Andrew Barr signed-off on deal paying $3 million more than fair value

The ACT Auditor-General has just presented another scathing audit report into land deals made by the ACT Government.

Page 19 of the report states that:

The Chief Minister and Treasurer approved the purchase of Milapuru for $7 million.

Th Auditor General went on to say:

However, the purchase price of Milapuru was $3 million more than the valuation conducted for the purpose of establishing fair value for financial reporting. This resulted in a reduction in value of Milapuru (a loss) of $3 million plus $0.362 million in stamp duty and other expenses in the former Land Development Agency’s Financial Statements for 2015‐16. (para 2.116, page 78)

“Andrew Barr must explain why he agreed to this outrageous deal,” Mr Coe said.

“The extraordinary list of property scandals would bring down a government in any other jurisdiction. But in the ACT, the Greens blindly give their support to Labor, despite massive integrity breaches and questions about corruption.

“Under Andrew Barr as the relevant Minister, some of the deals that have taken place include:

  • Glebe Park block;
  • Paddle-boat business and lease;
  • Bikie hire business and land;
  • Dickon Tradies $3.9 million purchase and $1 per year lease; and
  • Rural leases totalling millions more than fair value.

“The latest report demonstrates why an Anti-Corruption Commission is required in Canberra.

“Sweetheart deals with taxpayer’s money is standard practice for the ACT Labor Government,” Mr Coe concluded.

Key quotes from the Audit Report:

Para 2.108: ‘While the former Land Development Agency sought and received a valuation report, which provided a valuation range of $1.2 million to $1.4 million, the former Land Development Agency subsequently paid an estimated $2.2 million for the property…’

Para 2.116: ‘However, the purchase price of Milapuru was $3 million more than the valuation conducted for the purpose of establishing fair value for financial reporting. This resulted in a reduction in value of Milapuru (a loss) of $3 million plus $0.362 million in stamp duty and other expenses in the former Land Development Agency’s Financial Statements for 2015‐16.

Para 3.9: ‘There is no documentary evidence that the former Land Development Agency presented important information to the former Land Development Agency Board’

Para 3.26: ‘[The ACT Government paid] $298,045, which represented ‘Fee for sale/acquisition of properties as part of Stromlo Acquisition Strategy Paper’. Of this $36,363 is identified as relating to a property that was not purchased by the former Land Development Agency, i.e. part of the former Fairvale property, which was purchased by a private entity; and $50,000 is identified as relating to an unsolicited ‘Planning report’’

Para 3.52: ‘There was a lack of: documentation to request a quotation; written acceptance of a quotation; written explanation for undertaking a ‘single select’ procurement (where three written quotes would be expected); an authorising delegate for the decision; and creation of a purchase order in advance of the services being provided. The decision to procure the services was not justified and the conduct of the process was poor.

Para 3.69: ‘[The ACT Government hired a contractor to] provide services for conducting an Expression of Interest process for procuring a long‐term land manager for Huntly. The Director was a shareholder and non‐executive director of another company that was proposed by one tenderer to be engaged under a sub‐contract to manage Huntly’

Para 3.92: ‘While acknowledging that there is a limited number of valuers with ACT rural land valuation expertise, there is no evidence that the former Land Development Agency took action to reduce the reliance on this one valuer’

Para 5.114: ‘There is no documentary evidence that this advice was rigorously assessed or conflicts of interest identified.’