JACK WATERFORD. How rorting sporting grants became a bipartisan game.

Jan 21, 2020

The winner-takes-all approach to grants involves corrupt ideas of government, even if no crime occurred. It is an abuse of power

If Scott Morrison is as politically smart as he likes to think he is, he will be choosing his words very carefully as he, or if he, tries to frame a defence of Bridget McKenzie over the latest Sports Rorts affair. He would be wise too to consult Peter Costello, who first made his name in parliament, by taking down Ros Kelly as sports minister as well as minister for the environment, over Labor’s own 1994 white-board affair.

Morrison would know that the impeachment trial of Donald Trump, before  uber-partisan American Chief Justice John Roberts and 100 Senators will get a lot of public attention, even in Australia. Most expect that the Republican-dominated senate will acquit him, whatever the evidence. The essential allegation is that Trump was guided by his own personal interest, not the national interest, when he threatened to withhold aid from Ukraine until it provided him with political dirt on former Democrat Vice-President, Joe Biden.

Trump, of course, denies this, however unconvincingly, given both the evidence and his efforts to frustrate an inquiry into the affair. As Trump once said, some of his supporters would think he had done no wrong if he shot someone dead in the street. Others might not take their presumption of innocence that far, but see in the prosecution a mere partisan attack, unworthy of being called  “high crimes and misdemeanours’’.

But some of the Republican Senators, in drafting speeches defending Trump will be forced to consider whether purely personal or partisan considerations can be the basis of proper executive decisions. Or whether instead there is a concept such as public interest which must inform and guide  all the functions of executive government, even as it is understood that a person of Republican sensibilities might have a somewhat different appreciation of the public interest than a Democrat one. It cannot be assumed that only Democrats have a long-term interest in effective government.

Some will find it impossible to be disloyal to party, but will not want to endorse a new doctrine repudiating the public interest as the first, and last, consideration of good government. If they do, the US system of constitutional checks and balances will be incapable of putting any check on bad executive action, or demanding any legal accountability for it.

Twenty-five years ago Ros Kelly was accused of making grants to sporting organisations not by due process but so as to favour Labor’s interests in marginal seats. The Auditor-General, John Taylor, was in one of his feral moods. He said the process by which she and her office had doled out grants in a $30 million program left the Commonwealth wide open to charges of fraud.

What was missing – in particular – was documentation of why and how decisions had been made. Ms Kelly claimed that the consideration of individual applications had occurred on a whiteboard, now unfortunately wiped. There were simply no records of the criteria used, or showing how some applications of no particular merit had received approval, while others, of apparently higher merit (other than that they came from coalition electorates) missed out.

Kelly weakly claimed that, usually, Labor seats were more likely to have poorer sports and other facilities, given the socio-economic status of many of the electorates. In this sense it was a “coincidence” that they appeared to be favoured. (The coalition in more recent times has used similar sophistry to explain partisan pork-barrelling. Out on the hustings, however it boasts of how much money it is diverting to constituents.)

Kelly insisted that there had been due process. Yet once she promised to give $250,000 to the Altone Park community recreation centre in the marginal seat of Perth. The money, it seemed, was to come from next year’s grants, even before applications for these grants had been called for or assessed, and before any submission asking for it.  It did rather tend to undermine her claim that she had applied a needs test. A Labor candidate for the marginal Liberal seat of Ballarat announced a winning grant before applications had closed, let alone considered.

Peter Costello made adroit use of FOI legislation to get details of applications, and made Kelly look ridiculous. Especially over her claim of having used a white-board to record assessments of the merits of applications.   When Dr John Hewson entered the debate, he said the program was corrupt, and that Kelly had misled the House. He was applauded from the gallery.

Prime minister Paul Keating was given both to great tribal loyalty to one of his own faction as well as chronic inattention to routine matters of ministerial or bureaucratic government. He did not intervene in the affair until Kelly was already a political carcase swinging in the breeze. But his defence of Kelly, before she faced the obvious loss of confidence of her ministerial and parliamentary colleagues seemed to be that “everyone does it”.  What both sides of politics did with some schemes, he seemed to be saying, was that they applied them for their own partisan advantage. Just as the other side did, and would do, when it was in power. The right to do so, apparently, was one of the perks of incumbency.

Moreover, he seemed to be suggesting, the administration of such a scheme was entirely a matter for the discretion of the minister.  But the scheme had been promoted as one based on need, not mere politics, and that implied fairness.

Kelly’s fate was sealed when even a Labor-dominated House of Representatives committee (chaired by her ACT colleague, no admirer, John Langmore) was highly critical.  Langmore  told Parliament: “In relation to the minister’s administration of the sports-facilities program, the committee concluded that she did not approach the minimum standard in relation to supporting her decisions with documented reasons, that her record keeping was seriously inadequate and that her administration was deficient”. He did not add, though he probably knew, that her department’s secretary had warned her of the likely political consequences of her “personal touch.”

Keating’s initial unwillingness to give any ground whatever to the opposition meant he  went far too far in attempting to defend Kelly’s style of administration.

Scott Morrison usually has the same instinct.  But if he has any sense, he will not seek to defend McKenzie with such arguments. Nor to suggest that pork-barrelling and patronage is the order of the day – a perk of being in government. If he denies maladministration in the face of the auditor’s criticisms, he is telling every public servant in Australia that integrity in decision-making does not matter.

His own code of ministerial standards, for example, proclaims that ministers in carrying out their duties must

  • “ensure that they act with integrity – that is through the lawful and disinterested exercise of the statutory and other powers available to their office …
  • “observe fairness in making official decisions – that is to act honestly and reasonably, with consultation as appropriate to the matter at issue, taking proper account of the merits of the matter, and giving due consideration to the rights and interests of the people involved, and the interests of Australia.
  • “in taking decisions in their official capacity must do so in terms of advancing the public interest – that is, based on their best judgment of what will advance the common good of the people of Australia.

McKenzie’s current – and unconvincing — defence is that she was vested with discretion by the set-up, and that anyway, every organisation which got a grant used it well. That better qualified ones missed out is not to the point, she thinks, when recipients were happy, indeed delirious.

Senator McKenzie says, “no rules were broken” and that she was given discretionary powers “for a purpose” in program guidelines.  If the government supports her reasoning they will be repudiating the Auditor-General, Grant Hehir and government-wide rules for proper administration of grants.

McKenzie is the deputy leader of the Nationals, but no heavyweight, and is little regarded, even by her National colleagues, for her political judgment. But she has been set an appalling example by other National leaders and ministers over the years, many of whom – Barnaby Joyce in particular – have seemed to think that the power to dole out grants to their mates and constituents is a perk of winning government.  Not a few Liberals are disgusted by such an attitude, and by the rorting of various schemes by Nationals over the years. But Liberal prime ministers have little power over their junior coalition partners, nor, it seems, over the standards of accountability, transparency or regard for the public interest they have displayed. They seem to regard National chicanery as part of the price of coalition.

Some Liberals – the Attorney-General, Christian Porter, being a particularly bad example —  have also seemed to believe that the exercise of frankly partisan judgment – say in appointing Liberal friends, relations and donors to positions on the Administrative Appeals Tribunal, rather than the “best people” objectively established  – is a perk of political power.  Anyway, his apologists will say, Labor has done it too, if not on his scale.

That the other side has done much the same thing is never an acceptable excuse. Just listen, for example, to the standards that political leaders claim to be the proper ones when they are criticising the actions of the other side in government. They do not say, “seeing you have done that we will, when elected, do it too.’’  To the contrary they proclaim themselves to be of superior virtue. The lowest-common-denominator excuse – “I am no worse than you” — is a reason why the people are  losing faith and confidence in politicians, and in democracy.

Whether claiming a right to live by the standards set, in government, by the other side provides a legal as opposed to political excuse for improper conduct is doubtful. Whether such an approach is corrupt at law will always depend on the circumstances. If Porter and senior officials in his department have their way, we will never find out offenders through any anti-corruption machinery, or from AFP investigations.

But the attitude shows a corruption of the spirit, and a betrayal of basic principles of good, honest and accountable government in the public interest. And instinctive defence of those who abuse power, on the ground that they are “our “rascals not theirs suggests that our leaders have no moral bottom, and no real concern for fairness, the public or the public interest. It’s not leadership.

Rorting the public purse for purely partisan purpose is never OK, and, in my opinion, is often a corrupt and improper consideration that overwhelms and invalidates ministerial or administrative action that otherwise followed a process. The Judicial Review Act description of the offence to good government is “taking an irrelevant consideration into account”, or “failing to take a relevant consideration into account”.

It should be said in favour of McKenzie that the fault with her administration was not  in failing to document how decisions were made, as Kelly did. The Australian sports commission made more or less good recommendations, on clear and fairly objective criteria, even if one of the assessors had, in the auditor’s view, a serious conflict of interest. McKenzie received the results. But she did not sign off. Instead she and her office then injected frankly political considerations to modify the commission’s order of merit.

McKenzie wanted to help Liberal and National marginal seat holders, and help coalition candidates in seats the coalition hoped to take from Labor or independents. In both, the coalition candidates, such as Georgina Downer, would claim the grant was the result of their personal advocacy.

After the meddling by the minister and her staff, it ceased to be a fair scheme based on merit. It had become a rort. There was no obvious relationship between submissions that received grants and the scores given them by the department.

There were other problems. The minister said from the start that she wanted a role in assessing the grants.  An overly compliant commission, eager to please and to give the minister whatever she wanted – the modern way with senior public servants — factored her into the final decision-making. But it (and the portfolio department, Health) knew that it was legally doubtful whether the minister could be properly involved in a grant-giving process of the type the government had announced. Relevant sports commission legislation gave the minister a power of issuing a written direction which the commission would be bound to follow, but her role, and her position as the person who actually decided who got what, did not follow such a direction.

I have been writing about politics and public administration for decades. I am generally reluctant to declare that standards of this or that have risen or fallen, or that the calibre of ministers and political leaders has deteriorated. But it is plain that ministerial responsibility is becoming a dead letter under successive prime ministers, Liberal and Labor, and that it is now at its lowest ebb.  Prime ministers in particular do not enforce the written standards, so long as they think they can get away with it politically. There seems no shortage of “independent” officials that they can cite in defence of the proposition that the standard does not apply in this particular case. Rationalising obviously bad behaviour is in the modern bureaucrat skill-set.

It  seems to me that corruption and maladministration in government are increasing. This is in part because old systems of checks and balances are becoming increasingly ineffective, and because modern, meaningful agile and resilient leaders no longer preach or practise the virtues of integrity and regard for the public interest. And because more and more modern politicians, including Morrison, are allowed to get away without being made to answer questions. They obfuscate. They answer questions they were not asked. They invent bubbles. They deflect, usually with attacks on the other side, implying  that the mote in their eye, if it exists at all, is but nothing to the beam in Labor’s.  They declare questions out of bounds, or say they have dealt with issues when they haven’t. Journalists who try to insist on answers face intimidation, sometimes even by their own employers, and, sometimes, raids by a politicised police force.

Good government and regard for integrity and good process are not impositions on politicians who want to advance legitimate ideas and ideals. That is, unless, a governing party – and perhaps the general political milieu – has been overtaken by a culture of rorting, misappropriation of public resources and abuse of power.

Honest politicians know that good processes, transparency, and systems of accountability make for better, cheaper and more effective administration. That this government spends so much energy resisting proper process and the notion of a fair go for all citizens is, ultimately, something that will drag it down.

Jack Waterford is a former Editor of The Canberra Times

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