A Senate inquiry into the $443m grant to private foundation calls for termination of partnership

This article is more than 1 year old

This article is more than 1 year old

A committee examining the government’s decision to award $443.3m to the Great Barrier Reef Foundation has recommended unspent funds from the controversial grant be returned to the commonwealth and reserved for future reef projects.

The final report, tabled in the Senate on Thursday, calls the awarding of the grant last year “a highly irresponsible decision, hastily concocted by relevant ministers” and calls for a fresh review of the structure of all government funding meant to protect the Great Barrier Reef.

It recommends such a review be completed by July this year and used to guide the spending of remaining money from the grant.

“This grant was a desperate attempt to cover up this government’s legacy of reef mismanagement, years of chronic underfunding and disregard for climate change, in the context of an imminent world heritage ‘in danger’ listing,” the committee’s chair, Peter Whish-Wilson, said.

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“It was clearly a political decision made with no consultation, due diligence or regard for proper process.”

Whish-Wilson said the report was a chance for governments to “reset” and come up with a better plan for future management of the reef that involved proper consultation with all stakeholders.

Other findings by the majority committee, made up of Labor and Greens senators, are that the “‘off-the-cuff decision has caused massive disruption to existing policy and program delivery, including by existing government agencies”.

The report says the most appropriate action would be to “terminate the foundation partnership”.

“The committee believes this is necessary to help restore trust in the process of commonwealth funding for the reef, if not the entire commonwealth grants process,” the report says.

The report also recommends the federal and Queensland governments publish an updated Reef 2050 Plan investment framework that outlines current figures on established funding listed by both the source and priority area for spending.

It says if the reef partnership remains in place, “the committee recommends that all necessary steps be undertaken to ensure that the foundation’s investment of public funds precludes investment in sectors or funds that directly or indirectly contribute to climate change”.

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Coalition senators on the committee wrote a dissenting report stating they did not support the findings of the majority committee and “there has been exceptional transparency about this grant”.

The environment minister, Melissa Price, said on Thursday afternoon the reef “needs action, not politics” and the government was providing the funding at a critical time.

“Anyone who steps back from the political point-scoring of late, must acknowledge the outstanding calibre of the scientific, environmental, community and business credentials of the Great Barrier Reef Foundation,” she said.

“People who genuinely care about protecting the reef will support the fact that governments, scientists, communities and the private sector are now working together to achieve real outcomes that will help this natural wonder.”

The Senate inquiry was established last year after it was revealed the $443.3m grant had been awarded to the small foundation without a tender process.

In hearings in July, the foundation’s managing director, Anna Marsden, told senators the foundation was offered the money in a private meeting between its chair, John Schubert, the then prime minister Malcolm Turnbull and Josh Frydenberg, who at the time was the environment and energy minister.

An official audit by the Australian National Audit Office published in January criticised the government for applying insufficient scrutiny to numerous aspects of the proposal.

The audit found the department was given just 11 days to find a private organisation to deliver the record grant, announced in April last year, and it suggested the foundation as the “obvious partner” after just three.

The audit also found that the administration costs associated with the grant could be as high as $86.41m.

Documents obtained by Guardian Australia under freedom of information laws last year showed the department warned the government there was a “significant” risk on-the-ground reef projects could be delayed because the small foundation would have to expand its operations first.