Press Conference - Australian Parliament House, ACT

02 Feb 2020
Prime Minister

PRIME MINISTER: Good afternoon everybody. The good news is that the Qantas flight is on its way to Wuhan and I want to thank everybody for their cooperation, particularly the Chinese Government as we continue to move forward with that important programme. And just while we’re on those issues, I also advise, the New Zealand Government and our border officials, that as a result of the decisions that have been made in New Zealand, we will also be extending the same exemptions for triple 4 visa holders who are resident in Australia and they'll be treated as Australian residents. As you know, there are many New Zealanders who live in Australia under triple 4 visas. And so the same exemptions that apply to other Australians, residents will apply to triple 4 visa holders. It's a matter that the Prime Minister Ardern and I have been discussing over the course of the past day, as a result of our decision I'm pleased that following their decision, we have an alignment of the various border arrangements that are in place. 

But the reason for calling this press conference is that late last night I received the Secretary of the Department of Prime Minister and Cabinet's report in relation to the Auditor-General's report and other matters that have been referred to him as just over two- just two and a bit weeks ago. Earlier today, I convened the Governance Committee of Cabinet to review the findings of his report and he reported to us. I then asked the leader of the Nationals and the Deputy Prime Minister to raise the matters contained in that report with Senator McKenzie. And she was also briefed by the Secretary on the report as well. In that report there are two key issues, I'll be following the same practice in relation to- on these matters regarding reports of this nature from the Department of Prime Minister and Cabinet, as has been done by previous Prime Ministers, ie. they’re documents of Cabinet. But I note the following, the guidelines in relation to the matter of the Auditor-General's report clearly and publicly identified the Minister as having final approval authority and the right to consider other factors. This discretion was not constrained in any by way by the guidelines. While there may be differing views about the fairness of the process, the Minister used the discretion she was afforded, accordingly, the Secretary concludes, I do not believe there is a basis for you to find that the Minister had breached standards in that respect. He goes on to note, that he did not find evidence that this process was unduly influenced by reference to marginal or targeted electorates. And he notes the data indicates that applications from marginal or targeted seats were approved by the Minister at a statistically similar ratio of 32 per cent compared to the number of applications from other electorates at 36 per cent. And he said, I find no basis for the suggestion that political considerations were prime- were the primary determining factor. 

On the other matter, which was raised in relation to a conflict of interest the Secretary concluded that the timing is such that the potential conflict should have been clear, this is in relation to the gun club membership, to the Minister by failing to put appropriate arrangements in place to avoid the potential for conflict, such as asking another Minister to make any decisions relating to organisations of which she was a member. The Minister had failed to do that, and the Secretary found that this was in breach of the ministerial standards. There are also a number of other matters relating to another organisation, but that one in particular dealt with a conflict of interest for an actual recip- applicant who had received the grant. 

On the basis of that and that is the conflict of interest and the failure to disclose, the Minister has tendered her resignation to me this afternoon, and I want to say a couple of things about that. Minister McKenzie has shown a great respect for the statement of standards. She has honoured those, that statement of standards in the decision that she has taken today by offering her resignation to me this afternoon. I want to thank Bridget McKenzie for the outstanding job she has done in serving, both in my Cabinet and my predecessor's Cabinet. I particularly want to thank Bridget for the amazing work she has done for regional Australia and the incredible application she has shown and dedication to Australians in rural and regional areas who have been doing- who've been doing it tough through drought. She has been a drought champion for these farming and rural communities around the country. And this is federal Cabinet there are standards that must be upheld and she understands that and so do I. But I don't think that that in any way takes away from the outstanding work that she has done as a Minister, both in my government and in my predecessor's government. And I want to thank her very much for her hard work, for her discipline, for her dedication, but particularly Bridget, to all of those out there who I know, you extended that helping hand and that warm embrace and that practical effort through the discharging of your responsibilities to ensure that those rural and regional Australians were being heard and they were being supported through some of the toughest times of their lives. You have been an absolute champion in their cause. So I say thank you. I also thank her for her role, not just as a Minister but I thank her for her role in Cabinet and the many contributions she's made over quite a period of time. And I also want to thank her for the important role that she has played as part of our leadership group. 

But standards, as I say, are about accountability and they are about, even in tough circumstances like this, where the Minister obviously did not stand to realise any pecuniary or any direct personal benefit, the standards require a disclosure of interests and in particular, one where there invites a conflict of interest for a program they might be overseeing. On the other matters that relate to this issue, the Secretary also has made some observations and they support the decisions the Government has made, and that is to adopt the recommendations of the Auditor-General's report. But in particular, in relation to recommendation 4 and that is the recommendation that the Australian Government amend the Commonwealth grants rules and guidelines to require that the advising decision making reporting requirements, applying to situations where a Minister approves grant funding be extended to apply to corporate Commonwealth entities such as Sport Australia, which wasn't the case. And as a result, afforded the discretion in the process that was followed by the Minister. It was in the design of this process that those those arrangements were set up. And to close that gap, and to ensure that there is appropriate documentation and appropriate transparency about the reasons for decisions where they may differ from recommendations that are made by agencies that are assessing these applications and that process would be in place in any future such programs. 

There was also a matter that was raised in relation to the legality of the the action and decisions taken in the authority for the Minister. And I referred that matter to the Attorney-General. And I note that his advice is obviously confined to the general legal issue raised by the Auditor-General concerning the Minister's involvement in the program, which he notes, which has been left somewhat unresolved in the Auditor-General's report. You'll note that a question mark was raised about directions that the Auditor-General suggested was the what needed to be in place. Specifically, he refers to the finding in the report that in the absence of a Section 11 declaration, there was no legal authority evident to the ANAO under which the Minister was able to approve the CSIG program grants to be paid from the money of Sports Australia. Having consulted with the AGS and in the preparation of this advice, he considers that the Auditor-General's assumption arising out of his apparent interpretation of Section 11 of the Australian Sports Commission Act is, as he notes with respect, not correct. So these are the outstanding matters from this process and these are the decisions that I've taken as Prime Minister and have taken together with my colleagues. I want to thank the Deputy Prime Minister for working closely with me through this process. We have worked through this process each step of the way from the initiation of the referral of the matter to the Department of Prime Minister and Cabinet Secretary through to the reception of that report today. And I want to thank him for working through these issues in the professional way that he has. 

JOURNALIST: Prime Minister notwithstanding the fact that she’s fallen on her sword because of the conflict of interest, do you concede that the very nature of the program, or the fact that it was so politically charged even in its election, albeit with your your caveat that these sorts of programs do need to have a whole lot more scrutiny applied to them before millions of dollars is spent in such a way?

PRIME MINISTER: Well, what I've just relayed to you is the adoption of recommendation 4, which is exactly what that recommends, and the Government is-

JOURNALIST: In plain language what does it mean Prime Minister?

PRIME MINISTER: What that means is that where Ministers have discretion to make decisions and where they move away for whatever reason, from what those recommendations might be, that there is a process of accountability and transparency and documentation about the reasons for that. 

JOURNALIST: Where is Mr McCormack?


JOURNALIST: Where is Mr McCormack?

PRIME MINISTER: On his way to Canberra.


PRIME MINISTER: He's on his way to Canberra.

JOURNALIST: Who will now be serving as agriculture Minister? 

PRIME MINISTER: The Deputy Prime Minister will be appointed as acting agriculture Minister until I receive further advice from the Deputy Prime Minister. 

JOURNALIST: You said there was 2 conflicts of interest? One was I think the golf, the the the target club- 

PRIME MINISTER: Yep. The Wangaratta- Wangaratta Clay Target Club, that was the one that involved a membership that the Minister had and hadn't disclosed, and the funding decision had been made in favour of that organisation. And the other one related to the Field & Game Australia and they related to a disclosure that came later, to membership of Field & Game Australia and there had been grants awarded to the Northern Territory part of that association and the Warrnambool part of that association, neither of which the Minister had any membership of those specific clubs but the Minister was a member of the broader association of which those branches would have formed a composite part. 

JOURNALIST: Prime Minister, if the primary determining factor wasn't electorates and it wasn't merit, which is what the Auditor-General found, what was the primary determining factor for where this money was spent? 

PRIME MINISTER: Well, I don't accept the characterisation either of the Auditor-General's report, what I've said- what what the Secretary has been asked to do here is assess the Auditor-General's report and consider the fairness elements of that. And he's made a very clear finding which said that the Minister actually did not take as a primary consideration those factors, those political factors, so he’s actually rejected that as a position. 

JOURNALIST: No but I accept that, so on that on premise Prime Minister, if marginality of seats wasn't a factor and the Auditor-General says that merit wasn't a factor, then what was the Minister's factor in awarding this funding? 

PRIME MINISTER: Well the primary purposes of the program, which were also more generally set out by the guidelines, but she was also seeking to ensure that there was a broad application of this program right across the country, right across as many places as possible. And that has also been noted by the Secretary.

JOURNALIST: Prime Minister, the very last seats that were picked under this program were all either Coalition seats or Coalition target seats. Capricornia, Indi, Lyons among them. How on earth can you say that this is not a politically compromised program from, given that's the way it ended? 

PRIME MINISTER: Well, that's that's your commentary, Andrew. What I'm doing is-

JOURNALIST: That is the Auditor-General’s commentary.

PRIME MINISTER: What I’m- what I've cited back to you is the Secretary's response to that. And when he went to the actual statistics, what he found was there was no material difference between those that were marginal electorates and those that were not. And that that's just a simple statement of fact. 

JOURNALIST: Will you do anything differently before the next election with programs of this kind? Do you take any lessons out of the controversy over this? 

PRIME MINISTER: That’s what- that's why I said we're adopting recommendation 4, because the primary issue here, if you read carefully the Auditor-General's report as I have and if you- I have read obviously, through the Cabinet process, the report of the Secretary, the issue here is ensuring that the broader guidelines that would apply if this were being done in concert with a department as opposed to an organization like Sports Australia, would have had a different process. And so what we are agreeing to do, this is the constructive part of what has been a very difficult exercise in recent weeks, is to ensure that those rules will apply. That's what they're there to do. There was, under this program as it was designed initially there was a broad array of discretion that was provided and that is what the Minister exercised. And there were no rules broken in that context and as the Auditor-General found, unlike as had occurred in previous previous Labor administrations, there were no ineligible projects that were funded under this scheme. None. 

JOURNALIST: But is the Minister’s discretion part of the problem here, that when you get decisions made by Ministers rather than by independent officials who are not swayed by political factors, that you'll always get a distorted outcomes in some kind of, is it better to remove a Minister from that process?

PRIME MINISTER: The issue here, because I've actually experienced this the other way where I've say had this process applied, where I- where so many important local, charitable groups that were supporting people through emergency cash assistance and things had their funding cut by actually quite, quite difficult decisions that were made by departments that were unaware of many of the issues and the impacts this would have on the ground. As I said at the Press Club last week, there is a- and it was in response to your question, Michelle, there is a partnership here that works between the public service and Ministers, Ministers, parliamentarians are elected. What has been identified here through this process has been a lack of transparency and a lack of detail on the processes used by the Minister in exercising discretion. That's what's been identified. And what the Secretary has made very clear is that she's exercised that discretion. And in his view, that has not been done with the political considerations that others have suggested. Now, what you need to do to remedy that is you need direct- implement recommendation 4 of the Auditor-General's report. You've got to make sure that those rules about the transparency of that process, which applies in many, many other grants programs, many, and that should be applied to programs like this. That's the lesson. That's the lesson that I think we need to learn. That's the lesson I intend to put in place. We need to fix up that part of the system. The legal issue, the Auditor- the Attorney-General has addressed and the Minister in relation to the conflict of interests that had today has honoured that lesson process higher than anyone by honouring the Ministerial Standards, which are the ultimate safeguards on those things. 

JOURNALIST: Will you use this as a broader opportunity for a reshuffle, or will it just be replacing Senator McKenzie in Cabinet and that would be down to Michael McCormack’s decision?

PRIME MINISTER: I'm very, very, very pleased about the performance of the Ministers who serve around the Cabinet table. And I think they're doing an outstanding job. And what the country needs right now is for us to get and keep focussed on the issues that are most important to them. As you know, as I've addressed you in this room on I don’t know how many occasions over the last month, we're dealing with bushfires. We're dealing with drought. We're dealing with coronavirus. We're dealing with very serious economic challenges. And I intend to keep my focus stable and focussed on the jobs they're doing right now. 

JOURNALIST: Prime Minister, Prime Minister, despite Mr. Gaetjens finding there's no political considerations, it’s a firmly entrenched view out in society that there was. And you've just- Senator McKenzie has been dismissed on one hand- sorry resigned on one grant, do you think the public’s going to buy this? 

PRIME MINISTER: Well, that is a matter for others to commentate on. What I'm telling the public is the Minister has tendered her resignation. While I'm telling the public is the process where deficiencies have been identified in transparency and documentation, then that is going to be remedied. That's been acknowledged. It's acknowledged by me as Prime Minister. And the processes will be improved to ensure that as the rules apply in other areas, they'll apply in these areas, too. And as the Treasurer indicated this morning and I indicated at the Press Club last week, we will consider how this program might be able to provide further assistance, out in the community, in the sporting community as we prepare for the next Budget. 

JOURNALIST: Putting aside the Ministerial resignations that occurred during your ascension to the leadership of the Liberal Party, this is now 3 Nationals Ministers on a trot- on the trot that have had to resign, Andrew Broad, Barnaby Joyce, and now Bridget McKenzie. Is it time for the Nationals to get their house in order? 

PRIME MINISTER: I have a very solid Coalition as leader of the Liberal Party with the National Party. What has happened today brings to at least, the close of a chapter for Minister McKenzie in terms of her service in her current role. And we appreciate the great service that she's provided. But yet matters you're talking about are matters for the National Party, and the Coalition- our Coalition with the National Party remains very strong. And I think it's evidenced by the way the Deputy Prime Minister and I worked professionally and I think with a sense of fairness to all of those involved, to not to, not to respond to the latest tweet or out- or call or other thing like this. We just did the work, got people to look at the facts, present us with the facts, provide the opportunity for people to respond to those facts and then make a decision. And that's where we are today. That is the stable, calm, careful way to deal with issues like this, not to run around trying to react to everybody and every report and every news release. It's just simply to get to the facts, make a call and then get on with the job. 

JOURNALISTS: [inaudible]

PRIME MINISTER: Michelle, you haven’t had a chance,

JOURNALIST: On those facts. There's a huge gap between the Auditor-General's report and the Gaetjens report on the central substance of this matter. Can you either release the Gaetjens report or give us more detail of Mr Gaetjens’ reasoning on this argument that he's presenting that there weren't political decisions because this is flying in the face of the independent Auditor-General? 

PRIME MINISTER: Well, what- I'll treat this report the same way that every, Prime Ministers have treated these reports in the past and there are many, many instances of that, which I'm sure you'll be very familiar with, but I referred to the statistics myself earlier that he was citing, and that was a statistic, a statistically similar ratio of grant approvals by the Minister for marginal and targeted seats of 32 per cent compared with the number of applications for other electorates, which is 36 per cent. So look, the data has been looked at from various perspectives. The Auditor-General has has looked at it from that perspective. These results are based on all 3 rounds put together and there is a suggestion that certainly the Minister was aware that she may be successful for getting further rounds of funding to support the program, which would have played into her consideration. So what the Secretary has done has looked at the grants awarded in their entirety, and in their entirety he has concluded, not I, he has concluded that that particular point that is made in the Auditor-General's point, he couldn't find the evidence for. So that's-

JOURNALIST: That’s all what he said?

PRIME MINISTER: But the point is here and for the public and for people listening at home and watching at home, what matters is where there are problems, they get fixed. And that's what I've pledged to do today, where there accountabilities to standards that need to be upheld, that's also been done today by Minister McKenzie, and where there are things we need to get on with now. Well, that's what we need to do and that's certainly what I intend to do. Thank you all very much. 

JOURNALIST: [inaudible] you will release the Gaetjens report?