Public servants didn't tell Victorian minister about $250m of misspent COVID grants

Victoria's anti-corruption watchdog finds senior public servants hid losses from COVID-19 business grants

The full report

An investigation by Victoria's anti-corruption commission, the Independent Broad-based Anti-corruption Commission (IBAC), has found that senior public servants in the Department of Jobs, Precincts and Regions withheld information about the magnitude of losses from COVID-19 business grants. The investigation, known as Operation Harmonia, probed conduct by officers within the department responsible for making payments to businesses affected by the pandemic. According to the report, the department was aware of potential issues relating to its use of GST as a metric by mid-2021, but when the true scale of the losses came into view, suspected to be as high as $285m, the associate secretary and deputy secretary opted to withhold that information from their superiors.

The report found that in 2022, after the auditor general opened an audit of the grants, the deputy secretary prepared a brief to then-minister Ben Carroll, which contained 'false and misleading' information. The brief claimed Carroll's predecessor, Martin Pakula, had been aware of and approved the department's approach to assessing grants and that no payments had been made in error, but IBAC found 'the assertion that Minister Pakula was 'fully apprised of and approved the department's implementation approach' was disingenuous'.

IBAC commissioner Victoria Elliott said Operation Harmonia uncovered behaviour contrary to the Victorian Public Sector code of conduct, professional obligations and a clear failure to act in line with the high integrity standards expected. The investigation found that in 2021-2022, public servants suspected that $285 million may have been paid to businesses that had backdated their GST to qualify for the payments.

The opposition has said the report is more evidence Labor mismanaged taxpayers' money during the pandemic. The report found that more than $250 million in COVID-19 support was paid to 9,000 ineligible Victorian businesses, but senior public servants never reported the payments to the minister.