The purpose of the Public Service Amendment Bill (No. 2) 2024 (the Bill) is to amend the Public Service Act 1999 to allow the Australian Public Service Commissioner (APS Commissioner) to inquire into breaches of the Code of Conduct by former Agency heads. The amendments will also allow the APS Commissioner to determine if current or former Agency Heads have breached the Code of Conduct.

In his second reading speech, the Minister for Government Services, Bill Shorten MP stated:

This Bill will amend the Act to explicitly provide that the APS Commissioner has the power to inquire into and determine whether current and former Agency heads have breached the Code of Conduct. This will mean that the Commissioner has clear powers to hold current and former Agency heads to account for breaches of the Code of Conduct while they are an Agency head.

Background

Between 2015 and 2019, a series of measures were implemented by the then Department of Human Services which used income information reported to the Australian Taxation Office (ATO) to identify possible overpayments of income support payments. The measures became known as ‘robodebt’ because some aspects of the process of identifying potential overpayments, requesting information and raising debts were automated.

During a class action taken to the Federal Court by individuals affected by the scheme, the Commonwealth ‘admitted that it did not have a proper legal basis to raise, demand or recover asserted debts which were based on income averaging from ATO data’.

Established in August 2022, a Royal Commission into the scheme delivered its report on 7 July 2023. The Royal Commission’s report criticised the development and implementation of the robodebt program, particularly failures by the public service and ministers to ensure the program’s legality. A sealed chapter of the Royal Commission’s report has not been made public. Provided to a small number of recipients, including the APS Commissioner, the sealed chapter recommended referrals of individuals for civil and criminal prosecution.

The Government Response to the Royal Commission was tabled in Parliament on 13 November 2023. It accepted or accepted in principle the 56 recommendations made. Of the report’s recommendations, a number require legislative action, including many focused on strengthening the public service and oversight agencies. Recommendation 23.7 stated:

Agency heads being held to account

The Public Service Act should be amended to make it clear that the Australian Public Service Commissioner can inquire into the conduct of former Agency Heads. Also, the Public Service Act should be amended to allow for a disciplinary declaration to be made against former APS employees and former Agency Heads.

In relation to this recommendation, the Government’s Response stated:

The Government accepts this recommendation.

Secretaries and agency heads must be accountable for their actions. The Government will require the performance process and framework for secretaries and agency heads to be published.

The Government will introduce legislative amendments to the Public Service Act 1999 (Cth) to provide the Australian Public Service (APS) Commissioner with a new power to commence own motion reviews and investigations into Code of Conduct matters. The APS Commissioner will no longer have to wait for a referral before commencing an inquiry.

The Government will also progress amendments to extend the APS Commissioner’s powers to former secretaries, agency heads and APS employees. These amendments will also provide for disciplinary declarations to be made against past secretaries, agency heads and APS employees. This will ensure that inquiries into the conduct of former public servants can be commenced and undertaken, and sanctions applied, following the end of their tenure. (p. 38)

Set out in section 13 of the Public Service Act, the APS Code of Conduct provides specific behavioural requirements for all APS employees. Agency Heads also are bound by the Code of Conduct in the same way as APS employees (section 14).

The Australian Public Service Commission (APSC) established a centralised inquiry mechanism to look into alleged breaches of the Code of Conduct by the 16 individuals named in the sealed chapter. On 8 February 2024, the APSC provided an update that it had continued inquiries into all 16 referred matters:

To date:

• 15 investigations have proceeded to the issuing of notices outlining the grounds and categories for potential breach of the APS Code of Conduct.
• Of the 15 investigations, 4 individuals have been issued a preliminary determination that they have breached one or more elements of the APS Code of Conduct; 11 investigations remain current.
• One investigation has concluded as the individual's actions did not meet the threshold to issue a notice of suspected breach.

Final determinations and, if appropriate, decisions about sanctions will be communicated to individuals once preliminary determinations are finalised. The timeframe for the conclusion of inquiries depends on various factors, including the complexity of each matter, the number of submissions and any extensions that may be requested by respondents.

The 16 matters are complex, with a significant volume of evidence. Sufficient time is required to allow the Independent Reviewers, Mr Stephen Sedgwick AO and Ms Penny Shakespeare, to conduct the inquiries in a manner that is robust and affords respondents appropriate procedural fairness.

On 6 June 2024, the National Anti-Corruption Commission (NACC) announced that it had decided not to pursue the referrals concerning six public officials from the Royal Commission. In its statement, the NACC noted it had ‘...become aware that five of the six public officials were also the subject of referrals to the [APSC]’. It stated:

A significant consideration is whether a corruption investigation would add value in the public interest, and that is particularly relevant where there are or have been other investigations into the same matter. There is not value in duplicating work that has been or is being done by others, in this case with the investigatory powers of the Royal Commission, and the remedial powers of the APSC.

On 21 June 2024, an Australian National Audit Office (ANAO) report into the APSC’s Administration of Integrity Functions assessed the inquiries of the 16 referred matters. The ANAO noted that section 41A of the Public Service Act ‘empowers the Commissioner to investigate an allegation of a breach of the Code made against an APS agency head’ but confirmed in the footnote that ‘the Commissioner has no power to conduct investigations into allegations regarding former agency heads or former heads of statutory agencies or the heads of non-APS entities’ (p. 88).

The day before the Bill was introduced, Minister for the Public Service, Senator Katy Gallagher, stated that the changes were expedited ‘to clarify that former agency heads can be held to account for breaches of the Code while they were an Agency Head, in the same manner as current and former APS employees’.

Committee consideration

On 15 August 2024, the Senate Selection of Bills Committee deferred consideration of the Biil until its next meeting.

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights have not commented on the Bill.

Policy position of non-government parties/independents

At the time of writing, no comment on the Bill had been made by non-government parties or independent members. Previously, there have been calls for greater parliamentary scrutiny of the implementation of the Royal Commission’s recommendations. In October 2023, independent member, Kate Chaney MP proposed the establishment of a Joint Select Committee on Oversight of the Implementation of Recommendations of the Royal Commission.

Key issues and provisions

The Bill contains 2 schedules:

• Schedule 1 contains the key amendments to the Public Service Act and application provisions.
• Schedule 2 contains validation and continuation provisions for certain reviews commenced after 7 July 2023.

Schedule 1

APS Commissioner functions

Section 7 of the Public Service Act contains definitions for the legislation. For example, an Agency Head means the Secretary of a Department, the Head of an Executive Agency or the Head of a Statutory Agency. Item 1 inserts a new definition for former Agency head which ‘means a person who was, but is no longer, an Agency head’.

Section 41 currently outlines the functions of the APS Commissioner including ‘to inquire, in accordance with section 41A, into alleged breaches of the Code of Conduct by Agency Heads’. Item 2 will repeal and replace this with proposed paragraph 41(2)(m) to allow the APS Commissioner to ‘inquire into and determine ... whether an Agency head, or a former Agency head, has breached the Code of Conduct’.

Currently, section 41A provides for the APS Commissioner to inquire into alleged breaches of the Code of Conduct by Agency Heads and report on the results of those inquiries (including recommendations for sanctions) to certain persons. For example, if the Agency Head is a Secretary, the report would be made to Prime Minister. Items 3, 4, 6 and 7 amend section 41A to reflect the expanded functions of the APS Commissioner to inquire ‘and determine whether an Agency Head, or former Agency Hard, has breached the Code of Conduct’.

The form of determination, if one is made by the APS Commissioner, is unclear. The Royal Commission’s discussion of this issue indicated that declarations that include ‘a statement of the action that would have been taken against the former public sector employee had their employment not ended’ may be relevant and appropriate in these circumstances (p. 644).

Procedures for inquiries and determinations

Item 5 further amends section 41A to address procedures for inquiries and determinations. Proposed subsection 41A(1A) will require the APS Commissioner to establish written procedures for inquiring and determining whether Agency Heads, or former Agency Heads, have breached the Code of Conduct. The procedures must ‘comply with basic procedural requirements prescribed in the regulations’ and ‘have due regard to procedural fairness’.

The procedures may be different for different categories of Agency Head or former Agency Head, or where the Agency Head or former Agency Head has been convicted of, or found to have committed, a criminal offence (proposed subsection 41A(1B)). The APS Commissioner must ensure these written procedures are publicly available, but they will not be legislative instruments (proposed subsection 41A(1C) and (1D)).

Application of amendments

Inquiries

The Explanatory Memorandum states the application provisions in item 8 will ‘enable the Commissioner to inquire into and determine breaches of the Code of Conduct by former Agency Heads which occurred prior to the commencement of this Bill’ (p. 9).

In particular, subitem 8(1) provides that the amendments in Schedule 1 will apply to breaches of the Code of Conduct whether the conduct occurred ‘before, on or after the commencement day’. This will retrospectively apply the expanded powers of the APS Commissioner to inquire into Code of Conduct breaches of former Agency Heads and make determinations about conduct which occurred before the commencement of the Bill.

The amendments will also apply to Code of Conduct inquiries under paragraph 41(2)(m) which start on or after the commencement day, as well as inquiries that had commenced before, but had not yet been completed on or before the commencement day (subitem 8(2)).

While the Bill’s Explanatory Memorandum emphasises that the amendments do not ‘change the standards of behaviour expected of Agency Heads at the time of their employment’ (p. 3), the retrospective application of its provisions may have implications for certain former Agency Heads. If an Agency Head had resigned their position to forestall a Code of Conduct inquiry (relying on the provisions of existing Public Service Act) they may be subject such an inquiry (should the amendments of the Bill commence). Further, former Agency Heads may be subject to a determination that their conduct breached the Code of Conduct.

Written procedures, information and documents

Subitems 8(3) and (4) provide that the new requirements for written procedures will only apply to inquiries started on or after commencement. Subitem 8(5) states that this application of the written procedures is not intended to affect the rights to procedural fairness of Agency Heads, or former Agency Heads, that arose before commencement. Subitem 8(6) allows for information given and documents produced before the commencement of the Bill to be ‘used or disclosed’ for the purpose of an inquiry.

Schedule 2

Schedule 2 validates and continues ‘reviews or purported reviews’ of matters under paragraph 41(2)(k) of the Public Service Act. This refers to the function of the APS Commissioner to ‘review any matter relating to the APS referred to the Commissioner by the Public Service Minister, and report on that matter to the Public Service Minister’.

Notably, the APSC update on 3 August 2023 indicated that the 16 referrals to the APSC’s centralised code of conduct mechanism included ‘former Agency Heads referred by the [Public Service] Minister following advice from the Secretary of the Department of the Prime Minister and Cabinet’.

Where ‘reviews or purported reviews’ began between 7 July 2023 (the day the Royal Commission’s report was released) and commencement and involve a breach, or an alleged breach, of the Code of Conduct by an Agency Head or former Agency Head, they will be ‘taken to be, and to have always been, by force of [subitem 1(3)], validly conducted’.

Further, these reviews will be ‘continued as an inquiry under paragraph 41(2)(m)’ (the key APS Commissioner function amended in Schedule 1) (subitem 1(4)). This conversion will occur regardless of whether the review is continuing at commencement or even if it has concluded before commencement (subitem 1(5)).