How are you very well, thank you, and how do we find you this week? Oh always good this time of year, chris because footballs finished in its qriket season. Ah, well i i that one was lost on me, so there you go thanks for the reminder. Uh it is. I was thinking more fast track, its fast track day for the vlga big day and uh. Thank you for taking some time away from that to talk to us not a problem chris, but always a great day fast track and just wait for the uh. The post match reports on that now. Uh a few stories to touch on this week of interest from around the local government sector, not just in victoria but more broadly as well. I know youve um spent some time thinking about the implications of the latest episode of australian stories. Steve tell me about that. Some might think its a tenuous link. Chris, actually australian story. This week was a cracker and if anyone didnt um say it get onto the abc eye view and have a look, its the story of christopher hill and lucas came who were involved in a seven million dollar currency trading fraud were still going wheres. The link to local government im looking im looking but ive got my faith, but it shall all appear. Oh chris heres the thing um they were. You know old, uni, friends, school friends and christopher hill, worked at the australian bureau of statistics and was responsible for holding data about employment figures, national employment figures, lucas camay was a currency trader at the nab.
If you know in advance of the market information about employment figures, that is, they are matters that would actually affect the value of the currency right. So a person with knowledge ahead of the market can trade and make a profit um theres a whole bit of skullduggery. That went on between the two of them in terms of the quantum but um. As i said, there were seven million dollars worth of trades based on christopher, providing the information less than a minute ahead of the public announcement were talking about that kind of margin. Now, wheres the link to local government yeah, i think theres, two quiz one, is that um we are in in local government. We are managers of information, so we do hold information around properties around planning that, if released to the market, um people could make a profit out of yes um, so theres an implication there – and i know ibac in the past, have been concerned about the fact that Um, you know even that information around council valuations in the wrong hands could be used for criminal purposes, so it goes to how we run out. How we, you know manage data and information goes to uh. You know how we run our organizations. I think the other one chris is, if i take you to a thing, called the fraud triangle with which youll be familiar. When you do fraud training, any fraud typically has three elements: motive, opportunity and rationalization and, in a sense, the rationalization between particularly with christopher hill.
In his role at the abs was that it was a victimless crime, theres no such thing as a victimless crime. Well exactly – and that was the view of the federal police that, in fact, if someones made a profit on a trade, someone else has made a loss. Even if that loss is distributed between a number of financial institutions and ultimately to their shareholders – and it would be the same thing – you know um some of the sort of white collar type frauds that you might see in local government from time to time. People might think are victimless, but the reality is that theyre not, and so you know it just struck me as a reminder of the importance of thinking about the rationalizations that people use often about what might not seem particularly important or might seem trivial. I suppose chris. So i think youve made that link very nicely steve and the other thing youve done is uh is made me think i need to make sure i watch australian story from this one catch up on that talking about people doing things and how they perhaps might rationalize It in their own minds, but it appears you know when you test it more broadly, how what could they possibly be thinking um the shire of ravensthorpe in western australia, the ceo there has lost his job um, so hes, not the ceo anymore. Over an investigation thats been conducted by western australias crime and corruption, commission im not sure if ive got the words in the right order.
There yeah but effectively hes lost his job because hes used council funds, allegedly because this has not been tested criminally yet, but allegedly use council funds to pay for sex workers. Um its hard to understand on what measure anyone could think thats an appropriate use of ratepost funds um. I think the justification was along the lines of mentoring and support quiz, but that was the its the sort of story that gets uh media because of the salacious nature of it. So we sort of think all that topics you know worthy of attention, but um. Oh, look, i and i wonder i dont know um it might be that someones just not well. I guess the thing that struck me with that chris is how sometimes people are not necessarily ceos, but someone who has a powerful personality or occupies a powerful position or in a recent case that was investigated by the ombudsman at melton, occupies a role thats quite specialized And not subject to scrutiny can avoid the sort of checks and balances that would normally be applied through an organization. I guess with the ceo. The thing that struck me too, chris, is that um – and i know you and i talked about this before theres – been a bunch of if you watch aircraft on on a tv team at the moment, watch air crash investigations, often enough and youll, see circumstances where the Navigator and the first officer dont question the judgment of the pilot yeah.
I know that um its not uncommon for nursing staff to be given training of how to speak up when they think the surgeons not quite doing the right thing. So if youve got a situation where a ceo is raising Music, an authorisation for a new creditor providing invoices for payment, it becomes very difficult, for you know: staff in those organizations to question that uh again youve drawn a very nice link there – and i just want To be clear, about, whats happened with that case, so the the triple c launched the investigation. The council was obviously privy to what was coming out of that investigation. They terminated the employment of the ceo. The triple c has now publicly released its report, so this is in the public domain and has uh has said that its uh recommending that the matter be referred for criminal charges so or more at this more to come from this. The other thing thats worth noting is that the shire president, who, by all accounts from the media reports is, is devastated. Its a small shire uh were talking about 50 or 60 000 um its a lot of money to them. Um apparently, the the ex ceo has told the show president that hell repay the money, but i cant see that happening quickly. I saw that chris yeah, that was that was an interesting one. I thought it was interesting too um in the media reports that the termination was based on confidential advice provided by the ccc to the council, and i guess the other thing that struck me chris was um.
How do i? How do i put this? It goes back to a conversation that you had on vlja connect with david wolff a week or two back and again id commend that interview for anyone and david made the point that sometimes the controls that leadership think are in the organization arent as effective as they Might be and talk to the importance of the speak up culture and you and ive spoken previously. Well, how do you know that youve got to speak up culture in an organization? How do your staff feel you know? What are the stories that go around when the staff are perhaps presenting to a meeting of the executive team on a wednesday morning as to how candid they feel they can be? What are the stories that go around amongst the staff in terms of preparing council reports as to the capacity of staff to you know, give the council the whole story and for the council to receive that information? What are the consequences? You know of uh scrutiny and oversight done well compared with scrutiny and oversight done in a way thats actually damaging for um. The speak up culture in the organisation. Absolutely right and im reminded also of a story that i saw recently and i did share on my linkedin profile. If anyones interested uh, it was called uh, hypocritical leaders make poor leaders and the one of the quotes that jumped out at me is when the same rules apply from top to bottom.
People are more prepared to do what their ceo asks of them and the the flip side of that is. You know when the ceo or people in leadership positions arent living the values they expect everyone else to abide by. How can you expect them to also abide by those values yeah and then that takes us back to rationalizations quiz that oh, i did it because the issue was important. Oh, i behaved that i might have snapped, but you know we were under time pressure um. So you know, managing culture is a topic that really deserves some thoughtful attention. All right, we went down a bit of a rabbit hole. There. Lets lets climb back out and uh come into the into the sunshine uh and and look at defamation weve got uh. It seems to me another week another story about how someone has gotten into a bit of hot water uh through their social media activity um and without making any judgments on any of these particular instances. Weve got a case in mildura where a former mayor was subject of a defamation case by an mp and that matters been settled out of court this week, thats true chris, the mp is also a former councillor. My understanding of that situation, it related to a facebook post which described. How would i just put this nicely? It described the the mechanics and the interactions leading to the election of mayor, where perhaps a number of parties were involved and some councillors thought that um uh promises hadnt been kept in relation to what might have happened in relation to the mayoralty right um.
There was a post made to facebook and we know what happens to posts made to facebook quiz. They can be screenshotted very quickly, so its not on facebook, but he had done the rounds and um as a consequence of that poster defamation action was launched, but fortunately, in this particular case um all parties to the def def to the action uh are satisfied with The matter of the settlement uh, which of course is confidential – confidential, dealt with that of court, the post itself im, not, i think you might have seen it it got taken down a few days after it was up there, but there was a bit to it. I think it was like a 5 000 word game of thrones sort of dissertation wasnt it. It was an essay chris and uh yeah. I might have seen it, but anyway its uh its no its its its no longer there. I thought one of the really interesting things for that. Chris again were back to rationalization. Since i looked, i was angry. I was upset someone misbehaved um might have been the sort of thing that people might be thinking when they make a post thats, not complimentary of others. Again were not lawyers. Our good friends at hunt and hunt are probably much better qualified than us too. To talk about these things, but its not only truth, theres also an element of public interest and elements of reputation that go to um the determination of defamation, um matters and even at times where we think what were saying might be the truth.
Its only our view – and there may well be another broader view that weve missed, because you know we only see one side of things so um a word of caution. I think you are youre on this recurring theme around social media chris. Well, i am theres another one uh worth and we talked last week about the the the tasmanian case: thats uh underway theres, another issue in new south wales at bathurst council, where a council law was subject to. I think two complaints in relation to facebook activity um. One of those complaints was brought by a local resident um its been investigated under the councils code of conduct and uh tested against its social media policy for councillors. That council has been found to be in breach and has been officially censured by the council this week and the the other matter is ongoing, but just another example of what seems to be an increasing number of people just saying what they think on facebook and then Not perhaps thinking about the repercussions of that yeah and its interesting chris, because most councils will have a social media policy and im sure those policies talk about you know not using social media to disparage people or you know all of those sorts of of things, but Its so easy to be kind of caught up in the moment and um and regretfully or otherwise, uh the oath of office, the standards of conduct um. They still apply um notwithstanding that from time to time the issues are difficult or people can be.
Um can be a bit pushy and and behaving ways that we might agree when youre holding public office either as a councillor or officer high standards are required. So i i dare say these arent the last examples of these types of issues that well be talking about. I know our friends at hunt and hunt lawyers have recently produced some information on the use of social media, particularly around election time, but by you know, candidates, uh elected representatives, etc. It is a bit of a minefield and people just need to be really careful. Couldnt agree more steve uh, while were in new south wales couple of things that have happened this week that are worthy of note. The the long awaited central coast council, public inquiry started on monday and stopped on tuesday and unfortunately, its due to technical issues, uh about which the minister for local government in new south wales is very displeased mr grumpy apparently chris, yes, well uh. The minister shelly hancock put out a statement to say that the failure of the livestream is simply unaccept unacceptable and she expects the commissioner to rectify it as soon as possible. So so what happened was they were live streaming it on youtube? Apparently there was a technological upgrade on the weekend before the inquiry started on monday. Never good timing, i would have thought and then lots of glitches monday tuesday. The commissioner proceeded with some of the witness statements and there are transcripts of those online but uh.
The point is that they need to be publicly uh accessible in real time to instill that confidence in the process that wasnt happening so its stopped for the moment, its not yeah its, not quite the same having the transcripts and just to go back a step chris. This is the inquiry into the financial management that led to the dismissal of the central coast council. I would have presumed it to an inquiry that will get interest from local government practitioners right across the country as to what could happen that could lead a council to that situation where it effectively cut pads debts or its bills, as they come through absolutely right, and I know youve been looking for something to fill the void with the loss of the live streams of operation sand, and so this could be it when its up and running for you steve absolutely chris and i would say i mean im far more of a luddite Than you are on matters of technology but um, i always have a bit of a bit of sympathy for the igp people, because theres a bit of there, but for the grace of god, go eye absolutely right. Absolutely right and the other thing worth noting, is theyve quantified. The cost of the deferred elections in new south wales, which, as weve talked about on the program before, were pushed back another three months until december. Apparently, the electoral commission has asked the government for an additional 29 million dollars because of that deferral thats.
On top of the 57 million already allocated its a bit mind boggling, really to think that a three month, deferral and lets not forget its in in in covert times uh is going to cost uh nearly 30 million dollars um, and my understanding chris, is that the Escalator – and i think you drew it to my attention that the government is now in a spot in new south wales, where they have to have attendance, voting the escalation. Some people have said why dont they just go post but its its too late, and to set that up now would cost even more. I would uh, i would venture yeah and the escalation of covered means that um more staff are required to conduct the election. There are presumably sunk costs associated with the various arrangements that were previously in place. I think its just a general comment about project management. Chris, that the longer a project lasts, the more it will cost yeah thats a really good point uh. I think they had their chance to to make it go uh a postal vote, but the government decided not to – and i think i read the electoral commissioner saying uh – it is its just too late to pivot to that now so extra staff extra venues lots of Additional measures obviously to to conduct it in a covert, safe manner. I think the worst thing that could happen now steve is for it to be deferred again.
Oh lord! No! Well all those mayors, deputy mayors have been installed for on the understanding its for three months. Chris and thats still happening every week. Weve got two or three more of those uh coming coming through. All right. Well, keep an eye on that uh thats. All i had on my list this week. Steve have you got anything left to raise with our audience? No! Only a welcome back to the minister whos been recuperating after some treatment, so um yeah good to good to see the minister back on deck. It certainly is were all very pleased uh, and it was great to have him at uh fast track today. Doing that opening q a steve, thank you that wraps it up for a governance update with our thanks to hunt and hunt lawyers, the terrific team there. If you want to know more about the hunt and hunt team and what they can do for councils and local government visit them online at hunthunt.com and steve, well, see you next week for another governance, update.