• Mon. Oct 24th, 2022

Audit office reveals Paul Fletcher’s apparent endorsement of acquisition later found to be $27m above land’s fair value

Mar 10, 2021

CoalitionAudit office reveals Paul Fletchers apparent endorsement of acquisition later found to be $27m above lands fair value
The federal infrastructure minister, Paul Fletcher, told officials from his department that their decision to buy a parcel of land adjacent to the western Sydney airport a controversial acquisition later eviscerated by the commonwealth auditor general seemed perfectly sensible to me.
Fletchers apparent endorsement of the purchase was revealed by staff from the Australian National Audit Office (ANAO) at a Senate committee hearing on Wednesday.
They also revealed that representatives of the Leppington Pastoral Company and another politically connected landholder, Louise Waterhouse, had arranged meetings with a commonwealth official at Aussies coffee shop in Parliament House in October 2016.
The ANAO blasted the land purchase in September 2020 in an audit that found taxpayers had paid $29.8m for land owned by billionaire brothers Tony and Ron Perich to build a second runway at the airport. Only 11 months after the purchase the same land was valued at just $3.1m.
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The discrepancy triggered the ANAO investigation. The subsequent audit concluded the department did not exercise appropriate due diligence and its operations fell short of ethical standards. The Australian federal police are investigating the controversial transaction after a referral from the audit office.
Officials from the ANAO told a Senate inquiry on Wednesday an information brief had gone to Fletcher in January 2018 bringing him up to speed with the departments intentions regarding the controversial Leppington Triangle land purchase.
The ANAOs executive director, Brian Boyd, said the brief signalled the purchase price would be in the vicinity of $30m and Fletchers written response to the update was seems perfectly sensible to me.
But Boyd made it plain the department wasnt transparent or particularly forthright in the briefing materials about the specifics of what the commonwealth was agreeing to with the land purchase. Fletcher wasnt the decision-maker in the purchase. The decision was taken at the departmental level.
In its 2020 report, the ANAO said departmental briefings to the deputy secretary had described the price as reasonable and did not explain why the commonwealth had agreed to pay at least $30m to Leppington Pastoral Company, which was 22 times higher than a share bought by the New South Wales government.
When he was accused of ministerial incompetence by Labor last year in the wake of the audit, Fletcher said briefing material provided to the deputy secretary and himself was deficient, because it failed to disclose key pieces of information that would have allowed them to assess whether what was paid was reasonable.
The ANAO officials also told Wednesdays hearing they were aware that one official from the infrastructure department tried to schedule meetings with representatives of the Leppington Pastoral Company and with Waterhouse in Parliament House in October 2016.
According to Wednesdays evidence, Waterhouse who has substantial landholdings adjacent to the airport didnt make the scheduled catch-up in parliament and met later with the official in a coffee shop elsewhere in Canberra.
Boyd also told the committee the ANAO was aware of another meeting between officials and the Perich brothers that took place in a private home.
The chair of the Senate committee, Tim Ayers, asked whether officials from the ministers office were present at the meetings, given it would be unusual for a public servant to organise a meeting in Parliament House when officials worked elsewhere in Canberra.
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The ANAO officials said that was completely unclear because proper records of the conversations werent kept which was a significant criticism in their audit. Boyd said on Wednesday experienced commonwealth officials should not be having undocumented interactions with stakeholders almost at a personal level.
After the hearing, Ayers said it was important to get to the bottom of who the western Sydney landholders met when they were in Parliament House meeting a department official.
Ayers also declared Fletcher had questions to answer.
We are a long way from 2020 when Minister Fletcher blamed the department for paying $30m for a $3m piece of land, he said.
It turns out that he was in fact briefed on it, and when he was, he sent the brief back to the department saying seems perfectly sensible to me. Nobody else in Australia thinks it was perfectly sensible to pay an influential business interest 10 times the property value so why did Mr Fletcher tell the department it was OK?