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NSW grants system ‘open to abuse’: report

NSW grants system
Relief funds for the devastating 2019-20 bushfires failed to reach some of NSW's hardest-hit areas. Photo: Getty
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Relief funds for the victims of the devastating 2019-20 bushfires failed to reach some of the state’s hardest-hit areas, a report into the NSW government’s grants system has found.

Urgent reform to the system is needed, the Public Accountability Committee warns in its report tabled in parliament on Thursday.

There were widespread failures in the way grants were handed out by the NSW government, which used taxpayer money for political gain in a system that is “open to abuse” the final report found.

The system had shown a “complete failure” to detect fraud, Greens MP and committee chair David Shoebridge said.

Some $16 million worth of fraudulent grants had been handed out in NSW, while a further $40 million worth was being sought by “bikie gangs”, he said.

The government only intercepted these applications after media whistleblowers alerted authorities, he said.

“The government’s fraud control measures are rudimentary at best,” Mr Shoebridge said.

“One of their primary fraud control measures continues to be an Excel spreadsheet.”

The bushfire-impacted areas of the Central Coast, Blue Mountains and Ballina did not receive any stage-one funding through the Bushfire Local Economic Recovery packages.

That is despite those areas respectively receiving $163 million, $65 million and $4.2 million worth of economic damage from bushfires.

The report found the way bushfire funds were allocated was “politically driven” and the decisions were made after an inquiry drew attention to systemic pork-barrelling in NSW.

The government was also found to have “improperly” allocated grants from the Regional Cultural Fund overwhelmingly to coalition seats.

The report also found arts grants were pork-barrelled by the coalition in 2020, with the majority of funds going to the Sydney Symphony Orchestra.

A pool of 222 grant applicants was reduced to just six after the former arts minister Don Harwin reallocated funding to the SSO, which had not applied for grants.

Mr Harwin had overridden “detailed recommendations” from his department, Mr Shoebridge said.

“Communities that were desperate for funding for their own arts communities received not a dollar, because the decisions were made by a politician without any documentation, and without any due process,” he said.

Labor’s spokesman for music John Graham said there was “a story of heartbreak behind every one of these arts grants which is manipulated by a minister”.

“For every one of these grants that goes to someone lifted up the list by the minister, there is someone who has missed out on their big break – their chance to succeed on the world stage,” he said.

The report made 13 recommendations including an urgent fraud investigation, implementation of anti-fraud systems, and an accountability system for the arts minister and government bodies which deviate from department advice over funding.

It comes after a NSW auditor-general’s report revealed earlier this month the government awarded 95 per cent of the $252 million Stronger Communities Fund to coalition-held electorates before the 2019 election.

That same week an analysis found 75 per cent of ClubGRANTS funds were funnelled to coalition seats.

The NSW government’s Refresh and Renew Grants program was also 70 per cent funnelled to coalition seats. The $1.03m in grants was offered to 103 tourism operators over 2020 and 2021.

Premier Dominic Perrottet said earlier this month he has “zero tolerance” when it comes to pork-barrelling and is committed to “complete transparency” when it comes to spending taxpayer money.

After becoming premier in October last year, he ordered a review into how funds from government grants programs were distributed.

– AAP