Tony Abbott’s Victorian budget rort exposed. First it was the $8.8 billion in extra funds for the Reserve Bank (which was never needed, despite Joe Hockey’s alarmist justifications in late 2013). Then there was $1.5 billion slipped to the then-Liberal government in Victoria on June 30, 2014 by then-prime minister Abbott. The total of these two odd payments is $10.3 billion, and they boosted the 2013-14 budget deficit to $48.5 billion.

The $8.8 billion RBA payment has been fought over and is no longer an issue; it just added $8.8 billion to federal debt. In fact, the RBA is now returning billions of dollars to the federal budget, not from that payment, but from the profits generated by the 30%-plus fall in the value of the Aussie dollar. The full details of how the $1.5 billion payment was made surfaced yesterday in a report from the National Audit Office. The report makes it clear that the former PM was behind the payment to Victoria on June 30, 2014. It was the first half of a $3 billion payment the Abbott government had promised to make to the Liberal state government for the controversial (and now aborted) East West Link road project. — Glenn Dyer

Tony Abbott’s role exposed. In his report, federal auditor-general Grant Hehir​ revealed Abbott personally approved payments for both sections of the road, signing over half the money, $1.5 billion, on the last day of 2013-14 to maximise the budget deficit pain in Labor’s final financial year. And, in doing so, the audit report found Abbott ignored clear advice from the federal Department of Infrastructure and Regional Development that the money was being paid well in advance of project needs, which suggested the decision was taken for political purposes, in the absence of any rigorous assessment.

“The approval of funding had been given by the then Prime Minister sometime between 7 May and 12 May 2014. The usual process for obtaining the required statutory approvals is for DIRD to brief the relevant Minister on its analysis of whether the proposal is in accordance with the legislated requirements prior to a project approval instrument being signed. That did not occur on this occasion.”

The auditor-general further reported that the $1.5 billion, making for an additional multimillion-dollar cost to the Commonwealth.

“The decision to provide $1.5 billion in advance provided budget presentation benefits to the Government by bringing forward the payments which resulted in a larger budget deficit for 2013-14. None of the $1.5 billion in advance payments had been spent by Victoria prior to the cancellation of the East West Link project. Interest earned on the advance payments to the end of October 2015 is estimated to have been more than $49 million.”

— Glenn Dyer

But wait, there’s more. The way the $1.5 million was paid over has made it very hard for the federal government to get the money repaid by Victoria. The audit report reveals:

“The non-legally binding nature of the agreements signed with the Victorian Government meant the Commonwealth was unable to rely on those documents to require the advance payments to be returned when the project was cancelled. In September 2015, the Department of the Treasury obtained legal advice on how Victoria could be required under the federal financial relations framework to repay the $1.5 billion in advance payments. The advance payments had not, as of October 2015, been recovered from Victoria.

“The ANAO has not made any recommendations in relation to entity advisory processes given the audit found that the funding decisions had been informed by well-considered departmental advice, and that Infrastructure Australia’s assessment processes had been bypassed. The ANAO has made one recommendation to the Department of the Treasury for it to commence action under the federal financial relations framework to recover the advance payments from Victoria.”

So there was no problem with the Department of Infrastructure and Regional Development’s advice and performance. The problem lies with the Abbott. The Australian Financial Review and The Age reported the story this morning. The Australian (where Abbott seems to pop up weekly with an opinion piece) seems to have missed the story. And will the Herald Sun bash Abbott over the needless payment of $1.5 billion (and the $49 million in forgone interest) like it had been bashing Premier Daniel Andrews over the decision to junk the project? Not quite. Last week, Andrews was splashed on the front page for his part in the “$1.1B CON”, as the Hun had it. Today, the auditor-general’s report damning Abbott’s role in the fiasco was tucked away on page 10. — Glenn Dyer