Matters of trust in public office
The nation will soon head to the polls with public integrity a higher-profile issue than perhaps ever before in Australian history. The two major parties, however, seem to be the last people in the country to realise this.
It’s been more than a year since Labor adopted the establishment of a national integrity commission as one of its key pre-election themes. Now both sides – indeed, all significant parties and most independents – are backing such a reform in the next federal parliament, albeit promising some very different options.
But donation controversies dogging the Coalition provide a stark reminder that public trust is not going to return simply because a new federal anti-corruption agency is created. That’s a vital step – if done properly – but in itself provides no “silver bullet” solution to the cynicism afflicting whichever party forms government.
Australian public attitude research, including Transparency International’s 2018 Global Corruption Barometer, tells a chilling story. Australia traditionally had high trust and confidence in federal government, but this took a huge dive in 2010 when the Labor Party machine first removed an elected prime minister. It has since continued to slip away, reinforced by each leadership spill, especially last year’s crazy, botched attempt to replace Malcolm Turnbull with Peter Dutton.
Trust took a dive not only because citizens suddenly felt unsure that their vote mattered. It was also the flip side – concern about the failure of due democratic process and the role of undue influences over the decision-making in Australia’s highest office. This is the message the major parties seem to have missed.
“Revolving door” prime ministerships are symptomatic of political parties with a dwindling popular base, forced to pander to narrowing sources of political and institutional support. As they lose connection to the mainstream Australian community, and fight increasingly desperate seat-by-seat battles, these parties find themselves reliant on a thin band of high-value sources of political finance.
As a result, politics has never seemed so unstable, or so unsavoury. We no longer can be sure who is calling the shots, and that eats at the foundations of public trust – we fear the only people who would buy into this unattractive game are those in it for themselves. Of course, this is a perennial risk, not a revelation. But combine it with the new sense of breakdown in due process, and fear for the checks and balances needed to control undue influence, and the trust crisis is explained.
And it is why our next government and parliament must confront at least four more big issues – beyond simply establishing a new national integrity body – before we can expect collapsing trust to turn around.
The first is political donation and campaign finance reform.
The second is overhauling controls on lobbying, including codes for the conduct we expect of ministers, parliamentarians and their staff both during and after they leave office, as they continue to peddle their taxpayer-funded political skills and connections.
The third, in an age of continuing deregulation, is real whistleblower protections to support those prepared to speak up about institutional wrongdoing.
And finally to catch up with the world on the basic rules for corporate and financial transparency needed to curb corruption.
Canada, Britain and the Netherlands are leading the way on these issues. So far, Australia’s major parties are yet to address them, or even make the promise to deal with them comprehensively. Indeed, we seem permanently on the backfoot and government is suffering.
The current scandal over the $79 million water buyback reveals many of the problems and how they are all interlinked. What troubles us most? Is it the lack of transparency around the purchase itself, or that the company involved was previously co-founded and run by someone who is now a minister in the government that granted it? Or that the company was a significant donor to the New South Wales Liberal Party and the minister himself also a very big federal Liberal Party donor, in the year of his election?
Or is it that the parent company involved in the deal, Eastern Australia Irrigation, was, and is, registered in the Cayman Islands, with the advantage of assisting its owners to both remain unknown and minimise their Australian tax burden?
The answer is that all of these worry us.
Even if Energy Minister Angus Taylor ceased to be directly involved in the company, his prior connections with the beneficiaries remain. And it is all made worse by the public impression that his party perhaps owed the company a favour for generously helping finance Taylor’s election campaign. Even if he genuinely had nothing to do with the final deal and didn’t directly benefit, there is enough to make reasonable people wonder what’s going on.
Add The Sydney Morning Herald’s revelation this week that in 2016 a company owned by federal Liberal Party treasurer Andrew Burnes donated $200,000 to the party, at the time Burnes was tendering for a multimillion-dollar government accommodation contract, which he went on to win, after contacting Liberal Finance Minister Mathias Cormann to complain about the “robustness” of the tender process. This being the same minister for whom Burnes’s office booked and paid for a trip to Singapore the following year, as his company, Helloworld, successfully retendered for an equally large air travel contract.
Cormann repaid the cost of the flights in February this year and, in both cases, the ministers insist they had no influence over the public servants who assessed and made the relevant recommendations. Indeed, they point to the opposite side for evidence the government was not favouring its own friends – a Labor state government also supported a previous different water buyback and Helloworld won its original travel contract under the Gillard Labor government.
While some citizens may be reassured by these explanations, others wonder whether this is just proof favouritism is a bipartisan industry. And they remain sceptical as to how often departmental officials – even the most ethical among them – can truly stay uninfluenced by the knowledge their superiors could not be anything but pleased if a particular tenderer won a bid.
Many parts of our integrity system are overdue for an upgrade to help reduce these doubts, reverse our slide on international corruption rankings and give hardworking, ethical parliamentarians and officials a chance to get on with their jobs.
The Cayman Islands issue is perhaps the most stark. In 2014, under the Abbott government, Australia led a push at the G20 summit in Brisbane for an end to corporate secrecy, including the use of anonymous “shell” companies to hide illegal profits or avoid tax. But since then, Australia has made no real progress on its own measures to ensure corporate transparency or to require it from offshore companies – as the water buyback shows.
The tax policy floated by Labor in the lead-up to the 2019 election commits to a public register of the “beneficial” or real owners of companies. Along with other promises from Bill Shorten for overdue reforms to foreign bribery laws, this could go some way to closing the gap that has opened between Australia and other countries on combatting corruption. But when it comes to the bigger problem of the electoral campaign “arms race”, feeding public concern about the influence of political donations, our national plans are in disarray.
There are promising offerings within Labor’s national platform – reducing donation disclosure limits from $13,800 to $1000, banning “donation splitting”, linking public funding to campaign expenditure, capping campaign expenditure, real-time reporting of donations and contributions and a promise to work to harmonise and align disclosure laws across all state, territory and Commonwealth jurisdictions. But as yet, there are no specific election commitments as to how and when these goals will be realised.
There are also no commitments, from either side, to overhaul and properly enforce lobbying and post-separation employment regimes in order to remove the sense of undue influence over policymaking. For example, Andrew Burnes would be prohibited, even under existing rules, from acting as a political lobbyist. The presumption is that not only politicians but those senior in political parties should not be able to profit privately from their official role. Why then is such an officeholder entitled to tender for government contracts or make donations while doing so?
Neither major party has yet committed to a code of conduct for the federal parliament, let alone mechanisms for supporting and enforcing it. Apart from the Western Australian legislative council, the federal house of representatives and senate are the last Australian houses of parliament not to do so.
The now-bipartisan commitment to a national integrity commission is only as good as the rules and principles it gets to enforce. Unless those rules include more robust approaches to controlling undue influence, and re-establish the first principles of ethical conduct, there is only so much it can do.
Sure, as the Coalition proposes, any federal anti-corruption body will be able to investigate criminal corruption – such as outright bribery, or abuse of office for demonstrated private gain – much as the federal police already can. And, certainly, the principles proposed by Labor make for a stronger plan, including the discretion to hold public hearings – where they are in the public interest – across 100 per cent of the body’s jurisdiction rather than across just 20 per cent of the public service, which makes no sense at all.
In addition to needing stronger rules to enforce though, such an agency has to be properly resourced. It would need something like $100 million a year, but Labor’s 2018 estimate came in at under $20 million. Fortunately, last week it committed to match or better the Coalition’s funding promise, which at least adds up to $42 million a year once fully operational.
On whistleblower protection, the choice is similar. The Coalition made significant strides in stronger legal protections for private-sector whistleblowers in February this year. But only Labor has followed crossbenchers, such as Centre Alliance MPs and the Greens, in promising to implement the rest of a major 2017 parliamentary inquiry – including a reward scheme. So far, the only resources mentioned for Labor’s proposed whistleblower protection authority are totally unrealistic – just $1.1 million a year, or five full-time public servants, to take on this role for the entire Australian workforce. By contrast, the annual budget of the Fair Work Ombudsman is $184 million.
We can, and must, do much better if we want anything to change. There is unprecedented commitment to act on some fundamentals but the nation awaits a coherent plan that recognises the links between these forces that undermine our democracy. Re-establishing the spirit of integrity in public office, as well as setting up mechanisms to enforce what otherwise remain bad rules, is the real challenge at the heart of restoring public trust.
This article was first published in the print edition of The Saturday Paper on Apr 27, 2019 as "A matter of trust".
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