$30m deal ‘reflects poorly on all of us’

Treasury secretary Steven Kennedy said he was ‘very dis­appointed’ the department he once spent $30m on a $3m parcel of land for the new Western Sydney Airport.

Treasury secretary Steven Kennedy said he was “surprised” by the Auditor-General’s damning findings around the purchase of the Leppington triangle. Picture: NCA NewsWire / Gary Ramage

Treasury secretary Steven Kennedy said he was “very dis­appointed” the department he led before taking up his current position spent $30m on a $3m parcel of land for the new Western Sydney Airport while he was in charge, saying it reflected “poorly” on the public service.

The purchase of the so-called “Leppington triangle” was the subject of a scathing Australian National Audit Office report and has been referred to the Australian Federal Police to investigate possible corruption.

Dr Kennedy, who led the Department of Infrastructure, Transport, Cities and Regional Development for two years to September 2019, distanced himself from the scandal, saying he was aware only “in broad terms” of the land purchase for the $5.3bn Western Sydney Inter­national Airport, and he “wasn’t across the matter in detail”.

“I was surprised and concerned by the findings in the (ANAO) report, particularly the findings around unethical behaviour and the fact that information was withheld from key decision-makers, and that would include myself,” Dr Kennedy said during a Senate estimates committee hearing on Monday.

“There are a very large number of public servants who have worked extremely hard around this issue,” he said. “It’s now reflecting poorly on all of us. So we need to get to the bottom of it and find out why the systems didn’t bring this issue to a head.

“Whether I should have (known about the issues raised in the report) is something I will reflect on” following the conclusion of inquiries launched into the land purchase by current department head Simon Atkinson, he said.

As one of his final acts before joining Treasury, Dr Kennedy signed off on the Infrastructure Department’s 2018-19 financial accounts, but on Monday he agreed with the ANAO that it was “a matter of fact they are inaccurate” because of the issues raised in the audit report about the inflated land purchase.

“It’s a reasonable question: why did I sign the financial statements off when that matter had not been settled?”

Dr Kennedy said he felt it was “unreasonable” to ask Mr Atkinson to sign off on accounts for a year during which he hadn’t led the department. “It was my responsibility to sign it off, so I signed it off.”

He also said the unprecedented spending and borrowing undertaken by the govern­ment to cushion the impact of the COVID-19 crisis was “proportionate” and, thanks to record low interest rates, “affordable”.

He said “in the middle of a once-in-a-century pandemic, there is no set and forget on fiscal policy”.