CHAIR (Senator Forshaw) —I declare open this hearing of the Senate Finance and Public Administration References Committee, which is inquiring into the administration of the Regional Partnerships program and the Sustainable Regions Program. Today we will be hearing evidence from two individuals. Firstly, we will hear from the Hon. Bob Katter, member of the House of Representatives. We will also hear further evidence from Mr Peter McDade, who previously appeared in Cairns.

I know Mr Katter is aware of the rules and principles of parliamentary privilege, including the requirement that all evidence given to the committee be truthful. We prefer our hearings to be in public but, if witnesses wish to go into private session anytime, they can make that request and we will deal with it at that time. We decided at an earlier hearing that evidence given by all witnesses to this inquiry should be given either under oath or by way of affirmation.

Before we begin with Mr Katter’s evidence, I indicate to members of the committee and the public that it will be necessary for us to adjourn if we have not concluded at about five to six for approximately 20 to 25 minutes. Some of us have commitments at that time. We will resume at around 20 or 25 past six and go through to conclusion.

CHAIR —Welcome, Mr Katter. I understand you wish to make an opening statement and provide some material to the committee by way of overhead projection. I understand you have provided us with copies of those slides. Is that this document that you have provided?

Mr Katter —Yes.

CHAIR —We will formally receive this as part of your submission. I now invite you to make your presentation to the committee.

Mr Katter —Before I say what I have got to say, I refer to today’s announcement of the resignation of Mr Anderson. Obviously he was the minister administering this portfolio, and some of the things I am going to say here will reflect very harshly on his administration of this portfolio. Would anyone here desire that I come back on another day?

CHAIR —No, not at all. We have set today to hear your evidence. Mr Anderson is still a member of parliament; he is resigning, as I understand it, as deputy prime minister. I do not think that affects the conduct of this hearing in any way. I do remind you, and as a member of parliament you will be well aware of this, that this committee is bound by the standing orders of the Senate as if this were a meeting of the Senate, and adverse reflections may be regarded as disorderly. Let us get under way and hear your evidence.

Mr Katter —Having dealt with that issue and the request for postponement, I say that Mr Beazley considered that the events in Kennedy were important enough to mention the seat of Kennedy in the third paragraph of his first address to the Australian people. He said that $6.5 million was spent to win that seat, compared to our puny little $68,000, and that it was indicative of what had taken place in the election campaign. So, the Leader of the Opposition clearly thought this matter was of great import, and I do not hesitate to say to the committee that the resignation of Mr Anderson four hours before I came before this body is more than coincidence. In my experience of 31 years in politics, there have been very few coincidences. He knew that I was going to come here, and he knew what I was going to say. All the figures that I am going to be presenting today are available to him. The fact that there will be a great wave of sentiment for him today does not lead me to withdraw from putting on the record what I believe is the right and proper thing to be put on the record.

Senator BARNETT —On a point of order, Chair: the witness is not addressing the terms of reference; he is making reflections on the Deputy Prime Minister and the character of the Deputy Prime Minister that I find offensive and I draw the witness’s attention to the terms of reference.

Mr Katter —I think if you went over the words that I just said, you would find the honourable senator’s statements are fairly foolish. I do not meant to be disrespectful to you, Senator, but—

CHAIR —Let us get on with hearing the evidence.

Mr Katter —All right. But I want to demonstrate the determination, which is the context of this submission, to win the seat of Kennedy, which received a lot of national attention. We spent I do not know what it was, about $68,000—whatever it says in the reports. We spent $5,000 on our road signs and we counted between 20 and 30 of their road signs for every one of ours. That is $100,000 on road signs alone, so we estimated that they spent in excess of $300,000. You have to be very determined to win a seat to spend that amount of money.

Having said that, I think the important issues here were delineated by John Hewson when he was Leader of the Opposition, on 21 November 1993:

Referring to Minister Ros Kelly, he said:

Not my words; the words of the then Leader of the Opposition. The Auditor-General’s statement concerning this matter, which creates a precedent for the issues which we are dealing with today, was very succinctly put by the Sydney Morning Herald on 20 November 1993:

Direct involvement of the minister is a matter of public record, which will be shown in due course. The article continued:

The journalist at the Sydney Morning Herald replied:

My third and final quote along these lines—we are following precedent in this place, as we do in our courts—is from Mr Costello, the current Treasurer and member for Higgins, on a matter of public importance, from Hansard on 17 November 1993:

On 23 February 1994, Mr Costello quoted an article from the Sydney Morning Herald:

Mr Costello then continued:

The events of today resonate when one reads that. Remember this was prepared five or six days ago. I had no knowledge whatsoever of what the relevant minister would do.

The Auditor-General Audit Report No. 9 1993-94, page 10, dot point 2, says:

That is going to pale into insignificance in light of what I am going to put on the board very shortly. Ros Kelly was then stood down as a minister—whether it was by the Prime Minister or of her own volition, who knows? She was subsequently forced to resign from parliament. As a long-serving and ultimately senior minister in government, let me state for the record that the people of Australia, through their duly elected parliament, allocated moneys for a purpose—appropriation is the technical, legal word. I do not know whether anyone here has served as a minister, but you had better bear that in mind if you do become one. The money is appropriated for a particular purpose. If that money is used for some other purpose than for which it is appropriated, then such wrongful use is a breaching of the Constitution and the laws in a democracy. The capricious and discretionary use of money by the Crown is the most flagrant breach of the laws under which a democracy operates.

The Regional Partnerships program was money allocated by the parliament to help regional communities. If the money was used for primarily political purposes, then the most serious of questions hangs over the minister’s head. The worst aspect of this sorry affair is that such similar questions may not really worry a person who has lost a quarter of his representation in this parliament whilst his Liberal colleagues have gone from strength to strength. An honourable man would have fallen on his sword, but then an honourable man would not have so used this fund—would he? That is the question that the Australian people have asked and have called upon you to adjudicate, Mr Chairman. That is the important nub of the issue. If the gentleman has fallen upon his sword today, then I congratulate him for it—he has done a decent thing.

Senator BARNETT —You made a reflection that I would like to clarify. You said that the Deputy Prime Minister has fallen on his sword today.

Mr Katter —I said ‘if he has’.

Senator BARNETT —You are saying ‘if he has’?

Mr Katter —If he has as a result of this issue.

CHAIR —Excuse me—

Senator BARNETT —I just want to clarify what the witness said. I did not hear—

CHAIR —You will have an opportunity to ask questions. Mr Katter, please proceed.

Mr Katter —That is a question for the senator to answer, not really for me. If I made some comment to that effect, I withdraw it.

Overhead transparencies were then shown—

Mr Katter —I am going to put a map up on the board. I come from Queensland, and the National Party only really exists in New South Wales and Queensland. Obviously I relied upon the Queensland figures. Seats held by the National Party of Australia and the National Party target seats, which were Capricornia and Kennedy, received on average $5½ million. The remaining 22 seats in Queensland received less than half a million dollars per seat. ALP seats in Queensland received $81,000 per seat—so things are a bit uncomfortable if you are an ALP person in Queensland!

It is important to note—and it was more than surprising to find out—that Brisbane and its environs received much of the grants money. If anyone is sitting there saying, ‘What about all the Brisbane members?’, Brisbane got very substantial grants, although obviously not too many of them went to the Labor Party. I have limited staff and resources, so I could not go into all the details, but I am sure this scenario would look much uglier if we did have the time. If Brisbane and its environs are ‘regional’, what in Australia is nonregional?

This is important. The National Party—and I would expect Senator Barnett to raise this issue—disproportionately represents rural and regional seats, so naturally it should get more money than the ALP, which may represent more city seats. Therefore, to achieve a balanced and objective assessment, National Party seats that are similar in size and remoteness need to be compared to non-government seats that are of comparable size and remoteness.

I have tried to pick some seats to compare. The ALP seats are all very small, so I had to pick National Party seats that were very small. The only three in Queensland were Dawson, Wide Bay and Hinkler, which is the most marginal seat in Australia. So those were the three seats I picked. The last two are pretty handy to Brisbane and the other one takes in the Whitsundays. That is a very beautiful spot and I do not think they are suffering from great remoteness or pain. I could not really find three ALP seats of comparable size, so I took Calare, Hunter and Lyons. They were the only three I could find of similar size. We just thought, ‘Let the cards fall where they may.’ Then I took three National Party seats of comparable size in New South Wales: Page, Cowper and Lyne. We tried to get nine seats of roughly similar size and roughly similar remoteness.

Before I go into that, I of course represent Kennedy, shown in a golden colour. I also took the three biggest seats in Australia to see how the government conducted things in them. I just took the three biggest seats and let the cards fall as they may. It may have been that the figures were not very good for me—and, in fact, in this case the figures were not good at proving my case. The three biggest government seats are Kalgoorlie, Grey, and Maranoa in Queensland. The three biggest Labor seats are Lingiari, Lyons—again—and Capricornia. The three government seats—Maranoa, Kalgoorlie and Grey—got $12½ million whereas the three ALP seats got $7 million. That is a bit lower than the Ros Kelly ratio.

CHAIR —We have the difficulty that we are sitting whilst the Senate is sitting. The division bells are ringing in the Senate, so we will suspend until we return following the division.

CHAIR —The committee is resumed. Mr Katter, you were in the process of making your submission.

Mr Katter —I was mentioning that we took each party’s three biggest seats in Australia. The government ones get $12.5 million. The three biggest ALP ones got $7 million. That is about a 72 per cent difference. Ros Kelly presided over an 82 per cent difference, so the government comes up a bit better there. To illustrate the point, I picked the three biggest on both sides to compare them. There is a hell of a disparity between Lyons, for example, and Kalgoorlie. I thought it was fairer to take nine seats and analyse those. I picked on the map ones that were about the same size. We will move to that now.

CHAIR —Just so it is clear for anyone reading the Hansard in the future, when you say ‘the biggest seats’ you are talking about area, not population, aren’t you?

Mr Katter —Area, yes. Mine is the biggest in population, or it was.

CHAIR —I know what you are saying but other people may not.

Mr Katter —It is in area, yes. These are comparing like with like. If you look at the map over there and have a look at these seats, three of them are on the New South Wales coast: Page, Cowper and Lyne. There are Hunter and Calare. Calare is an Independent seat; it is non-Labor. Lyons is in Tasmania, and I could not find any other comparable seat. But if you have a look at the map they are roughly about the same in area, so these were very comparable seats. Their distances from capital cities were also very similar, so we are now comparing like with like.

Non-government seats get $2.7 million. A National Party seat in New South Wales gets $10.5 million. A National Party seat in Queensland gets $18 million. Those are staggering figures. When one considers why Ros Kelly was tortured out of the House of Representatives and then looks at these figures, the events of today may come into focus. I do not want to kick a person when they are down but I was asked to come along here. This was prepared. Should I pull it out because that person resigned? He resigned four hours before I came into this place to present this information to this group.

This is the most important thing I have to say today. The last group is a comparison of Ros Kelly and John Anderson. I have already told you about the Liberal Party’s judgment upon Ros Kelly. I read out at the start what they believed should happen to Ros Kelly. Are they going to be consistent? We had the sporting facilities program; we have the Regional Partnerships program. The average value of grants to a Labor seat in the sporting facilities program—and I read this out earlier; it is from the Auditor-General—was $257,000. Non-government seats got $141,000. There was a discrepancy of 82 per cent. I have not got the resources to do this for all of Australia but in comparable seats—and that is much more difficult because you have to choose the comparable seats as it would be unfair to the National Party otherwise—coalition seats got $9.5 million per seat and the non-government seats got $913,000, a difference of 928 per cent.

If you think that I cherry-picked those seats, you go to the map and you pick out some seats for me, and I will tell you that one seat you might pick out is New England and those figures will look worse if you do. That was another target seat. I will leave that map on the board, because that is why I am here today. It is disgraceful and it is the only word that could describe that performance. I hope that anyone here, if they become a minister, would never be responsible for that sort of operation.

When the Deputy Prime Minister dubbed these icon projects, his wording was right—they were: ‘I con.’ If the icon projects were put in the figures for the Regional Partnerships program, the figures would show Mr Anderson’s performance as demonstrating that, compared to him, Ros Kelly was a Sunday school teacher. In a wider perspective, the Deputy Prime Minister spent in Kennedy—most of it, arguably, in an election context—$6.5 million on Regional Partnership programs and $18 million on Sustainable Regions programs. There were five regions in Australia but Kennedy was selected as one of them, so I watched Senator Boswell running around handing out the $18 million worth of cheques, most of the time with the candidate in tow. There was another $200 million in road grants that suddenly dropped out of the sky on the eve of the election. They were things that should have been done years ago. They were screaming out to be done, and I do not want to bore the committee with those detailed issues.

The vast bulk of those announcements were made on election eve, as often as not with the candidate in tow and in the photograph, whilst the member of parliament for the area—me—was uninvited and unadvised. This turned many of the grants, whilst quite good in themselves, into shabby little political charades, grossly embarrassing many decent recipients. The results of the last election proved Senator Boswell wrong, when he said after the election—and this is very relevant; it may sound political, but it is not—that the people of Kennedy voted with their hearts, not their heads. Just the opposite was true. In Kennedy, the fishing and tobacco industries are all but abolished. Dairy, peanuts and maize have been seriously damaged. Bananas and sugar are in a desperate situation as a result of government deregulation, the government-AQIS action and transport ministers’ continuing opposition to mandating ethanol.

If 200,000 people in Kennedy can, for example, be cheated out of $1,500 a year by an artificially high dollar and it can be camouflaged by the Deputy Prime Minister and Senator Boswell, who describes himself as the real member for Kennedy, running around like Santa Claus doling out hard-earned taxpayers’ money—they were Mr Costello’s comments about Ros Kelly—then this indeed is a very bad day for democracy. The government has interest rates 100 and 500 per cent higher than in the USA, which has facilitated a rise in the Australian dollar, cheating primary producers of 30 per cent of their income. If, in spite of such reality, people could be bought off and beguiled by a hand-out system that would provide an illusion of largesse and generosity to the bush, obfuscating the destruction that government policies were wreaking upon these people then it would be a sad day indeed.

However, the National Party still does not accept that people will not be beguiled by trinkets and baubles into giving up their hard won businesses and land—not without a fight, anyway. Australian politicians already have a lower public approval rating than politicians in any other OECD country. If nothing is done about this unconscionable use of public moneys then all I can say is: we deserve that reputation and worse. The icon item strategy was a manoeuvre to make the fund more respectable. Big ticket items were taken out and called icons, so that it looked better. It still looks dreadful, but it was made to look better. Would Ros Kelly’s big ticket items, if they had been called ‘special needs’ have made her actions any more respectable? No. Whatever wording with which you close the improper decision making process, it remains an improper decision-making process, because it was based upon significant political consideration, not a needs consideration.

Finally, it is one thing to present the smoking gun, which is up on the blackboard there, but it is another thing to indicate motive. I cannot go into all of the handouts in the Kennedy electorate—some of them were very good, and we are deeply appreciative of those handouts—but one of the two that have received nationwide publicity is the Buchanan Park example in Mount Isa. Whether it is good or bad I do not know because I have never been provided with any of the detailed information. The marketing plan is still not a public document. I venture to submit that nobody could make a decision in a position such as I am in. On a visit the Deputy Prime Minister had to the north-west, the manager of the newspaper—

CHAIR —Could you identify, for the record, what it is you are referring to.

Mr Katter —These are a series of articles from the North West Star delineating that the candidate in the last election got Mr Anderson to come out and wanted him to give $5 million to Buchanan Park, a project in Mount Isa for racing, rodeoing and the show. The National Party candidate is mentioned in this first article and there is a picture of Mr Anderson. The manager of the newspaper was a campaign director for the National Party member of parliament in the seat of Mount Isa, so he has had a close history with the National Party. Whether he is giving them a rails run or not, it would appear so most certainly from this series of articles.

On 15 July 2004, there is another picture of Mr Anderson and another reference to the candidate and Buchanan Park—‘A Vision Splendid’. On 4 August, in the Stargazer column headed ‘Submission a work of art’, the manager of the newspaper again praises Mr Anderson and says, ‘Funding consideration for the project will fall under the Regional Partnerships program.’ I emphasise that because it is argued that if these are icon projects, that is something different. Never at any stage was the Buchanan Park money to be anything else except Regional Partnerships program money. The only reason that suddenly it half transformed itself into an icon project was to doctor up the figures. There is no other reason. But at all times it was referred to as a Regional Partnerships program. It is referred to in that article.

Again, on 9 August, there is a lovely photograph of the Deputy Prime Minister at the rodeo and he is saying it is a very important event and he will look ‘very favourably’ upon giving the money, or words to that effect. In the Stargazer column, again done by the same manager of the paper, there is reference to this project with a lovely photograph of Mr Anderson taken by one of his staffers here at Parliament House. All the way leading up to the election, every two or three weeks, Buchanan Park is a flag that is waved on behalf of the political aspirations of a political party. ‘Anderson delivers on Mount Isa complex’ is the headline on 20 September, and again there is a lovely photograph with him and the National Party candidate. Finally, on 21 September, a few weeks before the election, there is a final photograph of him with the National Party candidate.

The reason that I have emphasised that is that this was a political decision. I am saying thank you for $5 million for the Kennedy electorate, but was there due diligence? In the bigger frame of things, can it be argued that it was the sort of thing that the Regional Partnerships program would go for? The Hassell and Associates and Alderson Landscape Architects proposal formed the basis of the applications. When I first saw this, I was quite taken aback. On page 8 of the report, referring to racing, it states—

CHAIR —Could you identify for the record the report you are quoting from?

Mr Katter —It is the Hassell and Associates and Alderson Landscape Architects proposal for Buchanan Park.

CHAIR —You will provide us with copies of what you are quoting from?

Mr Katter —Absolutely.

CHAIR —Sorry, the committee has received a voluminous amount of material. But could you provide copies of what you are quoting from.

Mr Katter —I do not really have all that much here. This is the proposal that was put to the government. It said:

This report is saying that racing is going down the chute in Mount Isa. They may have put some nice trees around and landscaped it to improve the look of the place, but I do not know whether that is going to bring people back. My father was a great racing man but he went there to bet; he did not go there to look at the trees. There might have been some improvement, but to put in a proposal and then say that one of the major aspects has gone from 25 days to 15 days is a crazy way to ask for $5 million.

With respect to the rodeo I again quote from page 8 of the Hassell report. It said:

I would argue with that, but this is the report based upon which the government handed out $5 million. They handed the money out for the rodeo when the report said it was in decline and they handed money out for racing which the report said had gone from 25 days a year to 15 days a year. We are talking here of nearly $10 million of state or federal government funds.

Before this money was given out, the third area—the show—had been cut from three days to two days. Obviously, there must have been a problem with numbers. So all three activities had declined. I would argue with the report about the rodeo. I am not a racing man so I could not talk about racing but I would question the report with respect to the rodeo. But the report was the basis upon which the government parcelled out the $5 million.

There has been a refusal to release the marketing report to the public, and there are some growing worries in Mount Isa that they will have the upkeep on what looks like rapidly turning into a $15 million project. There is an awful lot of money now required from the ratepayers, in a little town of 20,000 people, to do the upkeep on what will be, on the current rate of increase, a $15 million project—it was $9 million, then $10 million and now it is $11½ million. They have not started work on it yet and already the figure is $11½ million. The council in Mount Isa has the Hard Times Mine. That is a very ambitious project which is costing the local ratepayers a very large sum of money. It looks as if it may be seven figures a year, from the way it is framing up. And they have very high water charges because they are out in a very dry place.

Was this all assessed? There are some very serious questions being asked about whether it was assessed. You need to look at it in the political context of week after week of program and promotion. Suddenly, because he could not fit $5 million in, he had to dream something up and call it an ‘icon project’. That is the issue of Buchanan Park but, as I said, I will not sit here all day going into case after case.

CHAIR —We cannot be here all day. We need to get to questions.

Mr Katter —I turn now to the A2 Milk case. Senator McLucas was heavily involved in exposing a lot of what took place. A lot of these things were done behind my back and I really did not know about them. The Mayor of Malanda said in the paper that he did not know anything about it, that it was extraordinary that the money was given out—the article refers to a senior DPI public servant—and that it could threaten the local Malanda factory. We have one factory right out in the middle of nowhere. It was employing 300 people. There are only 110 farmers left after deregulation—we have lost maybe a third of our milk throughput—and along comes someone proposing that we should lose another huge amount of that milk.

A factory processes. It produces whey, butter and milk. From my understanding of it A2 Milk does not process; it just gives you milk. It does not turn it into something else; it does not manufacture. I will not read out all of these newspaper articles—we do not have time—but in every one of these articles every single important person in the area says, ‘Hey, hold on a minute; if you take more milk away from this factory is our factory going to survive?’

There might be 200 jobs associated with it. I do not think that anyone was claiming for a minute that there were going to be any more than about 20 or 30 jobs in the A2 Milk factory. As for the fact that they were going to pay 50c a litre, I just have to say that I have enormous difficulty in believing that, if everyone else was getting 30c or whatever and the claim is that it was 50c. Once again, A2 Milk was fast-tracked to benefit farmers. The minister admits it was fast-tracked. Again, the candidate is there having his photograph taken with the minister handing out the money. Why was it fast-tracked?

CHAIR —Mr Katter, I do not know whether you have provided us with copies of those newspaper extracts. Would you do that at the conclusion of the hearing?

Mr Katter —Yes, most certainly. If you lose 30 per cent of your throughput, everyone has to be asking questions about your viability. All of us were very worried. It says here that the director of A2 Milk, Lindsay Stewart, told about 60 farmers they would receive 50c a litre. I can assure you that those 60 farmers would have taken the 50c a litre, and that would have been more than half of the farmers who are left servicing the factory.

If the minister, the processing officials or anyone had spoken to anyone locally, they would have known that this was a very serious situation indeed and should not have been taken lightly. But they ploughed on. What was not known at the time—and I think Senator McLucas may have had something to do with it getting the publicity—was that at the time the grant was made the matter was before the courts. A2 Milk was being prosecuted by none other than the state health department. A government instrumentality was actually suing these people, saying that their claims were erroneous. If they lost the case they would be blown to smithereens. They did lose the case and they were blown to smithereens. But to make a grant to an operation when the whole operation is effectively before the courts is extraordinary behaviour. To do it when your existing plant is seriously threatened is extraordinary. To do it without discussing it with anyone locally is extraordinary. Why was all this done? We know why it was done. It was done so that they could win the seat in the forthcoming election.

CHAIR —Could you wind up, Mr Katter? We do want to get to questions. I am not trying to frustrate your evidence.

Mr Katter —No. I am in winding-up mode now, Mr Chairman. Are there any questions that you wish to ask?

CHAIR —I am sure there will be questions from senators. Perhaps we will go to questions. I think all senators have the basis of your submission.

Mr Katter —I think that I have covered all the things that I wished to cover.

CHAIR —We have indeed heard evidence on some of the issues that you have just raised, particularly A2 Milk. That is not to prevent you from giving us evidence as well but senators are familiar with some of those issues that have been raised. Can we go to questions?

Mr Katter —I just want to put it on the record that I do not want in any way to denigrate the people that were involved in taking the A2 initiative. Some of them were really excellent people who acted out of the best of motives—the local people, I am talking about; I do not know anything about the company people. Similarly, in Mt Isa with Buchanan Park, some of the people there—not all of them—were acting out of the best of motives in trying to do this. And who can blame them? We have a government that is operating on the basis of saying, ‘If you ingratiate yourself to us and there is a political benefit for us you can get the money.’

Senator O’BRIEN —Thank you for appearing before the committee, Mr Katter. A written submission has been made to this inquiry in the name of your office. Should we accept that submission as being made in your name?

Mr Katter —Yes. I was undergoing heart surgery at the time.

Senator O’BRIEN —I want to discuss the A2 Dairy Marketers matter. Under the heading of ‘Examples of grants of concern’, the submission from your office refers to that grant based at Millaa Millaa in your electorate. Did Mrs Kelly talk to you about the A2 project before she approved it?

Mr Katter —Yes. I have had a friendship with the member for a long time. She rang me up 40 minutes before the grant was made. That call enabled her to say she had discussed it with me. I was two hours away—and she knew that—so I could not get there for any handover ceremony. I am certain I would have thought of attending, because I knew just how serious the matter was. She told me it was really excellent for my area and it was quite obvious to me that she knew all about it and there was very little point in me telling her anything at all. The telephone conversation was extremely brief. It might have taken half a minute.

Senator O’BRIEN —It was about 30 seconds?

Mr Katter —I think it was, yes.

Senator O’BRIEN —That was, as you described it, less than an hour before she made the announcement?

Mr Katter —Yes, most certainly. I looked at my watch and thought, ‘Should I get up there and maybe raise a bit of Cain?’ But there is no way in the world you can get from Innisfail to Malanda or Atherton or wherever it was in that time period. Senator McLucas would back me up on that.

Senator O’BRIEN —So your view, when you were told, was that this grant should not be made?

Mr Katter —No, at the time I knew very little about it; it dropped straight out of the skies. No-one from A2 had been near me. I knew very little about it except what I had seen on Four Corners one night, and I thought the scientific case had definitely not been made. Even though I was at a very great distance from the events, I happened to know that the scientific case was not made. That was my opinion, but nobody asked me. I did not know there were any handouts pending.

Senator O’BRIEN —Did anyone else, for example Mr Anderson, discuss with you the potential of this grant being made?

Mr Katter —Absolutely not. I do not like the way the government dumps on the junior ministers—

CHAIR —Mr Katter, you said ‘absolutely not’. I do not want to prevent you from putting your evidence, but at the same time we will get through it a bit quicker if you can answer the questions succinctly.

Senator O’BRIEN —Commenting on the propriety of one minister versus another probably will not help us, but I understand what you are saying. Had anyone from Mr Anderson’s department contacted you about the potential for this grant?

Mr Katter —No. According to these newspaper reports the local mayor, who was also the local DPI officer, was never contacted; none of the QDO people, who are elected representatives, were contacted; none of the state officials from QDO or Dairy Queensland were contacted. Nobody was contacted at any stage—most certainly not the factory.

Senator O’BRIEN —Did the proponents of A2 ever talk to you about seeking funding?

Mr Katter —No, not at any stage.

Senator O’BRIEN —What about Mr Ken Crooke? Did he ever talk to you about the project?

Mr Katter —No, not at any stage.

Senator O’BRIEN —But you know who Mr Ken Crooke is?

Mr Katter —I know Ken very well. Ken is an honest person. I think this was probably done to ingratiate them with Ken because he is a powerful and influential figure in the National Party. I think there are other games being played here and that Mr Crooke is innocent.

Senator O’BRIEN —At one stage he worked for A2 Milk as an adviser, and some would argue that he worked contemporaneously for Mrs Kelly.

Mr Katter —I find it quite extraordinary when disclosure does not take place in such a case as this. You do not go to a ministers school when you become a minister, but one assumes you have a certain sense of what is right. I do not have to go to a ministers school to realise that is unconscionable.

Senator O’BRIEN —Did the Far North Queensland Area Consultative Committee talk to you about the A2 Milk project?

Mr Katter —No, not at any stage. According to the newspaper reports they did not speak to anyone else in a position to know. I knew the situation at the factory very well.

Senator O’BRIEN —We have some other evidence, which I guess we will rely on. You have produced some interesting material, which we are yet to see, about what the newspapers were saying. Did the project have any chance of delivering any sustainable outcomes for dairying on the Atherton Tableland?

Mr Katter —I was very sceptical. The scientific case was not made out. The basis on which the project was going ahead was not going to happen, in my opinion, in the longer term. Why anyone would pay 50c a litre for milk when they did not have to seemed extraordinary to me. The very mention of 50c, for anyone who is cognisant of the dairy industry, would have raised eyebrows. I have been taken for a ride many times, but the minute I heard them talking about 50c a litre I was reaching for my branding iron, I can tell you!

Senator O’BRIEN —You thought it was too good to be true.

Mr Katter —It was always too good to be true. It was ridiculous.

Senator O’BRIEN —You have talked about the announcement. You did not get invited to it; you were told about it in circumstances which made it impossible for you to attend. In your submission you say that the involvement of The Nationals candidate was irregular. Why would you describe it as irregular?

Mr Katter —There was no scientific case. There was no discussion with anyone that you would normally discuss these things with. There was the most dubious of statements that they were going to pay 50c a litre. There were 60 people there. If 60 people were going to move over, there would be only 110 suppliers left. Clearly, the dangers to the factory were huge. You must understand that Malanda and Millaa Millaa are towns that exist just because of that factory. If the factory closes and they go to cattle fattening, there is no money there at all. Cattle fattening brings nothing into an area.

Senator O’BRIEN —In her statement announcing the grant, Mrs Kelly congratulated the local community on working together to get access to project funding. What community support for the grant do you know about?

Mr Katter —I was reading the newspaper reports late last night and it seemed to me that everyone who was anyone was trenchantly opposed to it. I am not blaming the locals, who thought they might get 50c a litre. When people are desperate you cannot blame them for trying anything at all that might come along. Good on them. But I could not see how, from a government point of view, any minister, much less the Deputy Prime Minister of Australia, could have been a party to decision making of that type.

Senator O’BRIEN —Your submission, on page 3, refers to the Strategic Opportunities Notional Allocation guidelines. I think the department says that they are the Strategic Opportunities Notional Allocation procedures, but let us take them to be the same thing. Can you tell me when you first became aware of these secret SONA procedures?

Mr Katter —I do not want to come before your committee and say that I knew things when I did not know them. But I was in the National Party for six years and there was clearly setting in a culture of the grossest irresponsibility. I had been in a government where all the ministers had interviews with the police about once a fortnight, but I did not need to be told what was proper and what was not proper. There was a feeling here—and it is always a temptation in government—that: ‘It’s your money; you can do with it what you like.’ The attitude was: ‘If you want to win a few seats, let’s throw a little money around.’ I am not saying that governments do not do that, but if you want to do that, you want to make sure that you can justify it on the basis of sound advice. It is not sound advice when the thing is before the courts.

Senator O’BRIEN —I am just trying to find out when you first heard about the Strategic Opportunity Notional Allocation guidelines or procedures.

Mr Katter —You mean the Regional Partnerships?

Senator O’BRIEN —Yes, under the Regional Partnerships program. If you do not recall, that is fine.

Mr Katter —I cannot say that I honestly recall.

Senator O’BRIEN —That is fine.

Mr Katter —I was aware of them and we urged people, in the newspapers, to put in applications. We said, ‘If the government’s handing out money, you’ve got to get in and make the applications.’ So I constantly urged people to get in and make applications. I am very disappointed at some of the projects that were knocked back.

Senator O’BRIEN —Your submission says that the potato growers co-op on the Atherton Tableland—

Mr Katter —Senator, I am sorry; I did not answer your question.

Senator O’BRIEN —No, you did not.

Mr Katter —Probably about four or five months before the election, in my opinion, that fund had been converted to what the politicians and ministers saw as a sort of political slush fund. I do not hesitate to use those words, and I will use them again: they had increasingly come to—

CHAIR —I think you made that point, Mr Katter. There are some specific questions being asked which we need to get answers to.

Mr Katter —Mr Chair, I do not know if I understand the committee. But, if you are asking whether I understood that backroom manoeuvrings were taking place, the answer is no, not at all.

Senator O’BRIEN —No, I am asking about a part of the program which in evidence we had before us was part of the administrative process and which had—I think this is the best way I can describe it—the effect of overriding some limitations published guidelines had in the way that funding could be allocated. That, we now know, was called the strategic opportunities notional allocation procedures. My specific question is: did you know about that? When did you know about it?

Mr Katter —No, I did not know about it.

Senator O’BRIEN —Okay. Thank you.

Mr Katter —I did not know about a lairy name or an actual process. But, if you had asked me whether it was being done on the basis of politics, it was clear that that was exactly what was happening.

Senator O’BRIEN —Your evidence is that you thought at the time that there might be something nefarious happening, but you were still not aware of how it was happening.

Mr Katter —No, I was not. I was in the mushroom club.

Senator O’BRIEN —The submission from your office says that the potato growers co-op on the Atherton Tableland faces bankruptcy because two processors, CosRock Pty Ltd and Barron Bella Farms Pty Ltd, received a competitive leg-up. Is that a reference to the Sustainable Regions grant to CosRock of $555,000 and to Barron Bella Farms of $275,000 in 2003?

Mr Katter —I am well aware of the situation with the potato growers cooperative. I had a series of meetings with them, before I had the heart attacks, because their situation is really desperate. There was an allocation of moneys to the potato growers. In relation to the people that got the allocation of money from the government, again, I would have thought that the first thing you would do would be to discuss it with the local growers cooperative and ask their opinion. They might have been very negative, but to proceed without asking them and finding out whether or not it would threaten the existing cooperative seemed to me to be grossly irresponsible. I think, again, that the applicants there quite genuinely thought that they could do something that as it turned out—as it would appear from just reading the media reports—they could not. But you could have been told that if you had spoken to the potato growers cooperative. Again, I had no idea this was going on. All I was doing was picking up the pieces afterwards.

Senator O’BRIEN —Is your concern about the competitive neutrality issues?

Mr Katter —It is with whether one hotel gets it and another hotel does not, whether a drying plant here gets it and a drying plant over there does not, or whether one potato processing plant gets it and another does not. I would have thought that those were the guidelines and no-one could vary from those guidelines. Look at Tolga Woodworks. One of my staff is related to the person involved there. The proposal is to build another one over the road. How fair is that to the existing operator? This was occurring continuously. I was playing catch-up football. This was all happening in the election time. It was happening at a million miles an hour during the election time. Also, again, a lot of these things I did not know about.

Senator O’BRIEN —The CosRock project is described as the establishment of an export quality potato grading and washing facility, but your submission says that that company has sold potatoes locally and used imported potatoes to fill export orders. How do you know that to be the case?

Mr Katter —I did not prepare that submission. I was very sick in hospital undergoing surgery and I had to rely upon a person who is a very senior public servant. He was my chief of staff at the time. He has been deputy head of a government department and is very competent. I relied upon his activities, and I trusted him to the point where I was prepared to put my name on the submission. I cannot honestly answer in detail there.

Senator O’BRIEN —So that information was given to you by your chief of staff?

Mr Katter —I would be very surprised if he had not fully substantiated that. Our staff are very heavily involved in the tablelands and that area. We know everyone there. If something is happening there, we usually know about it.

Senator O’BRIEN —I would appreciate it if you could give us some further information to substantiate that matter, if not today then on notice.

Mr Katter —Yes.

Senator BARNETT —I want to clarify something with regard to Senator O’Brien’s question and Mr Katter’s response. Mr Katter, you said earlier that you took authority and responsibility for this submission. It says ‘from the office of the Hon. Bob Katter MP’, and you said that you stand by your submission, but now you have responded to Senator O’Brien by saying that you are not sure about certain evidence that is in the submission.

Mr Katter —No, what I said was that I was in hospital.

Senator BARNETT —Can you clarify for the record whether you stand by every word in your submission?

Mr Katter —I cannot stand by something I did not do and did not have the details of when it was submitted. There is no way in the world. Anyone who does that is telling fibs and projecting themselves in a dishonest manner. I have been open and honest. I was in hospital at the time and I was told that I was not to have any stress. We desperately wanted to put in a submission—it would have been very remiss of us not to—so I simply had to trust that person. He had been a senior staffer with the Queensland government for many years.

CHAIR —I probably should have asked you at the outset if there were any additions or alterations to your written submission.

Mr Katter —Original submission.

CHAIR —I apologise for not doing that, but I think it would be appropriate for you to at some stage advise the committee of any matters in that submission that you wish to withdraw or clarify. I think that is the best way to handle it.

Mr Katter —I have a staff of four or five. My resources are very limited.

CHAIR —At the end of the day, we are responsible for our own submissions and comments in the parliament, just as we know ministers ultimately have to take responsibility for the actions of their staff where they know about them or have instructed them to act.

Mr Katter —Yes.

Senator O’BRIEN —One of the tasks of this committee is to recommend appropriate changes to the administration of regional funding programs. Can you tell me what role you believe local members of the House of Representatives should play in the administration of the Regional Partnership and Sustainable Regions programs—for example, in relation to, but not limited to, any consultation process?

Mr Katter —I would have thought the three tiers of government should play a role. An agreement is about to be made that the three tiers of government should be involved. That is not something any of us like to do, because it is just an extra work burden, but at the very least they should be consulted. A minister protects his own back if he consults with them. As a minister, I always endeavoured to do that, if for no other reason than so I was acting in a proper manner and could be seen to be acting in a proper manner.

Senator BARNETT —Mr Katter, you are here as an Independent federal member for Kennedy and you are a former member of the National Party. Can you clarify how many years you were the member as a National Party member?

Mr Katter —Since I was 14.

Senator BARNETT —But how long were you a federal member for The Nationals?

Mr Katter —I do not know how many years I was in for the National Party—maybe six or seven years. You would probably know better than I do when I resigned from the National Party. I was there for many years, if that is the question you are asking.

CHAIR —You served in the state parliament in Queensland too, didn’t you?

Mr Katter —I was a senior minister. I was the third-ranking minister on the government side.

CHAIR —As a National Party member?

Mr Katter —Absolutely.

Senator BARNETT —Then there was a falling out and you turned Independent.

Mr Katter —I had policies that I had been brought up with, and it was improper for me to stay in a party whose policies were the exact opposite of the ones I believed were needed and that had formerly been the party’s policies. I joined a party that had certain policies and then they had the exact opposite policies, so it was right and proper to resign in those circumstances.

Senator BARNETT —When was that?

Mr Katter —Three or four years ago. I have run two elections as an Independent, so it would be four years ago.

Senator BARNETT —You made some incredibly severe and serious allegations in your earlier submission to us about the National Party and specifically about the Deputy Prime Minister, John Anderson. Those allegations go directly to the reputation, credibility and honour of the Deputy Prime Minister. Do you agree with that?

Mr Katter —I said, ‘If he was an honourable man he would do this,’ or words to that effect. He did so today, so my ultimate judgment of him would be that, if not before, most certainly at the end he was an honourable man, and I respect him for that. I am not here today to kick him to death.

Senator BARNETT —Just to clarify for the record, earlier you said that the Deputy Prime Minister, John Anderson, resigned today because he was aware that you were about to make this submission to our inquiry.

Mr Katter —I do not think those are the exact words that I used. But I most certainly do not resile—

Senator BARNETT —Can you clarify for the record exactly what you did say?

Mr Katter —If I am to say it again, I would say that, from my experience in politics, coincidences do not exist. The minister knew that I was coming before this tribunal. He knows those figures exist and he knew that they would be disclosed today. I presume we would have got a lot of media attention but now, since he resigned at 12 o’clock, there are no media people here at all.

Senator BARNETT —Did you hear Mr Anderson’s reasons for resigning?

Mr Katter —Yes, I listened very closely.

Senator BARNETT —And you totally discount or disagree with them?

Mr Katter —I am not coming here to badmouth him; I am coming here to say that he presided over a process that was disgraceful. In relation to accountability in government, there is only one thing you do when you have those sorts of figures up on the board.

Senator BARNETT —But that is exactly what you have done. You heard Mr Anderson today. You obviously disagree with his view or his version as to the reasons.

Mr Katter —All those things that he said today could be true.

Senator BARNETT —But you have just told us that his resignation is in large part because you are here presenting your submission today. You have been around politics and in the game for a long time, and you do not see it as a coincidence that you are presenting your submission today and he is resigning today.

Mr Katter —No, I do not think it is. I have said that four times.

Senator BARNETT —We have that pretty clear.

CHAIR —Order! Mr Katter, you have made your point about your view of possible reasons for Mr Anderson’s resignation. Senator Barnett has asked questions about it, but at the end of the day I am not sure that the announcement today is specifically relevant to the terms of reference. It may be relevant to one aspect, but let us deal with the substantive evidence.

Senator BARNETT —I would like to. I want to finish on a question, though, because the witness did discuss this at length in his introduction and opening comments. I just want to clarify, Mr Katter, your view of Mr Anderson’s motives and whether he is an honest, honourable man. Based on the evidence that you have put to us today and what you have said earlier, you believe that he is not and it is a charade.

Mr Katter —With all due respect to the honourable senator, I read out what his deputy leader, the Treasurer, said concerning Ros Kelly. I read out what the leader of the Liberal Party said about Ros Kelly. Whether you want to accept the figures that are put on the board or race around and get another set of figures that disprove that is up to you. I have put the figures on the board. There is a massive case to be answered there. You make the decision on whether he is honourable or not.

CHAIR —Senator Barnett and Mr Katter, you have canvassed for about the last 10 minutes the issue of what may have been people’s and witnesses’ views about the motivations for Mr Anderson’s resignation. I think we need to move on to some of the more specific issues that are being raised because, frankly, at the end of day, Mr Anderson has announced his resignation as a minister today—that is a matter of public record. Mr Katter has given his views about that; you have your view, Senator. At the end of the day they are subjective views. Let us get on to the evidence.

Senator BARNETT —Let me ask the question germane to Mr Katter’s earlier submission. I will just repeat what Mr Katter said so he can clarify it for the record, if he wishes to. He did refer to the Regional Partnerships program being used, and I quote, as the ‘minister’s slush fund’—correct?

Mr Katter —Yes—what is the question?

Senator BARNETT —Did you use those—

CHAIR —He did—that is on the record, Senator Barnett. Can you ask the question that follows on from that.

Senator BARNETT —Let us clarify it for the record: what do you mean by the ‘minister’s slush fund’? Can you clarify and expand on your definition of the ‘minister’s slush fund’?

Mr Katter —I do not know what I said.

Senator BARNETT —That is what you did say.

Mr Katter —I do not have the text with me here, but I am going to say to you that if you are using money for political purposes that was appropriated by the parliament it may well be that I would use a lot stronger language and much more serious language. I would think that you, as a lawyer, should appreciate that if money is appropriated for one purpose and is used for another purpose, then there is a name for that sort of behaviour. I should not have to tell you, as a lawyer, what that name is. But I did not come in here to sling mud; I most certainly came here to see that this sort of disgraceful behaviour does not occur again. If there is some way to do that other than kicking the people that were responsible for it, I would like you, Senator, to tell me about it.

Senator BARNETT —Mr Katter, you are aware of how the Regional Partnerships program works. Are you familiar with the fact that a project proponent has to make an application through the Regional Partnerships program? Are you familiar with that process?

Mr Katter —Yes.

Senator BARNETT —Are you aware that applications are made across the country in different electorates—Labor, Liberal, Independent? Are you also aware that, based on the departmental advice we have received to this committee, the success rates from National Party, Liberal Party and Labor Party electorates are exactly the same?

Mr Katter —Chair, there is no question there; it is an assertion by the senator.

CHAIR —There is a question there. He is asking you if you are aware of a proposition that he has put to you about the success rate of the applications. If you are aware of that you can say yes, if you are not aware you can answer no. But you should answer the question.

Senator O’BRIEN —Chair, I have a point of order. The question is not necessarily accurately reciting the evidence. I would suggest that the proper recital is that there is evidence before the committee, which the committee will be considering, which suggests that.

Senator BARNETT —That is what I said.

Senator O’BRIEN —And the question was: are you aware that this is a fact? I am not sure that the committee has accepted that that is a fact.

CHAIR —Are you aware of the evidence that has been put in regard to this? I think that is probably the best way to put it.

Senator BARNETT —With respect to Senator O’Brien, what I said was: is Mr Katter aware of evidence put by the relevant department for Regional Partnerships to this committee that the success rates with respect to the applications for funding from Liberal and National Party seats on the one hand—coalition seats—and Labor seats on the other are the same?

Mr Katter —In light of the figures, I went and said that we would get three electorates—

CHAIR —Mr Katter, you have been asked a question about whether you are aware of this evidence that has been provided to the committee.

Mr Katter —No, I am not aware of that.

CHAIR —Then answer that question.

Mr Katter —I answer it by laughing.

CHAIR —Mr Katter, you should answer the question. If you do not know then the answer is no.

Mr Katter —No, I do not know.

Senator BARNETT —Thank you. Mr Katter are you also of the view that not only is it the minister’s slush fund but also the department are implicated in this scenario you have put to the committee? Are they also acting in breach of all the rules and guidelines to allow this rorting of the system, or whatever words you wish to use? Do you think the department are also involved in that process?

Mr Katter —I do not know. I am not privy to the process. How the hell would I know? I will answer your question this way: if I did something advertently or inadvertently that was improper behaviour when I was a minister then the head of my department refused to move forward. That was one of the reasons I had very great respect for two or three of those heads of departments I worked with.

Senator BARNETT —My first question was whether you are aware of the Regional Partnerships approval process, and you said yes. If you are not aware you can clarify that for the record but you indicated to the committee that—

CHAIR —Your question was whether he was aware they had to make an application.

Mr Katter —I understand the process to some degree.

Senator BARNETT —Are you aware of the process—that it has to go through certain channels and meet certain criteria and the department itself has to approve the application and the funding?

Mr Katter —I would like to answer that by asking a question. Are you aware of the early figures that came out of the Dairy RAP?

CHAIR —We are straying a bit here. Senator Barnett, I do not think it is quite correct to say that it is the department that approves ultimately.

Senator BARNETT —I did not say’ ultimately’.

CHAIR —You said ‘approve’, which means that it is approved. There is a further step, as you know.

Mr Katter —Someone has a case to answer—

CHAIR —Sometimes.

Senator BARNETT —In light of the time I will try to cut my questions short. I draw your attention to the Hansard evidence from the department in regard to the applications and the success rates being exactly the same and if you wish to put a further view with respect to that evidence please feel free.

Mr Katter —Your headache, not mine.

Senator BARNETT —Are you aware also that the Regional Partnerships program has been audited not only by the Auditor-General but also by independent objective analysis from KPMG? They found nothing untoward in the Regional Partnerships program.

Mr Katter —You are doing a marvellous job on behalf of your party. I have just finished three books on Enron.

CHAIR —Mr Katter, the question is whether you are aware. The question may also be stretching the facts and—

Mr Katter —I am sorry. With all due respect—

CHAIR —Order! I am sorry; you should wait until I have finished. The question essentially requires a yes or no answer. You can do that. Either you are aware of the evidence or you are not. Can you answer that question? The proposition that the entire program has been audited is stretching it a bit, too. But the question has been asked; you should answer it.

Mr Katter —No.

CHAIR —Thank you.

Senator BARNETT —Mr Katter, I have one last question. Just to clarify for the record, in your submission you stated:

Are you aware that the Liberal Party actually holds most of the seats in the country in rural and regional areas?

Mr Katter —You got a real rough deal, if we look at those figures. You got a real rough deal.

Senator BARNETT —I am not sure if that is a yes or no.

Mr Katter —I think it answered the question.

Senator BARNETT —I have no further questions.

Senator JOHNSTON —Mr Katter, you said that you had known Mr Ken Crooke. How long have you known Ken Crooke?

Mr Katter —I do not know; 20 years?

Senator JOHNSTON —In what capacity have you dealt with him?

Mr Katter —He was secretary to a number of ministers. I think he was the Premier’s secretary at one stage. I am not too sure; it might have been two premiers or three premiers. He was around for a long time. I had never heard any sullying of his reputation ever. That does not mean that people did not, to ingratiate themselves with Ken Crooke, act in an improper manner.

Senator JOHNSTON —Your interaction with him was in the state government, was it?

Mr Katter —Yes.

Senator JOHNSTON —You found him, over a period of 20 years, to be an honest man?

Mr Katter —In every way. Remember, I belonged to a government that was more looked into than any other government in Australian history.

Senator JOHNSTON —In revealing your own position, having adjudicated on Mr Crooke, you would say that you yourself were an honest man and conducted yourself with a degree of integrity at all times.

Mr Katter —I have been through six inquiries.

Senator JOHNSTON —I take it that is a yes.

Mr Katter —That certainly is. No-one else in Australia has been in governments that get caught in so many inquiries.

Senator JOHNSTON —I am looking at a press clipping dated, I think, 27 July last year from the North West Star where it quotes Mr Anderson saying of you, Mr Katter, that you had the best paid part-time job in Australia. It says that, according to voting figures, Mr Katter has not voted on legislation that has gone before the parliament 52 per cent of the time. Is that true?

Mr Katter —I have no idea.

Senator JOHNSTON —It is in the submission. Is that true?

Mr Katter —I have no idea. I have been in Senator Boswell’s office in days past on numerous occasions where he has not gone in for votes. He explained to me that it was because they were political point scoring votes.

CHAIR —Order! I think we have a division.

Mr Katter —I invite the honourable senator to come with me any day of his life.

CHAIR —You can issue those invitations at another time.

Mr Katter —He is impugning my integrity.

CHAIR —We have to go to a division.