Before "sports rorts" there were "travel rorts". The most notorious scandal was speaker Bronwyn Bishop's chartering of a helicopter to take her to a party fundraiser in 2015 ("Choppergate") but a number of ministers were also accused of misusing their travel entitlements for personal purposes. A storm of public outrage in early 2017, fanned by a news-starved press gallery, induced the prime minister, Malcolm Turnbull, to introduce major changes to the system of administering MPs travel and other expenses.
A new principles-based regime replaced the former rule-based model, to be monitored by a new independent authority, the Independent Parliamentary Expenses Authority (IPEA). Though only four years old, the IPEA already seems a relic of another era, when prime ministers could be shamed by public opinion into taking significant steps to curb the corrupt actions of fellow politicians. The Auditor-General has now conducted a timely performance audit (Report 33, 2020-21) to assess how successfully the IPEA has implemented the new legislation.
The new legal framework introduced a number of important changes. Taxpayer-funded expenditure, including travel but also covering office resources, is no longer an "entitlement" but simply an 'expense' incurred in performing one's duties. To justify public payment from the public purse, MPs' expenses must be incurred for "the dominant purpose" of conducting parliamentary business, defined as duties that are parliamentary, electorate, party political or official. This is intended to exclude the previous rort of appending the performance of a brief and superfluous public duty to a mainly private trip. To rule out extravagance, MPs are also obliged to provide value for money.
MPs must accept personal responsibility and accountability for meeting these requirements and must be prepared to justify their recommendations publicly. The old excuse that an expense was "within the rules", so frequently relied on by politicians to escape responsibility for questionable decisions, is no longer sufficient. To reinforce this shift of accountability, administrative responsibility for expenses was removed from the Department of Finance, always comfortable with routine box-ticking processes, and given to the new IPEA, an independent body with power to monitor and make binding rulings. The membership of the IPEA itself was designed to provide genuine independence and expertise, including members with judicial and auditing experience.
The IPEA also supervises the travel expenses of MPs' staff, including electorate and personal staff, though these staff are not subject to the same legislative framework as MPs and are not required to meet the same parliamentary purposes for their expenses. Instead, parliamentary staff are simply required to guarantee that their travel is for "official" business as certified by the employing MP. Within this much looser rubric, however, staff must guarantee that the expense meets the dominant purpose criterion and provides value for money.
Within the IPEA, day-to-day administration is delegated to a CEO and staff of around 50 who conduct the regular activities of processing claims, giving advice, monitoring, reporting and auditing (making formal rulings is reserved for full members of the authority). The Australian National Audit Office, using aggregate performance information and sampling individual cases, judged these functions to be performed accurately and efficiently.
A key issue is whether the new framework has altered the mindset of MPs and discouraged the former rorting of expenses. Here, the ANAO provides grounds for being cautiously optimistic. To monitor the level of MPs' compliance with the framework, including the dominant purpose test, the IPEA has developed an assurance framework with a series of graduated steps, ranging from basic checking of receipts to thematic audits of particular issues and in-depth audits of individual cases. During the two years 2018-2020, the IPEA conducted around 50 reviews of the dominant-purpose criterion for travel, finding non-compliance in 10 per cent of cases. One case (a staffer) was referred to the Australian Federal Police and others led to demands for repayment with a 25 per cent penalty.
The IPEA's choice of which individual cases to review depends on a number of factors, including its own research and familiar red-flag issues, such as desirable destinations and coincidence with school holidays. The IPEA also responds to external prompting from media reports or to complaints from the public. The selection process is somewhat ad hoc and upsets the ANAO which prefers strategic performance planning and formal risk-assessment.
The ANAO also asks for more accountability from the IPEA. It recommends that the authority's public reporting provide a more informative breakdown of the types of advice given rather than a simple aggregate as at present. It also notes that the IPEA decided not to publish the one formal ruling it made, relating to a parliamentarian's travel. This decision was influenced by the wishes of the parliamentarian in question as well as doubts about whether publicity would assist the authority's overall mandate. This reticence reflects the same over-concern for the sensitivities of the political class that is bedevilling design of a federal integrity commission. Even for low-level corruption such as cheating on travel expenses, the threat of public exposure is too powerful a weapon to disregard.
Other weaknesses relate to limitations in the IPEA's remit. For instance, it has no jurisdiction over MPs' use of special purposes aircraft which is jealously guarded by the Department of Defence. None the less, though its scope is modest, the IPEA's core principles of personal responsibility and independent scrutiny mark an important step in fostering greater integrity among politicians and their staff.
- Richard Mulgan is an emeritus professor at the Australian National University's Crawford School of Public Policy. firstname.lastname@example.org.