The gun club at the centre of a NSW Liberal Government corruption scandal became a financial disaster at the expense of taxpayers. Anthony Klan reports.
*Also listen to the audio version of this article on Spotify HERE.
NSW’S WAGGA WAGGA would become a “blazing star of the southern universe” thanks to millions in taxpayer grants, disgraced former state MP Daryl Maguire told Gladys Berejiklian in a secretly recorded telephone conversation. The reality is more crash and burn.
The $5.5 million Wagga Wagga gun club “function centre” project at the heart of the probe that felled Gladys Berejiklian as NSW Premier has turned out to be a taxpayer disaster — and even a financial albatross for the club itself.
None of the major conferences flagged in an “updated business plan” – used to get the highly-contentious grant over the line – has materialised in the five years since the 1,000-person function centre opened its doors.
Analysis of the Australian Clay Target Association’s annual reports shows that since opening in early 2018, the sprawling 2,200 square metre facility, The Range Function Centre, has notched up $823,793 in depreciation.
That’s more than double the entire revenue the facility has brought in over the five years — before deducting any costs.
The $5.5 million grant to build the facility is at the centre of the NSW Independent Commission Against Corruption (ICAC)’s Operation Keppel probe which saw Berejiklian resign in 2018, but which is yet to report.
Pursued heavily by Daryl Maguire and allegedly pushed by Berejiklian, first as NSW Treasurer and then as Premier, the “fast-tracked” gun club grant was unusual on many fronts, the ICAC has been told.
The director of the NSW Office of Sport, Michael Toohey, has said the business case – prepared by consultancy GHD at taxpayer expense – was “deficient” and “flimsy”, with “imaginative” claims of community benefit.
The project did not meet the “NSW Government’s own standards and policies”.
Former NSW Sport executive director Paul Doorn has said his department didn’t consider the project “stacked up” and he was “surprised” to hear it had been approved.
Nigel Blunden, a senior advisor to then NSW Premier Mike Baird, summed up his thoughts in an email to Baird in late 2017: ‘Sometimes you gotta say WTF.’ His recommendation: ‘Oppose.’
An in-depth review of the project five years on shows those concerns were well placed.
The project was to create ‘up to 91 FTE [full-time equivalent] and 86 resident jobs’; deliver over $2 million a year to the local economy and provide ‘international promotion of the City of Wagga Wagga, regional Australia and Australia as a whole’.
It was to host four 400-person conferences and two 800-person conferences each year.
Instead, demand for the facility has been so low that the project’s not only a woeful deal for the NSW taxpayer, it’s a financial burden for the club, which received the $5.5 million in free money.
Over its five years of operations, the average annual revenue of the function centre – which cost $6.8 million according to the accounts – has been just $97,000 a year.
Taking out operating costs including catering and maintenance, that figure falls to $53,700 a year.
Take out overheads such as electricity, water, gas, insurance, security and licensing – which the club does not individually apportion to the facility in its annual reports – and the results are worse again.
In 2019, the gun club hired an events coordinator for the facility but she resigned in 2020 and appears to have not been replaced.
At the heart of the failures is the failure to attract major events, which was precisely what got it over the line, after some rejigging of the figures.
The first proposal – although given “conditional approval” by Berejiklian’s “expenditure review committee” – was rejected by NSW Infrastructure on grounds it didn’t deliver a net return for taxpayers.
An updated proposal was submitted – allegedly following intervention by Berejiklian – and the project passed, barely.
Projects need to bring in revenue to NSW that would not occur otherwise and so the gun club, in its updated proposal, put forward a string of ‘potential conference-style events’ that it said the facility could attract and which Wagga Wagga could not cater to otherwise.
They included national conferences of the Country Womens’ Association; the APEX Services Club; the national exhibition of the lamb industry; national functions for the Royal Australian Air Force; conferences held by the Artlands Festival and electricity retailer Country Energy; and the annual conferences of the Local Government NSW and the Australian Local Womens’ Association.
Not one of those events has been held at the Wagga Wagga gun club in the five years since it opened.
And it’s not down to COVID-19. Those events have gone ahead most years, just not in Wagga Wagga and not at the gun club.
In its annual reports, the club does not individually apportion overheads to the function centre – only direct “operating costs” – but factoring them and the impact of the centre on the club is grim.
Since 2018, when the function centre opened its doors, the results of the club have plunged.
Even allowing for the impacts of COVID-19, the poor results remain.
In 2019 – the year before the pandemic hit – and in 2022, which was largely unaffected, the results, although slightly better, remain dismal.
In 2019, its first full year of operations, the function centre recorded revenue of $121,070 and operating costs (not including overheads) of $28,706.
In 2022, it delivered total revenue of just $134,117, with operating costs of $39,494.
After including overheads – water, gas and electricity, for example, have soared from $26,687 in 2017 to $48,082 in 2022, while its “rates and taxes” in that period have gone from $9,630 to $37,262 – the function centre is weighing down on the financial position of the club as a whole.
For each of the years since 2018, when the club was opened (shown below) the operating result for the gun club as a whole has been lower than for the rest of the decade.
The “depreciation” booked against the facility has no bearing on the day-to-day finances of the club.
It’s an accounting entry, but it helps to shed light on the performance of the taxpayer-funded project.
To date, the revenue the centre has earned, less its operating costs (but before the function centre overheads), is just one-third of its $823,793 depreciation.
The impact of the poor utilisation of the centre is magnified for taxpayers: a massive 97 per cent of the taxpayer “benefits” were to come from increased tourism in the region.
Writing to then NSW Premier Baird in late 2017, just days before NSW Treasurer Berejiklian’s committee “conditionally approved” the project, Blunden put his thoughts about this succinctly:
‘Increased tourism accounts for 97 per cent of the forecast benefits (so it’s suss).’
His recommendation to Baird was ‘Oppose’.
‘Gladys and [MP Stuart] Ayres want it,’ he wrote.
‘No doubt they’ve done a sweetheart deal with Daryl, but this goes against all the principles of sound economic management.’
In August 2017, with Berejiklian as NSW Premier, then NSW Treasurer Dominic Perrottet approved the $5.5 million grant.
*This article is also available on audio here:
Anthony Klan is an investigative journalist and editor of ''The Klaxon'. You can follow him on Twitter @Anthony_Klan.
Related Articles
- CARTOONS: Mark David is standing for re-election
- NSW Labor should have Perrottet on toast
- The New South Wales paleo-progressive Premier Perrottet
- EDITORIAL: The New South Wales paleo-progressive Premier Perrottet
- EXCLUSIVE: Extent of Perrottet family's alleged shady links exposed
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
Support independent journalism Subscribe to IA.
