Treasury secretary Jenny Wilkinson concedes error with $2.3 billion payments for electricity relief

Treasury secretary Jenny Wilkinson conceded today she wasn’t told her department illegally paid $2.3 billion to the states to provide electricity rebates.

The payments breached the Constitution because written approval was not sought from Treasurer Jim Chalmers, who had announced a six-month extension of the Federal Government’s $300 annual rebates in the last Budget.

In a Senate committee hearing on Thursday morning, Ms Wilkinson said she had not been initially told about Treasury’s unlawful payments which occurred when she was head of the Department of Finance.

“No, I wasn’t,” she said. “This goes to internal processes. I think probably, my better view is that these sorts of matters would be brought to the secretary when they are uncovered. I don’t think there’s any reason why they shouldn’t be. That’s my honest view.”

Shadow treasurer Ted O’Brien and Senator James Paterson, the Opposition’s finance spokesman who questioned Ms Wilkinson at the committee, said breaching section 83 of the Constitution “is no simple error”.

“It is a blank cheque culture inside a Government that has lost control of spending, debt and basic financial discipline,” they said in a statement on Thursday morning.

Treasury’s annual report for 2024-25 admitted $2.28b, related to the Energy Bill Relief extension, was paid to the states and territories “in potential breach of section 83 of the Constitution”.

“The payments were made without appropriate written ministerial authorisation in place for the senior official to approve the payments on the minister’s behalf,” it said.

Ms Wilkinson signed off on the annual report, published on October 24, after replacing Steven Kennedy as Treasury secretary on June 16.

“I first of all wouldn’t say it was offhand mention in the financial accounts. It’s a clear report,” she said on Thursday.

“I take these matters very seriously. While it’s never desirable to make such an error, I am impressed with how quickly the Treasury’s staff identified the issue, advised the Treasurer, took corrective action, reviewed our systems, and clearly disclosed the breach.”

Dr Kennedy, who presided over the bungle, is now the secretary of the Department of Prime Minister and Cabinet.

Damien White, the deputy secretary of Treasury’s fiscal group, told the committee on Wednesday that eight payments were made in 2024-25 after the Federal Government’s $300 annual electricity rebates were extended until the end of 2025 in the pre-election March Budget.

“The administrative parts of the process were the bits that were not done correctly and that happened when we changed from the original program and we changed over to the extension program,” he said.

Australian Public Service Commissioner Dr Gordon de Brouwer on Wednesday said he became aware of the problem on November 12 through media reports and the Opposition, and not via Treasury.

“Either through media reports or through Mr O’Brien’s letter,” he said.

The Federal Government’s $300 annual power rebates, in $75 quarterly instalments, were extended for another six months until the end of 2025 at an announced cost of $1.8 billion in the last Budget.

The initial program announced in the 2024 Budget was meant to last until the end of 2024-25.

Electricity prices soared by 37.1 per cent in the year ended October 31, following the end of Queensland’s $1000 annual rebates to households and Western Australia’s equivalent $400 program when the 2024-25 financial year finished.