The Indigenous Land Corporation gets a $65 million line of credit to refinance some of the debt it was left with by past directors, who arranged for the government body to buy Ayers Rock Resort for about $100 million more than it was worth.
Minister for Indigenous Affairs Nigel Scullion reported on Tuesday the low-interest loan from Treasury — at 2.5% per annum, according to The Australian — would “unencumber the ILC from the crippling impact” of the debt. He also steadfastly insists that everyone move on and leave the suspicious circumstances of the 2010 transaction in the past. Scullion said in his budget night statement:
“The loan will significantly reduce interest payments from the ILC on the debt incurred from the purchase of the Ayers Rock Resort. The Resort has become an incubator of indigenous employment and the Turnbull government is working closely with it to place it on a more sustainable footing.”
Scullion continues his efforts to help the independent public corporation move on from the suspicious sale, which left the immediate former board chaired by Dawn Casey in conflict with the minister over his opposition to investigating the potentially criminal actions of other ex-directors who made the deal.
His budget release says the loan “marks a new chapter in the relationship with the ILC and shows what can be achieved when the government and the corporation work together” in a veiled swipe at Casey’s dogged pursuit of the matter.
New chair Eddie Fry has distanced himself from Casey and the previous board and committed to drop his predecessor’s campaign for a public inquiry into the sale, in a statement he added to Casey’s last annual report following pressure from Scullion’s office.
Scullion denied his suggestion that the board rethink the statement amounted to inappropriate interference.
The loan will only cover a portion of the total debt that was borrowed from hotel group GPT, which sold the resort to an ILC subsidiary for about $300 million shortly before its true value — about $100m less — became known. Since then the ILC has invested more in improving the resort and its value has begun to go back up.
Budget 2016 also places new conditions on the funding of another independent body in the indigenous affairs portfolio, Indigenous Business Australia, which will need to achieve “specific outcomes” for the Prime Minister’s department under contract.
$23.1 million of IBA’s funding will be diverted to the Indigenous Advancement Strategy, run out of the Department of the Prime Minister and Cabinet, for 12 months.
To earn it back, IBA will need to provide “business planning and advice, and workshops and training for indigenous entrepreneurs who wish to take advantage of opportunities to start up, acquire or grow a business” which it could not provide under its own legislation.
According to Scullion, these services will “better align” with other measures designed to stimulate economic growth in the indigenous business sector such as the successful Indigenous Procurement Policy.
Earlier this week the PM&C revealed the new procurement policy had signed over 750 government contracts, worth $91 million, in the first six months of the policy’s operation — a fifteen-fold increase in less than one year.