The political skew to $828m industry grants signed off by Morrison

Liberal Party ministers and candidates used an $828 million spending program to target voters at the May election by promising cash grants to projects in key seats after former prime minister Scott Morrison approved a spate of decisions before polling day.

The former prime minister launched a spending blitz in March to fund 17 projects in the Modern Manufacturing Initiative with more than half the recipients located in Liberal and Nationals electorates and several others based in Labor electorates he was desperate to win.

Scott Morrison joined Gladys Liu to make one of the grant announcements in the seat of Chisholm, which was under threat and ultimately won by Labor.Credit: James Brickwood

But the rush to unveil the positive news during the election campaign meant hundreds of other companies were left in the dark about their funding applications and will only be told of a final decision after an internal review checks on every project.

The Sydney Morning Herald and The Age revealed on Saturday Morrison took control of the “collaboration stream” in the MMI program and signed off on the 17 grants as prime minister at the same time he held secret authority over five portfolios including industry, although he did not use his dual position as industry minister to approve the grants.

While Morrison argued last week that he gained authority over the ministries in order to protect the national interest, the government is likely to step up its attack on his conduct after it receives a report from Solicitor-General Stephen Donaghue on Monday into whether the unconventional moves were within the law.

Prime Minister Anthony Albanese said the government was reviewing the industry grants and would honour all contracts already signed but would need time to examine all the decisions.

“What we saw here is another element of the concentration of power in the hands of the former prime minister,” Albanese said on Sunday.

“Of course we know now that ... Scott Morrison was also the industry minister at the time that he signed off, but he signed off as the prime minister on these grants, rather than leaving it in the hands of the minister, which would be the normal process.”

The Australian National Audit Office has named the Modern Manufacturing Initiative as one of its potential audits this financial year.

The MMI program, set up in October 2020, offered $1.3 billion in grants in three streams, known as translation, collaboration and integration. Unlike other grants programs, the guidelines for the collaboration stream said: “The prime minister decides which applications are successful.”

The list of 17 projects, examined by The Herald and The Age, included help for six safe Coalition seats with projects in O’Connor, Gippsland, Fairfax, Fadden, Durack and two projects in Flynn – a target seat for Labor early in the election campaign.

This included $33 million for a food manufacturing precinct in the seat of Fairfax on the Sunshine Coast of Queensland, announced at a press conference on March 24 where local MP Ted O’Brien hailed the “very big lick of money” for jobs. It also included $52 million for Gilmour Space Technologies in the seat of Fadden on the Gold Coast, with a press release on March 25 quoting local MP Stuart Robert on the boost to jobs.

The grants also went to two seats held by the Liberals but targeted by Labor. Morrison visited the electorate of Chisholm on April 4 to announce $23 million for the Australian Precision Medicine Enterprise at Monash University alongside Liberal MP Gladys Liu, who lost the seat to Labor challenger Carina Garland.

A $61 million commitment to cancer research and the Australian Genomic Cancer Medicine Centre, now known as Omico, was unveiled on March 17 at the Garvan Institute near the electorate of Wentworth with Liberal MP Dave Sharma, who attended the announcement. The institute is located in the safe Labor electorate of Sydney, three blocks from the border with Wentworth, the blue-ribbon seat the government fought hard to keep but ultimately lost to independent Allegra Spender.

The collaboration stream also included projects in several seats held by Labor but targeted by the Liberals. Three days before the election, the government announced a grant in the seat of Eden-Monaro for the Australian Satellite Manufacturing Hub with Liberal candidate Jerry Nockles. Some of the project is based in Jerrabomberra, south of Queanbeyan.

The spending decisions also included funding for Boeing Defence Australia, based in Brisbane, to develop the Advanced Defence Aerospace Manufacturing Network. This was announced on April 21 with comments from Peter Dutton, then the defence minister, about the number of jobs to be created in Queensland.

As a result, 10 of the 17 projects in the collaboration stream were in Coalition electorates. None of the announcements quoted Labor local members.

Among the significant grants to Labor electorates, the government backed the Australian Space Manufacturing Hub at Adelaide Airport in the seat of Hindmarsh, a project to create an Advanced Steel Manufacturing Precinct at Port Kembla Steelworks in the seat of Cunningham, and promised $22 million for the Sovereign Combat System Collaboration Centre at Mawson Lakes in South Australia in the electorate of Makin.

A spokesman for Morrison said the former prime minister needed to give final approval because the projects covered several ministerial portfolios, such as health and defence, and involved large sums of money. The spokesman said Morrison accepted funding recommendations from then-industry minister Angus Taylor without any amendment.

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