What is the Australia Institute and how did it cultivate such critical influence over the government’s agenda? By Mike Seccombe.

The Australia Institute are the real senate puppet masters

Richard Denniss
Richard Denniss
Credit: Australia Institute

The Australia Institute will make some pretty big claims for itself in its forthcoming 2013-14 annual report.

The progressive think tank claims to have been instrumental in ensuring that $12 billion of cuts proposed in the federal budget were blocked. It claims the institute was “central” to saving the renewable energy target, Clean Energy Finance Corporation and Australian Renewable Energy Agency from the hatchet men of the Abbott government.

It says its research “generated” some 15,000 reports in the media. It asserts that it decisively shifted debate on a wide range of fronts.

Its claims in total are so wildly out of proportion to its size – this is an outfit with fewer than a dozen staff and an annual budget of about $1.5 million – that you would be tempted not to take it seriously were it not for the fact that its enemies apparently do.

Take the Minerals Council of Australia, for example. It was spectacularly angered by a recent report from TAI that analysed the past six years of state government budget papers and concluded the mining industry benefited from some $17.6 billion in subsidies from taxpayers.

The miners’ peak body hurriedly commissioned its own report, which of course found there were no such subsidies. That is to be expected, if not necessarily believed.

As TAI’s executive director, Richard Denniss, points out, the minerals council is contradicted not only by the institute’s work, but by the Queensland government treasury department. In its recent submission to the Commonwealth Grants Commission, it calls for Queensland to be compensated with extra federal money for the cost of all its subsidies to miners, and suggests the other big mining states might also be similarly compensated.

After investigating the competing claims, senior Fairfax business columnist Michael West concluded: “The subsidies are not fabricated. They are real.”

1 . Misunderstood links with Greens

Still, there’s nothing surprising in the fact that the miners’ lobby would respond by denying a report so damaging to the industry. The surprising thing was the vehemence and style of its comeback. It did not just dispute the facts, it launched a vicious series of ad hominem attacks on Denniss and TAI’s director of strategy, Ben Oquist, complete with cartoonish illustrations.

One depicts the leader of the Greens, Christine Milne, as a puppeteer pulling the strings of Oquist and Denniss. Above the picture it poses the question: “The Australia Institute: an objective think tank?” Below, it answers: “The Australia Institute are anti-mining activists run by the Greens.”

The text accompanying the illustration notes that both men have worked for the Greens, which is true, but also rather beside the point. For it is not TAI’s relationship with the Greens that threatens the miners; it is TAI’s influence with others in the parliament, notably those who hold the balance of power in the senate. A cartoon with Clive Palmer or his senate leader Glenn “The Brick with Eyes” Lazarus might have been more pertinent.

Indeed, Milne is one person in parliament to whom TAI chiefs don’t talk these days. Oquist, the long-time chief of staff to former leader Bob Brown, left Milne’s employ after differences over strategy. Denniss has been publicly critical of Milne’s leadership. In an opinion piece in The Canberra Times shortly after last year’s election, he noted that the party had “lost more than 500,000 of the 1.6 million voters who supported them in 2010” and Milne had “lost six of her most senior staff”.

The piece forensically debunked her rationalisations and left no doubt that he thought the real problem was Milne.

In truth, the minerals council should wish it were dealing with mere puppets of Milne. Denniss and Oquist’s influence would be a lot more contained if it were.

Instead, TAI plays a much wider political field. And it’s less green, in both senses of the word, than its opponents might suggest.

Denniss is a hyperactive and very sharp economist whose first think tank experience was fresh out of university, with the Labor-aligned Evatt Foundation, and who has worked with the Australian Democrats and in various academic economic posts including the Crawford School at the ANU. Oquist did some 15 years with Bob Brown, broken by a couple of years with a public affairs company, and is widely regarded as one of Canberra’s best tactical political minds.

They might be lefties, but they’re not luvvies, and like the rest of the staff, they’re heavy with economic and research credentials. The contemporary TAI is a pretty hardheaded political outfit.

It was not always thus.

2 . Murdoch backing

The Australia Institute was set up by economist and Labor MP John Langmore and philosopher-ethicist Clive Hamilton almost 20 years ago. Under Hamilton’s leadership, says Mark Wootton, an early board member and financier of the endeavour, it was more about social critique “and quite cerebral”.

In the first couple of years, the institute struggled financially. Its salvation came largely from members of the extended family of Rupert Murdoch: his sister Anne Kantor and her daughters Kate and Eve, to whom Wootton is married.

Over the years, he says, they have collectively poured in “many millions”. Exactly how many, he is unsure. “Shy of $10 million,” he says. “But not that much shy.”

But no more of the family’s money will go into TAI after this year. As Wootton explains: “Collectively I think we view philanthropy a bit like venture capital. You try to get these things up and running and then once they’re on their own feet, you move on.”

It’s ironic that it was largely Murdoch money that bankrolled TAI, given Rupert’s father was key to setting up Australia’s major conservative think tank, the Institute of Public Affairs, and Rupert remains one of its key supporters.

“There was a sense of, perhaps, rebalancing,” says Wootton. “Progressive think tanks are pretty thin on ground and if you go back to when it started, that was even more the case.”

Indeed, both Denniss and Oquist are prone to comparisons between themselves and the IPA.

“We think the IPA is effective and we’d like to grow to match their influence,” says Oquist. “They have much closer relationships with the Liberal than the Labor Party, but they don’t have none with the Labor Party, and we don’t have none with the Liberal Party.”

Exactly who their friends are among the conservatives, neither man will say. In the paranoid world of politics, particularly conservative politics, claiming influence can cost influence.

“But I think people would be surprised about our relationships,” says Oquist.

“Everyone knows about us and the Greens,” says Denniss. “But Nick Xenophon cites our reports. Bill Shorten recently used work we’ve done on gender inequality. John Hewson and Clive Palmer jointly launched one. Tony Windsor launched another. Glenn Lazarus has stood in the parliament and thanked us for his research. We’ll deal with anyone prepared to listen to ideas.”

One way in which TAI under Denniss has emulated the IPA is through assiduous courting of the media. Denniss, for example, is a regular commentator in The Australian Financial Review. He speaks their language: economics.

3 . Political muscle and intellectual heft

But it’s not just Denniss, as Labor shadow assistant treasurer Andrew Leigh – himself a former ANU economics professor – notes.

“The most important shifts in TAI under Richard are its discussion of a broader range of issues that are important in politics today, and the flourishing of different voices within the organisation, and those people being able to speak under their own name,” he says.

“Their work on tax breaks has been very important. I think of Richard as being kind of a mirror image of [free-market economist and former Reserve Bank board member] Warwick McKibbin. Every time I talk to him, we invariably disagree about a bunch of things, but I always learn something.”

That’s a big reason why its influence has grown since Denniss assumed the top role six years ago: it argues its case on the basis of empirical evidence and data rather than simple partisanship. An example is Denniss’s strong and early support for engaging the government’s “Direct Action” plan for reducing carbon emissions in place of carbon trading.

“I think we should have kept the carbon price,” he said, “but I also think there was a false dichotomy in the green movement along the lines of ‘Do you want a carbon price or do you support Direct Action?’ In reality, the previous government had come up with a complicated suite of policies that included a huge number of what Labor called ‘complementary measures’.”

A lot of those complementary measures – the carbon farming scheme, for example – amounted to Direct Action by another name. “Under Labor the environment movement strongly embraced the complementary measures. But when Abbott came along, there were a lot of people no longer prepared to talk about the role of complementary measures.

“I think it’s churlish to refuse to engage in the debate, a bit silly to not get the good bits of Direct Action up.”

There is a freedom to running a think tank that allows arguments to be advanced on their merits, Denniss says.

“We can give holy cows an almighty whack, because we are not seeking votes. We can float ideas before the polling says they are popular, before any party wants to talk about them. Five years ago, when we said superannuation was costing the budget, not saving the budget money, it was heresy. It’s now widely accepted. Every year, as the cost of the tax concessions grow, more people see the sense of what we were saying.

“Five years ago when we said the mining boom would be devastating for large sections of the economy, that its benefits to the budget and jobs growth were exaggerated, that was dismissed as anti-mining rhetoric, rather than a simple statement of orthodox economic theory. We didn’t invent ‘Dutch disease’.”

But Australia is now experiencing it.

It was Denniss and the small group of economists and researchers who built TAI’s intellectual heft, but it was the appointment of Oquist early this year that has given TAI its political muscle.

It was less a masterstroke than a matter of luck. Had Oquist not fallen out with Milne, he would not have been in the market for a job. But had he fallen out with her earlier, he would not have become mates with Clive Palmer.

Oquist and Palmer got to know each other during the process of negotiating preferences before the election. They are an odd couple in almost all ways, including appearance: the rotund, florid former National Party mining magnate and the dark, lanky, former Green spinmeister.

“But,” says Oquist, “I like his company. And I quickly found he was pro-refugee, anti-Abbott and at war with the Murdoch media. I liked that immediately.”

They kept in touch through the long count in Palmer’s seat. And when it became clear the Abbott government would not have the numbers to control the senate, the men saw the symbiosis. Oquist and TAI saw a vehicle for policy. Palmer saw a useful and wily strategist. In the months since, Oquist has been a fixture in the PUP offices.

“It’s been strategically masterful,” says Bob Brown.

The minerals council has it all wrong. The men from the Australia Institute are no one’s puppets. Indeed, through carefully cultivated alliances with the pivotal players in this parliament, they look increasingly like the ones holding the strings.

This article was first published in the print edition of The Saturday Paper on October 11, 2014 as "The real senate puppet masters".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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