Hornsby Shire Council, in Sydney’s north, is to be forced to repay most of the $40 million grant it received to build a park that never happened.
The money came from the former Coalition government’s Stronger Communities fund, which was established in 2017 to support councils that were forced to merge.
But the council never amalgamated and the NSW Labor government has ordered the council to repay $36 million in unspent funds.
“There have been significant delays in the delivery of the project and limited progress has been demonstrated, with most of the grant money yet to be spent,” it said in a statement.
A 2021 parliamentary inquiry into the Fund found councils were improperly given public money on the basis of political favouritism that was “a clear abuse of the grants process,” with 96 percent of the grants going to Coalition or marginal electorates just before the 2019 NSW election.
It was also designed to punish councils who objected to forced amalgamations.
Inquiry chair and NSW Greens MP David Shoebridge called it “a brazen pork-barrel scheme” and an electoral bribe.
“The Coalition designed a scheme with so few checks and balances that $252 million of public money was handed out on a purely political basis to sort out the Coalition’s political problems,” he said.
The fund was set up by the Baird government to help merged councils but the guidelines were changed in June 2018.
The inquiry found that the payment to Hornsby Shire Council—organised within 72 hours of Office of Local Government head Tim Hurst contacting the council—“was made without any due process or merit assessment, and was a misuse of public money.”
It also found working outlines of projects were used as formal funding briefs, with no signed paperwork originating from the premier’s or deputy premier’s offices, which administered the fund.
There was also no set application or assessment process, and the only councils eligible were those that were chosen by Gladys Berejiklian and John Barilaro (respectively, the premier and deputy premier at the time). Eventually, as scrutiny intensified, Ms. Berejiklian admitted the scheme amounted to pork barrelling, though she defended it by saying that it was “not illegal.”
The Hornsby Council’s request for an extension of time to use the unspent funds has been refused, but it was allowed to retain a separate $50 million grant designed to turn a quarry into parkland because construction had significantly progressed.
NSW Local Government Minister Ron Hoenig said the state government would be recouping money in any case where a council had not demonstrated sufficient progress on the projects for which it received Stronger Communities funding.
“The former Liberal-National government’s Stronger Communities fund has been exposed as one of the most egregious examples of pork barrelling,” Mr. Hoenig said.
“The fund was originally established to support councils which had been forcibly merged by the former government, yet Hornsby Shire Council received $90 million despite not being one of the amalgamated councils.
“At a time when we are facing a cost-of-living crisis, every dollar counts.”
