SHADOW MINISTER FOR CONSTITUTIONAL REFORM
MEMBER FOR ISAACS
1 JUNE 2021
In July 2017 the Liberal government offered a company called Canstruct International Pty Ltd a contract for welfare and garrison services on Nauru without a competitive tender. At the time, the contract was worth over $300 million. Since then, the contract has been extended five times, each time without a competitive tender, and its value has ballooned to $1.4 billion.
So why did Canstruct get this contract? Prior to Canstruct being handed this massive contract, the company had no experience of delivering welfare and garrison services to vulnerable people. Prior to Canstruct being handed this massive contract, the Department of Home Affairs had concluded that the company did not have, 'sufficient technical understanding to provide the required services.' Prior to Canstruct being handed this massive contract, at least two other, more qualified companies had told the government that they were interested in delivering the services. Prior to Canstruct being handed this massive contract, the Nauruan government told the Australian government that its decision to pursue a sole tender arrangement with the company—and again I quote from the Nauruan government's letter—'deeply offended us and, in our view, has damaged the sense of partnership and collaboration between Nauru and Australia.' So I ask again: why was Canstruct handed this megacontract on a platter without a competitive tender? And why has the contract been extended five times, also without a single competitive tender?
What do we know about Canstruct? We know that Canstruct International is part of the Canstruct Group, a group of Brisbane based companies owned by the Murphy family—three brothers and their father. Thanks to a report in the Nine papers on Monday last week, we know that, since October 2017, executives and associates of Canstruct have made 11 donations to the Liberal and National parties. These donations were made in seven different names and none were disclosed under federal electoral laws. We have to thank legislation passed by the Queensland Labor state parliament for the disclosure of these donations.
It is a matter of public record that Rory Murphy, the CEO of Canstruct, attended Liberal-National party fundraisers with the former Minister for Home Affairs, the member for Dickson, Mr Dutton, who was the minister responsible for the department that awarded these contracts. Rory Murphy attended these fundraisers with the member for Dickson in November 2018, April 2019 and October 2019. Those fundraisers took place either shortly before or shortly after the government extended its contract with Canstruct. The member for Dickson was at all relevant times the minister in charge of the department that awarded Canstruct the Nauru contract, and at all relevant times the member for Dickson was in charge of the department responsible for extending the contract with Canstruct. So, in short, we do not know much about Canstruct, but we do know that it is a major donor to the Liberal and National parties and we know the CEO of the company is very well known to the member for Dickson personally.
Thanks to two Auditor-General's reports, we also know that: (1) in the year before Canstruct was handed the contract for the provision of welfare and garrison services on Nauru, the Department of Home Affairs had determined that the company did not have 'sufficient technical understanding to provide the required services' and did not offer 'value for money'; (2) at least two other companies expressed an interest in delivering the services on Nauru, including one company, Serco, which according to the department did offer value for money and did have the relevant technical expertise to provide the services; (3) Canstruct had no previous experience in delivering welfare or garrison services to vulnerable people; (4) the decision to award Canstruct the contract without a competitive tender deeply offended the government of Nauru and, according to a senior Nauruan official, 'damaged the sense of partnership and collaboration between Nauru and Australia'; and (5) at the time Canstruct International was awarded the contract it had no assets and generated no revenue and it appears that the government did not require any director or related entity of Canstruct International to guarantee the company's performance under the contract. So Canstruct has breached its contract and caused massive loss to the Commonwealth. It's unclear whether the government could have recovered anything from Canstruct on behalf of Australians. So there is a very long list of reasons why Canstruct should not have been awarded this contract without a competitive tender, and nobody—not the department, not the current Minister for Home Affairs and certainly not the former Minister for Home Affairs—has offered a single cogent reason why the company should have been handed this contract, let alone without a competitive tender. Let's just recall that this is a contract that to date has been worth $1.4 billion of taxpayers' money.
That takes us back to the 11 donations. What role did those 11 donations play in the government's decision to award Canstruct the contract without a competitive tender, and what role did those 11 donations play in the government's five subsequent decisions to extend the contract with Canstruct, in each case without a competitive tender? But it's not just the Liberal government's decision to hand Canstruct this $1.4 billion without a competitive tender that raises questions and warrants scrutiny. Since October 2017, the value of the contract has continued to increase significantly, despite the dramatic and completely predictable decline in the number of asylum seekers on Nauru—from 1,094 to fewer than 150—and despite the government of Nauru taking over the provision of welfare services in mid-2019. Those service that have been taken over by the government of Nauru altogether are some of the services that Canstruct were previously providing.
In December 2017, Canstruct was paid approximately $27.3 million of public money to provide welfare and garrison services to 1,084 people. That's approximately $25,000 per person In January 2021, the Morrison government paid Canstruct over $40 million to provide fewer services to only 145 people. That's over $320,000 per person for the month. I'll repeat that; that's over $320,000 per person for that month, January 2021. That's in addition to the $6 million the Morrison government paid to the government of Nauru in January 2021 to provide the welfare services that Canstruct used to provide under its $1.4 billion contract. In other words, in December 2017 the government spent $27.3 million for the provision of welfare and garrison services to 1,084 people on Nauru; some three years later, in January 2021, the Morrison government spent over $46 million for the provision of fewer services to only 145 people. This is the same government that likes to claim it's good at managing money.
This is obscene. It's an obscenity with only one beneficiary: a company owned by a family of Liberal-National Party donors. According to the company's own financial reports, Canstruct International made almost $52 million in profit from the Nauru contract in 2017-18. In 2018-19 it made a $91.5 million profit. In 2019-20, its profit was $130 million. In other words, a huge proportion of the public money that the Morrison government is paying to Canstruct is going straight into the pockets of this family of Liberal-National Party donors. The Murphy family is laughing all the way to the bank, splashing out on expensive racehorses trained by Gai Waterhouse and $17 million houses in the suburbs of Brisbane, and the Morrison government thinks all this is fine.
In fact, when my colleague Senator Keneally asked questions about this at Senate estimates, Senator Stoker accused Labor of engaging in the politics of envy. Imagine that! A Liberal government hands $1.4 billion in a contract without a competitive tender to a major Liberal-National Party donor who has not relevant experience and no assets, and when Labor asks questions about it the Morrison government accuses Labor of engaging in the politics of envy. This looks like yet another example of the Liberal Party using public money like it's Liberal Party money and helping out their mates. It's no wonder the Morrison government has no interest in establishing a proper national anti-corruption commission, and, of course, the Murphy family are not the only Liberal mates doing well out of this government.
I don't think I have time to do through the litany of examples, but I just want to say a few words about the Administrative Appeals Tribunal. At a time when many Australians are doing it tough, the Liberal government has handed at least 79 jobs on the Administrative Appeals Tribunal to Liberal mates. That's at least 79 former Liberal Party staffers, failed Liberal Party candidates and Liberal Party donors and members who've been given secure and very highly remunerated jobs on the tribunal, and, for many of them, their only qualification seems to be a Liberal Party membership card.
Members of the tribunal are paid between $193,990 and $496,560 a year. It's basically impossible for them to lose their jobs, even if they never turn up for work. Based on recent data provided by the tribunal, we know that some full-time members—people who are receiving hundreds of thousands of dollars a year—have been doing no work. We know that many other full-time members have been doing very little work, finalising fewer than 25 applications a year. We also know that, as a result of the very generous and potentially unlawful remuneration policies adopted by the tribunal, many part-time members of the tribunal are being paid tens of thousands of dollars more than full-time equivalents. I've asked the Auditor-General to look into that particular issue, and I look forward to his response.
Let me be clear: membership of a political party is not a disqualification for appointment to the Administrative Appeals Tribunal, but the Morrison government has been treating membership of the Liberal Party as the only qualification for appointment. How else can one explain the appointment of a man like Anthony Barry, a former Liberal Party media adviser turned big tobacco lobbyist who reportedly boasted about dropping out of law school and who continued to work as a lobbyist long after he was appointed to the tribunal. It has become so bad that former High Court judge Ian Callinan, who was hand-picked by the former Attorney-General to conduct a review of the tribunal, felt the need to recommend that all future appointments be made on the basis of merit. Of course, the Morrison government has not implemented that recommendation.
It saddens me greatly to see the once-great Administrative Appeals Tribunal diminished in this way. Thousands of Australians rely on the tribunal to conduct an independent review of decisions by Commonwealth ministers and public servants—decisions that can have major and sometimes life-altering impacts on people's lives. This government doesn't care about those Australians. To the Morrison government, the Administrative Appeals Tribunal is there to serve the interests of the Liberal Party and its mates, not the interests of Australians. This government is so shameless and so lacking in integrity that it has even appointed Liberal aligned lobbyists to the tribunal. In other words, under the Morrison government's watch, Liberal aligned lobbyists, whose job it is to influence government decision-making, have been paid to conduct supposedly independent reviews of government decisions. There could hardly be a more flagrant conflict of interest, and yet, as with every other outrage, the Morrison government waves its hand, says 'whatever' and moves on to the next scandal.
What we're witnessing right now is a government that believes that it can act with complete impunity. The Prime Minister appears to believe that, no matter how disgraceful his conduct or the conduct of his ministers gets, time will march on, journalists will move on and people will forget. It's incumbent on all of us to ensure that the Prime Minister is wrong about that. Australia needs a powerful and independent national anti-corruption commission, and only a Labor government will deliver one.