Labor steps up criticism of bushfire grants after damage report by federal agency revealed

Former Coalition economic adviser Peter Crone’s report shows 48.1% of the Blue Mountains area was fire-affected, yet it missed out on funding

File photo of the Blue Mountains bushfire in 2019
When the NSW and federal governments announced $177m in joint funding for bushfire recovery, the Blue Mountains received no money. Photograph: Andrew Merry/Getty Images
When the NSW and federal governments announced $177m in joint funding for bushfire recovery, the Blue Mountains received no money. Photograph: Andrew Merry/Getty Images

Last modified on Sun 14 Feb 2021 11.32 EST

Fresh concerns have been raised about how bushfire grants are allocated, after a federal agency identified significant damage in a New South Wales council area that has so far missed out on help from a key economic recovery program.

A report prepared by the former Howard government economic adviser Peter Crone for the National Bushfire Recovery Agency shows 48.1% of the Blue Mountains local government area was directly fire-affected, compared with 47.9% of the Snowy Valleys.

When the NSW and federal governments announced $177m in joint funding for 71 bushfire recovery projects in November, 12 of these grants were for the Snowy Valleys, worth a total of $32.9m. None of the grants in that funding round were for the Blue Mountains, whose mayor is a Labor councillor.

The federal opposition has seized on the damage figures in the report – which was released in response to a question on notice in Senate estimates – as the national agency indicated it served “as a basis for discussion with the states”.

Labor’s spokesperson for disaster and emergency management, Murray Watt, said the report “directly connects the Morrison government to the NSW bushfire rorts”.

Both the National Bushfire Recovery Agency and the NSW state government defended the allocation of funding on Friday, saying the program in question was one of several, and that the Blue Mountains had received other support.

The NSW government also promised that areas “that have not yet received funding will be prioritised in the next round”.

The National Bushfire Recovery Agency’s report on fire damage in local government areas across Australia was completed last February and was marked as “preliminary”.

“The contract required Mr Peter Crone to undertake activities to assist in establishing a reporting and analytics function within the National Bushfire Recovery Agency, including an indicative mapping of local economic recovery geographic areas as a basis for discussion with the states,” the agency told a Senate committee.

The report outlines the level of impact for every local government area in Australia, relying on a national “burn scar” dataset. It was created using information collected and provided by state emergency management authorities, as well as input from Emergency Management Australia.

While the Crone-authored report does not mention the political affiliations of local government areas, the Labor mayor of Blue Mountains, Mark Greenhill, has previously argued the council’s applications had been overlooked by the NSW Coalition government.

The NSW deputy premier, John Barilaro, appeared before a parliamentary inquiry into the state government’s alleged pork barrelling of council grants last Monday. He argued councils in Labor-held seats including the Blue Mountains had not been eligible because they were not of sufficient size or readiness.

Greenhill disputed that, saying after Barilaro’s appearance that the projects put forward by the council were “carefully thought-out” and “shovel-ready projects”.

When contacted for comment on the damage figures in the Crone report and the treatment of the Blue Mountains, Barilaro’s office referred the inquiry to the Department of Regional NSW, which pointed to funding that has been allocated under other funding streams.

A spokesperson for the department said the Blue Mountains had so far received more than $30m in state and commonwealth funding.

This $30m figure is understood to include about $13m in small business grants and $1.8m in council grants.

NSW is about to consider applications for a new $250m round of the Bushfire Local Economic Recovery Fund.

“It is also not accurate to suggest that any LGA has missed out on funding from the Bushfire Local Economic Recovery Package, because the fund has not been fully allocated yet,” the NSW spokesperson said.

“Applications only closed on 28 January and are currently being assessed. Areas that have not yet received funding will be prioritised in the next round.”

The spokesperson said the NSW and federal governments “continue to work closely together to support communities on their recovery journey post the 19/20 bushfires”.

The national agency told Guardian Australia it had “used a range of point-in-time qualitative and quantitative information to frame early discussions with states on initial assessments of relative impact and funding apportionment”.

It said data prepared by consultancy firm Ernst & Young, under a contract managed by Crone, was “one of the pieces of information” used by the agency.

“The Blue Mountains community has received funding support for primary producers, small businesses, mental health, payments for volunteer firefighters, childcare subsidies,” it said.

But Watt said the report showed that “the Morrison government’s National Bushfire Recovery Agency was directly involved in assessing which areas needed federal funding for economic recovery”.

“The Morrison government has serious questions to answer,” Watt said.

“Why did they waste $136,000 paying Liberal mate Peter Crone to prepare this report if they were going to ignore it?”

Crone, who was a senior economic adviser to John Howard and helped conduct the Tony Abbott-ordered commission audit of government spending, was paid $136,000 to provide economic advice to the national bushfire agency but finished his work around the middle of 2020.

Officials from the Department of the Prime Minister and Cabinet said Scott Morrison’s office may have recommended Crone’s appointment.

“From my memory it was the prime minister’s office,” the department’s deputy secretary, Stephanie Foster, told Senate estimates in October.

“We were looking for ways to bolster the capability of the bushfire agency as quickly as we could. Mr Crone has a very strong reputation for his economic analytic work.”

In December the Morrison government appointed Crone to a five-year term as a commissioner at the Australian Competition and Consumer Commission.