Treasury strongly opposed the Rann Government’s decision to provide a $7 million subsidy to the developers of the City Central project, according to leaked information from within Treasury provided to Shadow Treasurer Rob Lucas.
“Treasury sources have confirmed that Treasury did not believe the Rann Government’s claim that the taxpayer subsidy of $7m was required to ensure the $600m project proceeded,” Mr Lucas said today.
“Kevin Foley has refused to answer questions in Parliament about Treasury’s views on this issue.
“Given Treasury’s strong opposition to the $7m subsidy, Kevin Foley must now give assurances that the Rann Government took independent advice that the $7m subsidy was essential to ensure the project went ahead.
“The Rann Government has not been open and accountable on this issue of the extent of the taxpayer subsidy – both the initial July 13, 2004 government press release (page 3 of which is attached) and the July 19, 2004 Ministerial statement to Parliament do not mention the $7m subsidy but refer to a ‘slightly higher cost’ for accommodation, and Kevin Foley in radio interviews claimed he didn’t have the figures with him.
“In fact the $7m ‘premium’ (as the Rann Government prefers to call the subsidy) was only finally confirmed nine months after the initial announcement, in response to a question in Parliament.
“Other developers are now asking the obvious question as to how they can also qualify for a government subsidy. Given that Mr Rann decided not to go through an open tender process, other developers want to know what the guidelines are to receive similar government subsidies.
“The Rann Government’s hypocrisy on this issue is breathtaking. This is especially so given their criticism of the former Liberal Government’s policy of providing assistance to specific companies, and their claim they would not follow this type of policy.
“The Rann Government has also refused to answer questions in Parliament as to whether all Ministers and officers had complied with all of the requirements of Treasurer’s Instructions and other government guidelines in undertaking this project. Given the Auditor-General’s and Government’s views in the ‘stashed cash’ affair, that breaches of Treasurer’s Instructions are unlawful, the Government’s refusal to answer the specific question is alarming.
“Kevin Foley must now come clean on this issue and answer the question as to whether unlawful acts, such as breaches of specific Treasurer’s Instruction requirements, have been committed by Rann Government Ministers or officers in their handling of this project.
“It is important to note that, while the Opposition is questioning the Rann Government’s handling of this issue and its hypocrisy, the Opposition is making no criticism of the individual developers in the project.”
Excerpt from July 13, 2004 news release (Government Backs $600m ‘Green’ City Development) issued by Premier Rann and Minister Conlon:
“The commitment is $33 million in lease payments over 10 years from June 2006, when the office tower is completed, will allow the developers to move ahead with the remainder of the development.
“This is a slightly higher cost for office accommodation that the Government would have otherwise been paying, but without the benefit of energy efficiencies and better working environment.
“In addition to the leasing costs, the Government will also spend $4 million in fit out costs for the seven floors it will occupy, to accommodate about 670 government workers.
“The Department of Administrative and Information Services’ Real Estate Management Group will assess and recommend to Cabinet within three months the Government agency or agencies best positioned to use the leased office space,” Mr Conlon said.