Senate Rural and Regional Affairs and Transport Legislation Committee, , 3:02:05 to 3:12:51
Investigation into an $8.8 million grant for the Tasmania Natural Asset Trust and the timing of Foreign Investment Review Board (FIRB) approval for the site.
Topics: Forestry, Grants administration, National security
Speakers: Hon Richard Colbeck, Guy Bursle, Matt Lowe, Speaker 16, Unknown Speaker
I want to ask some questions with respect to the $ 8.8 million grant to the Tasmania Natural Asset Trust for Rushy Lagoon. So the minister approved the grant round according to documents we have the 23rd of February this year. That's correct.
>> Um I believe that's right. I'll look to
Uh Sarah J first assist um yes 23rd of February 2026 the minister approved um that grant that's correct.
>> So has the agreement with the trust been >> and when was it signed?
>> Yes, if it was senator um it has been uh agreed. So on the 7th of May 2026, a grant agreement was executed between the department and the grantee.
So, so, so that the 7th of May is before further approval was given purchased the site. So, how do you say that long-term tenure over the site was demonstrated, which is a requirement under the guidelines when you don't have approval to buy the site? >> How do you demonstrate that?
>> Thanks, Senator Gveral, assistant secretary advoc.
>> Can you talk up a little bit?
>> Uh, Guy Bersell, assistant secretary, a vet chemicals and forestry branch. Uh so Senator uh you're right, the the grant guidelines do require long-term access to the site. Uh our processes uh require that the grantee make a declaration to that effect through the application process. Um and then we have a number of other controls uh to make sure that in instances like this one where a contract for sale had been signed at the point the grant application was made uh but hadn't been finalized uh by the time the grant um was approved in February. Um and in particular well in in the there there are two types of projects I suppose projects that have an ACUE attached and projects that don't. Um so for projects like this one where the grantee had indicated to us that they were seeking to access the carbon credit units. Uh payments are not made until uh the the clean energy regulator has declared a project on the site. So under our program, they've applied uh it's subject to the clean and energy regulator declaring a site uh declaring a project. And so in those cases uh our funding doesn't flow and our activity work plans plans that trigger payments uh don't flow uh until that step has been made, which is precisely the the case for for this particular project. In this case, uh the clean energy regulator is yet to declare the project and so an activity work
>> still has not. >> But but how does a how does proponent make a declaration that they have long-term tenure over a site when they don't have approval to buy it?
>> Uh the the proponent was clear with the department uh that it had a contract for sale. That's what they declared to us that the
>> that's very different very different to
FURB approval. Uh the grant agreement also requires them to provide us updates on things that are material to the progress of the grant and in this case the grantee has advised the department the status of its FURB application and on a on an occasion we've had to extend the life of the grant to reflect the delays that to the overall project um that have that are have resulted from a longer than usual FURB application
I still don't understand how you can make a declaration that you've got something that you don't have approval to do. I mean, it philosophically just application also require has some requirements with respect to local government or territory involvement in the project which disqualify them from um being uh provided grants under the project under the program. Um what declarations were made in terms of the application uh to indicate the CFC's involvement of the project and the extent of the involvement. >> I mean, you've got so you've got a government entity that's a 49% stakeholder in the project. was was that declared as a part of the application process?
>> Uh, Senator, that's not
>> to receive the grant.
>> The the program is uh it's driven by eligibility. It's a demand-driven program. And so when a project meets eligibility requirements, it qualifies for funding subject to of the >> I'm questioning the eligibility because
it's it's it's it's the Commonwealth effectively giving itself an 8 $8 million grant through this program >> because it's a 49% shareholder in the overall project.
>> Uh the eligibility requirements for this program are about the identity of the project proponent. I'll come to that. In this case, uh the the trust uh is an eligible uh vehicle. Um we don't look to the the subsequent ownership that sits behind those trusts. We we look to the eligibility uh of the the the applicant.
>> So it's possible for an entity to hide who is effectively involved in a project by setting it up through a trust. and then gain access to gaining access to further commonwealth funding.
>> Uh, Senator, I'm not sure. I suppose there's I think a difference between uh funding and the lo and and the and the the funders of a project um be it financing from banks or the CFC or the like and and the actual applicant. In this case, uh it it is the case that the CFC is providing uh financing and funding for a project, but the project applicant
we're being told that the CFC is a 49% stakeholder in the project and the property. That's what we're being told. And so how is that declared as a part of this process and what measures were ma taken to ensure appropriate eligibility as a part of the assessment of the application?
>> Uh I think senator the eligibility requirements of the program are set out in the guidelines. We assessed this application in line with the published guidelines
>> and a commonwealth entity is not eligible under the guidelines as as as well as a state entity, a state corporation, a local government entity or a local government corporation or a territory one. So that they are specifically ruled out under the guidelines.
>> Uh but in this case, the project proponent, the applicant is the is the Tasmanian Natural Assets Trust, which is an eligible entity under the guidelines.
But what a 49% stakeholder in that is a Commonwealth entity. I mean surely that's taken into account. I'm what my concern is double dipping here. So you're putting $69 million or the Commonwealth is through the Clean Energy Finance Corporation into this and then coming back around the other side through this department for another $8.8 $8 million on top of the $69 million that's already been put into the project. It's a bloody good deal if you can get it.
>> So, uh I mean a a range of commercial entities apply through the program. They all have different ownership structures, trust structures, corporate structures. Uh as I said, for this project, we assessed its eligibility in line with the published guidelines.
and and Senator maybe just just to add to Mr. reversal's comments. Uh my understanding is um though I'm not across kind of the arrangements in detail with the clean energy finance corporation but that is a commercial arrangement um that the C
>> again that's my point
>> which to
>> that's my point it's a commercial australian >> as a 49% shareholder do we know does the department know the proportion of the $69 million that went into the project versus ownership of the property?
When you say project,
it's uh $142 million project all up. >> Is all of the funding. Does the department know what proportion of that is for investment in the project versus purchase of the property?
>> I don't know. I don't think we are in a position to comment on that. Sorry, Senator. That might be best directed to the Clean Energy Finance Corporation.