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WestInvest scheme under former NSW government 'lacked integrity', audit report finds

2024.02.28

· In short: An audit report has found a $5 billion fund for Western Sydney projects designed by the former NSW government "lacked integrity".

· Chosen projects were not documented, did not meet certain criteria and were selected by former treasurer Matt Kean, according to auditor general Margaret Crawford.

· Mr Kean said given his time again, he would do the same thing and that he would "prioritise the people of Western Sydney over ratings agencies".

A $5 billion fund for Western Sydney created by the former NSW government "lacked integrity", was put together in a week and risked the state's AAA credit rating, a scathing audit report has found.

The WestInvest fund was set up under former premier Gladys Berejiklian's government in September 2021 to "help communities hit hard by COVID-19".

The program's aim was to fund new infrastructure and facilities in Western Sydney.

Money was awarded to projects in 15 local government areas, providing money for air-conditioning at schools, road upgrades, health hubs and even an ice rink in Canterbury.

But the state's auditor general Margaret Crawford said decisions about which councils were eligible and which projects to bankroll were not documented, and were instead chosen by then-treasurer Matt Kean's office.

"The design of the WestInvest funding program lacked integrity because it was not informed by robust research or analysis to justify the commitment of public money to a program of this scale," her report said.

"NSW Treasury was asked to provide the proposal for the WestInvest program within a very short time frame, during the week prior to the announcement of the program."

Treasurer Daniel Mookhey said the report showed the former government was "playing politics with the public's money".

"This is a classic in the genre of pork-barrelling at the public's expense," he said.

Chosen projects did not meet criteria, steering committee say

More than $1 billion of public money was given to projects which the WestInvest steering committee said were not ready, or did not meet the fund's criteria, the report found.

"One-third of the projects that were allocated funding (9 out of 27) had been assessed by the WestInvest steering committee as having "low or moderate merit," the report said.

In one incident, the audit found Mr Kean's office made a request to the WestInvest steering committee to add the Canterbury Olympic Ice Rink to its list of recommended projects, on the same day his government made it an election commitment.

The roof upgrade project would cost $17.7 million.

"On the day the then Treasurer's Office made this request, the NSW Labor Party had made an election commitment to fund an upgrade of the ice rink," the report said.

Mr Kean defended his decision to announce the funding during an election campaign.

"There was a large community outcry for that project," Mr Kean said.

"It was an important ice rink."

Labor re-announced the $17.7 million ice rink roof upgrade project in December, under its new fund for Western Sydney, called the Western Sydney Infrastructure Grants Program.

Funds redirected to new projects under Minns government

The current government decided not to fund 11 of the projects chosen by the Coalition, and redirect that money to 17 new projects in Western Sydney.

But the audit points out Labor also chose projects which were not ready.

"Of these [17 projects], 15 projects did not have business cases completed, as required by NSW government rules," the audit said.

The report found WestInvest also posed a risk to the state's AAA credit rating, because it appeared the fund was created from asset sales.

"A risk to the State's credit rating arose because the government may have been perceived to be using proceeds from major asset sales to fund new expenditure, rather than pay down its debt," the report said.

Mr Kean said given his time again, he would do the same thing.

"I was always going to prioritise the people of western Sydney over European ratings agencies," he said.

Mr Kean pointed to another finding in the report, which said the community projects competitive grants round and the local government projects grants round of the program were administered effectively.