A report by the Independent Broad-based Anti-corruption Commission (IBAC), released on Thursday, found that in November 2021 the Department of Jobs, Precincts and Regions identified more than 9,000 ineligible businesses that had claimed grants by backdating their GST registrations. The suspected loss was put at $285 million, though IBAC found approximately $257 million was actually paid out.
The investigation centred on the state government's $4.5 billion Business Costs Assistance Program, which supported businesses during Melbourne's pandemic lockdowns in 2020 and 2021. Businesses were required to be GST-registered to qualify.
Rather than report the problem, a departmental deputy secretary directed that information about the loss be removed from a draft report being prepared for Mr Pakula and the Victorian Auditor-General's Office. An associate secretary also withheld information about the size of the suspected loss from the head of the department, Simon Phemister. IBAC said information was also withheld from the Victorian Ombudsman.
Reports differ on how many officials were involved: The Age and The Sydney Morning Herald describe two senior bureaucrats, while the ABC reports three public servants withheld information. None of the officials were named.
IBAC found no evidence of political pressure to withhold information, but said "self-censoring occurred and information about the suspected GST backdating loss was withheld in circumstances" where it would anger the minister or reflect poorly on the department.
Commissioner Victoria Elliott said Operation Harmonia uncovered behaviour contrary to the public sector code of conduct. "While officers within the department spoke up, their leaders failed to act, meaning the government was left uninformed and unable to move quickly to address this suspected significant loss of public funds," she said.
Mr Pakula cautioned IBAC against giving "credence to the suggestion that presumed Ministerial displeasure might explain a failure by public servants to provide truthful and fulsome information". "In my view, it is dangerous for IBAC to provide such a signal, either to the public service or indeed to ministers," he said.
Victorian Opposition Leader Jess Wilson said the report was further evidence that Labor mismanaged taxpayer money during the pandemic.