It looks like a conflict of interest, it smells like a conflict of interest, but according to the Government, it is not a conflict of interest.

Shadow Parliamentary Secretary for Small Business and Fair Competition Senator Scott Ryan called on Prime Minister Julia Gillard to clarify the exact status of her special adviser Dr Ken Henry, who earlier this month took up a position on the board of NAB.

“Is he a public servant? Is he a personal adviser to the Prime Minister? It is impossible to tell,” Senator Ryan said.

Dr Henry has been appointed to the special adviser role under a little-used clause, section 67, of the Constitution, which sits outside the public service. But he has also agreed to be bound by the Australian Public Service code of conduct, which has extensive rulings on conflicts of interest. 

In the Senate Finance and Public Administration Legislation Committee today, Senator Chris Evans and Department of Prime Minister and Cabinet’s deputy secretary Renee Leon rejected that Dr Henry’s acceptance of the board position is in breach of the Australian Public Service code of conduct. Neither was able to advise what safeguards had been put in place to ensure Dr Henry would be at arm’s length during Asian Century Taskforce conversations on banking, finance arrangements and prudential regulations.

“How is it possible for Dr Henry to oversee a project that may or may not include work on the financial system, presumably a very important aspect of the white paper, and not experience conflict by being on the board of one of our major banks?” Senator Ryan asked

“The Government can’t have it both ways. Dr Henry cannot advise on the direction of a big bank with significant Asian interests and act with neutrality in his dealings with the Asian Century Taskforce.”

 “The Government needs to clarify Dr Henry’s role immediately, before the Asian Century Taskforce begins in earnest.”