In a classic tale "from the genre of pork-barrelling" more than $1 billion raised from the sale of Australia's largest road infrastructure project was allocated to projects deemed unsuitable for funding, an independent report has found.
The NSW auditor-general on Wednesday found substantial issues with the $5 billion WestInvest program, established in 2021 after the controversial $20 billion sale of Sydney tollway WestConnex.
The program's design lacked integrity while funding allocations through a $3 billion stream for state government projects did not follow agency advice or align with the program's stated objectives.
In that stream, nine of the 27 projects allocated $1.1 billion were assessed as having low or moderate merit, and thus unsuitable for funding.
Reasons included the absence of completed business cases, incomplete project development and poor alignment to the objectives and criteria for the WestInvest program.
More than half of the 27 projects allocated funding by the Perrottet coalition government also appeared to be 'business-as-usual' activities, such as school or road upgrades.
One $308 million project to build a pre-school, primary school and selective high school for 3000 students at Westmead, was knocked back for meeting none of six focus areas for WestInvest.
After guidelines were broadened, it was re-submitted, approved for funding and announced four months from the 2023 election.
No funds ended up flowing to any of the 27 projects after Labor won the 2023.
Labor however ticked off on $2 billion allocated by the coalition to community projects in two other WestInvest streams, as per a pre-election commitment.
Treasurer Daniel Mookhey said the auditor-general's "devastating indictment" on WestInvest was proof the program was a "classic in the genre of pork-barrelling".
"What becomes clear from this report is when the previous government was deciding how to spend that $2 billion, it was making it up as it went along," he told reporters.
But, with the report pointing out Labor's reallocation of funding had gone to 15 projects without business cases, the treasurer appeared to suggest low-merit projects were acceptable if taken to an election.
"Ultimately, the people of NSW decide how their money is spent," Mr Mookhey said.
"They didn't get a chance when it comes to these programs because $2 billion was already spent before anyone cast a ballot."
Mr Kean, the former treasurer, defended his actions and accused his successor of hypocrisy.
"The current treasurer has serious questions to answer about why he breached NSW government's integrity and assurance guidelines by using WestInvest funding for 15 projects in Labor electorates without business cases," he told reporters.
All five of the auditor-general's recommendations have been accepted by the state government.
