Murray Watt (Queensland, Australian Labor Party) Share this | Hansard source

I rise to speak on what is a growing scandal that is enveloping the Liberal-National Party government here in Canberra and also in Western Australia. We know that this is a scandal not just from the newspaper reports that we have been reading over the last three days; we also know that this is a true scandal from the incredible efforts the Attorney-General made in his statement to this chamber today to blame one person and one person only for this dodgy deal, and that is the former federal Treasurer, Joe Hockey. It was about 19 times that Senator Brandis named Joe Hockey as the architect of this deal, from the federal point of view. The reason that they have decided to go after Joe is that he is no longer part of this government. Their thinking is that, if they can pin the blame on a former minister—even though he is now Australia's representative to our most important ally, the US—then they can all get away with it.

We had a long, rambling contribution from Senator Back trying to give us the history of this Bell Resources case. What it ultimately got to, I think, was that he felt that the Western Australian government had done the right thing in trying to reach some sort of agreement with the federal government over the payment of taxes and to resolve litigation. I have spent a bit of time working in a state government. I do not mind state governments trying it on in their negotiations with their federal counterparts, to try to get the best deal that they can possibly get, but I do mind it when state governments enter into dodgy deals to try to avoid the payment of taxes which are legitimately owed to the Commonwealth. It is those taxes that the Commonwealth government relies on to fund health services and to fund education services. Those payments should not be subject to dodgy sweetheart deals between one leg of the Liberal Party and another. Senator Back, in his conclusion, admitted that he was not party to any discussions himself but described this deal as 'a sensible course of action'. I think quite the contrary: it is a dodgy deal that was designed to avoid the payment of taxes to the Commonwealth.

Earlier this afternoon we sat through a long statement from the Attorney-General, who tried his best to distance himself from this entire scandal that is enveloping the government. Essentially, the Attorney-General tried to characterise this deal as what might be called a sensible deal between Liberal chaps. The Liberal chaps got on the phone to each other and they had a bit of a chat. They might have had a few cucumber sandwiches to go with it and they worked it out. Rather than having this messy litigation and rather than having the potential for the Commonwealth to take the legitimate taxes that it was owed from this litigation, they came to a deal to hide a payment that was going to be made to the Commonwealth government and say that the Commonwealth would write off a debt and all would be forgiven. They could get on with being the Liberal chaps that they love to be.

This might have been a sensible deal or a sensible course of action, as Senator Back said, but let's have a look at what some other people have said about this deal that was struck between the Western Australian Liberal Party and their counterparts here in Canberra. When the Solicitor-General was finally given permission to draft advice and to act for the Australian tax office in this matter, challenging the Western Australian government's litigation, Mr Gleeson, the then Solicitor-General, said in the concluding remarks of his submission as follows:

The basic problem is that the drafter of the Bell Act has either forgotten the existence of the Tax Legislation, or decided to proceed blithely in disregard of its existence. No mechanism has been provided for in the Bell Act to allow for the continued operation or paramountcy of the Tax Legislation.

So the Solicitor-General of this country, our most senior legal representative, described the legislation that the Western Australian government had put through—the very legislation that federal Liberal ministers did not want to see challenged—as either having forgotten the existence of tax legislation or having decided to proceed blithely in disregard of its existence. I would have thought that was a pretty damning criticism of this deal.

But it is not only that. When the High Court ultimately made its decision on this legislation, it was with a seven-nil result. All seven High Court judges ruled that this Western Australian try-on legislation was invalid and inconsistent with the Commonwealth Constitution. They concluded that the Bell act was invalid in its entirety by the operation of section 109 of the Constitution, because of the inconsistency between provisions of the Bell act and provisions of the tax acts. It does not get a lot clearer than that. The High Court of Australia felt that there were absolutely no grounds whatsoever for this legislation to have been put through. It was invalid in its entirety.

One thing that we have not learnt yet from the statement by Senator Brandis, or any other statements that we have heard so far, is what Senator Brandis's department, some of the other Commonwealth departments and the Australian tax office had to say about this Western Australian legislation. We know what the Solicitor-General's view was and we know what the High Court's view was, but we have not yet heard what the departments who were in charge of collecting Commonwealth revenue thought of this blatant attempt by the Western Australian government—in cahoots with its Liberal Party mates here in Canberra—to avoid the rightful payment of taxes to the Commonwealth.

Senator Brandis did make the claim, and I see that he has repeated this claim in media comments since his statement, that he always supported the Australian tax office's intervention in this case. I really question whether that is actually true. I invite the Attorney-General to reflect on his remarks and to see whether he is still prepared to say to this Senate that he always supported the Australian tax office's intervention. That is not what we have been reading in media reports about this, going back several months now. I ask the Attorney-General to really think very hard about his own conduct in this matter and whether he actually did support the Australian tax office's intervention.

I know that this dispute, as with many disputes involving the Attorney-General, tends to get lost in a lot of legalese and jargon. Putting very simply what this is all about, ordinarily in the liquidation of a company, as occurred here with Bell Resources, there is not enough money to go around to pay all of the creditors. Under federal law, the tax office gets the first priority when it comes to distribution of the proceeds. So the tax office will always get to take the amount that it is owed before other creditors get an opportunity to share in the remaining proceeds. The consequence of this Western Australian legislation was that the tax office's right to be paid back first was relegated below the rights of other taxpayers, including arms of the Western Australian government.

You might ask: why would any federal government sign up to this kind of arrangement? We have had claims made that it was about settling litigation, but we all know the constant refrain we hear from Western Australian governments and Western Australian senators about Commonwealth-state relations about how they feel dudded by GST arrangements. Their view might change now that the Western Australian government and the Western Australian economy are not going so well, but for several years now we have been hearing the bleatings of Western Australian governments about how they are dudded by the GST arrangements.

Senator Brandis claimed to not have been aware of any discussions that occurred between the then Treasurer Joe Hockey, other ministers of this government and their Western Australian counterparts which made any connection to GST arrangements. Notice that he did not deny that that occurred. He did the old, 'I don't know about it; nothing to see here'—a bit of wilful blindness. Of course, there are many questions remaining for other current and former ministers of this government. I note that Senator Back of Western Australia, in his contribution to this debate immediately before me, did seem to spend a lot of time complaining yet again about how he feels that Western Australia is dudded when it comes to the distribution of GST moneys. I would say there is yet another link here. He was effectively arguing that the deal that was struck between the Western Australian and Commonwealth governments about the taxes owed by the Bell group of companies was okay because in some way it was compensation for the GST arrangements which he feels dud the Western Australian government.

There was another thing that the Attorney-General omitted to mention in his long statement. Over the course of the Attorney-General's statement, he found time to blame Joe Hockey about 19 times, but he did not really go near what we all know is emerging as the real background to the direction that he issued to restrain the actions of the Solicitor-General. I have been involved in this matter now for some months. The Senate committee that I was a part of reported that it was very clear that Senator Brandis had not consulted the Solicitor-General about the direction which restrained his independence and that further on a number of occasions he had misled this Senate about doing so.

What was never very clear was why the Attorney-General had felt it so necessary to make an unprecedented restriction on the independence of the Solicitor-General. Well, we are now understanding what that was all about it. I will refer to a timeline which I have prepared and which goes through some of the key events in the issuing of the direction against the Solicitor-General and this whole sorry saga that we are seeing involving the Western Australian government.

Over the course of the inquiry we held, Senator Brandis continually relied on a meeting that he had with the Solicitor-General on 30 November 2015, where he claimed to have consulted the Solicitor-General about issuing a new legal services direction. Of course, not one other person who was present at that meeting was prepared to back up Senator Brandis, but Senator Brandis stuck to his claim that he had consulted the Solicitor-General on 30 November 2015. What we do know, and everyone agrees, is that over the next few months there were a series of discussions between the Attorney-General's Department, the Solicitor-General and various other people about the process that Commonwealth ministers and departments should use when seeking legal advice from the Solicitor-General. But at no point in those few meetings taking place over a few months was there any discussion about the Attorney-General's intention to issue a direction restraining the independence of the Solicitor-General. So this meeting happened on 30 November and lots more meetings occurred.

We learnt today from the Attorney-General that he claims that he first became aware of this dodgy deal with the Western Australian government on 4 March 2016. On 8 March 2016, the tax office intervened in the litigation. Shortly after that, in early March, the Attorney-General also intervened. So months and months went by during which discussions have been underway about how the Solicitor-General should be briefed and at no point was anyone talking about the Attorney-General issuing a new direction which would restrain the independence of the Solicitor-General. Then things started getting interesting in early March 2016, when the Attorney-General said that he became aware of this dodgy deal involving the Western Australian. The High Court matter proceeded and ultimately the Western Australian legislation went down 7-0 in a ruling of the that court. On 30 March, the Attorney-General himself filed his submissions intervening in this case. Interestingly, at the Senate inquiry that we held into the legal services direction the Attorney-General's Department told us that they first became aware of any new idea about issuing a direction to restrain the Solicitor-General on 20 April 2016—not even a month after the Attorney-General had intervened in this litigation. So for months and months and months people were talking about what the process should be around briefing the Solicitor-General and no-one was talking about issuing any sort of a direction to restrain the Solicitor-General. Then, out of nowhere, on 20 April the Attorney-General's Department first became aware of this idea about a new direction. Of course, shortly after that, on 4 May 2016, the Attorney-General issued that direction.

Senator Brandis in here before, responding to Senator Wong, said there was no connection whatsoever between the dodgy deal with the Western Australian government, him finding about that and him issuing a direction to the Solicitor-General. He says that they are not connected at all. It is kind of like in Muriel's Wedding, which I know Senator McAllister is familiar with as well, and the mayor of Porpoise Spit happens to be in a Chinese restaurant and who should walk in? Deidre Chambers, what a coincidence! George Brandis is now emulating the mayor of Porpoise Spit, by saying we never were talking about this legal services direction for months and months and months, all of a sudden I became aware of a dodgy deal with the Western Australian government and, what a coincidence, I might go out there and issue an unprecedented direction to restrain the independence of the Solicitor-General to make sure that in the future he can never, ever be issue or be requested to issue independent legal advice by a tax office without going through me.

Further reports emerged over the weekend about how unhappy the Prime Minister is with Senator Brandis. We now know from one of Senator Brandis's own senior cabinet colleagues that the Prime Minister is infuriated with him and cannot wait to bring on a reshuffle. We all know that is going to happen by Friday. The only question is whether it is going to happen any sooner than that. In a desperate attempt to cling onto his own job and deflect blame, Senator Brandis decided to throw the former Treasurer Joe Hockey under a bus. Over the course of half an hour, he blamed Joe Hockey 19 times for this dodgy deal, suggesting it was nothing to do with him whatsoever. He named Joe Hockey so many times that I reckon Joe Hockey could hear that all the way across the Pacific over in Washington DC. Right about now, it is about 9.30 pm in Washington DC and poor old Joe was just trying to have a nice, quiet presleep cigar on his own. Well, he is choking on that cigar as he is being thrown under the bus by one of his own colleagues Senator Brandis.

They all think that if they can just pin the blame on Senator Brandis the rest of them can get away with it. Well, unfortunately, that is not going to happen. We know that there are far more people involved in this than just Senator Brandis and just former Treasurer Joe Hockey. We know that Christian Porter, the senior Western Australian minister, was involved in this. The Western Australian government has said so and Senator Brandis had said so; they have said that Christian Porter was involved in this. What exactly was his role?

What was the role of Senator Cormann? He has tried to pretend that he has had nothing to do with it. Do we seriously believe that a finance minister, who is from the state of Western Australia, knows nothing about a deal with the Western Australian Liberal Party that will cost the Commonwealth taxpayer $300 million—really? Do we really believe that he would know nothing about that? We need to know more about what Senator Cormann knew. We need to know more about what Kelly O'Dwyer, the Assistant Treasurer, knew about this arrangement. We really need to know what the former Assistant Treasurer Josh Frydenberg knew about it. Was he involved in discussions with the Western Australian government, and his cabinet colleagues over here, about this dodgy deal?

But the person I most want to know about, as to what he knew about this, is former Prime Minister Tony Abbott. You cannot tell me that a deal that was going to deprive the Commonwealth taxpayers of $300 million did not go through some version of an expenditure review committee that Prime Minister Abbott had in his cabinet at that point in time. What did Prime Minister Abbott know about this? Did he approved this deal or did people go around his back? I think we know what the answer to that is.

This is just the beginning of this saga. We are only just starting to learn what went on here. It is very clear that Senator Brandis was in this up to his neck, along with the former Treasurer Joe Hockey and along with the log list of current and former ministers. We are only beginning to hear the beginning of this. This is going to stretch on over the course of this week and probably into the new year while we get to the bottom of it.

Question agreed to.