Some exchanges during the two hours Secretary of Department of Prime Minister and Cabinet Phil Gaetjen spent before the Senate Select Committee on Administration of Sports Grants Committee on 22 July- the sports rorts committee- shouldn't stay buried away in the Hansard.
The backdrop is questioning about Mr Gaetjen's report undertaken at the request of the Prime Minister that led to the minister's resignation. And is subject to a claim of public interest immunity on grounds it is a document prepared for submission to cabinet so not available to the Committee.
Headings dedicated to the memory of Sir Humphrey Appleby:
Well, I did talk to the Minister
Senator GALLAGHER: As part of your report, you didn't interview the Prime Minister specifically?
Mr Gaetjens : No.
Mr Gaetjens : No. My report was with respect to the minister's apparent breaches of the status of the ministerial code of conduct.
Mr Gaetjens : I certainly had discussions with her chief of staff, knowing of course that, when I conducted my inquiry, the senator was in a different ministerial position. But I had no discussions with her staff when she was Minister for Sport.
Mr Gaetjens : I think she was Minister for Sport months before the inquiry happened.Senator GALLAGHER Yes. So you didn't go back to speak to those
Mr Gaetjens : No.The minister was responsible for the actions of her staff, so the interview with her, I thought, was sufficient.
Procedures, process? Nothing to worry about there!
Mr Gaetjens :.... I think what we did was, through my report ... basically approach the outcomes of all three rounds of the funding. I wasn't necessarily interested in the process; it was the outcomes of the funding round compared to—
Senator GALLAGHER But the process is pretty important here, isn't it, in terms of allegations of pork-barrelling and political interference? You would have thought the process leading to those decisions—
Mr Gaetjens : The process was fully outlined in the Auditor-General's report.
Senator GALLAGHER Indeed, which led to you being commissioned to conduct this assessment of whether fairness under the ministerial code of conduct was adhered to. The process is pretty important.
Mr Gaetjens : I was asked to ask about apparent breaches of the ministerial code of conduct. I was not asked to audit the sports administration program. That was my role.
Senator GALLAGHER....... I would have thought the process, including the communications between the Prime Minister's office and the minister for sport's office at the time was pretty central to you forming a view about whether there had or had not been a misconduct or whether the fairness obligations of the ministerial code of conduct had been met.
Mr Gaetjens : I will just repeat what I said: I was asked under paragraph 7.4 of the standards. The Prime Minister may seek advice from the secretariat of the Department of the Prime Minister and Cabinet on any matters within the standards. My focus was on whether the minister breached the standards.
The Auditor-General had done a report with respect to the administration of the program, and I used that report largely as the basis, with other information collected from the Department of Health and from questions asked of Sport Australia and others. ...... In the Auditor-General's report there was no mention of discussions or emails between the Prime Minister's office and the minister. In fact, it's the minister's actions that I was inquiring into.The Caretaker Conventions file was closed after sending a memo, no reason to open it since.
Senator GALLAGHER Mr Gaetjens, your report also doesn't note the two decision briefs authorising the expenditure of the $40 million that was sent to the Prime Minister's office in the hours after the election was called and the caretaker conventions were in place. Why is that?
Mr Gaetjens : Because it wasn't known at the time
Senator GALLAGHER In the evidence that you looked at, in terms of formulating your report, that did not come to your attention: that, following caretaker kicking in, decisions were still being made between the minister's and the Prime Minister's offices? You weren't aware of that? No-one told you that?
Mr Gaetjens : No.
Senator GALLAGHER So the first you knew about that was in one of these hearings?
Mr Gaetjens : Correct...
Senator GALLAGHER Were you concerned about that?
Mr Gaetjens : Not at the time, because I wasn't aware of it.
Senator GALLAGHER No? Were you concerned when you found out that decisions were being made after caretaker had kicked in, in allocating taxpayer funds?
Mr Gaetjens : Decisions can be made after the caretaker period starts. Usually, when caretaker starts, departments are advised to follow the guidance and advice of the Prime Minister and Cabinet. It is the departments and ministers who keep on making those decisions. The PM&C does not take over the decision-making ability. Everything is considered in the context of the transaction or decision being made with respect to scope, scale, importance and sensitivity, so I can't give you a one-size-fits-all answer as to whether a decision should or should not have been made in caretaker. It would relate to the actual circumstances of it being made.
Senator GALLAGHER Well, we've got an actual circumstance here. Does it bother you that $40 million of taxpayer funds were signed off after caretaker kicked in, going to projects in seats that the government was trying to win? Does it bother you, or do you think it's an appropriate use of taxpayer funds?
Mr Gaetjens : I would have to look in more detail at the actual decisions that were made.
Senator GALLAGHER Oh, come on! Mr Gaetjens, you're the head of the Public Service. It doesn't bother you that taxpayers' funds were being spent after caretaker kicked in. Extraordinary!
Mr Gaetjens : If those decisions were made with the advice or guidance of Prime Minister and Cabinet, of which at that time of course I was not a part—
Senator GALLAGHER Were they? Have you checked? Do PM&C have a view, or didn't they mind either?
Mr Gaetjens : My understanding is that advice was not sought, but I'll leave that to people who were there at the time.
CHAIR: But, when you became aware through the work of this committee or through media reports that it had happened, surely you would have then gone, 'We need to have a look at this'?
Mr Gaetjens : By that time the minister had resigned.
Mr Gaetjens : Why does one need to have a look at something when the minister has resigned?
CHAIR: The minister put out a statement saying that she had no knowledge that these changes were made after she signed the brief.
Mr Gaetjens : I'm sorry, I've got no role in that. The event had happened. The minister had resigned. There was this inquiry. There'd been an Auditor-General's inquiry. What else could I do? I was asked to inquire about the minister's apparent breaches of the ministerial standards. I did that. She resigned.
Mr Gaetjens : Yes, and then the minister put out a statement when people became aware that there were changes made after she'd signed the brief saying that she'd no knowledge of that. Surely, as the head of the PM&C, you would go: 'Wow, what has gone on there? We need to get to the bottom of that.'
Mr Gaetjens : As the head of PM&C and as a public servant, I'm an adviser, not a decision-maker.
Senator GALLAGHER But you lead the Public Service, and appropriate adherence to caretaker conventions is pretty fundamental to an independent and effective public service. Surely you have a view. It's extraordinary.
The Postal Service? That Trump fellow is onto something
Senator GALLAGHER:....In terms of commissioning the report, Mr Gaetjens, Ms Foster told the finance and public administration committee the Prime Minister or his office provided oral advice of the request on Friday 17 January, and a letter dated 17 January was received on Monday 20 January. Does that adhere to your recollection?
Mr Gaetjens : Yes
..... Senator GALLAGHER.... Why did the letter take until Monday 20 January to turn up, just out of interest?
Mr Gaetjens : I have no idea.
For heavens sake, we can't have the name of a senior staffer to the PM brandied about!
Senator Rice In the time I've got left, I want to go to issues regarding the breaches of the ministerial standards. You said in response to Senator Gallagher's question that the request for you to undertake the work was a call from a senior adviser. What was the role of that adviser?
Mr Gaetjens : I didn't say 'senior adviser'. It was a senior person in the Prime Minister's office.
Senator Rice Can you tell me what their role was?
Mr Gaetjens : I think that would identify them.
Senator Rice Was it the senior adviser for infrastructure and sport, or the senior adviser for backbench liaisons?
Mr Gaetjens : It was a senior adviser in the Prime Minister's office—sorry, it was a senior staff member in the Prime Minister's office, not necessarily a position of senior adviser. Can I also say that that followed with a letter from the Prime Minister.
Can I tell you the legal authority for the minister to make decisions? No I can't
Senator GALLAGHER I go now to the legal authority. You say the guidelines authorise Senator McKenzie to provide final approval for projects and authorise the minister to take other factors into account when deciding which projects to fund. You conclude that Senator McKenzie acted within the remit of the guidelines. Regardless of what the guidelines say, it matters whether the decision-making itself was lawful. Would you agree?
Mr Gaetjens : I think that has been covered by people more confident than I to talk about legal issues.
Senator GALLAGHER So can you tell us what was the legal authority for Senator McKenzie and not for Sport Australia to be the decision-maker?
Mr Gaetjens : No, I can't. I am not a lawyer. I think that should be addressed to other people.
Senator GALLAGHER But you have formed the view that the guidelines authorised her to make those decisions and therefore those decisions were lawful?
Mr Gaetjens : My inquiry covered a number of decisions that had been made. They were historical decisions that had been made. I then took upon the fact that those decisions had been made. I was then asked to look at whether in making those decisions there was a breach of the standards. That is the logic that I follow. I think I had also known at that time that the Prime Minister had asked the Attorney-General to provide a view about the legal status.
Senator GALLAGHER The Auditor-General said he can find no evident legal authority for Senator McKenzie's decision-making. Is the Auditor-General wrong?
Mr Gaetjens : I don't have a view on that. It is not in my purview or competence to answer that question.
Senator GALLAGHER As head of the Public Service, I presume this is a matter of interest to you about legal decision-making. Have you taken any advice based on what the Auditor-General found, because I presume it has wider application across the Public Service than just this program.
Mr Gaetjens : I am aware now of what the Attorney-General found.
Senator GALLAGHER You are talking there to the Attorney-General's finding about the legal decision-making?
Mr Gaetjens : Yes.
Senator GALLAGHER The University of Melbourne's Professor Cheryl Saunders and Professor Michael Crommelin said:
If the grants were made pursuant to the Sports Commission Act, they are invalid for failure to comply with the provisions of the Act. The Act confers on the Commission, not the Minister, the power to make grants for the purposes of the Act.
Are Professor Saunders and Professor Crommelin wrong?
Mr Gaetjens : I would have no confidence to answer that question. I am not a lawyer, I do not have legal qualifications, I am not a practising lawyer, so, again, I don't think it is an answer I can provide. All I do know is that the Attorney-General has reached his own view and I think the government would probably act according to what the Attorney-General thought.
Senator GALLAGHER The University of Sydney's Professor Anne Twomey says there appears to be no legal basis for Senator Mackenzie to be the decision-maker. Is Professor Twomey wrong?
Mr Gaetjens : My previous answer applies.
University of Adelaide's Emeritus Professor in-law, Geoff Linnell says, 'Senator McKenzie likely had lack of legal authority to either approve or participate in the decision making.' Is Professor Linnell wrong?
Mr Gaetjens : My previous answer applies.
Senator GALLAGHER So you just rely on the Attorney-General's advice to you or advice to the government?.....
Mr Gaetjens : A legal question was asked of a legally competent person....
Next day former Deputy Secretary of the Department of Finance Stephen Bartos testified about the legality issue thus
"My view is that the minister didn't have the authority to make those grants under section 83 of the Australian Constitution. Maybe it's because I worked for many, many years in the finance department, but I had it drummed into me that, under section 83, no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law—that is, ministers can't spend money unless the parliament has given them the authority to spend that money. Without that clear authority, ministers can't just spend as they wish. There are circumstances, like the advance to the finance minister, where ministers are given some discretion. But the parliament, in the case of the advance, puts a number of reporting and accountability requirements around that, precisely because it's unusual. Ministers are constrained by what the legislation says, and it does appear, looking at the legislation that governs Sport Australia, that not only did they not delegate to the minister the power to make grants; they actually may not have been able to, in any case."