Chris Bowen says it ‘defies logic’ that the grant was awarded without a competitive tender process

This article is more than 2 years old

This article is more than 2 years old

The transfer of $443.8m to the Great Barrier Reef Foundation will cost taxpayers another $11m in public debt interest, Labor’s treasury spokesman Chris Bowen says.

Bowen has questioned what oversight Treasury and the Department of Finance had of the decision to award such a large amount of funding to the small charity in one instalment.

Bowen said it “defies logic” that treasury or the department of finance would have supported the grant to the not-for-profit foundation without a competitive tender process.

The full $443.8m was transferred to the foundation on 28 June and is being held across a number of term deposit accounts.

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“Instead of contributing to paying down debt, the $440m is accruing interest for the foundation, and under the terms of the Turnbull government, the first $21m of interest can be used for administration costs,” Bowen said.

“It’s hard to believe that the treasurer or finance minister were absent at the meeting that saw $440m handed over without any sort of competitive or tender process beforehand.”

On Wednesday, the committee for a Senate inquiry into the grant resolved to hold two more days of hearings in Canberra next month, one with the foundation’s chair John Schubert and other board members, and another that will call on department officials, including from treasury and finance, to appear.

Bowen said there were several questions that should be answered, such as when the treasurer Scott Morrison and the finance minister Mathias Cormann first learned of the proposal, when the departments were first made aware of it and whether they were asked to scrutinise the policy.

“The Treasury and Finance need to attend and fully participate in the Senate inquiry,” he said.

The comments come after the government spent another day under pressure in question time about whose idea it was to award the foundation the money and what due diligence was done.

“Mr Speaker, as I have told the house previously, there was due diligence conducted by my department,” environment and energy minister Josh Frydenberg said.

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“In the first phase of due diligence, they looked at its governance, its structure, its constitution, its project management, its fundraising, its capacity for growth, its board composition and its scientific expertise, Mr Speaker.”

He said a second phase of due diligence before he signed off on the grant “made it very clear that they looked at the corporate information, compliance with applicable laws, litigation, asset checks, asset checks with the directors”.

The Labor leader, Bill Shorten, asked the prime minister, Malcolm Turnbull, “if it was such a good idea, why won’t the prime minister tell us whose idea it was?”

“The leader of the opposition has clearly not been listening to the minister who has said a number of times, as have others, that the decision to make a contribution to the Great Barrier Reef Foundation was made prior to the budget and went to the full pre-budget Cabinet process,” Turnbull said.