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How billions in government spending could be unlawful

Feb 24, 2020 • 11m 39s

In the past year, the government has directed nearly $5 billion to various schemes using a process lawyers say is likely unconstitutional.

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How billions in government spending could be unlawful

168 • Feb 24, 2020

How billions in government spending could be unlawful

RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

Over the past year the government has allocated nearly 5 billion dollars to various schemes… in a way that might be unlawful.

Today, Karen Middleton on how the federal government is avoiding parliamentary scrutiny in major funding decisions.

And why one of their own Senators has become a leading critic of the practice.

Archival Tape --teacher:

“Your word is ‘Turmoil’ - the school was in turmoil when the blackout happened. Turmoil.”

Archival Tape -- Student:

“Turmoil. T-U-R-M-O-I-L. Turmoil.”

Archival Tape --teacher:

“Correct.”

RUBY:

So, Karen, tell me about the prime minister's spelling bee.

KAREN:

It's a literacy program and it involves a one off grant that the federal government gave News Corp of three hundred and forty five thousand dollars

Archival Tape --teacher:

“Ryan, your word is ‘protocol’”

Archival Tape -- Student:

“Protocol. P-R-O-T-O-C-O-L. Protocol.”

Archival Tape --teacher:

“Correct.”

KAREN:

And there's not a huge amount of transparency on it, It's not very clear from the documentation on the grant what the process was and how News Corp was chosen.

RUBY:

Karen Middleton is The Saturday Paper’s chief political correspondent.

KAREN:

Historically, the government would allocate money by drafting legislation and putting it before parliament to set up some funding program or rubber. But they've also got the power to do it a different way to draft a regulation and just declare that it's going to allocate money to this or that.

But if they do that, that regulation has to be linked directly to an umbrella piece of legislation that's already passed parliament that gives it the authority to do that

Now, those regulations are also known as delegated legislation, meaning it's not a direct piece of legislation. It's a new amendment that doesn't get to be voted on by the parliament.

RUBY:

How much money is the government allocating in this way - using “delegated legislation”?

KAREN:

Well, in this manner, over the last 12 months, around about $5 billion worth of grants have been handed out like this.

RUBY:

Wow.

KAREN:

Yes, it’s a lot. Between about the first of March and the 22nd of May, there were almost $2 billion in grants spent across 20 different programs. That obviously coincided with the federal election period.

RUBY:

Ok, so just so I understand the parliament would historically pass laws for these programs, but now that's happening by regulation which allows the government to bypass parliament. Is that right?

KAREN:

That's right. To save the parliament's time, they do it in a shortcut manner. And that's perfectly reasonable in a lot of cases. But in some cases, it's being done in a way that doesn't stick to the letter of the law. And that's a concern.

So there are increasing numbers of people outside and inside the parliament that are worried about the practice of using delegated legislation because the parliament doesn't get to have a say.

I’ve spoken to several legal experts in the field of either constitutional or administrative law, and they're concerned that a great deal of what's being done by delegated legislation is actually unlawful,

We do have to make sure that what our parliament does on our behalf is lawful. So it's about transparency and accountability of the federal government to the people who elected it.

RUBY:

Karen can you tell me how this process could be unlawful?

KAREN:

There were three high court cases that went to this issue of government grants and whether the government had legal authority. The most well-known is known as the Williams case. And it involves a Queensland guy called, Ronald Williams, who had four children at state school in Queensland and it related to the federal government's chaplaincy program. It was funding chaplains in public schools.

Archival Tape -- Reporter:

“Ron Williams says he’s not a religious man but he’s certainly on a crusade. The Jazz singer and father of six has launched a self-funded legal challenge to the controversial national school chaplaincy program.”

KAREN:

He challenged it on the basis that the federal government was funding those schools through the Scripture Union organisation in Queensland. So it was sending money directly to a private organisation to run the chaplaincy program.

He challenged this constitutionally because under the Constitution that money really needs to go via a state government and not direct to an organisation. And he won that case

Archival Tape -- Reporter:

“The Prime Minister has declared he wants the school chaplaincy program to continue despite a high court ruling that funding of the scheme is invalid.”

KAREN:

The high court took the opportunity to rapt the government over the knuckles, it was the Labor government at the time and say, no, you have to be more careful about this.

Archival Tape -- Anna Twomey:

“This case wasn’t about whether it’s a good thing or a bad thing to fund chaplaincy in schools, it was really about the federalism issue, and that is, who has the power to make laws about chaplaincy in schools and the funding of chaplaincy. And the high court found that the Commonwealth just doesn’t have that power. If the power exists, the states have it.”

KAREN:

Anne Twomey is a professor at Sydney University. She's a highly regarded constitutional expert. One of the best constitutional lawyers in the country.

Archival Tape -- Anna Twomey:

“I personally find it outrageous that governments can take the view that, well, we can breach the law as long as nobody's prepared to take any action against us.”

KAREN:

She's written a paper recently on this issue which says she has considerable concerns about those legal issues

Archival Tape -- Anna Twomey:

“So there are two problems. First of all, constitutional power. The government doesn't seem to be acting with constitutional authority to do things like spending money on sporting fields, etc.. And the second problem is legal authority. If the government is not complying with the actual legal requirements of the statute, that undermines the really important principle of the rule of law.”

KAREN:

She says the government shouldn't be acting unlawfully, of course, that it should be accountable for the spending of public money

Archival Tape -- Anna Twomey:

“I think the real problem here is that it's corroding public trust in politicians and the system of government. It causes a lack of respect for politicians. And these are all things that politicians complain about. But ironically, they're causing these problems themselves and by this behaviour. And they really, really need to clean it up.”

KAREN:

The Attorney-General's told me that he believes that what they are doing is lawful, that they take a lot of time over the constitutionality. But Anne Twomey and several other significant lawyers say they don't think so.

RUBY:

We’ll be back in a moment.

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RUBY:

Karen, we're talking about the 5 billion dollars that the government has allocated in a way that could be unlawful. Why is the government so keen to avoid passing laws to spend this money, I mean, who's going to vote against the prime minister's spelling bee?

KAREN:

Right. It's a good question. And the point is that the government doesn't have a majority in the Senate. So while it has a majority, albeit a slim one in the House of Representatives, and it has to, to be the government and it can get legislation through there easily, it can't get legislation easily through the Senate. And there’s a Labor opposition and Greens and the cross-benchers who will often pick things apart and object to things. And it's not easy to get things passed. So this method is a way of getting things done quickly without having to ask the Senate. But the point is, the Senate is there for a reason and they're actually supposed to ask the Senate.

RUBY:

So without parliamentary scrutiny or Senate scrutiny, what is it that we're missing?

KAREN:

Well, we're not getting the opportunity to interrogate where the money is being allocated or why it's being allocated.

RUBY:

Has there been much push back then, against this practice?

KAREN:

So there's a six member committee called the Committee for the Scrutiny of delegated legislation, which has been around for a long time, one of the oldest in the parliament. And this committee is headed by a liberal senator at the moment, Senator Concetta Fierravanti-Wells. And it has members from Labor, Liberal and National Parties, and its job is to scrutinise every regulation that goes through parliament and to work out whether they think they're lawful or not, constitutional or not, and ask questions and ask the government to make changes if necessary. And increasingly, over the last year, they've been pushing back against a lot of the use of these regulations and saying they have concerns.

It's pretty unusual for liberal senators to challenge a liberal government in the way that they're doing and national senators as well. But they are the frontline, I guess, in examining what's being done by regulation in terms of being inside the parliament and pushing back.

RUBY:

So Concetta Fierravanti-Wells is leading the way in investigating these grants. But she is a coalition senator. So why is she so intent on exposing the government here?

KAREN:

Haha well, that's a good question. I could give you a cynical answer. Concetta Fierravanti-Wells has been a minister in the coalition government. She's been in and out of the ministry. She was one of the conservatives who. Aligned herself with Peter Dutton and pushed against Malcolm Turnbull. And in fact, was one who resigned her ministry in that turbulent week that ended up seeing Malcolm Turnbull lose his job and she wasn't promoted back into the ministry by Scott Morrison. You might think she might be a bit annoyed about that. So she's got reason to be irritated.

She's also a former lawyer in her previous life. So she's probably got a mixture of a sense of upholding the law and a sense of chagrin at not being in the ministry. And she's been given this this committee job in lieu of a ministerial position. And she's using it and wielding it with probably some annoyance on the part of the government.

RUBY:

Karen, thanks so much for talking to me today.

KAREN:

Thanks Ruby.

[Advertisement]

RUBY:

Also in the news… Senator Bernie Sanders has won the Nevada caucuses, cementing his position as frontrunner in the Democratic primary contest.

Sanders is projected to carry the state with over 50 percent of the vote, ahead of Joe Biden who polled 18 percent and Elizabeth Warren who received 10 percent.

The next state to vote will be South Carolina on February 29.

And calls are growing for men’s rights activist Bettina Arndt to be stripped of her Australia Day honour. Victorian state Liberal MP Tim Smith has written to the Council for the Order of Australia asking them to cancel the honour.

The renewed calls come after Arndt tweeted about the murder of Hannah Clarke and three children, saying…

“Congratulations to the Queensland police for keeping an open mind and awaiting proper evidence, including the possibility that Rowan Baxter might have been “driven too far.””

I’m Ruby Jones, this is 7am... See you tomorrow.

In the past year, the government has directed nearly $5 billion to various schemes using a process lawyers say is likely unconstitutional. Karen Middleton on a system that avoids parliamentary scrutiny, and why one Liberal senator has become a leading critic of it.

Guest: Chief political correspondent for The Saturday Paper Karen Middleton.

Background reading:

Government spends ‘unlawful’ billions in The Saturday Paper
The Saturday Paper
The Monthly

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  • 7am* is hosted by Ruby Jones. The show is produced by Ruby Schwartz, Atticus Bastow, Elle Marsh and Michelle Macklem. Brian Campeau mixes the show. Our editor is Osman Faruqi. Erik Jensen is our editor-in-chief. Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

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168: How billions in government spending could be unlawful