Victorian public servants hid up to A$285m in Covid grant losses, watchdog finds

Senior Victorian public servants concealed the scale of losses from Covid-19 business support grants paid to ineligible businesses, according to a report by the state's anti-corruption watchdog. The findings relate to the former Department of Jobs, Precincts and Regions and were tabled in parliament on Thursday. The report says the suspected loss could be as high as A$285m, after an estimated A$257m had already been paid to about 9,000 ineligible businesses during the pandemic.

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The Independent Broad-based Anti-corruption Commission said the conduct was not a one-off mistake or an oversight. It found that decisions were made to withhold information about the magnitude of the loss and that misleading information was later created and circulated over an extended period. By mid-2021, the department was aware of potential problems with its use of GST as a metric for assessing grants, according to the report.

When the true scale of the losses became clearer, the associate secretary and deputy secretary chose not to pass that information to their superiors. The report also says the deputy secretary ordered that references to the suspected losses be removed from a draft report prepared for the then-minister for Industry Support and Recovery, Martin Pakula, and the Victorian Auditor-General's Office. In 2022, after the auditor-general opened an audit of the grants, the deputy secretary prepared a brief for then-minister Ben Carroll that the watchdog described as false and misleading.

That brief said Pakula had been aware of and approved the department's approach and that no payments had been made in error, claims the commission rejected. The case is significant because it concerns public money distributed during the early stages of the pandemic, when governments moved quickly to support businesses under pressure. The report suggests the issue was not only the original eligibility failures, but also the handling of the losses once they were identified.

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It raises questions about internal accountability inside a major state department and about what ministers were told while the problem was developing. The investigation, known as Operation Harmonia, focused on conduct inside the since-replaced department under the government led by Daniel Andrews. The watchdog's findings indicate that senior officials were aware of the risk well before the full extent of the losses was acknowledged.

The report also points to a prolonged effort to manage the information flow upward through the department and into ministerial offices. That makes the case relevant not just as a financial loss, but as a test of public-sector integrity and oversight. What remains unclear from the report is whether any further disciplinary, administrative or legal action will follow.

The commission has set out its findings, but the next steps will depend on how the Victorian government and other authorities respond. The key issue now is whether the department's handling of the grants will lead to wider scrutiny of pandemic-era spending controls. The scale of the suspected loss and the allegation of deliberate concealment are likely to keep the matter under close political and public examination.

#Victoria #anticorruptionwatchdog #Covidgrants #publicfinance #misconduct

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