Labor pounce on second staffer conflict

Federal Minister Nigel Scullion is under fire over a staff member cited for conflict of interest. Source: AAP

LABOR has vowed to continue probing a second Abbott government minister over conflict of interest allegations.

William "Smiley" Johnstone resigned as an adviser for Indigenous Affairs Minister Nigel Scullion after it was revealed he was also chief executive and majority shareholder of the Indigenous Development Corporation.

Senator Scullion has defended Mr Johnstone's employment, saying his sole role of devising the school attendance strategy meant his private activities did not create a conflict of interest.

But Opposition Senate Leader Penny Wong says Mr Johnstone's employment showed an "arrogant disregard" for the standards for ministerial staff.

Senator Scullion told the Senate on Thursday there had been "a couple of items that required follow up" in Mr Johnstone's private interests disclosure, filed at the time of his employment.

Five months later, that process was still under way when a media inquiry forced Senator Scullion's office to address the potential conflicts and ask Mr Johnstone to "amend some of his personal affairs".

Mr Johnstone never intended to stay on fulltime and chose to resign, Senator Scullion said.

Senator Wong promised to explore that in more detail.

"The Australian people are entitled to know why not one but two ministers in this chamber happen to have staff who have interest in the portfolio that they administer."

In February, Assistant Health Minister Fiona Nash's staffer Alastair Furnival resigned over conflict of interest allegations.

Mr Furnival had a shareholding in his wife's public relations company, which has links to the junk food industry.

Unlike the case of Mr Furnival, who was accused of ordering the removal of a Health Department healthy food-rating website, there are no allegations Mr Johnstone made calls that affected his private interests.

The Abbott government's revised guidelines for ministerial staffers require divestment from private companies with a direct interest in their minister's portfolio.

The standards also forbid directorship of any company without written agreement of their respective minister and of the Special Minister of State.

Senator Wong asked Special Minister of State Michael Ronaldson if he had provided a written agreement regarding Mr Johnstone's employment on Thursday, which he took on notice.

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Govt cuts big on social studies fees

SOCIAL studies students will be the biggest losers once the government cuts its contribution to course costs.

Details of the new Commonwealth contributions, to apply from 2016, show government funding for social studies will drop by more than one-third.

Engineering, science, surveying and visual and performing arts courses face cuts of about one-quarter of present amounts.

But for maths courses, the government will pay about a quarter more than it does now.

It will also pay more of the costs for humanities, clinical psychology, foreign languages and allied health.

Tuesday's budget revealed the government contributions would drop by an average of 20 per cent across the board.

It's likely students will have to make up the difference.

The categories of Commonwealth funding have been streamlined from eight clusters of disciplines to five.

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Rudd accepts batt deaths responsibility

FORMER prime minister Kevin Rudd has accepted "ultimate responsibility" for Labor's home insulation debacle, but has used secret cabinet documents to deflect blame onto his ministers and public servants.

On a day when confidential cabinet processes around the scheme were made public, Mr Rudd told a royal commission in Brisbane that bureaucrats failed to bring any safety risks, including the potential for death, to his government's attention.

Queenslanders Matthew Fuller, Rueben Barnes and Mitchell Sweeney, and Marcus Wilson from NSW lost their lives while working under the $2.8 billion scheme.

Mr Rudd's uncensored statement says reports to the cabinet committee designed to alert ministers to programs "going off the rails" stated the pink batts scheme was "on track" even after the deaths.

But he says the buck stops with him because as prime minister at the time he has to accept the "good and bad" outcomes of his government's policies in 2009 and 2010.

"I have accepted ultimate responsibility for what was not just bad, but in this case a deep tragedy," he told the inquiry on Thursday.

But during his evidence, Mr Rudd suggested the senior ministers responsible for the scheme, Peter Garrett and Mark Arbib, were also to blame.

"The position in which I found myself in was to take advice from the portfolio minister responsible and the public servants advising me," he said.

But the former Labor leader was hesitant to point the finger at anyone in particular.

"I'm reluctant to say x, y and z failed because a, b and c didn't do their job," he said.

Mr Rudd also refused to point out specific problems with the rollout, saying it was the commission's role, not his, to judge what went wrong.

But he said if his children were victims, he would be just as eager as the affected families to find answers.

"All the families are entitled to feel confused, angry, let down by this system, which ultimately didn't perform to protect the lives of their loved ones," he said.

At the heart of the system, he said, were public servants who failed to brief senior ministers on serious safety concerns.

He said he only became aware of flaws after Mr Sweeney became the fourth installer to die in February 2010, eight months after the program's rollout.

This left him "exasperated, disappointed and despairing".

While Mr Rudd said one industrial fatality was one too many, he never considered suspending the program after Mr Fuller's death because nobody told him to.

"That advice was not put to me," he said.

Mr Sweeney's father, Malcolm, said on Thursday the commission "will go a long way in helping to make sure something like this doesn't happen again".

Mr Rudd has been excused from the inquiry, but might be recalled even though he is flying back to the US on Thursday night.

Former Labor frontbencher Greg Combet, who oversaw the program's closure, will take the stand when the commission resumes on Friday.

Mr Fuller's father, Kevin, and Mr Barnes' sister Sunny, are expected to address the inquiry after Mr Combet's testimony.

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Johnston fights for more funds for defence

DEFENCE Minister David Johnston needed to convince colleagues defence would be unable to mount short-notice missions such as its search for the missing Malaysian airliner if it did not get more cash.

In hard negotiations before the government's expenditure review committee, Senator Johnston made the point that defence would face serious problems if it had to endure more cuts.

As it turned out, defence was a big winner from the tough budget, with an increase of more than six per cent, taking funding to $29.3 billion in 2014/15.

Senator Johnston said finance and treasury officials acknowledged that defence had done it hard in the past five years, losing $16 billion.

"If we had to endure more cuts or absorb measures, there would be serious capability issues and we would be courting substantial difficulties," he told AAP.

Missions such as the ongoing search for Malaysia Airlines flight MH370, which at its peak featured four Orion maritime patrol aircraft and five ships, could only be launched at short notice because these units were maintained at a high level of readiness, he said.

The same applied to aid missions following the Japanese earthquake and the Philippines typhoon.

Most recently, at Christmas, two RAAF transport aircraft were despatched to help the UN peacekeeping mission in South Sudan.

Senator Johnston said it was expensive to maintain the level of readiness needed to be able to launch such missions at short notice.

"Those are the sorts of things we would not be able to do (without sufficient funding) and we would have to tell the national security committee and the prime minister we can't do this because we haven't got the money," he said.

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Uncensored Rudd reveals batts flaws

Kevin Rudd move to expose cabinet discussions about insulation scheme had a short-lived opposition. Source: AAP

OPPOSITION to Kevin Rudd's plan to reveal the innermost secrets of the federal government lasted for a little less than 16 hours.

The former prime minister's 31-page statement to the royal commission into the 2009 home insulation program was initially heavily blacked out or "redacted" at the insistence of government lawyers intent on protecting cabinet confidentiality.

Mr Rudd's lawyer had insisted his client could not tell the truth about the disastrous program that claimed the lives of four young workers if he was not permitted to tell his story in full.

Resistance was strong on Wednesday afternoon but evaporated on Thursday morning, when government lawyer Tom Howe QC said the Commonwealth supported "public ventilation" of everything Mr Rudd wanted to say.

What emerged from the document was Mr Rudd's portrait of the prime minister and his ministers as entirely reliant on the information and advice placed before them by the public service - the people he described at the commission as the "wicketkeepers" of his home insulation scheme.

Starting with the reason for implementing the insulation scheme, Mr Rudd reveals that an all-weekend sitting of senior cabinet ministers - Julia Gillard, Wayne Swan, Lindsay Tanner and himself - in October 2008 was warned that Australia faced recession and a nine per cent unemployment rate if nothing was done to combat the unfolding global financial crisis.

One response was the $2.8 billion home insulation scheme, devised as a make-work scheme to boost the economy.

Much of what was initially redacted from Mr Rudd's statement is simply anything mentioning cabinet processes, however mundane, but some reveal that even after people started dying, no alarm was raised about the program.

Mr Rudd described a briefing system used by the Department of Prime Minister and Cabinet to warn cabinet about "any programs going off the rails".

The reports were colour-coded: green for "on track", amber for "maintaining close watch" and red for "in difficulty".

From its July 2009 inception to until February 2010 when its immediate closure was urged, the program was never rated anything other than green for "on track".

Among other details is Mr Rudd's recollection of a January 28, 2009, cabinet meeting that considered the rollout of the Home Insulation Program.

Issues discussed concerned timelines and costs, Mr Rudd says, but workplace safety standards never came up.

The statement also shows a public service task force was set up four days after the February 4, 2010, death of Mitchell Sweeney, who was the last worker to die during the life of the scheme.

On February 17, the taskforce advised Mr Rudd's cabinet committee of senior ministers of "significant program design risks, notably safety risks ... and the need to exit the overall program".

The same day the committee accepted the taskforce's recommendation to terminate the program.

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Abbott hits back over state budget riot

Prime Minister Tony Abbott is confident he can get controversial budget measures through parliament. Source: AAP

PRIME Minister Tony Abbott has told the states they must accept there are "swings and roundabouts" when it comes to federal money.

Angry state and territory leaders have organised a meeting for this Sunday in Sydney to discuss the federal budget's $80 billion cut to school and hospitals funding.

The meeting comes as Labor and the Greens are poised to block many of the federal budget measures, with the government left to horse-trade with new Senate cross benchers after July 1 to pass a new Medicare co-payment and pension and welfare changes.

The next state leader to face an election, Victorian Premier Denis Napthine, said he had a long and strong conversation with Mr Abbott on Thursday about the budget.

"We have from between 2014 and 2017 to absolutely shake the federal government from their top to their bottom so they understand their responsibility to meet their share of public hospital payments," the Liberal premier said.

Mr Abbott told parliament he had made it clear to all the states and territories that in 2017/18 there would be a "lower rate of increase" in funding.

"Not a cut," he said.

Arguing that road funding was boosted in the budget, Mr Abbott said: "As far as the states are concerned there are swings and roundabouts."

Treasurer Joe Hockey backed up the prime minister, saying the states would still receive $400 billion in the six years from 2017 for schools and hospitals once agreements signed with the previous Labor government expire.

"It is not cost-shifting because we don't run the schools or hospitals," he said.

Opposition Leader Bill Shorten accused the prime minister of "deceit", having promised before the election no cuts to health or schools, no new or raised taxes and no changes to pensions.

He said modelling from NATSEM (National Centre for Social and Economic Modelling) showed that some families would lose $6000 a year by 2016 because of budget measures.

Labor would fight for those families.

"If you want an election try us ... bring it on," he said in his budget reply.

Mr Abbott and Mr Hockey admitted getting the budget through the Senate could take some horse-trading, but said Labor should pass the legislation and take responsibility for leaving the books in a mess.

"I've got some advice for Tony Abbott ... why don't you horse-trade away your paid parental leave scheme and leave the pensioners alone," Mr Shorten said.

Labor has yet to decide whether to support a temporary income tax rise for people earning more than $180,000 a year, but it will oppose the Medicare co-payment, pension changes and the fuel tax lift.

Mr Hockey said the $7 Medicare co-payment was only about the cost of two "middies" of beer and much less than the $22 cost of a packet of cigarettes.

The Greens will support the fuel tax rise.

The treasurer rejected a challenge from shadow treasurer Chris Bowen to debate the budget at the National Press Club next week.

Delivering his budget-in-reply speech to parliament on Thursday, Mr Shorten said Labor would oppose deregulated university fees, the Medicare co-payment, the fuel tax rise and hits to pensions and the dole.

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Boat turn-back lawful: border commander

THE army general leading Australia's border security crackdown is confident authorities did not commit a people-smuggling offence when turning an asylum seeker boat back to Indonesia this month.

Indonesian navy officers have claimed Australian authorities added three people to an asylum seeker boat before sending it back to their country.

The Australian Federal Police are considering a request to investigate the matter, which legal experts say might constitute a people-smuggling offence under Australian law.

But Lieutenant-General Angus Campbell maintains the boat turn-backs being carried out are consistent with international obligations and domestic law.

"I am confident ... we have taken lawful procedures to conduct operations," the Operation Sovereign Borders commander told an Australian Strategic Policy Institute dinner in Canberra on Thursday.

The federal government has declined to comment on the incident, citing "operational issues".

No people-smuggling ventures to Australia have been successful since late December, but Lt Gen Campbell warned that although the way to Australia was closed, it was not a case of mission accomplished.

"To modify a well-known and very apt phrase, the price of border security is eternal vigilance," he said.

Threats to Australia's border security remain as asylum seekers bide their time in Indonesia, holding out for changes to policy or operations, he said.

He expressed doubt about whether authorities could have reduced arrivals without the turn-back policy.

"There are too many prospective travellers susceptible to believing that Nauru is a town in Australia," Lt Gen Campbell said.

He said desperate smugglers were offering discounted rates and free travel for children.

Lt Gen Campbell said his team was proud to be preventing asylum seekers drowning during dangerous voyages.

Tuesday's budget allocated $480.5 million to establish a new super front-line agency, Border Force Australia, from July 2015, which will absorb Operation Sovereign Borders.

The new agency will replace customs and take on some functions of the immigration department. A commissioner will be appointed to lead the force.

"I look with interest to whoever might be appointed while I'm pursuing other pathways in my life," he said.

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