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The Department of Finance was warned by one of its own staffers that waiving a $41,000 debt owed by a senior official was likely illegal and was the opposite of the “many examples” of recovering “Centrelink overpayments” – but it fully waived the debt anyway.
The Finance staffer provided written advice that waiving the $41,073 debt – owed by a senior official of the nation’s media regulator – would “not be consistent” with the either the law “or the current approaches to such matters”.
The Department of Finance, headed by Finance Secretary, Coalition appointee Rosemary Huxtable, approved the waiver regardless.
That very same day.
The request to have the debt waived had been submitted by the Department of Treasury, which is overseen by Treasurer Josh Frydenberg.
The explosive revelations are contained in a 40-page report – marked “OFFICIAL: Sensitive Legal Privilege” – which was completed last month by the Commonwealth Ombudsman, following a year-long secret investigation into the affair.
The staffer warned the Department of Finance – in an official briefing dated August 13, 2020 – that there was a “legal obligation on the Commonwealth to recover overpayments” and warned Finance against waiving the debt.
“There are many examples of debts arising from Agency error not being waived, including APS staff debts, taxation debts (and) Centrelink benefit overpayments,” the official internal briefing states.
“There is no reason in this case that justifies why a statutory office holder should be treated differently.
“I recommend that you not authorise this waiver”.
“I recommend that you not authorise this waiver” — Department of Finance expert
The internal briefing was supplied to senior Finance officials on August 13 2020.
That same day, Finance wrote a letter to the Department of Treasury saying it had authorised the full waiving of the Jose debt.
The Ombudsman investigation says: “that letter did not set out the reasons for (Finance’s) decision”.
As revealed Tuesday, 53 illegal payments totalling $41,073 were made to Chris Jose, a top official at the nation’s media regulator, the Australian Communications and Media Authority (ACMA).
– December 18, 2017: Jose is appointed part-time NCC Councillor
– May 1, 2018: Jose is appointed full-time member of ACMA
– March, 2020: A whistleblower tells NCC the Jose payments are illegal
– April 30 2020: NCC stops making payments to Jose
– May 6, 2020: NCC President Julie-Anne Schafer passes the matter to PM&C
– May 12, 2020: PM&C, Finance and Treasury hold a teleconference to discuss the Jose matter
– May 27 2020: Assistant Minister to the PM&C, Ben Morton MP, signs legal instrument handing matter to Finance
– August 13, 2020: Finance staffer warns waiving Jose debt likely illegal and the opposite of handling of “Centrelink overpayments”
– August 13 2020 (Same Day): Finance grants a “waiver” of the Jose debt
– January 25, 2021: Ombudsman investigator begins its investigation
– December 2, 2021: Ombudsman officially completes its secret report
As well as receiving his full-time salary at ACMA – for two years, from May 2018 to April 2020 – Jose had also been illegally receiving a salary for his part-time role as a councillor of the National Competition Council.
The Remuneration Tribunal Act states that public servants being paid for full-time positions cannot also be paid for part-time public service positions.
The Commonwealth Ombudsman’s report into the Jose scandal, of which The Klaxon has exclusively obtained a copy, is marked: “OFFICIAL: Sensitive Legal Privilege”.
It reveals that despite the NCC payments to Jose being clearly illegal and in breach of the Remuneration Tribunal Act, that, rather than recovering the debt, top government officials across at least five federal agencies went to great lengths – at extensive taxpayer cost – to allow Jose to keep the money.
Those implicated include the Department of Prime Minister and Cabinet; the Department of Treasury; the Department of Finance; the National Competition Commission (NCC); and, by extension, competition regulator the Australian Competition and Consumer Commission (the ACCC provides all of the NCC’s staff).
The Finance staffer’s briefing to Finance officials regarding the proposed Jose debt waiver is extremely damning.
The name of the staffer has been redacted from the Ombudsman’s report, but is identified as a “Claims Officer within Finance”.
The staffer briefed senior Finance officials that issuing a waiver would neither be consistent with the law or with standard government procedure.
“I do not consider that waiver based on the information currently available would be consistent with RMG 401 framework or the current approach to such matters,” the advice states.
The staffer further warned that the submission seeking the waiver of the Jose debt – which came from the Department of Treasury – contained serious “gaps”.
“No information is provided about either debt management options and whether they may be more appropriate,” the staffer briefed Finance Officials.
“RMG401 guides that the existence of other debt management arrangements and whether they would be more appropriate must be considered.
“The aspect is not addressed in the Treasury submission”.
The minister responsible for the Department of Treasury is Treasurer Josh Frydenberg.
Treasurer Frydenberg has repeatedly declined to comment.
The staffer wrote: “I have attached a decision letter for your use should you be minded to waive the (debt)”.
“However…I recommend that you not authorise this waiver”.
The Commonwealth Ombudsman’s report states that that same day, “in a letter dated 13 August 2020”, Finance wrote to Treasury informing it that it had authorised the waiver, of “$41,073.06”.