Spokesman says minister has advice that states business interest in childcare centres not in breach of section 44

This article is more than 2 years old

This article is more than 2 years old

Peter Dutton reportedly has a business interest in childcare centres, which two constitutional law experts have suggested could amount to an “indirect pecuniary interest” in an agreement with the commonwealth and disqualify him from parliament.

Channel Ten first reported the potential constitutional issue on Monday, after the home affairs minister was subject of leadership speculation due to discontent in Liberal ranks with Malcolm Turnbull’s energy policy.

According to Dutton’s register of interests he, his spouse and children are beneficiaries of the RHT Family Trust.

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Channel Ten reported that Asic records show RHT operates two childcare centres that receive payments from the government due to changes that took effect on 2 July giving subsidies through centres rather directly to parents.

Section 44 of the constitution prevents members of parliament from having an “indirect pecuniary interest” in an agreement with the commonwealth.

In a response provided to Ten, a spokesman for Dutton said he had legal advice that “clearly states” his business interests are not in breach of the section.

Constitutional law experts Anne Twomey, from the University of Sydney, and George Williams, from the University of New South Wales, both suggested there was at least an arguable case against Dutton based on those facts.

“On its face Mr Dutton is in a position where there are at least questions to be answered,” Twomey said. “It’s a matter for the high court to decide.”

However, a case may never get to the high court because the lower house – where the government has a majority – is unlikely to refer him.

The high court has held when disposing of Labor’s challenge to Nationals MP David Gillespie that ordinary citizens must bring a case within 40 days of the election to challenge an MP’s eligibility.

Under a ruling disqualifying Family First senator Bob Day in 2017 on the same grounds, the high court made clear that a parliamentarian need not be a party to a contract with the commonwealth to have an “indirect pecuniary interest” in an agreement.

Dutton’s case differs from Day’s because Day had an arrangement that would allow him to benefit from the rental payments for his own electorate office whereas childcare subsidies would apply to all childcare centres, not only those operated by RHT Family Trust.