Coalition ‘ignored official advice’ on reef fund

A Great Barrier Reef Foundation grant was more than double the recommended amount and handed over as a single payment against departmental advice.

Treasurer Josh Frydenberg meets with Reserve Bank Governor Philip Lowe, at the RBA offices in Sydney, Wednesday, August 29, 2018. Picture: AAP

A grant of almost half a billion dollars to the Great Barrier Reef Foundation was more than double the recommended amount and handed over as a single payment against the advice of the Department of Finance.

The Australian can reveal a cautious Finance Department recommended the budget allocation to help protect the Great Barrier Reef be set at $200m over six years, but the government’s expenditure review committee took another view. According to senior government sources, the decision to shovel $443.4m out the door immediately and give it to a non-government organisation as a tied grant was taken because it allowed the administration to “look like heroes” without making the budget look worse.

Unlike the Finance Department option, this alternative would have the money off the government’s books and effectively gone in a year, making a previous deficit slightly bigger than it otherwise would have been but removing any impact from a future projected surplus.

The Australian understands the decision to give the money to the foundation — which says it did not ask for it — was made within then environment minister Josh Frydenberg’s office.

The foundation has just six full-time staff and the “partnership” did not go through a tender process. Its corporate membership group — which costs $20,000 a year per company — includes airlines, energy companies and miners such as BHP.

The Senate referred an inquiry into the matter to the environment and communications references committee, which heard that a meeting was arranged between then prime minister Malcolm Turnbull and Mr Frydenberg with foundation chairman John Schubert in Sydney in April.

“I’d like to state for the record that the foundation did not suggest or make any application for this funding,’’foundation managing ­director Anna Marsden told the inquiry at the end of July.

“We were first informed of this opportunity to form a partnership with reef trust on the 9th of April this year.’’

Documents tendered to the ­inquiry show the lead science agency, the CSIRO, did not know about the decision ahead of its ­announcement and subsequently worried how the foundation would administer the funding. In internal emails produced to the inquiry, CSIRO chief executive Larry Marshall discussed seconding a senior staff member to the foundation to support it in navigating the Department of Environment and other administrative requirements.

It is “better we help than he (Mr ­Schubert) burns millions on overheads,” Dr Marshall wrote in a May 21 email.

Finance Minister Mathias Cormann said it was not correct to say the federal government ignored advice because a “range of proposals” was considered by the ERC, which counts the prime minister, treasurer and finance minister among its ministerial members.

“As part of pre-budget consideration of potential budget measures of this ­nature, a range of options are invariably considered by the expenditure review committee before a final decision is made,” a spokeswoman for Senator ­Cormann said.

“The upfront payment of about $444 million provides long-term funding certainty for on-ground reef protection activities and sends a strong signal to ­potential private investors that the government is committed to the long-term protection of the reef.

Labor environment spokesman Tony Burke said Scott Morrison and the Treasurer “have their ­fingerprints all over this shoddy deal”.

“This government couldn’t care less about the Great Barrier Reef,” he said.

“They’ve found an accounting trick that looked after a foundation run by their friends without the money hitting the deficit that was announced on budget night.”

When asked whether the proper processes were followed, Senator Cormann’s spokeswoman said “Yes”.

Mr Frydenberg declined to ­answer detailed questions from The Australian.