Officials decline to say whether they had concerns about discussions between Hockey and WA treasurer

This article is more than 3 years old

This article is more than 3 years old

Treasury has declined to say whether it had concerns about discussions the former treasurer Joe Hockey had with the Western Australian government relating to the Bell Group controversy, which the tax office says has cost it $1.8bn.



Officials from the Australian Taxation Office, treasury and the attorney general’s department appeared before a Senate inquiry in Canberra on Wednesday, which is examining conflicting accounts over whether or not there was a deal struck between the federal and Western Australian governments in 2015.

The new inquiry is also examining the attorney general’s actions in relation to the former solicitor general Justin Gleeson.

Scott Morrison says he won't ask Joe Hockey if he made a Bell Group deal Read more

The controversy was kicked off by a report in the West Australian that alleged Brandis instructed Gleeson not to run a particular argument in the high court case that successfully challenged the constitutionality of a Western Australian law attempting to finalise the Bell Group fallout and distribute assets.

The report in the West Australian alleges that Brandis told Gleeson that an understanding had been reached between the federal and WA governments to end two decades of litigation in relation to the Bell Group.

The WA treasurer, Mike Nahan, told the state parliament on 18 May 2016 there was an understanding with the commonwealth that it would not oppose the Bell Act.

Treasury officials confirmed they had offered advice to Hockey and to his junior minister, Josh Frydenberg, after they became aware Hockey was in discussions with Nahan over the state’s proposed legislation – but they declined to reveal the nature of their advice, or whether they had concerns about the discussions.

Dianne Brown, chief adviser of treasury’s financial system division, Markets Group, told the inquiry Treasury was unaware of any discussions between Hockey and Nahan until the department received a copy of correspondence between the two men.

Officials from the attorney general’s department said they had first become aware of the Bell matter in April 2015, when they were briefed by Treasury. They declined to specify what advice they had given to Brandis.

Iain Anderson, deputy secretary of the attorney general’s department, said he had attended a meeting that also involved Brandis and Gleeson in late March about the Bell case and other legal matters, which he characterised as a “professional discussion”.

He said any differences there may have been between Brandis and Gleeson about whether or not the commonwealth should intervene were not evident at that meeting.

Appearing separately, officials from the tax office confirmed they had spoken directly to Brandis about the Bell case, which ATO second commissioner Andrew Mills said was “most unusual.”

Mills told the inquiry he had spoken to Brandis at the behest of the revenue minister, Kelly O’Dwyer, in order to brief him about the ATO’s position in the high court action. The tax office had resolved formally on 4 March to intervene in the case.

George Brandis to face inquiry into actions over Bell Group scandal Read more

Mills said during their conversation on 7 March the attorney general indicated he had not yet decided whether the commonwealth would also intervene.

He said the attorney general had not tried to talk the ATO out of proceeding with the high court action and he said he was not aware if there were any tensions between the minister and Gleeson over the litigation.

He said the government had not signalled any deal with the WA government.

Mills told the inquiry the tax office believed it was owed $1.8bn by the Bell Group – a figure made up of $460m in unpaid tax and $1.4bn in compounding interest.

Late last month, Brandis made a 30-minute statement to the Senate outlining his actions in relation to the controversy.

Brandis told the Senate he did not believe there was a deal between the commonwealth and the Western Australian government over litigation surrounding the collapsed Bell Group and, if there was any such agreement, he had no knowledge of it.

The attorney general has refused to divulge the detail of his conversations with Gleeson over the related high court proceedings, citing legal professional privilege, but he said he did not instruct Gleeson to run dead in the high court action.