Chapter 3 - Response to majority report case studies
3.1
A pattern becomes evident upon reading those chapters
of the majority report that examine a few projects in detail. The majority
report has selected a minority of projects and dismantled them to find fault
with the minutiae of the administrative process. These case studies home in on
some minor administrative glitches and magnify them in an attempt to undermine these
successful Australian Government programs. The majority report degrades and
devalues two of the most successful government programs in history.
3.2
The chronologies of events outlined in the majority
report's examination of six RPP projects and three SRP projects are generally
accurate. However, a political construction is placed on events. ALP members of
the Committee alleged that these six, or 1.2% of the total approved projects,
somehow represent 'systemic' weaknesses in the Regional Partnerships Program.
Clearly, there are no systemic problems. The evidence to this inquiry proved
that, even while ALP members were actively seeking negative evidence.
3.3
Government Senators note that none of the projects
subjected to case studies in the majority report had community opposition, rather
to the contrary all had strong community support. In some instances these
projects have also been supported by ALP state governments. Government members
further note that nowhere does the majority report state that these particular
projects do not meet genuine community need. All of these projects met the
relevant criteria and contract terms.
Beaudesert Rail
3.4
Rather than demonstrating, as claimed in the majority
report, that the Regional Partnerships program is open to politicisation, the
grant to the Beaudesert Heritage Rail instead demonstrates the Australian Government's
responsiveness to widespread community support for a project.
3.5
In light of the broad based community support for this
project and the monetary support from multiple levels of government, is indeed
unfortunate that unpredictable events prevented this project from continuing to
deliver a valuable tourist attraction for the region.
3.6
It is pointless to speculate, as the majority report
does, about the potential viability of the railway in the absence of those 'mishaps
that adversely affected the operation of the railway at vital times', and ill-considered
of the Committee to attempt to blame DOTARS or the Australian Government for
not foreseeing events such as derailments and grass and railway bridge fires.
A2 Dairy Marketers
3.7
Again, a minister has been baselessly attacked for
supporting a struggling sector of the community. All that former Parliamentary
Secretary Kelly
is guilty of doing is supporting struggling dairy farmers in their desire 'to
be able to negotiate for prices and get better returns'.[853]
3.8
By their very nature, discretionary programs require
the flexibility to expedite consideration of time-critical projects. As the
evidence from DOTARS shows, fast-tracking an assessment does not mean altering
the due diligence process in any way,[854]
despite intimations to the contrary in the majority report.
3.9
Allegations of maladministration do not stand up in
relation to this project. The evidence shows that all appropriate due diligence
checks were completed and passed at the project assessment stage. The proponent
did not meet the conditions that the Minister placed on the grant, and
therefore DOTARS acted appropriately in not entering into a funding agreement.
It must be kept in mind that the Regional Partnerships Program procedures
operated as they should have and no
public funds were granted to A2 Dairy Marketers.
Tumbi Creek
3.10
The Tumbi Creek dredging project is an important
project which will deliver a range of outcomes, including mitigating flood risk
for residents in the local area, improving the environmental state of the creek
and restoring a natural recreational asset to its proper condition. While there
have been some differences in views about the best method for dredging the
creek and the amount of dredging to take place, the need to dredge the creek
has been accepted and supported by all levels of government, local, state and
federal and has strong support from the local community
3.11
The majority report has attempted to draw conclusions
of political collusion and interference in the Tumbi Creek dredging project. The report stresses that there were
discussions and email exchanges between the local government and federal member
about the project. The government members make no apology for the government's
support of worthwhile projects with strong community support. Mr
Ticehurst's drive and tenacity in
representing his constituents and delivering outcomes to his electorate is
commendable. There is nothing untoward about an elected representative working
cooperatively with the local government and the community he represents to
bring forward projects for funding. Mr Ticehurst
is an example of a hardworking member representing the best interests of his
community.
3.12
The majority report also attempts to imply that funding
for the Tumbi Creek dredging work was expedited due to the 2004 federal
election campaign. This is not the case. During the election campaign the ALP
candidate for Dobell, Mr David
Mehan, with the support of then ALP
Leader Mr Mark Latham
announced that Labor, if elected, would fund the dredging work. That this
project was both sound and responsive to genuine community need is clearly
demonstrated by the cross party support demonstrated for the project.
3.13
The examination of the Tumbi Creek dredging project has
been characterised by groundless, political debates. For example, Mr
Beazley's assertions that members of the
local council were involved in a conspiracy with federal members in an attempt
to defraud the Commonwealth were baseless. On the 9 February 2005, Mr
Beazley moved a motion to censure the Minister
for Local Government, Territories and Roads for, among other things:
Conspiring with others to defraud the Commonwealth and
specifically directing local Wyong officials who knew the truth to stay silent.[855]
3.14
Mayor Pavier rejected these claims at the Committee's
hearing.
Senator BARNETT—So
you are not involved in any conspiracy?
Mayor Pavier—I have not been involved in any conspiracy...[856]
3.15
Similarly, the perception created by Opposition members
that storms had cleared the creek mouth
and therefore the dredging work was no longer needed were unfounded. In his
motion of 9 February 2005, Mr
Beazley asserted that '... the mouth of the
creek was open and such dredging was no longer required...'.[857] The Committee received evidence that
only 1,000 m3 of the
30,000 m3 of sediment
in the creek mouth had been cleared. The dredging project was to remove 15,000
m3.
3.16
It is indeed unfortunate that the delay in the NSW
Government issuing the local council with a dredging licence has delayed
commencement of this project. NSW Government support has now come through, with
the issue of a dredging licence for 5,000m3. As this licence
did not reflect the level of work needed by the Council, further discussions
have taken place between Council representative and the NSW Department of Lands.
Details of a revised dredging offer, for a longer channel on the Council's
preferred alignment, are scheduled to be considered by the Council at its
meeting on 12 October 2005.[858]
Privilege allegations
3.17
The majority report states that the Committee considered
that answers to questions on notice provided by the Wyong Shire Council
provided a prima facie case that
Mayor Pavier provided deliberately false and misleading evidence to the
Committee. The Government members strongly reject this assessment. Mayor Pavier
provided written advice to the Committee clarifying his understanding of the
question put to him and the nature of his answer. Mayor Pavier said:
In that email, advice was given that an announcement would be
made at Tumbi Creek.
Neither the extent or details of what was to be announced was
divulged to me, but Council obviously required advice that an announcement was
to take place so it could plan for a Ministerial visit.
When I was asked by the Senate committee if I was aware of
"any earlier decision to approve or a proposed decision to approve
funding" then I am still confident the answer I provided – 'no' – is
correct.
I regret any misinterpretation of the question or my response.
I trust this clarifies the matter.[859]
3.18
Mayor Pavier also stated in his letter to the
Committee:
It has never been nor
is it, my intention to mislead a Senate enquiry.[860]
3.19
Given the above statement, there is clearly no basis to
conclude that Mayor Pavier provided false or misleading evidence to the
Committee, let alone did so deliberately.
3.20
The majority report also indicates that Mayor Pavier's
oral evidence obstructed the Committee's inquiry. The Government members find
this conclusion untenable. Had Committee members felt that issues needed
examining further in light of answers provided in questions on notice, various
avenues were available for continuing the examination. For example, written
questions on notice could have been provided, as was the case with several
other witnesses to the inquiry. Alternatively, given that the Committee was
still holding public hearings for this inquiry in mid-September, the Committee
could have invited the Mayor to attend a further hearing.
Primary Energy
3.21
The majority report's treatment of the case of Primary
Energy is highly revealing of its authors' underlying approach and the defects
in their argument. The fixation on attacking the RP program has left them blind
to benefits of a project of not only regional but also potentially national
significance. As with the other case studies, the majority report magnifies
supposed shortcomings in the administrative process of the grant but,
tellingly, fails to comment directly on the project itself.
3.22
It needs to be remembered that the Australian
Government has allocated funding for a highly promising, innovative biorefinery
plant in regional Australia.
The project promises to inject over $1 billion into the region over a five year
period. The Committee took evidence in private session from the managing
director of Primary Energy which revealed further substantial windfalls can be
expected once the plant starts production and sales. This puts into perspective
the element of risk involved with a grant of $1.2 million for the Australian
Government, as does the point that the cost of the project is over $100
million.
3.23
The evidence also showed that the company has been
successful in attracting an impressive array of financial backers and is
approaching financial close. As the legal adviser to Primary Energy, Mr
Carmody, told the Committee in evidence that
was subsequently published:
Over four years, Matthew [Kelley,
the managing director of Primary Energy] has been developing this project. He
has brought together a consortium of interested parties and advisers. Some of
those parties [will] seek to inject equity at the appropriate time...[861]
3.24
As that was the purpose of the RP funding for the
project, the Government Senators believe that Primary Energy is a case study of
well-targeted government assistance enabling a capital intensive project to get
established in regional Australia.
3.25
As for the supposed flaws in the funding process, the
majority report has typically exaggerated or distorted a select number of
elements in the case. The evidence presented to the Committee on due diligence
was incomplete, not the due diligence process itself. The criticism of
ministerial intervention is mistaken. On the one hand, the majority report
criticises a supposed administrative delay in processing the application, and
on the other criticises a minister for getting the department to fix the situation
by expediting its assessment of the project. The majority confuses
fast-tracking a worthy project with railroading the matter through due process.
3.26
The argument about the involvement of a ministerial
adviser, acting to ensure the department considered all the facts related to
the application, is simply ludicrous. With complex projects like Primary Energy
that are time-critical, it is crucial that a minister's staff and his
department work together to ensure that nothing relevant is missed. Furthermore,
the Public Service Commissioner, Ms Briggs, made it clear to the Committee that
the adviser's behaviour in this instance was not only appropriate but also in
keeping with the contemporary framework that governs working arrangements
between ministers' offices and their departments. This, of course, is a topic
on which the Opposition is completely out of date.
3.27
Finally, the comments about the evidence of
departmental officers reveal the level to which the Opposition is prepared to
stoop to try to get political traction. The two officers in question, Ms
Riggs and Dr
Dolman, performed admirably throughout an
interminable inquiry hearing process. They were required to recall the minutiae
of innumerable projects. They were both responsive to at times the unreasonable
needs of the Committee majority, while mindful of their obligations as public
servants to the minister and Government. Their explanation of an understandable
confusion over two letters was convincing. The matter should have ended there.
That a minor mistake in evidence, that was promptly corrected in accordance
with Senate procedure, was referred to at all is a major blemish on the
integrity of the majority report.
Mr
Windsor's allegations
3.28
As the majority report states, the Committee was unable
to find evidence to support Mr Windsor's
claims that an RPP application was not approved due to his involvement. There
is also absolutely no evidence to support the allegation that the Hon
John Anderson,
then Deputy Prime Minister, and Senator Sandy
Macdonald offered an inducement to Mr
Windsor not to stand at the 2004 federal
election.
3.29
As acknowledged in the majority report, both Mr
Anderson and Senator Macdonald have provided clear accounts in relation to this
allegation, showing that there is no substance or fact to the matter. Mr
Windsor was not even present at the meeting
at which he purports an inducement took place. Of those witnesses who were
actually present at the meeting none
could link Mr Anderson's
or Senator Macdonald's names
to an inducement allegation.
3.30
Mr Windsor's
allegation was wrong in matters of fact. He alleged that a meeting took place
on the 18 May, but there was no meeting on that date. The Government Senators
consider that in light of this error, Mr
Windsor may also have facts regarding other
aspects of the allegation incorrect.
3.31
In the Government Senators view, this allegation should
never have been considered in the course of this inquiry. The matter had been
addressed and dismissed even before the Senate referred this inquiry to the Committee
for examination and report. For example, as noted in the majority report, on 17 November 2004 Mr
Anderson made the following statement to the
House of Representatives:
...I completely repudiate the member for New England's
allegations of improper inducements were offered indirectly by Senator
Macdonald and me earlier this year. I would
make the first point that there was no meeting on 18 May; I was in Queensland,
in Bundaberg, on the evening of the 18th. I have on three or four
occasions met Mr Maguire.
In total I doubt that I have spent four or five hours with him. But I want to
make it very plain that, at those meetings, neither I nor Senator
Macdonald gave him any indication or
authorisation to suggest to the member for New England...any
indication of any nature whatsoever that he might be offered some inducement in
return for not running for the seat of New England. I
cannot know what representations might have been made at the meeting that
apparently took place on 19 May, but I can know that he had no authority
whatsoever – implied, nuanced or whatever – from me or from Senator Macdonald
to stand aside in return for some inducement.[862]
3.32
On 22 November 2004 the Australian Federal Police,
which has the appropriate jurisdiction to address the matter, publicly
announced that there was no evidence of an inducement and no evidence that Mr
Maguire had conspired with any one else to make an offer to Mr Windsor. The
Australian Federal Police stated:
The AFP has finalised its investigation in relation to an allegation
of electoral bribery regarding the Member for New England,
Mr Tony Windsor MP.
As a result of advice from the Commonwealth Director of Public
Prosecutions (CDPP) no charges will be laid in relation to this matter.
The AFP began its investigations after it received a referral
from the Australian Electoral Commission (AEC) on 21 September 2004. This referral was based on an
allegation initially raised during a radio interview by Mr
Windsor.
Following investigations, the AFP sent evidentiary material to the
CDPP on 7 October for advice in relation to whether a prima facie case could be
substantiated in relation to allegations of an inducement being offered.
Having assessed this material the CDPP has advised that the
evidence will not sustain a charge.
The CDPP concluded that"... none of the versions of the
conversations related by any of the witnesses can amount to an "offer to
give or confer" a benefit. Further there is no evidence in the material of
Mr Maguire
having conspired with any other person to make an offer to Mr
Windsor."
The AFP has assessed the information provided by the CDPP and
has finalised its investigations as a result of that assessment.[863]
3.33
That the Committee decided to accept and examine
evidence on this matter reflects the political motivations that directed the
course of this inquiry. Even though the allegation had already been addressed
and dismissed by the appropriate authority, the Committee continued to
countenance the allegation in an attempt to besmirch the standing and integrity
of Mr Anderson
and Senator Macdonald. The
Government Senators consider this conduct to be an inappropriate use of the
Senate's Committee system.
3.34
The Government Senators also consider Mr
Windsor's actions in maintaining his
allegations following the AFP's finding to be inappropriate. The allegations
seriously impugn the reputation and integrity of the then Deputy Prime Minister
and Senator Macdonald.
Despite the AFP's finding, Mr Windsor
did not withdraw the allegations or publicly apologise for his assertions.
3.35
The Government Senators consider that Mr
Windsor should publicly withdraw and regret
his allegations and should apologise on the public record to both Mr
Anderson and Senator Macdonald
for his derogatory and defamatory statements.
3.36
Similarly, Mr Windsor
should apologise for his 'cash-for-comment' allegations, which were found to be
unsubstantiated.
3.37
The Government members would also like to comment on
the detour the inquiry took in terms of seeking evidence from Mr
Maguire regarding contributions to Mr
Windsor's election campaigns, and referring
the matter to the Australian Electoral Commission (AEC). Like the allegations
themselves, this information was not at all relevant to the inquiry. However,
any investigation by the AEC would presumably examine the disclosures made not
only by Mr Maguire
as a donor but also those required to be made by Mr
Windsor as a recipient.
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