Senate Economics Legislation Committee [Part 2], , 3:51:07 to 4:01:50
Appointment process for the new Housing Australia chair and management of perceived conflicts of interest.
Topics: Integrity, Procurement
Speakers: Senator Andrew Bragg, Speaker 30, Ben Rimmer, Senator Lisa Darmanin, Unknown Speaker, Interjection
that we can be as efficient as possible. So while everyone is settling into their chairs, I would um like to welcome on behalf of the committee representatives of uh Housing Australia and officers from the Department of Treasury Housing Group. Um and I welcome Miss Sarah Amos. Oh, there you are. Um acting CEO Housing Australia. Uh in the interest of time, if you have an opening statement, do you have it available to table so we can go straight to questions? Um, thank you opening statement for today. Fabulous. All right, we will go straight to questions then.
>> Chair, if I if I may, we do have an
opening statement which really arises out of the uh the uh matters considered by the references committee last week. Uh I'm happy to table that given the time but uh just in particular to help the committee uh understand the roles and responsibilities between Housing Australia and Treasury.
>> That is fantastic. Thank you very much, Mr. Rimmer, and we will make sure we get copies of that to everybody um as we get going. So, over to you, Senator Bragg.
>> Thanks, Chair. Uh thank you for being here this evening. Um I have some initial questions for the new chair. Congratulations on your appointment. Uh I'd just like to ask about how your appointment came about. Did you uh apply for this role or were you approached?
>> trying uh by a number of people actually, but one of whom was uh Mr. Rimmer here.
>> Okay. So, you're approached by Mr. Rimmer. You bumped into him at the airport or
>> No, no, no. He called me. He called you
by.
>> He called me to ask me if I would be interested in being considered.
>> Okay. And so he suggested you should uh consider applying if you were interested.
>> Yes.
>> Okay. And so you submitted an application to someone at the Treasury?
>> I submitted a CV.
>> To the Treasury.
>> Yes, indeed.
>> Okay. Uh, and did you meet with other government officials before your appointment was announced, like the minister or other people?
>> Uh, I spoke to the minister, not met
>> Okay.
>> Uh, and I also spoke with uh uh the secretary of prime minister and cabinet.
>> Okay. And so did you sub were you asked to submit any disclosures about real or perceived conflict of interest?
>> I spoke of real or perceived conflicts of interest because I do have a number of roles uh other than this one. Um, and so we did discuss the fact that I'm still a member of a major bank board. Uh, and there could be perceived conflict of interest given banks are involved in uh, funding some of the uh, affordability schemes and also I discussed my role as chair of the super members council. Yeah. >> And whether there could be perceived as opposed to real conflicts there. Yes, all of those matters were discussed.
>> Okay. And so who decided that ultimately the super members council real or perceived conflict was manageable and didn't need to be
>> perhaps the Treasury could answer that. I can tell you what the process is for managing it, which is not that uncommon, but yes.
>> Uhhuh. So, Senator, um this was a closed competitive process uh run in accordance with the Australian government appointments framework. Uh as part of the Australian government appointments process, uh it's um normal to submit a personal interest declaration form. Uh Merry uh did that. Uh that matter um was then considered uh by cabinet in the normal process for significant significant appointments. uh and Miss Sherry was appointed following that that process. Uh in relation to conflicts, uh there's the initial consideration by uh by cabinet. Um there's also a requirement under the PGPA act rules to uh disclose any material personal interests. And in addition, Housing Australia has its own internal policies about the management of conflict of interest uh and uh processes to ensure that individual board members or for that matter members of the executive who have conflicts um manage those conflicts in a way that's appropriate and consistent with good governance.
>> Okay. So, in this case, it was decided that this was not a conflict that needed to be eliminated.
>> Yes, Senator, that's right. it was decided that implicitly it was decided that it was a conflict that could be managed.
>> I understand that I'm asking questions so we have a proper public record of these matters because these are you know >> matters of public interest. Um uh and I think it's good that people of great uh experience in public companies are prepared to help serve their country in different ways. uh but it's also appropriate that the Senate considers whether or not there are conflicts which need to be uh discussed in these forums. So I in relation to this particular perception uh which some may have around the super members council being a lobby shop effectively for the super funds uh which have been successful so far in being able to pick up money from the housing future fund. Um I mean I think the ordinary person testing
>> I may say senator though it's not super members council
>> I understand that
>> that has done that it's the individual funds who have been able to do that
>> I understand that so in the case of the assembled transactions which I think are $2.5 billion over the course of the contract period of 25 years significant amount of funds uh both of the organizations which are major investors in assemble Hester and Australian super are on the board of super members council. So um I mean what happens when these contracts which are material to the to the operation of the half uh come up in the course of business of the
>> You happy for me to keep answering uh the any if there was any perception of conflict I would step aside if they came to the board. Firstly, if they came to the board, >> because most of them actually sit within the delegation of the management as opposed to coming directly to the board. If any of those funds came to the board and it was felt there was perception, I would step aside. And that's the way we also manage it for other members of the board. We have a member of the board who's involved in community housing, a member of the board who's involved in building uh in de in the development sector. anybody who where there's a perceived perception or actual perception steps aside from a decision where that may impact. So
>> but I mean if if such a material amount of funds is being allocated to assemble >> um I mean I would have thought that every board meeting would be considering how that those contracts are going given so much of the taxpayer funds have been allocated to these particular entities.
Um, Senator, I've been chair for two meetings. Uh, it has not come to either of those meetings, but largely the management of the contracts actually sits within the delegation of the CEO and the team inside Housing Australia once it's been decided. It was decided prior to me becoming chair and it is now within the delegation of the CEO and the management. If there was a reason it had to come to the board then and if there was any sense of perception of conflict of interest, I would step out of that conversation.
>> Okay. So your policy is that the chair will recuse themselves if these issues come up. Otherwise, it's business as usual
>> and that would that's fairly normal practice in organizations that if you if there is actual or perceived conflict of interest would step aside. to that discussion.
>> So the government have a agenda to try and help >> institutions get access to to this fund. Uh so I mean I would have thought that in a day-to-day sense a lot of these issues would come up at
Senator I I can help. I've been an observer at a number of board meetings um perhaps more more meetings cumulatively than other people at the table. the I mean, Housing Australia doesn't preference any particular form of institutional capital. Uh you're right, the government's policy is to try and attract um uh capital into the housing Australia future fund to reduce the cost of uh to the taxpayer and ensure that uh the the fund operates as effectively as possible. Um it's simply not the case that the interests of individual superanuation funds are considered often or frequently or even at all. Uh and um and and in any case the super members council is not an investor. It is a peak body uh that represents the interests of uh profit for member superanuation funds. Uh it it is a very remote perception of conflict that in the interests of um you know complete uh belt and braces the chair has indicated that she would um recuse herself from certain uh certain discussions but it's a it's really a very remote um conflict
think if you're giving 20% of the taxpayer funds to one entity which is a related entity in some way to this organization, I think it's a reasonable line of inquiry for us to make.
>> So a related entity has a quite a precise meaning and that is 100%
thousand different definitions of that. I can assure you um as someone who looked looked at this as a day job for quite a long time. So let let's go to