Last night, Daniel Wild, the Director of Research at conservative think tank the Institute of Public Affairs, published an article on Sky News in which he argues that Senator McKenzie is the victim of a “political hit-job” carried out by the ANAO at the request of shadow attorney-general Mark Dreyfus.
Mr Wild is wrong and his article shows an incredible lack of research and a lack understanding of how the ANAO, the public service and Australian democracy work. This post will explain why he is wrong by annotating the entire article.
The real scandal in the grants administered by Nationals Senator Bridget McKenzie is that unelected bureaucrats at the Australian National Audit Office engaged in political hit job against a conservative politician at the request of Shadow Attorney-General Mark Dreyfus.para. 1
As I argued two weeks ago, the real scandal that everyone seems to be missing is actually that Bridget McKenzie is potentially criminally liable for theft (or at least general dishonesty) offences that carry potential decade-long prison sentences.
The Audit in question was not a “political hit job”. If Mr Dreyfus were really trying to cause a ruckus, he should have referred Senator McKenzie to the AFP where he would’ve had greater success with the – not to put too fine a point on it – unelected policemen and detectives. At least then, the evidence gathered could actually be used against her in court.
For what it’s worth, the current Auditor-General, Grant Hehir, was appointed by a conservative Liberal prime minister, Tony Abbott. He was previously the NSW Auditor-General, appointed by Liberal premier Mike Baird.
Given that Mr Wild provided advice “directly to the Prime Minister’s Office” while Mr Abbott was in that office, I’m sure he has faith that Mr Abbott had exercised good judgement in listening to his fellow advisors’ arguments for appointing Mr Hehir.
The ANAO undertook its Award of Funding under the Community Sport Infrastructure Program audit at the request of Mr Dreyfus.
The shadow attorney-general requested an audit into the circumstances surrounding then-Liberal candidate for Mayo’s funding of a local bowls club in the lead up to the 2018 by-election.paras. 2 and 3. Emphasis added
Wild has missed that the ANAO was requested to do the Audit. There were actually two requests. One of these was indeed made by Mr Dreyfus. Cathy McGowan, then-independent MP for Indi, also requested an audit into this matter. Was she in on the “hit”? Considering that she gave the Morrison government supply-and-confidence during their period in minority, I’d say it’s unlikely.
Additionally, it is up to the Auditor-General to decide what will be audited, because the elected Parliament decided to give him such discretion. Section 8(4) of the Auditor-General Act 1997 gives the Auditor-General “complete discretion in the performance or exercise of his or her functions or powers.” The same section also states that the Auditor-General is “not subject to direction from anyone” in relation to the exercise of their powers.
It is curious that no one in the media has questioned why in a liberal parliamentary democracy like Australia a member of the opposition can direct unelected bureaucrats to investigate a minister of the Crown.para. 4.
Is it a peculiarity to Mr Wild that a government body in a liberal democracy would act according to laws passed by parliament?
Mr Dreyfus did not, and – as previously addressed – cannot, direct the Audit Office to do anything. He (and others) wrote a letter asking him if he would be interested in auditing a program that had been given a bad look by this government’s actions.
Mr Hehir, in exercising his discretion, decided to do an audit. No “direction” as described, was made.
Going beyond its original remit of investing the provision of a $127,273 cheque to the Yankalilla bowls club, the ANAO engaged in a far-reaching audit of all grants administered under the Community Sport Infrastructure Grant Program. Grants under the program could be provided under the discretion of then-minister for sport, Ms McKenzie.
Ms McKenzie’s apparent failure was that several projects which received grants did not meet the criteria established by Sport Australia, which is an unelected statutory agency.paras. 5 and 6.
The ANAO did not, and cannot, “[go] beyond its original remit” in the making of an audit report because the Auditor-General has, as previously addressed, complete discretion in what it will audit.
I should stress that: It has this discretion because the democratic process decided that it should have this discretion.
The report addresses how the Auditor-General exercised his discretion to expand the scope from the fateful cheque to a forensic audit of the entire program.
In addition to the failures mentioned by Mr Wild, the report also describes more “apparent failure[s]”. Including a failure to identify a legal basis for the Minister making grants with the money of a statutory corporation. Including failure a to follow “an appropriate process” that was “informed by sound advice” (ANAO, p. 8). And a failure to follow the guidelines she and Sports Australia had devised for prospective applicants.
But this is an egregious misunderstanding of how democracy works. Bureaucrats advise. Ministers decide. If public servants want to decide how taxpayer funds are allocated, they should run for parliament.para 7.
This is not a misunderstanding at all.
It would appear that Mr Wild is the one misunderstood as to how democracy works:
Someone did run for Parliament, and while they were there they decided that the Sports Commission should be independent of the executive; independent to a degree that the Minister would need to table any decisions they made about how the Commission should operate before Parliament where it can be scrutinised. Whoever that was introduced a bill codifying that decision. The bill passed Parliament and was signed into law according to the Constitution.
That law is called the Australian Sports Commission Act 1989; section 8 gives the Commission powers, section 11 says that the Minister can’t exercise those powers in the Commission’s stead except as described in the previous paragraph. The elected Parliament decided to impose this restriction on the Minister and it’s the bureaucrats’ job to faithfully execute the law by carrying out that statutory restriction.
Despite the bureaucrats advising the Minister of their doubts surrounding her legal authority to be the decision maker, the Minister decided not to seek the advice of a legally-trained bureaucrat and now she’s exposed herself and the government to potentially liability for $100 million in unlawfully made grants.
In reporting on the issue on Tuesday, the ABC thought they had found two fatal smoking guns.
The first was the apparent revelation that the minister’s office was running a parallel process to Sport Australia for where the grants should be allocated, as evidenced by a spreadsheet leaked to and reported by the ABC.
Far from a smoking gun, this spreadsheet appears to exonerate Ms McKenzie of any wrongdoing. The spreadsheet shows that the majority of the 223 projects marked as “successful” in the first round of grants went to Labor-held seats. As McKenzie said, this is “reverse pork-barreling”.paras. 9 through 11.
More of a nitpick than a criticism: The ABC did not reveal these smoking guns, the report did, but the ABC’s reporting brought them to wider public attention.
The crux of the report was that the “parallel process” was unaccountable and nontransparent. People applied for these grants believing that objective measures, such as need, would determine their success and not political considerations such as those put forward by the Minister’s Office.
And it doesn’t actually matter if this “reverse pork-barreling” actually took place (Wild conveniently leaves out the other two rounds, which were far worse than the first). As the report stated, the decisions made by the Minister were “not informed by an appropriate assessment process or sound advice” and the legal basis for these decisions was “not evident to the ANAO” (ANAO, p. 8) or indeed, seemingly any eminent lawyer such as Professor Anne Twomey or the well-respected constitutional lawyer Ian Cunliffe.
The second would-be smoking gun is the $500,000 grant provided to the Pakenham Football Club, which received a rating of 50 out of 100 by Sports Australia but received the highest possible grant. The Pakenham Football Club is in the marginal Liberal seat of La Trobe.
According to Sport Australia, that $500,000 would have been better provided to the Gippsland Lakes Roller Derby in the safe Nationals seat of Gippsland, which received a rating of 98 out of 100.
Only an unelected and out-of-touch public servant could think it is a better idea to fund the roller derby than the footy in Victoria. Besides, the ratings out of 100 are mere inventions of the bureaucracy designed to give the process fake scientific credentials.paras. 12 through 14.
I’m sure that Mr Wild would agree that public money should be spent based on need. That’s why the guidelines mentioned earlier were created. They are not some kind of pseudoscientific abstraction. They are devised to ensure good value for money, ethics and procedural fairness.
Only a former unelected, out-of-touch government-funded adviser turned pretend researcher would think that whether or not an applicant club based in Victoria plays football or not is a better criterion for a grant of taxpayers money than need or merit.
The published criteria (ASC, p. 10) did not include the political considerations applied by the Minister’s office. Given that these considerations appear to be the primary basis on which the Minister’s decisions were made, I imagine that many of the applicants – especially the ones which ranked particularly highly on the mutually-agreed criteria – are feeling cheated.
More to the point, the funding to the Pakenham footy club was to build change rooms for female footballers and netballers, something the woke ABC would usually celebrate. Instead, the ABC would rather play political football for the Labor Party even if it means female footy players lose out on much-needed facilities.para. 13.
The ABC is a professional journalistic organisation free of the editorial restrictions imposed by an advertiser-friendly entertainment company such as News Corp or Nine. The ABC generally does a good job at reporting the truth, even where it happens to be be inconvenient for the Federal Government. As such, governments of both parties have consistently attacked it for alleged biases against them.
“A right-of-centre Coalition government sees the ABC as left-biased; a Labor government is likely to see the corporation as right-biased, and so on.” (McNair, 2016)
To be sure, the potential misuse of taxpayer funds is a big policy issue and must be investigated.para. 14.
Since Mr Wild doesn’t believe the ANAO or any other “unelected bureaucrats” should investigate: who does he believe should? Is he looking for another government job?
In 2018, this government gave $444 million to the Great Barrier Reef Foundation which at the time had an annual revenue of around $10 million. No one lost their job.para. 16.
The ANAO investigated that one already. Also, he doesn’t know if anyone lost their jobs and neither do I: not every public servant’s sacking is published for everyone to see.
For a decade both Coalition and Labor governments gave more than $88 million to the scandal-plagued Clinton Foundation.para. 17.
DFAT said in a statement to news.com.au all the way back in 2016 that the purpose of the funding was to enable previously “agreed development projects” to take place and that the foundation had “a proven track record” for carrying such projects out.
If you don’t agree, I guess you could… write to the Auditor-General and request that he audit whether or not it was good value for money.
Yet Ms McKenzie could lose her role as deputy leader of the Nationals for faithfully discharging her duties as a minister and an elected member of parliament.para. 18.
One of her duties as Minister which she is to “faithfully discharge” is to ensure that every executive decision she takes is supported under legislation – specifically the PGPA and the ASC Act. As Anne Twomey wrote in the ABC yesterday, nothing she did was.
If she had followed the guidelines set by the unelected bureaucrats (and perhaps, the laws set by the elected ones), this entire program would not have lifted an eyebrow. Instead, she chose to introduce factors which could not be supported under the guidelines, the law, or good practice. She also chose a process which had been contentious in the past, as seen in the previous sports rorts scandal by Ros Kelly (albeit this time, it was written down).
Ms McKenzie has been engulfed by a scandal. Just not the one spun in the media. A member of the Opposition directed the ANAO to investigate a political opponent, the ANAO then went beyond the remit of this original request, and the taxpayer-funded ABC conspired with a leaker to obtain and report on confidential information with the potential effect of ending the political career of an elected member of parliament.
Investigate that.para. 19 and 20.
As I have already addressed, The ANAO chose to do the audit, they were not directed to do it. They did not go “beyond the remit of this request” because no such remit exists and the Auditor-General chose to conduct audit at their own, statutorily-granted, discretion.
The ABC did not “conspire” with a leaker to bring down Senator McKenzie; they reported a matter of public interest, that happens to be rather inconvenient to Senator McKenzie, using leaked primary source evidence that verifies their claims.
This affair will be investigated and inquired about at every level when Parliament returns this week. The unelected bureaucrats at the AFP will no-doubt be raiding some public servant or ministerial staffer’s home or office for leaking documents; and the ANAO will face an unprecedented torrent of questions from the Joint Committee of Public Accounts and the various Senate Committees during Senate Estimates.
Some of those questions will no-doubt be things that can be answered by reading the report, or the relevant Acts of Parliament. But I predict that none of Grant Hehir’s answers to committees’ questions, which are given under oath, will be “we did this to get rid of Bridget McKenzie”. Why? Because they have no reason to.
Mr Wild spent so much of his time devising a bizarre conspiracy theory about the deep state that he forgot to establish a plausible motive for such a conspiracy.
The ANAO is a highly-regarded and trusted institution that is empowered to “scrutin[ise] [the] exercise of authority and the expenditure of public funds by the Executive”. The Auditor-General is an officer of the Parliament and his job is to assist Parliament in conducting this scrutiny by conducting audits and tabling reports.
If the government does something unethical or utterly indefensible, it will inevitably come up when the government is placed under scrutiny. Whether Parliament does it directly, or the Auditor-General conducts an audit.
The office of Auditor-General has been created in such a way as to minimise practically all political influences that could arise. Specifically, the Auditor-General has a fixed term of ten years, cannot be reappointed, and – save for exceptional circumstances – cannot be removed. These provisions relieve the Auditor-General of the political pressures often applied to departmental secretaries who can be dismissed (or MoG’d) at any time for any reason. The inability to reappoint the Auditor-General means that they have no incentive to curry favour with the government (or opposition, for that matter) towards the end of their term, because their only practical option after their term expires is to retire.
This research took me about only a few hours. Given that research is Mr Wild’s full time job, I’m sure he has the time to do the minimum amount of basic research before writing an article about institutions designed to keep government accountable.
Transparency and trust is an important part of democracy. Given that trust in public institutions is at an all time low, Mr Wild should be happy that these institutions exist and are doing their job. Unless of course, as would not be unexpected for a hack at the IPA, he doesn’t actually care about democracy and actually is actually just cheerleading for the most authoritarian federal government of our times.
Perhaps, Mr Wild – a “Research Director -should do some, well, research before he publishes.