Excluding ministers from grants: mission impossible?

In case anyone was in any doubt, the Grattan Institute’s new report on pork-barrelling demonstrates once and for all that governments — and the Morrison government in particular — skew grants programs for political purposes. For those who recall Phil Gaetjens’ ridiculous and innumerate attempt to justify Bridget McKenzie’s rorting of sports grants, here’s chapter and verse on how spending is directed towards government-held seats, and to marginal seats. And, for Phil’s edification, the sports rorts were the second-most rorted federal program the Grattan Institute examined.

It’s also worth noting that while Gladys Berejiklian was the queen of the state rorters — unsurprisingly — the Queensland and Victorian governments secured second and third places, respectively. Pork-barrelling is a bipartisan disease.

What to do? The Grattan team, led by national treasure Danielle Wood, calls for reforms familiar to Crikey readers — taking the politicians out of the grants allocation process, the equivalent of cutting a cancer from an otherwise healthy organ. The Grattan proposal would allow politicians to establish programs and design their function and selection criteria for grants, but all programs would be based on a competitive application process. And the administration of the program would be entirely a matter for public servants, who would publish the criteria, assess applications and allocate grants based on documented selection processes.

The report also wants some other oversight measures — more funding for auditors-general, better parliamentary oversight, better data — but it’s worth wondering whether, given the existing level of politicisation of public services, the reforms would go far enough.

Take the Barilaro scandal in NSW. In his report on the recruitment processes for the New York trade role, former public service commissioner Graeme Head found there were real concerns around the role played by Investment NSW head Amy Brown in the second recruitment process that led to Barilaro’s selection. One of those related to entering into contract negotiations with Barilaro before the process had been completed, but the other three all related to the extent to which Brown consulted with then trade minister Stuart Ayres about the process. “These steps call into question the integrity of the process,” Head concluded, adding that Brown’s failure to disclose these consultations to the recruitment panel also did so.

While Brown points to the purgatorial status of the trade commissioner roles somewhere between public service appointments and ministerial appointments as one issue in her consultations with Ayres, it’s also clear that Brown — who admitted to Head that she had been promoted quickly and was inexperienced — was being highly “responsive” to her minister.

That is, she was highly attuned to what her minister and his staff wanted, anxious to avoid anything that might displease or surprise her minister, and absorbed the minister’s wishes as part of her general operating framework. She was acting like most senior public servants now do in jurisdictions with long-serving governments — federally until May 21, NSW, Victoria and Queensland.

In such an environment, requiring that departments and agencies administer grants may not provide sufficient separation from politicians. Clearly ministers and their staffers prefer to directly allocate grants themselves so they can target political priorities — under the Morrison government, we saw an explicit shift of grant allocation powers to ministers and even the prime minister himself, so that pork-barrelling and rorting could be carried out without the inconvenience of maintaining a facade of independence.

But in an era of “responsive” department heads who feel inclined to keep ministers informed of everything, and who are apt to sound out ministers on departmental decisions in order to make sure ministers aren’t upset, what guarantee is there that public service decisions won’t be tainted by partisan interests, especially if the minister’s office is inclined to call the line area to get an “update” on where a grants process is at?

An outright ban on communications between ministers and their offices, and grants administrators, would be the only way to minimise the risk. That would be a highly restrictive and interventionist approach to administration. But if politicians insist on rorting money, then they need to be treated strictly.

None of this is on the agenda of the federal government. Its approach is to criticise the rorting of its predecessor without changing the system that enables it. Trust us, Labor says, we won’t rort like the Coalition. Who believes them?

Does the government have the will or inclination to change the system? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.