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RUBY:

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

Before he was voted out, the former Prime Minister, Scott Morrison received a pitch from the Governor-General David Hurley: he said the taxpayer should fund a foundation for ‘future Australian leaders’.

We don’t know much about the merits of the program, who would get selected and what kind of training they would get – but it was promised the funding.

With the secret ministries saga still hanging over Canberra, pressure is mounting to investigate whether there was enough transparency in the process of funding this mysterious leadership training program.

Today, chief political correspondent at the Saturday Paper Karen Middleton, on Scott Morrison’s secretive $18m leadership grant.

It’s Wednesday September 7.

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RUBY:

Karen, until recently the Governor-General, David Hurley, wasn’t someone who was often in the headlines - but then it was revealed that he approved Scott Morrison's five secret portfolios. You have been looking into something else that he's been a part of that also seems to be quite secretive. So can you tell me about it?

Karen:

Yes. So we know about the so-called secret ministries that the Governor-General signed off on for Scott Morrison when he was Prime Minister. And we're now looking at a grant that the Morrison Government made for a new leadership programme that was going to bear the Governor-General's title effectively, so he pitched it directly to the then Prime Minister. Scott Morrison it was an $18 million programme and the Governor-General had been promoting it and it was to be funded under the Morrison government and it was also given charitable status so that any donations that went to the organisation from private donors could attract a tax deduction.

RUBY:

Ok so it’s a leadership program with charitable status. What else do we know about it? How would it operate? And where did the Governor-General get this idea?

Karen:

Well, the key point I guess is that the programme was an idea and it needed an organisation to be established to run it. And so the company called the Australian Future Leaders Foundation Ltd was established in order to run this proposed programme.

It sort of crept into the budget papers over a period of time from early this year and we didn't know a great deal about it. It didn’t have any presence much at all when the funding was approved, it didn't have a website, it didn't have a full board appointed, no contact details, just the name of the proponent, which was a man by the name of Chris Hartley, who had got to know the Governor-General through one of his other endeavours, a rowing regatta called the King's Cup that involved military veterans.

He had pitched this idea to the Governor-General and this foundation was set up in order to run it. Now the grant was made, but then the election came along. So the money has not actually been paid out. It's an $18 million allocation over five years. And that involves $14 million for the first year. $4 million for year five. And then after that, $4 million every year in perpetuity as long as you like. And the Morrison government had lined it all up. But the election came and it hasn't actually yet been delivered.

So it's got some mystery surrounding it I suppose. And there was a mystery surrounding the process as well, because the Governor-General pitched this directly to Prime Minister Morrison as a good idea, And in the end the Government gave them the money without any kind of open, tender process. It was a closed, non-competitive process. There's no merits review for it and it's exempted from being revealed in the usual place online, what's called the Grant's Connect Hub, where grant applications and awards are listed in public.

So it's hard to find out a lot about what the programme is supposed to be doing.

RUBY:

Right, so how unusual is this kind of lack of transparency, and for taxpayer money to be allocated in a closed, non-competitive process?

Karen:

Well it became more and more usual under the Morrison Government. They increasingly were giving out grants without the usual merit based assessment process. But I think this one's particularly unusual because the organisation that's going to run the programme that's at the heart of this funding didn't exist when the pitch was first made and as I've said, doesn't really have a great deal of detail publicly available about it even yet. And you know, I spoke to somebody recently who made the point that if this was a community or organisation in the community sector, that has to really fight for funding, they would have had to have every I dotted and every T crossed in order to get that money a lot earlier than this organisation has.

RUBY:

Yes - and it did get a lot of money - 18 million dollars to begin with and then 4 million a year in perpetuity. It’s certainly a lot of taxpayer funding, especially when you consider how few details there are around the program. But the decision to set this up, as you said earlier, it all happened under the former government, under the former Prime Minister Scott Morrison. But now, the Albanese government is in charge, so what does that mean for the future of the foundation?

Karen:

So where it's interesting is the Morrison government allocated the money, but it didn't actually pay the money out. And so now the Albanese Government has got to make a decision whether it makes good on that promise or whether it decides to withdraw the offer and not give the money to the foundation at all.

And there's a second way that this whole grant could be stopped and that is using the Senate. The Senate actually has the power to veto this grant because part of the way that it was given involves a legislative instrument that the Senate has the power to overrule. But it's got to do it on a deadline. And that deadline is approaching.

I don't think they've made a decision yet, but I know there are people who are concerned about the process involved in allocating this grant. And I guess in the context of a budget with $1 trillion debt, they'll be wondering about the priority of affording a leadership programme like this money when other things can't be funded.

So while we don't know exactly what they're going to do, there are suggestions and rumblings that they may not be terribly keen on the idea.

RUBY:

We'll be back after this.

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RUBY:

Karen, we’ve been talking about a grant for a leadership program that was awarded under the previous government. And the question now I suppose is - will that grant be honoured, or should it be honoured, by the new government. So what’s likely to happen next?

Karen:

There are two ways that funding could be stopped. One is if the Albanese Government makes a decision in the context of the upcoming budget in October not to go ahead with it or indeed to keep it in the books. And so even though the previous government said you can have it, the new government can say no, you can't and take it back. And so that is possible.

And the other one involves particularly a committee in the Senate that is set up that looks at all these kinds of legislative instruments and works out whether they're good or whether there are questions to be asked about them. And the committee that exists to do that, it's called the Scrutiny of Delegated Legislation Committee. Bit of a mouthful. It is looking at this regulation that governs this particular funding decision to decide whether it needs closer scrutiny and closer examination.

And at least one member of that committee, Independent Senator David Pocock from the ACT, has raised some concerns. And whether the process we've been talking about, the very narrow and quite secretive process of giving this grant was good enough or whether the whole thing should be thrown out.

RUBY:

And so the main issue here is the lack of transparency Karen?

Karen:

I think that's the big thing that people are concerned about.I spoke to David Pocock’s office about this and he is concerned particularly about the transparency and the secrecy. Transparency was a big issue in the recent election and David Pocock was very strong on it in his campaign. So he wants the whole thing looked at and he's considering pressing the Senate to get more time, at least if not to absolutely veto it, to get more time to examine it, because he thinks that the process has been a long way from transparent.

It's not unprecedented that a governor general would make personal representations for some proposal that he or she wants to be involved with if they think there's a public benefit in it. But it is pretty unusual to do it this way and to have it done so secretively, without much public discourse and have the decision made behind closed doors without a lot of information available about the process on the government side, and almost nothing available about the company that is receiving the money.

RUBY:

Ok - and just to come back to the program itself - it's supposed to be a leadership program. So what do we know about who might be selected to go through it, and what it is that they would actually learn?

Karen:

Yes, this is another strange aspect of this whole thing, not just about the process of the money being allocated in the first place, but the nature of the programme that they are funding. It was put forward as an independently run leadership programme for potential future leaders of the nation. But buried in the fine print of this legal instrument is a suggestion that the Morrison government was intending to run the show itself. These instruments are produced with an explanatory memorandum attached to them that explains a bit more about what the law is meant to do. And they usually have a section at the back that lists the sections of the Constitution under which this law is made sort of pretty dry and legal. And there's usually not a lot of interesting detail in there beyond that. But in this case, a few paragraphs have been slipped in there that talk about the Commonwealth taking over the role of running the programme effectively. It suggests that the Commonwealth believed that it was best placed to know the kinds of people who would make the best future leaders that it was suggesting it would select the people who would choose the programmes candidates, and that it would also set the agenda for the programme itself. It would choose the subject matter and the kinds of things that they would study. Now, this is not, as I understand it, what the proponents were suggesting in the first place. I don't think it's what the Governor-General had in mind and it's not what Chris Hartley had in mind either. So not only is there now controversy over the way this was done, perhaps in a not open and transparent manner, but there's a question about whether the Commonwealth Government is funding what they were asking for at all. And I can't imagine that the new Government is going to be that happy with the suggestion that it would be taking over this leadership programme and running it effectively and choosing the candidates.

So there's a fair bit of unravelling and digging to go on this whole thing.
Will the money go out at all? What will the programme do and who's going to be in charge of it? And is it in line with what the proposal was in the very first place?

RUBY:

Karen, thank you so much for your time.

Karen:

Thanks, Ruby.

RUBY:

Several senators and MPs have now moved to disallow the regulation behind the leadership foundation’s funding.

The move by Senator Tammy Tyrell from the Jacqui Lambie Network, Greens Senator David Shoebridge and other independent MPs could see funding cancelled – as early as today.

Tyrell said on Twitter that she first learned about funding for the Australian Future Leaders Foundation from reading Karen Middleton’s reporting in The Saturday Paper.

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Also in the news today...

The Reserve Bank of Australia has raised Australia’s cash rate for the fifth month in a row, to 2.35 per cent, the highest rate in seven years.

The RBA board said the rate rise was needed to tame inflation, which is projected to rise to 7.75 per cent by the end of the year.

And...

Instagram’s parent company Meta has been fined €405m euros by Ireland’s data watchdog for breaches to the privacy of children.

An investigation by Ireland's Data Protection Commissioner found Instagram allowed users aged between 13 and 17 to operate business accounts, which in some cases, made the minor’s data – including phone numbers and email addresses – publicly available, without the minors knowing.

Meta has announced it will appeal the decision.

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

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