News

New details in the governor-general grant saga reveal the haste with which Scott Morrison allocated funding – and show that support was also sought from TAB and British American Tobacco. By Karen Middleton.

Morrison hid governor-general grant money for a year

Governor-General David Hurley (right) and his wife, Linda, with then prime minister Scott Morrison at a special prayer service to commemorate the death of Prince Philip, held the day before Morrison asked to be appointed Resources minister.
Governor-General David Hurley (right) and his wife, Linda, with then prime minister Scott Morrison at a special prayer service to commemorate the death of Prince Philip, held the day before Morrison asked to be appointed Resources minister.
Credit: Bianca De Marchi / AAP Image

Prime Minister Scott Morrison earmarked millions of dollars for a pet project of Governor-General David Hurley more than a year before revealing it publicly, four months before the recipient organisation legally existed and just three weeks after Hurley wrote asking for support.

Documents released under freedom of information laws reveal funding was quarantined for the Australian Future Leaders Foundation in late 2020, 15 months before it was disclosed in the March 2022 federal budget. The grant fell below the threshold for cabinet approval and was hidden in the mid-year economic and fiscal outlook (MYEFO) in late December 2020, among “decisions taken but not yet announced”.

The money was to fund a leadership program for promising young Australians, to be run by an organisation that did not formally exist at the time. The foundation was not registered until April 13, 2021, and continues to list only three directors: its now chief executive, expatriate British–Australian Chris Hartley; and advertising executives Julie and Andrew Overton, who are also co-directors with Hartley in another non-profit venture, the King’s Cup Organising Committee Ltd.

Via his official vice-regal secretary, Paul Singer, the governor-general has denied involvement in the funding arrangements.

At a senate estimates committee hearing on October 28 this year, Singer challenged the suggestion Hurley had discussed funding with Morrison multiple times.

Singer said “it may well be” that they had spoken about the program but that funding decisions were for the government.

A spokesperson for Singer’s office said later it was “on the public record that there were conversations with the then prime minister and other parliamentarians” about the program but funding was a government decision.

The FOI documents from the Department of the Prime Minister and Cabinet (PM&C) reveal multiple contacts between Government House and government officials on the funding issue. Together with information The Saturday Paper has obtained, and evidence to senate estimates hearings, they begin to reveal how the grant came about and the lengths to which its proponents – including at Government House – went to secure it. To help the venture along, Hurley invited almost 70 influential individuals to twin “roundtable” events at the Sydney vice-regal residence, Admiralty House, on May 17 last year, to hear about the foundation and its proposed leadership program. Hurley argued its importance to the nation. Hartley asked for support, circulating pledge forms seeking in-principle commitments of “talent, time, treasure” and “thought leadership”.

“The governor-general and office did not seek donations,” a spokesperson for Singer’s office told The Saturday Paper. “The foundation did seek indications of intended support.” He said these amounted to “willingness to contribute to the design, willingness to give time, and expressions for in-kind or financial support in due course”.

Various offers were made. At least one commitment was formalised, although it is not clear now if it will proceed.

The Saturday Paper has learnt those invited included senior employees of British American Tobacco, betting outfit TAB, mining company Rio Tinto and alcohol giant Lion. There were also representatives from the pubs sector and real estate development, along with executives from banking, soft-drink manufacturing, insurance, grocery retail, media and social media, technology, telecommunications and others.

Some current and former public sector figures were also present, along with senior figures from academia and the union movement. They went because the governor-general invited them. Some thought the program a good concept, worthy of support. Others wondered why they were there and what problem the idea was trying to solve.

 

Chris Hartley began lobbying for support in mid-2020 and it was Paul Singer who brought Hartley and David Hurley together around the idea. At an earlier estimates committee hearing on April 4 this year, Singer was asked how he and Hurley knew Hartley.

Responding only about the governor-general, Singer described a “tangential and peripheral” relationship, saying Hurley met Hartley through the annual King’s Cup rowing regatta. A former chief of the Defence Force, Hurley has attended King’s Cup events in both his role as governor-general and, before that, as New South Wales governor.

In response to a written question, Singer later explained his own relationship with Hartley and elaborated on the association with his boss. “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’s statement said. “The Official Secretary participated in the Commonwealth Study Conference in 2015, during which he met Mr Hartley.”

Now known as the Duke of Edinburgh Commonwealth Study Conference, that organisation is an international leadership initiative of the British royal family and operates on a model similar to the one Hartley had in mind. Both Hartley and Singer received personal honours from Queen Elizabeth II for services to the sovereign.

On October 28 this year Singer was asked when he personally knew of Hartley’s idea. He answered only that his office was aware in July 2020. It appears Hartley pitched it as a legacy piece for Hurley, a vice-regal contribution to the nation’s future. Singer persuaded his boss to become its patron. Hurley approached Morrison for support.

 

When the money was set aside, few specifics on either program or organisation were available and no government due diligence had been done.

Singer told estimates that Hurley wrote to Morrison on November 26, 2020, “inviting the then prime minister to take a brief on the project”. MYEFO was published three weeks later, on December 20. The funding was only formalised and disclosed 15 months after that, in this year’s March 29 budget. In between, in late 2021, the Australian Future Leaders Foundation was granted charity or deductible gift recipient (DGR) status so it could attract tax deductible donations.

Treasury FOI documents show this involved a special arrangement and expedited process that saw approval within eight months instead of the usual two years. The specific listing meant the foundation needed its own legislative approval and bypassed the usual qualifying criteria – which, Hartley admitted in his April 27, 2021, submission, the organisation did not meet. Treasury officials had concerns about Hartley’s credentials but the DGR decision – requiring the treasurer’s approval – was formalised in the 2021 MYEFO on December 8, 2021, backdated to July 1.

That the funding was ring-fenced so much earlier than disclosed previously may explain reports that Hartley had boasted of securing support more than a year before the budget confirmed it. PM&C documents show he hoped Hurley and Morrison would launch the program in 2021.

But a delay in formalising the $18 million grant and the $4 million promised every year thereafter meant no money had flowed by the time of this year’s May federal election.

A range of factors appear to have caused the delay, including officials’ concerns about Hartley’s proposed structure and “excessive” estimated costs, and the fact that the project appeared completely dependent on obtaining both government funding and DGR status. Hartley had defended his numbers and said it could not proceed without either.

To complicate it further, Morrison signed the approval document a week too late to make the cutoff for funding this financial year. But the money was approved, with then minister assisting the prime minister Ben Morton indicating more could follow. The election was called on April 10, before it could be transferred. In September, the new Albanese government cancelled both the initial and ongoing grants.

 

After funding was quarantined in 2020, Chris Hartley set about gathering support with Singer’s help and Hurley’s backing.

The Saturday Paper has identified some of those invited to the Admiralty House “roundtable” morning and afternoon tea events on May 17 last year. Singer sent the invitations on his letterhead. He told estimates that the governor-general approved the guest list.

In correspondence with PM&C before and after, Chris Hartley said he had broad support, including pro-bono assistance. Emphasising diversity, he proposed a female board chair and Indigenous involvement, “mission positive”, curious and collegiate directors, as well as a spread of geographic, societal, generational and “cognitive” representation.

Hartley leveraged the largely in-principle expressions of support – some made out of politeness and some more substantial – to assure the government his project had widespread endorsement.

Brian Schmidt, vice-chancellor of the Australian National University, was among a dozen academic representatives at the May 17 roundtables. Approached two months earlier, he thought the program seemed like a good idea.

“The idea of having a leadership program that would bring together a very diverse group of Australians had some appeal and I was happy to support it as part of our role as a national university,” Schmidt told The Saturday Paper this week. “It is unfortunate that the details underpinning the program have not been done in a way that has led to a successful outcome.”

Public and community sector invitees included Sex Discrimination Commissioner Kate Jenkins and her predecessor, Elizabeth Broderick, Australian Council of Trade Unions president Michele O’Neil, and former PM&C secretary Martin Parkinson.

Lisa O’Brien, who is chair of the Australian Education Research Organisation, was also invited. O’Brien had previously headed up The Smith Family but had left three months earlier. The Saturday Paper has been told The Smith Family was mentioned later as supporting the leadership program. A Smith Family spokesperson told The Saturday Paper no employee had attended the May 17 events and it has had no involvement with the proposed program.

In his pitch document, sent to PM&C before the event, Hartley claimed program “champions” included “charities, CEOs, trade unions, sporting codes, Public Service, Business Council of Australia and 13 Universities”. A BCA spokesperson told The Saturday Paper it was broadly supportive but made no formal commitment.

An ACTU spokesperson confirmed O’Neil attended “at the invitation of the governor-general”.

“The ACTU never indicated support in any forum, including the event at Admiralty House, for the Future Leaders Foundation. Any suggestion of support from the ACTU or the trade union movement is incorrect.”

Spokespeople for a number of companies told The Saturday Paper that they never committed funding and current or former executives attended in a personal capacity. Throughout, Singer has maintained that Government House was not involved in “funding arrangements”.

“I absolutely dispute the fact that the governor-general was aware of the mechanism, the quantum, the modalities of how funding would be transferred,” Singer insisted. “The governor-general had no involvement in relation to the funding arrangements and nor did my office.”

Under questioning, he reiterated: “The governor-general and my office had no involvement in those arrangements.”

A spokesperson for Singer’s office told The Saturday Paper on Thursday: “The responses provided at estimates were correct: financial decisions were a matter for the government of the day. Neither the governor-general nor the office were involved in those decisions or the arrangements … The office sought updates on those arrangements – they were not involved in them.”

 

Hartley is recorded as first having met with Governor-General Hurley about the foundation on January 29, 2021. Hurley’s official diary indicates he has held 14 meetings with Hartley since then, including two in one day on November 9 last year.

The documents show Singer hosted two PM&C officials at a lunch meeting with Chris Hartley at Government House on February 16, 2021. On March 3, Hartley wrote to one of them, assistant secretary Peter Rush, with an update on the proposed foundation structure. It was still six weeks from being legally established.

“With a tight timetable and such a complex logistical exercise, my ability to resource the project is wholly dependent on the speed at which funds can come from your end,” Hartley wrote. “Hopefully this will be within a six-week horizon but might you be able to assist before that?”

He also sought Rush’s help on both registration with the Australian Charities and Not-for-profits Commission and Treasury approval for deductible gift recipient status. He hoped both might be expedited.

“Swift approval from the charity commissioner may be accelerated by a supportive letter from your end and I will let you advise me on how best to catalyse DGR status,” he wrote.

He noted Rush had suggested he might talk to Boston Consulting Group and another organisation, whose name is redacted. Boston Consulting and Accenture were among the companies that helped with the design and pitch, along with the advertising agency M&C Saatchi. All were involved in the May 17 events.

On March 24, 2021, Paul Singer emailed Peter Rush seeking a funding update because Hurley was meeting Chris Hartley in five days’ time. Rush emailed some notes the next day, warning “the legislative and government procurement requirements” meant it would be several more weeks before “the potential” for funding could be discussed in detail.

Rush also emphasised that the foundation needed to be “legally established as soon as practicable” because no funding arrangement was possible without that. He sought more information on “the identified non-government funding sources available to the foundation”.

Rush emailed Chris Hartley with an update on April 13 last year, copying in Paul Singer and his deputy.

The email was sent at 11.39am. Earlier that morning, Hurley had hosted then prime minister Scott Morrison for breakfast at Government House. Prime ministers and governors-general meet regularly – fortnightly or even weekly. It is not known what was discussed.

The day before, Morrison had written to Hurley with a highly unusual request. He had asked to be appointed to administer the Department of Industry, Science, Energy and Resources and to be made the portfolio’s “responsible minister”, secretly usurping minister Keith Pitt in a move he would not reveal publicly until 16 months later.

Signed on April 15, it was the third such secret appointment Morrison had requested. Two more would follow. Former High Court justice Virginia Bell has been commissioned to investigate that process. Bell spoke with the governor-general on October 27, his diary records.

The Saturday Paper is not suggesting Scott Morrison’s multiple ministerial appointments and the decision to fund the Australian Future Leaders Foundation are linked in any way.

Peter Rush’s email to Paul Singer later on the morning of April 13 suggested PM&C was scrutinising the foundation’s funding proposal. Rush asked again for “as much information as possible” to show “the total sum and mix of revenue sources”, noting that the new foundation “will have no financial history for us to assess”. Such information would help “strengthen the rationale” for proceeding and inform the department “how we might best administer any funds to support the running of the programme”.

Rush emphasised again that the foundation needed to be legally established. Its constitution was finalised by the end of the day.

Hartley then sent PM&C his pitch documents on “The Governor-General’s Australian future leaders program”. Following the twin roundtable events, Rush’s PM&C colleague, acting deputy secretary John Reid, wrote to Singer on May 27, assuring him things were “tracking well”.

After an August 20 meeting between Hurley and Hartley, Singer wrote to Reid. He said “very impressive” design work was being done on the program, achieved largely through “leveraging existing relations and at personal cost”. He did not elaborate.

Hurley wanted an update on funding, the DGR application and when a public launch might occur. Reid replied with more dot points. He indicated the PM&C had submitted a brief to the prime minister to approve release of the money held in the contingency reserve so a funding agreement could be progressed.

In the end, a special legislative instrument was drafted to allow the government support – a regulation, so not required to pass through parliament. On the afternoon of February 28 this year, an official alerted Singer by email that the regulation was being slotted into the next executive council meeting in three days’ time.

“Minister Morton’s office mentioned that this item is one which the governor-general may also have an interest in,” the email said.

Morton then wrote to Hurley seeking the single late addition to the meeting’s agenda. On March 3, Governor-General David Hurley signed the instrument authorising funding for the program that bore his name.

It is not clear what will become of the foundation. The Saturday Paper has attempted to contact Chris Hartley via phone and email over the past two weeks. He has not responded. His voicemail says he is overseas. 

This article was first published in the print edition of The Saturday Paper on November 12, 2022 as "Exclusive: Morrison hid governor-general grant money for a year".

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