ANALYSIS
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After two weeks of intense media scrutiny and criticism over her handling of the sports grant program, former sports minister Bridget McKenzie resigned from the front bench of the ministry and stepped down as agriculture minister.
The controversy was sparked by the Auditor-General's damning report, finding that $100 million of sports funds were distributed in a biased way to marginal electorates just before the 2019 federal election.
The Auditor-General concluded that the "award of grant funding was not informed by an appropriate assessment process and sound advice", contrary to principles of merit. This suggested that Senator McKenzie effectively acted against the expert advice of Sports Australia, and misused large amounts of public money to boost her party's electoral prospects.
It was later revealed that Senator McKenzie had approved a grant of almost $36,000 to a shooting club that she was a member of, raising a question of conflict of interest.
The final stroke that sealed Senator McKenzie's fate was a report by the head of the Prime Minister's Department, Phil Gaetjens, finding that she had breached the ministerial standards by failing to disclose her membership of a gun club that received federal funds.
What do the ministerial standards say?
Ministerial standards set out the standards of conduct expected of ministers. The principle underlying the standards is that ministers should uphold the public's trust since they wield a great deal of power deriving from their public office.
The standards say that ministers are required to ensure that their official ministerial decisions are unaffected by bias or irrelevant considerations. Ministers are also expected to conduct all official business with the sole objective of advancing the public interest.
Further, ministers must declare their private interests that give rise to, or are likely to give rise to, a conflict with their public duties.
The Gaetjens report concluded that Senator McKenzie breached ministerial standards, due to her conflict of interest in awarding a grant to the Wangaratta Clay Target Club, where she was a member. The report noted that Senator McKenzie failed to put in appropriate arrangements to avoid the potential conflict, such as asking another minister to make decisions for organisations where she was a member.
Fortunately for the government, Mr Gaetjens "did not find evidence" that the allocation of grants was "unduly influenced by reference to marginal or targeted electorates". This finding is at odds with the Auditor-General's investigation, which found bias in the allocation of funds.
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Mr Gaetjens noted that applications for marginal or targeted seats were approved by the minister at a statistically similar ratio of 32 per cent compared to applications from other electorates at 36 per cent.
Thus Mr Gaetjens contended that political considerations were not "the primary determining factor".
But the question was never whether partisanship was the primary determining factor: political considerations should not have been a consideration at all in awarding the sports grants. As the standards say: ministers must not take into account irrelevant considerations.
An investigation by the Prime Minister's Department is not independent as it is conducted by the executive behind closed doors.
A broader question left unanswered is whether Senator McKenzie was acting alone, or whether other senior Coalition members were also involved in interfering with Sports Australia's decision-making. The Australian has reported that two senior staffers in the Prime Minister's Office worked closely with Liberal party strategists on handling of the grant applications before presenting them to Senator McKenzie's office. The Prime Minister has denied this involvement.
Ministerial responsibility in Australia
The ministerial standards reflect the underlying doctrine of ministerial responsibility. According to this doctrine, ministers are responsible to parliament for their decisions and the acts of their departments. British MP Lord Morrison proclaimed that the "minister is responsible for every stamp stuck on an envelope".
The most visible aspect of ministerial responsibility is sacrificial responsibility, where the minister pays the ultimate price of a misstep by resigning.
With the onslaught of recent controversies and ministers denying responsibility, some commentators have nostalgically harked back to a "golden era" of ministerial responsibility that is now lost. This is probably overstated, although there have certainly been resignations over small infractions in the past. This includes the quaint example of former Hawke-era minister Mick Young resigning over failing to declare to Customs a Paddington bear in his wife's suitcase.
Academic analysis has also shown that ministerial resignations for controversies have declined over time in the 60 years between 1947-2010.
Looking into the annals of the past, the McKenzie affair bears a striking resemblance to a previous sports rorts affair in 1994. Following an Auditor-General report, former Keating government minister Ros Kelly was unable to explain the distribution of federal sporting grants to marginal electorates held by the governing Labor Party.
Strikingly, Ms Kelly claimed that she had assessed 2800 funding submissions on a "great big whiteboard" in her office, which was then erased without permanent record.
A House of Representative Committee found Ms Kelly's administration was "deficient", prompting her to resign from her position. At the resulting by-election, the government lost the normally safe Labor seat of Canberra.
Twenty six years after the first sports rorts affair, Senator McKenzie's resignation is a classic case of ministerial responsibility, where the minister takes the fall for failing to declare her personal conflict of interest.
Yet Senator McKenzie's resignation is just the tip of the iceberg. The sports rorts affair shows we need stronger rules and greater probity for public funding and procurement decisions. Restoring the integrity of government decision-making is vital towards rebuilding public trust.
- Yee-Fui Ng is a senior lecturer in law at Monash University. Yee-fui.ng@monash.edu.au