‘That’s a fact’: New twist in sport scandal
The government is still refusing to concede it misused taxpayers' money for political gain, despite Bridget McKenzie's resignation from the frontbench yesterday amid the fallout from the sport rorts scandal.
Prime Minister Scott Morrison has latched onto the findings of a report written by his former chief of staff Phil Gaetjens, who now serves as Secretary of the Department of Prime Minister and Cabinet.
That report is being used both to justify Ms McKenzie's exit and simultaneously bolster Mr Morrison's defence against accusations of pork-barrelling.
It sounds counterintuitive, until you dig into the details.
Ms McKenzie was forced out on a technicality, for failing to declare her interests in gun clubs that received money from the $100 million sport grants program she oversaw.
Mr Gaetjens found that constituted a breach of the ministerial standards.
Incredibly, her resignation actually had nothing whatsoever to do with the broader accusation that she funnelled money from the program into seats the Coalition needed to win at last year's election, ignoring the independent recommendations of Sport Australia, which had ranked applicants based on merit.
"I accept that my failure to declare my membership of certain sports shooting clubs in a timely manner constituted a breach of the ministerial standards," Ms McKenzie conceded at a press conference in Canberra today.
However, she cited Mr Gaetjens' report to claim vindication of sorts, saying there was "no political bias" in the administration of the program.
The Gaetjens report, commissioned at Mr Morrison's request and finalised over the weekend, has added a new wrinkle to the debate over the government's conduct.
There are now two reports into the grants program - the one written by Mr Gaetjens, and the one written by Auditor-General Grant Hehir. And they directly contradict each other.
As he announced Ms McKenzie's resignation yesterday, Mr Morrison repeatedly quoted excerpts from the Gaetjens report to support his assertion there was no political interference in the program.
"(Mr Gaetjens) did not find evidence that this process was unduly influenced by reference to marginal or targeted electorates," Mr Morrison said.
"And he notes the data indicates that applications from marginal or targeted seats were approved by the minister at a statistically similar ratio of 32 per cent, compared to the number of applications from other electorates at 36 per cent.
"He said, 'I find no basis for the suggestion that political considerations were the primary determining factor.'"
There are two significant problems here.
First, the Prime Minister is not releasing the Gaetjens report, so we can't examine its reasoning. All we have are the quotes Mr Morrison hand-picked.
"Will you release the Gaetjens report?" a reporter asked him directly yesterday.
"No," he replied, arguing previous reports of this nature had not been released either.
Second, the Auditor-General's report - which is available for anyone to read - reached the exact opposite conclusion.
According to that report, while Sport Australia was ranking applications based on merit, Ms McKenzie's office was running a "parallel assessment process", which favoured projects based in seats the Coalition wanted to win.
"This process drew upon considerations other than the assessment criteria, such as project locations including Coalition 'marginal' electorates and 'targeted' electorates," said the Auditor-General.
"The award of funding reflected the approach documented by the minister's office of focusing on 'marginal' electorates held by the Coalition as well as those electorates held by other parties or independent members that were to be 'targeted' by the Coalition at the 2019 election.
"Applications from projects located in those electorates were more successful in being awarded funding than if funding was allocated on the basis of merit assessed against the published program guidelines."
We also know Ms McKenzie's office developed a spreadsheet colour-coding applications according to which party held the electorates they were in. That seems a weird thing to have done if politics were not a concern.
So we have one report, written by the Prime Minister's department secretary and former chief of staff, saying grants were not divvied up based on politics. And we have another, written by the independent Auditor-General, which clearly says they were.
Journalists asked Mr Morrison about that gulf between the two reports' conclusions at yesterday's press conference.
Reporter: "There's a huge gap between the Auditor-General's report and the Gaetjens report on the central substance of this matter. Can you either release the Gaetjens report or give us more detail of Mr Gaetjens' reasoning on this argument he's presenting that there weren't political decisions? Because this is flying in the face of the independent Auditor-General."
Morrison: "I'll treat this report the same way that every prime minister has treated this report in the past, and there are many, many instances of that, which I'm sure you'll be very familiar with. But I referred to the statistics myself earlier that he was citing, and that was a statistically similar ratio of grant approvals by the minister for marginal and targeted seats of 32 per cent compared with the number of applications for other electorates, which is 36 per cent. So look, the data has been looked at from various perspectives. The Auditor-General has looked at it from that perspective. The results are based on all three rounds put together."
It's interesting that Mr Morrison is choosing to focus on data from all three rounds of the program combined, instead of breaking them up. Because the Auditor-General found that as the program progressed - and the election drew nearer - the number of projects affected by political considerations increased drastically.
Across all three rounds, 44 per cent of the projects approved by Ms McKenzie were not recommended by Sport Australia. That doesn't sound great, nor does it necessarily sound all that outrageous.
Things look a lot worse when you look at reach round of the program individually.
In round one, just 4 per cent of approved grants went to applications not recommended by Sport Australia. That figure rose to 53 per cent in round two, and a whopping 73 per cent in round three.
In the time period closest to the election, Ms McKenzie gave $7 million to applicants who had been deemed worthy by the independent body, and $32.4 million to applicants who had not.
Other details in the report jump out as well - for example, nine of the 10 electorates which received the greatest amount of funding were "either a marginal electorate or an electorate the minister's office had identified as being targeted by the Coalition".
Meanwhile, nine of the 10 electorates receiving the least funding were held by Labor.
It's quite clear that Ms McKenzie's office was not making its decisions based purely on merit - otherwise it would not have overruled hundreds of recommendations from Sport Australia.
So if the minister was not basing her decisions on political considerations, as Mr Morrison claims, what exactly was she basing them on? We have yet to hear a plausible answer.
Here is another extended exchange from yesterday's press conference, covering that issue.
Reporter: "If the primary determining factor wasn't electorates, and it wasn't merit, which is what the Auditor-General found, what was the primary determining factor for where this money was spent?"
Morrison: "Well I don't accept the characterisation of the Auditor-General's report. What the secretary has been asked to do here is assess the Auditor-General's report and consider the fairness elements of that. And he's made a very clear finding which said that the minister actually did not take as a primary consideration those factors, those political factors, so he's actually rejected that as a position."
Reporter: "No, but I accept that, so on that premise Prime Minister, if marginality of seats wasn't a factor and the Auditor-General says that merit wasn't a factor, then what was the minister's factor in awarding this funding?"
Morrison: "Well the primary purposes of the program, which were also more generally set out by the guidelines, but she was also seeking to ensure that there was a broad application of this program right across the country, right across as many places as possible. And that has also been noted by the secretary."
Reporter: "Prime Minister, the very last seats that were picked under this program were all either Coalition seats or Coalition target seats. Capricornia, Indi, Lyons among them. How on earth can you say that this is not a politically compromised program, given that's the way it ended?"
Morrison: "Well, that's your commentary Andrew."
Reporter: "That is the Auditor-General's commentary."
Morrison: "What I've cited back to you is the secretary's response to that. And when he went to the actual statistics, what he found was there was no material difference between those that were marginal electorates and those that were not. And that's just a simple statement of fact."
We are now in a stand-off of sorts.
The Prime Minister is telling us to trust Mr Gaetjens' assessment of the program over the Auditor-General's - but he is refusing to release the Gaetjens report so we can read it in full and judge its logic.
With parliament resuming tomorrow and the Senate already determined to start an inquiry of its own into the grants program, the issue is clearly going nowhere.