Pressure is mounting to investigate a special grant to fund a leadership program pitched to Scott Morrison by Governor-General David Hurley. By Karen Middleton.

Inside Morrison’s secretive $18m leadership grant

Governor-General David Hurley at a launch in Canberra last month.
Governor-General David Hurley at a launch in Canberra last month.
Credit: AAP Image / Mick Tsikas

The Albanese government is under pressure to decide whether to overturn an $18 million prime ministerial grant Scott Morrison made for a leadership program at the governor-general’s request – with a deadline looming and at least one backbencher considering asking the senate to veto it.

The grant recipient, the mysterious Australian Future Leaders Foundation, was established in April last year solely to create and run the proposed program, which Governor-General David Hurley had pitched personally to Morrison. The foundation still has no office, no website and an incomplete board, although The Saturday Paper has been told prospective members have agreed to join once the funding is secured.

Hurley pitched for funding to set up a program to identify and nurture people with potential and contribute to raising future generations of leaders. He proposed that business executive and project manager Chris Hartley run it, through the foundation Hartley subsequently created for that purpose.

The foundation was granted the money through a closed, non-competitive process for which there is no merits review. It was exempted from having to go through the central online GrantConnect hub, and from having details published, although it is potentially subject to examination by the Australian National Audit Office if referred.

In February, the Morrison government updated its 2020-21 budget estimates to allocate $2 million to the Australian Future Leaders Foundation before the end of June and another $12 million over the following three years.

There was a little more information in the 2022-23 budget, which was presented in March. It described an $18 million allocation over five years for the proposed leadership program – the $14 million already outlined plus $4 million for the extra year, as well as an ongoing commitment of $4 million every year after that.

The grant gained public attention during the budget estimates process in April because a legal instrument had been registered to authorise it. No money had been transferred – and still hasn’t been. The new government must now decide whether to honour the grant promise or withdraw it.

The Saturday Paper understands extensive work has been done during the past two years to design the leadership program, involving lawyers, academics and others acting pro bono.

The Australia Future Leaders Foundation was registered on April 13, 2021, and has three directors – Hartley and advertising executives Andrew and Julie Overton.

Questions are being raised about the process of awarding the grant. Hurley also advocated for it privately with then opposition leader and now prime minister Anthony Albanese, after Hartley put the idea to him almost two years ago. Hartley is now the foundation’s executive director and Hurley’s published vice-regal diary shows that they have had 12 formal meetings or conversations since late January last year, the most recent on August 18.

The update to last year’s Prime Minister and Cabinet portfolio budget, known as the additional estimates and in which the funding was first revealed, followed December’s midyear economic and fiscal outlook (MYEFO) statement. The apparent reluctance to advertise the grant’s existence, or indeed make an announcement about what its proponents argue is a very positive program, left some in the former government puzzled.

Other than line items in the budget papers, there was no public announcement about the grant from the Morrison government, the governor-general or the foundation.

The election interrupted the grant process and the proposal’s supporters say the foundation’s administrative and governance structures cannot be created until the funding is confirmed and delivered. The Morrison government awarded the foundation charitable status late last year, backdated to July, making any eligible donations it received after that time tax deductible.

Aside from the appropriations legislation, what makes the grant legal is a regulation outlining the constitutional powers under which it is made. Regulations, also known as delegated legislation, are a normal way of making law but they do it effectively by decree, bypassing any advance parliamentary scrutiny. The senate has the power to disallow this regulation no more than 15 sitting days after its March 3 creation. Anyone who wants it to do so must give notice by September 13.

The Saturday Paper understands that, before parliament was dissolved for the federal election, the senate’s standing committee for the scrutiny of delegated legislation sought more information about the grant from the Department of the Prime Minister and Cabinet. It is not clear what, if any, clarification it received and both its former chair and deputy, the Liberals’ Concetta Fierravanti-Wells and Labor’s Kim Carr, have since left the parliament. The committee had not formally registered an objection or raised questions by the time the election was called, either with the prime minister or then Finance minister Simon Birmingham, whose signature is on the regulation.

Newly elected independent senator David Pocock, who has since joined the committee, is considering whether to give notice of an intention to disallow the regulation – at least to buy time for issues around the grant to be considered. That would also allow officials from both the prime minister’s department and the vice-regal official secretary’s office to be questioned during senate estimates hearings after the October budget and before any money is paid out.

Pocock is concerned about transparency. “The eligibility criteria for the grant appear not to have been published,” he told The Saturday Paper. “The grant was exempted from being published on GrantConnect and was not subject to a merits review process. I’ve heard loud and clear that people want more transparency and integrity. I think there is a case to more closely examine the circumstances around this instrument.”

Another committee member, Labor backbencher Louise Pratt, said inquiries were continuing. Now chaired by Labor senator Linda White, the newly configured committee will hold its first meeting next week. Louise Pratt is also chair of the finance and public administration legislation committee, which conducts the estimates hearings.

New contentious issues are now emerging around the government’s grant process, with an explanatory memorandum to the regulation suggesting the Morrison government planned to directly control the manner of choosing candidates for the leadership program and deciding what they would learn.

“The Commonwealth is uniquely placed to determine the selection process for participants and the composition of any selection panel,” the memorandum says. It continues that this should be done “in line with the Commonwealth’s perception of who is suited to be a future national leader, as well as to identify the topics of national importance to be addressed through the program”.

This contradicts the original proposal, which was for an independently run program open to a diverse range of candidates representing the whole Australian community. The Saturday Paper understands the grant proponents were not consulted about the language.

The implications of this wording – attached to a legal document – are not clear. But the project’s proponents, possibly including the governor-general, appear unlikely to support its retention.

Through his department, Scott Morrison drove the grant process in conjunction with David Hurley. The money was appropriated through the Department of the Prime Minister and Cabinet and authorised, as is the case with all legislation, by Hurley himself.

A spokesperson for Hurley’s official secretary, Paul Singer, told The Saturday Paper this week that the previous government had made the funding decision independent of the viceroy.

“The governor-general had no involvement in deciding the mechanism and, prior to it being brought forward at federal executive council, was not aware of the mechanism chosen by the government,” the spokesperson said. “After a matter goes through federal executive council, it is tabled in each house of parliament. The process, therefore, is discoverable and able to be considered and debated by the parliament.”

The spokesperson rejected previous public descriptions of Hurley’s role in the process as “lobbying”.

“It is on the public record that the governor-general had several conversations with the then prime minister about the leadership program, the potential national value and his support in the design and development of the program,” he said. “This was not ‘lobbying for the funding’. Funding decisions … were and are always a decision of government.”

Singer was questioned during a post-budget estimates hearing in April about what is being called the Governor-General’s Future Leaders Program. Asked about the governor-general’s connection to Chris Hartley, he described it as a “tangential, peripheral relationship”.

“Other than briefly meeting Mr Hartley in 2019 in the context of the King’s Cup rowing regatta, there is no existing relationship between the governor-general and Mr Hartley,” Singer later confirmed in a written answer to a question placed on notice at the hearing. He said he had also met Hartley before.

“The official secretary participated in the Commonwealth Study Conference in 2015, during which he met Mr Hartley,” the response said.

Chris Hartley has had a longstanding involvement in the Commonwealth Study Conference, an initiative founded by Prince Philip, Duke of Edinburgh in 1956. For his service to the Commonwealth through that program, the Queen awarded him a royal honour in October 2020, making him a Lieutenant in the Royal Victorian Order, which entitles him to use the initials LVO after his name. Aside from these details, he appears to have a very limited online presence. Hartley declined to comment on the grant process when contacted this week. The Saturday Paper is not suggesting there is anything inappropriate about Hartley’s involvement.

The regulation clarifying the grant’s constitutional status is titled Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet’s Portfolio Measures No. 2) Regulations 2022. Dated March 3, 2022, it bears the name of then Finance minister Simon Birmingham. As revealed recently, Scott Morrison also had administrative power in the Finance portfolio at the time. Secretly obtained a year earlier, that power was not exercised here.

Morrison’s relationship with Governor-General David Hurley has also been in focus in the context of the so-called secret ministries – the former prime minister’s decision to take on responsibility for five extra portfolios in total throughout 2020 and 2021, without telling most of his colleagues.

Last week, Prime Minister Albanese announced that former High Court justice Virginia Bell would conduct an inquiry into how that came about and what the implications may be. Bell will report back by November 25.

Under the terms of reference for the inquiry, she will also examine and report on the practices employed in appointing ministers under two sections of the constitution – section 64, which provides the power to administer a department, and section 65, under which the governor-general directs someone to hold the office of minister in a specified portfolio.

“The inquiry will make recommendations to the government on any changes which could provide greater transparency and accountability to ensure that this can never happen again,” Albanese said, “and to ensure that we have a system of government in this country that is transparent, where there are checks and balances.”

Bell has not been tasked to examine the role of the governor-general or his office in either the way Morrison assumed the extra powers or in the secrecy that surrounded it.

Separate from that issue, Albanese has not confirmed whether he will allow the grant to the Australian Future Leaders Foundation to stand. The Saturday Paper asked his office but did not receive a response before time of press.

Spared from Bell’s inquiry around secret ministries, David Hurley’s official secretary still faces questions about the vice-regal role in the other matter of securing $18 million to bring an idea to life.

“The governor-general supports the vision and intent of the Australian Future Leaders program and has appreciated the expertise, experience and support of a broad cross-section of the Australian community in its design,” the official secretary’s spokesperson said. “Regardless of any public funding, he would be very comfortable with it being called the Governor-General’s Australian Future Leaders Program – the objective of building leadership capability in Australia and bringing future leaders together is one which we should all share.”

In other words, the viceroy believed it was a good idea at the time and still does, whether taxpayers fund it or not.

This article was first published in the print edition of The Saturday Paper on September 3, 2022 as "Inside Morrison’s secretive $18m leadership grant".

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