Auditor-general Grant Hehir defends his independence from ministerial direction

By Stephen Easton

Monday July 16, 2018

The Treasurer had no right to stop the auditor-general telling his parliamentary oversight committee about a last-minute funding change this year, according to official legal advice.

Treasurer Scott Morrison and his department both ignored an opportunity to comment in May when The Mandarin reported the concerns of the JCPAA’s deputy chair, Julian Hill, that they might have overstepped their powers.

Morrison’s office told auditor-general Grant Hehir not to brief the Joint Committee of Public Accounts and Audit about the late update to the Australian National Audit Office budget before Morrison delivered the budget speech. The JCPAA has a legislated role of reviewing and commenting on the ANAO budget before the papers are published.

Hehir had wanted to update the JCPAA, but did not rock the boat at the time. He later obtained advice from the Australian Government Solicitor that disagrees with the Treasurer’s strict interpretation of budget confidentiality, which he refers to in a response to the draft report from the review of the Public Governance, Performance and Accountability Act.

“In effect, I have a statutory duty to respond to a request from the JCPAA to disclose information about the ANAO’s pre-budget estimates, and am advised that section 53 [of the Auditor-General Act] is designed to ensure the information is available to the JCPAA despite its otherwise confidential status,” Hehir writes.

“I am advised that this leaves no real room for executive discretion based on conventions around prebudget confidentiality.”

It is far from clear that the government will agree with this advice, however, and ministers may well argue that Morrison’s strict interpretation of budget confidentiality was correct under current legislation.

Hill said the AGS advice, as reported by Hehir, “casts serious doubt on the government’s direction to the auditor-general being legal” but he hadn’t seen it personally and accepted “it may just be one opinion” on the issue.

“The critical point for me is to put beyond any doubt, remove any shred of ambiguity, that the auditor-general cannot be bound or gagged by executive government in that way,” he told The Mandarin.

“At this stage I remain unconvinced that the legislative arrangements are adequate, and we’re going to need to look at this more closely in the second half of the year. It’s one thing to say the auditor-general could brief the committee; it’s another to say there is a positive requirement to do so.”

The auditor-general’s main concern with the PGPA review is that any proposed changes to the financial management and accountability regime for the public sector should enhance or at least maintain the independence of the office he holds.

The advice from the AGS appears to have answered the key question at the heart of the matter. Hehir said it confirms “it is open to the Committee to make more than one request per budget cycle to require me to provide an update on the ANAO’s budget estimates” in his submission.

“While this matter can be practically resolved, it is important that any changes to the PGPA Act and Rule sufficiently take account of the position of the Auditor-General as an independent officer of the Parliament, and the special relationship established by statute with the Committee,” he adds, among many other detailed comments on the draft report by David Thodey and Elizabeth Alexander.

Hill said that if the advice from the AGS was contested by the government, he hoped Thodey and Alexander could explore an amendment to the act that could clarify the issue of the auditor-general’s independence once and for all.

Members of the JCPAA were surprised to see the funding changed this year in the federal budget papers compared to a draft they had believed was accurate.

Hill was particularly annoyed to find the Treasurer’s office left him to speak for the committee in the House of Representatives on the basis of inaccurate information.

“I think what’s transpired, by way of the Treasury gagging the auditor-general, is completely inappropriate,” he told The Mandarin in late May.

“To date, there’s been no explanation given, or apology, or indication even that the Treasurer, or the Executive of the government, even understand the distinction – which may seem arcane to some, but it is important.”

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