Senate Economics Legislation Committee [Part 1] video | 11/02/2026 - 8
Staff at $1trn debt agency blew whistle to Treasury
As it happened: what you missed from day three of Senate estimates
Lucinda Garbutt-Young
Ray Athwal
Eleanor Campbell
February 11 2026
Top defence officials faced questions about the Albanese government's $3 billion defence estate overhaul during Senate estimates hearings on Wednesday.
The hearings were Greg Moriarty's final appearance as secretaryof the Department of Defence, following his appointment to replace Kevin Rudd as Australia's Ambassador to the US.
Treasury secretary Jenny Wilkinson appeared after the Reserve Bank of Australia's interest rate hike last week, with Coalition senators honing in on concerns about record-high government spending. Bureaucrats were probed on supermarket price gouging changes, capital gains tax discounts and forward estimates.
You can catch up on it all in our blog below.
SENATE ESTIMATES:
Greens Senator Barbara Pocock hit the Education Department with a barrage of questions.
Had Ms James been forced to "walk the plank" because she had raised concerns about the targeted compliance framework, the controversial program found by the Commonwealth ombudsman to have operated illegally between April 2022 and July 2024?
"Because of personal privacy, we don't speak publicly about the reasons for termination," Labor frontbencher Murray Watt told the committee hearing on Wednesday.
Had Ms James, who was paid out $900,000 to end her contract, signed a non-disclosure agreement?
Acting DEWR Secretary Tania Rishniw said she was "not aware" of one, but that this was "a matter for PM&C."
The Department of Prime Minister and Cabinet has refused to say why Ms James was suddenly terminated in December, with more than 18 months remaining on her contract and prompting a $900,000 payout.
PM&C Secretary Andrew Walter said to a committee hearing on Monday that the Governor-General had terminated Ms James' appointment on the prime minister's advice.
Liberal Senator Maria Kovacic said the answers to Senator Pocock's questions did not stack up.
"We have a very good, senior public servant who has been terminated ... And you've been asked by more than one senator for an explanation," Senator Kovacic said.
"What is it that's happened here that we don't know? Clearly, something has transpired.
"This is not a normal termination. This is a termination that has happened suddenly, it is 18 months early and it has happened at a cost of almost $1 million for the taxpayer."
"I understand that you may be frustrated," Senator Watt said.
The ombudsman found that DEWR, which designed the targeted compliance framework requiring welfare recipients to meet mutual obligation requirements such as looking for work or studying, and Services Australia, responsible for implementing it, had operated it unlawfully by cancelling income support payments to more than 900 people.
Both agencies have agreed to a list of changes recommended by the ombudsman in December.
Senator Pocock cited a letter from Ms James to the ombudsman saying the department would not resume the welfare penalties system unless she was confident it was legal, then asked if the former secretary had been dismissed because her position was at odds with the government's plan to restart it.
The mid-year fiscal and economic outlook (MYEFO) released in December revealed that the government was planning to bring back the targeted compliance framework with "safeguards".
"The time of MYEFO and decision to terminate Ms James' contract came in quick succession," Senator Pocock said.
"Are the two decisions - to remove Ms James and to resume the targeted compliance framework - related?"
Senator Watt declined to answer on privacy grounds.
"The reason I am curious about this ... Is that we have gone through a very painful experience in our public sector in the last few years with robodebt," Senator Pocock said.
"There is a really important right that secretaries and all public servants need to have, which is to give frank and fearless advice to those they serve."
She said it was a worrying "coincidence" that Ms James had raised concerns about the targeted compliance framework shortly before her "sudden dismissal", which was "nothing to do with her performance." PM&C confirmed on Monday that Ms James' sacking was not related to any misconduct.
"The only thing I can point to is a difference of opinion about a really critical policy position," Senator Pocock said.
"Is this it? Did Ms James give advice about this particular program that was at variance with the government or minister's view and is that why she's walked the plank here?"
Senator Watt replied: "I don't think it's appropriate to speculate when not in possession of the facts."
Ms Rishniw said welfare cancellations remained paused, but that the department believed the program was operating lawfully.
She said when asked if there was "a chilling effect" on the public service by a secretary being suddenly terminated and no explanation given: "I can assure you we, as senior executives, take our responsibilities under the Australian Public Service Act very seriously."
Effectively passive’: Future Fund says it didn’t choose to buy its $100m Palantir stake
Purchasing a $100 million stake in the controversial Trump-linked company was done by an external fund manager, a Future Fund representative has told Senate estimates
ATO sidelines official who pursued PwC over tax scandal
The man who led a probe into the leaking of confidential government information by PwC partners will be moved to another regulator in a more junior role, a shift that will disrupt multiple inquiries into the firm.
Tax Practitioners Board chief executive Michael O’Neill will become a “specialist adviser” to the Australian Charities and Not-for-profits Commission from November 24, according to an all-staff email sent by Tax Commissioner Rob Heferen on Wednesday morning.
TPB CEO Michael O’Neill (right), Tax Commissioner Rob Heferen (left) and TPB chairman Peter de Cure. The latter told a parliamentary hearing last year that, under O’Neill, the tiny agency had been “an efficient, effective and focused regulator”. Bethany Rae
The decision comes after tax officials made six attempts to sideline or sack O’Neill from the role while he led the tiny agency’s broader investigation into PwC despite opposition from the Australian Taxation Office. These attempts included claims that O’Neill was acting illegally in investigating PwC and raising three unsubstantiated bullying claims against him.
The executive move was announced the day after The Australian Financial Review revealed details of new investigations into PwC stemming from its scandal over the leak of confidential government tax information.
The new inquiries will now continue without O’Neill, one of the nation’s most experienced tax investigators. The inquiries include assessing whether PwC’s advisers misused legal professional privilege to stymie probes into their conduct and allegations the firm misled the Foreign Investment Review Board over whether company restructures were done to cut tax bills.
TPB now a feared regulator
O’Neill led the original investigation, which uncovered that a former PwC partner had shared confidential government briefings with partners and clients. The fallout shrank the firm by a third, triggered inquiries into nine other PwC partners and resulted in a major crackdown on the industry.
O’Neill will be replaced on an acting basis by Janette Luu, an assistant commissioner at the Tax Practitioners Board. Heferen told staff the ATO would seek expressions of interest for the role.
O’Neill is being moved to the smaller agency after more than seven years in the leadership role at the Tax Practitioners Board. He has transformed the once little-known agency into a feared regulator with strengthened laws to police the country’s almost 70,000 tax advisers.
O’Neill “was a key part of the machinery” that held PwC to account over the tax leaks matter, said Greens senator Barbara Pocock.
“I’m really disappointed at the loss of Michael O’Neill from the machinery of the TPB and the ATO, and I am very concerned to ensure that he is not paying a political price for all the work that he has done and this is a matter which requires further investigation,” Pocock said.
“It’s hard to overstate the role that Michael O’Neill played as events around PwC evolved. He was a key part of the machinery within the Tax Practitioners Board that held bad actors to account. He was courageous, persistent and honest – all characteristics of a very good leader.”
Pocock added that the inquiries “surfaced multiple attempts to sideline, demote and remove Michael O’Neill from the role”.
An ATO spokesman said that executive changes are “a regular part of our strategy to build diverse experience and enhance leadership” at the agency.
“These movements, planned with input from all involved, are part of our broader approach to workforce management and strengthening our leadership capabilities,” he said. “We anticipate the incoming executive will bring strong experience to the role, ensuring ongoing investigations continue effectively and without disruption.”
In his email, the ATO’s Heferen said O’Neill’s “extensive experience as secretary of the Tax Practitioners Board and former chief risk officer for the ATO will be invaluable in delivering strategic assurance advice to the ACNC”.
Tax Practitioners Board chairman Peter de Cure said: “I congratulate Michael both on his appointment to the important new role at the ACNC and for his significant achievements as CEO and secretary of the TPB.”
Other executives moved, promoted
O’Neill will continue to be classified as a senior public servant, known as Senior Executive Service band 2, and retain his entitlements in the new role.
The Tax Practitioners Board, which has almost 200 staff, and the Australian Charities and Not-for-profits Commission, which polices almost 65,000 charities with a staff of almost 150, are part of the ATO.
Other moves announced in the email, designed to align ATO’s “leadership with strategic priorities”, included promoting Rowan Fox to deputy commissioner of small business, shifting deputy commissioner Rebecca Saint to be head of a new business line known as litigation and legal services, and moving deputy commissioner Marek Rucinski to lead another new business line known as enterprise risk, change and integration.
O’Neill has had a long career at the ATO. He previously led Project Wickenby, a decade-long investigation into the offshore accounts of high-wealth Australians, including Paul Hogan and Glenn Wheatley (Hogan has always denied wrongdoing regarding his tax affairs).
Financial Services Minister Daniel Mulino did not respond to requests for comment.
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