Government’s $526,869 on consultants results in $27.3 million in handouts to Griffin

Sep 1, 2023 | State News, Steve Thomas MLC

Questions in Parliament this week have identified that the Cook Labor Government’s ongoing financial disaster at Griffin Coal has come at the cost of over half a million dollars in consultant fees on top of the $27.3 million in Government direct operating subsidies paid to Griffin Coal.

“Not only are taxpayers funding the operating losses of a foreign owned company in receivership, but they are also paying at least $526,869 to private consultants who appear to simply advise the Government to pay more subsidies to Griffin” the Shadow Treasurer and Shadow Energy Minister Dr Steve Thomas said.

“The answers I have obtained this week have identified that:

• Consultants have been paid $526,826 to advise the Government on the debacle at Griffin Coal. One of the contracts is open ended and could well run into the millions.

• They have been engaged to “assist the Government with discussions with commercial parties” and to “provide advice to Government on mining operations and funding matters at Griffin Coal.”

• The funding for consultants has resulted in $27.3 million in taxpayer handouts to Griffin Coal so far this year, with millions more undoubtedly to come.

• Those payouts are to cover “the ongoing operation of the mine, including labour, fuel and maintenance, that were not covered by the revenue generated” – that is normal operating losses.

• The Government keeps saying that it “remains of the firm belief that Griffin Coal’s financial difficulties should be resolved through commercial agreement with Griffin Coal’s customers, based on paying a fair price for coal” but refuses to say what a fair price is, how those customers can afford higher prices, or whether the price of electricity for consumers will go up as a result.

• Neither of the consultant companies have advised the Government on whether Griffin Coal has been trading whilst insolvent, despite the fact that the Government has already acknowledged publicly that this may be the case.

• Neither company has apparently advised the Government how to fix the problem, how long the subsidies will need to go on for, or how much it will ultimately cost.

“As the Government has previously admitted, they are just propping up this company by paying the difference between income and costs” Dr Thomas said.

“They are paying half a million dollars to consultants to tell them to do so.

“Even the Government has had to admit that there is no way the Government will be able to recoup the millions it is handing over, and the consultants fees are sunk costs.

“And as I have previously said, this will potentially have to repeated for years to come until a final resolution occurs.

“That final solution probably means the winding up of Griffin Coal, which has no capacity to pay back the taxpayer handouts it is receiving or the $1.4 billion it owes to the bank.

“There is also a question as to why the Government, the Treasury and Development WA have to outsource the management of the debacle that is Griffin, when each of these Departments have enormous internal capacity?

“Is it simply such a toxic position that Premier Roger Cook is trying to distance the Government from it as rapidly as possible?” Dr Thomas asked.