Queensland premier says the LNP ‘intends to smear me and my partner’ over his work for PwC on Adani’s application for funding through Northern Australia Infrastructure Facility

This article is more than 2 years old

This article is more than 2 years old

The Queensland government will veto Adani’s application for a $1bn commonwealth loan to build a rail line for its massive Carmichael mine, Annastacia Palaszczuk has said.

Palaszczuk said the dramatic move, amid her campaign for re-election, came in response to what she believed was a federal Coalition plan to “smear” her and her partner, Shaun Drabsch, over his role in Adani’s loan application to the Northern Australia Infrastructure Facility (Naif).

As the government is in caretaker mode, any move to veto the loan would need bipartisan support.

The move will be a heavy blow to the Indian mining giant’s attempt to win finance in China for the controversial coalmine, but puts the state Labor government on the right side of opinion polls on the issue.

Palaszczuk has accused some in the federal government of breaching commercial in confidence obligations around Naif to try to sabotage her campaign.

But the upshot of the rumours is that Palaszczuk has discovered she unwittingly had a perceived conflict of interest because her partner worked on an Adani loan bid her government may have been asked to sign off on.

Palaszczuk said she learned on Tuesday of “a rumour circulating among LNP senators” about Drabsch’s work as managing partner for PwC, which helped Adani with its Naif loan application.

“I am told they planned to use this during the election campaign to impugn my character and suggest something untoward,” she said.

Drabsch was involved in PwC’s work for Adani and its bid for the federal loan but she did not know this until after the rumour arose this week, Palaszczuk said.

Why Adani's planned Carmichael coalmine matters to Australia – and the world Read more

Palaszczuk sought the advice of the Queensland integrity commissioner, who told her “a reasonable member of the public, properly informed” would perceive she now had a conflict of interest.



Palaszczuk said she now wanted to “remove doubt about any perception of conflict” by notifying the prime minister, Malcolm Turnbull, that “my government will exercise its ‘veto’ to not support the Naif loan”.

The premier said she had kept a 2015 election promise that “not one cent of taxpayers’ money would go to this company” and stopped the former LNP government “gifting $500m of taxpayers’ money to Adani” through a state loan for its Carmichael rail line.

Play Video 3:02 Fact v fiction: Adani's Carmichael coal mine – video explainer

Palaszczuk said her announcement on Friday in Brisbane would be the first Adani was hearing of her decision. She will ask LNP leader Tim Nicholls to endorse her decision.

If Nicholls refuses, the issue of enabling federal financing for Adani will likely become the decisive dividing issue for Labor and LNP in the Queensland campaign until polling day on 25 November.

Labor strategists believe voters in regional Queensland who support the mine - and whom the party needs to win over to retain power - will not feel so strongly about taxpayer support being withdrawn.

“In terms of the project itself, Adani representatives have been on the public record numerous times indicating that they do not need Naif to proceed with this project,” Palaszczuk said.

“Malcolm Turnbull can still give taxpayers’ money to Adani if he wants to, but I won’t stand for his LNP operatives trying to smear my good name.”

Palaszczuk said she still supported the project and jobs for north Queensland but “I do acknowledge many Queenslanders have concerns about the potential for the federal government providing a loan to Adani”.

She released the integrity commissioner’s advice, which said it could be perceived that Palaszczuk “may personally benefit” from influencing decisions in favour of Drabsch or against rival Naif contenders.

The integrity commissioner, Nikola Stepanov, told Palaszczuk her conflict arose through her role in the government’s Cabinet Budget Review Committee (CBRC) – the state’s “approving authority” to execute Naif loans – and Drabsch’s business dealings.

The premier’s move to veto the loan goes well beyond the strongly “preferred option” recommended by Stepanov – that Palaszczuk declare a conflict of interest and exclude herself from CBRC discussions and decisions on Naif projects.

Palaszczuk also released letters in 2015 showing the integrity commissioner raised no concerns about her ethical position when Drabsch joined PWC to advise on infrastructure projects at a federal but not state level.

Palaszczuk said Drabsch had kept his work on the Adani application from May 2016 a secret from her under his “commercial-in-confidence” obligations.

“Shaun has always told me he’s worked at PwC, working on infrastructure, and that is it,” she said.

The only people who knew were PwC and Naif, and of course the Naif reports to the federal government,” Palaszczuk said.

“I understand LNP senators were seeking to use this as a smear against me in the middle of an election campaign.”

Palaszczuk’s chief of staff David Barbagallo told her on Tuesday that he had, after becoming aware of “rumours being circulated by LNP senators in Canberra”, confirmed that Drabsch worked on the Adani bid.

Palaszczuk said the LNP senators “obviously” sought to “break that commercial in confidence” around Drabsch, saying the extent of knowledge about this was a matter for both Turnbull and Nicholls to address.

“What does that say about the federal government when they are breaching commercial in confidence arrangements between a company and the federal government?”

Efforts to discredit her would involve “trying to allege there was a massive conflict of interest and seeking to tear down my position as premier of this state and tear down my integrity and honesty”, she said.

“I’m putting on the record every step I have taken and to put beyond any doubt about this, we will veto that loan.

“I entered politics to make a change, I actually want to make a change to people’s lives, not to be smeared at.

“And this sort of level of politics, I think the public find truly and utterly disgusting, as I do.”

Federal resources minister Matt Canavan was quoted by the ABC as saying the Queensland government had been “all over the shop on Adani”.

“Last year, they wrote to the Commonwealth Government suggesting that we look at funding the Adani rail line through the NAIF. Then, in May this year, the Deputy Premier, Jackie Trad, said the Labor Government wouldn’t participate in any NAIF loan to the Adani project, which would effectively block federal funding. The next day, Treasurer Curtis Pitt contradicted her, saying the Labor Government’s position was to support Adani being funded by NAIF, he was quoted as saying.

“This is a circus, and it puts thousands of people’s real jobs and real businesses at risk.”



The Guardian has been told the state Labor government was first warned by federal colleagues weeks ago that the LNP planned to raise in federal parliament allegations about a conflict of interest involving a Queensland minister. It was not clear at the time this was Palaszczuk.



The Queensland government does not assess Naif loans but can veto them by objecting at both a project’s “due diligence” and “investment decision and execution” stages.



Labor was first pressed on its veto power over the Adani loan when activists and others, including Greens Maiwar candidate and environmental lawyer Michael Berkman, raised it earlier this year.

The state government had previously refused to contemplate its veto power. Strategists within Labor judged that - even while polls show a majority in the state and nationwide oppose Adani receiving the government loan – supporting the project was a critical step to retaining marginal seats in regional Queensland, especially Townsville.



