Senate debates

Monday, 18 October 2021


Public Governance, Performance and Accountability Amendment (Improved Grants Reporting) Bill 2021; Second Reading

11:19 am

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

Mr President, I take this opportunity to congratulate you on your election to the role of President this morning. The very existence of this bill, the Public Governance, Performance and Accountability Amendment (Improved Grants Reporting) Bill 2021, the fact that I'm up here needing to debate an antirorting bill from opposition, highlights the urgency of the situation we find ourselves in today. Day after day, month after month, over the past eight long years that the Liberals and Nationals have been in government, Australians have opened the newspapers or turned on the TV news only to learn about a new spending scandal ensnaring this government—sports rorts, the Building Better Regions rort, the pork-and-ride commuter car park scheme. And they're only the most recent and some of the most egregious examples.

Two weeks ago, on 2 October, I opened the Daily Telegraph to find one of the most galling examples of just how shameless this government has become with its rorts. In an article about the continuing saga of the National Party considering whether they'll agree to a net zero climate policy, an unnamed government MP told the Daily Telegraph that policy packages are going to be 'less important than the compensation package offered to regional Australia'. The quoted MP joked:

There's going to be a giant National Party green rainbow across regional Australia with crocs full of pork at the bottom …

That's where we're at after eight long years of this government. We have a government MP joking with a journalist about the flagrant misuse of taxpayer dollars to buy off members of this government—senior members, in fact, like the Deputy Prime Minister, Mr Joyce. What this quote says to me and the rest of Australia, and the Australian public, for that matter, is that the rorts have reached a crisis point. The government are at the point where they don't even care about being caught anymore and they're actually joking in broad daylight about what is to come in the lead-up to the next election.

To be honest, this sort of behaviour is so blatant, it's so brazen, you'd be forgiven for thinking that this sort of spending, this bankrolling of anyone or any seat that's a bit politically difficult, is a natural part of any government's activity. They do it so casually, in the hope that Australians also think that this approach to budgeting is a perfectly legitimate strategy. Australians work hard for their money and they should be able to have faith that those who find themselves in positions of power, making decisions about how Australian taxpayer dollars are spent, are doing so with the utmost honesty and integrity—which is exactly why we in Labor have been left with no choice but to introduce this bill for debate.

It's clear that the current Commonwealth Grant Rules and Guidelines are part of the problem when it comes to a lack of transparency around government spending. At the moment, a minister who approves grants against the recommendation of their department or within their own electorate can have a free pass of up to16 months before their decisions are public. In some cases—and, indeed, in the case of the pork-barrelling that has been foreshadowed by government MPs in a newspaper—that will be well after the next federal election. That's what the Prime Minister and his ministers hope will remain the case. In a government that is already marred by a 'don't ask, don't tell' culture, this sort of lag time has undoubtedly helped the Prime Minister and others avoid accountability on dodgy spending decisions.

Labor believes that taxpayers deserve to know how their money is spent in as close as possible to real time, not 16 months down the track. That's why this bill will force ministers who award grants in their own electorate, or against departmental recommendations, to report the decision to the finance minister within just 30 days of the approval, and then the finance minister has to table that report in the parliament within five sitting days. This will dramatically reduce the time ministers are able to hide their dodgy decisions from the Australian community, and there is no reasonable argument for any senator in this place, particularly those on the government benches, to oppose this bill. The fact that we are even introducing this bill, though, is a sad indictment of the current state of affairs under Scott Morrison and the coalition. But rorting and pork-barrelling are just business as usual for this lot, as they have been for some time.

Since 2014, this government has created more than 150 funds or grants programs in the budget, totalling almost $70 billion in public money. Now, let's be clear. Some of these funds are legitimate, and we accept that. But what we don't accept is the pattern of behaviour that has become standard practice for the Morrison government. That behaviour is to hide money away in these funds for a rainy day and only open them up to coalition held or target seats, sometimes on the eve of an election, and, most importantly, to do so in a way that keeps it secret for as long as possible. Make no mistake; this pattern started when Mr Morrison, our current Prime Minister, was Treasurer. He learnt very early that it's a pretty neat way to campaign without ever having to touch your own Liberal Party campaign funds.

In the lead-up to the last election, we saw 91 per cent of the $30 million in round 3 of the Safer Communities Fund go to government, Independent or marginal Labor seats, with the government rejecting projects picked by experts and instead choosing to funnel the money into their own hand-picked projects. We saw a $150 million fund dedicated to building female change rooms appropriated for swimming pools in 11 Liberal and Nationals held seats. We even saw a Liberal seat holder announce $400,000 worth of Communities Environment Program funding before the program was even opened. Fancy that. These aren't even the most egregious of the examples. Who could forget sports rorts, where $100 million in funding was flung out the door, not based on the advice of Sports Australia but based on a colour-coded spreadsheet that passed between the Prime Minister's office and Senator McKenzie's office on the eve of the election, indeed, with final decisions being made after caretaker commenced? Or the latest one, the 'pork 'n' ride' commuter car park rort, which puts sports rorts to shame, really—a $660 million fund for commuter car parks with a view to reduce congestion in urban areas and ensure commuters get home sooner.

Who could forget the Treasurer of Australia on budget night announcing this fund to the Australian people in his budget speech? He said, 'We're going to have a commuter car park fund to beat congestion.' He didn't say: 'We're only going to canvass government members to be able to apply for this fund. We'll use your money and announce this fund and make it look like it's going to be open to everybody, but then we're going to have a secret process where only coalition members can be invited and canvassed'—I think that was the word—'for what we'd like and where we'd like it.' Lo and behold, the Treasurer of Australia gets four in his electorate. He announces the fund on budget night, pretends that it's open to anywhere with urban congestion issues, and then on the eve of the election, again, before any transparency or accountability, he signs off on four in his own electorate. That's what happened here.

The Treasurer of Australia is the apprentice of the Prime Minister when it comes to rorting funds. It starts at the top. This Prime Minister rewards ministers who take public funds, put a dodgy process around them and then allocate the Australian people's money into seats they want to either hold or win, or for a political fix with the National Party. That's the other option. That's how this government works. There will be no lecturing about fiscal responsibility from the government that has wasted more money than any other government since Federation. There will be no lectures on fiscal responsibility, because this is the behaviour they have engaged in year after year for eight long years. The Australian people are paying the price for it. The bill has to get paid. Once the pork-barrelling and the rorts are over and the government's kicked out, the bill will still be there. This is why we are introducing this bill today.

When government members are questioned about the appropriateness or otherwise of their spending, they fob it off and say: 'Oh well, we hold seats in those areas, that's why we're funnelling 90 per cent of the funding into those areas. We're sorry that there's only 10 per cent for the rest of you. That's where we hold a seat, and that's where we want to maintain our seat.' They don't even pretend. The Deputy Prime Minister was quoted as saying, 'Oh well, I don't care,' when asked about pork-barrelling in the regions.

Look at the Building Better Regions Fund rort. That has been a really special one for this government. It was one of the earlier performers in funnelling money into coalition seats. It started as a relatively modest program in the rorting schemes that we've seen established. It started out as a $300 million fund in 2016. It's been so successful at funnelling money into particular electorates without any accountability that it's been topped up several times, and the fund has now grown to a whopping $1.38 billion. The Deputy Prime Minister announced a couple of weeks ago that $100 million would be going into round 5 of the program, bringing the total round 5 funding to $300 million. Then, in the same breath—what a coincidence!—he said nearly 90 per cent of this funding, $270 million out of $300 million, went to coalition held or target seats.

So this shows that, even after sports rorts, even after the female change rooms rort, even after the commuter car park rorts and even after the Auditor-General has handed down scathing report after scathing report—and it still has reports into the Urban Congestion Fund going on—this government doesn't care, because it hasn't changed anything about the way it allocates money through these schemes.

We know that 112 out of 330 projects in round 3 of the Building Better Regions Fund and 49 of the 163 projects in round 4 were approved against departmental recommendation. When the government was forced, under a Senate order, to table the information about those decisions—it is inadequate; it takes months—and we had this at estimates, all of the detail in all of the attachments was blacked out under some confidentiality principle. So we have this situation where we have all of the details but nobody's allowed to see them. A straight black sheet of paper was released when trying to bring this government to some transparency. That's the approach.

This is an issue that we take really seriously. I would note that the usual defence is, 'You all do it too.' The finance minister used the argument on national TV: 'We took it to the people, the people voted us in and, therefore, we can do what we like.' The problem with that argument is that, when they announced the Building Better Regions Fund, the sports community grants program, the sporting infrastructure program, the swimming facility improvement program and the Building Better Regions Fund, they didn't say, 'We're going to have a dodgy process around them and funnel all this money into seats that we want to hold.' When that money is appropriated through the appropriation bill, the Australian people are right to believe that that money is there for all of them, because that's how this money's made available. It's made available through an appropriation bill based on the government saying, 'We are establishing this program.' But then there's this fine line and this small print when you get down into the detail which is never published when these funds are appropriated that says, 'By the way, 90 per cent of this billions of dollars is going to be allocated to our election priorities and is going to favour the seats we want to win.' That is not said to people before the election. I think if the government were honest and took that approach, saying, 'We're going to establish funds and then we're going to allow only our people to apply for them,' there might very well be a different election result. So it's dishonest to use that as a defence for the way these programs are managed.

This government has wasted more money than any government since Federation. Through JobKeeper, $20 billion was provided to companies whose profits increased and who didn't meet the turnover threshold test. That's the legacy of this government. So we want no more lectures on fiscal responsibility as they're pork-barrelling their way around the country. People should support this bill. (Time expired)

11:34 am

Photo of Claire ChandlerClaire Chandler (Tasmania, Liberal Party) Share this | | Hansard source

I rise today to make a comment on the Public Governance, Performance and Accountability Amendment (Improved Grants Reporting) Bill 2021. This bill has some reasonable intentions around transparency of government expenditure, but it seems to have not taken account of some of the processes, rules, procedures and policies that this government has already put in place to ensure that we have transparency over those decisions. In making my contribution here today, I intend to provide some background as to what those existing frameworks look like and also highlight some of the issue with this bill, particularly regarding how it duplicates existing processes, confuses information and has the potential to create inconsistency when it comes to the manner in which government reports its grants.

The government is committed to transparency on government grants and government expenditure. Senator Gallagher's bill would significantly increase the duplication in existing reporting arrangements, creating, in effect, a fifth set of reporting rules that duplicates reporting that already operates under four other sets of rules. I will go into some background regarding that now. Currently, grants that are awarded by a minister, either contrary to official advice that it be rejected or 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 Rule, and for non-Commonwealth entities this is required under the Commonwealth Grants Rules and Guidelines. Currently, grant information is also disclosable in parliament under Senate orders of continuing effect Nos 16 and 23E. Order 23E covers most grants reported to the finance minister and order 16 covers all grants.

Transparency is achieved not only through periodic reporting to the parliament but also, directly and faster, through online reporting to the wider public. Indeed, this has already been happening at a federal government level for a number of years. In 2017, the government mandated the requirement to report all grants on the GrantConnect website, which is located at This site provides whole-of-government consolidated data on grant opportunities and grants awarded. Grants are uploaded regularly throughout the year to this site after grant agreements are signed. That's an important point that I will come to later. The GrantConnect website captures information on grant recipients, their location and the value of grant decisions. The website includes the guidelines for each program, allowing people to look up who is a decision-maker for the program and, thereby, identify which grants are decided by which minister.

This website shows not only grants previously awarded but also grant rounds currently open and grant rounds that will be opening in the near future, which enables community organisations to plan future ideas for grant applications. People can search by key terms for any grant they might be interested in, and they can also explore large datasets to find programs or decisions of greatest interest. GrantConnect can notify registered users on grant opportunities as they become available. This website really is the public interface through which Australians can access whatever information they need about the awarding of government grants and about any potential grants that might soon be up for consideration.

The bill that we're debating here today deals with one subset of grants specifically: those that are awarded on the basis of ministerial decisions. I know Senator Gallagher said that she had heard these comments before, but I'm going to repeat them here today: governments of all colours have considered it appropriate to use some ministers as decision-makers for some grant programs. Ministers often have greater opportunities than officials to consult extensively with their local communities, non-government organisations, industries and other stakeholders. They travel extensively around the country and hear frequently from constituents, including people who are referred by parliamentary colleagues from around the country. Therefore, ministers are often uniquely positioned as grant decision-makers, because they have a very broad understanding of community needs. This is a fundamental tenet of our democracy, because, fundamentally, what would be the point of having ministers in the first place if the bureaucracy always decided these things? Certainly, we on this side of the chamber would never attest that the bureaucracy always, 100 per cent of the time, knows best. The Commonwealth Grants Rules and Guidelines state that where ministers decide grants they must consider official advice. But they are not rubber stamps. Ministers are obliged to use their own judgement, so they may take a different view to officials, .but they are always required in the first instance to receive and consider the official advice. That's where the control point is in this process—that ministers, first and foremost, must consider the advice from the bureaucracy and then determine whether or not they are going to overrule that advice. So that's the background, generally speaking, on the administration of grants and the awarding of grants at a federal level.

I will now outline for the chamber the five key issues that we see with this bill. The first is that the bill has an inconsistent manner of treating different agencies as it relates to their grants. The bill proposes to introduce a new term of 'reportable grant', which covers most grants that are currently reported to the finance minister by ministers in respect of 98 non-corporate Commonwealth entities. However, Senator Gallagher's bill doesn't cover any of the grants that are administered by the 71 corporate Commonwealth entities. This seems a slightly odd oversight. The bill is oblivious to the fact that there are separate requirements in the PGPA regulations that cover those 71 entities, several of which also administer grants. This bill would therefore create a divergence in the current approach, which is a line between the treatment of grants administered by corporate and non-corporate government agencies. That alignment was cemented in regulations on 17 July last year, regulations that Senator Gallagher might have missed in drafting this private senator's bill that we are discussing, because this bill would take these requirements to a position of inconsistency.

This bill also places in the PGPA Act detail covering practices that have until now been in delegated legislation. It would require agency officials to depart from following a consolidated set of rules and guidelines that provide a single point of reference today in the Commonwealth rules and guidelines and would expecting them to follow scattering rules that are separated between primary and delegated law. This will inevitably increase the risk of inadvertent rule breaches by officials and make for a confused structure of laws governing our grants processes. Procedural information more appropriately belongs in regulation, and key principles belong in primary law. This bill cuts against longstanding practice for procedural requirements around grants that have allowed officials to follow a unified rule book.

The second issue with the bill as I see it is duplication. This bill would require ministers who approve grants to provide reports to the finance minister within 30 days of their approval. This requirement relates to three types of grants: those the department recommended against, those within the minister's own electorate and those that did not meet any of the relevant selection criteria. However, that third category, at least to my mind, is overlapped completely by the first. It will mean that everything reported in category 3 will also have to be reported under category 1. If a grant doesn't meet any of the relevant selection criteria, it therefore follows that the department would be recommending against awarding that grant. That grant would therefore be reportable under category 1, just as it's reportable now under both the Commonwealth Grants Rules and Guidelines and under existing Senate orders. This bill will make that same grant reportable yet another time for no obvious purpose.

The bill is also unclear about the point in time at which an application is reportable if it didn't meet the criteria for a particular grant program. It's been acceptable under governments of all colours for opportunities to be afforded for applicants to improve their grant proposals in some circumstances—for instance, where there are few applicants in a given region or sector of the community—and this bill unfortunately deals with those situations quite poorly. This bill suggests that an application that is initially found not to meet criteria, but the proponent later agrees to changes that would bring it within the relevant program criteria before the minister approves, would have to be reported as if it were outside guidelines. That seems to be a somewhat misleading outcome, when all that has effectively happened is that there have been negotiations between the department and the proponent to ensure that the grant in question operates within the criteria or guidelines. The bill looks only at what is in a grantee's initial application, not what is in a final grant agreement after that negotiation between proponents and officials. The bill therefore may lead to reputational harm for proponents who have ultimately come into accord with program requirements.

The third issue we see in this bill is the duplication of existing reporting requirements of the Commonwealth Grant Rules and Guidelines 2017 relevant to Senate standing orders. It duplicates Senate order 16, which I previously mentioned requires ministers to table grants approved between estimate periods three times a year, at least seven days before each estimates round. Grant details are tabled to facilitate Senate scrutiny. This reporting covers many more grants that would be reported under the bill that we're discussing today. This bill also duplicates the requirements of Senate order of continuing effect 23E. This order requires tabling of reports from other ministers to the finance minister about grants awarded contrary to official advice, including those grants that I previously mentioned awarded in a minister's own electorate contrary to official advice.

The fourth issue I will briefly go into is inaccurate reporting. In the pursuit of rapid reporting, this bill would result in inaccurate reporting. Ministers would have to report to the finance minister within 30 days, and then the finance minister would be required to table the reports in the parliament within five sitting days of receiving them. And I think this bill confuses a decision by a minister with the award of a grant. A grant isn't payable until a grant agreement is struck, which occurs after a minister's decision. Variations can occur during the negotiation of an agreement between an agency and an applicant, as I previously mentioned, and this is why the existing regular reporting on that GrantConnect website that I mentioned earlier is based on grant agreements, based on actual legal undertakings, as opposed to ministerial decisions on allocations, which are closer in nature to policy decisions. In some cases grant applicants drop out—for instance, because the minister doesn't award as much funding as they were originally seeking or because the applicant might be unwilling to meet all of the conditions of funding that the Commonwealth requires. This bill would create several harms to the public interest by requiring public reporting of intended grants at a point prior to the finalisation of a grant agreement. First, this may hinder agreement negotiations with applicants and reduce value for money where officials are seeking better outcomes for taxpayer expenditure, and, second, in the event that an agreement is not signed, this would result in the publishing of misleading data that would contradict other more accurate public information reported on GrantConnect and reportable to the Senate. For instance, amounts reported under this bill may be different from what is actually and ultimately paid. Indeed, the bill may require publishing amounts that in fact may never be paid.

Fifthly and finally, I want to address the issue of the lowering of standards that may inadvertently result from this bill. The Commonwealth Grant Rules and Guidelines currently require ministers to report to the finance minister about grants that occur in their own electorates as soon as practicable. This bill, by contrast, would seek to contradict this in primary law by requiring that this occur within 30 days. This creates real issues of interpretation and attention in how we interpret these guidelines. The current obligation is focused on drawing forward the obligation to the earliest possible point. That's why it says 'as soon as practicable'. Because this bill would redefine what is a reportable grant in primary law, it could override and therefore push that reporting time line back to the 30 days. All these reporting cycles inevitably depend on our public servants tracking decisions on behalf of their ministers and gathering up documents for each reporting cycle. If a new, conflicting standard is introduced around how soon they have to report, it's easy to see that officials might try to fold processes together, which would mean that reporting would ultimately happen later than it currently does.

As I said in my introductory remarks, this bill evidently has some reasonable intentions around transparency, but it is not taking into account the processes this government has already put in place to ensure transparent reporting of government grants.

11:49 am

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

In the few minutes I've got allocated to speak on the Public Governance, Performance and Accountability Amendment (Improved Grants Reporting) Bill 2021, I want to list all the rorts that have happened. We've got sports rorts 1 and 2. We've got the Safer Communities Program rorts. We've got the 'pork and ride' rorts—the Urban Congestion Fund. We've got the Building Better Regions Fund rorts. I'm going to run out of time to list all these rorts. Are there any buckets of public money that this government won't use for its own electoral gain? There are so many examples of grants being awarded contrary to selection criteria or merit, and, as we head into the election, I have no doubt that we will see more from this government. This is a government that feels entirely comfortable using public money to feather its own electoral nest.

We've got some Commonwealth grant guidelines. They require disclosures to be made to the finance minister, but that's where they stop. That's why last year, in May, the Greens moved an order of continuing effect, which passed, that made that information public, to try to reveal that these rorts are happening and to not let the government keep it all under wraps. This bill builds on that, and we support it. But it's not enough just to stop the rorts; we need a strong federal corruption watchdog. We've been waiting 1,000 days for this government to get on with the job. My bill passed the Senate two years ago, and it has been languishing in the House for all that time. I'll be moving again this week to force the government to bring that bill on in the House. The Australian public are fed up with the rorting and fed up with the corruption. They deserve better.

Debate adjourned.