Mike Pezzullo Home Affairs Paladin scandal Peter Dutton
Secretary of the Department of Home Affairs Mike Pezzullo (Image: AAP/Lukas Coch)

The mounting scandal over the Department of Home Affairs’ secret tender deal with the mysterious Paladin company is only the latest example that something is deeply wrong inside the vast Home Affairs portfolio. Its history in recent years is of an agency that has been proven serially incompetent and which has refused to accept well-founded criticisms of its performance.

In the absence of a government willing to try to fix the systemic problems within Home Affairs, only a royal commission can cut through the wall of lies and bureaucratic obfuscation.

Crikey urged an inquiry into Home Affairs nearly two years ago in the wake of a series of highly critical reports by the Australian National Audit Office (ANAO) revealing systemic flaws within the department, exacerbated by the merger of the immigration and customs departments. The expansion of the portfolio into Home Affairs — Malcolm Turnbull’s futile attempt to keep Peter Dutton at bay — seems to have done little to address those flaws.

Since 2017 there have been further audit reports exposing problems. A June 2018 report found that the merger of customs and immigration had failed to produce any of the benefits claimed for it ahead of the Abbott government’s decision to combine them.

A December 2018 audit examining the Cape Class patrol boat program — which cost taxpayers hundreds of millions of dollars — found a litany of major problems, including that the boats weren’t meeting contracted performance and availability requirements; there was no effective oversight of in-service support or risks to it; the department wasn’t managing the service contract properly; and it didn’t understand and couldn’t control the costs associated with it.

An audit released on Monday of the department’s processing of citizenship applications was damning, showing that applications were not being processed in neither a time-efficient nor resource-efficient manner, despite a decrease in the complexity of the applications.

The citizenship application audit exposed another long-running aspect of Home Affairs — its refusal to accept criticism. It dismissed out of hand the ANAO’s findings about its handling of applications, declaring “the department dedicates significant resources to addressing these national security, community safety and program integrity risks and notes that cases with adverse indicators take a disproportionate level of effort and time to resolve, often requiring the assistance of various other agencies and partners”.

The same rejection of audit findings characterised the department’s response to the ANAO’s two bombshell 2016-17 audits of the department’s letting and subsequent management of offshore processing contracts, which found a staggering series of major problems in relation to contracts worth billions of dollars. The department refused to accept a number of ANAO findings, prompting the ANAO to take the unusual step of publicly correcting the department’s claims in a counter-response.

Later at a Senate Estimates hearing, department secretary Mike Pezzullo dismissed the ANAO’s findings as mere “allegations”. After another critical ANAO report on the way the department used its wide-ranging powers, Pezzullo used Estimates to attack the audit office and complained of a “reoccurring pattern” of being criticised by it.

The problem for Pezzullo is that the 2016-17 criticisms of his department’s mishandling of major contracts — much of which, it should be noted, occurred prior to his time as secretary, under the Gillard-Rudd government — are resonating in the Paladin contract scandal, with that company benefiting from a limited tender process rather than having to compete in an open tender, and peculiar decisions around management of the contract, such as a highly unusual advance payment.

The contracts with Paladin were in late 2017 — just months after the ANAO had explained in excruciating detail the problems with the way the department had let its offshore detention contracts, including the use of limited tendering and sole sourcing.

It’s also clear that the vast department continues to have problems recruiting and retaining senior staff. According to the department’s current org chart, more than 40 SES positions either have acting staff or are vacant.

The department’s refusal to accept the findings of independent auditors and the recurrence of the same problems over and over suggest a bureaucratic culture hostile to accountability and unwilling to improve its performance. It’s de rigueur to call for a royal commission into scandals, but they should be reserved for circumstances where the normal regulatory processes have failed and a systemic problem needs assessment by a figure with strong investigative powers.

It’s clear that Home Affairs will not improve until it is subjected to forensic independent investigation by a judicial figure.

Peter Fray

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Peter Fray
Editor-In-Chief of Crikey

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