4.1
Concerns were raised by submitters and witnesses about the lack of consultation with states, local councils and industry experts prior to site selection and funding announcements for the Commuter Car Park Fund (CCPF), echoing the findings of the Australian National Audit Office (ANAO).
4.2
The ANAO found that the Department did not engage with the states, did ‘not put in place a process for engaging with states and councils on the identification of candidate projects, nor did it recommend a process to the Minister’—but that it did engage these stakeholders during the funding approval and delivery stages.
4.3
This chapter details the consultation which took place around CCPF projects and considers the impact of inadequate consultation on the feasibility and costs of the projects. The chapter also discusses the governance arrangements and investment principles around the CCPF, the lack of a competitive process, and the need for a better legislative framework around the administration of the UCF.
Engagement with states
4.4
The ANAO observed that the records indicated that ‘there was no material engagement with states on the identification and selection of commuter car park projects, other than with New South Wales’. In correspondence to the ANAO, it was made clear that numerous state agencies and state Ministers were not consulted with regard to the selection of the car park commitments, with one state Minister writing to the Department expressing ‘disappointment’ and concern over the lack of consultation.
4.5
Evidence provided by the Department supports this view, with Mr David Hallinan, Deputy Secretary, noting that as it goes through the process of scoping each of the projects, the Department will then have:
… the evidence base on which to make the assessments of each project. As they were announced, the projects had not been determined in detail or scoped in detail by proponents. For this one, we need to await that time frame, that process to undertake, in order to get the full detail.
Engagement with local government
4.6
Regarding councils, the ANAO found that there had been ‘no engagement at any level with some councils prior to a project in their local government area being announced’. The ANAO advised that:
The department did not engage with councils to identify candidate commuter car park projects. There was engagement with some councils by some of the Federal Members or other ‘colleagues’ that put forward candidates for funding consideration … The records indicate that the ‘colleagues’ had consulted with, or sourced information from, at least seven councils for 16 of the car park sites put forward but are unclear as to whether these councils were aware of the UCF funding request.
Submissions of Councils
4.7
The committee sought the views from local councils on the matters relating to the commuter car park scheme. The committee specifically asked councils:
how any carparks nominated for their local government area aligned with their strategic planning frameworks; and
if the council was consulted prior to any announcements under the Fund.
4.8
The committee wrote to 24 local councils inviting submissions but received responses from only five—all from councils in Victoria.
4.9
The committee received a mixed response from councils as detailed below. Some councils submitted they had been consulted prior to the CCPF announcements by the Federal Government (Moorandah, Boroondara and Knox City Councils), and others suggested they had not been consulted at all (Cardinia Shire and Hume City Councils).
4.10
The Moorandah City Council advised that its Commuter Car Park upgrades at Croydon, Heatherdale, Heathmont and Ringwood were consistent with the Maroondah City Council Parking Framework and confirmed that the Council ‘actively sought funding for and suggested suitable sites’ for its carparks, all prior to the funding announcements made under the CCPF.
4.11
The Boroondara City Council noted that its position on the proposed construction of commuter car parks was ‘guided by its Integrated Transport Strategy’, a key objective of which is to ‘facilitate improvements to and better integration of all forms of public transport’. Boroondara advised it was working on car park projects relating to Canterbury and Glenferrie Stations, both of which were consistent with the Council’s strategic planning frameworks. With regard to consultation, Boroondara Council submitted that:
Council Officers provided feedback to the office for the Member for Kooyong in March 2019 with respect to sites in Boroondara.
Representatives from the Department of Infrastructure, Transport, Cities & Regional Development sought Council Officer views on the four project locations proximate to Glenferrie, Camberwell, Canterbury and Surrey Hills railway stations in October 2019.
4.12
Knox City Council noted the announcement and allocation of Commonwealth funding for the expansion of commuter car parks at the train stations at Boronia and Ferntree Gully aligned with the Council’s Community Investment Plan and the Boronia Renewal Strategy. Turning to consultation, the Council advised that it had:
… received notification of the [CCPF] proposals in early 2019 and engagement occurred with the local Federal member, the Federal Department of Infrastructure (DOI) and relevant state agencies. For both sites, it’s worth noting the existing railway carparks are located on State Government land (managed by VicTrack and the DoT).
4.13
The Cardinia Shire Council provided information in relation to the ‘Beaconsfield and Pakenham Railway Stations commuter car park upgrades, both of which have (completed) or are expected to have (planning phase) benefit from funding allocated from the CCPF’. The Council advised that:
The upgrades that have been undertaken to the commuter car parking at Beaconsfield Railway Station and those proposed at Pakenham Railway Station do not go against and are not in conflict with Council’s strategic intentions for these sites.
…
No formal consultation was undertaken with Council prior to the announcement of commitments under the CCPF. For both Beaconsfield and Pakenham Railway Stations Council was informed by the Level Crossing Removal Project (LXRP) that the upgrades were to occur. Council did not have input in the planning, design, or delivery stage for the upgrade at Beaconsfield Railway Station and has to date not yet been involved in the planning and design of the Pakenham Railway Station upgrades.
4.14
The Hume City Council provided information on the commuter car parking upgrade at the Craigieburn Railway Station. The Council pointed out that additional parking at the Station ‘was identified as an advocacy priority in Hume City Council’s Council Plan 2013-2017’. However, there was ‘no consultation with Council prior to the Australian Government’s publicly announcing funding’ for the car park upgrade. The Council further observed that:
Prior to the announcement of Australian Government funding for parking at Craigieburn Railway Station in April 2019, the Victorian Government had announced car park funding for the same station in April 2018 via their Car Parks for Commuters program.
Risks of inadequate consultation
4.15
The ANAO noted, at Budget Estimates, that insufficient consultation had resulted in the benefits of co-funding not being realised, given most of the CCPF projects were now being wholly funded by the Australian Government due to lack of support from delivery partners, including states and local councils.As Mr Brian Boyd of the ANAO noted:
It's very hard to have a program where there’s co-funding when the person you’re looking to contribute the co-funding hasn’t been engaged in the selection of projects.
4.16
Mr Boyd noted that under the CCPF, there were 11 projects where a delivery partner was not coming forward with a project proposal, 23 where—as of July 2021—there has been some scoping work, but no delivery work, and two projects cancelled. Mr Boyd suggested that the approach to ‘selecting candidates for funding hasn’t led to a program being delivered in a timely and effective manner’.
4.17
The ANAO summarised the risks of this approach in its audit report:
Risks associated with identifying projects without engaging delivery partners include that selected projects would not be: feasible given site constraints; feasible within the funding commitment; supported; or co‑funded. Each of these risks was realised.
4.18
The NGAA similarly made an important point about risk in the way the CCPF project rollout had been executed. The NGAA noted that the situation ‘transfers considerable risk to local government’, because local government is:
… bound to spend considerable time and effort trying to secure additional Federal funding for a non-priority project. It also transfers reputational risk to local government, who as the closest level of government to the community, will be implicated in the project’s non, partial or delayed delivery.
Views on consultation
4.19
Several submitters and witnesses expressed considerable concern over the CCPF rollout and the extent of consultation with local government areas on the choice of locations for commuter car parks.
4.20
Parking Australia said it was ‘frustrated’ by the delivery of the CCPF, noting that the car parking industry seems to have been ‘ignored’ when it comes to providing local information on ways to delivery CCPF projects in a timely and cost‑effective ways. Parking Australia expanded on this point, noting that:
The industry has expertise in both car park construction and parking technology to ensure that the car parks are built cost effectively and efficiently with the correct technology installed to achieve the program’s stated objectives.
… More innovative construction methods would see the time of disruption greatly decreased, construction time significantly reduced and commuters being able to access the car parks sooner. All this at no additional cost, in fact they would be cheaper. This can be demonstrated by reviewing the tender submissions for the Berwick train station commuter car park.
4.21
In terms of industry expertise, Mr Stuart Norman, Chief Executive Officer of Parking Australia, told the committee that he and two members of the board met with Minister Tudge in May 2019, and had two subsequent meetings with the Minister, where they discussed ‘how the industry could avail itself of these [CCPF] funds to provide the best possible outcome for motorists and the commuter’. When asked whether these views and the experience of Parking Australia was taken on board, Mr Norman said:
No, we’ve been completely ignored by the former minister and the current minister.
4.22
Similarly, the National Growth Areas Alliance (NGAA) informed the committee that it had repeatedly sought clarification on how local government could best work with the Commonwealth to ‘ensure the Fund would be allocated to projects most likely to “bust congestion” in Australian cities’. However, the NGAA advised that:
No avenue for consultation was identified as the Fund’s distribution clearly remained a decision solely for the then Minister for Population, Cities and Urban Infrastructure.
By July 2019, NGAA was concerned when advised by the then Minister that three quarters of the $4 billion announced for the Fund had already been allocated, and that responsibility now sat with relevant jurisdictions to deliver the project.
We were particularly concerned to be advised that the Minister did not have a complete list of all projects allocated funding, nor was a clear role for the federal bureaucracy established.
Advice from our Member Councils indicates that very few car park projects had been identified as local priorities and that, in the majority of cases, the announcement of project funding took Council by surprise.
4.23
The NGAA concluded that the process for selecting sites was ineffective and inappropriate, given the lack of consultation and transparency in the decision‑making process.
4.24
The NGAA found the lack of local consultation prior to the allocation of project contracts to be concerning. The NGAA suggested that this had resulted in ‘vastly underfunded projects’ which would either deliver a reduced number of car park spaces, or in ‘sub-optimal outcomes which will prove unstainable in the long-term’.
4.25
In appearing before the committee, Ms Bronwen Clark, Executive Officer at the NGAA noted that due to the lack of consultation, ‘the biggest barrier councils are facing now’ is a lack of clear ownership of some of the projects. Ms Clark explained that:
Sometimes the funding announced was insufficient to build fit-for-purpose car parks, and so other funding then needed to be sourced. That leads to, as it should, a number of parties being involved in the construction and delivery of the car park, but without a clear owner. Some councils are now in this chase of trying to find out who's taking a lead on particular projects.
For example, there was one which was allocated, funding was announced, but then it was allocated as a level crossing removal site by the state government in Victoria. Another one was where an arterial road was being duplicated, so the car park space was actually going to be on a road at some point in the future.
4.26
While Parking Australia argued that allocating funding following engagement and feedback with local members or candidates did ‘have some merit’, it did question whether this feedback was from a ‘large enough sample of elected members and/or candidates’. Parking Australia observed that local members have ‘a very good understanding of their electorates and are regularly receiving feedback from constituents regarding local issues, including parking’.
Merit criteria and non-competitive processes
4.27
The ANAO confirmed to the RRAT committee that the UCF more broadly—not just the CCPF—was not open to applications from stakeholders, with no application process in place.
4.28
The ANAO also found that the 47 CCPF sites were selected for funding commitment using a non-competitive and non-application‑based process. The ANAO concluded that:
There was no call for submissions under the UCF and no information on the department’s website as to how candidate projects would be identified. The ANAO examined the authorisation process for, and the timing of, the selection decisions taken in respect of the commuter car park projects.
4.29
The Department advised that it had proposed to the Minister’s office a ‘non‑competitive submission process but that ultimately the Government agreed on alternative governance arrangements’.
4.30
The Department suggested that this approach was not new, drawing attention to the fact it had ‘previously adopted non-competitive processes, in combination with transport modelling and stakeholder consultation, as a means of project identification’. By way of example, the Department pointed to the National Faster Rail project.
4.31
The Secretary of the Department, Mr Simon Atkinson, also suggested that it would be ‘unusual’ under national partnership arrangements to ‘have an open, competitive process’. He noted that this approach more aligned with grant programs, and the CCPF isn’t a grant program.
4.32
Additionally, the Deputy Secretary, Mr David Hallinan, told the committee that the ‘consultation process was done internally to the Commonwealth, with priorities identified at the Commonwealth level’, and that the Department ‘largely wasn’t involved in the project selection process’. Mr Hallinan did concede that the process to select the sites as part of the UCF was ‘certainly unusual’.
4.33
The Department provided advice at Budget Estimate about its work with delivery partners, once agreement had been reached on projects with states and territories. The Department would then ‘go through a feasibility studies process and get a project proposal report developed by the states’. This scoping work would inform ‘costs and delivery time frames’. The Department would then:
… brief the minister necessary to get those decisions made. The states would then get into the delivery stage of that project, should the Commonwealth wish to deliver those projects.
4.34
This evidence from the Department was challenged by the evidence of the ANAO. For example, Mr Boyd informed the RRAT committee that it wasn’t that Ministers ‘weren’t asked to decide upon an open and competitive approach’; rather ‘it was the Department of Infrastructure arguing that what should be put to government isn’t a competitive, open and transparent approach’.
4.35
The ANAO noted that decisions of government were instead taken from January to July 2019, and put in place as follows:
effected in 38 cases (81 per cent) by the written agreement of the Prime Minister to a written request from Ministers;
effected in seven cases (15 per cent) by election commitment processes; and
in two cases (four per cent), the Department had not evidenced how the funding commitment was effected, beyond email advice from the Minister’s office and a media announcement by the Prime Minister (See Box 3.1 for details).
4.36
The ANAO could not satisfactorily determine why the Department did not have a merit-based and open application process, especially in light of the fact that the UCF, and the CCPF in particular, were relatively new initiatives as the ‘Commonwealth doesn’t have a long history of funding car parks at railway stations’. Mr Brian Boyd of the ANAO made clear to the RRAT committee the lack of proper processes in place at the Department around the CCPF, saying that the risks involved became more apparent when the ANAO began looking at how the Department was examining eligibility:
When we looked at how the department was going about that work, we saw there were no procedures in place as to how you would assess the eligibility of a car park. The actual assessment reports didn't even address eligibility; it was covered off fairly briefly in a covering minute. It was almost saying it would be eligible under this section of the act without anything underpinning it to demonstrate that the department had actually properly turned its mind to that. For us the ultimate fail there is when you look at the Doncaster project, where the department had to agree with us in the course of our audit that, yes, it's not eligible currently. They are saying they will look to make some legal changes so that it will be eligible before construction commences, but that doesn't change the fact that it's been approved under the NLT Act but was not eligible at the time that it was approved.
Box 4.1: Case Study – Commuter Car Park at Mitcham (electorate of Deakin)
The Mitcham CCPF project was allocated $15 million, with the aim of delivering 500 car parks.
For the two sites without complete evidence—Gosford and Mitcham—the ANAO explained that the ‘departmental records of the authority for their selection was incomplete’ and for Gosford, it was ‘not evident at which point in time the project was authorised’. Upon requesting the evidence for the authority to select the Gosford site, the ANAO was provided with:
… a copy of the joint media release by the Prime Minister and the Minister for Urban Infrastructure dated 7 February [2019] (announcing funding for six sites including Mitcham) and advised:
There is precedent established by the Department for the Prime Minister and Cabinet that a media announcement by the Prime Minister constitutes relevant authority to progress a project.
The ANAO confirmed that it asked the Department for any further evidence about how the Gosford and Mitcham decisions had been made, but the Department could not provide any records indicating ‘the executive government decision-making which led to the press release’. When asked about changes made to the Mitcham site (being swapped for the Heatherdale site), Mr Brian Boyd of the ANAO told the committee that there was:
An internal email saying they had approval from PMO that they could make the change, but to us that still didn't give us a record of government decision-making. It's people referring to a decision having been made, but we were looking for the actual record of the decision.
… [The Department] said a formal note would be circulated, but we couldn’t find a formal note, and the department couldn’t provide it to us.
The Department confirmed that the Minister’s office had emailed it on 31 January 2019, advising that the PMO had given approval for the site. The Department assumed it did not have a copy nor had seen the email directly from the Prime Minister—only the email from the Infrastructure Minister to the Department. The Department took the view that it ‘is not a new thing for prime ministerial media releases to be considered by the Public Service as authority for a decision from the Prime Minister’.
At the RRAT Budget Estimates hearing on 19 July, the Department asserted that the Prime Minister only approved the authority to progress the CCPF project. The Department later clarified on notice that:
The advice to the Department was via email from the Minister’s office in the context of a pending announcement of commuter carpark upgrades. Authority for the Department to start engaging with the State on delivery is provided by the media release from the Prime Minister with funding committed to the project confirmed in the context of the 2019-20 Budget.
When asked whether the ANAO had previously seen a decision of government like this—where $15 million funding had been approved by only a press release, the ANAO advised that:
That sort of approach is more akin to what we often see with election commitments. Over time, we've audited election commitments, including programs established solely to fund election commitments. That's not uncommon in that sort of world, but when we're well before caretaker, and government decision-making is proceeding as per usual, no that's not something you expect to see.
Governance arrangements and investment principles
4.37
The ANAO observed that in lieu of merit selection criteria and program guidelines, ‘the governance arrangements for the UCF agreed by government in October 2018 included a set of investment principles that were to be publicly released’. The principles were as follows:
focussed on investment on high value works;
smaller scale and co-funded projects ($5 to $50 million but with no upper limit set);
project selection and design driven by evidence;
the initiative should encourage innovative solutions; and
projects should support wider urban development.
4.38
However, the ANAO pointed out that the investment principles were not released—‘an approach inconsistent with transparency and accountability in funding decision‑making’. The ANAO made further inquiries of the Department about release of these principles and reported that it was:
… unable to identify a subsequent decision taken to withhold public release. The ANAO therefore asked the Department of Infrastructure in November 2020 for a copy of the records of the Australian Government’s decision not to release the UCF investment principles. The department’s response of December 2020 indicated that no decision to withhold release had been taken.
As the entity responsible for program implementation, the Department of Infrastructure should have proactively engaged with the Minister on a process for releasing the investment principles.
4.39
Mr Boyd further made the point that the investment principles ‘could have been used to develop merit criteria to assess applications, but they weren’t’. Instead, ‘particular people in particular places’ were asked what they would like to see funded, ‘without an attempt to align that up against the investment principles for the program’.
4.40
The ANAO in its audit report also made several observations about the fact that the Department did not ‘suggest that the Minister (or the Australian Government) record the basis for selection decisions’. The ANAO elaborated:
Nor did the department assist the Minister to record an assessment of the merits of candidate projects against the UCF investment principles or policy objectives. For example, the department could have provided an assessment and/or selection template to complete so as to facilitate transparency and accountability in decision-making (as the department has done when administering other funding programs).
4.41
Submitters were critical of the non‑competitive process used by the Government to identify and fund projects.
4.42
Submitters such as the Centre for Public Integrity (CPI) found it ‘alarming’ that, for example, authority for one of the car park sites appeared to be a press release from the Prime Minister. The CPI said the use of such authority to allocate taxpayers money should be abandoned ‘in favour of more formally documented practices’.
4.43
The CPI provided strong commentary on the allocation of CCPF funding under the non-competitive process, saying:
It is verging on incomprehensible that upwards of $660 million of public money could be expended without any published guidelines, eligibility criteria or merit criteria, and via a process that was not competitive.
4.44
The CPI also pointed to the finding of the ANAO that while the CCPF is not a grant program, payments made under the Fund share many characteristics of grants. The CPI was of the view that there was ‘no persuasive reason for not extending the application of the CGRGs to cover payments such as those made under the UCF…. There is every reason to do so if integrity is to be achieved’.
4.45
Similar views were put forward by Professor Richard Mulgan, who submitted that:
Ministerial decisions will always be influenced, not necessarily improperly, by calculations of political advantage. Conversely, departmental officials should always defer to political direction, but subject to the proviso that they adhere to rules and regulations.
4.46
Despite this, the Professor was the view that even under the CGRG framework, ministers have not been held properly accountable for their decisions, as evidenced by the CCPF and the community sports infrastructure program, nor had ministers been pressed to show that their decisions were fair and in the public interest.
4.47
Further, Mr Tony Harris considered that the CCPF’s ‘seed of misfortune’ commenced with flawed advice that the $660 million component of the UCF for the CCPF ‘did not need a competitive process’. Mr Harris argued the rationale for this decision was ‘nonsensical’, with the adopted process allowing ministers to ‘select projects based on conservations with ‘relevant stakeholders’’—Mr Harris suggested that ‘in the main, stakeholders were those whose political connections were shared by ministers’.
4.48
Mr Harris further submitted that Minister Tudge claiming the CCPF projects were selected on merit was an ‘assertion without evidence’. Mr Harris continued that all the evidence showed:
… that the decisive need mentioned by Mr Tudge was the political need of a government facing a general election. What is surprising is that only 77% of projects were in Coalition electorates.
4.49
Mr Harris made strong comments in his submission, suggesting that the CCPF had been ‘managed … corruptly and ineptly’, with the public service choosing to ‘ignore illegalities’ and thus abandon its duty ‘to advise ministers of the law and proper processes: the wishes of ministers trumped good government’. Mr Harris further argued that the CCPF showed that ‘when ministers choose to act unethically and illegally the Australian Public Service becomes a co-conspirator’.
4.50
Transparency International Australia (TIA) pointed to the fact that a majority of funding was directed to ‘Liberal-National Party held federal seats, and the funding was not directed towards the area’s most in need’. The TIA concluded that:
The distribution of the selected projects reflected the geographic and political profile of those identifying candidates for funding consideration. In short, it is our view that public funds were misappropriated and misused for political purposes.
Committee views
4.51
The Department’s argument that the government’s non-competitive and non‑merit‑based process is ‘not unusual’ for national partnership agreements does not stack up.
4.52
These processes generally involve, at least, consultation with state and territories, and councils in local government areas in order to align the objectives of all levels of government and to secure willing delivery partners. States and local councils should have been afforded the opportunity to put forward project suggestions under the UCF framework which would align with their existing infrastructure and transport strategies and would actually go some way to addressing congestion in urban areas.
4.53
The results of the failure of the adopted process are clear, with delivery partners not coming on board, projects being scrapped and cost blowouts. It has also resulted in projects being approved without any clear indication whether the projects will actually deliver the outcomes for commuters and local communities which have been promised.
4.54
These failures point to the clear lack of evidence which would allow consideration of the merit of each proposal. The ANAO makes clear that the government, and therefore the Department, is working backwards—selecting the projects and then trying to develop an evidence base to argue the projects are needed and will reduce congestion.
4.55
Good governance demands open and transparent processes wherever possible. It is clear to the committee that the commuter car park projects could have been selected and progressed through calling for submissions and considering each case on its merits. Instead, the process adopted did not seek to consider any analysis of proposed sites nor were any feasibility studies completed. If proper process had been followed, it seems far more likely that the government could have found willing and able delivery partners and not have had to cancel projects or increase funding allocations.
4.56
It is also concerning that the ANAO could find no clear records indicating how projects were selected against UCF investment principles and policy objectives.
Legislative framework
4.57
All the evidence before the committee calls into question how any minister could made decisions under the NLT Act regarding infrastructure investment programs and urban congestion funds. As noted in Chapter 1, the NLT Act requires that the Minister must consider the following when approving a project under section 11 of that Act:
the results of any assessment of the economic, environmental or social costs or benefits of the project;
the extent to which the project is likely to improve access for communities to services and employment;
any transport or land use plans that might be relevant to the project; and
the extent to which persons other than the Commonwealth propose to contribute funding to the project.
4.58
In addition, the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the associated Rules stipulate that a Minister must not approve expenditure of relevant money, unless satisfied it is a proper use of relevant money. While there are some requirements on the Minister to record the approval of expenditure, there is a lack of transparency over this process—particularly when the Minister reports to the Finance Minister about approved grants in their own electorate.
4.59
The committee therefore recommends that the Government commission a review into the legislative framework provided by the NLT Act and the PGPA Act in providing authority to a Minister to approve funding for infrastructure projects. The review should also put forward recommendations for how the NLT Act could be strengthened and enforced, to ensure that there are consequences for the misallocation of public money.
4.60
The committee further recommends amendments to the PGPA Act, to provide for reporting and tabling requirements for certain grants and expenditure. These amendments would address those instances where a Minister approves funding which has not been recommended by officials, or, does not meet relevant selection criteria, or has been approved by a Minister who is a Member of the House of Representatives, for a grantee in their electorate.
4.61
The committee recommends that the Australian Government conduct a review into the National Land Transport Act 2014 and the provisions regarding Ministerial approvals for infrastructure projects and programs as part of the Urban Congestion Fund. The review should evaluate whether the Act has adequate provisions regarding:
the investment principles and project selection process; and
transparency, accountability and enforceability measures for infrastructure project identification and selection.
The review should put forward recommendations for legislative amendment where necessary to strengthen the transparency and accountability of the NLT Act and ministerial decision‑making.
4.62
The committee recommends that the Australian Government introduce a bill to amend the Public Governance, Performance and Accountability Act 2013 to provide for reporting and tabling requirements for certain grants and expenditures, which have been approved by a Minister based on an application which an official has recommended should be rejected, or does not meet relevant selection criteria, or which have been approved by a Minister who is a Member of the House of Representatives, for a grantee in their electorate.