Attorney-General’s department pulls out of funding agreement with think tank China Matters
The Attorney-General’s Department has become the fourth government agency to cease funding to the prestigious think tank China Matters.
National
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The Attorney-General's Department has revoked its “in-principle agreement’’ to continue funding the controversial think tank China Matters.
The move comes six weeks after a News Corp investigation revealed the prestigious think tank had raked in more than $1.86 million in taxpayer funds since it was established in 2015.
Attorney-General Christian Porter had said he was reviewing the future three-year funding agreement to see if it was “appropriate.’’
In a statement, his department told News Corp it had “reviewed funding to China Matters and will not be providing further funding at this time.’’
Three departments – Prime Minister and Cabinet, Defence and Foreign Affairs – had already decided not to continue funding the think tank, which is backed by some of Australia’s most senior public servants and business figures, from June 30.
The think tank, which strongly denies it has a pro-Beijing agenda, this month confirmed in a webinar that it was getting “the silent treatment’’ from the Government and had lost a special tax status it had been seeking to help it raise funds.
The move to freeze out the think tank comes after China Matters’ former CEO last year called for Australia to sign a Memorandum of Understanding with Beijing over its highly-controversial Belt and Road infrastructure initiative.
China Matters co-founder and director Linda Jakobson also ruffled feathers in Canberra when she made a submission urging caution with the Government’s Foreign Interference Transparency Scheme register, which was designed to flush out covert influence by foreign countries, particularly China.
A special News Corp investigation can reveal:
*Politicians who attended a talk by China Matters representatives at Parliament House in February 2018 felt they were being pressured to sign up to Beijing’s Belt and Road infrastructure initiative, despite Australia’s foreign policy position opposing it.
*China Matters has flown several MPs, including Labor frontbenchers Chris Bowen, Richard Marles and Tanya Plibersek, and Liberal backbenchers Julian Leeser and Ted O’Brien, on all-expenses paid study trips to China where they met with Chinese Communist Party government officials and leaders of the Centre for China and Globalisation – a think tank with links back to Beijing’s propaganda outfit United Front.
*47.76 per cent of China Matters’ funding coming from taxpayer-funded government grants, according to the latest charity filings, meaning the MP’s trips were heavily-subsidised by the tax-payer.
*Five government departments – Defence, Prime Minister and Cabinet, Foreign Affairs and Trade, Attorney-General’s Department and Industry, Science, Energy and Resources, have funded the think tank to the tune of $1.86 million since 2015.
*The Department of Industry, Science, Energy and Resources has a $60,000-a-year funding agreement with China Matters, which concludes next financial year. “The department has no existing plans to provide further funding beyond 2020-21,’’ a spokesperson said. The former secretary of the department is Heather Smith. Dr Smith is now on the board of China Matters.
*A senior bureaucrat from the Attorney-General’s Department who administers the Foreign Interest Transparency Scheme has attended several China Matters events as a guest.
*The man who founded China Matters in 2015, prominent businessman and China adviser Warwick Smith, parted ways with the organisation after he expressed concerns about its direction, governance and finances.
*The Government has curtailed China Matter’s ability to raise funds by refusing to grant it deductible gift recipient (DGR) status. The decision to grant DGR was listed in the 2019 Budget but never legislated, with the legislation going through Parliament without China Matters being included.
Victorian Liberal and China hawk Senator James Paterson spoke out in the Liberal party room in December raising concerns about the agreement to give China Matters DGR status, which would allow its donors to claim their donations as tax refunds.
The enabling legislation later went ahead without including China Matters.
Senator Paterson declined to comment to News Corp. He and fellow China critic Andrew Hastie were due to attend a China Matters study tour last year which was cancelled when the Chinese government refused them a visa.
Ms Jakobson told News Corp: “I have been in touch with our government contacts and been told that there has been no change in the government’s decision to grant China Matters DGR status.’’
She declined to answer further questions.
NDIS Minister Stuart Robert, who resigned from the ministry in 2016 after failing to declare a trip to China to help a mate and Liberal donor sign a business deal in which he had an indirect financial interest, has attended at least two China Matters events in Australia. Another guest has been Martin Parkinson, the former head of the Department of Prime Minister and Cabinet and husband of Dr Smith.
Sarah Chidgey, the deputy secretary of the international group of the Attorney General’s department who helps administer the foreign interference register, has also attended at least two events.
She is the bureaucrat who wrote to former prime minister Tony Abbott asking him to register as an agent of foreign interest due to a speech he gave at a conservative political conference.
Mr Porter said of Ms Chidgey’s attendance at the events that: “Listening to organisations that do not agree with every policy position of Government is a normal part of the public service’s work.’’
He later told News Corp: “However, I am reviewing the circumstances in which the department is intending to provide further funding and whether that is appropriate.’’
His department has paid China Matters $375,000 in grants, and a spokesperson said there was “in principle agreement’’ to provide another three years of funding – but would not reveal how much. “As future funding is not guaranteed a specific amount cannot be provided.’’
In November then-CEO of China Matters Alistair Nicholas gave a speech in which he said the “real benefits of signing an MOU with Beijing for BRI projects in Australia would be to give face to Beijing on a matter of great economic importance to it.
“And that could relieve some of the tension currently present in our relationship with the PRC. It might even open the door for real conversations on some of the tough issues we do need to discuss with Beijing,’’ he said, referring to human rights abuses of Uighur people in China.
Former Trade Minister Steve Ciobo did sign a Belt and Road agreement in 2017 but it related to third countries only, and the Federal Government quickly began distancing itself from it after the relationship with China began to sour.
News Corp has seen contemporaneous notes written by a politician who attended a China Matters discussion in Parliament House in February 2018, in which the MP noted the comment had been made that it was “better to be at the table’’ with China with regards to Belt and Road.
Also in February 2018, Ms Jakobson made a submission to a Parliamentary committee which was examining the proposed Foreign Interference Transparency Scheme legislation.
Writing that China Matters did not have a “corporate position’’ on the issue, but that she was giving her personal view “as the chief executive officer and founding director,’’ Ms Jakobson said she was supported by six of her fellow directors.
She said the discussions about the new foreign interference laws needed to be managed “with common sense and in a nuanced, balanced manner’’ and that “a diplomat’s job is to influence the host country’s citizens with the aim of portraying an issue, event or situation in a positive light from the viewpoint of the diplomat’s country.’’
She also called for security and intelligence agencies to provide the public with facts about wrong-doing “despite the sensitivity of classified information.’’
“This would enable Australians to develop a sophisticated understanding of the actions of the PRC government in Australian society which are considered to be unlawful foreign interference.’’
She urged politicians not to “rush’’ the new legislation through Parliament and called on the committee to commission a discussion paper on it.
Warwick Smith, the former Howard government minister who has had advised six prime ministers on China issues, said he had co-founded China Matters after Ms Jakobson and another academic, Bates Gill, came to him with a proposal to fund a book.
At the time, he was advising ANZ, which was active in China, and felt the book would be a “helpful contribution to understanding China.’’
“I parted company a little while later, might have been a year or two years. Linda was expanding it to become more of a think tank, which was not really what we had envisaged,’’ he said.
Mr Smith said he had raised some concerns with China Matters before his departure.
“I’m just a boring banker, spent more time banking than politics. I’m always interested in process and I wasn’t happy with the governance and financials. I departed as chair.
“I think they started to rely strongly on Commonwealth money and that’s not always a good thing.’’
Mr Smith said he believed China Matters had been set up for a good purpose, and had continued to attend some of their events as a guest.
He said he it should merge with the Australia China Business Council, which was a long-standing organisation with clear objectives for small and medium enterprises, and not reliant on government funding.
The Department of Prime Minister and Cabinet said it had provided $1.3 million to China Matters over the past five years but “the funding arrangement ceases on 30 June 2020.’’
The Department of Foreign Affairs and Trade said it had provided $300,000 over three years and that “this agreement concludes at the end of the FY19/20.’’
China Matters had previously attracted big names to give speeches at its public events, including then-foreign minister Julie Bishop and then-defence minister Christopher Pyne.
Guests at their functions have included University of Queensland chancellor Peter Varghese, the former DFAT secretary and ex-director general of the Office of National Assessments, who has been criticised for a heavy reliance on Chinese students as a funding source, and La Trobe University chancellor John Brumby, a former Victorian premier who later served eight years on the board of controversial Chinese telco Huawei. He also chaired the Australia China Business Council.
The think tank’s sponsors comprise mainly big businesses with strong China links, including Rio Tinto, PwC, miner Aurizon, the Star Entertainment Group and Australia Post.
Originally published as Attorney-General’s department pulls out of funding agreement with think tank China Matters