As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
Trust me: Pezzullo’s mega powers
On Friday last week, former attorney-general George Brandis went to see Michael Pezzullo, the secretary of the new Department of Home Affairs.
The meeting was a scheduled consultation ahead of Brandis’s departure for London to take up his post as Australia’s new high commissioner. It was cordial, even friendly. But what the soon-to-be diplomat Brandis did not tell Pezzullo during the pre-posting briefing was that he had singled him out in a private farewell speech he had given to the Australian Security Intelligence Organisation on the eve of his retirement from parliament two weeks earlier.
As revealed in The Saturday Paper last week, the then senator Brandis used the ASIO speech to raise concerns about the power and scope of the new department and the ambitions of its secretary. Brandis effectively endorsed the private concerns of some within ASIO that the new security structure could expose the domestic spy agency to ministerial or bureaucratic pressure.
In a regular Senate estimates committee hearing this week, Pezzullo described his meeting with Brandis – on the day before The Saturday Paper article appeared – as Opposition senators asked him for assurances that ASIO would retain its statutory independence once it moves from the attorney-general’s portfolio to become part of Home Affairs.
“I had a very good discussion on Friday,” Pezzullo told the committee, of his meeting with Brandis.
“He’s seeking instructions and guidance on performing the role of high commissioner. None of those issues came up, so I find that of interest. If he has concerns, I’m sure that he would himself raise those publicly.”
Labor senator Murray Watt pressed: “So he raised them with ASIO but not with you?”
“I don’t know what he raised with ASIO,” Pezzullo responded. “… You should ask the former attorney-general if he’s willing to state any of those concerns … He’s a high commissioner now, so he may not choose to edify your question with a response, but that’s a matter for him. As I said, he didn’t raise any of those concerns with me when we met on Friday.”
The Saturday Paper contacted George Brandis but he had no comment.
Watt asked Pezzullo for assurance there would be no change to the longstanding provisions in the ASIO Act that kept the agency under its director-general’s control and not subject to instruction from the departmental secretary. The minister representing Home Affairs in the Senate, Communications Minister Mitch Fifield, said: “It is not proposed that there be a change to that effect.”
The new Department of Home Affairs takes in Immigration and Border Protection, the Australian Federal Police, the Australian Criminal Intelligence Commission, the Australian Transaction Reports and Analysis Centre, known as AUSTRAC, and ASIO.
ASIO does not move until legislation is passed to authorise the shift, and will retain its status as a statutory agency.
Pezzullo addressed the fears of those questioning his department’s reach. He said some commentary mischaracterised the arrangements as “being either a layer of overly bureaucratic oversight of otherwise well-functioning operational arrangements or, worse, a sinister concentration of executive power that will not be able to be supervised and checked”.
“Both of these criticisms are completely wrong,” he said.
Pezzullo had already described his plans, both to the committee and in a speech he made in October last year, in which he spoke of exploiting the in-built capabilities in digital technology to expand Australia’s capacity to detect criminal and terrorist activity in daily life online and on the so-called “dark web”.
But the language he used, referring to embedding “the state” invisibly in global networks “increasingly at super scale and at very high volumes”, left his audiences uncertain about exactly what he meant.
Watt asked if there would be increased surveillance of the Australian people. “Any surveillance of citizens is always strictly done in accordance with the laws passed by this parliament,” Pezzullo replied.
In his February 7 speech to ASIO, George Brandis described Pezzullo’s October remarks as an “urtext”, or blueprint, for a manifesto that would rewrite how Australia’s security apparatus operates.
Pezzullo hit back on Monday. “Any suggestion that we in the portfolio are somehow embarked on the secret deconstruction of the supervisory controls which envelop and check executive power are nothing more than flights of conspiratorial fancy that read into all relevant utterances the master blueprint of a new ideology of undemocratic surveillance and social control,” Pezzullo said.
He told the Senate committee parliament provided the legal framework for how ASIO operated and who controlled it. “Ministers and senior officials will conform with those requirements,” he said.
“You set the laws. The laws that you set will be the rules that we follow. It’s not for me to give you an assurance about how ASIO will be managed under the law because you set the laws … Nothing in the establishment of the department will change or affect the accountability and oversight arrangements that this parliament puts in place through the passage of relevant laws.”
The first tranche of changes to legislation required to complete the establishment of Home Affairs is currently before the parliament.
The same day that Pezzullo appeared before Senate estimates this week, the powerful parliamentary joint committee on intelligence and security – one of the bodies with legislated oversight of intelligence agencies – handed down its report into the proposed amendments.
It suggested some should not proceed, including one relating to the autonomy of the independent inspector-general of intelligence and security, currently Margaret Stone.
The government appears likely to accept its recommendation.
The inspector-general, or IGIS, reviews the activities of Australia’s six intelligence agencies and undertakes investigations where necessary.
While Brandis and others have been concerned about the role of the Home Affairs minister, Stone was worried about the role of the attorney-general.
Among the first lot of proposed legislative changes was a move to grant the attorney-general the authority to ask the IGIS to establish particular inquiries.
Currently only the prime minister has that power.
In her submission to the joint committee’s review, Stone strongly opposed that move. “The power of the attorney-general to compel an inquiry would materially detract from the inspector-general’s ability to assure the public, as well as parliament, that the decision to conduct an inquiry is free from political influence,” her submission said.
In evidence before the committee, she said she remained concerned that because the attorney-general will retain the power to authorise ASIO surveillance and search warrants and order special investigations under the new structure after it moves to Home Affairs, there could be a perception of a conflict of interest.
Stone said that while “sophisticated and educated people” would understand the distinction, uninformed others might imagine a conflict.
“We are dealing with perceptions that can be exacerbated by journalism that may not be as balanced and as careful as we would like,” Stone told the security and intelligence committee on February 7. “… If the attorney-general is authorising warrants then it will lead to a perception that ASIO is the attorney-general’s creature and that the attorney-general may have a political interest in defending it. Whether or not that perception is soundly based, it is a reality that is likely to arise.”
Stone was not opposing the attorney-general authorising the warrants; she was opposing the additional power to then issue requests to the IGIS for particular investigations.
“When I talk to the public, the single most cynical, sceptical, critical comment that’s made about our office and its efficacy in discharging those objects is that it’s not really independent,” Stone said. “[They say], ‘It’s in the prime minister’s portfolio; it’s an arm of the government; you’re not really independent.’ To my mind, actual and perceived independence are equally important.”
She said adding another minister, particularly one authorising aspects of an agency’s activity, potentially created both a perceived compromise of independence and a real one.
The intelligence and security committee also recommended another change: that references to the word “minister” in legislation governing the roles of both the IGIS and another overseer, the independent national security legislation monitor, be changed to specify “the attorney-general” where they referred to the person administering the act. That change would avoid any confusion as to whether the attorney-general or the home affairs minister was in charge.
Those two agencies plus the Commonwealth Ombudsman are being transferred into the attorney-general’s portfolio under the restructure, as ASIO moves out.
The committee also recommended that parliament not vote on the first tranche of changes until the final lot of legislative amendments have also been presented for scrutiny. They relate specifically to shifting ASIO but leaving those ministerial authorisation powers with the attorney-general.
Some in the security community concerned about a creeping transfer of authority to Home Affairs are urging that the detail of those amendments be particularly closely scrutinised.
Other changes to authority and roles have already been implemented by regulation, avoiding having to ask parliament’s permission.
Among those, the power under the Criminal Code to authorise the AFP to apply for an interim control order over terrorism suspects will now also be extended to all the junior ministers in the Home Affairs portfolio. That means along with senior minister Peter Dutton, the Citizenship and Multicultural Affairs Minister Alan Tudge will have that power, as will Assistant Home Affairs Minister Alex Hawke.
Previously, the authorisation power was held by then attorney-general George Brandis – now Christian Porter – his junior, former justice minister Michael Keenan, and their assistant ministers, previously known as parliamentary secretaries.
Pezzullo insists that in practice, Dutton would be the one issuing the authorisations.
This week, rather than any of the ministers, it was Pezzullo again speaking out to directly reject the criticisms of Home Affairs and explain its purpose, via his scheduled estimates appearance.
As the relevant ministers are in the House of Representatives, neither are allowed to appear before Senate estimates committees, which are only authorised to interrogate Senate ministerial representatives and public servants.
Pezzullo said the government had decided to reorganise itself “before the nation is caught out unprepared in the face of new vectors of threat and risk”.
He outlined what he said were the new department’s objectives, among them taking advantage of the creation of “this larger and more integrated portfolio” to do what wasn’t possible when the agencies were separate.
His emphasis was on intelligence – human and artificial – and analytics. The latter refers to the instant matching and linking of data that establishes patterns and identifies anomalies.
Pezzullo highlighted data exploitation, advanced identity and biometrics capabilities, and the use of advanced digital systems that have these processes embedded in them, saying the volume of data involved in the global movement of people, goods and information was now so huge it was beyond the capability of human teams to monitor it.
Pezzullo said he would “absolutely not” have the power to direct ASIO.
“There’s no capacity in the current law for that to arise, and to put that in place in law you’d have to change the law. I, for one, as a citizen, if nothing else, would not want the parliament to pass such a law,” he said.
Responding to suggestions of increased surveillance of Australians, he emphasised repeatedly the new department’s role in combating child exploitation, ranking it alongside counterterrorism.
“You’re not surveilling the Australian population,” he said. “You’re surveilling – potentially – abhorrent and obnoxious practices undertaken by child exploitation networks to try to separate themselves off from being monitored through the internet; that’s why they’re in the dark web. Now, Australians may or may not be caught up in some of those operations, that is true.”
He said such monitoring and detection work had to be done on a large scale, in real time and invisibly, “because you don’t want those child exploitation gangs, child paedophile gangs, to know how you go about detecting them”.
“If that requires invisible work, I sit before you guilty as charged.”
Pezzullo said the object “isn’t to surveil the population” but to thwart mass casualty attacks and protect children.
“We, like you, are fellow Australians who cherish our liberty and we don’t want to be surveilled by the state,” he said. “I don’t want to be surveilled by the state.”
The committee was told there had been extensive communication with staff, who were being transferred to other portfolios, about what it would mean for them. Pezzullo said the merger thus far had been “quite seamless”.
ASIO’s director-general, Duncan Lewis, told the committee relations with Home Affairs were already close.
Lewis was asked about the 2013 letter his agency received from the then secretary of the Immigration and Border Protection Department, Martin Bowles, asking it to slow down processing security assessments of people otherwise found to be refugees as part of a government move to avoid granting permanent visas.
“We responded to what was then Immigration and Border Protection’s priorities,” Lewis said. “That is so they can work through these very large caseloads.”
He said he did not accept that acceding to the government’s request amounted to denying natural justice to refugees. He said 23,400 cases had been referred to ASIO in the year preceding the letter and that it prioritised them according to security risk.
Lewis reminded the committee that Bowles acknowledged in his letter that he did not have the power to direct ASIO and it was a request.
“While I was not the director-general at that time, I can guarantee you that ASIO would not and would not now or ever be influenced in terms of our core function, which is around the security threat to Australia. That comes as No. 1 and then we are happy to go to the administrative triaging according to the Immigration Department’s requirements.”
Lewis was asked directly about the fate of ASIO’s oversight arrangements under the new Home Affairs structure.
“I am pleased to say those oversights are in prospect of remaining,” he replied.
He said after his agency’s 70-year association with one department, the transfer to another was “not something we take lightly”. He was working closely with Home Affairs to ensure it was swift and efficient and to allay any concerns his own staff had.
He said while his discussions with staff were private, he was ensuring everyone was kept informed and that “their anxieties, to the extent there always are anxieties when there is change, are properly catered for and managed”.
He said there was “not anything in particular to remark on”.
This article was first published in the print edition of The Saturday Paper on Mar 3, 2018 as "Trust me".
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