3.1
The Australian National Audit Office’s (ANAO) findings sparked a public debate about the inappropriate use of public funds and a lack of transparency and accountability around the actions of the government and its departments. In the case of the Commuter Car Park Fund (CCPF), these concerns have been exacerbated by fact that funding allocations made for CCPF projects are not grants, and therefore are even less likely to be properly considered and scrutinised under the Commonwealth Grant Rules and Guidelines.
3.2
This chapter focusses on the questions which have been asked around the timing of the announcement of the selected CCPF sites, including how the announcements around the selected sites came to be announced during the election period and could amount to election commitments—despite being decisions taken by executive government prior to the election.
3.3
This chapter considers the timing of decisions around the CCPF and their subsequent announcement, and also details the findings of the ANAO about the timing of CCPF project selections. This chapter also presents the evidence of the ANAO regarding CCPF project funding approval.
Caretaker conventions
3.4
Before considering the timing of the CCPF announcements, it is worth detailing the caretaker conventions which come into play when an election is called, and the House of Representatives is dissolved.
3.5
In November 2018, the Department of the Prime Minister and Cabinet (PM&C) issued the most recent version of the Guidance on Caretaker Conventions (the Guidance), which details how the business of government should proceed following the dissolution of the House of Representatives.
3.6
The Guidance recognises that:
… with the dissolution of the House, the Executive cannot be held accountable for its decisions in the normal manner, and that every general election carries the possibility of a change of government.
3.7
Notwithstanding the dissolution of the House, the Guidance notes that the business of government needs to continue and that ‘ordinary matters of administration still need to be addressed’. This is achieved via a series of practices known as ‘caretaker conventions’, which aim to ensure that the government in place prior to an election does ‘not bind an incoming government and limit its freedom of actions’. The Guidance notes that adherence to the caretaker conventions means a government avoids:
making major policy decisions that are likely to commit an incoming government;
making significant appointments; and
entering major contracts or undertakings.
3.8
The Guidance also makes the point that the caretaker conventions help to ensure neutrality of the public service and that no one political party is favoured. The Guidance notes that:
There are also established practices associated with the caretaker conventions that are directed at protecting the apolitical nature of the public service and avoiding the use of Commonwealth resources in a manner to advantage a particular party. The conventions and practices also aim to prevent controversies about the role of the public service distracting attention from the substantive issues in the election campaign.
3.9
The Guidance does, however, make clear that the ‘conventions are neither legally binding nor hard and fast rules’. Further, it says that application of the caretaker conventions to individual cases requires ‘judgement and common sense’.
3.10
While PM&C is able to provide some advice to agencies on the application of the conventions, the Guidance states that:
... responsibility for observing the conventions ultimately rests with agency heads or, in cases where they are involved, with the Prime Minister and Ministers.
Major policy decisions
3.11
According to the Guidance, whether a policy decision made during the caretaker period would be considered a ‘major’ decision is ‘a matter for judgment’. Matters to consider in making this determination include:
the significance of the decision in terms of policy and resources; and
whether the decision is a matter of contention between the Government and the Opposition in the election campaign.
3.12
In addition, the conventions do not apply to the announcement of decisions, or to promises of future policies made by a party in government during an election campaign—but rather to the making of decisions. The Guidance clarifies that the conventions are not infringed where decisions made before the dissolution of the House may be announced during the caretaker period. The Guidance does caution that:
… where possible, decisions should be announced ahead of dissolution if their announcement is likely to cause controversy which would distract attention from the substantive issues in the campaign. Care should be taken to ensure that Commonwealth resources are not used to make announcements that involve partisan activities.
3.13
The Guidance suggests that if circumstances require the Government to make a major policy decision during the caretaker period that would bind an incoming government, the Minister would usually consult the Opposition spokesperson beforehand.
CCPF project announcements
3.14
A total of 47 sites for the CCPF were initially identified and selected, with a funding commitment of $625 million (in 2020-21, the number of sites decreased to 45, and funding increased to $660.4 million). A list of the CCPF projects, by jurisdiction, can be found at Appendix 1.
3.15
There are now 45 CCPF projects, 11 of which were agreed to by the Government in January 2019, 27 were agreed on 10 April 2019 and a further seven were announced during the 2019 election campaign.
Position of the Department
3.16
The Department of Infrastructure, Transport, Regional Development and Communications (the Department) made clear that 27 commuter car park sites were selected the day before the caretaker period commenced and announced during the election, with a further seven carpark projects announced during the election.
3.17
The Department argued that these 34 CCPF projects were ‘considered to be election commitments by the Government and were treated as such by the Department’, and that investment in these projects was included in the Pre‑election Economic and Fiscal Outlook. (These were the 27 CCPF projects agreed on 10 April 2019, and the seven announced during the election campaign.)
3.18
In relation to the seven projects during the election campaign, the Department advised that these projects:
… had not been a decision previously as [sic] the Government. The audit report notes that authority to progress these projects was confirmed by the Prime Minister following the election with funding included in the 2019-20 Mid‑Year Economic and Fiscal Outlook.
The Department at all times adhered to the caretaker conventions.
3.19
The Department, at a Budget Estimates hearing on 19 July 2021, alluded to Cabinet documents—to which the ANAO did not have access—which in its view made clear that the CCPF projects were election commitments and were to be delivered as such. On notice, the Department continued that:
… on 10 April 2019 the Australian Government made a decision providing funding for 27 commuter car park projects that were announced during the election period. The Australian Government announced a further 7 projects during the election period.
3.20
The Department advised that it was provided with the relevant correspondence regarding the decision of 10 April, on 11 April 2019—the day the caretaker period commenced.
3.21
Mr David Hallinan of the Department advised at the RRAT Supplementary Budget Estimates hearing on 25 October 2021 that in the ‘lead-up to the election period, the Department provided advice that it could within the time constraints that it had’ on the 27 projects, and that for the additional seven announced during caretaker ‘there was no previous process and the Department had no involvement’ in providing advice.
3.22
The Department Secretary Mr Simon Atkinson asserted at the same hearing that he treated ‘commitments made to the Australian public during the election campaign as election commitments’, including those projects decided on 10 April 2019—despite acknowledging the decisions were taken in government. The Secretary continued that:
For the purposes of implementation, they are treated as election commitments. The two things aren't mutually exclusive. They can be a formal decision of government that is in the books and a commitment made to the Australian public during an election campaign.
3.23
Similar points were made by Mr David Hallinan, Deputy Secretary of the Department, who suggested that the Department didn’t see the terms of ‘election commitments’ and ‘decisions taken by government by not yet announced’ as mutually exclusive. Mr Hallinan was of the view that:
The decisions taken by the government on the eve of the election are then announced as commitments in the election campaign. They've been tracked by government since that point as election commitments. We've reported on them as election commitments. I think there are other cabinet documents of the government that identified [them] as election commitments as well. To be honest and completely open, I think it's a little bit of a semantic point.
3.24
Mr Hallinan continued that:
Sure, it was certainly a decision taken in government. That's clear. But it was also a commitment made publicly in an election. It was tracked by departments across the Commonwealth as a series of election commitments from that point. That's just a matter of record and fact.
3.25
Following the caretaker period, the Department ‘engaged with states and councils on implementing the Government’s program and projects as is normal course of business’. This involved ‘extensive and ongoing engagement with the states to ensure projects were included in their delivery schedules’.
3.26
The Department said it was ‘important to note’ that all projects needed to progress through:
… the necessary design, planning approval and environmental processes before construction is able to commence. The work required prior to construction can create long lead times between Government commitment and construction commencement. However, the design and planning works required for projects is essentially to ensuring that the best possible option is delivered.
ANAO findings
3.27
The ANAO noted that its analysis did ‘not support the view expressed by the Department’ that the 27 CCPF projects decided upon by the Prime Minister on 10 April 2019 were election commitments.
3.28
The ANAO provided a summary table, outlining the sequence of selection decisions taken, key events and the funding committed at the time. This table is replicated below (Figure 3.1).
3.29
The ANAO found that only 15 per cent of the projects were election commitments, with 70 per cent announced during the caretaker period (see Figure 3.1 for a breakdown of dates and announcements). The ANAO detailed that as of 10 April 2019, the Government had not yet entered caretaker and that:
The decision in relation to those 27 commuter car park projects was authorised in writing by the Prime Minister on 10 April 2019 following written advice, and a consultation process, involving the Minister for Finance, the Treasurer, the Deputy Prime Minister and the Minister for Urban Infrastructure. Reinforcing that those 27 projects reflected a decision taken by government but not yet announced, the funding commitment to the 27 commuter car park projects was then included in the Pre-election Economic and Fiscal Outlook 2019 report.
3.30
The ANAO, on notice, provided more specific advice about this correspondence. The ANAO detailed that on 10 April 2019, the Minister for Urban Infrastructure wrote to the Prime Minister, seeking agreement to fund an attached list of projects, including proposed CCPF sites. On the same day, the Finance Minister wrote to the Prime Minister, in relation to ‘proposals with financial implications across various portfolios’, including the Infrastructure portfolio proposals put forward by the Minister for Urban Infrastructure. Again, on 10 April 2019, the Prime Minister wrote to the Finance Minister, agreeing to the various spending proposals. This letter was emailed by the Prime Minister’s Office to the offices of the Finance Minister, the Deputy Prime Minister and the Treasurer at 7:15 pm on 10 April 2019.
3.31
In further evidence to support its view that the 27 car parks were not election commitments, the ANAO noted that following a return to government, the Prime Minister provided written authority to progress the UCF‑related election commitments, but importantly:
In relation to commuter car park projects, it outlined seven (only). These seven correspond with the seven projects identified by the ANAO to be election commitments, with the Election Commitment Authority letter not including other projects where the department advised the ANAO it considers to be election commitments.
3.32
The ANAO considered there was ‘nothing unusual about that 10 April correspondence’, because such a process was the ‘ordinary business of government’—the ANAO noted this was uncontroversial. The exchange of letters between portfolio ministers and the Prime Ministers was ‘standard government decision-making’ and was the Prime Minister making a decision as the head of government—not as an election commitment. In this light, the ANAO was ‘quite perplexed’ as to how the decision made on 10 April 2019 could be considered an election commitment by the Department. Mr Brian Boyd of the ANAO continued that:
… it always perplexes us too that, whilst the department's response to us in the audit report formally is that they're election commitments, if the department actually looks at its own records of the time, it was telling itself they weren't election commitments, that they were decisions of government to go through PEFO. The department's own incoming government proofs say to government that these are PEFO projects, not election commitments. They separately put out the election commitments. There was never anything to us to suggest that these were considered election commitments until we started looking at the Hansard of the department before estimates.
3.33
In response to the Department’s views on its audit, the ANAO made the important point that ‘irrespective of whether they were election commitments, the Department was responsible for advising the Minister on whether projects were eligible and appropriate for approval’ under the NLT Act. Further consideration was also needed as to whether ‘expenditure would be efficient, effective, economical and ethical’ under the PGPA Act.
Views raised in evidence
3.34
In line with the ANAO findings, submitters made clear their views on the timing of the CCPF site selections, against the 2019 caretaker and election timeframes.
3.35
Mr Harris also drew attention to comments of Minister Fletcher stating that 34 CCPF sites were ‘selected as election commitments … because the projects were committed to publicly as part of the election campaign’. Mr Harris suggested that this ‘argument is derisible’, as it:
… incorrectly implies that all announcements or re-announcements made during an election campaign must be election promises even if they are clearly pre-election decisions. More importantly, it ignores all evidence to the contrary.
3.36
Mr Harris told the committee at a public hearing that it was important to maintain a distinction between election commitments and the normal decision‑making of government. He said that:
… when you enter the election period, the government is constrained from making decisions unless they're particularly urgent and necessary. The promises to build several car parks made during the election were not government commitments and, as far as the department is concerned, they need to go through the normal governmental processes before they can be enacted. For example, a political party representing the government can, during an election, make a promise which the government has no power to implement because it lacks the legislative or revenue authority. That's the way we were taught when we were in the Commonwealth, and it's a big distinction. Election commitments are nothing, until the government takes them up after the election and goes through the normal processes.
3.37
Mr Harris noted that the PGPA Act imposes requirements on ministers when making funding decisions, but that these requirements do not apply to most announcements made during the caretaker period before general elections, ‘when conventions restrict government decision making’.
3.38
Similarly, Professor Richard Mulgan argued that any claim that the CCPF projects were election commitments was ‘largely spurious’, as ‘most of the proposals were approved before the election with no suggestion that their approval was dependent on the outcome of the election’. In addition, he submitted that ‘there is no suggestion that an election commitment allows ministers, either before or after an election, to override all rules and processes in the interests of seeking electoral advantage’.
3.39
In appearing before the committee, Professor Mulgan made the point that calling the CCPF election commitments was ‘dishonest’, as:
… the notion of an election commitment is that you promise something at an election and, if you win the election, you have a commitment to produce it. There are policies which come under that heading, but these obviously didn't because these decisions were made before the election. They weren't made conditional on an election result, and so there is a distinction here. I'm not sure about whether the notion of an election commitment should cover everything, because it seems to be a blank cheque.
3.40
Professor Mulgan noted that the Minister for Finance, Senator the Hon Simon Birmingham, had argued that the ‘government’s electoral victory retroactively authorised all the car-park decisions made before the election’.
3.41
The committee notes with interest advice from Parking Australia, that it had met with Ministers Tudge and Fletcher in order to promote best practice and offer industry expertise to the CCPF. Parking Australia told the committee that in a meeting with Minister Tudge on 8 May 2019, it was ‘stated that funding was allocated prior to the election being called’ and the car parks ‘would be built, should they have been elected or not’.
CCPF project funding approval
3.42
The ANAO considered CCPF project funding approval, and at the time of its report in June 2021 found that:
assessment work has been completed for 10 car parks resulting in $100 million of Australian Government funding being approved for the full project (including delivery of construction work);
for a further 23 projects, the Department had assessed proposals for the funding of scoping/development work with $22 million in funding approved (representing seven per cent of the total Australian Government funding committed for those projects); and
Further assessment work was required in relation to:
whether the remaining $278 million in Australian Government funding should be awarded to deliver those 23 projects for which scoping/ development work has been approved; and
the remaining 11 projects with an aggregate commitment of $175 million.
3.43
The ANAO found that ‘inadequate assessment attention has been given to the eligibility of projects. The assessment guidelines do not address how the department will assess eligibility and was not addressed in the department’s project assessment reports’. The ANAO continued that:
For each of the 33 projects assessed up to 31 March 2021, the department identified in decision briefings provided to the Minister a subsection of the National Land Transport Act 2014 under which it considered the project to be eligible. The ANAO’s analysis was that, of those 33 projects:
three were not eligible under the subsection identified by the department, although they were eligible under another subsection;
one project was not eligible— a finding that has been accepted by the department with the department advising the ANAO that it is seeking to address this situation before construction commences; and
10 proposed sites were not attached to a rail station which raised questions as to their eligibility that were not addressed in the relevant project assessment reports, but were addressed by the department in responding to the ANAO.
3.44
The Secretary of the Department told Budget Estimates that the Department adhered to the requirements of the PGPA Act by noting there was an allocation of funding for CCPF projects under the broader UCF umbrella, but until such time as each project was signed off and agreements entered into with delivery partners, it would not recommend the Minister sign off on expenditure.
Abandoned and delayed projects
3.45
Following 2021-22 Budget Estimates, the Department confirmed that all commuter car park projects ‘currently have a proponent for the relevant stage of delivery for each project’.
3.46
However, since announcing the CCPF in 2019 several projects have been abandoned and the rollout of the remaining projects extremely slow, with completion not expected until 2026-27. Further, there appeared to be a disconnect between the aims of state and federal governments, exacerbated by non-existent or poor consultation by the Federal Government with state and council stakeholders.
3.47
For example, since making the initial announcements in 2019, the ANAO noted that there had been a number of announced changes to some CCPF projects, including changes to funding allocations and the cancellation of five car park sites with $51.3 million in unspent funding to be reallocated—with one of these cancellations later reversed in May 2021.
3.48
The ANAO provided several examples of how the lack of consultation had resulted in the cessation of some CCPF projects, and necessitated changes to the funding allocation. The ANAO drew attention to the following:
as at 31 March 2021, the Australian Government had determined not to proceed with the CCPF projects at Brighton Beach and South Morang stations in Victoria because, as detailed by the Department, ‘both of these projects face significant constraints and the state government indicated it would not act as the delivery agent’; and
decisions had been taken to increase the funding commitment for eight projects by a total of $39.7 million (48 per cent).
3.49
Further examples have been reported in the media and were provided to the committee as evidence to the inquiry. In the case of Mitcham, Minister Sukkar suggested that the ‘Victorian state government has determined that they are unable to construct the $15m multi-level train station car park’ planned for Mitcham. This assertion was strongly disputed by the Victorian Government, which said the claim was ‘completely false’.
3.50
Additionally, the Public Transport Users Association (PTUA) observed that while the federal budget had allocated funding for a 500-space car park at Surrey Hills in Victoria, the Victorian state government plans on eliminating that station. Further, the proposed stations at Elsternwick and Bentleigh face ‘local planning complications as well as questions over the probity of the unsolicited grants’.
Committee views
3.51
The committee questions whether the decision to approve the 27 CCPF projects—more than half under the current CCPF program—the day before calling an election is simply a coincidence. The approvals of 10 April 2019 and the announcements made during the election period, seem to ignore the fact that the decision was made by executive government prior to caretaker commencing.
3.52
There must be a clear distinction between the actions and announcements of a political party as distinct from the actions of government and decisions made by the executive.
3.53
As noted by the ANAO, the decisions made on 10 April 2019 were done so as part of the ordinary functioning of government and in that sense are uncontroversial. The committee is not persuaded by the evidence of the Department that the 27 CCPF projects agreed to by the Prime Minister on 10 April 2019 were election commitments. The committee joins with the ANAO—and other submitters—in being perplexed by the Department’s arguments and position on this.
3.54
The ANAO made one of the most important points in observing that regardless of whether they are election commitments, the Department had responsibilities under the NLT Act and PGPA Act, to ensure CCPF projects were eligible and appropriate for funding approval, and represented an ethical, efficient, effective and economical allocation of expenditure. This was not done in this case.
Caretaker conventions
3.55
The process of approving the projects on 10 April 2019, and then announcing them during the caretaker period also falls foul of the caretaker conventions, which clearly provide that, where possible, decisions made before the dissolution of the House of Representative should be announced ahead of the dissolution.
3.56
Further, the caretaker conventions state that ‘care should be taken to ensure that Commonwealth resources are not used to make announcements that involve partisan activities’.
3.57
The committee understands that there was apparently little time between the Prime Minister’s decision on the 27 CCPF projects and the start of the caretaker period, but subsequent public statements by government ministers and other members suggests that a lack of any pre-caretaker announcements may have served a specific purpose.
3.58
The commuter car park site selections and their announcements—despite being agreed to before caretaker—were depicted almost universally as election commitments, which they were not. For the most part, they were directed to specific, Coalition-held electorates (as discussed later in this report).
3.59
One possibility which is suggested by the evidence is that by arguing the CCPF site announcements were election commitments, it excuses the government from its apparent neglect of due process and proper decision‑making in first determining the feasibility, necessity and cost for each CCPF project. This should have occurred before the sites were announced.
3.60
The selection of CCPF sites, the consultation involved in this process and the role of the CCPF and UCF in reducing congestion are discussed elsewhere in this report.