MICHAEL KEATING. Scomo and the Public Service: How Bad Can It Get?

Feb 6, 2020

The Report by the Secretary of the Department of Prime Minister and Cabinet, Phil Gaetjens, into Bridget McKenzies’ handling of the Community Sport Infrastructure grants fails to address key questions and raises serious concerns about the relationship between the Government and the Public Service.

For a start the Gaetjens’ report should have been publicly released so that we could all satisfy ourselves that justice had been done. A secret trial where the evidence considered and the reasons for the judgement are not released does not satisfy any standard of accountability.

However, the Minister, Bridget McKenzie, has now resigned – on what she appears to regard as a technicality – and the Government would clearly like us all to now to move on and forget this incident.

Nevertheless, we should continue to be concerned by Gaetjen’s finding of not guilty to the more substantive charge by the Auditor General that “There was bias in the award of grant funding … [which] was not consistent with assessed merit of applications”.

The key evidence cited by the Auditor General was that just over half the grants approved by the Minister were not recommended by Sport Australia. In effect, the Minister ignored the assessment by Sports Australia against the known criteria, and instead the Auditor General found that:

The award of funding reflected the approach documented by the Minister’s Office of focussing on ‘marginal’ electorates held by the Coalition as well as those electorates held by other parties or independent members that were ‘targeted’ by the Coalition at the 2019 election. Applications from projects located in those electorates were more successful in being awarded funding than if the funding was allocated on the basis of merit against the published program guidelines.

On the other hand, according to the Prime Minister, Gaetjens allegedly found that “the data indicates applications from marginal or targeted seats were approved by the Minister at a statistically similar ratio of 32 per cent compared the number of other applications from other electorates at 36 per cent”. And on this evidence Gaetjens allegedly found “no basis for the suggestion that political considerations were the primary determining factor”.

Frankly I find these (unsubstantiated) findings by Gaetjens difficult to reconcile statistically with the evidence produced by the Auditor General. For Gaetjens to be right, applications from the marginal and targeted electorates would have had to run at double the overall rate to be consistent with the eventual electoral distribution of the grants. Of course, any such presumed bias in the application rates beggars belief and I query the Government’s defence on these grounds.

However, the other line of defence by the Minister and the Government is that she had the right to use her discretion and determine her own allocation of these grants, irrespective of any criteria and assessment against those criteria.

In fact, no-one denies that Ministers should have discretion; it is they who are elected not public servants. Nevertheless, as David Solomon pointed out in his article,  (Pearls & Irritations, 31 January,DAVID SOLOMON. Audit exposes Government’s trust deficit. )ministers are bound by a code of conduct in the exercise of their ministerial discretion. That code requires them to act with due regard for the integrity, fairness, accountability, responsibility and the public interest.

In relation to grants programs, compliance with the code of conduct usually means ministerial discretion is limited to ministers determining the criteria for assistance, but not deciding which individual applications most merit assistance. In any event, reasons must be given and documented for how ministers exercised their discretion.

Indeed, some may remember that it was Ros Kelly’s inability to produce documentation of her reasons that led to a negative finding by a House of Representatives Committee, and Mrs. Kelly losing her job as the Minister responsible for a similar sports grants program 27 years ago. Thus, the obvious question that the Gaetjens’ report should have addressed is what is different this time?

In addition, if Bridget McKenzies’ department had been responsible for administering this Sports grants program, then she would have had to abide by the Commonwealth Grant Rules and Guidelines (CRGGs). In that case Ms. McKenzie would have had to use criteria that established merit in the same way as Sports Australia did in conducting their assessment for their recommended allocation of these grants.

Furthermore, the Government has now accepted the recommendation by the Auditor General that the present exceptions should be removed and that in future all programs should be bound by the CRGGs. But that seems to be tantamount to admitting that Bridget McKenzie should have been bound by these rules this time too. So the fact that she got off on this unfortunate technicality doesn’t excuse her ethically for not following the code of conduct.

So, where does this leave us in relation to the Gaetjens’ report?

Personally, having also been the Secretary of the Prime Minister’s Department and Cabinet Secretary, and having been involved in a similar situation, I find the fact that Gaetjens’ report apparently ignored these fundamental considerations of good government and ministerial conduct inconceivable. In my view the Gaetjens’ report reflects poorly on its author.

It would seem on the evidence that Gaetjens has produced a report whose only purpose was to get the Government off a political hook. One suspects that finding Bridget McKenzie guilty on the grounds of political bias in her administration of these grants would have implicated other ministers and/or their offices, and therefore she was exonerated on this charge.

However, as Head of the Public Service, Gaetjen’s first duty is to uphold it values and integrity. And as set out in its enabling legislation, the Australian Public Service (APS) is meant to be apolitical, serving not only the Government, but also the Parliament and the Australian public. Gaetjens should be setting an example for the rest of the APS – indeed the head of any organisation has their greatest impact on its culture.

My other concern about this sports rorts saga is what it tells us about the Prime Minister’s attitude to the public service.

As the High Court has found: “the maintenance and protection of an apolitical and professional public service is a significant purpose consistent with the system of representative and responsible government mandated by the Constitution.” But the Gaetjens’ report reinforces doubts about whether Morrison accepts the independence and impartiality of the APS. Furthermore, this report comes on the back of the Morrison Government’s rejection of all the recommendations from the independent Thodey Review of the APS which would have strengthened that independence, and therefore reinforces that concern.

In contrast, John Howard said in his 1997 Garran Oration:

‘Let me say at the outset my firm belief that an accountable, non-partisan and professional public service which responds creatively to the changing roles and demands of government is a great national asset. Preserving its value and nurturing its innovation is a priority of this Government.’

‘The responsibility of any government must be to pass onto its successor a public service which is better able to meet the challenges of its time than the one it inherited.’

On the evidence of the last few months, Scott Morrison has failed to live up to his mentor’s precepts – indeed, he seems to positively reject them.

Michael Keating is a former Head of the Departments of Prime Minister & Cabinet, Finance, and Employment & Industrial Relations. He is presently a Visiting Fellow at the Australian National University.

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16 thoughts on “MICHAEL KEATING. Scomo and the Public Service: How Bad Can It Get?

  1. What would Trollope say?
    “Do you recognise no duty but what the laws impose on you? Should you be disposed to eat and drink to bestial excess, because the laws would not hinder you? Should you lie in and sleep all the day, the law would say nothing! Should you neglect every duty which your position imposes on you, the law could not interfere! To such a one as you the law can be no guide. You should so live as not to come near the law, – or have the law come near to you. From all evil against which the law bars you, you should be barred, at an infinite distance by honour, by conscience, and nobility. Does the law require patriotism, philanthropy, self-abnegation, public service, purity of purpose, devotion to the needs of others who have been placed in the world below you? The law is a great thing, – because men are poor and weak, and bad. And it is great, because where it exists in its strength, no tyrant can be above it, but between you and me there should be no mention of the law as a guide of conduct. Speak to me of honour, of duty, and of nobility; and tell me what they require of you.” Anthony Trollope, “The Last Chronicle”, chapter LXI.

  2. How much longer will politicians denigrate their profession? How much longer will the public meekly watch the theft of their taxes? Why are we prepared to tolerate the absurdity of asking a ‘public servant’ to investigate a Minister? Can we continue to call a person who has moved in and out of party political employment, and is now on contract, a ‘public servant’?
    Could any of this have happened in the days of ‘Permanent Heads’? (as distinct from departmental heads on contracts with one eye on its renewal).

  3. Sadly we no longer have a commonwealth ‘public’ service, but in effect a privatised political one serving political masters and not the public good. The rot set in some time ago with the SES and has become rampant recently. (And I speak as someone who was once a deputy secretary/acting secretary in a Premier’s Department.)

    1. Peta – at a Federal level it would appear to go back at least as far as a High Court decision involving Greg Combet (early 80’s).

      It sickens me to have to think that Labor has been just as conniving of this Constitutional erosion as the Coalition.

  4. The question might arise; what action will the Public Service Commissioner take in the light of Gaetjens’ possible breach of the statutory APS code of conduct? I shall not hold my breath.

  5. Thank you Michael for your article and analysis. Your key point has largely been overlooked in the media, namely that “In relation to grants programs, compliance with the code of conduct usually means ministerial discretion is limited to ministers determining the criteria for assistance, but not deciding which individual applications most merit assistance. In any event, reasons must be given and documented for how ministers exercised their discretion.” Nowhere has the Government or in the Gaetjens report (so far as we know) explained what criteria the Minister used for assessment, or explained reasons for how the Minister exercised her discretion. Not to do so is improper.

  6. As concerning is this maybe a symptom of what has been happening in both the US and the UK where it’s important for govt. sponsors that the govt. stays in power and without too many constraints e.g. regulation, transparency, ethical behaviour etc..

    Of course one is not suggesting that our govt. has been ‘captured’ by corporate and/or ideological interest groups.

  7. The Public Service Act includes a statutory Code of Conduct. The phrase “high crimes and misdemeanours” comes to mind as do Yes Minister and the Hollowmen. All true it seems.

    All these pious rules, High Court findings and traditions, but if they are ignored, there seem to be no consequences. No one, least of all the current government, would formally repeal them. The punters might find out. Why bother with Hansard? The AFP?
    Why not re-develop Parliament House for some mega tourist attraction? Why bother with elections? Move sport to the front pages.

  8. Thanks Mike for a good piece. The comments above reflect my own experience and thoughts. Perhaps a new system is needed that addresses 21st century concerns about cronyism and corruption. I honestly believe we need more community and citizen involvement in the selection and removal of politicians and senior public servants.

  9. Jon Buttery’s point is entirely apposite. The Morrison/Gaetjens interpretation of appropriate behaviour under the Westminster model is but one, albeit particularly egregious, example of how far Australia’s federal government administration has moved from transparent and accountable government. As I have said in a post on this topic,
    (https://johnmenadue.com/mike-waller-what-westminster-system-prime-minister/), starting well before this current government, the critical moving parts of a reasonable approximation of the Westminster model have been seriously compromised. Ministerial accountability, effective freedom of information, transparent and competent development, implementation of evidence based policy and a stoutly apolitical public service are now largely missing in action. In the absence of any serious championing of the re-establishment of the critical elements of the Westminster model (which no political party seems wont to do), serious consideration needs to be given to the design of a fit for purpose system to replace the bowdlerised version over which Messrs Morrison and Gaetjens now preside.

  10. In claiming the Minister has the discretion to over-rule her officials the government is ignoring the applicable legislation. The Sports Commission Act makes it clear that developing and implementing “programs that promote equality of access to, and participation in, sport by all Australians”, and administering and expending “money appropriated by the Parliament … for the purposes of the Commission” are the responsibility of the Commission (section 7 (c) and (n)). The Minister may give directions to the Commission, but these must be in writing, published in the Gazette and tabled in Parliament (section 11). No such directions were given. In usurping the Commission’s powers the Minister was over-ruling not just her officials but the enacted intent of Parliament.

  11. John Howard’s pious view of the APS doesn’t gel with my own experience. As I have mentioned before in these columns, I recall in 1996 being herded into a briefing by Max M-W to be told to ‘forget all that rubbish about frank and fearless advice, your job is to implement our programs’: and it wasn’t long before we were into those local government rorts.

  12. Is it not true, that despite his fine words about preserving an impartial apolitical public service, Howard began the practice of replacing career public servants with political appointees which is now taken for granted?

  13. While agreeing entirely with these sentiments, I think this saga is better understood as a result of systemic changes, rather than individuals. Morrison and Gaetjens are symbols of a deeper dysfunction in our politics and consequently our public service. The old models are dying. Public service capacity is diminishing. Corruption is increasing. The same drivers that enabled the election of Trump are here too.

    The question is where to now and what we are to do.

    1. Is this were the judicial arm delivers the required checks and balances? They are sorely needed.

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