"No requirement" to record $41,000 waiver: Finance

EXCLUSIVE

ANTHONY KLAN

The Federal Government has told the Commonwealth Ombudsman that it didn’t record its reasons for fully waiving a $41,000 owed by a boss of the nation’s media regulator - because there was “no legal requirement” it had to.

The Department of Finance has also remarkably claimed that it doesn’t record its processes in those cases where it decides it will waive debts to the Commonwealth - only when it decides not to.

While the Morrison Government is refusing to say who approved the waiver at the heart of the scandal, The Klaxon can exclusively reveal it was the head of the Department of Finance - Treasury Secretary and Coalition appointee Rosemary Huxtable.

As revealed Tuesday, the Commonwealth Ombudsman last month completed a secret, year-long, investigation into 53 illegal payments - totalling $41,073 - made to Chris Jose, a top official at the Australian Communications and Media Authority (ACMA).

It has emerged that as well as receiving his full-time salary at ACMA - for two years, from May 2018 to April 2020 - Jose had also been illegally receiving a salary for his part-time role as a councillor of the National Competition Commission.

The Klaxon has exclusively obtained a copy of the Ombudsman’s secret December 2 report into the matter - marked “OFFICIAL: Sensitive Legal Privilege” - and the findings are highly damning.

It reveals that despite the NCC payments to Jose being clearly illegal and in breach of the Remuneration Tribunal Act, that rather than recovering the debt, top government officials across at least five federal agencies went to great lengths - at extensive taxpayer cost - to allow Jose to keep the money.

Those implicated including the Department of Prime Minister and Cabinet; the Department of Treasury; the Department of Finance; the National Consumer Commission (NCC); and, by extension, competition regulator the Australian Competition and Consumer Commission (ACCC), which provides all of the NCC’s staff.

Remarkably, the Department of Finance, for which Huxtable has been responsible since being appointed Finance Secretary in 2016, has said it doesn’t record its decisions when the outcome is that it decides to waive a Commonwealth debt.

Huxtable’s Finance has formally told Ombudsman investigators that: “there is no legal requirement for a for a statement of reasons to be provided, and that it is not (Finance’s) practice to do so where a decision is made to authorise the debt waiver. However the decision-maker does provide a statement of reasons if a decision is made not to authorise a debt waiver.”

The Ombudsman found Finance had authorised the waiver despite not obtaining key information  about the case - including even apparently failing to have any communication at all with Jose - and had failed to examine options other than waiving the debt, such as recovering the money from Jose.

“Finance’s decision in this case not to request additional information…was not good administrative practice,” the report says.

“The (laws) exist to ensure a degree of transparency and consistency in the application of waivers, and departures from the guidance introduce the risk of inequality and perceptions of partiality.”

“Recommendation 2” states: “Finance review its processes for documentation of waiver decisions to ensure both positive and negative decisions are properly documented”.

Timeline:

- December 18, 2017: Jose is appointed part-time NCC Councillor

- May 1, 2018: Jose is appointed full-time member of ACMA

- March, 2020: A whistleblower tells NCC the Jose payments are illegal

- April 30 2020: NCC stops making payments to Jose

- May 6, 2020: NCC President Julie-Anne Schafer passes the matter to PM&C

- May 12, 2020: PM&C, Finance and Treasury hold a teleconference to discuss the matter

- May 27 2020: Assistant Minister to the PM&C, Ben Morton MP, signs legal instrument handing matter to Finance

- August 13, 2020: Finance grants a “waiver” of the Jose debt

- January 25, 2021: Ombudsman investigator begins its investigation

- December 2, 2021: Ombudsman officially completes its secret report

The Ombudsman’s report contains a series of recommendations.

Huxtable has repeatedly failed to respond to detailed questions from The Klaxon.

However today, in a written response from an unnamed “Finance spokesperson” the department said that it had implemented the Ombudsman’s recommendation.

“The Department of Finance has accepted the recommendation of the Ombudsman related to Finance and has implemented revised arrangements in respect of positive decisions,” the statement says.

“At all times the Department of Finance has cooperated with the Ombudsman in its investigation of this matter.”

The Public Governance, Performance and Accountability Act (PGPA Act), which governs senior public servants.

Under the PGPA Act the Commonwealth can waive debts it is owed, but only as a “last resort” and only after other options have been examined, including recovering the debt or “offsetting” the debt against a public servant’s future paycheques, or a Centrelink recipient’s future payments.

Huxtable’s Finance did none of this.

The power to waive debts lies with the Finance Minister.

“The Finance Minister’s power...has been delegated to the Finance Secretary””

Under the PGPA Act, the Finance Minister can “delegate” that power to the Finance Secretary if they issue an official instruction in writing.

The Finance Minister at the time the debt was waived, in 2020, was Mathias Cormann.

The Ombudsman’s December 2 secret report states: “As permitted by section 107 of the PGPA Act, the Finance Minister’s power under section 63 of the PGPA Act has been delegated to the Finance Secretary”.

More to come.

Do you know more? anthonyklan@protonmail.com

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Anthony Klan

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