Treasurer Tim Pallas defends axing of key integrity officer Anthony Close

Tim Pallas has defended his involvement in the axing of Victoria’s Parliamentary Budget Officer, saying he didn’t accept the committee’s recommendation to extend his appointment.

Treasurer Tim Pallas has defended his involvement in the axing of one of Victoria‘s key integrity officers. Picture: Nicki Connolly

Treasurer Tim Pallas has defended his involvement in the axing of one of Victoria’s key integrity officers.

Mr Pallas has been accused of improperly influencing the Parliamentary Accounts and Estimates Committee (PAEC), which is responsible for choosing Victoria’s Parliamentary Budget Officer.

Mr Pallas’s office on Friday released correspondence sent to the chair of the committee, in which he argued he was unable to accept the committee’s recommendation to extend the appointment of current PBO Anthony Close by two years.

“This period of reappointment appears not to be permitted under section 9(2) of the Parliamentary Budget Officer Act 2017 (the Act),” Mr Pallas wrote.

“Section 9(2) of the Act stipulates that any period of appointment must be for no less than four years.

“I consider that the Committee should review its recommendation on this matter and consider alternative options to ensure consistency with the Act.

“Potential options consistent with the Act could include reappointing Mr Close for four years or appointing an Acting Officer for six months to enable the Committee to conduct a competitive recruitment process.

“I note these potential options set out what is possible under the Act and are not intended to reflect a view on PAEC’s approach to any appointment or reappointment process.”

Sources said Mr Pallas could have simply accepted the recommendation but dismissed the two-year term option, and reappointed Mr Close for four years. Picture: Nicki Connolly

However several sources linked to the process have raised questions about the letter, claiming it invited the committee to reconsider its recommendation, which it subsequently did.

While Victorian legislation mandates PAEC must make a written recommendation, the option to include conditions to the appointment remains discretionary.

Sources said Mr Pallas could have simply accepted the recommendation but dismissed the two year term option, and reappointed Mr Close for four years.

Questions have also been raised about the Treasurer‘s interpretation of the legislation and whether Mr Close could have been reappointed for a shorter term given he has already served the minimum four year appointment.

It is understood PAEC did not receive any independent legal advice over the Treasurer‘s assertion.

Shadow Special Minister of State, David Davis, on Friday wrote to PAEC urging it immediately reverse the decision to not recommend Mr Close for reappointment.

Questions have also been raised about the Treasurer‘s interpretation of the legislation and whether Mr Close could have been reappointed for a shorter term. Picture: Luis Enrique Ascui

He has also called for assurances that a proper process was followed and has asked PAEC to release any assessments or materials on which it relied in reaching its decision.

“The weakening of integrity bodies under the current government is of great concern,” he wrote.

“The PBO initially proposed in legislation by the Baillieu Government is a major reform that provides independent costing support to Members of Parliament and provides significant oversight of state government fiscal activities.

“Weakening this body is not in the public interest and for this reason the actions of the Committee in not reappointing Mr Close, apparently under pressure from the government, is unfortunate and will weaken the Committee further.”

Mr Close, who was appointed Victoria’s first PBO in 2018, has become increasingly critical of the state government.

In 2021 he published a bombshell report that accused it of hiding the state’s true fin­ancial affairs from Victorians. He also lobbied for more ­powers and funding, saying his office was starved of funds.

And he publicly criticised the public sector for thwarting ­requests for information.

“This should be seen as a political hit by Labor to remove Anthony, who has turned out to be a thorn in their side,” one source said.

“The government’s action in this regard will put all integrity agency heads on notice that they are not safe in their roles.

“The impact of this decision is that from next week, Vic­toria will not have a parlia­mentary budget officer for an unknown period of time.”

A parliamentary inquiry into the PBO found it had met its performance targets and gave MPs “high quality products and services”.

Mr Close’s appointment is due to end on Sunday.