Reef fund admin costs may hit $80m

About $80 million of the government’s $443.3m grant to the Great Barrier Reef Foundation could be lost in management costs.

Environment Minister Melissa Price.

About $80 million of the government’s $443.3m grant to the Great Barrier Reef Foundation could be lost in management costs, despite claims by Environment Minister Melissa Price that only 5 per cent of the grant would be spent on ­administration.

Ms Price told parliament yesterday the foundation was already doing “a considerable amount of work” under the grant, which allowed only “a small amount of money with respect to administration”. “The number is 5 per cent,” she said.

But the grant agreement, awarded to the foundation without a tender process, caps administration costs at 10 per cent. Sub-contracted organisations can also spend up to 10 per cent administering their own grants, awarded by the foundation.

Labor said Ms Price was “out of touch” and “out of her depth”.

“Melissa Price was asked twice how much of that money can be spent on administration and the answer she gave was wrong. Factually wrong,” Labor environment spokesman Tony Burke said.

“If there is one thing an environment minister should be across in this government it is what is happening to the money that went to the Great Barrier Reef Foundation.

“This was the largest single removal of money from the commonwealth Environment Department in history, half a billion dollars on a single day leaving the commonwealth and going to a small private foundation.”

Scott Morrison recently took responsibility for the controversial grant, declaring it made “financial sense” to deliver the funds in a one-off payment.

Mr Morrison said what mattered was that “important projects” got funded to ensure the future of the reef.

The government awarded the grant to the charity after then prime minister Malcolm Turnbull and former environment minister Josh Frydenberg held a private meeting with its chairman, John Schubert, in early April.

Mr Turnbull told a Senate committee his government rejected the Environment Department’s initial two proposals for extra funding to support the health of the reef, and the expenditure review committee sought an “alternative” to create a tied reef fund with an organisation outside of government.