Victoria’s integrity agencies push for reform amid collapse in public confidence

The state’s three leading integrity agencies – IBAC, the Ombudsman and the Auditor-General’s Office – have revived a push for parliament instead of the government to set their annual funding, as new data shows Victoria is Australia’s least trusted state when it comes to fighting corruption.

The agencies told this masthead in a rare joint statement that there had been no “commitment or substantive action” by the state government to quarantine their budgets from political pressure since they publicly raised the matter before the last election.

The issue of budget independence and how to address falling public confidence in Victoria’s integrity system will take centre stage at a national anti-corruption conference in Melbourne over the next two days to be addressed by Ombudsman Marlo Baragwanath, IBAC Deputy Commissioner Stephen Farrow and Australia’s most prominent integrity campaigners.

Transparency International Australia chair Professor AJ Brown will on Monday present to the conference new data showing that public confidence in the Victorian government and its peak anti-graft body, IBAC, to fight corruption is lower than in any other state.

“Victoria has the worst corruption challenge,” Brown said. “Confidence in the state government’s commitment to fighting corruption and the ability of the anti-corruption commission to tackle it is lower in Victoria than anywhere else in the country.″⁣

Brown said providing budget independence for integrity agencies was “absolutely fundamental” to restoring public trust. “The problem is both the risk of governments de-fanging integrity agencies by reducing or compromising their funding and the more subtle problem of gradual erosion of capacity,” he said.

IBAC, the Ombudsman and the Auditor-General published a joint report in October 2022 calling for the establishment of an independent commission or tribunal to determine funding for the state’s integrity agencies, a reform they described as “profoundly in the public interest”.

A departmental briefing to then attorney-general Jaclyn Symes, released to the state opposition under freedom-of-information laws, recommended the issue be deferred to the incoming government.

A government source, speaking confidentially to discuss internal matters, confirmed that no formal consideration had been given to the proposal. The government was also frustrated by the timing of the 2022 report, which it saw as an attempt to influence the state election campaign, the source said.

In the three years since the report was published, government funding for IBAC and the Ombudsman has flat-lined, while funding for the Victorian Auditor-General’s Office has increased by 15 per cent.

IBAC’s 2025-26 budget of $64.6 million is comparable to this year’s $67.4 million in total appropriations provided by the NSW government to that state’s Independent Commission Against Corruption. The Victorian Ombudsman’s current budget of $22.7 million is less than 40 per cent of the $58.5 million provided to the NSW Ombudsman to do similar work.

In response to questions from this masthead, IBAC Commissioner Victoria Elliott, Victorian Auditor-General Andrew Greaves and the Ombudsman, Baragwanath, issued a joint statement signalling their renewed push for reform.

“The Independent Broad-based Anti-Corruption Commission (IBAC), Victorian Ombudsman (VO) and Victorian Auditor-General’s Office (VAGO) continue to examine the issue of budget independence and transparency for Victoria’s three core integrity agencies,” the statement reads.

“Since the release of joint paper ‘Budget independence for Victoria’s Independent Officers of Parliament’ in October 2022, discussions have been ongoing between our agencies and government. However, a commitment or substantive action by government in response has not yet been made.

“Work is currently under way on an updated paper building on the 2022 paper, with the aim of providing recommendations that strengthen institutional independence, improve the quality of decision making, enhance transparency, and promote public trust in Victoria’s integrity system.”

A government spokesperson said the three agencies had received “funding uplifts” in recent years and were exempt from savings measures applied to government departments, such as efficiency dividends and the still unreleased recommendations of Helen Silver’s review of the public service.

The spokesperson said changes made this year to public sector financial management laws included provisions which supported budget independence for the integrity agencies.

“We expect all public sector bodies, including the integrity agencies, to manage their budgets and ensure public money is spent efficiently and effectively.”

Opposition spokesman for financial integrity David Davis said inadequate funding and support for the state’s integrity agencies had led to more public sector corruption.

“We have a real problem with integrity and, particularly, corruption across key areas of government procurement,” he said. “Transparency International Australia makes clear that if you starve the integrity agencies of support you end up with more corruption and higher costs.”

The previously unpublished results of a national survey conducted this year through the Australian Research Council Discovery Project show that only 19.5 per cent of respondents in Victoria thought the state government was doing a good job of fighting corruption. This compares with 31.8 per cent in NSW, 32 per cent in Queensland, and 33.2 per cent in Western Australia and South Australia.

The research shows that public confidence in IBAC is lower than in other peak anti-corruption bodies including the nascent National Anti-Corruption Commission, despite intense scrutiny of the NACC and its commissioner, Paul Brereton.

Respondents in Victoria also had less awareness of IBAC’s work than respondents in other states about their respective anti-corruption bodies. IBAC, in contrast to ICAC, can only conduct public hearings in exceptional circumstances.

AJ Brown, the lead researcher on the Australian Research Council-funded five-year project, said budget independence was a concern for integrity agencies in all jurisdictions and that previously, Victoria was an exemplar state in addressing it.

Victoria in 2019 through a series of law changes enshrined the principle of budget independence and created the Integrity Oversight Committee to review the performance and budgets of IBAC, the Ombudsman and the Auditor-General.

Brown said Victoria now lagged behind NSW, where reforms prompted by a NSW Auditor-General report established a special integrity agency unit within the Department of Treasury and require the treasurer to report to parliament and answer questions about annual appropriations to integrity agencies.

“The Victorian reforms were a big step in the right direction but NSW seems to have leapfrogged Victoria,” Brown said.

In Victoria, the Integrity Oversight Committee has a statutory obligation to review the budgets of integrity agencies but in practice, this is stymied by advice from the government instructing the agencies not to provide the committee with their annual budget bids, which are treated as cabinet-in-confidence.

The committee’s chair, Greens MP Tim Read, confirmed this meant his committee had no line of sight over a key step in the budget process. He backed the need for further reforms.

“Funding of integrity agencies should be decided at arm’s length from government, in the same way that MPs’ salaries are determined,” Read said. “Integrity agencies need the courage provided by independent funding.”

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