Morrison and the G-G: did Hurley’s favourite charity get special treatment from secret treasurer ScoMo?

What a strange and worrisome picture has emerged of the relationship between former prime minister Scott Morrison and Governor-General David Hurley, the former addicted to secrecy and the latter whose role is cloaked in secrecy.

There’s more that leaves us wondering — and that should never be the case in a checks-and-balances relationship at the top of government.

David Hurley, the accomplished military man, was appointed governor-general in July 2019 by Morrison. Any transparency in the selection? Forget it. There was no debate at all, least of all in Morrison’s mind.

Hurley was his “first and only choice”, Morrison proclaimed when he appointed him — head-hunted, as it were, direct from his role as NSW governor.

It can’t have hurt that Hurley, like Morrison, is deeply religious, as is Mike Baird, the former NSW premier who appointed Hurley to the NSW job. Three men of faith? A coincidence, surely. And so what, you might ask.

Morrison saw an earthy everyman-leader in his new appointment. “He takes on those Australian values as someone who is able to bring people together … looking eye to eye, face to face, understanding people’s challenges and issues, one on one in a very direct and humble way,” he said.

Much of Hurley’s time as governor-general has been unexceptional. Even the routine fare of school visits and official ceremonies has been largely muted because of COVID. Hurley has done what G-Gs do, up to and including rubber-stamping the wildly political Order of Australia recommendations bowled to him over the years. If he felt any sqeamishness at handing out gongs to a range of Liberal Party luminaries, he certainly didn’t show it.

Hurley has also been unmoved by calls to strip honours from the likes of disgraced High Court judge Dyson Heydon and cover-up-cardinal George Pell, even though the regulations technically give him the power to do so. He has instead relied on convention, allowing them to keep their honours unless they are convicted by a court. It’s jarring that a decent man occupying a revered position allows indecency to go unpunished, but that apparently goes with the territory. There has certainly never been any obligation for Hurley to explain.

By and large a passive, khaki-grey presence, the governor-general surprised everyone in June this year by appearing in a promotional video to spruik the virtues of a renovation company that had done work on the Hurleys’ home. Screeching out of left field, it was a bewildering breach of convention. However, Hurley didn’t recognise that until it was pointed out to him and he agreed to have the promo taken down. Even then he defended himself on the grounds that he had received no personal benefit, a rationale that seemed to miss the point.  

Yet bubbling away in the background has been a separate saga that has proved awkward for the governor-general before — and which has raised its head again last week in light of revelations of Morrison’s many ministries. In this case, it is Morrison’s secret role as treasurer, signed off by Hurley, which is relevant.

The Australian Future Leaders Foundation Incorporated

The Australian Future Leaders Foundation Incorporated is the brainchild of Chris Hartley, an upper-crust English chap with royal connections and an advocate for the greatness of the Commonwealth. Hartley’s idea was that a foundation could help produce great leaders in Australia by providing an escalator for success for mid-career notables in the public service, private enterprise and academia. 

Earlier this year it emerged that the foundation, which enjoys the strong support of the governor-general, had been funded to the tune of $18 million by the Morrison government, despite the organisation having no staff and no office beyond a lawyer’s office address at the time.

Senate estimates hearings in April revealed that the Department of Prime Minister and Cabinet (PM&C) had taken the running on dealing with the foundation. PM&C had done the due diligence — such as there was — and negotiated an agreement with the foundation. 

It emerged that the foundation was registered as a charity in April last year and had been granted DGR (deductible gift recipient) status — which makes donations tax deductible — in a faster timeframe than normal. DGR status is an effective government subsidy and is approved by the treasurer.

The proposal too had stuck in the mind of then finance minister Simon Birmingham. 

“I remember the proposal crossing my desk at a point in time, because it’s unusual to see a proposal from the governor-general — not ‘from’ but ‘that cites the governor-general’ would be a more accurate description,” he told Senate estimates. (Morrison also had a secret stake in Birmingham’s Finance portfolio.)

There was something else exceptional. In the case of the Australian Future Leaders Foundation, the prime minister’s department was “involved” in discussions about a DGR status, as PM&C first assistant secretary John Reid conceded under questioning.

The $18 million grant was made outside the government’s routine tender processes and was done by non-competitive tender.

Enabling legislation for the funding describes the program as “an initiative of the Department of the Prime Minister and Cabinet in consultation with the Office of the Official Secretary of the Governor-General”.

Governor-general excited

The governor-general’s official diary shows he met with Hartley on several occasions as the foundation took shape early last year. 

And how much in favour was the governor-general?

At Senate estimates hearings earlier this year, the governor-general’s official secretary, Paul Singer, gave an insight. Singer said his office and the G-G were “pleased and excited” to be part of “such a bold initiative” to build the future leadership capability in Australia. It was a “new and exciting initiative” that would make an impact “in the national interest”.

So enthusiastic was the governor-general that the proposal had earnt “his own personal patronage”, Singer said.

So what role did the secret treasurer play?

The timeline shows that Scott Morrison assumed the role of treasurer as the Australian Future Leaders Foundation was seeking DGR status from the Treasury.

The foundation was registered with the Australian Charities and Not-for-profits Commission on April 16 2021.

Some three weeks later — on May 6 — Morrison secretly took on the treasurer’s responsibilities, with papers sent to the governor-general. (Morrison took on Home Affairs the same day.)

In May, according to reports, the foundation began the process of seeking DGR status. 

On December 8 2021 the government’s mid-year economic and fiscal outlook (MYEFO) statement included an update that the Australian Future Leaders Foundation had been granted DGR status, backdated to July 2021.

In April this year — with the election due to be called — the government introduced enabling legislation for the $18 million grant. Senate estimates heard that the Prime Minister’s Office had been “involved” in discussions over the DGR status.

Crikey asked Governor-General David Hurley whether or not he discussed the issue of the foundation’s DGR status with Morrison. We also asked the governor-general whether he believes an independent review is warranted to address any perception of favourable treatment for DGR status given the technical involvement of Morrison.

His office answered that it had nothing to add to previous comments it had made on what it called “the two unconnected issues”. To be clear, Crikey does not suggest the G-G asked Morrison to use his powers to grant DGR status.

Morrison said last week that he only exercised his powers on one occasion, in relation to the Resources portfolio.

The open question is whether or not Morrison felt empowered — or legally entitled — to insist on DGR status for the governor-general’s pet project, coming from his position as secret treasurer.

What communications did Morrison and his office have with the treasurer Josh Frydenberg? Did Morrison and the PM&C override the Treasury? 

These questions can only be answered by a formal inquiry into Morrison’s secrets.

Crikey has sought comment from the treasurer’s office and the Treasury.