Extract from The Guardian
PM says he and Mathias Cormann were responsible for awarding the money to foundation in one year
Scott Morrison has said he and the finance minister, Mathias Cormann, were responsible for the government’s decision to give $444m to the Great Barrier Reef Foundation in one year.
At a doorstop in Perth on Monday the prime minister said that the pair, as the Coalition’s economic team before the 2018 budget, had worked out “the best way to do [the grant] financially”, and argued it was the right decision because it helped the reef without “blowing the budget”.
Far from allaying Labor’s concerns about the grant, the comment has led the shadow treasurer, Chris Bowen, to pin the responsibility for the grant on Morrison, who was the treasurer at the time – calling on Morrison to explain what due diligence was done on the foundation.
The reef grant was first proposed at a meeting on 9 April 2018 between the former prime minister Malcolm Turnbull, the then environment minister, Josh Frydenberg, and the foundation’s chairman, John Schubert.
The Coalition has refused to explain the genesis of the idea to grant funding to the private foundation without a competitive tender process or any application for the money, saying only that Frydenberg had made the submission to cabinet and the decision had gone through normal expenditure review processes.
On Monday Morrison reiterated that the grant had gone “through a proper process”.
“We knew that the position in 2017-18 – Mathias Cormann and I – had improved and that gave us the opportunity to actually make the biggest investment in the future of the reef in one go,” he said. “Now, had we not taken that decision, I think it would have been a lot more difficult to do that over a number of years.”
Morrison said he and Cormann had taken “the right financial decision” when the idea for reef spending was presented by Frydenberg, and the pair had “worked out the best way to do that financially”.
“Now, that’s what treasurers and finance ministers do,” Morrison said. “I mean you don’t do it in a way which is going to blow the budget and undermine your other fiscal objectives.”
In the 2018 budget the Coalition announced the budget would return to balance in 2019-20, one year ahead of schedule. Morrison’s answer seems to confirm Labor’s suspicions that the grant was front-ended so spending in later years would not weigh down projected surpluses.
Although the $444m grant was given in one year, rules in an agreement with the foundation stipulate that it will be spent over six years.
Bowen said the “one-off transfer” would cost taxpayers “at least $11m in public debt interest every year because the entire amount of the grant is already sitting in the foundation’s bank accounts”.
He doubted Morrison’s claims it was fiscally responsible to manage the grant in that way, citing reports that the department of finance instead recommended the budget allocation to protect the reef be set at $200m over six years.
Bowen said if government organisations like the Great Barrier Reef Marine Park Authority or the CSIRO want federal funding for the reef they will now have to “apply to a small private foundation”.
“By privatising the management of Australia’s most precious and fragile environmental asset, money which could have been spent on the reef is instead spent on administration,” he said.
“The agreement between the environment department and the foundation allows the foundation to spend up to $44m of the grant money on its own administration.”
Labor has called on the foundation not to spend the grant, warning it will force the return of the funds if it wins the next election.
At a doorstop in Perth on Monday the prime minister said that the pair, as the Coalition’s economic team before the 2018 budget, had worked out “the best way to do [the grant] financially”, and argued it was the right decision because it helped the reef without “blowing the budget”.
Far from allaying Labor’s concerns about the grant, the comment has led the shadow treasurer, Chris Bowen, to pin the responsibility for the grant on Morrison, who was the treasurer at the time – calling on Morrison to explain what due diligence was done on the foundation.
The reef grant was first proposed at a meeting on 9 April 2018 between the former prime minister Malcolm Turnbull, the then environment minister, Josh Frydenberg, and the foundation’s chairman, John Schubert.
The Coalition has refused to explain the genesis of the idea to grant funding to the private foundation without a competitive tender process or any application for the money, saying only that Frydenberg had made the submission to cabinet and the decision had gone through normal expenditure review processes.
“We knew that the position in 2017-18 – Mathias Cormann and I – had improved and that gave us the opportunity to actually make the biggest investment in the future of the reef in one go,” he said. “Now, had we not taken that decision, I think it would have been a lot more difficult to do that over a number of years.”
Morrison said he and Cormann had taken “the right financial decision” when the idea for reef spending was presented by Frydenberg, and the pair had “worked out the best way to do that financially”.
“Now, that’s what treasurers and finance ministers do,” Morrison said. “I mean you don’t do it in a way which is going to blow the budget and undermine your other fiscal objectives.”
In the 2018 budget the Coalition announced the budget would return to balance in 2019-20, one year ahead of schedule. Morrison’s answer seems to confirm Labor’s suspicions that the grant was front-ended so spending in later years would not weigh down projected surpluses.
Although the $444m grant was given in one year, rules in an agreement with the foundation stipulate that it will be spent over six years.
Bowen said the “one-off transfer” would cost taxpayers “at least $11m in public debt interest every year because the entire amount of the grant is already sitting in the foundation’s bank accounts”.
He doubted Morrison’s claims it was fiscally responsible to manage the grant in that way, citing reports that the department of finance instead recommended the budget allocation to protect the reef be set at $200m over six years.
Bowen said if government organisations like the Great Barrier Reef Marine Park Authority or the CSIRO want federal funding for the reef they will now have to “apply to a small private foundation”.
“By privatising the management of Australia’s most precious and fragile environmental asset, money which could have been spent on the reef is instead spent on administration,” he said.
“The agreement between the environment department and the foundation allows the foundation to spend up to $44m of the grant money on its own administration.”
Labor has called on the foundation not to spend the grant, warning it will force the return of the funds if it wins the next election.
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