Pearls and Irritations

Ministerial discretion under the Westminster system as it is applied in Australia is a useful but corruptible power.

Regardless of informal or formal departmental or a contracted expert consultant’s advice, a minister can order expenditure up to a set limit or approve or refuse applications under his or her ministerial control designated by relevant acts of parliament.

In New South Wales at the moment we are waiting on Justice Elizabeth Fullerton’s (judge alone) verdict on the conduct of former minister Ian Macdonald and the exercise of his discretion in issuing a lucrative coal mining exploration licence (EL) to former Upper House member Eddie Obeid over his Bylong Valley property. Her honour must decide if the former minister has criminally misused his discretion by facilitating the EL allegedly in secret with Eddie Obeid and his son Moses Obeid.

This case seems likely to set a precedent. There was no evidence that Mr Macdonald had been bribed or would receive any personal benefit by approving the EL. So, given the absence of such evidence, can ministerial discretion be fettered?

In Queensland in the 1980s then Minister for Roads and Racing, Russ Hinze, famously applied his discretion to approve the construction of an off ramp of the Bruce Highway into his hotel’s drive-in bottle shop and reallocated to the hotel its own TAB licence. It was denounced in parliament under privilege as Queensland’s only ministerially approved “six pack, six pick” highway stop.

Apart from generating widespread hoots of laughter, derision and outrage it was all quite legal. The minister’s discretion was unfettered.

Those Queensland journalists and citizens who asked questions about then Premier Sir Joh Bjelke-Petersen’s personal business interests conflicting with his ministerial duties were denounced as politically motivated, anti-private enterprise and anti-Queensland.

It took the ground-breaking Fitzgerald inquiry in the late 1980s to nail the consistent failure of Queensland’s Justice Department over decades to alert executive government to corruption risk. As a result structural reform including an anti-corruption body that could investigate ministerial indiscretions and misconduct was established in the Queensland jurisdiction.

On many occasions Queenslanders have seen their ministers being called into the witness box to be held to account over questionable or corrupt conduct. Prosecutions often resulted from these investigations.

In contemporary times auditors and media outlets have exposed what is now headlined as the sports rorts, regional renewal and the community grants scandals where ministerial discretion was used for electoral advantage, more commonly known as pork barrelling.

Merit assessment rankings of hundreds of applications for taxpayer grants via published criteria were often overridden by ministerial discretion.

The latest scandal exposed by the Australian National Audit Office concerns the commitment of funds for political advantage in a $600 million commuter car park construction scheme announced just before the 2019 federal election. Said to be necessary to relieve congestion, the ANAO found that 64 per cent of projects were in Melbourne in spite of the country’s greatest congestion being in Sydney.

It found that 77 per cent of projects were in Coalition-held seats with 10 per cent in seats held by Labor at the time but picked up by the Coalition at the election.

Some sites acquired for car parks were not close to railway stations when the objective of the scheme was to enhance public transport use to reduce citywide congestion. ANAO found that no project had been proposed by the urban infrastructure department and “was not demonstrably merit based” and followed canvassing of local Coalition MPs or candidates for certain seats. There was only “limited engagement” with state government and some councils.

It is pertinent to note with these contemporary examples of pork barreling that at no time has the Attorney General’s Department and its director general been reported to have alerted executive government to the potential for abuse of ministerial discretion.

Pork barreling has been declared a form of corruption by integrity experts but also dismissed by those state and federal ministers so accused as the result of effective representation by MPs on behalf of their electorates and constituents and more broadly defended as part of the spoils of office. Wink wink. Nudge nudge.

Public trust in government has been measured in opinion surveys as negligible.

As public consciousness about corruption has increased over the years there have been efforts to minimise risk and damaging perceptions by introducing pecuniary interest registers for ministers and MPs and ministerial codes of conduct. Donations to political parties, also known as “slush funding” by vested interests and industry lobbies, are now conditionally required to be published.

Also in play at the moment is a NSW ICAC recommendation that ministers should publicly and transparently declare their access meetings with industry and vested interest lobbyists as they are scheduled.

Currently New South Wales Premier Gladys Berejiklian is awaiting formal findings of the NSW Independent Commission Against Corruption in the examination of her adherence to her own Cabinet ministerial code of conduct.

The Premier denied under oath that her relationship with former MP Daryl Maguire was “intimate”. Such an admission would have obliged her to make a declaration under the ministerial code of conduct in the event that the relationship could be seen to have advantaged Mr Maguire’s personal business activities.

The ICAC had begun an investigation into Mr Maguire following complaints received about his alleged conflicts of interest as an MP. These inquiries led to the discovery of Mr Macguire’s relationship with Ms Berejiklian. The NSW ministerial code includes a definition of “family member” as “any other person with whom the minister is in an intimate personal relationship”.

Any finding by the ICAC that Premier Berejiklian had breached the ministerial code of conduct could be politically lethal, provoking demands for her resignation.

Perhaps herein lies the root cause of the current federal government’s resistance to a federal ICAC or its own proposed Commonwealth Integrity Commission having independent coercive powers (search warrant raids, covert surveillance, meta data access) to examine ministerial discretion and to test the application of that discretion against codes of conduct.

Pointedly the current draft Commonwealth Integrity Commission legislation drawn up under the authority of former Attorney General Christian Porter prohibits any “own motion” CIC investigation of ministers and MPs, limiting coercive inquiry only to law enforcement corruption.

The CIC would not be able to investigate retrospectively. There would be no findings of corrupt conduct allowed for parliamentarians or public servants. No public hearings could be held into public sector corruption.

Any evidentiary leads into public sector corruption, provided, say, by an anonymous informant or whistleblower could only be investigated by the CIC where there is a reasonable suspicion that at least one of a number of listed offences has been or is being committed.

Referrals (tip offs) alleging corrupt conduct within the public sector and by parliamentarians is “significantly circumscribed” according to a submission on the CIC draft by the Centre for Public Integrity.

The functions the CIC would be divided into a law enforcement integrity division, incorporating the existing Australian Commission for Law Enforcement Integrity, and a public sector integrity division.

But, please note, nothing has been proposed on constraining ministerial discretion. This is because it is acknowledged that ministerial discretion can be a useful lever of administrative efficiency in bureaucracies often bogged down by discoverable compliance documentation, otherwise known as “red tape”.

Ministerial discretion has been particularly helpful during Australia’s COVID pandemic counter measures federally and in the states and territories.

It is also interesting to note that neither the authors of the Morrison government’s proposed Commonwealth Integrity Commission nor its informed critics of former judges and corruption investigators from the Centre for Public Integrity, other ethicists and integrity advocates are proposing any reform of ministerial discretion. So the issue is about practical, transparent accountability with consequences to drive culture change from its current cynicism to help restore public trust in government.

Attorney General Michaelia Cash, who has replaced Christian Porter, has indicated that the Morrison government is still committed to a federal anti-corruption body.

Hundreds of public submissions are currently being assessed. A total of $106.7 million in “new” funding was allocated for the CIC in the 2019-20 budget and together with the ACLEI’s $40.7million budget any new CIC would have a total staff of 172.

In his consultation paper issued last November Mr Porter attacked Labor and Greens calls for a new integrity body that, he said, would represent “a NSW ICAC on steroids”.

But in an analysis of 18 major submissions on the CIC draft, the Centre for Public Integrity has found “virtually unanimous” opposition to the CIC’s constrained jurisdiction, powers and its unnecessary split up into two divisions.

“No organisation supports the CIC’s referral process and the inability for the public to make complaints. Nine organisations support broadening the definition of corrupt conduct, one opposes. Fifteen organisations support public hearings, one opposes,” said former judge Anthony Whealy QC, chair of the centre.

“The proposed Commonwealth Integrity Commission will not be able to do its job. It will not be able to investigate most cases of corruption, and it will keep everything hidden from public view.”

As things stand at the moment Christian Porter’s proposed CIC model has been judged a whitewash.

Over to you Attorney General Michaelia Cash.