Documents about the federal government’s $30 million purchase of the Leppington Triangle – land valued at just $3 million – have revealed Urban Infrastructure Minister Paul Fletcher accepted the price as “perfectly sensible”.
Labor seized on the previously confidential cabinet notes, obtained after a 10-month Senate battle and revealed on Thursday, as an “extraordinary” example of “inept” government management.
“No wonder the Morrison Government hid this document for ten months after it was ordered to be produced by the Senate,” shadow infrastructure minister Catherine King said.
The purchase of the Leppington Triangle, a 12.26-hectare block at the Western Sydney Airport site, was the focus of a scathing 2020 auditor-general report that claimed Department of Infrastructure officials’ approach “fell short of ethical standards” and was “not appropriate”.
The land was purchased from Leppington Pastoral Company, a large dairy firm.
Taxpayers shelled out $30 million in 2018 for the land, following a valuation by MJD Realty, but the property was valued at $3.065 million less than a year later by the Department itself. Following the Australian National Audit Office report, federal police confirmed they were “conducting an investigation to identify potential criminal offences relating to issues identified in an ANAO report”.
An independent report, commissioned by the department, found officials involved in the purchase had “no experience in acquisition of land for public purposes” and “heavily focused on maintaining a positive relationship with LPC”.
Mr Fletcher, the Liberal MP for Bradfield and Minister for Communications and Urban Infrastructure, claimed in 2020 that key details of the purchase – including other lower valuations – were “concealed” from him.
But new documents tabled in the Senate, following a nearly year-long request from Labor, found Mr Fletcher backed the purchase at the time.
A note from the Infrastructure department to Mr Fletcher in February 2018 said there was a “small window of opportunity” to buy the land, due to “mutual goodwill with the landowner and because funds for the purchase are available”.
Copied in on the note was Barnaby Joyce, who was then – and is again – Minister for Infrastructure.
The department’s note called the purchase “reasonable and defensible”, but offered to “prepare talking points” for Mr Fletcher – seemingly a reference to prepared responses for media questions.
In a hand-written response at the bottom of the note, Mr Fletcher wrote that the acquisition plan and $30 million price tag sounded “perfectly sensible to me”.
Mr Fletcher’s response to the documents were revealed by the ANAO in a Senate hearing in March, but this is the first time the note itself has been shared. ANAO executive director Brian Boyd told the hearing the department wasn’t “particularly forthright” in its communications with Mr Fletcher.
In 20202, Prime Minister Scott Morrison said he was “disappointed” by the price paid, while then-infrastructure minister Michael McCormack said it was a “bargain” and the purchase “eventually will be hailed as a good decision”.
The 2020 ANAO report said briefings by the department on the purchase “lacked balance” and “omitted evidence that the price was too high, including reference to other valuations of the land”. Mr Fletcher claimed valuations were “not disclosed even to senior officials at the department, let alone the minister”, and that he became aware of the full picture only after reading the ANAO report.
The new documents show that in November of 2019, a briefing note from the department to its deputy secretary admitted two other valuations – by Jones Lang LaSalle and Colliers – had put the land at just $4 million.
The department claimed that valuation considered only the block’s value for agricultural or rural use, not as an industrial property, as MJD Realty did.
The briefing noted that all three valuers had been asked to value the land “on the basis of a highest and best use”.
A brief on July 25, 2018, from the department’s assistant director of legal for the Western Sydney Unit, noted the Triangle was “not required” for the airport’s first stage. It was needed for a future second runway.
That note also called the $30 million valuation “reasonable and consistent with our own estimations”, saying it reflected “the sharp increase in property prices in the area”.
Numerous notes from the department highlight that LPC deliberately held onto the land in hopes it “would be more valuable in future”, and that the company had successfully challenged an attempt at compulsory acquisition in the 1980s.
Ms King called the Leppington purchase “scandalous”.
“The document underlines the Morrison government’s inept management of major infrastructure projects and its ongoing misuse of taxpayer funds and raises serious questions that deserve answers,” she said.
Ms King claimed the documents also “implicated” Mr Joyce, as he received some of the documents as Infrastructure Minister.
“At best, these two ministers are incompetent. The Prime Minister and his ministers need to explain why their own officials chose to appropriate $32 million for this and other transactions even before negotiations with landholders had commenced,” she said.
The New Daily contacted Mr Fletcher and Mr Joyce for comment.
Labor is expected to further pursue the matter in Thursday’s parliamentary Question Time. It will also renew its investigations as part of a Senate inquiry into the airport’s planning and construction.