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RUBY:

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

It was the Governor-General’s pet project, a foundation that promised to nurture the future leaders of Australia.

But the elite foundation never came to be – the new government has axed it.

So why did the Governor-General put his name to it? Why did Scott Morrison decide to fund it before it was viable? And who was advocating for it?

Today, chief political correspondent Karen Middleton on the Australian Future Leaders Foundation and who was courted to support it.

It’s Wednesday, November 16.

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RUBY:

So, Karen, your story, it's about the attempt under the previous government to create something called the Australian Future Leaders Foundation and the ways in which that was handled and what it all means for the relationship between the Governor-General and the former Prime Minister, Scott Morrison. So can we talk about the foundation itself first? What is the Australian Future Leaders Foundation and how was it conceived?

KAREN:

Well the foundation exists to run a leadership programme that was the brainchild of a guy called Chris Hartley. Now he's an expatriate British Australian, I believe he's a dual citizen. And he had been very involved with something originally called the Commonwealth Study Conference - it’s now called the Duke of Edinburgh Commonwealth Study Conference. And that's a kind of a leadership programme run under the auspices of the British Royal Family, so he has been connected through that programme to the British Royal Family. And he wanted to run a leadership programme in Australia and he pitched that idea to Paul Singer, who is the official secretary to the Governor-General, on the basis that it was something that perhaps the Governor-General might lend his patronage to, the idea of a national leadership programme that took young promising Australians, brought them together and encouraged their talents with a view to becoming future leaders.
Now Paul Singer had been involved with the Commonwealth Study Conference as well, and that's how those two knew each other. And they together basically pitched it to the Governor-General, David Hurley, suggesting that it's something that he could be involved in.

What we know from some evidence that Paul Singer gave to a Senate Estimates committee hearing is that on the 26th of November 2020, the Governor-General wrote to then Prime Minister Scott Morrison, about this. We haven't seen the letter yet, but we know he wrote about this suggesting it could be supported. And we know now within three weeks that money had been set aside within the Commonwealth Federal Budget to fund this leadership programme. But it wasn't done publicly, it was squirrelled away in private, it was sort of hidden really within the Mid-Year Economic and Fiscal Outlook, the MYEFO budget forecasts that are published in the middle of the year. So by the end of 2020 that money was set aside quietly and then the bureaucracy went about doing the work it had to do to be able to make that official.

RUBY:

And so when you say ‘the work to make it official’ what is that work? What needed to happen?

KAREN:

What had to happen was that the Department of Prime Minister and Cabinet had to go about doing the due diligence - asking Chris Hartley questions about his proposal, his idea, what sort of support he has, how it would work.

This process was underway and Chris Hartley was proving to the government then that the foundation was sustainable and had adequate support to make it a proposition that government could support as well. There was a fundraising drive and a drive to encourage prominent organisations and individuals to back it.

RUBY:

Right so at this point Karen, the funding has been ‘set aside’ but things are in no way official yet, nor are they public. Nevertheless, a funding drive gets underway. So, can you tell me more about that?

KAREN:

So one of the key endeavours undertaken in the early part of 2021 to try and gather up some financial and other kinds of support for the leadership programme was a series of roundtable events held at Admiralty House in Sydney, that's the Governor-General's Sydney residence. A range of people were invited to attend these two meetings one in the morning and one in the afternoon to discuss the leadership programme and the foundation and its objectives.

About 70 invitations were sent out to those, they were sent on letterhead from the official secretary to the Governor-General, and they were sent to a range of prominent people in the private, public and community sectors.

RUBY:

So who are these people, who was invited to these roundtable events?

KAREN:

We certainly know there were people from government, statutory authorities and other roles or former public servants, someone from the union movement, someone who’d formerly been associated with a prominent charity, there was at least one real estate development, banking, soft drink manufacturing, insurance, grocery, one media company, I think a social media company, technology, telecommunications, and I certainly, I managed to establish that there was one mining company, Rio Tinto was there, alcohol giant Lion was there, the betting company TAB and British American Tobacco in the tobacco industry.

Now some of those industries are industries that tend to be a little controversial these days. I think some of them may have even been surprised they were invited, but nevertheless people were invited along ostensibly by the Governor-General to come and hear all about it.

RUBY:

And just to be clear, what was the aim of this event, Karen? Is this about asking for money? Or just for support for the idea of a leadership foundation?

KAREN:

Well, it's a little bit of both. Now, the Governor-General, through his official secretary, has stipulated that they didn't ask for money because they're not allowed to do something like that. But they did host the event at which Chris Hartley was asking for money.

The Governor-General gave a speech talking about the programme and his support for it and the foundation's ideas. And then Chris Hartley gave a speech seeking assistance and support in-kind or financially. And then my understanding is that pledge forms were handed out where people were asked to make some kind of contribution, talent, time, treasurer and thought leadership.

And so it was an event, really, to try and get people to say that they supported the idea. Now, it does seem and I've spoken to a few of the people who were there that really what was given was in principle support.

And this is the support that Chris Hartley and indeed Paul Singer then were discussing with government, and particularly Chris Hartley saying, look, I've got evidence of all these organisations and people who are willing to back this. It's a good bet. You should feel free to go ahead and fund it.

But it wasn't until just before that fundraising event was held that there was even a foundation in existence at all. It was only formally registered as a foundation and an entity on April the 13th, 2021 and these events were held just a month later. So after the early back and forth between Chris Hartley, Government House and the government, it sort of then all happened in a bit of a rush through 2021.

RUBY:

We’ll be back after this.

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RUBY:

Karen, we’ve spoken about how Chris Hartley was trying to sure-up corporate support for the idea of a future leaders foundation, but while that was happening, what was going on inside the government, and how did they come to the decision to fund the project?

KAREN:

Well, it's important to say that this is a common process to set money aside in advance and then finalise the arrangements before it's formally allocated. But I think the issue here is that absolutely no due diligence had been done on this proposal at the time that the money was earmarked. So there were two processes going really in parallel.

Through 2021, the Department of Prime Minister and Cabinet was gathering information from Chris Hartley and from Government House to finalise the funding arrangements for the foundation. And the foundation was applying to Treasury and ultimately the Treasurer to get deductible gift recipient status or charity status, DGR, which would allow donors to the foundation to have their gifts made tax deductible.

Chris Hartley wanted both of those things, he told PM&C he needed both of those things for this to be a viable proposition.

But what then happened was, and this has come out through freedom of information laws, there's growing concern at the viability of this organisation if it doesn't get government funding. And Chris Hartley makes it clear in a letter to the government he says, look, I really need this government funding. It's not really going to stand up on its own with just private funding. And I also need the DGR status from Treasury.

So he makes it very plain to the officials within the Department of Prime Minister and Cabinet that he really needs these two decisions. He achieved DGR status by the end of 2021, and he finally secured the funding in the early part of 2022, and it was revealed in the March federal budget that the Morrison government handed down just before they called the federal election.

RUBY:

And you mentioned earlier, Karen, that in the very early stages of all of this, it was the Governor-General, David Hurley, who spoke to Scott Morrison about the foundation. And after that the funds, the initial funds, was set aside. So as things progressed, do we know if the then Prime Minister Scott Morrison and the Governor-General continued to speak about the foundation and more specifically about the funding for it?

KAREN:

We do know that they have spoken about it. We don't know how many times.

Archival tape -- Senate Estimates Hearing:

“I now welcome office of the Official Secretary to the Governor-General, Mr Paul Singer, Official Secretary…”

KAREN:

Paul Singer gave evidence to the Senate Estimates Committee hearing on the 28th of October and talked about the fact that there had been conversations.

Archival tape -- Paul Singer:

“Senator, you've suggested several times that the Governor-General raised this on multiple occasions seeking funding from the Prime Minister. I'm not entirely sure that's correct. It may well be that the Governor-General spoke to the Prime Minister about this programme, but acknowledged from the outset that any funding arrangements and any funding decisions would be a matter for the government.”

Archival tape -- David Shoebridge:

“So then what was the purpose of the Governor-General raising it with the Prime Minister, if not to obtain funding? It's just a fireside chat?”

Archival tape -- Paul Singer:

“Well, no, Senator.”

Archival tape -- David Shoebridge:

“I just don't understand how, you know, you distinguish the two.”

KAREN:

I've also had comments from his spokesperson telling me that we know there were conversations, but they haven't been specific about how many or what was said, only to say very firmly that the Governor-General and the official secretary have had no role in funding arrangements. That's the quote that they use.

Archival tape -- Paul Singer:

“Funding arrangements were a matter for the government and directly handled between the Department of Prime Minister and Cabinet and the entity being the foundation. My office had no role in the funding arrangements.”

KAREN:

But there certainly was engagement between the office of the Official Secretary and the Department of Prime Minister and Cabinet by email, quite extensive engagement in which funding came up, so in that sense, there was certainly discussion about funding, but they dispute that they had any direct role in the decision.

RUBY:

And of course, Karen, the timing of all of this, it's interesting to consider that, because we now know that running parallel to whatever conversations might have been happening around the foundation, we know that Scott Morrison was also speaking to the Governor-General about being sworn into several secret ministries.

KAREN:

That's right, and the timing of the two things going on is interesting…

Archival tape -- News Reporter:

“Scott Morrison is offering his first detailed explanation for his secret ministerial appointments.”

Archival tape -- News Reporter:

“Former prime minister Scott Morrison, not telling the majority of his ministers involved in this situation that in fact he'd taken on new powers….”

Archival tape -- News Reporter:

“...the Governor-General has explained his actions effectively saying it wasn't his responsibility to advise the broader ministry or parliament or public about these kinds of administrative changes.”

KAREN:

There is a coincidence between being appointed to one of those extra portfolios, the resources portfolio, and also the Prime Minister's Department coming back to Government House with more detail, seeking to finalise the arrangements for the charity funding.

On the 13th of April we know Scott Morrison and David Hurley had a breakfast meeting that's in David Hurley's published diaries, the same day there was correspondence from PM&C back to Government House on the other issue, the charities issue, which also emphasised the need to get that foundation established before money could be transferred. That foundation was established that day and ultimately the funding was allocated in the course of the budget process that ended up being in this year's budget. And two days after the foundation was established and that correspondence occurred on April the 15th, was when the Governor-General signed the instrument on the resources portfolio.

Now they’re two separate incidents where not saying the two things are linked here, I'm just saying that they were both going on in parallel at the same time.

RUBY:

Okay but, hearing you talk about all of this, I think, what I’m really hearing is a story about privilege and power, we’ve got words between the Queen's representative and the Prime Minister about an elite leadership foundation then events to support that foundation, involving people who work at tobacco companies, alcohol companies, gambling companies. There’s money being set aside without due diligence being done and all of this happening in an opaque way, nothing being made public at the time. So, what does it all say to you about how decisions are made, sometimes behind closed doors?

KAREN:

Well, I think it gives us some insight into the way these processes work both normally and the way they can be shortcutted or short circuited sometimes, when there are people who have direct access who can argue the case for funding or government support in some way. So the process was smooth and rapid for this foundation. For many other organisations it's been less like that and that's why people have queried it. And, it seems that's why the new government decided to cancel the funding and not proceed with it because they were not satisfied that it was an organisation that accorded with its priorities and the money had not been transferred by the time the election came around. So the new government has been able to cancel it.

One of the questions that the Governor-General's official secretary received at that estimates hearing was about a conflict of interest policy - “do you have a conflict of interest policy when it comes to these kinds of things?” And he said “No, we don't.”

So I think that's interesting and raises questions about where a perceived, if not an actual conflict of interest arises and how you deal with it when you're dealing with people who are in very important positions.

RUBY:

Karen, thank you so much for your time.

KAREN:

Thanks, Ruby

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RUBY:

Also in the news today,

Anthony Albanese has met with the President of China, Xi Jinping, on the sidelines of the G20 summit in Bali.

It’s the first formal meeting between the leaders of China and Australia in six years, after diplomatic tensions escalated in part due to Australia’s push for an independent investigation into the origins of COVID-19.

And tech billionaire Mike Cannon-Brookes succeeded in installing four new directors to the board of AGL at the annual general meeting of the energy giant.

Cannon-Brookes is also the biggest shareholder of AGL, a stake he bought while campaigning for the energy generator and retailer to transition away from fossil fuels and towards renewable energy.

AGL is currently Australia’s biggest polluter, but the four new board directors are expected to accelerate the company’s transition towards greener energy.

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

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