Senate Rural and Regional Affairs and Transport Legislation Committee, , 3:12:53 to 3:24:11
Examination of potential double dipping between CFC funding and departmental grants, alongside internal departmental concerns regarding the verification of land tenure.
Topics: Forestry, Grants administration, Integrity
Speakers: Guy Bursle, Hon Richard Colbeck, Matt Lowe, Unknown Speaker
>> Was all of the funding applied to the property?
>> Do you know? Do you have 142 million? >> All of the 142 million. I I'll defer to colleagues, but I I I just don't know that we know the answer to that. All we all I can probably comment on is that that was the the transaction cost.
>> Yeah. So So I go back to the double dipping point. So if if for example of the $142 million $15 million is for the property and the other 37 goes to the project which is to establish the plantations. Um and then we're paying another $8 million to basically purchase the trees. this is where I'm concerned about double dipping and the Commonwealth putting in in in two chunks.
>> Got it.
>> For the project. So, do we understand
my understanding of the of of the character of the transaction is and I'll I'll if colleagues correct me um I'll I'll look to colleagues to correct me if I'm wrong but my understanding is that that was the 142 million was to take >> okay well and then subsequently any investment decisions they make in relation to activity on the property is a decision for that trust
>> if we can confirm that.
>> Yeah.
>> So I don't so that we actually understand what the story is there. Um the grant was for 4,400 hectares. the plantation estate is to be nine. um, how is the grant applied to >> are they applying for half of it
>> So, yes, I I I think that's right. they they applied to us for a project area of uh five or just shy of 5,200 hectares and then they they weren't provided the full amount of funding uh because the the program funds were exhausted partway through. So the the project area is uh now I think in the order of 4,400 as as you've said I can I can check the numbers there elsewhere in in the folder. Um but the program works on a per hectare basis. So they're awarded up to $2,000 per hectare to cover the establishment costs um of the plantation element that the the applicant in this case uh chose to apply as as you said in terms of commercial uh plantations there, as I understand the overall project is for in the order of 9,000 hectares. Um, but they applied to the program for uh just shy of 5,200
>> Yeah, I just reading through my notes. Sorry, chair. Um, so this grant at 8.8 about or close to 50% of the remaining funding available under the program. did other miss out projects miss out because of the scale of this grant
how are they dealt with? Uh so as I said the program is based on eligibility and funding available. So uh in this case this was the final round of of the then announced program. >> Uh so and as I said this project uh was not fully funded because the program funds were fully exhausted partway through. Uh there was my recollection is uh there was one other plantation project that applied in that grant round uh that was uh because the program funds were fully expended not able to be funded. Um so there were no available
funds on the project. So when you were doing the assessments, did you take into account that there was already $69 million of Commonwealth funding going into the project >> um as a part of your assessment of the priority of the of the um grant round?
>> No, Senator, we assessed the round in line with the grant guidelines. uh that that makes uh that requires us to assess eligibility and then we assess funding priority in order in which the applications were received. Uh so uh the projects last in the queue are funded
>> So first come first served.
I should hasten to mention, Senator, that um uh we will be releasing another round of the support plantation establishment scheme, I think, in November. Um so for for interested parties, that will be an option for them to secure further support for establishing plantations going forward.
so in terms of the tenure issue, apart from the declaration, what work was done to understand that there was long-term control over the site.
>> Uh, so I mean that's that's done through our grant management processes sent senator. So a declaration is made in the application process. Um and that was made and they declared that they had a contract for sale. Um the my recollection is the applicant uh we were aware uh through the process that that it was subject to FURB approval. Um but at the the processes for executing a grant and then uh providing funding under that grant uh are additional controls that make sure that we h we continue to seek information and that the applicant is has an ongoing obligation to provide uh information about the status of the grant. Um so uh part of that is the development of an activity work plan uh which is another point in time at which the applicant needs to set out what they will be doing and when they will be doing it. Obviously those activities are what drive the the the funding and as I said in this case an activity work plan hasn't been finalized because uh in this particular project it requires uh the clean energy regulator to declare the uh ACU project. Um but essentially the applicant has an ongoing obligation to advise us of anything material to the grant and also tell us through their activity work planning uh requirements under the contract uh when they'll be proceeding with projects. And in this case the the the grantee has advised us uh before the FURB process was completed that it wasn't yet completed and then once and now that it has been completed that um that that element is um now resolved I suppose um but that the first step for their for them obtaining funding which is the project declaration by the clean energy regulator still
I have to say I find it hard very difficult to to see how an organization that's incorporated in late October can step into a grant process in November um and be offered a grant when there's no capacity for it to demonstrate tenure given that they still need approval to buy the property from the for from the foreign investment review board process. On the 25th of June, your department noted, "In hindsight, the offer could have been conditional upon planning and regulatory consent being finalized and noted, I had a quick glance at the application package. I'm not sure how it would have been able to be determined if there was any foreign ownership investment involved in the ownership management of the trust based on the information provided in their application. On this point, I agree that even though some panel members had visibility of the FURB, they would not have been not have considered this information as part of the assessment of the application. At worst, perhaps there should have been a formal conflict of interest declared property advice sought, which I can't seem to locate. So I mean clearly there are concerns being expressed in the department about the approval of this given let's call it the complications surrounding the approval process.
>> Um Senator I think a couple of things. The first is yes uh our officials reviewed the process in the light this is an unusual transaction. This is a very long uh time frame I suppose for FURB approval. Uh I think we would always expect our our offices to diligently reflect on the processes that we have in place um the assessment processes that we've undertaken and ensure that we think for the current round and for future rounds that we are doing the right thing. I I think in this case what uh what that review involved is uh revealed is that yes this is an unusual case and um that we we may consider whether or not there are changes that you could make to tighten requirements I suppose but on the whole my observation would be that no funding has been released under this grant. uh the applicant at all times kept the department advised uh of what was happening under the project. Uh we still don't have an activity work plan in place and that's directly as a result of the delays in the transaction and so I think the program really is running um as expected even though this quite unusual transaction that has had a regulatory approval that's taken substantially longer than initially