Introduction
The Community Sport Infrastructure Grant Program administered by Senator the Hon Bridget McKenzie was an outstanding success.
Clubs and organisations were able, with the assistance of taxpayer funds from the federal Liberal National Party government, to upgrade sporting facilities, thereby encouraging greater community involvement in sport helping to create a more active, healthy and inclusive society.
The Community Sport Infrastructure Grant (CSIG) program was designed to provide important upgrades to sporting infrastructure for community sport organisations. As the guidelines to the program stated:
The objective of these grants is to support local communities to participate, recreate, learn and develop together. The grant has two guiding themes: Community Sporting Hubs and Inclusion. Both are focussed on encouraging greater levels of participation in community sport and physical activity.
Sport is enormously important to many Australian communities. Beyond the physical benefits it also provides for useful social interaction and the broader involvement of even non-sporting Australians through coaching, administration and fundraising efforts that bring people together. The Australian Government’s CSIG program was an innovative way of funding a clear need for better sports infrastructure at a community level. A program of this design had not been delivered by the Commonwealth before.
The clear need for this infrastructure was highlighted by the level of the demand for the funding. The initial round of funding provided $29.7 million in grants but Sport Australia received 2056 applications amounting to $397 million. In effect, the first round was oversubscribed by more than a factor of ten.
Not a single one of the projects funded was criticised by the government’s political opponents. The Member for Grayndler welcomed the federal contribution under the CSIG program to saving the historic Dawn Fraser Baths in a press release on 27 February 2019 which read in part:
It is critical that we save Dawn Fraser Baths, which is an institution and a heritage icon… Sport Australia is managed by the Minister for Sport, Bridget McKenzie, whom I thank for campaigning for further investment in this precious asset.
In an exercise best described as lacking coherence, the committee has sought to champion those organisations that of necessity (because of limited funds) missed out on funding but were unable to advise one project from which they would have withheld funding. Indeed the ALP celebrated announcement after announcement acknowledging the funding was secure irrespective of which party was to win the next election. Yet the government inexplicably stands accused of ‘pork barrelling’.
The Secretary of the Department of Prime Minister and Cabinet (DPM&C) in his submission to the committee noted that:
… in exercising her discretion as decision maker for the Program, Senator McKenzie acted within the remit of the Guidelines. Further, the evidence I have reviewed does not support the suggestion that political considerations were the primary determining factor in the Minister’s decision to approve the grants … I concluded Senator McKenzie did not act in breach of the Standards with respect to fairness.
The Secretary further found ‘no constraints in the Guidelines limiting the other factors that the Minister may consider, so a wide discretion was available’.
In fact, after exercising her discretion, compared to Sport Australia’s suggestions, grants approved in Labor electorates increase from 26 per cent to 35 per cent while they fell from 66 per cent to 60 per cent in Coalition electorates.
The sheer pent up demand which was triggered by the grants on offer clearly surprised and overwhelmed the bureaucracy which sought to administer the CSIG program to the best of its limited resources. Other sub optimal outcomes have been explored and highlighted by the Australian National Audit Office (ANAO). The four ANAO recommendations have been accepted by the Government.
Conduct of Inquiry
The committee has, from its establishment, been run by its non-Government majority as a highly politicised and weaponised exercise. This is most evident with language used by non-Government members well before the committee had been given the opportunity to conduct public hearings and review submissions and prior to publishing its report. The Labor Chair referred to the CSIG program as ‘corrupt’ in the public realm well before the conclusion of the committee’s investigations. Both the Chair and his Greens Deputy Chair have repeatedly referred to the program as ‘sports rorts’ prior to this report exposing a predetermined mindset from which predetermined conclusions would be drawn. Neither such terms were used by the ANAO.
The public commentary from both the Chair and Deputy Chair indicated a predetermined outcome without the need for review of submissions or evidence gathered through public hearings. The hearings were a charade. Furthermore, the Deputy Chair drove misconceptions peddling the myth that applicants who missed out on funding did so because they were not in marginal and targeted seats.
The conduct of the committee was highly politicised with the Chair determining that the allocation of time by way of a 2/3 and 1/3 split between Labor, Green and the Coalition was somehow equitable. It was not. Yet the Labor Green majority seeks to criticise the former minister for not fairly allocating funds under the CSIG program.
Nevertheless the majority seeks to lecture the government on due process.
The Committee even with the benefit of a number of extensions of time was unable to procure evidence to support the hyperbole and rhetoric employed to denigrate both the government and the CSIG program.
Indeed so devoid of factual material was the committee it took the unprecedented step of requiring a Senator to appear before it and sought to obtain confidential legal advice which as a matter of precedent has been rightly withheld by governments of all persuasions. Senator the Hon Bridget McKenzie’s evidence was clear, confident and compelling.
It is noteworthy no successful applicants were called.
Disappointed Organisations
The Coalition accepts that there are many disappointed organisations having missed out on the grants scheme because it was so popular and therefore oversubscribed. Representatives of such organisations often appeared without a full understanding of the facts. The Belconnen Tennis Club was such an example where the fact they were in a Labor electorate was deemed the reason for them missing out, but being surprised when told others were funded and the ACT received a fair share.
The fact that Labor’s safe seats in the ACT were allocated 1.5 per cent of the funding whilst representing 1.6 per cent of the population highlights the equity in the minister’s decision making which was regrettably not seen as relevant for the majority report because it debunked their unsustainable narrative.
Another club (the Olympia Football Club) was similarly critical but unaware of the organisations being funded in the same electorate, completely undercutting the assertion it was overlooked simply because it was in a Labor electorate.
One cannot help feel organisations were misled by the spin and misrepresentations and were surprised when confronted with indisputable evidence. Some local councils aggrieved at missing out simply saw the program as a way for tapping into federal funds rather than their own resources.
Some local councils, which sought to be critical of the process with the minister being the decision maker, acknowledged their own councils often rejected or over-rode staff advice exposing an embarrassing paucity of argument. It seems what was good for some councils was not good for the federal government.
With 2056 applications seeking $396.6 million but with only $100 million available, only 684 projects were able to be funded, leaving the vast bulk of applicants understandably disappointed.
At all times the minister was clothed with the authority to determine the grants beneficiaries as outlined in the Community Sport Infrastructure Grant Program Guidelines.
Section 8.1 of the CSIG program guidelines made it exceptionally clear that:
The Minister for Sport will provide final approval. In addition to the application and supporting material other factors may be considered when deciding which projects to fund.
As such, any party applying for a grant under the CSIG program was aware that the minister was the final decision maker and could call other matters into account, something the Secretary of the Department of Prime Minister and Cabinet has acknowledged.
Serious applicants read this document in full. The minister’s discretion ensured a more equitable distribution between states and territories, sports, and regional spread.
The disingenuous suggestion that final ministerial decision making and discretion specifically stated in Section 8.1 of the CSIG program guidelines were ‘unpublished’ would be the same as stating this committee had unpublished Terms of Reference where in its own Terms of Reference it gave itself the power to inquire into ‘any other matters’.
The Mythical 74 Point Score
The ANAO’s over reliance on the point system and its flaws was exposed by the evidence of the highly subjective nature of the Sport Australia assessment which saw examiners varying the point allocation by 30 points on the same project. Different assessors awarded a point rating discrepancy of 30 per cent on the same project. Any fair analysis would not deem such a process as robust or final.
Further Sports Australia itself confirmed the simplistic point system adopted by the ANAO would not have been the sole basis of its recommendations if it had the final say. It is a mystery why the ANAO placed such reliance on the point system which was simply one metric.
The minister’s decision making ensured that 20 per cent of Australian people did not miss out on any grant funding which would have occurred if the simplistic point system had been adopted. Thirty electorates or 20 per cent of the Australian people would have been denied any funding under the CSIG program. Imagine the uproar if this would have been allowed to eventuate. Even more galling and inappropriate is the criticism of the minister’s decision making which saw more Labor seats being provided funding than if the simplistic point system would have been applied. Nearly two thirds of the funding would have gone to Coalition held seats. In the past the ANAO has been critical when allocations were not equitably spread over the electorates held by differing parties.
When the funding was more equitably provided to favour Labor held seats the goal posts for criticism needed to be shifted so the narrative became that this was cynically done in pursuit of winning marginal seats. No matter what the minister did she would have been condemned by the government’s opponents.
As Mr Gaetjens noted in his submission to the inquiry:
As the Prime Minister said on 2 February 2020 applications from ‘marginal’ or ‘targeted’ seats were approved by the Minister at a statistically similar ratio of 32 percent compared to the number of applications from other electorates at 36 percent.
As Mr Gaetjens further pointed out this conclusion holds when comparing the minister’s decisions in marginal or targeted seats compared to projects recommended by Sport Australia:
In terms of the comparison between those applications recommended by Sport Australia over the three funding rounds and those approved by the Minister, 180 ‘marginal’ and ‘targeted’ projects were recommended by Sport Australia, and 229 were ultimately approved by the Minister, representing a 27% increase. This is smaller than the percentage increase of projects recommended (325) to projects funded (451) in non-marginal or non-targeted seats which was 39 per cent.
A serious limitation of the Majority Report is a lack of any attempt to discuss this clear statistical evidence. It is unclear how the majority can maintain a conclusion that the minister’s decision making was influenced by the ‘marginal’ or ‘targeted’ nature of a seat, when those seats were not more successful in having grants awarded than other seats.
The Majority Report makes much of a so-called ‘colour-coded’ spreadsheet and its alleged influence on ministerial decisions. Yet, as Mr Gaetjens points out, 30 per cent of applications listed as ‘successful’ in the adviser’s spreadsheet were not approved for funding in any of the grant rounds.
There is no evidence that the minister’s decisions were distorted in favour of Liberal-National electorates or that the marginal or targeted nature of an electorate influenced the minister’s decisions. For this reason we confidently reject the majority’s Recommendations 6 and 8 to require further explanation of decision making or to establish a Royal Commission type inquiry.
In our democratic system it is appropriate for the elected representatives to decide the final allocation and not an unelected bureaucracy.
The minister’s decision is ultimately tested by the people.
Throughout the inquiry Labor and Green Senators have allowed a misperception to emerge that any project that was rated at a score about 74 by Sport Australia was one that was recommended for funding. For example, the majority report refers to evidence that a score of 74 was a ‘threshold score’.
It is important to clarify that this measure was one calculated by the ANAO for their report. A threshold score was never presented to the Minister by Sport Australia or anyone else. The score was calculated by the ANAO by simply allocating all of the available funding to projects with the highest score to the lowest until all the funding ran out. There was sufficient funding to invest in all projects that achieved a score of 74 or more by Sport Australia.
In practice, this artificial measure would have led to an unfair allocation of funding.
Suggestions that all organisations scoring 74 points in the flawed Sports Australia examination should have received funding would have seen 50 per cent of the funds go to 30 Coalition seats, something which the ANAO has previously suggested needed to be avoided. Further Sports Australia itself told the committee it would not have only relied on that metric to make decisions if it had been the decision maker. The Minister’s decisions saw a reduction for Coalition seats from two thirds of the funding to 60 per cent and saw a commensurate increase for Labor seats.
The ANAO’s reliance on this flawed mythical cut off of 74 points is difficult to understand.
On receipt of Sport Australia’s recommendations for Round 1, the Minister relayed her concerns, highlighting the lack of geographical distribution of projects. Sport Australia’s evidence to the Committee was that it did not see its role as ensuring there was a broad spread of grants geographically. As the Chair of Sport Australia stated:
We don’t take a view in where things fall in particular electorates.
According to analysis by the Secretary of Prime Minister and Cabinet, Sport Australia’s recommendations would have had 30 electorates receiving zero grants. Ministerial discretion reduced this to five electorates, of which three had no applications submitted. This demonstrates why ministerial discretion is so fundamentally important, because ministers are accountable to the people. Without ministerial decision making those 30 electorates which represent over three million Australians would have been disenfranchised from the program.
This would have been a clearly unfair outcome for a national program administered by the federal government. The CSIG program guidelines made clear that the minister would take into account ‘other’ considerations when making decisions. It is a reasonable expectation that a minister in a federal government would ensure that funding would be spread across the entire country.
In addition, there were a number of deficiencies in the Sport Australia scoring process that would have made it inappropriate to rely on this one score alone. For example, the ANAO report found that there were at times large divergences given by different Sport Australia assessors for the same project. As the ANAO explained:
In a way, as soon as you have a process which has more than one assessor, there is always that risk. That’s why it is important that we see that that possibility be planned for and addressed in the assessment process because it’s not a mathematical equation here. Judgement is being applied. So it was important for us to see how did you then go about addressing those differences. There are always likely to be differences when you’re applying judgement to assessing applications against merit criteria.
We make no criticism of these divergences in assessment. These deficiencies are inherent in all subjective scoring based assessments. That is why it is important that minister’s retain responsibility for final decision making. As the ANAO confirmed there were no ineligible projects funded under this program:
Senator CANAVAN: Was there a project that received funding that was assessed as ineligible by Sport Australia?
Mr Boyd: No …
Legal Authority
While the committee heard interesting legal hypotheses as to the constitutional or legal validity of the programme the minister was never made aware of any doubts entertained by officials. The minister indisputably acted in good faith regarding her legal authority.
If the majority seriously entertains doubts about the Commonwealth’s authority to operate such a program it would not be recommending the unfunded projects be now funded. It begs the question how could the Commonwealth do so without an appropriate constitutional or legal authority. It appears the majority, in its haste to be both critical and popular, failed to reconcile this inherent contradiction.
The official government legal advice suggested there were no issues.
ANAO Recommendations
The ANAO recommendations have all been accepted without equivocation and obviates the tortured rationale advanced by the majority for a corruption agency.
The Spreadsheet
Much was made of a staff generated spreadsheet which was never seen by the minister.
Claimed to be political and cynically developed to promote the Coalition’s election prospects the inconvenient truth is that its suggestions were not followed in 30 per cent of its suggestions thus deflating the conspiracy balloon. Furthermore all projects were locked in for funding irrespective of which party won government. Indeed the government’s political opponents were all aware of the approved projects.
The majority report continues to seek documents from the government which previous governments (including Labor governments) would not have provided. The Government has cooperated with all aspects of this inquiry, including through the unprecedented questioning of a sitting Senator who is no longer a minister and would not normally be accountable to the committee process in this fashion.
However, there are legitimate reasons for governments not to provide some documents especially those relating to the legal advice given to a government, or documents that could prejudice a case before the courts. For example, former Attorney-General Senator Gareth Evans AC, QC in 1995 explained his Government’s position on this practice:
Nor is it the practice or has it been the practice over the years for any government to make available legal advice from its legal advisers made in the course of the normal decision making process of government, for good practical reasons associated with good government and also as a matter of fundamental principle.
The Government’s position is aligned to this longstanding practice, which enables governments to receive privileged legal advice to inform its positions. This is critical to the development of Commonwealth policy and to robust lawmaking. This rule applies generally as a matter of precedent given the public release of legal advice on a single issue would then call into question whether future legal advice could be made public at some stage. If that became a concern it would materially change the form and content of legal advice to governments and that could substantially harm the ability of any Commonwealth governments’ ability to govern.
In addition, in this particular case, a Government agency is facing legal action in relation to the CSIG program in the Federal Court. Given the ongoing nature of this court action, the Government is well within its rights to claim protection and this is an entirely appropriate position for any government subject to court proceedings.
The Employment, Workplace Relations and Education Legislation Committee distributed a paper during the May 2005 Senate Estimates hearings listing potentially acceptable grounds for claims to public interest immunity. The first of the grounds that had attracted some measure of acceptance in the Senate was ‘prejudice to legal proceedings’.
For the reasons outlined above, Liberal National Senators do not agree with the committee’s recommendation to move a motion in the Senate requiring the production of legal advice. The Government is relying on the accepted principle of not prejudicing legal proceedings as a grounds for public interest immunity.
Conclusion
The minority appreciates the support of the secretariat staff and witnesses, many of whom presented in their own time as volunteers.
The huge demand for upgraded sports facilities is a reminder, especially to local and state governments to concentrate on their local communities and provide the facilities for which they have responsibility, noting the majority believe the federal government’s grants program was unconstitutional.
Senator the Hon Eric Abetz
Senator the Hon Matthew Canavan