Continuing disquiet over the rorting of discretionary grants and charges of pork-barrelling raise the general question of the proper role of ministers in awarding such grants. Under the Commonwealth Grant Rules and Guidelines, all applications must first be assessed by officials in terms of published criteria designed to further the objectives of the program. Applications deemed eligible under the criteria should normally then be ranked by officials in order of priority. When making a final decision, ministers must first receive this written advice from officials but they are not obliged to follow the recommendations so long as they clearly record, in writing, the reasons for their decision in terms of the program's guidelines. Ministers are also obliged to follow "the key principle of achieving value with relevant money". Ministers may also, in exceptional circumstances, approve an application that has not been recommended by relevant officials, provided that they report their reasons to the Department of Finance.
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The intention behind these guidelines is to allow ministers to make their own decisions but only after being fully informed by officials and only if they record and report their reasons in terms of stated criteria and principles of proper expenditure of resources (efficient, effective, economical and ethical). Ministers are not prevented altogether from acting for partisan or vote-seeking motives but are required to justify their decisions in terms of the public interest. From this perspective, grants decisions become another instance of how policy is supposed to be made under a system of executive government based on ministerial responsibility. Elected ministers make final decisions but subject to strict procedures and the obligation to answer fully to the public in terms of their own version of the public interest.
This structure is now openly failing to achieve its careful balance between due process and political influence. Ministers and their political advisers have been able to operate grants programs almost without any procedural constraints. The community sport infrastructure program ("sports rorts") has been the most egregious example, which, according to a national Auditor-General's report last year, was administered by Sport Australia outside the ambit of the CGRGs and approved with uncertain legal authority. But the government has similarly exploited a host of other community grants programs for blatantly partisan motives.
Some of the responsibility lies with public servants who have knowingly turned a blind eye to the guidelines, particularly in the case of sports grants. Also at fault have been some of the institutions of accountability that we rely on to scrutinise the actions of the government. The Auditor-General has been an honourable exception. Indeed, Grant Hehir and his predecessors are almost solely responsible for instigating and then monitoring successive government policies on community grants. But auditors-general are constrained in their ability to question ministers.
Parliament itself could have done more to press ministers on their justifications for individual decisions. On the community sport program, the Labor opposition became obsessed with the role of the Prime Minister's office, in the vain attempt to catch the Prime Minister out in a lie. Whether decisions came from the Prime Minister's or the minister's office is largely irrelevant to the issue of unconstrained political influence.
Moreover, focusing on the notorious coloured spreadsheet that set out the party status of each electorate was also beside the point. Certainly, the issue of whether grants favoured government or marginal seats over safe Labor seats was germane to questions of possible partisan bias. But the spreadsheet itself was no smoking gun. As the CGRGs indicate, auditors-general have regularly calculated the geographical spread of grants as a measure of partisan equity across electorates. Officials are therefore advised to follow the same process. A coloured spreadsheet would therefore be a sensible tool for officials wishing to achieve an equitable outcome, a point argued by Senator Bridget McKenzie, the former minister, when appearing recently before the Senate inquiry.
Contrary to much public commentary at the time, therefore, the spreadsheet itself was not automatic evidence of impropriety. The devil was in the detailed allocations and their interpretation, an issue successfully muddied by the secretary of the Department of the Prime Minister and Cabinet, Phil Gaetjens, in his partially suppressed report. The minister's office appears to have been gaming the system. It included enough opposition seats to achieve a rough balance between the parties but concentrated on opposition-held marginals where the grants could assist the government's cause. At any rate, the charge of partisan bias is a complex issue that requires more nuanced analysis than most media critics were prepared to offer.
Another common misconception has been that ministers who depart from their officials' recommendations are thereby acting improperly. Recent charges against the Minister for Home Affairs, Peter Dutton, that he had misused community safety grants for political reasons, provide a good example. The ABC's 7.30 program, which broke the story, led with documents, obtained under Freedom of Information, showing the department's recommendations on individual grants, some of which Mr Dutton had manually altered in order to fund other applications of his own choice. The ABC's clear initial implication was that the minister's intervention was in itself unethical, a conclusion supported by some well-known integrity experts.
However, the minister had every right to alter the recommendations and could well have had very proper reasons for doing so. Under the current administrative structure, departmental assessments of grant applications given to ministers are not the judgments of independent "experts", as some critics claim. Like all public service advice, they are expected to be accurate and objective but they are still only advice. Final decisions involve judgments of community need and local priorities which elected and accountable politicians, arguably, are better qualified to make than non-elected officials.
The key issue, therefore, was not how many changes the minister had made to the department's recommendations but whether the changes could be plausibly defended as in the public interest. Here the ABC had some pertinent questions to raise about the timing and location of some of the new grants, which other critics later took up in Parliament and elsewhere. The minister needed to justify why his preferred allocations were not only eligible and worthy in themselves but also more meritorious than those he had reduced or passed over.
On these questions, however, the minister was able to avoid serious discussion. In Parliament, he relied on the point that grants under the scheme were divided equally between government and opposition seats, thus confirming that minister's offices know they need to avoid accusations of overall partisan bias. But the question of aggregate bias is irrelevant to individual cases, where the minister (backed by the Prime Minister) fell back on the claim that all grants had complied with the guidelines. In other words, a scribbled comment from the minister is deemed sufficient to meet the requirements. Instead, such a comment should properly provide an opening for further questioning and discussion rather than an excuse to close the argument.
This is a familiar weakness in many procedures allowing ministers to exercise political discretion in accordance with stated criteria. Instead of taking responsibility and being accountable for how their decisions meet the criteria they are allowed to assert baldly that a relevant criterion has been met. Decisions thus become routine box-ticking exercises, which suits everyone concerned - the ministers and their offices as well as Department of Finance bureaucrats who are supposed to be monitoring the integrity of procedures but are always mindful of their loyalty to ministers.
With respect to community grants, if ministers wish to retain responsibility for final allocations, they must be held more effectively accountable for individual decisions. After all, the rationale for their right to intervene is that they are elected by and accountable to the voters. They should not be able to hide behind a blanket claim that all bureaucratic procedures were followed. Where they have disagreed with departmental advice, they must be prepared to justify and discuss each decision in an open democratic forum. Questions in Parliament and the media need to be more sharply focused. Parliamentary committees should make more time available for the forensic examination of individual decisions. Only then will ministers and their advisers begin to think twice about blatant pork-barrelling or favours for mates.
- Richard Mulgan is an emeritus professor at the Australian National University's Crawford School of Public Policy. richard.mulgan@anu.edu.au.