Queensland election: Spotlight on David Crisafulli role at training firm

LNP leader David Crisafulli quit as director and chief executive of a training company just two days after the federal regulator warned that it had uncovered ­serious ‘training quality issues’ and was rejecting its national registration.

Queensland Opposition Leader David Crisafulli takes an early morning walk on Wednesday. Picture: Liam Kidston

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LNP leader David Crisafulli quit as director and chief executive of a training company just two days after the federal regulator warned that it had uncovered ­serious “training quality issues” and was rejecting its national registration.

The company, Southern Edge Training, collapsed two months after he left, and an Ernst & Young audit found it had repeatedly breached its contract with the Victorian government and had made claims for “ineligible” overseas students on temporary visas, forcing the can­cellation of its state funding deal.

Separately, Mr Crisafulli paid $200,000 in three compensation payments to the company’s liquidators who investigated him for insolvent trading. The liabilities were not declared on his ­parliamentary interest register, despite the transfers occurring in 2020 and 2021 when he was an LNP frontbencher and then ­opposition leader.

Mr Crisafulli was a one-term MP for the Townsville seat of Mundingburra until he was swept out of office in Labor premier Annastacia Palaszczuk’s unexpected January 2015 election victory. By that December he was sole director and chief executive of SET, which was based in Victoria but operated there and in Queensland, propped up by millions of dollars in taxpayer funding from state and federal governments.

The Australian can reveal Mr Crisafulli quit the company on April 1, 2016, two days after the regulator ASQA told the company of its decision to reject its federal registration renewal application.

An ASQA spokeswoman said: “After compliance activities and the seriousness of the training quality issues identified, ASQA notified Southern Edge Training Pty Ltd of its decision to reject its application to renew its registration on 30 March 2016.”

A report by liquidators from PwC, filed with corporate watchdog ASIC in 2019, shows investigations indicated that SET “appears to have traded while insolvent from at least 1 December 2015” and flagged seeking compensation from directors.

The LNP leader has repeatedly refused to say why he paid $200,000 to the liquidators, but a federal department of employment spokesman said a negotiated resolution had been reached between the liquidator and Mr ­Crisafulli.

“The department provided funding to the liquidator to issue demands and conduct settlement negotiations in relation to insolvent trading claims against the company’s directors,” the spokesman said.

Court and corporate documents reveal the company had been in financial trouble for some time before Mr Crisafulli took over, but liquidators discovered several significant events occurred when he was in charge.

Five days after he took over, the Australian Taxation Office threatened legal action and issued the company with a demand for $112,576.69 in outstanding liabilities, giving a due date of December 23. The bill was not paid, and an arrangement was only sorted out on May 20 of that year.

The company had been unable to pay its tax debts from as early as mid-2014.

On December 22, 2015, the ­Victorian department of training issued the company with a noncompliance notice, warning that it had breached the funding contract, based on “an audit report identifying a number of material breaches”.

The department then rejected its application for registration renewal in Victoria in March 2016, blocking its access to taxpayer funding.

A Victorian Supreme Court judgment said that on August 25 of that year, Ernst & Young finished a quality review report, identifying a “number of instances of non-­compliance with the 2014-2016 SET Funding Contract” with the Victorian government worth $39m. The department paid $11m to the company for the 2015 calendar year.

Judge Michael Sifris, in deciding to appoint special purpose liquidators to SET, said the EY report found breaches “including, but not limited to, failure to adhere to relevant guidelines to determine student eligibility, adequate pre-training reviews of students were not completed and the quality of training services was inadequate to satisfy the contractual funding obligations”.

In sworn evidence given to the special purpose liquidators, it was revealed the EY audit found that SET had wrongly considered students on temporary visas eligible for the government-funded training.

SET fell into voluntary liquidation in June 2016, in part because the company discovered EY was conducting the audit.

In a statement to The Australian, a spokeswoman for the Queensland Opposition Leader said Mr Crisafulli had “met all of his obligations both to the business and to the parliament”.

“David was only at the business for four short months, nine years ago, and there are no findings against him during or since,” she said.

“The fact Labor desperately held on to documents for years which confirm no wrongdoing, and never took any action inside or outside the parliament, proves this is nothing more than a ­desperate attack in the shadows of an election.”