Imagine a bus with a politician at the wheel during the final stages of a race to win a federal election. The bus must not be allowed to slow down, so the politician and his campaign team put a brick on the accelerator and crash through every barrier in their way – roadblocks, boom gates, you name it.
Yes, this sounds like a scene from , the blockbuster that made Keanu Reeves a star. It is also the outtakes from a $2 billion federal spending program that poured money into hundreds of projects in a race to win the 2019 election. This time, however, the people at the front of the bus were no heroes.
The previous government spent money so quickly on the Community Health and Hospitals Program that nothing was allowed to stop them. The campaign bus crashed through every safeguard meant to protect taxpayers from pork-barrelling for political gain, to the point where politicians and public servants not only flouted the grant guidelines but spent money without the authority of the law.
This seems inconceivable. It reads like fiction – or, at best, a columnist’s hyperbole. In fact, it is a finding on page 95 of the audit of the CHHP released this week, four years after some of these grants helped the Coalition hang on to power.
“Health did not establish grant opportunity guidelines for CHHP grants in all instances,” the Australian National Audit Office said of the Department of Health. “The decision to not develop grant opportunity guidelines was made consciously and deliberately by senior officials.” In other words, the officials knew they were skirting the rules. But that is not the worst of it.
“Following risk assessments from the Australian Government Solicitor which determined that there was no legislation that could reasonably be relied on to authorise expenditure on the whole of some grant proposals, Health advised the minister that it would proceed to execute grants despite there being no legislative authority to do so in some cases.”
Voters probably assume the law is a barrier to a rushed decision on a government grant. Not with this scheme. Those who made the decisions knew they were beyond the letter of the law. That is why this audit takes the anger about Commonwealth grants to a new level. It deepens the concerns about the moral and ethical standards within government.
The CHHP put money into worthwhile projects, so this is not about every dollar being wasted on 171 bad ideas. The program began with $1.25 billion and was expanded with $747 million to back decisions made under national partnership agreements with the states. There was $80 million for the Peter MacCallum Cancer Centre and $50 million for melanoma research at the Alfred Hospital in Melbourne. There was $128 million for Shellharbour Hospital in NSW, $100 million for the Sydney Children’s Hospital in Randwick and $65 million for the Cystic Fibrosis unit at Westmead Hospital in western Sydney.
The biggest projects were chosen with support from state governments and were in Labor and Greens seats close to city centres. This explains why 71 per cent of the money was spent in safe seats. Health Minister Greg Hunt found a way to put money into hospitals after years of criticism from states for not spending enough.
Some of the projects, however, were “other grants” and many were not identified by department officials with the usual call for expressions of interest and a selection between competing applications.
“Health received several requests from the minister’s office to draft national partnership agreements once projects were publicly announced,” the audit says. “Following these requests, Health decided to begin drafting national partnership agreements on the basis of public announcements. Health monitored the media to keep track of announcements.”
So the political promise came first and the paperwork came second. That is how some of the $2 billion was put to use to help win the 2019 election.
The Coalition found $7.5 million for the Very Special Kids Hospice in the Melbourne seat of Higgins in March of that year, as well as $4 million for a wellbeing hub in Ocean Grove in the seat of Corangamite near Geelong. There was $5 million for the Power House Community Hub in the Melbourne seat of Macnamara, announced by Hunt with the local Liberal candidate Kate Ashmor.
When the Coalition found $9 million for the Glen Centre on the NSW Central Coast to help Indigenous women, the good news was announced in April 2019 with Liberal candidates Lucy Wicks and Jilly Pilon. This project, like the others, seems like a worthwhile cause. The pattern with the smaller grants, however, was all about maximising the political gain from the CHHP spending.
Measured by funding, more than two-thirds of the cash went to safe seats. Measured by projects, however, there was a greater tendency to spend money in political battlegrounds: 45 per cent of the projects were in marginal seats. The program lasted so long that it helped at the 2022 election as well. The Nationals announced $1.9 million for a cancer telehealth service in Gladstone in April last year, just when they needed to defend the seat of Flynn.
Labor has not scrapped the program and may be tempted to use it for its own purposes. In the marginal seat of Gilmore on the NSW South Coast, for instance, Labor MP Fiona Phillips opened the Triple Care Farm project near Bateman’s Bay in February this year with $8 million from the CHHP. The government is promising to “run the ruler” over each project.
At its heart, the latest audit is about ethics in government. First, the expectation that elected leaders will spend public money in the national interest and not in their own interest – or their party’s interest. Second, the requirement in the law that public servants will ensure grants are decided in an impartial way that is lawful and publicly defensible.
It should be shocking, but is mostly accepted with resignation, that it took four years for the failures with the CHHP to come to light. This is a terrible measure of the scale of the problem: we have an overload of poor programs that need checking and an undersupply of funds for the audit office to do its work.
The logical conclusion is to tighten the guidelines on all grants so the programs are public, anyone can apply and there is full disclosure about the reasons for decisions. The Centre for Public Integrity is calling for new laws to govern the grants, more limits on the power of the minister to allocate cash and a renewed trust in the public service to offer “frank and fearless” advice that can stop a rort.
Cynics will tell voters to expect the worst from those they elect, but that argument only highlights the need for a better system to keep ministers in line and allow senior public servants to apply stricter rules. If the campaign bus is going to crash through the boom gates, the answer is to build a stronger barricade.
David Crowe is chief political correspondent.
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