PM confirmed departure of deputy leader of the Nationals after receiving advice from his department

Bridget McKenzie has resigned from Scott Morrison’s ministry in an effort to stem the rolling controversy and political damage over sports grants before the opening of the 2020 parliamentary session this week.

The prime minister confirmed the departure of the besieged deputy leader of the Nationals late on Sunday after receiving advice from his departmental head and former chief of staff, Phil Gaetjens, and after a meeting with the governance committee of cabinet.

Sunday’s news follows weeks of bad press about the community sports infrastructure program, sparked by a scathing auditor general’s report that found the program conducted under McKenzie, the former sport minister, skewed the grants towards marginal seats.

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The prime minister continued to defend the administration of the sports grants program, and told reporters on Sunday that McKenzie had resigned not because of general maladministration but because she had failed to declare a conflict of interest by not disclosing that she was a member of a gun club that received funding in the program – which was a breach of ministerial standards.

Morrison declined to release the Gaetjens advice, which contains a significantly different interpretation of McKenzie’s administration of the sports grants program, and whether the grants were made with proper legal authority, than the interpretation of the auditor general.

The prime minister shrugged off calls that the advice should be released in order to allow the differences to be properly scrutinised and reconciled. “For the public and people watching and listening at home, what matters is where there are problems they get fixed and that is what I have pledged to do today,” Morrison said.

McKenzie did not front reporters on Sunday. In a statement she said she accepted the findings of Morrison’s departmental head. “I maintain that at no time did my membership of shooting sports clubs influence my decision making, nor did I receive any personal gain.

“However, I acknowledge that my failure to declare my memberships in a timely manner constituted a breach of the prime minister’s ministerial standards,” she said.

“Elected representatives are responsible for public expenditure and take advice, not direction, from the public service and others. The operation of ministerial discretion is important to our democratic process.”

While the Australian National Audit Office said grants were skewed to marginal seats, and the process was not informed by an appropriate assessment process or sound advice, Morrison said Gaetjens found no evidence that the process was “unduly influenced by reference to marginal or targeted electorates”.

Morrison said his departmental head found “no basis for this suggestion that political considerations were the primary determining factor” in awarding the grants. He also said the advice from the secretary was the minister had used her discretion to make funding decisions appropriately.

The prime minister said the government would accept recommendation four of the ANAO report, which advised the government to amend the Commonwealth Grant Rules and Guidelines “to require that the advising, decision-making and reporting requirements applying to situations where a minister approves grant funding be extended to apply to corporate Commonwealth entities in situations where a minister, rather than the corporate entity, is the decision-maker”.

The ANAO said making that change “would mean that there would be a single framework in place for all circumstances where a minister decides upon the award of grant funding”.

In addition to the sharp criticism about process, the ANAO raised another significant issue – whether the grants made by McKenzie were made with proper legal authority. Morrison referred that issue to the attorney general, Christian Porter, for advice.

The prime minister said on Sunday that Porter had told him the auditor general was wrong in his assessment that the grants made under the program were legally questionable. Quoting Porter, Morrison told reporters that the auditor’s commentary about the potential legal exposure was, “with respect, not correct”.

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McKenzie’s resignation from the frontbench means the Nationals will have to select a new deputy leader. While the Queensland frontbencher David Littleproud is the likely replacement, there is deep irritation in Nationals ranks that media reports last week pointed to a deal to replace McKenzie with Littleproud before the issue had been properly considered by the Nationals party room.

Morrison made it clear on Sunday he did not see McKenzie’s departure as the trigger for a broader reshuffle of his senior team despite the fact there is dissatisfaction inside the government about the performance of the embattled energy minister, Angus Taylor.

The Labor leader, Anthony Albanese, welcomed McKenzie stepping aside. But he said the opposition intended to get to the bottom of the imbroglio. “This scandal is bigger than one minister, and we still need to get to the bottom of these tawdry sports rorts,” the Labor leader said.

“This scandal characterises everything that’s wrong with this government – one that is all about its own interests and not the national interest. It also begs the question: How does Angus Taylor remain in cabinet while Bridget McKenzie does not?”