Blockchain fish tokens and failing ferries: does the Coalition’s jobs program pass the smell test? | Greg Jericho | Australia news

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It was just over 25 years ago that the Keating government minister Ros Kelly resigned over what had become known as the “sports rorts” affair.

Pork barrelling in the lead-up to the 1993 election had seen grants for small sporting clubs directed to marginal Labor-held electorates, with the auditor general tabling a report that savaged the administration of the program. Kelly had explained her use of a “big white board” when deciding which projects to support, and the rolling scandal led to her resignation from cabinet in February 1994.

Fast-forward 10 years and it was the Coalition’s turn, with the Regional Partnerships program making headlines and the Nationals on the back foot over its own “regional rorts” program.

“The Regional Partnerships program is nothing more than a Nationals slush fund, a $150m pork barrel administered by the leader of the Nationals himself,” Labor’s Kelvin Thomson said.

It was a case of deja vu when the national audit office last week delivered its report into the Coalition’s $221m Regional Jobs and Investment Packages program – tabled quietly on Tuesday afternoon while much of the nation was watching the Melbourne Cup.

The auditor general, Grant Hehir, pulled no punches in his review of the program, finding it had been poorly administered, with conflicts of interest undeclared and ministers ignoring departmental advice about which projects to fund.

The most damning statistic was the number of projects approved against the advice of the department. The ministerial panel that made the decisions declined to fund 28% of grant applications recommended to them by officials, but approved 17% of applications that had not been recommended to them.

Shadow infrastructure minister Catherine King called the review ‘scathing’. Photograph: Lukas Coch/AAP

Of the 232 projects approved, there were 132 applications where the panel’s ultimate funding decision differed from the departmental recommendation.

There were two ministerial panels overseeing the grants program. The first three regions were decided by a panel chaired by the then infrastructure minister, Darren Chester, along with the deputy prime minister and Nationals leader, Michael McCormack, and the Liberal senators James McGrath and Michaelia Cash.

The remaining regions were decided by a second panel chaired by then minister for regional development, John McVeigh, along with McCormack, McGrath and the then local government minister, Bridget McKenzie, who replaced Cash.

The audit found that the ministerial panel overturned decisions by objecting to the scoring of certain projects, but they were never reassessed.

“This adversely affected accountability as it meant there was not a clear line of sight between the departmental assessment results, the subsequent adjustments by the ministerial panel and the funding decisions,” Hehir said.

“Applications were not soundly assessed in accordance with the program guidelines.”

The RJIP scheme was hatched during Malcolm Turnbull’s marathon eight-week election campaign in mid-2016, which was centred on the campaign slogan of “jobs and growth”.

Turnbull hailed the $200m scheme as needed to diversify regional economies, boost export opportunities and create jobs.

It was relished by regional marginal-seat MPs who promoted the benefits of the commitment to their constituents in the lead-up to the 2016 poll. In the two years following – in the run-up to Scott Morrison’s election this year – the cash began to flow, providing countless media opportunities for ministers and marginal seat MPs.

The objective of the initiative was to create jobs in regions in five states – the Bowen Basin, tropical north Queensland and Wide Bay Burnett in Queensland; the north and south coast of New South Wales; the upper Spencer Gulf in South Australia; Geelong, the Goulburn Valley and the Latrobe Valley in Victoria, and regional Tasmania.

Under the requirements of the grant scheme, applicants were required to spend a matching amount to the government contribution, with the guidelines emphasising the importance of leveraging investment from the private sector.

This element of the scheme has been promoted extensively by the government, with the Coalition claiming the $220.5m in taxpayer funded grants has leveraged $467.8m from the private sector that would stimulate regional development and jobs.

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“Despite assertions being made and the cherry-picking of certain sections of the ANAO report, it is worth noting the report concluded there was no bias evident in the assessment and decision-making process concerning funding of projects in RJIP regions over others,” a spokeswoman for McCormack said following the audit’s release.

But since the auditor’s report, Guardian Australia has uncovered a series of projects that have raised further concerns about the administration of the scheme, and in particular, the ability of some applicants to meet the co-funding requirements.

In the NSW marginal seat of Gilmore, the Coalition awarded a $205,000 grant to a dog breeder to build an aquaculture project on the south coast, with the venture to be funded by raising $5m on the blockchain market by issuing “aqua tokens” that offered a return to investors based on the price of fish. The project has stalled.

Another project in the same electorate received $750,000 while possibly trading insolvent, and in another instance, a grant in north Queensland was provided to a bus and ferry project that is losing money and is unlikely to happen for two more years.

The auditor general also revealed that two projects that were granted co-funding exemption were given the reprieve in breach of the program’s guidelines, while big political donors have also benefited from the scheme.

Scrutiny of the project will continue.

So far, the government has refused to reveal which projects were approved against the recommendations of the department, claiming information relating to individual projects is commercial-in-confidence.

Following a Senate order to produce the departmental briefings that underpinned decisions made by ministers, the government refused, defying the order and saying it needed more time to assess the request.

“Additional time is required to identify what documents and information may be or may not be acceptable to publicly release, and over which a claim for public interest immunity may need to be made,” the letter from Nationals senator Matt Canavan to the Senate president, Scott Ryan, tabled on Thursday, said.

The government has said it will respond to the order on the next sitting day of parliament on 25 November.

But Labor is not going to let the government off the hook.

The shadow infrastructure minister, Catherine King, has written to the chair of the joint committee of public accounts and audit, requesting an inquiry into the audit’s findings, saying it is needed to examine the “maladministration by the Morrison government” uncovered by the auditor.

McCormack, who has struggled to assert his authority as Nationals leader, is also expected to come under pressure over the program’s management when parliament returns.

“How many more revelations of cash for aqua tokens, food vans and failing ferries will we need to see before deputy prime minister McCormack offers a full explanation in response to this scathing audit?,” King told Guardian Australia.