The state government says it has not contravened guidelines for a jobs fund used to attract private investment to the Latrobe Valley despite claims by independent MP Russell Northe that criteria for the fund was breached last month.
Mr Northe said funding awarded to NDIS call centre operator Serco in Newborough potentially breached guidelines which stated funds would not be allocated to projects undertaken by the private sector as a result of a government contract.
He also criticised the state government for awarding the funding to Serco after federal Labor's social services spokeswoman Jenny Macklin said the Commonwealth appointment for the NDIS contract was a "worrying development" in March.
At the time, Ms Macklin questioned whether the multinational outsourcing giant was capable of providing the appropriate services to NDIS participants.
The funding for Serco was allocated from the Latrobe Valley Economic Facilitation Fund – a fund developed by the state government and used to attract private investment to the region.
"When you read the criteria of that particular fund it seems to contravene what the rules actually state," Mr Northe said.
"The fund refers to certain activities that won't be funded and that includes projects that are undertaken by the private sector as a result of a government contract or regulatory requirement.
"In my opinion, this grant would seem to contravene that particular provision."
Minister for Industry and Employment Ben Carroll said "it's a real shame that anyone would rally against job creation in the Latrobe Valley".
"The Latrobe Valley Economic Facilitation Fund, which would be cut by the Liberal National Coalition, is creating more than 900 jobs and driving $80 million in private investment."
Mr Northe also raised concerns surrounding a lack of transparency about the fund and dismissed claims by the state government that details could not be released due to commercial-in-confidence.
"This is a $40 million fund but it is impossible to find how and where this money has been spent and I don't believe that is good enough for people and businesses within the Latrobe Valley," Mr Northe said.
"When the Coalition had the Latrobe Valley Industry and Infrastructure Fund, that fund was very transparent; funding allocations to businesses were publicly known and understood.
"I don't see why the argument of commercial-in-confidence is being used for this fund."
However, a spokesman for Mr Carroll said the fund was an "investment-attraction fund" and details, including how much Serco was given, could not be released.
The spokesman said companies were subject to a strict and rigorous selection process and the information surrounding the Serco agreement was commercial-in-confidence.
He said Serco was awarded the NDIS contract by the federal government, while the state government contributed funding for the centre to be based in the Latrobe Valley.
A Serco spokesperson said the company had employed 112 local people in new positions at its Newborough contact centre.