Inquiry hears that meat business of Liberal National donor was ineligible for grant but ministers had ‘strong preference’ it receive funding

This article is more than 6 months old

This article is more than 6 months old

A group of Coalition ministers kept no records of a critical meeting during which they overturned a department’s recommendation and awarded $5m to a Liberal National donor for an ineligible and lowly ranked project, an inquiry has heard.

Nolan Meats, an abattoir and meat processing business, was approved for the $5m grant in April 2018 under the business stream of the government’s $200m regional jobs and investment package.

Guardian Australia previously revealed that Nolan Meats was deemed ineligible for the grant because its status as a registered training organisation disqualified it under the program guidelines, which also say the government “cannot waive the eligibility criteria under any circumstances”.

A parliamentary inquiry on Friday heard that Nolan Meats’ bid for funding was not ranked because it was ineligible, but if it had been ranked it would have sat 48th out of the 62 applications.

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The company was given another chance to argue its case and its application went up to a ministerial panel – consisting of four Coalition ministers – who met on 7 February 2018. The ministers advised that they had a “strong preference” that Nolan Meats be funded.

Nolan Meats disclosed a $3,000 donation to the Liberal National party several months earlier, in November 2017, though the company denies this had anything to do with the grants process.

One of those on the ministerial panel was former Coalition minister John McVeigh. McVeigh’s brother’s consultancy had an “existing relationship” with Nolan Meats and later won a contract to help it expand its Gympie abattoir as part of the same project, the inquiry heard.

McVeigh said he recused himself from the ministerial panel over a separate issue and denied any involvement in the deliberations that led to the panel’s recommendation.

But the inquiry heard on Friday that no records had been kept that documented the ministerial panel’s deliberations. That is at odds with the usual practice, where ministerial panels keep records – albeit of varying quality – of their deliberations, according to the Australian National Audit Office.

“The challenge for us here … deputy chair, is that there are no records of the ministerial panel meetings,” Brian Boyd, an ANAO officer, said. “We have the records of the briefs that went up and were signed coming back.”

Labor’s Julian Hill, deputy chair of the committee, responded: “So we had four politicians locked in a room with no public servants awarding a grant to a company that was ineligible that had just made a curious donation to the Liberal National party during the assessment process, and there’s no records?”

Boyd again confirmed there were no records of the panel meetings, prompting Hill to say: “Well that’s convenient, isn’t it?”

The grant program was the subject of a scathing report by the Australian National Audit Office in November which found 12 applications were ineligible for funding, including one that won money.

The report did not name Nolan Meats, but it found that in the Wide Bay Burnett region, where Nolan Meats is located, none of the eight applications ranked and scored the highest received funding.

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The ANAO told the inquiry on Friday that the Nolan Meats project was ranked 48th of 61 projects.

The panel consisted of McVeigh, the then-small business minister, Michael McCormack, the then-assistant minister to the prime minister, James McGrath, and the then-minister for regional communications, Bridget McKenzie.

The inquiry heard that McVeigh’s signature was on a “review of recommendation” document template, needed because the panel was overruling the department on Nolan Meats. It also heard McVeigh was the chair of the panel, and it was an administrative requirement to sign such a document.

The LNP member for Wide Bay, Llew O’Brien, has previously defended the awarding of the grant, saying the primary purpose of Nolan Meats was clearly meat processing, not providing registered training.

“The internal training provided exclusively to their staff develops skills, providing them with long-term career opportunities,” O’Brien said.

He said ministers were not there simply to “listen to the advice of their departments, but they also have to make decisions”.

“In this case, ministers have made the right decision that will benefit hundreds of families in Gympie.”