THE Audit Office of NSW is investigating the controversy-plagued Resources for Regions program after the NSW Government approved a $6 million grant to a Singleton project losing $250,000 a year.
Singleton Council livestock saleyard was unloved, unwanted and losing a lot of money when the council successfully applied for $6 million towards a $7.76 million upgrade – only to throw the gift in the government’s face in November with a plan to sell it even before the upgrade is completed.
The decision to sell or lease the saleyard was made after a council review “found the current operation of the facility was unsustainable”, the council said in a statement on Monday after the Newcastle Herald revealed the plan.
The news flies in the face of Resources for Regions guidelines which require the government to assess if organisations have “the ability to fund and operate the infrastructure over its life” and an “ability to meet ongoing operational and maintenance costs”.
“Somebody’s going to get a nice windfall,” said Upper Hunter real estate agent John Flood, after industry observers said a sale could recover as little as $4 million.
Singleton Council confirmed it is participating in an Audit Office review of regional assistance programs after years of controversy about Resources for Regions allocations, including anger that mining-affected areas like Lake Macquarie had received no money while grants were heavily weighted towards Nationals seats.
Resources for Regions is meant to fund projects in areas affected by mining.
The Audit Office action follows Herald articles in January showing the marginal Nationals seat of Barwon had received considerably more Resources for Regions funds than Singleton and Muswellbrook, despite the Upper Hunter areas contributing 70 per cent of the state’s mining royalties, and Barwon only a fraction of that.
It prompted an appeal to the Audit Office in January by senior Labor MPs, including Shadow Treasurer Ryan Park, for a review of Resources for Regions.
Labor’s Duty MLC Mick Veitch on Monday said news that $6 million of public funds went to a heavily loss-making saleyard, apparently breaching Resources for Regions guidelines, “just adds to our concerns about projects funded through this fund”.
The proposed sale raised a question about “whether someone must consider that to be inappropriate”, he said.
“Is there anyone in the department watching this project?” Mr Veitch said.
Singleton mayor Sue Moore said she could “appreciate the community is probably concerned at the timing” of the council’s call for expressions of interest to either sell or lease the saleyard, even while work on the upgrade continues.
“It’s a decision that was reached because the saleyard is costing us a considerable amount of money to run. It’s not making a profit,” Ms Moore said.
She questioned whether the council had a clear plan for the saleyard at the point in 2014 that it applied for the grant, which she said was “clearly putting the cart before the horse”.
Industry observers and users of the saleyard criticised the council for not listening to users about what was needed as part of the upgrade, potentially leading to the waste of significant sums. They also criticised the council for the “poor taste” of trying to sell the facility before work is completed, and upgrading a saleyard in a region with other saleyards, including the much larger Scone which is also undergoing a major upgrade.
The Audit Office of NSW did not respond to requests for comment.
Ms Moore said Singleton Council supported the need for a review of Resources for Regions.
“Singleton is the biggest contributor to mining royalties in NSW, amounting to $541.9 million in 2015/2016,” she said.
“If the Resources for Regions program exists to support mining-affected communities in NSW, then how the funds are allocated should reflect the contributions that come from mining-affected communities.”
A spokesperson for NSW Nationals leader John Barilaro said to receive funding the council had to demonstrate the economic benefits of the project.