Labor industry spokesman Ed Husic has written to Scott Morrison urging him to commit to following the advice of the department in disbursing an $800 million manufacturing grant program, after it was revealed the Prime Minister will have final say on funding decisions.
Last week, guidelines were released for the $800 million collaboration stream, the largest part of the government’s flagship $1.3 billion Modern Manufacturing Initiative.
As first reported by InnovationAus, the guidelines include a final say on funding decisions up to $200 million resting with the Prime Minister rather than Industry Minister Christian Porter who has made previous MMI funding decisions based on the departmental advice.
While the guidelines show the department and Mr Porter will still provide recommendations to the Prime Minister, Labor is concerned the program is now open to politicisation.
Shadow industry minister Ed Husic wrote to Prime Minister Scott Morrison on Thursday asking him to commit to accepting the department’s advice on grant recipients, and to make the department’s recommendations public.
The letter, seen by InnovationAus, asks the Prime Minister to explain why he will make funding decisions, and to publicly commit to accepting the department’s advice on grants.
Mr Husic said the Prime Minister holding final approval on grants is a concern after a series of scandals involving his office and the alleged misuse of grants programs, most recently with a $660 million dollar commuter carpark fund, which the Auditor General determined “was not demonstrably merit-based”.
The Auditor General’s report revealed none of the 44 projects selected by the government for funding ahead of the 2019 federal election had been recommended by the Infrastructure department, labelling the process “not appropriate”.
Labor fears a similar use of “dodgy practices” for $800 million in grants from the MMI collaboration stream, with approval announcements potentially coinciding with the next federal election campaign expected next year.
“This is even an even bigger fund,” Mr Husic told InnovationAus. “If we look at the way that they’ve done things in the past, you’d be concerned that decisions are being made for political gain rather than merit.”
The likely timing of grant announcements shortly before the next election also “raises alarm bells”, Mr Husic said.
“Rebuilding Australian manufacturing is absolutely critical. There shouldn’t be any question marks around how these funds are granted. It undermines the ability of governments to work with the industry to rebuild this sector.”
“And that’s why the Prime Minister, and the Industry Minister for that matter, should make an absolute declaration that this will be merit based and that there’ll be open and transparent about how the decisions were made, because up until now that hasn’t been the case.”
Labor has proposed its own National Reconstruction Fund should it win the next election. The party says it would partner with the private sector, including superannuation funds, to invest $15 billion into Australian industry, including the manufacturing sector.
Under the proposal the fund would be legislated and administered by an independent board with a Labor government setting its mandate. Mr Husic said the Opposition is also considering how Industry Growth Centres could be incorporated in the fund.
“We do want to have a lot more independent decision making injected into these decisions,” Mr Husic said.
“We think that’s a way that people can then be confident, particularly taxpayers and industry, that decisions are made in the best interest of the country. And I think that’s probably the way that it has to get done.”
“But this is a government that has shied away from being open about how it’s made its decisions, explaining how it’s made its decisions, and correcting bad decisions.”
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