A report by the Australian National Audit Office (ANAO) has found taxpayers paid 10 times the fair value for land near where the Commonwealth is developing Western Sydney Airport.
The federal Department of Infrastructure was savaged for providing “inadequate and unreliable advice”, which saw the federal government buy land that may be used to construct a second runway at the airport for 10 times what it was worth a year earlier.
According to the ANAO’s audit, on 31 July 2018, the federal government purchased a 12.26-hectare triangular parcel of land for $29,839,026 (GST exclusive) in Bringelly NSW.
The land is referred to as the ‘Leppington Triangle’ and sits adjacent to the Western Sydney International (Nancy-Bird Walton) Airport site.
The section of land is expected to be needed in “about 30 years” should a second runway be constructed in a future stage of the Western Sydney Airport’s development.
However, the Department of Infrastructure’s 2018-19 financial statements valued the Leppington Triangle land at $3,065,000 – a tenth of the price it had paid 11 months earlier.
The ANAO said the Department of Infrastructure had not exercised appropriate due diligence in its acquisition of the Leppington Triangle land.
Aspects of the operations of the department “fell short of ethical standards” and the conduct of officials was “not appropriate”, the ANAO said.
The scathing report also claimed decision-makers “were not appropriately advised on the land acquisition”.
“Formal briefings omitted relevant information, such as the purchase price, that the price exceeded all known market valuations of the land, and the method of acquisition,” the ANAO said.
The Department of Infrastructure is now investigating the conduct of its staff.
Speaking to The New Daily, Labor’s shadow infrastructure minister, Catherine King, called the report “almost unbelievable”, claiming “this deal stinks”.
“It is not good enough to brush this off as a simple departmental mistake. Ministers must bear ultimate responsibility for this decision,” she told The New Daily.
The seller of the land was the Leppington Pastoral Company, which is of the same name as an entity that had donated nearly $59,000 to the Liberal Party of Australia in 2018 and 2019, King noted, according to Australian Electoral Commission donor returns.
“The Deputy Prime Minister and Minister Tudge need to urgently front up and explain what went wrong, what they knew about it, and what they are doing to fix it,” she told The New Daily.
“We need to know who knew about the purchase, why the department was so prepared to pay above market value, and who signed off on the final purchase.”
In its response to the ANAO audit, the Department of Infrastructure said it was “concerned” by the findings of the audit and “is taking actions to address any shortcomings in the processes and decision-making arrangements”
“In light of the allegation of individual breaches of integrity, the matters raised by the ANAO in the report are being investigated to ensure all such matters are fully understood and appropriate action can be taken,” it told The Guardian.
The department noted the ANAO’s view that the purchase could have been made at a much later date, but argued “early acquisition provided certainty to stakeholders for long-term planning”.
“The department agrees that the valuation strategy was unorthodox,” it said.
“However, we note that the strategy was developed in consultation with the department of finance and the Australian government solicitor and was designed to mitigate the risk of costly and lengthy legal challenges.”
According to The Guardian, Leppington Pastoral Company runs one of Australia’s largest dairy farms and had fought “a 10-year battle” against the compulsory acquisition of part of its land from 1989 to 1999.
Featured image source: Western Sydney Airport/Sam Mooy