Michael McCormack defends regional grants, saying he is 'happy to stand beside' all projects

Sarah Martin Chief political correspondent
Photograph: Glenn Hunt/AAP

Michael McCormack has defended the Coalition’s regional grants program, saying ministers overruled departmental advice based on what “is best” for regional Australia.

The deputy prime minister, who was on the ministerial panels that oversaw the scandal-ridden $220m regional jobs and investment packages program in the last term of parliament, rejected criticism from the auditor general about the scheme’s operation.

In a scathing report tabled on Melbourne Cup day, the auditor general found ministers knocked back almost 30% of recommended projects and supported 17% of those not recommended.

But McCormack said decision-making should not be “outsourced to the bureaucracy”.

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“If the people of Australia want all decisions made by government to be outsourced to the bureaucracy, we would just have a bureaucracy running Canberra, but we don’t have a bureaucracy running Canberra, it’s run by the government and it’s run by the ministers in that government, and we made decisions based on what was best for regional Australia,” McCormack said.

“Australians don’t want the public service running the nation, they want the people they elected running the nation and that is what we did.

“We take advice from the departments, of course we do, that’s natural, but at the end of the day we make the decisions based on what we think we know is best for regional Australia.”

Guardian Australia reported on Monday that the top eight projects recommended for funding in the Wide Bay-Burnett region, based on the department’s merit-based scoring system, were all rejected by the ministerial panel.

However, in the same region, two known political donors to the LNP were among those that secured funding.

McCormack defended the panel’s decision to overrule the department’s recommendations, saying he did not “get a list of political donors and tick it off”.

“I got a list of the projects and the programs that we needed to fund, that we were encouraged to fund, and I looked at those other projects and programs which we felt was value for money and was going to help turn around the economic fortunes of those areas in which the funding was allocated,” he said.

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“That is why I know that the program is working, and that is why I know the benefits are going to be writ large across regional Australia.”

Guardian Australia has reported on a range of projects that have raised questions about the rigour of the RJIP application process, including a project on the NSW south coast that attempted to raise money for an aquaculture farm through a fish-based cryptocurrency.

A camper trailer company in the same region won a grant while it was possibly trading insolvent, while in Queensland a company that received a grant for a ferry project is losing money, and the project is unlikely to happen for two more years.

A former Nationals candidate successfully secured a $300,000 grant under the scheme, and then spruiked the project in a pre-election advertisement with the Nationals MP Michelle Landry.

Labor has called on the government to release details of which projects were approved against the advice of the department, and has asked parliament’s audit committee to delve into the scheme’s administration.

But McCormack said he believed the grants program would create “hundreds, if not thousands” of jobs in the 10 regions targeted under the scheme.

“I’m happy to stand beside any of those projects, to stand beside any of those proponents of any of those projects and talk about the wonderful benefits that it is going to bring to regional Australia,” he said.

“At the end of the day, that is what is most important, not a discussion about who funded what and why they funded it.”

He criticised Labor’s shadow infrastructure minister, Catherine King, saying regional funding when she was in government had gone to Labor-held seats in metropolitan areas.