Anti-corruption body says senior public servants withheld information on payments to thousands of ineligible businesses during pandemic.
Senior public servants in the Australian state of Victoria deliberately concealed the true scale of losses from COVID-19 business support grants, with a suspected shortfall of up to $285 million paid to ineligible recipients, according to a major investigation by the state’s anti-corruption watchdog.
The Independent Broad-based Anti-corruption Commission (IBAC) released its Operation Harmonia report on Thursday, finding that officials in the former Department of Jobs, Precincts and Regions withheld critical information from their superiors, government ministers and oversight bodies between 2021 and 2022.
IBAC’s own analysis concluded that approximately $257 million was paid to more than 9,000 businesses that did not meet the eligibility criteria for the Business Cost Assistance Program. Many of these businesses had backdated their Goods and Services Tax (GST) registrations to appear as if they were operating during the required period, even though they were not.
Of that total, around $108 million went to businesses that reported no turnover in the six months leading up to the pandemic, suggesting they were dormant or inactive entities not entitled to the emergency support.
Victorian Officials Accused of Concealing $285 Million in Losses:
The commission found that departmental analysis had initially estimated potential losses at more than $285 million. Rather than escalate the findings, senior officers, including an associate secretary and a deputy secretary, chose to withhold the information.
Details of the suspected losses were originally included in a draft report prepared for then-Minister for Industry Support and Recovery Martin Pakula and the Victorian Auditor-General’s Office. However, the deputy secretary directed that all references to the magnitude of the losses be removed.
IBAC described the actions as deliberate. “This was not a one-off event, nor was it due to an oversight,” the report stated. “Decisions were made to withhold information about the magnitude of the loss and misleading information was subsequently created and disseminated over an extended period of time.”
In 2022, after the auditor-general began examining the grants, the same senior official prepared a brief for the new minister, Ben Carroll (who later became premier), that contained “false and misleading” information, according to the findings. Information was also withheld from the Victorian Ombudsman.
Only $8 Million Recovered from Victoria’s COVID Grant Scandal:
Despite the scale of the problem, recovery efforts have so far returned only about $8 million to the state, with another $5 million expected through repayment plans. The department failed to stop further payments to ineligible applicants even after the GST backdating issue was identified internally.
The grants were part of Victoria’s emergency response during some of the world’s longest and strictest COVID-19 lockdowns. The programmes were intended to help genuine businesses survive prolonged restrictions, but weak verification processes allowed thousands of ineligible claims to succeed.
Opposition parties have seized on the report as evidence of poor management of public funds under the previous Labor government led by Daniel Andrews. The current administration has not yet issued a detailed public response to the specific findings against the senior bureaucrats.
IBAC’s investigation began in 2022 following complaints from whistleblowers within the public service. The commission praised those who came forward, stressing the importance of internal reporting mechanisms when large sums of taxpayer money are at stake.