New South Wales’ premier, Dominic Perrottet, says he denied a request by the state’s anti-corruption watchdog for its funding to be made independent from government because of a “philosophical view” about the role of the executive.
On Tuesday Perrottet announced an overhaul of funding for the state’s key integrity bodies, including the Independent Commission Against Corruption (Icac), after long-running concerns about the role government ministers have in providing money to the agencies.
Perrottet also ignored the sustained attacks on Icac from the prime minister, Scott Morrison, by announcing the agency would receive a funding boost in the June budget.
Funding for Icac and other integrity agencies, including the auditor general and the NSW Electoral Commission, would “better reflect current and future resourcing needs”, Perrottet said.
The changes have been welcomed by some of the state’s integrity agencies. The state’s police watchdog – the Law Enforcement Conduct Commission – told the Guardian it believed the changes would “benefit the LECC’s budget and are therefore welcome news”.
The changes announced by Perrottet will make the state’s integrity agencies exempt from efficiency dividends applied to other government departments and establish a specialist unit inside Treasury, to which Icac can apply for supplementary funds.
But they fall short of Icac’s request for its funding to be made independent from government. In 2020 the NSW auditor general released a report in which it warned Icac’s independence was threatened because politicians sign off on its funding.
It also found some of Icac’s funding arrangements were legally “contestable”.
Icac’s chief commissioner, Peter Hall QC, has repeatedly called for the watchdog’s funding to be decided by parliament. Last year he told a budget estimates hearing that the current funding arrangements were a “serious public interest issue”.
On Wednesday Perrottet, who met with the heads of the integrity agencies over their funding concerns last year, said he understood the arguments put forward by Icac but disagreed because of a “philosophical view” that the executive should be in charge of funding allocations.
“I believe it’s the executive, fundamentally, that makes decisions. The public service has a role to play, they come up with ideas, they provide advice to the executive, but the executive makes the decision,” he said.
“That is the system we live in. So fundamentally I believe in that premise and that’s why I didn’t agree with Icac’s model.”
While he said some of the integrity agencies had welcomed the changes, he accepted it did not go as far as Icac wanted but he believed “it’s much better than what we had”.
“I think Icac won’t necessarily agree with the approach we’re taking, completely, but I think they will certainly see what we’ve done will address their concerns.”
Geoffrey Watson, a former counsel assisting for Icac and now a director of the Centre for Public Integrity, said the government could have accepted the watchdog’s request.
“The ideal arrangement would be to take all of Icac’s funding arrangements out of the hands of anything to do with government or politicians when it might be called upon them to investigated them,” he said.
“It would be ideal for it to be given to an independent authority – such as the authorities that set power prices or judges’ salaries. We have bodies that do this already.”
However, he said, the funding boost announced by Perrottet was “the best thing to happen to Icac in a long time”.
“This is a positive step and the premier should be congratulated for doing something towards getting a proper budget back for Icac,” he said, noting previous cuts under both former premiers Mike Baird and Gladys Berejiklian.
“If anything, Icac’s workload was growing as its budget was cut [and] I know from personal experience that there is a lot of important work for Icac to do which it cannot under its current budget afford to do.
“At least this is a positive step even if it’s not everything. It’s the first positive step for years.”
Perrottet said some of the new measures – such as a requirement for the government to publish reasons if it does not follow Icac’s budget funding requests – would improve “openness and transparency”.
“I believe it provides greater resourcing to Icac and I believe it will increase public confidence in public servants and politicians in this state and I believe it strikes the right balance.”
Icac said it would “await the outcome of the government’s consideration of the commission’s budget bid as part of the forthcoming budget”.
