❓ Mr. Redman questions the Deputy Premier's decision to approve funding for Carnegie Clean Energy despite concerns about their financial stability. The Deputy Premier explains the timeline of events and the state's actions to mitigate risk.
AnsweredQoN 972Legislative Assembly
QuestionView source ↗
ALBANY WAVE ENERGY
PROJECT — CARNEGIE CLEAN ENERGY
972. Mr D.T. REDMAN to the Deputy Premier:
Before I ask my question, I would
like to acknowledge the birthday of one of the member for Roe's
constituents, my granddaughter Lola Castelli from Esperance. My question is to
the minister representing the Minister for Regional Development, who I believe
today is the Deputy Premier.
I refer to the minister's
decision to approve $2.6 million to Carnegie Clean Energy following a meeting
with the Carnegie board on 2 October 2018 and her concerns about the
resignation of the CEO.
(1) Was the
minister aware of the 2017–18 financial audit opinion stating ''material
uncertainty that may cast significant doubt about the group's ability
to continue as a going concern''?
(2) If no to (1),
who is the minister holding responsible for such a significant oversight?
(3) If yes to
(1), why did the minister approve $2.6 million on the back of such a damning
audit opinion?
PROJECT — CARNEGIE CLEAN ENERGY
972. Mr D.T. REDMAN to the Deputy Premier:
Before I ask my question, I would
like to acknowledge the birthday of one of the member for Roe's
constituents, my granddaughter Lola Castelli from Esperance. My question is to
the minister representing the Minister for Regional Development, who I believe
today is the Deputy Premier.
I refer to the minister's
decision to approve $2.6 million to Carnegie Clean Energy following a meeting
with the Carnegie board on 2 October 2018 and her concerns about the
resignation of the CEO.
(1) Was the
minister aware of the 2017–18 financial audit opinion stating ''material
uncertainty that may cast significant doubt about the group's ability
to continue as a going concern''?
(2) If no to (1),
who is the minister holding responsible for such a significant oversight?
(3) If yes to
(1), why did the minister approve $2.6 million on the back of such a damning
audit opinion?
AnswerView source ↗
I thank the member for some notice
of this question and I am advised in the following terms.
(1)–(3) The
minister was well aware of the financial challenges facing Carnegie. On 28 September
2018, the Department of Primary Industries and Regional Development, as the
contracting party, agreed to a variation to the funding agreement with Carnegie
with a revised first milestone payment of $2.625 million. This was before
Carnegie's 2017–18 financial audit opinion was released. The
minister became aware of the audit opinion when it was released on 1 October
2018, at which time she directed the department to halt any payments and seek
legal advice on the state's obligations under the funding agreement.
After consideration of the legal advice on our obligations, the state proceeded
to pay Carnegie the previously negotiated first milestone payment of $2.625 million.
However, as it was clear that the federal government's proposed changes
to research and development tax incentives had affected the company's
finances, the state required Carnegie to provide a comprehensive and detailed
funding plan for its contribution to the project. The state will assess whether
the company has the financial capability in an altered federal R&D tax
incentive environment to complete the project. The state will not provide
Carnegie with any further payments until the funding plan has been approved and
until further milestones in the project have been reached.
�I note that as
we speak the University of Western Australia is hosting a symposium on ocean
renewable energy, bringing scientists, engineers and industry developers from
around the world to WA to look at opportunities.
of this question and I am advised in the following terms.
(1)–(3) The
minister was well aware of the financial challenges facing Carnegie. On 28 September
2018, the Department of Primary Industries and Regional Development, as the
contracting party, agreed to a variation to the funding agreement with Carnegie
with a revised first milestone payment of $2.625 million. This was before
Carnegie's 2017–18 financial audit opinion was released. The
minister became aware of the audit opinion when it was released on 1 October
2018, at which time she directed the department to halt any payments and seek
legal advice on the state's obligations under the funding agreement.
After consideration of the legal advice on our obligations, the state proceeded
to pay Carnegie the previously negotiated first milestone payment of $2.625 million.
However, as it was clear that the federal government's proposed changes
to research and development tax incentives had affected the company's
finances, the state required Carnegie to provide a comprehensive and detailed
funding plan for its contribution to the project. The state will assess whether
the company has the financial capability in an altered federal R&D tax
incentive environment to complete the project. The state will not provide
Carnegie with any further payments until the funding plan has been approved and
until further milestones in the project have been reached.
�I note that as
we speak the University of Western Australia is hosting a symposium on ocean
renewable energy, bringing scientists, engineers and industry developers from
around the world to WA to look at opportunities.
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