regional
priorities
10.28
The Committee received evidence from residents of
Dimbulah, a town of approximately 500 residents located in Mareeba Shire. They
represented the Dimbulah Reticulated Water Action Group which lobbies to gain
access for Dimbulah to reliable and safe water supply, as the town's
current supply was unreliable and suffered from very low water pressure and
unhygienic water quality.[760]
10.29
The Queensland Government had committed to funding 40%
of the approximately $1 million cost of pressure pumps, a new reservoir and an
improved filtration system. Mareeba Shire Council had said that Dimbulah
residents would be responsible for funding the remaining 60%—a prohibitive cost
for the small community. The Action Group therefore requested Mareeba Shire
Council to apply for SRP funding for the 60% cost.[761] However, the Committee heard that
Dimbulah residents had been informed that the provision of a water system would
probably not fall within the scope of the SR program because other sources of
government funding were available and therefore Mareeba Shire Council would not
apply for funding for the project.[762]
10.30
The Dimbulah residents were particularly disillusioned
because they had been involved in initial ATSRAC
workshops at Mareeba Town
Hall after the demise of the local tobacco
industry, at which the problems with the Dimbulah water supply were discussed.[763] Dimbulah witnesses also said that as
part of the establishment of an industrial estate in Mareeba, Mareeba Shire
Council had received SR funding for basic water, sewerage, electricity and
telecommunications infrastructure.[764]
10.31
The claim that provision of a water system is out of
scope of the program is questionable in light of the following statement in
DOTARS' submission:
Funding is available for a wide range of projects including
minor infrastructure, skills building, encouraging small businesses and local
enterprises, as well as for addressing social development, environmental and
cultural issues.[765]
10.32
The priorities of other sustainable regions, for
example, Far North East NSW SRAC, include 'infrastructure
as an enabler of development';[766] and the Gippsland
SRAC priorities are even more specific,
including 'provision of water, sewerage and
transport infrastructure'.[767]
10.33
The Committee heard that as a result of continued
pressure from Dimbulah residents, Mareeba Shire Council made a unanimous
decision at its meeting of 5 April 2005
to lodge an expression of interest with ATSRAC
for the Dimbulah water system renewal project.[768] By this stage, however, it was too
late, as ATSRAC was not accepting any further
applications because the remaining funds in the program were expected to be
exhausted to process existing applications.[769]
It is regrettable that this expression of interest was not lodged at an earlier
date.
10.34
The Committee believes the renewal of Dimbulah's
water supply fits within ATSRAC's
regional priorities. The Committee recognises that access to sewerage,
communications and water infrastructure are fundamental to regional development
as their absence means that many industries cannot operate.
Cradle
Coast regional priorities
10.35
Cradle Coast SRAC took a different approach to
developing regional priorities that also garnered more community support. It
initiated a regional strategic planning process and analysed several industries
that required development. From this process Cradle Coast SRAC created a
Sustainable Regions Investment Plan[770]
and proposed to the minister that the money available to the region would be
best distributed through a strategic investment approach rather than a
competitive small grants program for the whole of the money. The plan outlines 'where
investment could be applied to address some of the long-term structural and
economic issues that made us one of the regions chosen to participate in this
program'.[771]
The minister accepted the investment plan as a basis for use of the region's
SR funds, subject to his discretion.[772]
10.36
Mr Jaensch
explained to the Committee that the investment plan contained six key areas,
each structured differently. For example, the tourism and the education and
training programs were run as targeted grants programs, and the food industry
program included a $1 million small grants component as well as a project
commissioned with the University of Tasmania
to develop a food innovation centre to create research and development
capability to support the local food industry.[773]
10.37
The Committee believes this approach is a good model
for other SRACs as it includes more specific priorities and allocates some
funding towards research to identify how the program could best be structured
and targeted to benefit the region. The Committee recognises that grants based
programs are not sufficient to meet regional development needs and an element
of strategic investment planning is also required.
Application of program guidelines
10.38
A number of witnesses from the Atherton Tablelands had
attended community meetings at the commencement of the Sustainable Regions
Program and had received the impression that the purpose of the program was to
create employment in new, innovative or more diverse industries to replace the
declining, deregulated or closed industries in the region such as the tobacco,
timber and dairy industries.[774]
10.39
However, many people saw the SR grants on the Atherton
Tablelands as assisting individual businesses to gain an unfair competitive
advantage. For example, Mr Denis
McKinley told the Committee that he believed
some people saw the program as an opportunity to 'feather
their own nests' and commented that few of the
SRP projects were 'really focused on the
overall outcome for the tableland...'[775]
10.40
Mr Trevor
and Mrs Annette
Allwood talked about SRP funding polarising
rather than galvanising the small Atherton Tablelands community, and said that '...people
who are in a position where they can utilise the funding are seen as
opportunistic'.[776] Mr and Mrs
Allwood believed it was fair if a competitor
set up with their own funding, but saw inequities with their competitors being
subsidised by the government.[777]
10.41
The inquiry also raised questions about the rigour of ATSRAC's
assessment processes and adherence to program guidelines. Particular concerns
included competitive neutrality considerations, allegations of political
favouritism or conflict of interest and the requirement for relevant approvals
(e.g. development approvals) to be obtained prior to a project being approved.
Lack of transparency
10.42
One witness, Ms Jean
Campbell, summed up many Atherton Tablelands
residents' concerns with the lack of
transparency of the SR program and lack of avenues for community input as
follows:
The public has only become aware of grant approvals (some) when
they have been announced in the local newspapers. This has caused considerable
anger in the community with many taxpayers questioning the wisdom of some of
the funding allocations and what they believe to be a waste of their tax
dollars on projects that ultimately will not benefit them, the public, in any
significant way. Many members of the public feel alienated and isolated in that
there appears no avenue to protest or object to ATSRAC
decisions.[778]
10.43
The Committee recognises that ATSRAC
was unable to release commercial-in-confidence information, because under the
program requirements SRACs are not permitted to disclose that an application
has been received until after the minister has made a decision about it.[779] The effect of these restrictions,
however, could be overcome if the government removed, or at least relaxed,
commercial-in-confidence provisions.
10.44
DOTARS suggested that there were adequate mechanisms
for third parties to raise concerns in relation to funding decisions made under
the program, including writing to the minister or parliamentary secretary to
ask that a decision be reconsidered or reviewed; or contacting the Commonwealth
Ombudsman.[780] The Committee does not
consider these avenues sufficient, and believes the government should consider
alternatives such as those discussed below that would allow public scrutiny and
input during the application assessment process.
Competitive neutrality
10.45
The SRP general assessment criteria, which SRACs are
required to assess each application against, include the following:
The project does not compete directly with existing businesses,
unless it can be shown that there is an unsatisfied demand for the
product/service or the product/service can be provided in a new way.[781]
10.46
DOTARS gave evidence to the Committee that the SRP
competitive neutrality requirements were as follows:
Under the Sustainable Regions Programme the proponents are
required in the application form to identify how their project will impact on
other businesses or groups in the area. In addition the SRAC when looking at a
project is required to give consideration to the criterion of competitive
neutrality.
The Department relies in part on the local knowledge of the SRAC
and EO to determine if there are potential competition issues.[782]
10.47
Mr McDade explained ATSRAC's
investigation of competitive neutrality processes as involving ATSRAC making
its own inquiries, requesting product differentiation information from the
proponent and relying on ATSRAC members'
and executive officer's local knowledge.[783] He also said that ATSRAC
believed that this criterion could be met even if a proponent was ostensibly
competing against other businesses, if they could sufficiently differentiate
their product or introduce new services.[784]
10.48
The Committee was concerned to discover that
information in relation to this criterion was only sought from proponents, and that ATSRAC
and DOTARS did not carry out any further investigation such as contacting
existing businesses or seeking advice from people with expertise in the
relevant industry.[785]
10.49
Dr Stocker
suggested to the Committee that competitive neutrality could be more thoroughly
assessed by opening applications made by individual businesses to public
scrutiny. The removal of commercial-in-confidence qualifications would give
community members and competing businesses the opportunity to make submissions
on the proposed project.[786] While the
Committee recognises that proponents may wish certain information to remain
confidential, they must accept that in applying to receive public funding,
there is an increased obligation to disclose information to the public. Dr
Stocker suggested that making proponents
aware at the start of the process that their application would be public would
allow them the choice of accepting the accountability requirements or not
applying:
I would say that
applicants should be warned at the start that their application will not be
treated in confidence, so they should not bother to put in one [if they do not
accept this condition]. If it is treated in confidence it creates too many
other problems. If their proposal is so good that they have to keep it
confidential, they should use conventional sources of finance, such as banks or
finance companies.[787]
10.50
Ms Campbell
suggested the introduction of a public notice as the final step before project
approval was granted, with a one-month period for members of the public to
comment on the proposal. She believed such a measure would 'ease
public disquiet' and bolster the due diligence
process.[788]
10.51
The Committee received relevant evidence from the Pilbara
ACC about an alternative approach it took to
assessing competitive neutrality regarding an application for funding made
under the RPP. The ACC required the proponent to obtain letters of support or
acknowledgement from identified competitors.[789]
This ensured that competitors were aware of the application and had an
opportunity to put their case to the ACC before it made a recommendation about
the project.
10.52
The three projects discussed below, JAM Custom
Kitchens, the Atherton Hotel and Kalamunda
Ecostay, raised concerns among community
members relating to competitive neutrality, conflict of interest and the lack
of transparency of the application process.
JAM Custom Kitchens and Furniture
10.53
On 15 April
2004, Senator Ian Campbell,
as acting Minister for Transport and Regional Services, approved an application
by JAM Custom Kitchens and Furniture for $204,350 of SRP funding to build a
showroom, workshop and timber heritage display. The grant was announced on 6 May 2004.[790]
10.54
Mr and Mrs Allwood, proprietors of Tolga Woodworks studio,
gallery and caf in Tolga, gave evidence to the Committee that they did not
believe ATSRAC had carried out its duties in
relation to competitive neutrality before recommending JAM's
application for approval, as the new showroom was to be located within 50
metres of their business, which had been operating for over 20 years:[791]
Due diligence was not done, product differentiation was assessed
by asking the proponent to comment, the findings of the Tourism Strategy were
ignored, and an assessment of the impact on my business was not carried out. No
one from the Committee or the Department ever contacted me. This was a "me
too" attempt to capitalise on my successful woodworking enterprise, rather
than an innovative tourism project.[792]
10.55
Mr McDade told the Committee that ATSRAC
had conducted its normal investigation of competitive neutrality, including
requiring the proponent to address that question in the application form and
drawing on the local knowledge of ATSRAC
members and staff—in this case, Mayor Chapman—who 'knew
both parties very closely and knew their businesses very closely'.
ATSRAC also asked JAM to provide further
information about product differentiation, and the Committee made the
assessment that the criterion was not being breached.[793]
10.56
Mr and Mrs Allwood
also expressed concerns about the lack of transparency regarding the assessment
of competitive neutrality, and requested from ATSRAC
and JAM information about product differentiation and the products that JAM
would be producing. They were refused that information on the grounds it was
commercial-in-confidence.[794] However,
DOTARS provided the following information to the Committee:
The applicant advised that no other business in Tolga provided
cabinet making services. JAM also provided an explanation of how its showroom
would complement other woodwork enterprises in Tolga whose products were aimed
at a different segment of the market.[795]
10.57
The Committee questions why Mr and Mrs
Allwood were not provided with this
information when they requested it. Mr and Mrs
Allwood's
main concern was that the first they knew of the project was when its approval
was announced, and they had not had an opportunity to comment with respect to
an application that would directly affect their business, and there was no
process for appeal or objection.[796]
10.58
JAM Custom Kitchens and Furniture advised ATSRAC
in October 2004 that the company would not take up the offer of funding.[797] The Committee heard that the
construction of the workshop is proceeding without the proponent taking up the
grant.[798] This suggests that the
project would have occurred irrespective of the funding, and therefore the
grant would not have resulted in a net benefit to the Atherton Tablelands or
met the SRP project assessment criterion of '[t]he
extent to which Australian Government funding is needed to realise the
project...'[799]. However, the fact that
the funding was not taken up does not excuse the shortcomings in the program
that became evident in relation to this project, for example, overlooking
competitive neutrality considerations, over-reliance on the proponent's
view of competitive neutrality and a lack of transparency.
The Atherton Hotel
10.59
Competitive neutrality concerns were also raised in
relation to a $500,000 grant to the Black Stump Hotel, Atherton.
The purpose of the grant was as follows:
Project funding...will support the construction of ten four star
hotel rooms with business facilities, a 350 seat function room and a 50 seat
conference facility.[800]
10.60
The Committee received evidence from a number of
Atherton residents, most of whom owned or worked for other licensed premises in
Atherton, that there was a deficit in the due diligence process in that no
existing businesses with similar facilities were given the opportunity to
comment on whether they approved or disapproved.[801]
10.61
Mr Michael
Nasser, part owner of the Barron Valley
Hotel in Atherton, believed the government 'should
not be handing out taxpayers' money to
duplicate existing facilities that are threatening the livelihoods and jobs of
current employees'.[802] The Committee also heard allegations
that the extension funded by SRP would be used to house poker machines and
entertainment acts rather than conferences, although DOTARS indicated that the
funding agreement would not allow for SRP funds to be used to construct space
to house poker machines.[803] However,
the Committee was not satisfied that the grant would not be used to facilitate
other, non-conference related activities.
10.62
Mr Len Curtis, an Atherton Shire Councillor, told the
Committee that Atherton currently has other conference venues and function
centres catering for between 250 and 450 people, and the town only hosts two or
three conferences a year. He attempted to get Atherton Shire Council to place a
condition on the development approval that the extension funded by SRP could
only be used for functions, but was unable to do so.[804]
10.63
The witnesses also expressed animosity at government
subsidisation of competitors rather than 'fair'
competition. Mr Nasser
said:
If anyone else wants to get in on the act and do it on a level
playing field, well and good. But, if someone is going to get half a million
bucks to build an extension to their pub to duplicate what we do, we are going
to lose a number of employees because there is just not enough people in the
town to support it.[805]
10.64
The witnesses asked for copies of the letters of
support for the project, but were denied on the grounds it was
commercial-in-confidence information.[806]
They also contacted the then Minister for Transport and Regional Services to
request a review of the decision. DOTARS stated that the minister requested the
department undertake a review of the material facts relating to the project,
and the review 'confirmed that the project
will contribute to expanding the Tablelands Tourism identity'.[807]
10.65
Apart from being an inadequate answer to a serious
matter, the department's response suggests the project's expected contribution
is limited to raising the region's tourism profile ('identity') and that that
the review avoided or glossed over the project's impact on local employment or
the business of competitors. If so, the department's review is likely to be
seen by already disgruntled local residents as adding insult to the injury
caused through the shortcomings of the process with the grant in the first
place.
Kalamunda
Ecostay
10.66
On 17 April
2003, ATSRAC recommended for
funding an SRP application by Innesfree Pty Ltd to provide eco-tourism based
accommodation for backpackers (who were expected to work as fruit pickers on
nearby farms) and self-drive tourists. On 9 July 2003, a $150 000 grant was
approved for the Kalamunda Ecostay project by then Deputy Prime Minister and
Minister for Transport and Regional Services, the Hon John Anderson MP.[808] This project raised questions about
compliance with relevant planning laws and concerns about possible conflict of
interest and the lack of transparency of the application process.
10.67
Evidence about this project also raised questions about
inconsistencies in ATSRAC's
assessment of projects against the program criteria. Although ATSRAC
recommended the Kalamunda Ecostay
project, the Committee heard from Ms Gaye
Taylor, a Mareeba Shire Councillor, that a
similar proposal had been rejected on the grounds it did not fit the program's
criteria:
For several years, one of our other councillors has been asking
for bunkhouses to be built at the Dimbulah
Caravan Park.
We have nowhere to put itinerant workers when they come to the town. A council
officer emailed ATSRAC and received the
response that the bunkhouse project was not within the criteria and that
council may want to reconsider the application.[809]
10.68
The email from Ms Yvonne Tunney, then ATSRAC
Executive Officer, to Mr Kieran Coyle of Mareeba Shire Council, stated that the
bunkhouse project would not appear to meet SR criteria including competitive
neutrality requirements and ATSRAC's
priorities such as a 'significant regional focus...and...significant regional
sustainability and viability'.[810] The same questions could be asked of
the Kalamunda Ecostay
project, as discussed below.
10.69
The Committee took evidence from Mr
Leslie and Mrs
Jenny Tenni,
who live next door to the project site. They had initially believed their
neighbours intended to establish a small number of cabins to accommodate
itinerant workers. However, when construction commenced in November 2004 and a
material change of use application was lodged with the council, they discovered
that the project for backpacker accommodation had become a caravan park to
accommodate 140 people. They expressed concerns because the land zoning did not
allow for this use. Mr and Mrs Tenni
were concerned to discover that SR funding for this project had been approved
before council approvals were obtained.
10.70
One of the mandatory requirements which SR applications
must meet is that '[p]roposals must comply with relevant planning and
environmental laws'.[811] Council
development approval, however, had not been obtained at the time the project
was applied for or approved, and building appears to have commenced in November
2004—well before approvals were obtained. DOTARS advised the Committee that
ATSRAC 'recommended this project with the knowledge that the development
approvals had not been finalised, but were confident that these approvals would
be forthcoming'.[812]
10.71
Mr McDade
told the Committee that ATSRAC had considered
the Kalamunda proposal under its normal processes, including comparing it
against program criteria and regional priorities and investigating letters of
support, and recommended it for approval because it would help to address the
deficit in itinerant workers on the tablelands in peak harvest time.[813] He also said that a letter from
Atherton Shire Council to the proponent had been attached to the application.
The letter outlined the steps the proponent would need to take to gain the
necessary approvals. Mr McDade
believed that the criterion relating to approvals was not a matter for ATSRAC
to consider as it would be considered at the due diligence stage undertaken by
a person contracted by DOTARS.[814]
10.72
Ms Riggs
informed the Committee that DOTARS had made the funding agreement for the Kalamunda
Ecostay project conditional on development
approvals being obtained as part of the first milestone.[815] The Committee is concerned that a
supposedly mandatory project assessment criterion was not really considered
during the project assessment stage, and was only enacted through a funding
agreement developed well after the project had been recommended, approved and
announced.
10.73
Mayor Jim
Chapman informed the Committee that Atherton
Shire Council members voted four to three to give the approval to change the
zoning of the land.[816] Council
officers, however, had recommended the project not be approved because it was
inconsistent with the shire's planning scheme.[817]
10.74
The Committee is concerned that Mayor Chapman
did not abstain from the vote, as a potential conflict of interest existed. Mayor
Chapman had previously made a decision to
support this project as a member of ATSRAC and
was also one of the people who approved the change of land zoning on the
council.[818]
10.75
The Committee heard that ATSRAC
has a conflict of interest declaration process whereby mayors declare a
conflict of interest when discussing a matter in their shire. In some cases
they leave the meeting. The ATSRAC minutes of 21 March 2002 stated that members
discussed the issue of conflict of interest and 'pending
advice to the contrary from DOTARS, proposals put forward by councils need to
have no ATSRAC member abstain'.[819] ATSRAC,
however, was unable to provide any evidence that DOTARS provided advice on this
matter.[820]
Cradle
Coast project assessment model and
conflict of interest processes
10.76
Cradle Coast SRAC deals with potential conflicts of
interest by seeking declarations, excluding the relevant members from
deliberations on proposals where conflicts may arise and noting them in the
minutes of the SRAC meetings.[821]
10.77
Cradle Coast SRAC's
project assessment processes involve a detailed assessment by each committee
member of various aspects of each project.
When applications are sent to committee members, comments and technical
advice are included, as is an assessment sheet that is completed by each member
before attending the meeting. The process in the meeting includes a discussion
about each project, covering whether there is sufficient information for it to
be assessed and then going through each of the eligibility and assessment
criteria. Mr Jaensch
told the Committee he ensures that every SRAC member has an opportunity to
state whether they believe the criteria have been met.[822]
10.78
Cradle Coast SRAC added to the program's
generic project assessment criteria a set of criteria specific to each priority
area outlined in the investment plan. Each committee member is required to give
a proposal a score out of five against each criterion. The scores are then
averaged and included with the recommendation to the minister to show the
relative strength of the application compared to other applications.[823] The Committee suggests that other
SRACs examine Cradle Coast SRAC's internal
project assessment processes and consider adopting a similar approach.
The @GIS project
10.79
A further sign of the troubled state of the Sustainable
Regions Program in the Atherton Tablelands area emerged in relation to a grant
to three councils for a geographic information system (GIS) project. Atherton,
Eacham and Herberton Shire Councils set up a separate entity, known as Atherton
Tablelands GIS (@GIS) to run this project.[824]
The then Minister for Transport and Regional Services approved SRP funding of
$1.6 million for the project on the 9
July 2003. The funding was intended to:
...enable local governments, businesses, organisations and
individuals to better understand the region and stimulate growth in investment,
trade and the regional economy through electronic collection and manipulation
of data.[825]
10.80
The Committee became aware of allegations of corruption
in relation to the administration of the project, including claims that
$110,000 of Sustainable Regions funds had been 'absorbed'
by the Atherton Shire Council.[826]
Other allegations included that the three councils had not provided the $1.5
million of cash and in-kind support required under the conditions of the grant[827] and that a consulting firm had been
engaged to review the project without seeking three written quotes as required
under the Queensland Local Government Act.[828]
10.81
The Queensland Audit Office has the appropriate
jurisdiction to investigate these matters and the Committee understands that it
is about to commence an audit of the financial statements of Atherton Shire
Council, Eacham Shire Council, Herberton Shire Council and @GIS as part of its
annual audit program.[829] The
Committee notes that the Queensland Crime and Misconduct Commission also has
jurisdiction to investigate local government joint ventures and has recently
released public sector fraud and corruption guidelines.[830]
10.82
The Committee considers that this project demonstrates
the importance of tracking government-funded projects beyond their initial
funded period to ensure outcomes are achieved, monies are expended
appropriately and the promised partner support is actually provided.
Conclusion
10.83
The Atherton Hotel, Kalamunda Ecostay and JAM Custom
Kitchens projects highlight the inherent difficulties in providing government
grants to the private sector, namely that while the grant may have a particular
purpose, it frees up capital for other purposes (for example, the purchase of
poker machines), raises due diligence and competitive neutrality questions and
can create fractures in small and already fragile communities. This
particularly applies if the grant process is not seen as transparent, rigorous
and equitably accessible.
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