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Senate Estimates: Finance and Public Administration Legislation Committee: Prime Minister and Cabinet Portfolio (Governance Group)

Estimates & Committees
Lee Rhiannon 2 Nov 2016

Monday, 17 October 2016

Senator RHIANNON: Former resources minister Mr Ian Macfarlane, who had nine years as resources minister, was quoted in media coverage in late September as saying that he had checked his new appointment as CEO with the Queensland Resources Council with the PMO and that they were 'cool with it'. Is that accurate?

Ms Kelly: That is my responsibility. If I can just take a moment to find my relevant briefings, I may be able to answer that question. We are unaware of the answer to that question.

Senator RHIANNON: When you say you are unaware of the answer to the question, are you unaware that Mr Macfarlane used the words 'cool with it', or are you unaware that he checked his new appointment with the PMO, as he stated?

Ms Kelly: The latter.

Senator RHIANNON: You do not have a record of him checking with the department.

Ms Kelly: We would not keep records of matters that were dealt with by the Prime Minister's Office unless we were asked for advice, and that was not the case in this instance.

Senator RHIANNON: Does that mean that you do not know if the PM or the PMO or PM&C approved or condoned Mr Macfarlane's apparent disregard for the Statement of Ministerial Standards?

Ms Kelly: The department does not have any knowledge or involvement in that matter at this stage.

Senator WONG: If I may, Chair, I will just to follow up. You asked to check your notes, Ms Kelly. What did the department deal with?

Ms Kelly: The department noted the media reports.

Senator WONG: So that generated a brief.

Ms Kelly: No.

Senator WONG: That generated your estimates brief.

Ms Kelly: That is correct.

Senator WONG: Not a brief to the PM.

Ms Kelly: Yes. It generated a note to that effect.

Senator RHIANNON: Just with regard to post-ministerial employment, 2.24 sets out:

“Ministers are required to undertake that, for an eighteen month period after ceasing to be a Minister, they will not lobby, advocate or have business meetings with members of the government …”

 I was just interested in the words 'lobby, advocate or have business meetings with'. How do you interpret that?

Ms Kelly: I think the words would be given their ordinary English usage, but perhaps with the exception of 'lobby', which I suspect would be interpreted—in fact, I think would be reasonable to interpret—in accordance with the Lobbying Code of Conduct, which has a definition of 'lobbying' in it.

Senator RHIANNON: Also, is it supposed to be restricted to the activities of somebody who appears on the federal Lobbyists Register. Is that what is meant by that?

Ms Kelly: I do not know that I would be able to go that far, but I do know that the meaning of the word 'lobbying' would be interpreted by reference to the Lobbying Code of Conduct.

Senator RHIANNON: Just sticking with this word 'lobbying', I noted that Mr Macfarlane was quoted in the media as saying that he is not a lobbyist, he is an engager. Is there any reason why an engager would not also fall foul of the Statement of Ministerial Standards if they engaged in conduct that meets the definition of 'lobby, advocate or have business meetings with'?

Ms Kelly: There is a very specific definition of 'lobbying' under the Lobbying Code of Conduct, and the Lobbying Code of Conduct does refer to third-party lobbying. I am not familiar with the detail of the circumstances that you are raising, but I would just refer you to the Lobbying Code of Conduct definition, which is limited to third-party lobbying.

Senator RHIANNON: Would you interpret an engager as a third-party lobbyist?

Ms Kelly: I would not offer hypothetical advice. I am merely saying that there is a quite specific and detailed description of what constitutes third-party lobbying in the Lobbying Code of Conduct, and I think how that matter would be interpreted would be by reference to that definition.

Senator RHIANNON: How do we deal with this situation? You have acknowledged that it is a detailed description. Does that mean that if somebody changes their title from 'lobbyist' to 'engager' they no longer come under that description?

Ms Kelly: I think there is more to the definition of 'lobbying' under the Lobbying Code of Conduct than a title. It is a substantive test. That is my understanding.

Senator RHIANNON: A 'substantive test' of activities. If you were engaging substantially with somebody on issues that were to do with your previous work as a minister, would that be captured by that definition?

Ms Kelly: I will just get the definition for you. In addition to the substance, it is also actually on whose behalf. That is my understanding of the definition. Under clause 3.5 of the Lobbying Code of Conduct:

"Lobbyist" means any person, company or organisation who conducts lobbying activities on behalf of a third party client or whose employees conduct lobbying activities on behalf of a third party client …”

Then there is a range of exemptions that follow that.

Senator RHIANNON: Has Mr Macfarlane disregarded the statement in your view?

Ms Kelly: The department has not been asked for advice in relation to those particular circumstances, so I am not in a position to provide any advice in relation to them.

CHAIR: Are industry associations on the Lobbyist Register?

Ms Kelly: I cannot answer that. I can make some inquiries and determine that. But if they had people who met the definition of 'lobbyist', then they could certainly seek registration on the register.

CHAIR: I am happy for you to take that on notice, but my understanding is a third-party lobbyist is a professional firm that engages on behalf of paying clients. A peak representative body such as the Business Council of Australia or ACCI are not typically regarded as lobbyists.

Ms Kelly: That is my understanding.

CHAIR: Thank you.

Senator RHIANNON: Which actually identifies why the definition of 'lobbyist' needs to change, so thank you for drawing that out, Chair. Senator Brandis, if Mr Macfarlane wanted to meet with you on matters that you may be discussing in cabinet, would you decline his request?

Senator Brandis: It is a hypothetical question. It would depend on the circumstances.

Senator RHIANNON: Could you expand on those circumstances? You could sit here and get away with saying every question is hypothetical, but we are just asking you a question to explore an important issue.

CHAIR: Allow the minister to answer.

Senator Brandis: It all depends what he wanted to meet about. I know Mr Macfarlane quite well. I have known him for nearly 20 years. If Mr Macfarlane wanted to have a talk to me about the political tactics of the LNP in Queensland, I would not see anything wrong with having a conversation with him about that.

Senator RHIANNON: The question was quite specific. It was—

Senator Brandis: No, it was not specific. It was completely open-ended, as a matter of fact.

Senator RHIANNON: It was quite specific. Would you meet with Mr Macfarlane if he wished to discuss with you matters that you could be considering in cabinet. That was the question.

Senator Brandis: I do not disclose to anyone what is disclosed in cabinet, so the issue would never arise.

Senator RHIANNON: You can tell what will be coming up in cabinet because there are issues before the government.

Senator Brandis: Can we?

Senator RHIANNON: And Mr Macfarlane knows how things work. He could easily guess that.

Senator Brandis: This is a matter of conjecture.

Senator RHIANNON: You could therefore be in an interesting situation. It is a fair question.

Senator Brandis: I would not be discussing with anyone matters that are before cabinet.

Senator RHIANNON: Even if they are not before cabinet but may come before cabinet—hot issues of the moment?

Senator Brandis: I will choose my own words, thank you. I would not be discussing with anyone matters that are before cabinet.

Senator RHIANNON: Ms Kelly, you have set out the description and offered some other information about the standards, but what is the point of the standards if they can simply be ignored?

Ms Kelly: The standards are a set of guidance and behaviours to ensure that members and senators conduct themselves appropriately. I cannot speak to the policy of the standards. That is a matter for the Prime Minister.

Senator RHIANNON: To ask about the previous government: Labor ministers like Martin Ferguson moved directly from the cabinet to work for APPEA as chair of their advisory board just a month after the 2013 election. Given that Mr Abbott brought in the Statement of ministerial standards in 2013, was it the policy of the government to decline meetings with former ministers who had not observed the cooling-off period?

Ms Kelly: I cannot answer that question, but I am happy to take it on notice.

Senator RHIANNON: Thank you for taking it on notice. Is that how the policy works or is intended to work now?

Ms Kelly: Again, I would have to take that on notice. I obviously have the Statement of ministerial standards, and the department from time to time is requested to provide advice and provides advice, but I would have to take the specific matter you raised on notice.

Senator RHIANNON: I would like to ask about the cooling-off period because that is essentially what now has a considerable cloud over it. Do you have any processes to ensure the departments are able to offer their ministers advice about when the cooling-off period may be breached?

Ms Kelly: As I said, we do not have processes. We are requested for advice on specific issues from time to time and we provide that advice, so that is not an issue upon which we have provided advice.

Senator RHIANNON: Senator Waters this morning asked the Department of the Environment and Energy about whether they have any administrative practices in place to advise ministers about potential breaches of the statement, and they indicated they did not.

Ms Kelly: As I said, I cannot take that any further. We provide advice on request from the Prime Minister about specific aspects. We have not provided advice on that aspect.

Senator RHIANNON: We now have this example with the department of the environment. Are you saying that you would only be providing advice if they asked for the advice? Is that how it works?

Ms Kelly: That is specifically the role of the department that is described in the Statement of ministerial standards, and so we carry out the role that is specifically described for us to do.

Senator RHIANNON: Which is one of offering advice when it is asked for—

Ms Kelly: Absolutely, yes.

Senator RHIANNON: not just assisting—being proactive—in an area where there is clearly uncertainty.

Ms Kelly: We carry out the role that is described for us in the Statement of ministerial standards.

Senator RHIANNON: It would seem that this is a key risk management measure. There is significant media risk and reputational risk for current ministers who flout the Statement of ministerial standards by meeting with former ministers inside the cooling-off period or who allow their department to do so. Surely this is something that your department or line departments like environment should be briefed about.

Ms Kelly: I can only repeat my previous answer: the role provided for the department described in the standards, which are the Prime Minister's document, is that we provide advice upon request. Any further discussion about the adequacy of them is a policy matter on which I could not express a view.

Senator RHIANNON: I am not trying to get into the policy of it; I am just trying to understand how the process works, because what is becoming apparent is that the process is not working. You would have to ask what the point of standards is if no-one, including the departments, is paying them attention and working out how they work.

Ms Kelly: I note that that is a policy view on your part. It is not one that I can comment on.

Senator RHIANNON: So you do not share that position?

 Ms Kelly: I can only reiterate my previous answer.

Senator RHIANNON: Do you think the system—

Senator Brandis: I think, with respect, you are asking the officer to comment on policy.

Senator RHIANNON: It is not policy. Don't hide behind that, Senator Brandis. It is asking how the system works.

CHAIR: Please allow Senator Brandis to finish.

Senator Brandis: Ms Kelly has said in her view that is a matter of policy, as, in my view, plainly it is. You have asked her about what the words mean. You have asked her a series of questions about the operation of the standards. Whether the standards in your view should be varied is a policy matter, and you cannot ask officials about policy matters.

Senator RHIANNON: Don't verbal me. I did not talk about variation. I am just trying to understand the process, and you bringing up the old one of policy is a way of avoiding the question. So I will ask a question directly to you.

Senator Brandis: The 'old one' is in fact the standard of this committee.

Senator RHIANNON: Is the system working? Do you believe the current system is working?

Senator Brandis: I do, as a matter of fact.

Senator RHIANNON: Even though there is this 18-month period and Mr Macfarlane has jumped into this job?

Senator Brandis: There are so many false premises and untested assumptions in your question, but—

Senator RHIANNON: You are saying 18 months is untested?

Senator Brandis: For a start, as the chair of the committee has pointed out in the observation he made, a distinction is drawn between professional lobbyists and industry peak bodies. My understanding—I do not know the details of Mr Macfarlane's employment contract—is that he is engaged in some capacity for an industry peak body.

CHAIR: Senator McAllister I think had a related question.

Senator RHIANNON: Thank you.


Senator RHIANNON: Chair, one question before we move past this. With regard to Mr Macfarlane, did the Prime Minister approve his new position with the Queensland Resources Council?

Ms Kelly: As I have indicated, the department has not had any involvement in that matter, so I am not able to assist you with that.

Senator RHIANNON: Not even at that point of—

Ms Kelly: The department has had no involvement in that matter. In relation to Mr Ferguson, he is not a registered lobbyist.


Senator RHIANNON: Listening to the responses, we have a curious situation where Mr Macfarlane has said that the PMO have been contacted and they were 'cool with it'—they were his words. If the DPMC did not give any advice to the PMO re the appointment, it appears we have two choices, and this is what I wanted you to help me with: either Mr Macfarlane is lying or the PMO approved the appointment without any advice from the department. Are they the two choices? Is the conclusion that it could be either one of those and that is what we now have to explore?

Ms Kelly: I expect that there are matters that the Prime Minister and the Prime Minister's office have discussions with individuals about all the time in relation to the Statement of Ministerial Standards. They decide, on particular matters, to seek advice. This was not a matter on which advice was sought from the department. But I simply do not know what processes took place in the Prime Minister's office in relation to this matter.

Senator RHIANNON: So you cannot throw any light on that. We are not able to take it any further. If the statement, 'The PMO was cool with it,' is accurate, we cannot take that any further. So we do not know if it is accurate or a lie, and we do not know if the PMO approved the appointment. Ms Kelly: As I said, the department was not involved.

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