A Minns government scheme that allowed Labor candidates running in the 2023 election to allocate $400,000 to projects in their potential seats has been described as an “election slush fund” by a parliamentary inquiry.
The inquiry into the local small commitments allocation (LSCA) program found that John Graham, the minister responsible for the scheme, misled parliament on multiple occasions during its probe.
The non-government-controlled committee alleged in its report released on Tuesday that Cherie Burton, the former MP for Kogarah and now a senior adviser to the premier, and another staffer, Paul Mills, allegedly made false statements under oath to the inquiry and should be considered for prosecution.
Under the LSCA, Labor candidates in 93 lower house electorates were each responsible for nominating projects totalling $400,000. After the Minns government was elected in March 2023, they were funded regardless of whether the candidates won their seats. By the middle of last year there had been 642 projects worth more than $37m approved.
Sign up for the Breaking News Australia emailLabor witnesses told the inquiry the program was designed to combat “pork barrelling” because projects were funded regardless of election results.
But the inquiry chair, Greens MLC Abigail Boyd, criticised the government’s “entire defence of this utterly inappropriate and anti-democratic scheme”.
“Ultimately, the most accurate way to describe this grants program is far more direct: a publicly-funded Labor party election slush fund,” she wrote in the committee’s report.
“The only criteria imposed by the NSW Labor party on the expenditure of up to $40m of public money … was that a Labor party candidate anywhere in the state thought it was a good idea.”
This included MPs who allocated a combined $100,000 in funding to sporting clubs that had supported their election campaigns, the Sydney Morning Herald reported.
The Audit Office of NSW last year published an audit into the administration of the LCSA from July 2023 – but not before that year’s March election.
It found the grants scheme had been “effectively administered” by the government office set up to run the program, but only 17 out of the 93 Labor candidates had been assessed for conflicts of interest, with the rest relying on “verbal communication” from the Australian Labor party.
It recommended providing more guidance and that conflicts of interest processes be “implemented as intended” for future programs.
The parliamentary inquiry established in November 2024 found Labor implemented the LSCA program “in an attempt to influence voters for electoral gain … rather than for legitimate public purpose”. It said conflict of interest processes before the election were “inadequate and allowed projects with conflicts to be nominated”.
The committee alleged the office of the premier, Chris Minns, “unlawfully redirected” $6.4m away from projects originally nominated – against the government’s own guidelines.
The report alleged there were “attempted changes” for the electorate of Sydney made after consultation with the independent member Alex Greenwich.
Greenwich, who is not accused of any wrongdoing, told Guardian Australia he was “proud to have advocated for funding for homelessness services in the Sydney electorate”.
Burton, who was described as a “hostile and unreliable witness” in Tuesday’s report, told the inquiry the funding for Sydney was that originally proposed.
The report states: “However, this was only the case because ‘corrections’ were made following Ms Burton’s interference in the list that saw the member for Sydney’s preferred projects be fraudulently put forward as Labor election commitments.”
The report alleged Burton had “coached” Mills to give non-answers and take questions on notice with no intention of answering them. Both were accused of breaching obligations under the NSW Office Holder’s staff code of conduct.
The report alleges that Graham breached ministerial obligations and misled parliament, including when he said all commitments were made before the election, and when he told the inquiry that the program office had received agency advice against assessing all electorates for conflicts of interest.
A witness from the office told the inquiry that agency advice was that it could be done, but Graham had directed it not to.
The inquiry has recommended that the state’s Electoral Act, which it described as “vague and ineffective”, be amended “to prevent unethical election campaign promises and pork barrelling”, and that the government adopt the recommendations of the audit office in relation to the LSCA program.
In a statement, Graham said the government “rejects this report in its entirety”.
“It is a desperate political hatchet job by partisan politicians who have spent the past year harassing and threatening ministerial staff and now demand the power to arrest anyone they wish,” the minister said.
Burton and Mills were contacted for comment through the premier’s office.
In response, a government spokesperson referred to the audit office’s assessment and said it would “not be indulging the conspiracy theories in this report and the ongoing harassment of staff, particularly junior staff”.
