We publish this Hansard speech to alert readers that a Senator has expressed serious concerns on Local Government Corruption in Queensland.
We await further developments with this matter and will publish news on this subject as information becomes available.
Senator ROBERTS (Queensland) (21:45): As a servant to the people of Queensland and Australia, on this budget day I will address corruption in Queensland local government—corruption that is ripping off millions of dollars of Commonwealth and state taxpayer money and local ratepayer money. We cannot afford corruption at any time, especially not in today’s economic climate. The corruption in Queensland local government is systemic and criminal to the extent that people are essentially stealing from taxpayers and ratepayers. Government-provided taxpayer moneys are redirected, not spent on their intended purposes, not spent at all or corruptly provided to persons in exchange for overvalued materials and service.
The Natural Disaster Relief and Recovery Arrangements, NDRRA, governs disaster-recovery funding. The Australian government reimburses 75 per cent of the cost of the works and the state government reimburses the other 25 per cent of the cost of the works. Emergency Management Australia administers NDRRA funding on behalf of the Australian government. The Queensland Reconstruction Authority and Emergency Management Queensland coordinate the NDRRA funding in Queensland. Councils regularly rort this arrangement with the assistance of the Local Government Association of Queensland, the LGAQ, through several of its business entities, including Local Buy.
Take, for example, the Tablelands Regional Council. It made a claim for road damage which allegedly occurred during severe weather and flooding in February 2016. No disaster event was declared—in fact, the dates council provided were not consistent with any particular event at all. Local residents confirmed there was no damage to the road during that period—no damage. The council directed that sections of a perfectly good, undamaged road be dug up. It was replaced with inferior materials at half the cost claimed for specified suitable replacement material. This was coupled with shoddy workmanship. All parties to the project knew that the road was substandard, dangerous and would fail, yet it was signed off as satisfactory and completed. Council correspondence states that the road would be expected to have a design life of 12 years; this road did not last 12 weeks. And this is not an isolated example; similar practices have occurred under previous administrations in the Central Highlands, Fraser Coast and Charters Towers regional councils, as well as Carpentaria and Cook shire councils.
The councils and the LGAQ are facilitating and encouraging a system where contractors fraudulently make unreasonable profits on road building. They fraudulently claim payments and strip 40 to 60 per cent out of NDRRA project funding as private profits. They do this inferior work using road materials of substandard quality from private and unlicensed quarries. The net result is fraudulent expenditure on roadworks that has rorted millions of dollars in Commonwealth and state moneys. Substandard materials and works also contribute significantly to more rapid deterioration of local assets. These rorts mean that taxpayers pay up to 40 per cent more than they should.
Substantial misuse of Local Buy contracts contributes to the fraud.
Local Buy is a wholly LGAQ owned company, set up with the stated aim of meeting the needs of local councils and with a procurement process that arranges contractors to fill council contracts. In reality, it’s a way to rip off ratepayer money, especially where the complaints processes and the anticorruption body, the Crime And Corruption Commission, the CCC, are so ineffective. Local contractors are often sidelined when contracts are given to outside contractors who don’t satisfy the required standards. Once Local Buy gives a contract to a contractor, a percentage of the contract price must be paid to the LGAQ for arranging the contract through Local Buy. The Local Buy concept is widespread and is clearly a front to gouge profits of up to 60 per cent from ratepayers’ money. The LGAQ protects Local Buy.
Corruption by Queensland council members is a reality, and the number of Queensland council members and officers convicted and jailed in recent years is the proof. This, though, is just the tip of the iceberg. In recent times, corruption in local government seems to have been centred on Ipswich, arguably the corruption capital of Queensland. Former Labor mayor Paul Pisasale was convicted of extortion and related offences and jailed. His successor, former mayor Andrew Antoniolli, with close connections to Labor, was convicted of multiple fraud charges. Fortunately, though, former state MP Jo-Ann Millar and honest Ipswich locals like Gary Duffy and his wife, Conny Turni, worked hard to expose this corruption. Yet they were thwarted at every step and bullied at every step. The corruption has been linked to the Queensland Labor state government. After 16 years of Jo-Ann Millar’s hard work, the entire Ipswich city council was sacked and court proceedings against individual councillors and officers remain ongoing—there are so many of them.
This level of corruption is not isolated. Our sources from right across Queensland confirm this. We have many examples. In Logan City Council, seven councillors and the mayor were charged with corruption and conspiracy offences, and the entire council was sacked. A common link to this local government corruption has been the Local Government Association of Queensland, the LGAQ, a private company limited by guarantee, which many people think is a government instrument, but it’s not. The association’s principal activity is said to be representing Queensland local governments in their dealings with other governments, unions, business and the community. What makes the Local Government Association of Queensland unique are the special statutory provisions that made the LGAQ virtually unaccountable for their actions. Under rule 234 of Local Government Regulation 2012, a council is exempt from calling contracts to tender or calling quotes ‘if the contract is entered into under an LGAQ arrangement’. This includes a contract made with the LGAQ. Every contract the LGAQ enters involves a substantial fee being paid to the LGAQ. It is the classic cartel arrangement, prohibited in every other state except Queensland, where rule 234 legalised it. Rule 234 must be repealed to ensure transparency and integrity.
As for audits, under section 591 of the then Labor government’s Industrial Relations Act 1999, LGAQ Limited are exempt from appointing an auditor to inspect the accounting records and issue an audit report, as is usually undertaken under the Corporations Act 2001. There is no independent audit. The LGAQ is a powerful organisation that is well protected from revealing the murky side of operations. How such an organisation can have such wide exemptions from integrity checks and balances must be explained and remedied. The Queensland Labor government has failed the people of Queensland—again. It is equally difficult to break through the corruption when incriminating evidence is disclosed to authorities who do nothing to stop the corrupt practices. Much of this information has been disclosed in the Queensland state parliament and directly to the CCC, which, inexplicably, declined to investigate. Many complaints to the CCC about a council are simply referred back to the council to investigate itself: no problems found; complaint resolved. Really?
The LGAQ must be brought to account. The LGAQ is supporting, if not directly funding, the current fabricated proceedings brought by its CEO, Mr Greg Hallam, against former state member of parliament the courageous Mr Rob Pyne and Queensland resident Ms Lyn O’Connor as an attempt to silence or punish them for challenging the LGAQ practices.
It’s hard to argue that, while these corrupt councils have rorted the finances of the Commonwealth, the state and taxpayers, ministers for local government, including former minister for local government Ms Jackie Trad, have been blind to the extensive corrupt practices going on around them. Wilfully blind? The mechanics of the corrupt practices are known and they’ve been brought to the attention of authorities. The ministers for local government cannot say that they are unaware yet still do nothing. This is corruption. It must stop. Tomorrow I will submit a motion calling for a Senate inquiry into the corruption in Queensland local government that has cost—and, unless stopped, will continue to cost—millions of dollars of Commonwealth and state moneys, all ultimately paid by the taxpayer. It’s estimated that stopping the corruption will halve council rates, a huge saving every year for honest, hardworking Queenslanders.