Crown Employees (Public Sector - Salaries 2008) Award [2008] NSWIRComm 142 - NSWIRComm 2008 case summary

Crown Employees (Public Sector - Salaries 2008) Award [2008] NSWIRComm 142 - NSWIRComm 2008 case summary — Zoe

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7 The Secretary of the Treasury relied upon affidavits sworn by the Director General of the NSW Department of Premier and Cabinet, Ms Robyn Kruk; the Deputy Secretary, Budget and Financial Management at the Office of Financial Management of the Treasury of New South Wales, Mr Mark Ronsisvalle; the Senior Director, Financial Management and Reporting at the New South Wales Treasury, Mr Brian Pellowe and an Assistant Crown Solicitor, Ms Anthea Tomlin. 8 The PSA sought the opportunity to cross-examine Ms Kruk and Mr Ronsisvalle on their affidavits. The application was opposed and was refused, the Full Bench taking the view that in the ordinary course, such cross-examination is not permitted and no case had been established permitting any departure from the ordinary course. (See Attorney General for New South Wales v Stuart (1994) 34 NSWLR 667 at 681 and Young v Quin and Others (1990) 59 ALR 225 at 227 and 230-31). 9 The PSA relied upon an affidavit of Mr Nathan Keats, solicitor, annexing a NSW Government document entitled, 'A new direction for NSW State Plan' and a Treasury Circular of 29 August 2006, concerning Results and Services Plans. These documents were relied on to advance an argument that the Plans the subject of the summons were not in fact documents which were the subject of Committee, or Cabinet deliberation. 10 There was an issue between the parties as to whether or not the evidence led by the Secretary of the Treasury had left unclear the question of whether the documents in issue between the parties had gone before the Cabinet, or a Committee of the Cabinet, or were ever considered, other than by Treasury. The respondent sought and was granted an opportunity to clarify that aspect of the evidence. That application was not opposed and further affidavits sworn by Ms Leigh Sanderson, the Deputy Director General (General Counsel) of the Department of Premier and Cabinet and by Mr Ronsisvalle, were subsequently received. The Crown's case 11 It was the case put for the Secretary of the Treasury that production of the documents sought could only be required if a legitimate forensic purpose for their disclosure had been shown. That had not been established by the PSA, in relation to the documents remaining in issue between the parties. 12 It was argued that the documents sought had been prepared for deliberations in Cabinet. The documents were Cabinet documents, being papers relating to the annual State Budget, with the 2008 Budget having only recently been handed down. In considering the documents, no distinction should be drawn between Cabinet and a Committee of Cabinet, working in a process, whereby the State Budget is ultimately produced. 13 Further, given their nature, the documents were apt to be misleading or misunderstood, given that they do not themselves represent the final budgetary process outcome contained in the State Budget. 14 Here, in evidence, was an opinion, expressed in similar terms to that expressed by the Director General of the New South Wales Department of Premier and Cabinet, in Egan v Chadwick & Ors (1999) 46 NSWLR 563. That opinion was there accepted by Spigelman CJ at 576, as indicating 'that the documents which the Legislative Council sought included documents which revealed the internal deliberations of the Cabinet'. It was argued that the Commission would come to a similar conclusion in relation to the documents here in issue. 15 It was also submitted that the evidence here led, also demonstrated that the documents were used for Cabinet deliberations and by their nature would expose such deliberations, thereby justifying them being labelled as 'Cabinet documents', attracting the immunity described in at 576. 16 It followed that in this case, the balancing exercise required to be undertaken by the Commission, when public interest immunity privilege was claimed, would lead to the summons being set aside. 17 After further evidence was led, it was submitted that it was not necessary that all of the documents in issue had gone before the Cabinet or a Committee, for the privilege to be attracted. The test was whether the documents had been prepared, or brought into existence, for the purpose of preparing a submission to Cabinet, or as a part of a Cabinet process. It had been established on the evidence that the documents were prepared for such submission, as a part of the annual State Budget process. Thereby, the documents raised matters for policy decision by the highest level of Government. 18 The harm to the public interest of disclosure of the documents had been established on the evidence given the matters of ongoing controversy dealt with in the documents. It followed that the orders sought would be made. The PSA's case

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21 It was not disputed that documents recording actual deliberations of Cabinet are to be accorded the highest level of protection, in order to protect the principle of collective responsibility in Cabinet decisions. Documents produced outside of Cabinet, even if the subject of cabinet deliberation, attracted a more limited immunity. Unless they recorded or disclosed the content of Cabinet deliberations, or the voting position of particular Ministers, the principle of collective responsibility could not be undermined by their disclosure. 22 The evidence showed that the Results and Services Plans are key documents relating to performance management of agencies, linking performance with Government priorities set out into the State Plan. They are not solely or principally for the purpose of Cabinet deliberation, but are used internally by agencies in their own planning and service delivery processes. They also provide an information base for cabinet submissions, separate from submissions seeking funding. 23 There was no suggestion on the evidence that proposed Results and Services Plans were submitted to or considered by Cabinet, or Committees. Agreed Results and Services Plans reflected decisions already announced, which could not possibly be subject to protection. 24 The evidence was that some Results and Services Plans were considered by the Budget Committee, but that was not evidence that the Committee deliberated upon them, rather than simply receiving them for information. 25 As to Efficiency Improvement Plans, the evidence was that they were prepared by agencies and submitted to Treasury; if there were concerns, a revised Plan was negotiated with Treasury and only if a dispute could not be resolved, was the matter referred to the Expenditure Committee. On the evidence, only 13 of 48 plans sought had been submitted to the Committee in full and a further 15, in summary. There was no evidence of Cabinet deliberation about such Plans. 26 Nor had any case been made out establishing any clear basis upon which production and inspection of the documents would be injurious to the public interest. The documents were central to the PSA's case, advanced on the basis of improvements in productivity and efficiency. In any event, danger of premature or ill-informed comment had passed in relation to most of the documents sought. That risk could only arise in relation to the 2007-08 year documents. 27 Inspection of the documents was urged and finally, it was argued that conditions on access could be imposed, which could include partial production and confidentiality measures, which could ensure that there was no injury, to the operation of Government. 28 It followed that the motion would be dismissed. The Crown's Reply

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In Conway v Rimmer , Lord Reid said [1968] AC, at p 952: "Virtually everyone agrees that Cabinet minutes and the like ought not to be disclosed until such time as they are only of historical interest. But I do not think that many people would give as the reason that premature disclosure would prevent candour in the Cabinet. To my mind the most important reason is that such disclosure would create or fan ill-formed or captious public or political criticism. The business of government is difficult enough as it is, and no government could contemplate with equanimity the inner workings of the government machine being exposed to the gaze of those ready to criticise without adequate knowledge of the background and perhaps with some axe to grind. And that must, in my view, also apply to all documents concerned with policy making within departments including, it may be, minutes and the like by quite junior officials and correspondence with outside bodies. Further it may be that deliberations about a particular case require protection as much as deliberations about policy. I do not think that it is possible to limit such documents by any definition. But there seems to me to be a wide difference between such documents and routine reports." I agree with his Lordship that the possibility that premature disclosure will result in want of candour in cabinet discussions or in advice given by public servants is so slight that it may be ignored, despite the evidence to the contrary which was apparently given and accepted in Attorney-General v Jonathan Cape Ltd [1976] QB 752. I should have thought that the possibility of future publicity would act as a deterrent against advice which is specious or expedient. I also agree with his Lordship that the efficiency of government would be seriously compromised if Cabinet decisions and papers were disclosed whilst they or the topics to which they relate are still current or controversial. But I base this view, not so much on the probability of ill-formed criticism with its inconvenient consequences, as upon the inherent difficulty of decision making if the decision-making processes of cabinet and the materials on which they are based are at risk of premature publication. Cabinet proceedings have always been regarded as secret and confidential.

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But it has never been doubted that it is in the public interest that the deliberations of Cabinet should remain confidential in order that the members of Cabinet may exchange differing views and at the same time maintain the principle of collective responsibility for any decision which may be made. Although Cabinet deliberations are sometimes disclosed in political memoirs and in unofficial reports on Cabinet meetings, the view has generally been taken that collective responsibility could not survive in practical terms if Cabinet deliberations were not kept confidential (See UK, Parliament, Report of the Committee of Privy Counsellors on Ministerial Memoirs ("the Radcliffe Committee") (1976), Cmnd 6386, p 14.). Despite the pressures which modern society places upon the principle of collective responsibility, it remains an important element in our system of government. Moreover, the disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course (See Conway v Rimmer , [1968] AC, at p 952, per Lord Reid; Sankey v Whitlam (1978), 142 CLR, at pp 97-98, per Mason J; UK, Parliament, Departmental Committee on Section 2 of the Official Secrets Act 1911 ("the Franks Committee"), (1972), Cmnd 5104, vol 1, p 33.). The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny. Whilst there is increasing public insistence upon the concept of open government, we do not think that it has yet been suggested that members of Cabinet would not be severely hampered in the performance of the function expected of them if they had constantly to look over their shoulders at those who would seek to criticize and publicize their participation in discussions in the Cabinet room. It is not so much a matter of encouraging candour or frankness as of ensuring that decision-making and policy development by Cabinet is uninhibited. The latter may involve the exploration of more than one controversial path even though only one may, despite differing views, prove to be sufficiently acceptable in the end to lead to a decision which all members must then accept and support. 39 Documents prepared for submission to Cabinet were also considered in Lanyon Pty Ltd v The Commonwealth of Australia (1974) 129 CLR 650, where Menzies J observed at 653, when upholding the claim for privilege that:

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Results and Services Plans 49 We are satisfied, on the evidence, that the PSA has established a legitimate forensic purpose for its pursuit of these Plans. The PSA seeks wage increases for public servants to whom the new award is to apply, in order to ensure that they receive fair rates of pay and conditions of employment, for the work which they are required to perform. The claim concerns not only work value change, but productivity and efficiency improvements, which it is claimed have occurred, over the period in question; as well as improvements in the quality and quantity of work and service delivery; employee contributions to public sector restructuring; and the development of synergies in internal service provision. 50 On the evidence, these Plans include information as to agencies' result indicators and service measures, including how efficiently an agency is delivering services, as well as quality, access and timeliness of services. The Plans also deal with organisational capability, including people, systems and processes, as well as actions agreed between the Treasury and a Minister, in relation to strategic issues and monitoring agency performance. We are satisfied that the potential relevance of the documents to issues in the proceedings was thus apparent, given the basis of the PSA's claims. 51 We are also satisfied that the documents are of a kind, which may attract the immunity claimed. They are documents prepared for submission to Cabinet, by the responsible Minister, as a part of the preparation of an annual Budget for the State. Unsurprisingly, some of the issues dealt with in these Plans span periods of time longer than one year and are the subject of ongoing consideration, including in subsequent years' State Budgetary processes. 52 Decisions as to State finances, are a fundamental aspect of Government, finally determined at the highest level. These Plans are an integral part of what is, undoubtedly, a complex annual decision-making process, requiring input from agencies and responsible Ministers, as well as by a Committee of Cabinet, in order that Cabinet may finally come to produce a State Budget. It follows that the documents are concerned with 'policy issues at a high level'. 53 While prepared by agencies, the documents communicate the relevant Minister's proposals to Cabinet, as to various policy issues in relation to the agencies for which they have responsibility, necessarily the subject of the Cabinet's ultimate decision in relation to the State Budget. We concur with the view taken by the Full Federal Court in Ryan, that recommendations of any kind involved in a document of this kind, submitted by a Minister to Cabinet, are quite likely to have been involved in the deliberations of the Committee and Cabinet, necessarily involved in production of the State Budget. No doubt, competing agency demands have to be considered and determined in that process. That view is also consistent with the evidence of Ms Kruk, to which we will turn below. 54 On the evidence, access to the documents could reveal both internal Committee and Cabinet deliberations, as to funding priorities and the formulation of the State Budget, in relation to competing funding issues and proposals made by various Ministers. Certain of those issues continue to be current and controversial. 55 Mr Pellowe described how Government agencies were required to produce a Results and Services Plan in accordance with Treasury Guidelines. Mr Ronsisvalle explained the part which such Plans then played in the State Budget process. He deposed at [9] to [10]:

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8 Mr Cameron also informs me that the 2005/06, 2006/07 and 2007/08 Results and Services Plans of eleven of the agencies named in the Summons were considered at meetings of the Cabinet Standing Committee on the Budget on 5 October 2005, 28 August 2006 and 15 August 2007 respectively. 63 Mr Ronsisvalle's further evidence sought to explain a flow chart appearing at p 146 of the State Plan, on which the PSA relied to submit that these Plans are directed to Treasury, but not to Cabinet or any Committee. Mr Ronsisvalle said that the State Plan provided an overview of Government priorities announced in 2006, in relation to 'the implementation of fundamental reforms to Government accountability and reporting'. It did not, however, prescribe 'in a precise manner', how such accountability and reporting would be carried out. As a result, the flow chart was not complete. Mr Ronsisvalle further explained that: 14. As is indicated in paragraph 12 of my first affidavit, Treasury Circular 06/22, also issued in 2006, confirms the requirement that Results and Services Plans in fact must be developed for submission by the relevant Minister to, and approval by, the Cabinet Standing Committee on the Budget. I can confirm from my own review of Cabinet records and recollection of personally attending meetings of this Committee, that since Treasury Circular 06/22 was introduced in 2006, agency Results and Services Plans have been submitted to Budget Committee. 64 Having considered this evidence, we are satisfied that the claim for public interest immunity in relation to these Plans has been made good. The PSA confirmed that its summons required production of both proposed Plans and those finally agreed. That put beyond doubt that production of the Plans could reveal the deliberations of the Committee and Cabinet in relation to the matters dealt with in the Plans, which come to form part of the State Budget. These documents are not merely reports or submissions prepared by agencies to assist Committee and Cabinet deliberations. They are prepared for submission by the relevant Minister, in accordance with required guidelines and are finalised as the result of Committee and Cabinet deliberations, with the end result being the formulation of the State Budget. Their publication would, undoubtedly, reveal deliberations as to policy matters of both past and ongoing controversy at those levels of Government. 65 To be weighed with those considerations is the impact of not requiring the documents to be produced in this civil litigation. On the material, it is difficult to see that these proceedings would, in reality, be frustrated or impaired by production of the Plans being refused. Parts of the documents are later disclosed publicly in the State Budget and in agency Annual Reports and are thereby available to the PSA, to be used in its case. The consequences of decisions made by the Committee and Cabinet on contentious matters raised in the Plans, which are not so revealed, may, nevertheless, later become known through decisions which are implemented at agency level. Again, thereby that information comes into the public domain and is available for use in the proceedings. 66 While we do not accept the PSA submission, that, in truth, these Plans are but a management tool, designed to be used by the agencies to whom they apply, undoubtedly the consequences of the decisions made in the approval process leading up to the issue of the State Budget, as reflected in these Plans, affect the work which public servants later have to perform when the Plans are implemented. That is information which then also comes into the public arena, and as a result, is undoubtedly within the knowledge of public servants, who, as members of the PSA, are available to be called to give evidence in the proceedings about such matters. 67 What ought not to be revealed in these proceedings is the content of the draft and agreed Plans, which will reveal Cabinet and Committee deliberations, particularly in relation to ongoing contentious matters of policy, which have to be resolved in determining how the State's finances are to be utilised by agencies, as well as those which remain in contention and will require future consideration. 68 As was put by Mason J in Sankey at 97: ... the efficiency of government would be seriously compromised if Cabinet decisions and papers were disclosed whilst they or the topics to which they relate are still current or controversial. But I base this view, not so much on the probability of ill-formed criticism with its inconvenient consequences, as upon the inherent difficulty of decision making if the decision-making processes of cabinet and the materials on which they are based are at risk of premature publication. Cabinet proceedings have always been regarded as secret and confidential.

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77 Ms Kruk's evidence at paragraphs [21] to [26], earlier quoted, also concerned these Efficiency Improvement Plans. 78 Ms Sanderson's evidence was that review of Cabinet Secretariat records had shown that the Plans of nine agencies had been submitted to the Committee in full, or had their contents presented in summary form for consideration. 79 Mr Ronsisvalle's further evidence was that Efficiency Improvement Plans formed a part of the annual State Budget process. Plans submitted to Treasury might be acceptable; they might lead to changes negotiated by the Treasurer, or Treasury, which might seek a revised submission; and if any issue could not be resolved, the relevant Minister could be required to appear before the Committee, which could also request a revised Plan for further consideration. That Committee endorsed the final Plan. 80 If that Committee formed the view that efficiency dividends or savings could not be achieved without unacceptable reduction in key services, the funding shortfall could be referred to the Standing Committee on the Budget, for consideration of supplementary funding. This could be approved by a one-off increase in budget allocation, or an ongoing increase, over four years, in its Budget and Forward Estimates. 81 These Plans were one means by which the Government determined budgetary needs of a particular agency and its budget allocation. They were one means by which a Minister may raise for policy discussion funding issues faced by an agency in meeting the State Plan. 82 On the evidence we are also satisfied that, on balance, these Plans do attract a claim for public interest immunity, even though that conclusion was not as obvious in the case of these Plans, as it was in the case of the Results and Services Plans. 83 Nevertheless, there can be no question, on the evidence, that the Plans are the responsible Ministers' proposals to Cabinet as to how a Government directive, requiring cost savings, is to be achieved by the agency concerned. Proposed Plans are accepted for implementation as a part of the State Budget, as the result of a process involving agencies, Ministers and the Treasury. They may be the subject of negotiation with the Treasury or the Treasurer, or may be the subject of separate consideration by the Committee. Some agencies' Plans are always considered by that Committee. 84 It follows that these Plans are also not just a management tool for an agency, or even a report to Cabinet, as to what an agency proposes in relation to cost savings. The Plans form a part of a process by which the State Budget is developed. This involves Ministers' proposals, in relation to the agencies for which they have responsibility, meeting Government directives. It is not to the point that not every individual Plan is, itself, separately considered at Committee and Cabinet level. Some are routinely considered. Others are considered when the view is taken by Treasury that Government directives are not satisfied. Whether or not so considered, what is proposed in the Plans is provided by the relevant Minister to the Committee and Cabinet for deliberation in relation to the matters of policy dealt with in the Plans, some of which, undoubtedly, concern matters of ongoing controversy. The information so provided in that process is fundamentally concerned with Cabinet's formulation of the annual State Budget. As we have observed, that is plainly a complex process conducted at a high level. We are satisfied that while not themselves containing Cabinet deliberations, given their contents, access to the Plans could reveal aspects of Cabinet's deliberations on the State Budget and its formulation. 85 The evidence also showed that these proceedings would not be frustrated or impaired by production of the Plans being refused. While these Plans themselves are kept confidential, parts of these Plans are also later disclosed in the State Budget and in agency Annual Reports. The consequences of decisions made by Committee and Cabinet on contentious matters raised in these Plans, also later become known through decisions which are implemented at agency level, which are then reflected in the work of public servants, about which the PSA is free to call evidence in these proceedings. 86 It is unnecessary for policy issues of ongoing controversy and deliberation in relation to required cost savings, at Committee and Cabinet level, which are dealt with in these Plans, to be revealed in these proceedings, in order to do justice as between these parties. We are satisfied that premature disclosure of Government decisions as to matters of ongoing cost savings, which are well known to have been the subject of repeated controversy before this Commission in the past, ought not to be required in these proceedings. 87 It must be remembered that these proceedings concern the PSA's claims for wage increases for past work value change; productivity and efficiency improvements; as well as improvements in the quality and quantity of work and service delivery; employee contributions to public sector restructuring processes, departmental amalgamations and the development of synergies in internal service provision. 88 Not only does the PSA have access to aspects of the Plans, as they have been made public in other ways, the consequences of the implementation of the Plans, in the period to which this claim relates, have been reflected in the work which public servants have been required to perform. It follows that the consequences, in these proceedings, of a refusal to require disclosure of the contents of the Plans themselves, which will not only reveal matters not already in the public domain, but will also reveal Committee or Cabinet deliberations in relation to matters of past and ongoing controversy, are not such as to override the public interest in the confidentiality of such deliberations being maintained. 89 It follows that the orders sought in the motion must also be made, in relation to this class of documents. Orders 90 For the reasons given, we order that the summons be set aside, other than in relation to Budget allocation letters, the subject of our earlier order.

Crown Employees (Public Sector - Salaries 2008) Award [2008] NSWIRComm 142

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Judgment (84 paragraphs)

Cases Cited (10)

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