A proposal by the health minister, Mark Butler, for a new grant category for “explicit decisions of government” has alarmed legal and transparency experts, who warn it could lower the bar for grants at “high risk” of corruption and pork-barrelling.
The public law expert Prof Anne Twomey said the plan “appears to be an attempt to extend the perfunctory assessment of election promise grants to other publicly announced grants between election cycles that have not gone through appropriate merit assessment”. She warned against such a “retrograde step”.
The proposal is revealed in an Australian National Audit Office report on the Morrison government’s $2bn community health and hospital program (CHHP), which found the health department deliberately breached commonwealth grant guidelines to deliver grants promised before the 2019 election.
The report noted in November 2022 Butler wrote to the finance minister, Katy Gallagher, making suggestions aimed at “reducing the administrative burden on both grant administrators and funding recipients”.
In the letter, seen by Guardian Australia, Butler proposed developing a specific category of grant under the commonwealth rules to “support timely delivery of published and explicit decisions of government”.
The department would undertake “appropriate due diligence to ensure the funding recipient has the capacity” to deliver the program, he said.
Twomey said that reducing unnecessary administration must not be used to remove checks that are “necessary to ensure that grants are distributed fairly and in the public interest, rather than for party political purposes or the private benefit of others”.
Butler’s letter refers to grants where “risk is assessed as low”, but Twomey noted it did not identify “what type of risk is being referred to and how that assessment is to be made, or by whom”.
Published and explicit decisions of government “are exactly the types of grants that are the most high-risk when it comes to corruption concerns, because they have not been made through an open merit process in which they are objectively assessed against published guidelines”, she said.
“It is already the case that election promises do not receive appropriate assessment to ensure that they are efficient, effective and value for money, despite existing legislative requirements and the current grant rules.”
Twomey said the letter “lacks sufficient detail to know for sure what is intended” but the plan “does not appear to the be the best way” of improving integrity and transparency of the grant system.
“The Albanese government was elected on the basis that it would clean up the grants system, making it fair and ensuring that public money is used in the public interest.
“I would hope that a more comprehensive review and strengthening of the grants process is currently under way.”
Geoffrey Lindell, emeritus professor at Adelaide law school, said the proposed change “looks suspiciously like something that could or would water down the task of ensuring legal compliance”.
Geoffrey Watson, barrister and director of the Centre for Public Integrity, said the proposal was “really bad” and risks “entrenching a system of permissible pork-barrelling”.
Watson said it was “cynical” to extend the current practice of using grants to honour campaign promises to “any kind of promise made from time to time by the party in power”.
“Occasionally they could be for good purposes, but occasionally they are done to win votes or favour.”
Watson said the experience of the community health and hospital program and other grants “has taught us it is seriously important to have a proper examination process”.
Watson warned against “sidestepping the experts, the bureaucrats, whose role is assessing where the money is most needed, and where it will be used most effectively”.
Guardian Australia understands the letter was not in response to the CHHP, but responded to a request by finance for input into a review of grant guidelines.
Butler, who has ordered his department to review unfinished CHHP projects, has criticised the Morrison government for announcing “billions of dollars of taxpayers money for health projects around the time of the 2019 election, with no regard to proper process or good governance”.
“The captain’s picks came so thick and fast, that the health department was forced to monitor the media to know which projects had been selected,” he said.
Butler noted the health department had accepted ANAO recommendations, strengthened its internal procedures and “is taking additional actions, including a comprehensive external review”.
Butler and Gallagher were were contacted for comment.
