THE State Government has come under fire for agreeing to a $1.2m grant to a local New Norfolk small business which has family links to the Liberal Party.

During estimate hearings in Parliament on Monday, Labor focussed questions on the process behind the promised grant and what action was taken to manage potential conflict of interest.

Small Business spokesperson Janie Finlay accused Premier Jeremy Rockliff of failing to answer questions about the process behind his promise to give funding to the New Norfolk Distillery, and only requiring the business to contribute $500,000 itself.

New Norfolk Distillery director Tarrant Derksen’s brother was a Liberal candidate for Lyons at the last State election and is employed in Guy Barnett’s office as a veteran’s ministerial advisor.

Last week, the Gazette reported how the distillery owners and the Derwent Valley Council were in dispute over unpaid rent for the Willow Court buildings and an offer to buy the buildings for $450,000. The offer has subsequently been withdrawn and the owners and council are in discussions about the rent issue.

Ms Finlay said the Government needed to explain the process behind the decision to grant funding.

“Mr Rockliff refused to explain to Tasmanians what process was followed to promise so much money to a business with ties to the Liberal Party,’’ she said.

“The Premier did confess that he doesn’t usually write letters offering to give out million-dollar grants, but didn’t say the New Norfolk Distillery letter was the only example of this happening.

“This begs the question – how many other similar letters of promise has he made to his Liberal mates?

“I have been contacted by another distiller who expressed annoyance that the New Norfolk Distillery has received special treatment.

“This person also stated that other distillers are not happy with the special treatment given to this operator.’’

The grant funding has not yet been given to the distillery owners as certain conditions – the subject of conjecture between the Derksens and council – have not been met at this stage.

When questioned, Mr Rockliff said the project aimed to increase visitation to the Derwent Valley.

“No allocations of funding have been made to this project.

“ The distillery successfully applied for a $2 million loan under the Tourism Development Loan Scheme to assist with its project in February 2022,’’ Mr Rockliff said.

“The original loan was approved, subject to conditions including the project receiving Federal Government funds, the transfer of properties from the council and an equity contribution by the proponents and appropriate approvals. 

“This loan was assessed by the independent Tasmanian Development Board, which is at arm’s length from the Government, however, the proponent was unsuccessful in securing the Australian Government funds at the time.

“In recognition of the project’s merits, in February this year I provided the New Norfolk Distillery with a letter of intent for a grant of up to $1.2 million towards the project.

“The grant would be conditional and these conditions were made very clear, including the transfer of land from the Derwent Valley Council to the New Norfolk Distillery with the New Norfolk Distillery demonstrating an ability to finance and complete the project.

“Our visitor economy is one of our state’s biggest strengths, delivering a record spend to our economy, supporting our regional communities and the jobs that come with them.

“Our products and experiences are the backbone of our tourism industry and we must continue to foster innovation and growth so that we can remain competitive as a destination to attract visitors who will stay longer.

“This project aims to restore the buildings in Willow Court into an innovative visitor experience for tourists and locals alike, with a focus on a cellar door, tasting room, distillery, restaurant, function space, as well as a courtyard and external works.’’

The distillery owners argue they do not have to pay the rent as they have spent a considerable amount of money on the premises – an agreed clause in the contract with council.

However, the council argues the money spent was not on capital works which improved the premises.

“At all times we have acted appropriately and refute any claims suggesting otherwise,” a distillery spokesperson said.