PREMIER and racing minister Denis Napthine faces major conflict of interest questions over a $1.5 million government grant to a leading Warrnambool business and racing figure with whom he co-owns a thoroughbred racehorse.
Inquiries by Fairfax Media have revealed that Premier Napthine is in partnership in the racehorse Spin the Bottle with Colin McKenna, the head of expanding meat processor the Midfield Group, a major employer in the premier’s South-West Coast electorate.
Mr McKenna and Dr Napthine share multiple connections, including through the businessman’s role as a committee member at the Premier’s beloved Warrnambool Racing Club, which hosts its annual carnival this week.
Mr McKenna also features in club promotions for a Liberal Party/Napthine fund-raiser at the Warrnambool track on Wednesday evening.
In 2012 the Warrnambool Standard reported that Mr Napthine co-owned Spin The Bottle with fellow politician, federal Wannon MP Dan Tehan, and ‘‘a group of friends’’.
Premier Napthine owns a share of Spin the Bottle in his own name. Mr McKenna’s share is in the name of Halo Racing Services Pty Ltd. Halo is fully owned by Mr McKenna’s CB McKenna Investments Pty Ltd.
Revelations of the premier’s relationship with Mr McKenna are likely to raise questions about Dr Napthine's involvement in racing, fund-raising and, now, government grants, especially in his own south-west electorate.
Premier Napthine's connections to Mr McKenna also raise uncomfortable questions about the rationale for hand-outs to business – especially cashed-up ones – through the government’s $1 billion Regional Growth Fund.
In Warrnambool last month, Dr Napthine announced a $1.5 million grant from the fund to assist the $20 million expansion of McKenna's meat processing operation, and the creation of 200 jobs, in the regional city.
The government’s deal with Midfield also includes the sale of Crown land to the company for construction of a new cold store, and state approval of rezoning.‘‘This is a win for the region, it is a great result for Colin McKenna and his team,’’ Dr Napthine said at the time.
Last week, the Premier sparked controversy with his public support – at odds with state racing authorities – for Sydney bookmaker Robbie Waterhouse’s bid to work the ’’rails’’ betting ring at the annual Warrnambool Carnival this week.
A political row followed the revelation that Waterhouse’s wife, trainer Gai, was scheduled to join Premier Napthine as the drawcard to this week’s Liberal Party fund-raiser.
Ms Waterhouse trains at least one of numerous racehorses owned or part-owned by Mr McKenna.
Money raised at the Liberal party function on Wednesday will be shared with Peter’s Project, a local cancer treatment charity founded by Dr Napthine with others, of which Mr McKenna is a director.
Mr McKenna is one of the south-west's wealthiest men and biggest employers. His Midfield Meats business, which received the government grant, is in a robust financial position. Accounts filed with the corporate regulator show it had revenue of $356 million last financial year while profit more than doubled.
Mr McKenna, who owns a private jet, also paid himself a dividend of more than $1 million as cash flow quadrupled to $23.5 million.
He is also a dairy farmer and major landowner with nearly 6500 hectares around Warrnambool, including the historic Union Station and homestead.
Mr McKenna sent his jet to collect the Waterhouses from Avalon airport and fly them back to the Warrnambool racing carnival in 2013.
On Sunday, Premier Napthine confirmed his co-ownership of Spin the Bottle with Mr McKenna. But he refused to answer when asked whether Mr McKenna had donated to the Liberal Party or to his own local election campaigns, referring questions about donations to Liberal Party headquarters.
Mark Lee, a spokesman for the Premier, denied a conflict of interest as a result of the partnership with Mr McKenna.
He said Premier Napthine – who is also Regional Cities minister – had had no input into the Midfield grant decision, which was made by Regional Development Minister Peter Ryan, consistent with a recommendation from his department.
Mr Lee said Midfield had applied for the grant with the backing of the Warrnambool council.
He said he was unaware Mr McKenna had been used in racing club promotions for the fund-raising event for Premier Napthine this week.
Asked why taxpayer funds were given to a successful and expanding business, Mr Lee said the grant was consistent with government policy to support growing food enterprises.
Last week Premier Napthine also defended his decision to spruik the cause of bookmaker Waterhouse, dismissing claims there was a link between his comments and Ms Waterhouse’s appearance at the Liberal fund-raiser on April 30.