Pearls and Irritations

One of the worst aspects of the sports rorts affair is the way elements of the public service turned a deliberate blind eye to what was known, or assumed, to be a failure by the Minister to be bound by the requirements of the law governing the way the grants could be approved.

More evidence of what was done, or not done, by the government continues to emerge. We will have to wait another five weeks (till 24 June) until we have the benefit of the Senate committee’s report on its inquiry. Hopefully, that report will detail the advice that Sport Australia obtained about its legal authority to act as it did in affair – effectively handing its own powers over to the Minister to determine what grants should be made. That advice (from an as yet unnamed barrister) was received in February this year, after the Auditor-General said in his report two months earlier:

• 2.17 In early June 2018, Sport Australia recorded that adherence to the ASC Act required that it, not the Minister, approve the award of CSIG funding. In late June 2018 the Department of Health identified that, in the event the Minister was to be the approver, legal advice may be required on the use of the section 11 directions power in order for the Minister to be able to undertake this role. The Department of Health advised the ANAO in November 2019 that this legal advice was not sought.
• 2.18 The guidelines published on 2 August 2018 identified that the Minister would approve CSIG funding, with her decisions to be informed by recommendations from an assessment panel that had been endorsed by the Sport Australia board. Throughout the granting process all parties acted as if the Minister was able to be the approver.
• 2.19 No section 11 directions were issued to Sport Australia in 2018–19. In the absence of a section 11 direction, there was no legal authority evident to the ANAO under which the Minister was able to be the approver of CSIG program grants to be paid from the money of Sport Australia.

So, if the ANAO is correct, Sport Australia knew that it, not the Minister, had to approve funding. No legal advice was sought at the time to dispute this, or find a way around it.

During the Senate committee inquiry, Senator Anthony Chisholm (the Labor chair of the committee) asked Sport Australia, ‘What was the legal basis for the Minister to provide final approval to fund grants’ under the scheme. In a written answer, Sport Australia provided a classic non-answer, ignoring the fact that the question was about the legal basis for the Minister to give approval: ‘The legal basis for Sport Australia’s role in the Community Sport Infrastructure grant program was Sport Australia’s own powers under the Australian Sports Commission Act 1989. In exercising its powers, it was open to Sport Australia to take account of the Minister’s approval.’

So apparently all this stuff about Ministerial (and even Prime Ministerial) approval was just nonsense; it was Sport Australia making these grants. It merely ‘took account’ of what the Minister had approved.

Everyone must have been deceived. The former Minister, perhaps, should get an apology (and her old job back) because she didn’t actually make the decisions about the grants (contrary to what she insisted was the case), she just gave ‘approvals’ so that Sport Australia could make the grant decisions.

We are apparently expected to accept this nonsense.

Senator Bridget McKenzie, the former Minister, provided the committee with a 20-page document in which she defended her role in approving grants. She was in no doubt that it was she, as the Minister, who was the decision-maker, not Sport Australia. In the course of the submission she dealt briefly with the ‘technical question’ raised by the Audit Office ‘regarding the statutory basis of my discretion, specific to this grant process’. (As an aside, this is a curious way to refer to the question the ANAO raised about whether the Minister had the power to be the approver of the grants – it was more than a mere ‘technical question’, it was whether the Minister had the power to act as she did in approving the grants.)

Senator McKenzie said: ‘The ANAO’s legal concern, however, was not raised with me, or my Ministerial office, by Sport Australia or the Department of Health prior to the commencement of the CSIG program. Nor was it flagged during the rigorous 2018-19 Budget process in which the Government agreed to the CSIG program being funded and administered through Sport Australia. I expect the Australian Public Service would resolve such legal issues, if they exist, prior to advising a Minister on how she should proceed with the expenditure of public monies.’

And that is absolutely correct. The evidence from the ANAO makes it clear that both Sport Australia and the Department of Health were aware there were or could be legal issues about the Minister taking over as the decision-maker or grant approver, contrary to the provisions in the legislation. They did not tell the Minister she might not be able, legally, to do as she wished. They did not bother to get legal advice.

According to a number of submissions to the Senate committee from leading academic lawyers, any such advice should have been that the legislation, as it then was, did not permit the Minister to have that role.

Advice should have been obtained by either or both Sport Australia and the Department of Health and the Minister should have been advised that the legislation would have to be changed if she wanted to exercise the decision-making power which she required.

Whether the Minister should be able to exercise such powers is a different issue.

The Commonwealth Electoral Act contains section 326 which deals with electoral bribery. It says in part,

A person shall not, with the intention of influencing or affecting:

(a) any vote of another person … give or confer, or promise or offer to give or confer, any property or benefit of any kind to that other person or to a third person.

Penalty: Imprisonment for 2 years or 50 penalty units, or both.

But it contains an important exception:

This section does not apply in relation to a declaration of public policy or a promise of public action.

So its OK for politicians to bribe us, according to the law.

The exception is necessary to cover promises of a general kind made particularly during election campaigns when politicians promise that if elected they will change taxes or social security laws or whatever for the benefit of various people or groups in the community. Promoting such policies is not classed as bribery under the Act. But grants favouring relatively few members of sporting clubs aren’t really what is envisaged by this exception in the Act, which is why the laws about such grants normally provide they should be awarded on a needs or other specified basis, and not left to the discretion of a minister.

Another reason why most people have regarded the grants in this case as a rort.

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