‘Vehicle for buying votes’: The next test for Labor’s controversial $37m election fund

The NSW Labor government’s controversial community grant scheme will be put under the microscope by the state’s auditor-general as pressure intensifies over the administration of the $37.2 million fund.

Confirmation of the program’s audit comes after an upper house parliamentary inquiry was established last week to “report on the integrity, efficacy, and value for money” of the Local Small Commitments Allocation (LSCA) scheme.

The grant program was announced by Labor ahead of the 2023 state election and gave each Labor MP and candidate in the state’s 93 seats the discretion to nominate projects for $400,000 of funding.

NSW Premier Chris Minns’ $37.2 million community grants program driven by Labor MPs and candidates has been controversialCredit: Janie Barrett

However, as revealed by the Herald, the scheme faced accusations of using public money for political purposes and breaching Labor’s standards for grant funding.

A secret review undertaken by Special Minister of State John Graham’s office in October last year found two projects worth more than $100,000 had “unacceptable” conflict of interest concerns, while a further 28 were identified as having a “moderate probity risk”. Two “high-risk” projects were scrapped by the premier’s department.

Of the 28 projects considered a “moderate” risk, 10 were due to political connections. This included Newcastle MP Tim Crakanthorp, who the review found received campaign support from connections in four of the nine organisations associated with his nominated projects.

At the time, Crakanthorp referred questions to the minister’s office.

Shadow special minister for state Chris Rath referred the program to the Audit Office in late October, asking Auditor-General Bola Oyetunji to “ensure integrity in line with legislative requirements”.

In response, correspondence from Oyetunji on November 13 said the LSCA scheme would be subject to a compliance audit to interrogate the issues Rath raised.

The government has defended the program, contrasting the scheme against previous Coalition grant schemes including $250 million for local councils and another recovery fund for victims of the Black Summer bushfires.

In response to an investigation by the Audit Office into the bushfire recovery grants, Premier Chris Minns declared he would “restore integrity” to the grants system by banning pork-barrelling.

Opposition Leader Mark Speakman accused the government of hypocrisy, saying they were claiming they would return integrity to politics while “running a scheme that fails even their own standards”.

“Taxpayers deserve transparency and accountability, not political self-interest. This program epitomises Labor’s hypocrisy,” he said.

Rath accused Labor of politicising the public service and failing to uphold integrity in the grants program.

Greens MLC Abigail Boyd, chair of the LSCA inquiry, said the committee would examine issues relating to the administration and probity of the fund and the electoral impacts.

“It looks like a vehicle for buying votes with discretionary funding promises, and if that’s the case, it simply doesn’t pass the sniff test,” she said.

In response to questions, Graham said: “The NSW government welcomes the compliance oversight of the auditor-general. Last year I committed to providing all the approval documentation publicly, which is now done. This is unprecedented transparency for a grant program.”

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