John Barilaro inquiry reveals blurred lines between ministers, public servants

For the senior public servants who would have their emails, decisions and text messages pored over in full public view, the parliamentary probe into John Barilaro’s appointment to a plum New York trade role was not ideal. But it was, to use the words of the state’s top bureaucrat, utterly predictable.

They were right to be concerned. Over six weeks of evidence, the inquiry has prized open the internal machinations of the public service to lay bare the muddied line separating the state’s most highly paid public servants and the government ministers who can hire or fire them on a whim.

Witnesses in their evidence have proclaimed the lofty ideals of a government sector that operates without fear or favour. But lines of questioning have more often revealed political pressure and nervous bureaucrats.

“The relationship between politicians and the public service is a perennial challenge,” says Andrew Podger, a former senior bureaucrat and public service commissioner.

“Problems of excessive political pressure are occurring across jurisdictions and are not confined to one side of politics or the other… Clearly the head of Investment NSW felt constrained in exercising her authority, and pressure was known also to the head of the NSW Premier’s department. ”

But Investment NSW chief executive Amy Brown’s opening statement to the inquiry in June gave nothing away. “I am committed to the public sector core values ​​of integrity, trust, service and accountability. That includes the Westminster principle of an apolitical and impartial public service,” she said.

The process that appointed Barilaro was consistent with the government sector employment act, Brown insisted, and the independent Public Service Commissioner, who was on the hiring panel, would back her in on that fact.

Brown appeared protective of Stuart Ayres, who was the relevant minister when she was promoted to secretary of the NSW Department of Enterprise, Investment and Trade without a recruitment process earlier this year.

“Minister Ayres … is very respectful of the public service and our processes and so he was very cautious about not having those sorts of conversations [about the appointment],” she said under questioning.

The early days of the saga exposed Brown and set her up to take the fall if required.

Premier Dominic Perrottet was quick to distance himself from the process. In question time in June, he emphasized Brown was the “final decision-maker” and the appropriate person to explain what went on. “It would not have been lawful for me as premier to intervene in any step of the process,” he told parliament.

Later that day he said: “If there were no good reasons behind the decision, I’ll take action.”

By the time of Brown’s second appearance, the department secretary was taking a different tone. It was six weeks later, but just hours after Ayres had resigned amid concerns about his involvement in the recruitment process that had emerged in a separate review Perrottet had commissioned.

She admitted the process that appointed Barilaro was not conducted at “arm’s length” from Ayres, who had told her within days of Barilaro’s application that the former deputy premier would make a good candidate.

While she maintained she was responsible for the decision, Brown confessed she “had some nervousness” about the ramifications.

That was when she sought advice from the department of premier and cabinet secretary, Michael Coutts-Trotter. Brown said she asked him in April whether there was “anything that you wish to tell me that would dissuade me from making that decision.” “I think he shrugged and said ‘no’,” she said.

In another exchange from May, when Brown told Coutts-Trotter by text that Barilaro would take on a plum New York trade role with the blessings of the premier and deputy premier, he responded with: “Righto”.

Brown said his replies did not imply that there was nothing to worry about. Rather, “it was more ‘I’m not going to tell you anything to stop it going ahead.’ Like, a bit as though he was resigned to it,” she told the inquiry.

Coutts-Trotter, an experienced bureaucrat, was Perrottet’s choice to lead the public service when he became premier. Information in the public domain has suggested he took a neutral role in Barilaro’s appointment of him; it is unclear whether he escalated Brown’s concerns to the premier.

Coutts-Trotter’s text to Brown – that the Labor probe was an “utterly predictable” outcome – was released this week as part of the inquiry, which has entered its seventh week and is ongoing.

Ministers who have worked with Brown regard her as intelligent, but there is a view that she was promoted too quickly, without the requisite experience for such a senior role.

Asked if Ayres’ interventions had put her or her agency in a difficult position, Brown said: “That’s fair.”

“It’s tough being a public servant at the best of times.”

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Much of Brown’s angst related to the back-and-forth surrounding the government’s desire to convert the trade roles from public service decisions to ministerial appointments.

The political uncertainty had a clear impact on Brown. She described it as both disheartening and disillusioning, and said it led her team to feel ministers did not have faith in their decision-making.

“I felt the need that I had to keep checking [with the minister] – partly because of this gray area that we were in around public service or ministerial. But, broadly speaking, I wanted to make sure he was comfortable,” she said.

Then, last week, the state’s public service commissioner Kathrina Lo weighed in. She was adamant that fear of controversy should never stymie an independent, merit-based selection.

But she, too, had lost faith in the process and even feared she was being used – by Brown or the hiring firm – as political cover.

Lo said she would not have signed off on Barilaro’s appointment if she knew “the degree of ministerial involvement, including input into shortlisting and provision of an informal reference” that had gone on behind the scenes.

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Podger, now a professor of public policy, said the political arm of government had put pressure on what was ostensibly a public service decision.

“The public service must be responsive to the elected government. That’s part of the democratic principle: serve and be loyal,” he said. “But at the same time, it has to have a degree of independence, make appointments on merit, exercise law in an impartial way, be professional and expert.”

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He said striking the right balance was always an issue, but it has been made worse over the last 20 years with what he describes as “an army of political advisers controlling the way the public service operates”.

The inquiry has opened a window into that too: it heard Ayres’ office would meet weekly with Investment NSW and that the change in policy for the trade role appointment process – for which Investment staff provided advice – was managed by former Barilaro adviser Joseph Brayford.

Part of the picture also involves the fact department secretaries – whose pay packets at the top end are above $600,000 – are on term contracts and can be hired and fired by ministers at their discretion.

Podger said it meant top bureaucrats would often “pick and choose” when they stand up to a minister.

Colleen Lewis, a professor at the Australian Studies Institute at ANU, said it created a tension between political advisers – who have grown in number – and increasingly dispensable senior bureaucrats.

“There’s not a lot [the bureaucrat] can do – the ministry is their boss. What’s happening in terms of the relationships is that frank and fearless advice takes second priority to the advice from the ministerial adviser,” she said.

“We don’t want to go back to the days of the mandarins, who ran a particular government for 35 years and thought of it as their fiefdom, but we have to find a compromise.”

Top silk Geoffrey Watson, SC, a former counsel assisting the Independent Commission Against Corruption, who has represented former bureaucrat Jenny West in the inquiry, also said it was a “genuine problem” that department heads had no job security.

“It means you’re less capable of providing that kind of independent advice that is required in these dramatic circumstances, this being a very good example,” he said.

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“If you’re getting any political input in the process, you are compromised. High-paid public servants owe their jobs to political appointments. Their appointments can come and go … You can never divorce yourself from the influence.”

If there were concerns about the hiring process or political influence, Watson said it was the role of a public servant to report it.

There are codes of conduct for both public servants and ministers that apply in NSW, although much relies on individuals being proactive about their responsibilities.

The NSW Ombudsman is the main option for reporting wrongdoing and maladministration in government agencies, but a review described existing laws as “overly technical and complex” and full of “trip hazards” for public officials to navigate. New laws – due to come into effect in October next year – are intended to encourage public interest disclosures.

There is also the NSW Public Service Commission, but it does not have complaint-handling powers and Podger said it needs to be strengthened.

At the Commonwealth level, secretary appointments are made by the prime minister, but only after a report by the prime minister and cabinet secretary and the public service commissioner. The commissioner is also responsible for certifying senior executive appointments are made strictly according to merit, and these appointments are usually ongoing, not term contracts. The NSW equivalent does not have these statutory responsibilities.

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Chair of the Center for Public Integrity and former NSW judge, Anthony Whealy, QC, said further reforms should be considered to mitigate future controversies.

“What emerges from this case is the real political danger with the perception that integrity issues have not been followed where a minister is appointed so soon after his retirement,” he said.

“We ought to have a prohibition on a former minister being appointed for at least 12 months after resignation, to avoid that inevitable perception that someone’s getting a job for the boys.”

He also vouched for ministerial appointments made at the recommendation of a “truly independent panel”. “If they don’t agree, there need to be transparent reasons,” he said.

Whealy said intersections between government departments and ministers were inevitable and would always be fraught, but the Barilaro saga had exposed faults on both sides.

“It’s not truly an independent process, and neither is it ministerial – it’s a hybrid of the two. Unfortunately here, you can’t work out which one’s which.”

Lewis said it was necessary “to look quite broadly at what’s happening.”

“The forensic examination that is going on now – from the opposition’s point of view – is a gift,” she said.

“But it is certainly not peculiar to NSW or the Liberals. There are structural and cultural problems that need fixing in NSW and beyond.”

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