Coalition defies Senate order on scandal-ridden regional grants scheme

Sarah Martin Chief political correspondent
Photograph: Mike Bowers/The Guardian

The Coalition has defied a Senate order demanding it table documents to justify decisions made under the scandal-ridden $220m regional grants program.

On Thursday afternoon, the Nationals senator Matthew Canavan advised the Senate that the government would not be complying with a production of documents order relating to the grants program.

Canavan, representing both the deputy prime minister, Michael McCormack, and the industry minister, Karen Andrews, said because of the scope of the order, it was “not possible to produce the documents in the timeframe requested”.

“Additional time is required to identify what documents and information may be or may not be acceptable to publicly release, and over which a claim for public interest immunity may need to be made,” the letter to the Senate president, Scott Ryan, says.

Related: Wollongong dog breeder given $205,000 for aquaculture project under regional grant scheme

The government has said it will respond to the order on the next sitting day of parliament on 25 November.

The request for documents comes after the auditor general identified serious shortcomings with the administration of the RJIP program, raising concern that ministers declined to fund 28% of grant applications recommended to them by officials, and approved 17% of applications that had not been recommended to them.

With the support of the crossbench, the opposition had demanded the government table briefings from the department that had underpinned the decisions made by the ministerial panel, along with details of the Business Grants Hub, which was engaged to administer aspects of the program at a cost of about $8m.

The Labor senator Murray Watt said the poor administration meant that some applicants who had been recommended for funding by the department had missed out because of political preference, including in some instances for projects that were ineligible.

“How’s that fair? How is that a good use of taxpayers’ money? How is that not rorting of the system to prop up marginal LNP members in Queensland, or Liberal and National party members in other states?” Watt said.

“So that is why we need to get these documents and frankly the response we have got today from the government as to why they can’t produce these documents is pathetic.”

On Thursday, Guardian Australia revealed that a $205,000 grant in the marginal New South Wales seat of Glimore was given to a dog breeder to build an aquaculture project on the south coast, with the venture to be funded by raising $5m on the blockchain market by issuing “aqua tokens” that offered a return to investors based on the price of fish.

Another project in Gilmore received $750,000 while possibly trading insolvent, and in another instance, a grant in north Queensland a was provided to a bus and ferry project which is losing money and is unlikely to happen for two more years.

The auditor general also revealed that two projects that were granted co-funding exemption were given the reprieve in breach of the program’s guidelines, while big political donors have also benefited from the scheme.

The shadow infrastructure minister, Catherine King, has also written to the chair of the joint committee of public accounts and audit requesting an inquiry into the audit’s findings, saying it was needed to examine the “maladministration by the Morrison government” uncovered by the auditor.