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EXCLUSIVE
Department of Finance Secretary Rosemary Huxtable wasn’t the “decision maker” who approved the department’s waiving of a $41,000 debt to a senior public official, her department has claimed.
That’s despite Huxtable, as the head of the Department of Finance, having been “delegated” that waiver power by the Finance Minister – who at the time was Mathias Cormann.
In a statement to The Klaxon, following a series of exposes by this publication, the Department of Finance has sought to distance Huxtable from the $41,073 waiver at the heart of the growing scandal.
“The Secretary of the Department of Finance was not the decision maker in this matter,” the department said in a written statement.
“The Secretary of the Department of Finance (Huxtable) was not the decision maker” — Department of Finance
Instead, Huxtable had “delegated the power” to other “officers in the Department”, the statement says.
As revealed last week, Chris Jose, a top official at media regulator the Australian Communications and Media Authority (ACMA), was illegally paid $41,073 for a second government role.
Full-time public officials cannot be legally paid a second government salary.
Yet, alongside being a full-time officer at ACMA, Jose had for two years been paid as a part-time councillor of the National Competition Council.
Finance Secretary Rosemary Huxtable. Source: Supplied
The Commonwealth Ombudsman last month completed a secret, year-long, investigation into the matter.
Its findings are detailed in a secret 40-page document, marked “OFFICIAL: Sensitive Legal Privilege”, a copy of which has been obtained by The Klaxon.
It reveals that rather than having Jose repay the debt, senior government officials across multiple federal agencies went to great lengths – and extensive cost – to allow Jose to keep the money.
The Department of Finance ultimately approved the debt waiver, despite the law stating that waiving Commonwealth debts was only an option of “last resort”.
It did so despite failing to properly consider other options, such as simply having Jose repay the money, or having the illegally-paid money recouped from his future paycheques, the Ombudsman report found.
As revealed Saturday, Finance also approved the debt waiver despite it being formally warned, in writing, that doing so was likely illegal and opposite to how Centrelink overpayments had been handled.
ACMA boss Chris Jose. Source: Supplied
Huxtable refused to respond when asked whether, as boss of the Department of Finance, she had green-lighted – or been involved in, in any way – the waiving of Jose’s $41,073 debt.
Instead, her department said she had not been the “decision maker” in the process – a term which carries a specific meaning under the government rules.
In any event, The Klaxon can now reveal that any person within Finance that Huxtable “delegated” the job to was required under the law to “comply with any directions” she made.
“The second delegate must comply with any directions of the Finance Secretary,” section 109 of the PGPA Act states.
“The second delegate must comply with any directions of the Finance Secretary” — PGPA Act
The Ombudsman report reveals the Jose “double payments” matter went through at least five federal departments and agencies: and that the matter was apparently too big for the Department of Prime Minister & Cabinet (PM&C) to handle.
That’s despite the PM&C being the “policy department” responsible for Remuneration Tribunal matters – and the most powerful agency in the Commonwealth of Australia.
The Department of Prime Minister and Cabinet had been “assisting in investigating” the Jose matter – but then “concluded it would be managed more effectively by a larger agency”, internal documents state.
No explanation is provided as to why PM&C was unable, or unwilling, to handle the Jose matter.
Jose was appointed to both the ACMA and NCC roles by the Federal Coalition.
Prime Minister Scott Morrison’s office refused to comment when approached by The Klaxon.
“The Jose matter would be ‘managed more effectively by a large agency,” — PM&C
It went from the National Competition Council (which was responsible for the matter) and the Australian Competition and Consumer Commission (the ACCC provides all the NCC’s staff), to the PM&C, to Treasury, to Finance.
The Ombudsman report shows that, behind-the-scenes, key senior officials, including at the PM&C and Treasury, decided that they would have the Jose debt “waived”.
The person with the authority to waive debts is the Finance Minister – so it had to go to Finance.
Under the Public Governance, Performance and Accountability Act (PGPA Act), the Finance Minister can “delegate” that debt waiver power to the Finance Secretary.
The Ombudsman report shows this in fact occurred: the debt waiver power of the Finance Minister (Cormann) had been “delegated” to the Finance Secretary (Huxtable).
Exactly what happened next is murky.
But Huxtable, through her Department of Finance, is pointing the finger at subordinates, stating:
“The Secretary has delegated the power to make decisions on debt waiver requests to officers in the Department in accordance with section 109 of the Public Governance Performance and Accountability Act 2013”.
And one in particular.
“Mr (Gareth) Sebar was, and continues to be, a duly authorised delegate for this purpose,” the statement says.
Gareth Sebar from the Department of Finance. Source: Facebook profile
That is, the National Competition Council (for reasons not fully explained) passed the Jose debt matter to the PM&C; the PM&C apparently considered the matter too big for it to handle (for reasons not disclosed) and officially assigned it to the Department of Treasury; the Department of Treasury sent the matter to Finance; the Finance Minster was responsible for waivers, but had “delegated” the matter to Finance Secretary Huxtable – and then Huxtable (for reasons not disclosed) further “delegated” the matter.
Sebar is one of dozens of “Assistant Secretaries” at Finance.
At the time the $41,067 Jose debt was waived, Sebar’s title was “Assistant Secretary: Risk and Claims Branch”.
He had been in that position for less than a year when he was given the Jose matter. (In October 2020, weeks after the Jose debt waiver was approved, Sebar’s title became Assistant Secretary: Significant Matters Taskforce).
As previously reported, responsibility for the matter transferred from the PM&C to Treasury after Liberal MP Ben Morton, who is PM&C Assistant Minister, signed an “instrument” prescribing “the Department of the Treasury as the relevant Commonwealth authority”.
As well as being PM&C Assistant Minister, Morton is the Federal Minister for the Public Service.
At the time he signed the legal instrument, Morton wrote to the head of the Department of Treasury, Treasury Secretary Steven Kennedy, to officially inform him of the arrangement.
The Department of Treasury is the responsibility of Federal Treasurer Josh Frydenberg.
The 40-page Ombudsman report has been “redacted”, with some key matters – and names – blacked out.
Sebar’s name appears, un-redacted, numerous times throughout.
There are also multiple references to the involvement of other Finance officials in the ordeal – yet those names have all been blacked out for reasons not explained.
Sebar did not respond to repeated requests for comment.
His position among Department of Finance officials is shown below.
(Huxtable is also circled).
Finance management chart. Source: Finance
More to come…
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