The New South Wales government initially sought to spend almost $200 million on bushfire recovery funding without any open application process and was privately criticised by federal Agriculture Minister David Littleproud over delays in opening the scheme up more broadly.
- In May 2020, the federal government announced a $448m grant scheme called the Local Economic Recovery Fund after the devastating bushfire season in 2019
- The NSW government approved 71 projects worth $177m in November 2020
- The political distribution of those grants came under scrutiny when it was revealed just $2.5m of the $177m went to Labor-held seats
7.30 can also reveal the state government approved funding for two projects outside designated bushfire affected areas that the federal government did not support in the $541 million co-funded Bushfire Local Economic Recovery Fund.
The NSW government has been under scrutiny for the spending of $177 million from this fund after an analysis of the spending was first reported by Michael West Media.
The government has been under pressure over its political distribution of funding. Just $2.5 million of the $177 million went to Labor-held seats.
Some bushfire-affected areas like the Blue Mountains missed out entirely in the first round, although Deputy Premier John Barilaro has said they will be prioritised in the next round of funding.
‘Fast-tracked’ projects pitched for funding
From the first round of funding, $72 million went to 50 projects as part of an open application process through the bushfire industry recovery scheme, which was designed to support industries like forestry.
The remaining $107 million went to just 22 “fast-tracked” projects that the NSW government had already identified and invited to apply without an open application process and included $11 million for a skydiving facility.
But documents released to NSW Greens MLC David Shoebridge reveal that on September 30, 2020, the NSW government put forward 38 fast-tracked projects initially, which would have totalled just under $200 million.
Had that funding been approved, the NSW government would have spent half of all of the bushfire recovery funding available from the $541 million scheme.
The NSW government has not released any detailed documentation around the selection and approval of the fast-tracked projects it identified.
On October 5, 2020, days after these projects were submitted by the NSW government, Mr Littleproud wrote to Mr Barilaro about delays in announcing the broader open process for grants under the fund.
“I seek your assurance that any projects agreed for co-funding will be announced without delay, along with the broader NSW LER process and program guidelines,” he wrote.
“Announcing approved LER projects and, critically, the broader NSW LER process as soon as possible will impart some hope to those bushfire impacted communities and some momentum to this important phase of bushfire recovery.”
In a statement, Mr Littleproud said: “It is expected that any Commonwealth funding given to states and territories to assist those recovering from disasters is provided to those in need quickly and efficiently.”
The National Bushfire Recovery Agency (NBRA) also said: “The NBRA takes a big picture view of project proposals put forward by state governments for Australian government co-funding across the totality of each state’s LER allocation — to ensure that all bushfire-impacted regions receive a fair share of the total LER funding allocation within each state.”
“Under the ‘fast-tracked’ process, the NBRA did not support the Commonwealth’s contribution to 10 projects (the other projects referenced were not part of this round or were subsequently withdrawn).”
“Reasons for declining these projects included: The project was not located in an eligible LGA, the project was considered the core business of the statement government and/or the project did not otherwise meet the LER criteria.”
“The ‘fast-tracked’ projects were important to generate jobs and stimulate local economies, which is critical to recovery.”
The Department of Regional NSW said in a statement: “The Commonwealth (via the National Bushfire Recovery Agency) and the NSW governments continue to work closely together to ensure every bushfire impacted LGA receives appropriate support.”
Tension between states and the Commonwealth
The documents released to the NSW Parliament highlight some of the points of tension between the state and federal government in administering the scheme.
The Bushfire Local Economic Recovery Fund is a co-funded bushfire recovery scheme by the states and the Commonwealth.
The agreement that established the scheme gives state governments broad discretion in how they identify projects and they are not required to conduct an open grant application process.
After projects have been identified by states, the Federal National Bushfire Recovery Agency then assesses them against national criteria and decides on whether to support the funding arrangement.
The documents released to the NSW Parliament also show that the NSW government agreed to fund two bushfire recovery projects that the Commonwealth did not support because they were outside designated bushfire-affected areas.
The NSW government put forward to the federal agency funding approvals for Rowlee Wines for $425,522 to fund a farm to table restaurant and event space in Orange, NSW.
The government also put forward an approval for Nick O’Leary Wines for $421,000 to fund a cellar door, restaurant and function centre in Wallaroo, NSW.
Both applications were approved by the state government. But the Bushfire Recovery Agency declined to support them because the “project benefits” sat outside eligible bushfire-affected areas.
‘I feel that we’re being forgotten here’
In the Blue Mountains, some communities are still angry about being overlooked in the first round of funding.
Malina Schindler runs a function centre in Blackheath in the Blue Mountains. Her events venue, which usually hosts weddings and other large events, overlooks the iconic Pulpit Rock lookout.
“I see a lot of the local businesses definitely suffering. And definitely not the amount of tourists that we have had in the past. It’s very quiet,” she said.
“Personally, I was a little shocked that the Blue Mountains received zero of the funding. I’m disappointed. I feel that we’re being forgotten here.”
The facilities and infrastructure in the area were badly burnt in the fires, making parts of the area inaccessible.
“It was damaged very, very badly. Everything was completely burnt out. So it’s quite dangerous to be on the trail,” she said.
“It’s handled through local council. And I believe they just don’t have the funds to fix it.”
Funding for Blue Mountains to be ‘fast-tracked’ in second round
The Blue Mountains City Council put forward a proposal in July 2020 under the Local Economic Recovery Fund to repair some of the burnt-out infrastructure in the area alongside several other projects but did not receive any funding through the first round.
Mr Barilaro told a NSW parliamentary inquiry into the administration of grants in February this year that the projects put forward by the Blue Mountains council did not meet the threshold for funding through the fast-tracked scheme and were not eligible.
“The projects weren’t ready under the criteria. They had to be able to be completed within six months or started within six months,” he said.
“They had to meet the eligibility criteria, which had a $1 million minimum threshold.”
He also said the Blue Mountains would be prioritised for funding in the second $250 million round of funding, which was broadly open to applications.
“We will be working with the Blue Mountains council to fast-track that investment in this round,” he told the inquiry.
He has also rejected claims the distribution of grants was politicised, arguing that the most heavily bushfire affected areas were in Coalition held seats.
He pointed to the $48 million in funding delivered in the state seat of Wagga Wagga, which is held by an independent, and said the selection process was conducted by the department.
“I just want to put on the record that the facts are not correct. Those projects were delivered by the department, identified by the department, by the agency, brought to government,” he said.
“They went through the ERC [Expenditure Review Committee]. So I actually did not have the final sign-off.”
Blue Mountains designated a ‘priority region’
The documents released this week to the NSW Parliament make it clear that the Blue Mountains was always considered an eligible local government area for funding.
A letter from the National Bushfire Recovery Agency coordinator Andrew Colvin to Resilience NSW in May 2020 sets out that the Blue Mountains is a designated a “NSW priority region”.
Resilience NSW wrote to the National Bushfire Recovery Agency in July 2020 advising that it wanted to include “significantly impacted metro councils of Blue Mountains, Wollondilly and Hawkesbury in the program, and including central coast” within the scheme’s eligibility.
The Department of Regional NSW said in a statement: “Every one of the 50 Local Government Areas impacted by the unprecedented 19/20 bushfire season has been supported by the NSW government. This support includes various grants to councils, individuals, businesses and primary producers; support with emergency and temporary accommodation as well as the state’s largest-ever clean-up program with over 3,600 properties cleared.“
“The Blue Mountains was impacted by the 19/20 bushfires with 22 homes lost and 10 damaged.”
“The region has received more than $28.8 million in support from the NSW and Commonwealth governments.”
The National Bushfire Recovery Agency also said in a statement: “The processes in NSW and Victoria are still underway, so it is incorrect to say that some areas have ‘missed out’.”
“The Blue Mountains LGA is expected to have a number of applications for review in this current grants round.”
The open round of recovery funding is due to be announced in June 2021.
Watch the full story on 7.30 tonight on ABC TV and iview.