SIMON BIRMINGHAM: This report from the Auditor-General is a damning indictment of the Commonwealth funding decisions into the Adelaide Desalination Plant. $328 million of taxpayers’ money was spent in a process that demonstrates Labor spends first and thinks later when it comes to its funding commitments – $328 million of taxpayers’ money spent, the overwhelming majority on doubling the size of the desalination plant in an unnecessary way.
The report demonstrates that the Labor Government did not follow its own grants processes, ignored the fact that this project had been rejected by Infrastructure Australia, overlooked the fact that it had failed a cost-benefit analysis and, quite remarkably, even the Water minister of the day, Penny Wong, was kept in the dark about the decision to fund the doubling of the desal plant.
Simply put, a Cabinet committee of four, including Julia Gillard and Wayne Swan, made the decision to throw this money at getting some good media coverage in Adelaide, at getting a quick headline, for then Kevin Rudd and Mike Rann, without any consideration to the fact it would leave Adelaide saddled with a white elephant of a desalination plant, leave Australian taxpayers with even bigger debt to fund in the future, and leave South Australians with significantly higher water prices in the long term.
Overall, this is another demonstration of Labor spending first, thinking later, in their commitment of $328 million of taxpayers’ money to a plant that has proven to be a great big flop.
JOURNALIST: So, do you think this is a political decision or was there a sort of a pervading sense of panic about the then drought?
SIMON BIRMINGHAM: The absence of involving the department in these processes, the sidelining of Senator Wong as the Water minister, is a demonstration this was a political decision. It was done at the highest levels of government – Kevin Rudd and Julia Gillard signed off on funding this project without even talking to Penny Wong. They just decided they wanted to get a quick headline in the Adelaide media
JOURNALIST: Long term projections are that we need a bigger plant, though, so in the long term isn’t this of benefit to South Australia?
SIMON BIRMINGHAM: There was an obvious case to provide for a small desal plant, which the Coalition supported, which the State Liberals even initially called for. The doubling of the plant was done without any proper analysis. The Auditor-General has found the business case for it was weak at best; it’s found that the cost of water was underestimated and not even considered in the analysis that was taken to the minister, so we have obvious failings of process here and the fact is this is a very damning report that is highly critical of the Government’s approach to this and demonstrates very much that this funding was not justified for the doubling of the plant at the time it was undertaken.
JOURNALIST: We were sitting on a worst case scenario at the time – that’s the Premier’s argument – so should he have looked a gift horse in the mouth?
SIMON BIRMINGHAM: Well, the Commonwealth Government is what is being criticised here very significantly. The Federal Government sidelined all proper process, not just departmental analysis of the grants that were given but even proper Cabinet processes where Julia Gillard and Kevin Rudd and Wayne Swan sat around without even consulting the Water minister, Penny Wong, to fund $228 million to double this plant. That is the case of a government that was really focused on the politics of the day, not good policy.