Victorian COVID-19 grants cover-up by public servants exposed by IBAC

Consensus Summary

An investigation by Victoria’s Independent Broad-based Anti-corruption Commission (IBAC), codenamed Operation Harmonia, has exposed a systemic cover-up by senior public servants who withheld information about a $257 million loss from COVID-19 business grants paid to 9,000 ineligible Victorian businesses. The grants, part of the Business Costs Assistance Program, were intended to support businesses during pandemic lockdowns in 2020 and 2021, with eligibility determined by GST registration. However, the department failed to account for businesses backdating their GST registrations by up to four years, leading to widespread overpayments. IBAC’s report, released in October 2026, confirms that the true scale of the losses—initially estimated at $285 million—was deliberately downplayed and later deleted from internal reports to protect senior officials and ministers from scrutiny.

The scandal unfolded in late 2021, when public servants in the Department of Jobs, Precincts and Regions first identified the issue. By November 2021, internal analyses revealed that nearly a quarter of the program’s funds had been paid in error, with $108 million alone going to businesses that reported no activity before the pandemic. Despite this, the department’s associate secretary and deputy secretary suppressed the findings, revising figures downward and ultimately removing references to the suspected loss from a draft report intended for then-minister Martin Pakula and the Victorian Auditor General’s Office. The cover-up persisted even after Pakula was replaced by Ben Carroll in 2022, with misleading briefings provided to the new minister, who is now premier. IBAC Commissioner Victoria Elliott described the conduct as a 'clear failure to act in line with the high integrity standards expected of Victoria’s public officers'.

Key figures in the cover-up include Pakula, who denied ever being informed of the issue, and Carroll, who received false assurances that no payments had been made in error. The deputy secretary and associate secretary, though not named, were central to the suppression of information, with one text message from December 3, 2025, revealing the associate secretary’s relief that the problem was being downplayed. Whistleblowers within the department played a critical role in exposing the misconduct, prompting IBAC’s investigation. While the opposition, led by Jess Wilson, has used the report to accuse Labor of mismanaging taxpayer funds, IBAC’s findings focus on the failures of senior public servants rather than political interference, though ABC notes that 'self-censoring' may have been motivated by fear of ministerial displeasure.

The three outlets diverge slightly on framing and specific details. THEAGE provides the most granular financial breakdown, including the $8 million already repaid and the $5 million under repayment plans, as well as the initial $8.92 million figure that was later revised to $251.9 million before being deleted. The Guardian emphasizes the systemic nature of the cover-up, describing it as 'not a one-off event' and highlighting the deputy secretary’s role in scrubbing the draft report entirely. ABC, meanwhile, focuses on the political fallout, quoting Pakula’s denial of ministerial displeasure and framing the scandal as evidence of Labor’s mismanagement. All three agree that the department’s use of a live GST database—rather than a static dataset—allowed ineligible businesses to slip through, but THEAGE and Guardian provide more technical context on how this occurred.

While IBAC’s report does not name the deputy secretary or associate secretary involved, it leaves little doubt about their responsibility for the cover-up. The commission has called for the findings to be used to strengthen integrity standards in Victoria’s public sector, and Elliott praised whistleblowers for their bravery in exposing the misconduct. The report also notes that the department responsible for the grants was replaced in 2023, though it does not specify whether this was a direct result of the scandal. As of October 2026, the focus remains on accountability for the senior officials involved, with no adverse findings made against Carroll despite the misleading briefings he received. The investigation underscores the risks of self-censorship in public service and the importance of whistleblowers in holding institutions to account.