While Bridget McKenzie hovers in no man's land, we're left waiting for a clear explanation

Extract from The Guardian

Bridget McKenzie

Katharine Murphy

We need to care deeply about the sports grants saga, because the quality of our institutions, and the processes they run on our behalf matters

@murpharoo

Sat 1 Feb 2020 06.00 AEDT Last modified on Sat 1 Feb 2020 06.02 AEDT

‘Whatever happens to McKenzie, this case study shows us that there is much more to see here.’ Photograph: Mick Tsikas/AAP

Have you ever been in a position where you read something, and you can’t get it out of your head? I’ve been in this unfortunate situation since coming back from a summer break and reading the Australian National Audit Office report on the community sport infrastructure program – plagued by questions that have trailed me around like a little ghost for several days.
There’s been such good journalism in recent weeks teasing out the minute atrocities associated with the sports grants program, which is the latest iteration of politicians and their advisers treating taxpayers’ money as if it’s an election-funding ATM. As the various revelations drip out day by day, Bridget McKenzie hovers, decoupled, in no man’s land, in a suspended state between ministerial life and ministerial scalp, with the scalp feeling more probable than life.
While we are all gripped by the story arc – the dispiriting spectacle of ministers and their advisers carving up taxpayers money for targeted seats on colour coded spreadsheets, whether or not McKenzie will have to take a dive for the team, and the impact of any controlled detonation inside the Nationals and the government – the thing I’ve become fixated on is what this sordid summer saga tells us about the parlous state of governance in Australia.
Which brings me back to those questions I can’t get out of my head.
The questions materialised between paragraphs 2.14 and 2.19 of the ANAO probe. These particular paragraphs detail the legal framework sitting around Sport Australia, which might sound a bit arid, but walk with me, it’s worth it.
The first thing to understand before we dive in is Sport Australia is a corporate commonwealth entity. As the audit office notes, these entities are body corporates that have a separate legal personality and can act in their own right exercising legal rights such as entering into contracts, deciding on the award of grants and owning property.
In these circumstances, ministers have to follow specific processes when it comes to directing their agency. They can’t just wing it, or put on a paper crown and appoint themselves supreme ruler.

The next point to grasp is the minister insisted on being the decision maker about these grants, not the agency. Sport Australia told the audit office this was the price of admission. “Sport Australia advised the ANAO in March 2019 that the program guidelines would only be approved on the basis that the minister was the decision-maker.”
Small problem with this though. It wasn’t clear that the minister had the legal authority to be the decision maker, and Sport Australia clearly knew that because in early June 2018, it recorded that its own legislation required the agency to approve the grants, not the minister.
The audit office then says later that month, the health department noted that “in the event the minister was to be the approver, legal advice may be required on the use of the section 11 directions power in order for the minister to be able to undertake this role”.
Then we arrive at our next hiccup. That legal advice was never sought, and the bus accelerated. The program guidelines specified that the minister was the decision maker, and the whole apparatus bent to that view of the world.
But despite declaring herself she who must decide, the minister never issued any section 11 directions to the agency, and in the absence of those directions, “there was no legal authority evident to the ANAO under which the minister was able to be the approver of CSIG program grants to be paid from the money of Sport Australia”.

Oops, as they say in the classics.
Oops.
Since reading those five paragraphs, I’ve been asking myself, over and over, how, if you know there’s a potential liability, and there is a conversation between two agencies about that potential liability, if officials are worried enough to create a record about that potential liability, the whole caravan seemingly forgets there’s a liability, crosses their fingers, touches wood, throws salt over the shoulder, avoids walking under ladders, and keeps going.
Reading the ANAO’s account of events behind the scenes gave me the same sinking feeling I had when sifting through the robodebt debacle last year – another instance where a government program was rolled out, and an acceleration of it contemplated, despite the fact the program may not be lawful.
As a former public servant, as a journalist, as a citizen, I care deeply about this stuff. We all need to care deeply about this stuff, because the quality of our institutions, and the processes they run on our behalf, matters.
It isn’t an abstraction. It’s the difference between politics and policy working, and politics and policy failing.
Running as a backing track to all this is Scott Morrison’s regular exhortations to bureaucrats that the correct hierarchy of things, as long as he is at the helm, is governments doing the thinking, and bureaucrats doing the doing, which translates as bureaucrats doing what the government says.
We think, you do. Now get on with it.
The loop of sports grants questions brought me back to the Thodey report, a report analysing the current state of the public service, which sunk without trace just before Christmas. In advocating for a clearer set of termination procedures for departmental secretaries, rather than the night of the long knives culture that has emerged in more recent political times – a recommendation with a view to preserving the tradition of frank and fearless advice – the report sounded a warning about an emerging culture of timidity in officialdom.
“While many senior officers provide frank and honest advice to ministers, a perception that appointment and termination to a senior position can be arbitrary has a chilling effect, and public servants may become timid,” the report said. “The impact could mean the APS leadership favours being agreeable rather than engaging in debate and challenge, and so compromise the provision of frank and fearless advice. As a result, APS culture can shift to one of hesitation, failing to challenge assumptions of ministers where warranted”.
Just for the record, Morrison rejected Thodey’s recommendations to adopt a less arbitrary process for terminating the appointments of secretaries.
So, summarising now, the ANAO probe of the sports grants saga raises the following basic questions. Did people inside officialdom forget to commission legal advice about whether the minister could be the decision maker? Was this incompetence?
Were they told not to seek that advice, either directly, or not in so many words, and meekly follow a manifestly unreasonable instruction?
Worse. Did they not have to be told, instead self-censoring to avoid a barney with the minister, who was clearly intent on being the decision maker, come what may?
McKenzie, stuck in no-man’s land, isn’t in a position to answer these questions, and we wait to see whether the attorney general can come up with what the ANAO could not – a clear explanation about how these grants were made with proper legal authority.
Whatever happens to McKenzie, this case study shows us that there is much more to see here, and the more to see here is more profound than the stink of of pork barrelling in marginal seats.
In fact, that might be the least of our problems.

• Katharine Murphy is Guardian Australia’s political editor