A report from the audit office has found Barnaby Joyce expanded a farm finance scheme against the advice of Treasury.

A report from the National Audit Office on the Farm Management Deposit Scheme shows the scheme was expanded by Mr Joyce as agriculture minister in 2016 despite none of the proposals having a “strong case for change”.

Auditor general Grant Hehir also found that the FMD scheme, which had charge of over $6.6 billion in deposits in June 2018, does not have “fully effective” administration processes, risk identification, or compliance measures.

Despite this, the amount of foregone revenue from the taxpayer-funded scheme has more than doubled from $245 million in 2016–17 to $500 million in 2017–18.

The authorities looked at three changes made by Mr Joyce to the scheme in 2016, lifting the limit of deposits from $400,000 to $800,000, allowing early access to deposits and also permitting the use of accounts to offset business loan repayments.

The Department of Agriculture’s records show the move to lift the deposit cap to $800,000 came from the minister for agriculture’s office. It was significantly higher than the budget-costed limit of $500,000.

“While the advice noted that increasing the deposit limit to $800,000 would assist primary producers to ‘better manage’ fluctuations in cash flows, it did not include any specific reasons why it was appropriate to double the size of the cap, or provide other deposit limit options for government to consider,” the audit notes.

“The advice noted that a deposit limit of $800,000 would likely benefit a small number of primary producers. No assessment was made as to how the higher limit would support the policy objective of increasing financial self-reliance.”

Overall, the audit found the changes would have a “limited” impact on achieving the scheme’s objectives.

“Treasury’s advice to government was that none of the proposals provided a strong case for change. A common theme in the advice was that the proposals were likely to benefit a relatively small number of primary producers,” it found.

The authorities say the agriculture department should work with Treasury to improve its risk assessment and compliance processes.

“The compliance arrangements and risk assessment processes have not fully captured key elements of the Scheme’s design,” Mr Hehir says.