[Greens-Media] Deafening silence from Federal Labor on forest industry grants' rort

[O'Connor, Cassy (Sen C. Milne)]

		Deafening silence from Federal Labor on forest industry
grants' rort

		Hobart 29 February 2008  Prime Minister Rudd's
commitment to accountability and transparency in government will be
tested by the release of the Auditor General's damning report on the
Tasmanian Forest Industry Development and Assistance Programs,
Australian Greens' Senator for Tasmania, Christine Milne said today.

		"When the then Howard Government's Regional
Partnerships' scheme was exposed as a complete rort last year, Labor in
Opposition was tripping over itself to condemn the Liberals' misuse of
public funds.  Where is Labor in Government on the rort revealed by the
Australian National Audits' Office late yesterday?  Is Prime Minister
Rudd protecting the Lennon Government from scrutiny?

		"When the Community Forest Agreement was announced by
then Prime Minister Howard in 2004, he promised the $250 million scheme
was designed to, "assist the timber industry and to preserve old growth
forests".

		"The ANAO has revealed that millions of taxpayer dollars
have been thrown at the Tasmanian forest industry under an opaque
grants' scheme that did little or nothing to modernise the timber
industry, create jobs or help it make the transition out of old growth
logging.
		 
		"Instead, it devolved into an anything-goes slush fund
where successful applicants did not have to provide employment figures,
or performance outcomes.  Nor did they have to satisfy the assessor that
the money requested would be used to make a transition out of logging
high conservation value forests.

		"Far from bringing the Tasmanian logging industry into
the 21st century, the scheme allowed industry to purchase second hand
equipment (some over ten years old) and accepted the applicant's
determination of the market value of that equipment.  A total of $1.1m
was used to fund second hand equipment.

		"By September 2007, less than $17 million of the fund
had been spent, so then Forestry Minister Minister Abetz extended the
application period up to June 2008 and increased the amount of the
grants approved by 30% to offset tax liability.  

		"Between October 2005 and June last year, a total of 48
grants had been approved.   Then there was a flurry of at least 40
pre-election approvals, some of them granted only on the advice of the
Tasmanian Department of Economic Development and without any further
Commonwealth investigation.  Grants were allocated with little or no
regard for the financial viability of the applicant, or the viability of
the proposed project," Senator Milne said.

		 "The Minister responsible at the time was Senator Eric
Abetz.  Today on ABC local radio he sought to play down the seriousness
of the Auditor-General's findings, and laid ultimate responsibility with
the Department of Agriculture, Fisheries and Forestry.

		"Ministers are required by law not to approve a spending
proposal unless satisfied, after undertaking such inquiries as are
reasonable, that the proposed expenditure is in accordance with the
policies of the Commonwealth and will make efficient and effective use
of public money.

		"The Department's Chief Executive Instruction on Grant
Management also requires systematic assessment processes be established
including setting out the method and scale of rating applications. This
was not done.   Why not?

		 "The Auditor General has found that the Advisory
Committee established to assess the applications and to recommend grants
approval were from the Tasmanian Forest Industry, had conflicts of
interest which were identified but no documentation exists to identify
how these were resolved in grants assessment. 

		"The Advisory Committee decided then Prime Minister
Howard's pledge to Australian voters was not relevant, and that the
funding should be available to businesses involved in any aspect of the
forest industry.

		"Voters who believed the Prime Minister in October 2004
were conned, and taxpayers are now propping up an unsustainable logging
industry through a massive slush fund which is neither transparent or
accountable in its administration.

		Senator Milne said Australian taxpayers are entitled to
have answers to these questions:

		1.  Who was on the Advisory Committee and how were they
identified and appointed?   
		2.  How did they come to an understanding that grant
applications did not have to meet the criteria?
		3.  How or did members of the Advisory Committee resolve
conflicts of interest?
		4.  If this scheme was established to fund new
equipment, why was it funding second-hand equipment and with little or
no checks/balances of what was being claimed?
		5.  Who is going to take responsibility for this misuse
and maladministration of public funds?
		6.  Will Prime Minister Rudd act on the ANAO report?

http://www.anao.gov.au/

		Other key points

		*	The Audit report says, " lack of supporting
documentation and reasons for justifying the Committee's decisions
means that the process was not transparent and not consistent with the
commonly applied standards of grants administration." No rankings or
assessment summaries documented the Committee's decision-making
rationale. 
		*	In 5 cases ($235 050) harvesting equipment
purchased under the scheme was 5 - 10 years old
		*	In 4 instances ($162 000) harvesting equipment
was over ten years old
		*	In 13 instances ($714 202) there was no record
of the year or model of the equipment funded
		*	There was no assessment of value for money or
the age, value of the equip or its serviceability 
		*	Grant recipients were required to provide a
milestone report with each application for payment, including the
effectiveness of the new equipment and the employment implications with
verification of specific employment numbers for the Tasmanian forest
industry.  
		*	Instead of the 67 milestone reports due with the
claims for payment, only 30 were received before payments were made. 
		*	Of the 31 milestone reports received, only
eleven met the reporting requirements.  The ANAO found that 65% of
applicants were asked to report on employment targets and the others
were not.  DAFF could not explain why some grant recipients were not
asked to verify employment changes stated in their application or why
others were not asked to comment on 	employment at all.  
		*	Where recipients did report on employment
outcomes, there was no way to verify that information.  
		*	Of the 29 final reports due as at the 30
November, 15 final reports had been received and NONE met all the
requirements of the funding deed.



		Media contact:   Cassy O'Connor (HOB) 03 6224 8899  or
Tim Hollo (CBA) 0437 587 562 

Cassy O'Connor
Adviser
Senator Christine Milne
www.christinemilne.org.au

Email:  cassy.o'connor at aph.gov.au
(Ph)  03 6224 8899  
(Fax) 03 6224 7599