Comment

John Hewson
Sack the NACC

After years of unfulfilled promises by both sides of politics, the Albanese government passed legislation in its first term to establish the National Anti-Corruption Commission. The NACC began operations on July 1, 2023, with much fanfare and strong expectations, especially after all the spending rorts and questionable contracts of the Morrison government. However, the commission has disappointed and has been pretty much a dud in the two years since. Momentum is now gathering for reform of the NACC to overcome its timidity, and there are calls to replace its commissioner, Paul Brereton. Basically, the government needs to get the commission to focus on corruption and on holding identified crooks to account.

The major disappointment of the commission’s performance was in relation to the robodebt scandal. The royal commission into the robodebt scheme passed a sealed envelope with a request for the NACC to investigate six individuals and prosecute corrupt practices and practitioners in relation to the scandal. However, not only did the NACC not do as requested, it also revealed some inherent weaknesses in its team and practices. The NACC’s decision not to investigate was incorrect and defining. The statutory inspector of the NACC, Gail Furness, SC, intervened and reversed it. Her report emphasised that the commissioner had failed to handle his significant conflict of interest, surely one of the standards the NACC is expected to set and address. Brereton’s misjudgement led to a finding of “officer misconduct” against him. As highly respected lawyer Geoffrey Watson, SC, has recently pointed out, writing in his capacity as a director at the Centre for Public Integrity, it is ironic that the first finding of “misconduct” by the NACC was “a finding against itself”.

Watson has also noted that the NACC “misunderstand their jurisdiction”, which he confirms by quoting the evidence provided by Deputy Commissioner Nicole Rose to a recent Senate inquiry “that a major reason that the NACC decided it would reject the royal commission referral was that it did not have the power to inflict ‘punishment’ or to impose a ‘fine’ ”.

In the lead-up to its two-year anniversary, the NACC released details of its first finding of misconduct by a public official. Against the background I have just described, it generated little better than a horse laugh, both for the insignificance of the offence and because the commission refused to name the guilty party. So much for the hoped-for transparency! Watson recently wrote a column for Nine newspapers focusing on this release, under the headline “Anti-corruption body wastes time with a triviality”. The decision related to what Watson has described as “pretty low-level stuff” where a senior public servant placed her sister’s fiancé in a job with a forged signature. Hardly the “prize decision” hoped for of the NACC. As Watson points out, a case such as this would be more “commonly dealt with by the Australian Public Service Commission, not an anti-corruption body. It really looks well beneath the role of the NACC.”

Another perceived weakness of how the NACC has operated has been its lack of transparency, its secrecy. This was the central focus in a column in this paper by Helen Haines, who is an independent MP and was one of the strongest advocates for a robust and independent national integrity commission in the run-up to the 2022 election. Haines attributes the secrecy in relation to the NACC’s operations to a last-minute amendment in the draft legislation to establish it. The act states that hearings are generally in private. To merit a public hearing, the issue in question must clear two hurdles: the commission must be satisfied it is in the public interest, and there must be “exceptional circumstances” to justify the transparency. Haines contends that this second hurdle was inserted at the last minute by the Albanese government, “without clear explanation or justification”. She concludes that “we can only assume it was a deal done between the two major parties: a commitment elicited from Labor by the Coalition to secure bipartisan support for the bill”. Haines, who is deputy chair of the parliamentary committee with oversight of the NACC, also suggests the Coalition’s opposition to public hearings is well recorded. Citing “concerns about unfair damage to reputations and mental health impacts”, she said the opposition argues “it would be unfair to have public hearings when court-like rules of evidence don’t apply”. In simple terms, there was concern the NACC might operate as a “kangaroo court”.

This was a heavily contested aspect of the legislation. The Saturday Paper’s senior reporter, Rick Morton, has noted that expert opinion “warned the definition of ‘exceptional circumstances’ was so vague, so open to interpretation, that any decision to hold a public meeting would likely be tied up in litigation and obstruct the NACC’s ability to conduct public hearings”. This has certainly been the case. Brereton has admitted to a parliamentary oversight committee considering its first annual report that no public hearings had been held to date, even though 29 corruption investigations were then under way. Seven of these had held private meetings involving 26 witnesses – “the NACC was not satisfied that exceptional circumstances warranted public hearings for any of them”, Haines says.

Unfortunately, the parliamentary process provided little clarification of what constitutes exceptional circumstances. The commissioner’s answer on this was the ultimate brush-off: “We’ll know exceptional circumstances when we see them.” Pfft, hardly encouraging. This leaves the public in a most disadvantaged position. They look to the NACC to expose corruption, unethical behaviour, a breach of public trust, misuse of a public official’s powers – and yet it has become virtually impossible to judge how well the NACC is performing against its objectives and whether it is meeting its purpose. It is impossible to ignore the argument of probably the most credentialed and experienced legal expert in this field, the late Stephen Charles, KC, in the book he co-athored titled Keeping Them Honest, that public hearings “are a crucial mechanism in meeting corruption commissions’ objectives of promoting integrity, investigating and exposing corruption”.

There is also an emerging discussion of what is corruption. In a column this month, independent economist John Adams sought to focus attention on “process corruption” beyond the populist concept of brown-paper-bag bribery or blatant financial fraud. He pushes the definition of the Wood Royal Commission into the New South Wales Police Service, which refers to misconduct where officials manipulate or circumvent official procedures for an improper purpose. It does not require personal gain; rather, it is concerned with actions that distort the machinery of justice itself, such as fabricating evidence, perverting investigations or shielding wrongdoers from scrutiny. Justice James Wood found this rampant in the NSW Police Force in the 1980s and 1990s – conduct Adams says was “justified in the name of ‘getting the bad guys’. However, the result was a travesty: the innocent punished, the guilty unprosecuted and the public left in the dark.”

Adams main concern is that “many of the same organisational traits” identified by Woods “are alarmingly present in certain modern regulators” such as the Australian Securities and Investments Commission. A Senate committee inquiry last year strongly criticised ASIC’s investigative and enforcement practices. It seems the NACC initially concentrated on financial corruption where personal enrichment is clear and demonstrable. Process corruption is harder to detect but no less of a danger to public trust and lawful government. This is what the Hayne royal commission uncovered – years of widespread misconduct in the banking sector, often unpunished due to weak or selective enforcement. One recent criticism of ASIC is the declining number of criminal referrals, known by some as “regulatory capture”.

Recognising the extent to which the NACC has failed to live up to the expectations and assurances of the first-term Albanese government, it is time for parliament to refocus its operations and assess its leadership and staff. It may be that this process can begin with a Wood-type royal commission or simply by removing key staff. There is certainly a procedure in the parliamentary processes to remove a commissioner. A clause in the NACC legislation states, “The Governor-General may terminate the appointment of a NACC Commissioner if each House of the Parliament, in the same session, ... presents an address to the Governor-General praying for the removal of the NACC Commissioner”.

Of course, whether our parliament could demonstrate the necessary leadership and courage will depend how the votes fall. If the matter were to be initiated in the Senate, I suspect the Greens and One Nation would support such an initiative. Assuming Labor would be inclined to defend its initial legislation rather than admit its failures, this would leave it to the independents and the Coalition to determine the vote. Labor might, however, be more receptive to serious and genuine amendments such as those proposed by Helen Haines, specifically to put some safeguards on the circumstances where hearings are to be defined as “exceptional”.

The Australian public were led to believe that transparency and public accountability would be delivered by an integrity commission. It should be an absolute priority of this new term of government that our parliament works to reform the NACC and deliver a gold-standard commission. A basic requirement should be that identified corruption be exposed publicly.

This article was first published in the print edition of The Saturday Paper on July 12, 2025 as "Sack the NACC".

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