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Opposition alleges political bias in the granting of funds for sport

PETER THOMPSON: At home, where the Federal Minister for Sport, Ros Kelly, is in trouble over sloppy administration of a $30 million grants program. The Australian National Audit Office has found that last year Labor-held Federal seats received more funds and larger grants for sport than Coalition seats, with marginal Labor seats doing best of all. The audit report doesn't allege political bias because there's no proof that the Labor electorates aren't also the most needy, but it did find that there's insufficient evidence to show why grants were made and says that unwarranted secrecy invites public suspicion and mistrust. It also commented that the funding decisions were made directly in the Minister's office.

Ros Kelly was unavailable for comment this morning, so we've gone to the Shadow Finance Minister, Peter Costello. Mr Costello is talking to Fran Kelly.

FRAN KELLY: Peter Costello, the Minister holds she's done nothing wrong and the Audit Office admits there's no proof, but the Opposition's alleged political bias. Do you have any proof?

PETER COSTELLO: The proof is in this report. What this report says is first of all it was the Minister and her office making the decisions, not the public service; secondly, before they were making decisions they were writing out to find out what electorates these proposals were in; and thirdly, when the decisions were made not only did the Labor Party electorates get much more proportionately than the Coalition-held electorates, but in terms of the amount of dollars to marginal seats it was 2 : 1, 2 : 1.

FRAN KELLY: But the Minister's also argues that they received a lot more grants from Labor seats, quite a significant number more grants.

PETER COSTELLO: Well, this is another very interesting thing. You know, the applications were put into categories and category 3 was those that were lacking in relevant information. You had a better chance of success if you put in an application lacking in relevant information than if you put in one that was well documented. So what seems to have been important is not what you actually said but who you knew.

FRAN KELLY: Those 700 groups were awarded funds and it is likely, isn't it, that traditional Labor areas are likely to be more needy?

PETER COSTELLO: Well, of course, this wasn't about needs. There was some suggestion that it would be a jobs program, but I'll tell you who the jobs were for - they were for Labor politicians. This was a Labor politician jobs program. And what was being done was with taxpayers' money, the money was being funnelled to areas where votes were needed, and the evidence is there, clear to see. The Labor Party held 53 per cent of the seats but they were getting 66 per cent of the funding and 73 per cent of the grants.

FRAN KELLY: Well, you call that evidence, but the Audit Office itself admits that there was no evidence really to prove that.

PETER COSTELLO: Well, the Auditor-General is saying: Look, until you get a confession you can't say it's proven, but all of the circumstantial evidence points one way.

FRAN KELLY: Though there's no administrative evidence to back that up.

PETER COSTELLO: Well, that's another thing that the Auditor-General finds. He finds that there wasn't sufficient documentation to actually go through these applications and find out why the decisions were made. The documentation just didn't exist. So all he could do is look at the evidence, and the evidence points one way - 53 per cent of the seats, 73 per cent of the grants and 66 per cent of the funds.

FRAN KELLY: But poor administration is not the Minister's fault, it is a departmental failure.

PETER COSTELLO: Oh no, it's the Minister's fault because this was a Minister who decided the Department wouldn't make the decisions. This was a Minister that said: We'll make the decisions in my office, thank you very much. And the Department was trying to get information, trying to get in on the act, but it was all being held in at the political level. There's only one person responsible, and it's Ros Kelly.

FRAN KELLY: Peter Costello, thank you very much.

PETER THOMPSON: Peter Costello, the Shadow Finance Minister, was talking to Fran Kelly in Canberra.