The Auditor-General has responded on 3 July 2020 to correspondence from the Hon Brendan O'Connor MP dated 11 June 2020, requesting that the Auditor-General consider an audit of the operation of the Small and Medium Enterprises (SME) Export Hubs program. The SME Export Hubs program is administered by the Department of Industry, Science, Energy and Resources. 

Auditor-General's response

3 July 2020

The Hon Brendan O’Connor MP
Shadow Minister for Small and Family Business
Shadow Minister for Science
Federal Member for Gorton

By email: Brendan.OConnor.MP@aph.gov.au

Dear Mr O’Connor

I am writing to you in response to your letter of 11 June 2020 requesting an audit of the operation of the Small and Medium Enterprises (SME) Export Hubs program administered by the Department of Industry, Science, Energy and Resources.

I have carefully considered your request in relation to other competing priorities for audit coverage across the public sector, including audit topics related to the government’s response to COVID-19, and have decided that an audit of the program you referred is not currently a higher priority than other audits currently included in the Annual Audit Work Program (AAWP). On this basis I have decided not to include an audit topic on the SME Export Hubs program in the 2020-21 AAWP. I will however, reconsider the matters you referred as part of the planning process for the 2021-22 AAWP.

Yours sincerely

Grant Hehir
Auditor-General

Correspondence from the Hon Brendan O'Connor MP

Transcript of letter from the Hon Brendan O'Connor MP

Mr Grant Hehir,
Auditor General, Australian National Audit Office

11 June 2020

By email: grant.hehir@anao.gov.au
CC: external.relations@anao.gov.au

Dear Mr Hehir,

I write to you following media reports about the distribution of successful grant recipients awarded under the Federal Government’s SME Export Hubs program administered by the Department of Industry, Science, Energy and Resources.

There have been two announcement rounds of the grant program to date, one on 13 March 2019 (Round 1) and the other on 11 May 2020 (Round 2). A list of successful grant recipients across both rounds is available here: https://www.business.gov.au/Grants-and-Programs/Small-and-Medium-Enterpr...

The first round, announced approximately a month before the 2019 federal election was called, had eight recipients. Seven of those recipients appear to be located in electorates held by members of the Coalition Government, with the eighth distributed over Coalition and Labor electorates.

On that basis, it appears approximately 97 per cent of the distribution of Round 1 grant funding flowed to Coalition electorates (assuming an even split in funding to the eighth project).

The second round, announced approximately a year after the 2019 election, had a broader distribution of funding in electorate areas held by Coalition, Independents, and Labor.

Nonetheless, across the two rounds of funding, approximately 64 per cent – almost two-thirds – of funding went to areas in Coalition electorates.

In taking note of the distribution of recipients in the rounds pre-and-post-election, the disparity in areas with successful recipients between funding rounds, and other concerning findings regarding grant programs scrutinised by the ANAO (such as the Community Sport Infrastructure Program) I ask that you consider the operation of this program for a future audit with reference (but not limitation to) to the following:

  • the choice and application of eligibility criteria;
  • the degree to which the Minister considered the committee’s recommendations; and
  • discernible differences between the nature of recommendations made by the committee to the Minister and the Minister’s final choices.

I thank you in advance for considering this request.

Yours sincerely,

Brendan O'Connor MP