The former Labor government flagrantly ignored the expert advice of its own treasury officials and shelled out $5.48 million in taxpayer-funded jobs grants and another $23.6 million in loans to businesses, some of which had been evaluated as ‘high risk’.
Treasurer Rob Lucas said as many as 7 companies that either failed grant criteria or the previous government’s own due diligence checks – on the basis of a poor balance sheet, high cost per job and overall risk to taxpayers – were subsequently given taxpayer funds anyway.
“It is eminently clear the former Labor government had utter contempt for hard-working South Australians and splashed their taxpayer dollars around like it was Monopoly money,’’ said Treasurer Lucas.
“Instead of developing real policies they tried to pick winners and buy jobs, in some cases despite knowing full well the corporate recipients were either ineligible or posed a high risk to taxpayers.
“In some cases, these loans were interest free for more than 10 years and, in one case, the cost per job was $385,000.
“In another instance, a health industry firm was handed $10 million in grants and loans despite warnings from treasury officials ‘there was not sufficient evidence that the company had the capacity to undertake or deliver the project’.
“In another, a food manufacturer was offered a $3 million taxpayer loan for a $5.9 million project employing 22 people – which equates to $136,364 per job.
“This is just another example of the gross financial mismanagement and mess we’re having to clean up.”
After receiving legal advice, Mr Lucas said the former government’s offers would be honoured but he had asked treasury officials to seek terms and conditions with grant recipients, where possible, to offer additional security for taxpayers.