Senate Finance and Public Administration Legislation Committee [Part 2], , 1:21:35 to 1:29:56
Senators inquire about a reported $5 billion funding request from Snowy Hydro and its potential impact on the Commonwealth budget. The department addresses an advisory from S&P Global Ratings regarding the government's support for the project.
Topics: Snowy Hydro, Government spending, Electricity grid
Speakers: Senator The Hon Katy Gallagher, Senator The Hon Jane Hume, Speaker 3, Matt Yannopoulos, Marisa Purvis-Smith, Senator Karen Grogan
>> Secretary were you aware of these projects?
>> Matt wasn't in the job then for
>> my predecessor was aware and that's why >> well that's why it's been disclosed in
>> I made sure there was a full list I was aware that there um and in accordance with what happened for you in 2022 23 where the similar disclosure was made at PIO
>> they're not comparable please just stick to
>> they are in terms of disclosure. They are Senator McKenzie the process treasury and finance has a view election commitments announced before should be should be declared in PEO.
>> Well, I'm feeling like you're being quite rude certainly towards me.
>> So, it's it's it's a similar position to what was taken in 2223. You're saying it's different because re guidelines that's a separate issue. The disclosure of announcements of election commitments made before caretaker were disclosed in 2223. They are being disclosed in 25.
Um is the department aware of whether there is an official assessment process undertaken by any government agency prior to the decisions being taken to fund the $125 million worth of PCIP round two projects. Sounds formal. round two uh projects in the 2025 budget.
>> So I can answer that. The reason it was round two was cuz our 22 election commitments were round one. So that was the decision uh taken. It
>> suggests there a process though
>> to disclose round two. After the election, the commitments that had been disclosed as part of subsection V of PIO were bought together with the other commitments that were made post caretaker and the grant round was um delivered through that program uh in accordance with the grant rules and guidelines. I mean we have followed the rules every step of the way. Senator McKenzie. Um, no matter which way you try and and come at this, we have followed the rules. We've taken advice. I've met with the auditor general, the previous auditor general about how do you acquit election commitments in the in an appropriate way to [clears throat] make sure that we we we followed every single bit of advice and Minister King and myself have done that.
Secretary, did the process undertaken for these PCIP round two grants funded in the 2025 budget comply with the requirements of the Public Governance Performance and Accountability Act and the Commonwealth Grant Rules and Principles 2024?
>> Well, uh, before the payments were made, they went through the normal grant guidelines, value for money assessment. So, yes,
>> that's not my question. The payments were made. the payments in most cases haven't been made at all.
>> Well, the PGPA is exercised once the grant guidelines have been finalized and payments are going to flow. Prior to that, it was a decision of candidates. What projects? The projects we knew at the time of PIO are disclosed in part B.
So it is your evidence to this committee that um the process undertaken for the PCIP round two grants funded in the 25 budget do comply with both the public governance performance and accountability act and the commonwealth grant rules and I think it's principles without my glasses 2025 2024
>> 2020
>> secretary it's a yes or a no
>> I I I only found out about this program a year ago I I would want to have a look at all the paperwork that you clearly are asserting that there is a problem. There is nothing that I
>> want to be assured.
>> So I will take on notice and provide you that assurance.
>> Thank you so much, Secretary. Thank you,
>> Senator McKenzie, Senator Hume.
>> Thanks. Thanks, Chair. I want to turn to some questions about um Snowy Hydro. Last night in Senate Estimates, it was revealed that Snowy uh Hydro made a request to the government for a new support package. It was confirmed by the um CEO of Snowy, Mr. Barnes, that this new support package would be required by the middle of next year and that it would cost anywhere between five and 10 billion. So, I want to ask, is Finance aware of this request that's coming to
Uh yes, Senator, we're aware.
>> Yes. Okay. Did you find out last night like the rest of us or did you know about it beforehand?
>> No. No. We've been engaged with Snowy uh throughout. We we support our our minister as a share as one of the shareholder ministers for Snowy Hydro,
>> right? Okay. So, you knew about that in advance. Then can I ask does finance understand the type of additional port uh support that's being requested to be a loan or equity investment?
>> those decisions haven't been taken. Um I think Snowy would have a view, but um we will be going through our processes um to make those decisions.
>> Okay. All right. Um does finance understand the quantum of additional support that's requested? Is it I mean my understanding is it's between five and 10 billion, but is there something more specific that you can um enlighten us? Senator, will you
be working with Snowy through the uh Mayo process to uh for the government to be able to make a decision uh uh on options of both quantum and uh what the financing might look like.
>> Okay. So for the myo process, so
>> we'll consider it as part of government. It will come through our normal processes as you would expect.
so if that's the case, has the request been turned into a submission to the minister yet or um something that
>> I think we've correspond. had corres the shareholders have had correspondence from Snowy um and we will be um considering that and then taking as you would expect a normal submission u process through u myo
>> when was the request from Snowy um
>> uh it would have been only a matter of a uh it was it was very recently I mean obviously we've been engaging with them as they've been going through this uh cost reassessment process Yes. Uh but it would have been around the time that the cost reassessment process was finalized
>> the end of September. End >> of September shareholder ministers received a letter from Snowy Hydro uh and that was around the time uh that the cost reassessment that Snowy's cost reassessment >> uh was provided.
>> Okay. Uh, has finance considered the um amount of government funding required to prevent Snowy's credit rating, which my understanding is tripleB plus at the moment being downgraded.
>> That's one of the >> that's one of characteristics that we will think about as we provide advice to government for myo.
>> Right. And I think S&P have issued um is it S&P have issued you know an advisory um saying you know that they're in essence keeping an eye on how the government responds to the cost reassessment
>> right is that is that that's publicly available provided that
>> publicly available
>> yeah do you I don't have a copy of it that you could table do you
>> I don't I I probably do and can we can get it brought up
>> provide them with a copy cuz that is
>> it's no change But they have it's a no change on their credit rating but saying in light of the cost reassessment they'll they'll keep an eye on how the
>> Okay. Okay. Uh so what does it mean for the Commonwealth's budget position if Snowy's credit rating is downgraded?
>> That would be a hypothetical.
>> Yeah. We have we're not there