Senator MacGIBBON --I understand that the position of Director of the AWM has been advertised. Has that closed?

Dr Hawke --That is correct. The position was advertised as being available from 1 January next year. It was advertised on 21 September in the Gazette and in the Australian, the Sydney Morning Herald , the Age and the Canberra Times on 23 September. The selection committee is at the moment finalising the process.

Senator MacGIBBON --The closing date for nominations has passed.

Dr Hawke --Yes, and interviews have been held.

Senator MacGIBBON --How many applicants did you get?

Dr Hawke --I think 56, at last count.

Senator MacGIBBON --Who was eligible to apply?

Dr Hawke --It was advertised inside and outside; so anybody, basically.

Senator MacGIBBON --There is a rumour around that ex-service personnel would not be eligible. Is that true or false?

Dr Hawke --That is not correct. There were a number of ex-service applicants, and a number of those were interviewed.

Senator MacGIBBON --What is the selection process?

Dr Hawke --This is a statutory appointment, appointed by the Governor-General under section 20 of the Australian War Memorial Act 1980. The position would be that the Minister for Veterans' Affairs would take a recommendation to cabinet; and, following approval in cabinet, that would go forward to the Governor-General.

Senator MacGIBBON --I have read the act because I was interested in the process by which the selection took place. There is no definition in the relevant section of the act of how the selection should take place. It is done by the minister, is it?

Dr Hawke --Yes.

Senator MacGIBBON --He appointed the selection committee?

Dr Hawke --That is correct.

Senator MacGIBBON --That was from within the department?

Dr Hawke --No. The selection committee comprises General Peter Gration, who is the chair of the War Memorial's council, who is chairing the selection committee; I am on it, from Veterans' Affairs; Cathy Santamaria, who is deputy secretary in Communications and the Arts and who has responsibility for museums policy, is a third member; and there is a fourth member, Mr Tony Beddison, who is a member of the War Memorial Council but is also the head of Sacs Consulting, which is a firm of head-hunters in Melbourne.

Senator MacGIBBON --Is the minister bound to accept the recommendation of the selection committee that he appointed?

Dr Hawke --No, he is not. Because it is a statutory appointment, it is up to the minister what processes he follows.

Senator MacGIBBON --I move on to a matter that has had some publicity. It relates to the Merit Protection and Review Agency. There has been some rather sensational reporting of this. How did the Merit Protection and Review Agency come to be involved in this?

Dr Hawke --I cannot answer that. The matter of the MPRA's involvement was a matter for Minister Johns, who administers the Merit Protection and Review Agency.

Senator MacGIBBON --It had nothing to do with the Minister for Veterans' Affairs?

Dr Hawke --That is correct.

Senator MacGIBBON --It was at Minister Johns' instigation that these people came in?

Dr Hawke --Yes.

Senator MacGIBBON --What has been the impact on morale of the staff since they visited?

Dr Hawke --It is fairly difficult to say. It is a bit difficult to know because one of the people who was mentioned in the MPRA report is no longer with the War Memorial. The second person is temporarily away from the War Memorial as well.

Senator MacGIBBON --My understanding was that allegations were made against nine officers of the War Memorial; two of them were named publicly. Is that correct?

Dr Hawke --I do not know.

Senator MacGIBBON --I thought there was an allegation of 360 charges against one officer. Is that correct?

Dr Hawke --I do not know that either. I have never seen what the allegations are or the report. It has been handled almost entirely by Minister Johns' portfolio.

Senator MacGIBBON --It went to the courts. The judge found that the process was fatally flawed. His judgment was that the findings in the MPRA report be kept secret. But that does not solve the problem, because the public allegations that were made against the officers presumably are not addressed in any way at all.

Dr Hawke --That is correct. However, there have been some discussions between the minister, the chairman of the council and me about what might happen. The minister has not concluded his consideration of that yet.

Senator MacGIBBON --How do you see it as being all put back together again?

Dr Hawke --One of the issues was that there would have been a statutory period of time for the director of the Merit Protection and Review Agency to lodge an appeal against the Federal Court judge's decision. I think that time is now just about up, but I am not aware whether or not there is going to be an appeal.

Senator MacGIBBON --The director of the Merit Protection and Review Agency surely would not have any grounds for an appeal after judgment was passed?

Dr Hawke --I could not speak for her, but I will certainly be checking in the next week or so whether she is going to appeal or not.

Senator MacGIBBON --Presumably this has had a very deleterious effect on the morale of the War Memorial staff. Are the people who initiated the inquiry through Minister Johns still on the War Memorial staff? If so, how are they treated and viewed by their colleagues?

Dr Hawke --We do not know who the people were who initiated the inquiry, nor have we made any endeavours to find out.

Senator MacGIBBON --I thought it would have been a reasonable management move to bring peace, love and harmony back into an organisation that has gone through the ructions that this organisation has gone through in the last few months.

Dr Hawke --I am sure that is correct and I am sure the minister will act on it as soon as he has finished his consideration.

Senator MacGIBBON --Did the Minister for Veterans' Affairs at any time object either orally or in writing to the thought police coming in?

Dr Hawke --I think it would be fair to say that this was a matter for Minister Johns. Minister Sciacca was advised by me and by his staff that it was within Minister Johns' prerogative, and if he sought to interfere in any shape or form that might not go down too well.

Senator MacGIBBON --With your great experience of the Public Service, surely you can see very serious consequences of the action of the MPRA in this instance throughout the whole of the Commonwealth Public Service?

Dr Hawke --I think you would have to ask Minister Johns on what basis he took the decision to instigate the review by the Merit Protection and Review Agency.

Senator MacGIBBON --You can appreciate and you must understand the difficulties for people in authority if a body like the Merit Protection and Review Agency can come in, with the secrecy with which they can operate, and do to any government department what they did to the AWM and not be held accountable for what they have done.

Dr Hawke --I am at a loss as to how I answer this because the matter remains between the Merit Protection and Review Agency and Minister Johns. Neither I nor the minister and his office have ever been shown the basis for undertaking the inquiry; nor have we seen or sought access to the subsequent report. The report was to Minister Johns.

Senator MacGIBBON --I think the principle of these people coming into any department in the way they can does not improve the prospects of good management in the Public Service.

Dr Hawke --That could be right, but we are not in a position to know on what basis Minister Johns took the decision to initiate the inquiry. Obviously under the act, the minister was happy that he had the authority to do that.

Senator Robert Ray --At this point I intervene. You have asked Dr Hawke a variety of questions calling on his opinion and drawing on his experience as a public servant. As I work with him so closely, I have let him run with it. But we are at the point where we can no longer use him as an expert witness on this matter.

Senator MacGIBBON --Does this mean that we have to go to a Senate inquiry now?

Senator Robert Ray --You can certainly go to the other estimates committee and probe it. You have asked for Dr Hawke's opinion. He has tried to be as helpful as he can without going over the line. So I have let him go as far as he could. But that is as far as he can go.

Senator NEWMAN --It was a real mess, was it not?

Senator MacGIBBON --It involves judgments about the way that the Public Service is managed. Have those officers of the AWM staff who had to take legal action to defend themselves been offered any financial support?

Dr Hawke --The two people who went to the Federal Court?

Senator MacGIBBON --Yes.

Dr Hawke --They received legal aid.

Senator MacGIBBON --We had a debate a while ago about the sale of the B25 Mitchell bomber. I subsequently saw it advertised. My advice is that it has not been sold. Is that correct?

Mr Hawker --Technically, it is not sold as of today, but it is very close to it.

Senator MacGIBBON --Is that sale irrevocable?

Mr Hawker --At this stage, yes. The sale is irrevocable.

Senator MacGIBBON --Why is the museum going ahead and selling part of Australia's military heritage?

Mr Hawker --I am not quite sure how to answer that, Senator. It has been debated at length in these committees previously. I can go through the explanation again as to why that aircraft is not considered to be of any great significance to us if you would like me to do that.

Senator MacGIBBON --I thought that argument was destroyed, because we showed you that there were two Australian squadrons operating that aircraft through the Second World War. It was an aircraft flown by Australians in the Middle East, Italy and the European theatre. It was probably the most significant bomber in the Pacific area operated from Australian soil by the Americans. The fact that it was not in the RAAF inventory really means nothing. Many of the aircraft in the RAAF museum were not on the RAAF inventory at any time.

Mr Hawker --As I think has been outlined here previously, that aircraft is a B25J. It was manufactured in July 1945. It never saw service in Australia. In selecting aircraft for the memorial's collection, we try very hard to select aircraft that have some record of service in the Australian theatre, preferably with Australians operating them. That aircraft does not fall within that definition.

Senator MacGIBBON --The B25 was a significant aircraft in Australia's military history. All the ones that were on issue to the two Australian squadrons have been destroyed. This aircraft was produced in a batch. Other aircraft served in the RAAF. For all intents and purposes, it is identical to aircraft that were on the No. 2 or No. 18 Squadron inventory at the time.

Mr Hawker --It is not true that all the aircraft serving Australian squadrons were destroyed. The aviation museum in Darwin has a D type B25.

Senator MacGIBBON --Which served with a USAF squadron.

Mr Hawker --I thought it had served with Australian squadrons.

Senator MacGIBBON --I stand corrected on that. I would be happy to apologise. My understanding was that it was American.

Mr Hawker --But, if it did not serve with Australian squadrons, it is at least of the type that served with Australian squadrons, and very extensively.

Senator MacGIBBON --There is another element to this. In effect, it was the public generosity of the aviation heritage group that really financed the War Memorial in this. The War Memorial originally wanted this aeroplane, but they had no money. Bruce Andrews and Randal McFarlane put up $120,000 and bought the aeroplane. They gave the War Memorial time to pay for it.

Mr Hawker --I was not on the War Memorial staff at the time this occurred, so I can only go from the records which the War Memorial has. Those records state that the aircraft was purchased with $140,000 from the War Memorial's fund and was purchased in association with an Australian company which operated the aircraft here in Australia for some years as part of the deal. There was a decision to sell the aircraft when it was no longer considered to be something that was of relevance to the War Memorial's collection in order that that money could be repaid into the War Memorial's fund to thereby replace funds which had been used to purchase the Kittyhawk aircraft some years ago. I am certainly not aware of any record in the War Memorial's files which says that any money was donated for that.

Senator MacGIBBON --No, they were not donated. The idea came from the AWM, as I understand it, that they would like a B25. These two men formed a company, they bought a B25 and made it airworthy. They did not pay $120,000; they paid $140,000 for it. I believe you are trying to get $250,000 for it, aren't you?

Mr Hawker --We advertised it for sale between $200,000 and $220,000.

Senator MacGIBBON --Anyway, they bought the aeroplane with their money, they made it airworthy, they came out and when the AWM had time to get the funds together, the AWM got it. But it is worse than that. They gave an undertaking to the group that acquired the aircraft that they would have first refusal on the aircraft if at any point in the future the AWM wanted to sell it or dispose of it. Secondly, they could keep flying the aeroplane at their expense for a period into the future. When the AWM paid the full amount for the aircraft, they withdrew the aircraft from these two who had provided it in the first place. On the advice I have, there has been a rather considerable breach of faith by the AWM.

Mr Hawker --I doubt that that is the case because in 1992, when this allegation was made by the company concerned, that was tested by the Attorney-General and was found not to be the case.

Senator MacGIBBON --My advice on that is that your advice to them was, `You can fight us through the Attorney-General if your pockets are big enough.'

Mr Hawker --I cannot comment on that.

Senator MacGIBBON --Well, it is a totally different construction to the one you are putting on it.

Mr Hawker --I can only tell you what is in the War Memorial's files on the subject.

CHAIR --There being no further questions, that completes program 5, Australian War Memorial, and that completes the additional estimates for the Department of Veterans' Affairs. I thank the Minister and the advisers.

Committee adjourned at 10.29 p.m.