Ben Small (WA, Liberal Party) Share this | Hansard source

I join my fellow colleague from Western Australia Senator O'Sullivan in rising today to argue against the Public Governance, Performance and Accountability Amendment (Improved Grants Reporting) Bill 2021. The reason is not, as those on the other side of the chamber would have you believe, that this is a government committed to anything other than transparency in decision-making, and indeed accountability, to the people of Australia who send us here but rather that there are five key flaws in this particular bill which seek to undermine its intent, complicate decision-making and indeed do nothing to further the cause of transparency within government. If we take this in turn, in terms of transparency in grant-making decisions by ministers of the Crown, Senator Gallagher's bill would significantly increase duplication in existing reporting arrangements, not only creating a second but rather a fifth set of reporting rules that complicate reporting that already exists under four other separate and distinct sets of rules.

To Senator O'Sullivan's point: a lot of the hot air that we hear out of those opposite on this is, in fact, only caused by the transparency that's upheld by those reporting arrangements. Currently the grants that are awarded under ministerial discretion either contrary to official advice that they be rejected or relating to projects in the minister's own electorate are already disclosed to the finance minister. For corporate Commonwealth entities this is required under the Public Governance, Performance and Accountability rules. For non-corporate Commonwealth entities this is required under the Commonwealth Grants Rules and Guidelines. There are many good reasons, some of which even Senator Grogan touched on, that would require a minister to take a decision that isn't in line with official advice, and we'll get to those a little later. However, on this point that grant information is already transparent, grant information is also disclosable to the parliament under Senate Procedural Orders of Continuing Effect Nos 16 and 23E. Order 23E covers most grants reported to the finance minister under those circumstances I just touched on. Order 16 covers all grants.

Transparency is, ultimately, achieved in our democracy through periodic reporting to this parliament, and transparency is achieved more directly and faster through online reporting to the wider public. This is what's been happening for years. In 2017, the government mandated the requirement to report all grants on the GrantConnect website, located at www.grants.gov.au, which provides whole-of-government consolidated data on grant opportunities and those grants that were awarded. Grants are uploaded to this site regularly throughout the year, after the grant agreements are signed between parties. So we have a GrantConnect website that captures information on grant recipients, their location and the value of those decisions.

It includes the grant guidelines for each of the grant programs under which those same grants are made, thereby allowing every person in Australia to look up who the decision-maker is for the grant program and, therefore, identify which grants are decided by which minister. The website not only shows previous grants awarded but also those grant rounds that are currently open and upcoming grant rounds that enable community organisations to plan for future grant applications.

This bill deals with just one set of grants, those that are awarded based on ministerial discretion or ministerial decision against advice. Governments—on both sides of politics—have always considered it appropriate to use ministers as decision-makers in certain circumstances, because the reality is that ministers have greater opportunities than those public servants and bureaucrats based here in Canberra to consult widely with the people of Australia, to engage with stakeholders and industries, particularly in rural and remote parts of our country. They travel extensively around the country and hear from these people directly.

Ronald Reagan said it best: the nine most terrifying words in the English language can be, 'I'm from the government and I'm here to help.' Having ministers of the Crown, of the democratically elected government of the day, travel our country and hear directly from the horse's mouth on these important issues and take up the decision against official advice is recognised by both sides of politics as an important part of our democracy.

That said, the Commonwealth Grants Rules and Guidelines require a minister to consider, when making a decision on a grant, that same official advice. Official advice from a department is not simply a rubber stamp. Ministers are obliged to use their own judgement, and sometimes that means they form a different view from that of our officials. Ministers are always required, though, in that very first instance, to receive and consider the official advice and the very good reasons that the hardworking public servants here in Australia provide that same advice.

There are five key areas of defect within this bill. Firstly, there is inconsistent treatment of different government agencies. On the face of it, this makes absolutely no sense to me, because the bill proposes to introduce a new term, a 'reportable grant', which covers most grants currently reported to the finance minister by ministers in respect of the 98 non-corporate Commonwealth entities. The bill does not cover any of the grants administered but 71 corporate Commonwealth entities.

I just touched on the two very different sets of circumstances in which these decisions are reported to the finance minister and the parliament. This is a bizarre oversight. The bill is oblivious to the fact that there are separate requirements in the PGPA regulations that cover those 71 corporate Commonwealth entities as distinct from the 98 non-corporate entities. So that will cause a divergence in the current approach, which is aligned and uniform, requiring the treatment of grants administered by both corporate and non-corporate agencies to be reported. That alignment was cemented in regulations on 17 July 2020—regulations that Senator Gallagher appears perhaps to have missed in bringing this legislation forward despite the fact that she was shadow finance minister at the time. This bill would take those requirements from a position of uniformity to a position of inconsistency.

The bill also places details in the PGPA Act covering practices that have until now sat within delegated legislation. It would require agency officials to delegate and depart from following a consolidated set of rules and guidelines, providing a single point of reference that exists today in the Commonwealth rules and guidelines, to expecting them to follow scattering rules that are separated between primary and delegated law. That inevitably increases the risk of inadvertent rule breach by officials within the Australian government structure and makes for ultimate confusion in the administration of our laws—procedural information being appropriately in the regulations with key principles sitting within the primary legislation that informs it. The bill cuts that longstanding practice for procedural requirement around a grant application that has allowed officials within the Australian government structure to operate from a position of uniformity.

There's duplication within the bill, requiring ministers who approve grants to provide reports to the finance minister within 30 days of their approval, relating to three key areas of grant decisions. However, the third category, which is that those did not meet any relevant selection criteria in 1 and 2, are completely overlapped by the first category, which are those grant decisions that the government department recommended against, so everything in category 3 would also have to be reported in category 1. If a grant application doesn't meet the selection criteria or falls short in some way, a departmental official will, of course, recommend against it. Therefore, the grant would be reportable under category 1, just as it is now reportable under the status quo, under the Commonwealth Grant Rules and Guidelines and under the existing Senate orders 16 and 23E.

The Gallagher bill is also unclear about the time point at which an application is in fact reportable if it did not meet the criteria for a particular grant program. It has been accepted practice by governments of both political persuasions for a long time to provide opportunities for those applicants who are unsuccessful to approve their applications in some circumstances. If an application is found not to have initially met the criteria and later the proponent, having brought on changes that would improve the compliance with the relevant program criteria and before the minister approves, the Gallagher bill suggests it would have been reported as if it were outside guidelines. That is a misleading outcome. The bill only looks at what is in a grantee's application, not what is in the final grant agreement after a negotiation between proponents in the community and those government officials who sit here in Canberra. Therefore, the bill leaves open those proponents to reputational harm for those who have ultimately brought their application into close accord with the program requirements.

In addition to these two key defects in this legislation, we also see a duplication with those Senate orders 16 and 23E. Senate order 16 provides that ministers are able to table grants approved between estimates periods. Three times a year and at least seven days before each estimates round, the grant details are tabled to facilitate scrutiny of those same decisions by this very chamber. This duplicates entirely the requirements, with continuing effect, of Senate order 23E, which, as I've already outlined, requires the tabling of reports from other ministers to the finance minister about grants awarded contrary to departmental advice in any way, including those grants awarded in a minister's own electorate.

Senate order 23E only came into effect relatively recently, so the first tabling of documents under this accord occurred on 30 April this year. There has been no review of that reporting and no suggestion that the additional reporting is not of some value in upholding the transparency which Australians rightly expect we uphold in dishing out taxpayer money. If Senator Gallagher somehow thinks that Senate order 23E is deficient, perhaps we ought to be having a conversation around extending those terms—