Interview with Sky News, News Day with Tom Connell


Tom Connell, Host: There's more criticism from the audit office on how grants were handled under the Coalition. The latest one takes aim at regional grants, saying again, Ministers intervened against the decisions made on merit. Joining me now from Ballarat, the Infrastructure Minister, Catherine King for more on this. What's your reaction to this? What are you most aggrieved by in this report?

Catherine King, Minister for Infrastructure, Transport, Regional Development and Local Government: I'm surprised, but not surprised, is the reaction I have to this. This is the latest audit report, into a $1.1 billion fund for our regions and what we saw in the audit report, is that the previous Government started off pretty well, so round one did pretty well in terms of sticking to Guidelines and transparency. But by the end of round five there was a fair disconnect between the Guidelines and what people would expect to be funded and what actually happened. That ends with the audit report saying that 65% of the approved infrastructure stream projects, the big projects, were not the ones assessed as the most meritorious by the Department and were increasingly benefitting National Party seats.

[Break for technical reasons]

Connell: So, we ran through first of all the report, we've just shown from our view as part of the response from the Nationals essentially that they have more seats, it's no surprise, they get more funding. What's your response to that?

King: Well, like I said, it's not what the Audit Office found. And it's not just Labor seats that missed out, there are actually regional Liberal seats that missed out as a result and the Audit Office found that if you took into account the sort of proportionality of National Party seats, that they still got more money than they would have, if the projects were assessed on merit. This has been a pattern of behaviour that we saw under the previous Government, particularly in terms of the way in which the National Party used regional grant funding. We've got a big mess on our hands to try and clean this up. It's just fundamentally unfair that regions who are putting in projects, to suddenly see that these projects are being assessed on other factors that none of us have any idea about what they are, they're being decided by a Ministerial panel in secret and we see the end results of those. So, there's a bit of work to do to try and clean this up to make it much fairer and much more transparent for regions across the country.

Connell: The fundamental issue through the Coalition through Labor Governments as well has been there is that ability for a Minister to overrule decisions which you say were based on merit. Will that change under Labor?

King: There are always discretionary grants programs. You are absolutely right, that, at the end of the day, a Minister has to sign the appropriation of money for the grant to actually go ahead and that's part of that. What I want to see is a much more transparent process and Ministers being accountable, including myself if I make decisions in this way, of telling people if you are not following the recommendations by the Department, then this is why and explaining that fully and properly and being held to account for that. The problem with this program as well, is that by the time Barnaby Joyce was the Minister, they basically said to the Department - knowing full well if they went against their recommendations that they'd have to report that – basically, don't give us recommendations at all. In fact, actually what you should do is just give us a pool that we can fund from. Then we can select from whatever we want, according to other matters, because that's in the guidelines. They just completely kept stretching the envelope to make sure they stayed sort-of within the Guidelines, but just kept stretching the goalposts, and that's fundamentally been unfair to regional Australians across the country.

Connell: There was a pattern of criticism from the independent audit office of the Coalition during their time in office. That's true but the ANAO also in 2014, found a quarter of all funds in Labor's Regional Development Fund were not recommended for funding by the Advisory Council. These decisions were actually made by you as Minister at the time. So, what's the difference between then and now?

King:  A couple of things. If you look across all rounds of the Regional Development Australia Fund, the split was pretty even between Liberal and Labor seats. But, I am also a much more experienced Minister. I've watched over a decade of what the previous Government did and I've learned from that, I'm a much better and stronger Minister now and I'm really determined. I think the Australian people have spoken loudly and clearly that they have had enough of this. I've seen how incredibly unfair the last decade has been, particularly across our regions, like my own, and we really want to make sure there's much better transparency of funding so that regions can equally compete for those funds, have the opportunities to have infrastructure in their  areas, but also have lots more transparency and accountability from Ministers.

Connell: Okay, so that's interesting that you say you'd be a stronger Minister this time around. Going through that report the final round again, and this sort of echoes what happened on the Coalition, the closer you get to an election, the more tempting it might be to get results that are good for you. 80%, this is the fund that you were in charge of, 80% of the rejected projects fell in Coalition held seats. 64% of the not recommended projects which were adopted fell in Labor held seats. So, do you agree that was a mistake at the time to have those sorts of percentages out there, those sorts of Ministerial interventions?

King: Again, we looked across the whole four rounds of the Program in terms of where funding was distributed, and obviously that was part of the decision making, that I was looking at and there are also projects that, I made some different decisions about that I was uncomfortable about, such as funding health infrastructure, because we actually had other proposals around that, but I should have explained that better at the time. But what I would say is that across the Regional Development Australia round the four rounds that we had as a Government, really, that split was 50/50. And given we were in the majority, that we held more seats than the Liberal/National Party, that was a reasonable spread in terms of regional Australia.

Connell: Not more regional seats though.

King: We certainly have a lot of regional seats and of course under us, there were regional areas in outer metropolitan areas that were eligible under some of those Regional Development Grants as well. So, the RDA regions also covered some of the outer metropolitan areas as well.

Connell: The final bit I'll get out of that one, round four of this grant process, in the last days of the Labor government, the Minister made 34 decisions that diverged from the recommendations of the panel. That's 80% in round four, that just sounds like a lot intervention. Is that the sort of thing you don't want to repeat?

King: Well, certainly what we've seen under subsequent audit reports, and including the one more recently, is that we need greater transparency and better decision making when it comes to regional grants. I think what we saw is a pattern in the last decade, particularly from the National Party, basically saying we're not going to get any recommendations from the Department at all because that's how we want to get around reporting. I stand by all of the decisions that I made, but I certainly know that the Australian public have spoken loudly and clearly that they want better transparency. Regional Australians deserve better representation and fairness in those grant programs.

Connell: We'll see what changes do come and perhaps talk to you then and we do appreciate you sticking around while we were having those technical difficulties Minister, thank you.

King: Absolutely, my pleasure.