Ombudsman finds Victoria’s public service undermined by political secrecy, culture of fear

The power amassed by Daniel Andrews through the Premier’s Private Office has created a public service ruled by excessive secrecy and fear, an alarming Ombudsman report has found.

The centralisation of power around Daniel Andrews’ former office has been linked to an increasingly politicised public service that has sparked concerns about the proper use of taxpayer funds.

In a damning new report tabled on Wednesday, Victorian Ombudsman Deborah Glass warned the work of Victorian public servants was now being undermined by a culture of fear that had corrupted the sector.

Ms Glass found that in 2022 the Premier’s office employed as many staff as the offices of the Prime Minister and NSW Premier combined.

She also raised concerns about secrecy around major projects and government initiatives, singling out the controversial $125bn Suburban Rail Loop she said lacked “rigorous public sector scrutiny”.

“It was subject to excessive secrecy and ‘proved up’ by consultants rather than developed by public servants. Its announcement ‘blindsided’ the agency set up by the same government to remove short-term politics from infrastructure planning,” Ms Glass said.

“The lack of rigorous public sector scrutiny over such projects before they are announced poses obvious risks to public funds.”

Daniel Andrews amassed a personal staff larger than any other Australian political leader. Picture: Picture: Sarah Matray

The 280-page report follows an almost two year probe sparked by a parliamentary referral over concerns the public service had been stacked with Labor Party operatives.

While Ms Glass failed to find widespread evidence of this, she said the public service had been politicised in other pervasive ways and Mr Andrews had amassed a personal staff larger than any other Australian political leader.

“Politicisation can take many forms. It is not just the hiring of people with political affiliations,” Ms Glass said.

“It is also the closing down or marginalisation of apolitical, independent voices.

“Creeping politicisation is a reality in Victoria, and requires urgent attention.”

Ms Glass said she was unable to take her investigation as far as she’d like due to cabinet secrecy, poor record keeping and a reluctance from witnesses to take part.

“Cabinet secrecy is certainly a significant block in a number of areas where we sought to go,” she said.

“There were sort of many moments in there where you are basically chasing rabbits down holes and the path is blocked.

“(For example) the answers to the Suburban Rail Loop are shrouded in cabinet secrecy which I am simply unable to access.

“There were certainly moments of frustration.”

Staff numbers in Premier and Prime Ministers officers. Source: Victorian Ombudsman

Ministerial staff numbers for state governments and the Commonwealth. Source: Victorian Ombudsman

Ms Glass said she had concerns about a general reluctance from witnesses to take part in her investigation due to fear of repercussion.

“The fear factor was certainly disturbing,” she said.

Ms Glass’s investigation was predominantly focused on the second term of Daniel Andrews’ leadership from 2018-22.

Asked whether she had confidence there could be a cultural shift under Jacinta Allan’s leadership, Ms Glass said: “I can’t answer that question. I simply don’t know.”

“I know everybody wants me to comment on Daniel Andrews. This report is not about Daniel Andrews,” she said.

“Dare I say, it is bigger than Daniel Andrews but I absolutely realise that we are talking about a period of time where he was the leader, of course, and people will make their own observations and commentary about that and we all know that when you talk about culture that culture starts at the top.

“Politicisation is far more nuanced, complex and potentially pervasive than simply the practice of hiring your political mates.”

Ms Glass said it is now up to the government to consider her recommendations and make any changes to the way its public sector operates.

“If this report does not convince those with the power to change, I must leave it to the public to judge for themselves,” she said.

“I’m going to have to let this report speak itself. It’s a pretty weighty tow. The evidence in it is there in the public domain for all to see.

“You ignore recommendations like this and reports like this at your peril.”

Ombudsman Deborah Glass. Picture: David Caird

Among sweeping recommendations for reform, Ms Glass has called for the Premier to be replaced as the employer of Department Secretaries and administrative office heads by an independent public servant.

Other recommendations include steps to crackdown on the use of direct appointments to fill senior roles, and the lifting of excessive Cabinet secrecy to bring Victoria in line with other jurisdictions.

“Our recommendations speak to the need for greater independence in the appointment of public officials and improved security against ‘at will’ termination to mitigate the fear of speaking out,” Ms Glass said.

“But nothing will change without a recognition at the highest levels of government that change is necessary.”

Ms Glass said Cabinet secrecy, poor record keeping, and a fear of repercussion for speaking out had hampered the inquiry.

More than 45 senior serving and former public officials were interviewed as part of the probe, including former Department of Premier and Cabinet secretary Chris Eccles.

Millions of individual records across more than a dozen agencies were also reviewed.

However neither Mr Andrews, Jacinta Allan or any other Victorian minister were interviewed as part of the investigation.

“Whatever the truth of the question at the heart of this investigation, that so many people were concerned and fearful should be a signal to this Government that all is not well. A culture of fear in the upper echelons of the public sector does not support frank and fearless advice,” Ms Glass said.

The report identified the growth and influence of the Premier’s Private Office as concerning.

“In 2022 the Victorian Premier had roughly as many staffers as the Australian Prime Minister and New South Wales Premier combined,” Ms Glass said.

The report also found senior hiring decisions often ignored proper process with frequent direct appointments of former Ministerial staffers, rushed and shoddy recruitment practices, poor record-keeping and opaque selection methods.

“Perception matters. Not only must merit selection be done, it must be seen to be done,” Ms Glass said.

“Disregarding this principle makes it less likely that the public sector will attract and retain capable leaders.

“The quality and candour of advice upon which important decisions are made will suffer.”

Premier to consider report recommendations

Premier Jacinta Allan said she believes Victoria has a strong and functioning public service, maintaining she has never experienced a culture of fear during her time in government.

Responding to the Ombudsman report on Thursday, Ms Allan said she would be concerned if public servants felt disheartened in the workplace but acknowledged robust debate was an important pillar in creating policy.

“From an overall perspective, the Ombudsman examined 4.5 million different sets of records going over a 20 year record and did not find one piece of evidence around a partisan political appointment, which speaks to the fact that we have a strong and functioning public service,” she said on Thursday.

“I’ve been a minister for a number of years. I have worked with probably thousands and thousands of public servants across Victoria. My expectation of the public servants that I’ve worked with is that they give me strong, professional, intelligent, thoughtful advice and we have discussions.

“That’s how public policy should best be done.

“From time to time, you might have a point of disagreement with your public servants but that’s a good and healthy thing to have in a functioning democratic system.

“I’m not fussed who they’ve worked for in the past or where they’ve come from or their political affiliations in the past, I just want their best advice.”

Ms Allan said a culture of fear is not one that she has ever experienced in her time in government.

Ms Allan said the government would now read the report and consider its recommendations.

Jacinta Allan says her government will take time to ‘reflect’ and consider the recommendations of the report. Picture: Martin Ollman

The report comes just months after the independent Broad-based Anti-corruption Commission found “evidence of misconduct and improper influence” at the highest levels of the former Andrews government.

It related to an investigation into the awarding of a training contract to the Health Workers Union ahead of the 2018 election.

While it stopped short of finding corrupt conduct, it found “ample evidence of the misuse of power and influence by ministerial advisers and departmental executives who breached codes of conduct and established conventions”.

“The pursuit by advisers of the perceived interests of their ministers, including the Premier, at the expense of proper process and standards is another example of the phenomenon of grey corruption that is of increasing concern to integrity bodies around Australia,” the report found.

“Grey corruption involves the bending or breaking of rules, even if that might not amount to criminal behaviour, but that unfairly favours the allies, friends and networks of decision makers.

“It corrodes standards of public governance, decision-making in the public interest and trust in government, and if left unchecked increases the risk of corrupt criminal offending.”

Allan’s leadership style ‘different’ to Dan

Treasurer Tim Pallas said he had noticed a shift to a less centralised government under Jacinta Allan’s premiership.

Mr Pallas said the observation was not a criticism of his former boss, Daniel Andrews, but conceded that ministers now have more power.

“It’s a much more engaging process of discussion that goes on around ministerial decision making processes,” he said.

“It’s probably true to say that there’s been a bit more of a relaxation (of) central control. It’s not that that’s a bad thing.”

“The Premier has a different style and that’s the way she wants to go about it and I think you’ll find from the ministers that they’re quite relaxed with that approach.

“She’s her own person and she’s putting in place a style of governance that sits most comfortably with her and her personality.”

Treasurer Tim Pallas says there’s been a relaxation of central control under Jacinta Allan. Picture: Getty Images

Responding to the Ombudsman’s report, Mr Pallas said the government had been vindicated by a failure to find any inappropriate appointments.

“She described her own inquiry as one of the most intensive investigations in the Ombudsman’s 50-year history ... as a consequence of all of that work, the Ombudsman made it very clear that she could not find one example of partisan political appointments,” he said.

Mr Pallas rejected Ms Glass’ finding of a culture of fear.

“That could not be further from the truth,” he said.

He also said ministerial advisors operate under “very strict instructions” not to direct public servants how to go about their job.

“They are not to tell public servants how to tailor or amend the advice that they would ordinarily give,” he said.

“Believe me, I have had many examples of public servants (in) my Department providing me with advice that I don’t agree with. I don’t go back to them and say ‘change your advice’.”

Opposition Leader John Pesutto says said he doesn’t have the confidence of a cultural shift under Jacinta Allan’s leadership. Picture: David Geraghty

Pesutto says report is ‘damning’

Opposition Leader John Pesutto called the investigation the “most serious and damning” against the government in the last 10 years.

“It’s clear on the basis of this report, which confirms what so many of us have long suspected, that the Victorian public service under Jacinta Allan and Daniel Andrews have been conscripted to serve the interests of the Labor Party and not the Victorian people,” he said.

“This report paints a scathing picture of a public service where people are too fearful to speak out, and where they are suppressed in their ability to do their job by a culture of secrecy.”

Mr Pesutto said he didn’t have confidence of a cultural shift under Ms Allan’s leadership.

“I have seen no evidence that confronted with the opportunity to be different, Jacinta Allan is going to be different from Daniel Andrews,” he said.

“Let’s remember, Jacinta Allan has worked alongside Daniel Andrews as Deputy Premier and as a fellow cabinet minister for many years across two sets of governments.”

Department of Premier and Cabinet secretary Jeremi Moule said he was unsusprised Ms Glass “did not find even one example of partisan political hiring in the Victorian public sector in the last twenty years.”

But Mr Moule said Ms Glass had incorrectly focused on aspects of the public service, including its size, to draw erroneous conclusions.

“The Referral, to which the Report responds, did not ask you to investigate the manner or quality of government decision making, nor whether certain government decisions could have been made in different ways or other policy objectives should have been prioritised in government decision making,” he said.

“These are properly matters for government, for the Parliament and, every four years, for the electorate.

“Rather, you were asked to investigate whether “ALP activists are ‘stacked’ into the public service thus compromising objectivity and professionalism and increasing the risk of corruption.”

“I commend you on conducting such a thorough forensic investigation and I welcome your conclusion that these serious allegations are unfounded.

“I hope that the thoroughness of your independent inquiries will now bring to an end unfounded and unfair criticisms of the staff of the Victorian public sector, criticisms which impugn the integrity of Victoria’s skilled and dedicated public sector workforce and weaken public trust in Victoria’s institutions of government.”