September 2017

Comment

Canberra needs a watchdog

By Richard Denniss
Who is keeping an eye on our federal politicians?

The NSW Independent Commission Against Corruption (ICAC) never seems short of things to investigate. Its investigations have led to the resignation of two NSW premiers and more than a dozen MPs, including a Coalition police minister. Labor powerbroker Eddie Obeid and former Labor minister for resources Ian Macdonald are both in jail after their illegal dealings were exposed. But is corruption confined to state politics? How would we know?

Fear not. There is no need to create a federal equivalent of ICAC. Sure, the Australian Wheat Board was caught up in a bribery scandal with Saddam Hussein, the Reserve Bank was caught up in a bribery scandal related to winning note-printing contracts abroad, and Senator Arthur Sinodinos was sorely embarrassed to discover that a company on whose board he served donated money to the political party of which he was treasurer. But they were isolated incidents and accidents, all of them.

Australia’s federal parliamentarians are virtually the only ones in the country without a dedicated anti-corruption watchdog to keep an eye on them. (Each state has one, while the Northern Territory and the ACT are both in the process of establishing their own.) Although corruption is commonplace at the local and state government levels, the Turnbull government apparently believes the fresh air of the bush capital is enough to keep the stench of corruption at bay.

Not everyone agrees. Tony Fitzgerald, for example, thinks we need a federal ICAC. Thirty years ago, Fitzgerald’s royal commission into police corruption in Queensland shattered the complacency of the Australian political class. Four former ministers and a police commissioner were subsequently jailed. The investigation saw Premier Joh Bjelke-Petersen thrown from office and the end of his party’s 32-year reign. In hindsight, it was clear why ministers had had no need to fear the police. It wasn’t just individuals that were crooked, the state was corrupt.

Meanwhile, in the lead-up to the 1988 NSW election, the former state Labor minister for corrective services faced court for taking bribes to release prisoners early. The then Opposition leader, Nick Greiner, promised to create an Independent Commission Against Corruption should he win the next election. He did and he did, and he was soon being investigated by that same body. And while the NSW Court of Appeal subsequently overturned ICAC’s ruling that Greiner would be seen “by a notional jury as conducting himself contrary to known and recognised standards of honesty and integrity”, he had already stepped down as premier over his decision to use an unadvertised public sector job to help persuade an MP to resign from parliament.

Many describe it as ironic that the first major scalp of the NSW ICAC was Greiner himself. To this day, the man who gave Australia its first standing corruption watchdog genuinely doesn’t believe that he behaved improperly. At the federal level, politicians claim they don’t need a corruption watchdog because there is no corruption that existing bodies can’t tackle. Fish can never taste the water they are swimming in.

Meanwhile, the same federal politicians continue to hurl smears and allegations of corruption at each other. Their opponents, working on the assumption that offence is the best form of defence, then return fire with similar accusations or, having no independent umpire to turn to, accuse their accusers of far worse. All the public hears are the accusations, because in the Commonwealth sphere there is no such thing as exoneration.

With no standing body that has the power to investigate MPs, and no reason to believe that the political parties that preselect corrupt candidates for state parliaments can ensure they don’t do so at the federal level, the public is understandably sceptical of those who say there is no problem. Arguably, the growing lack of faith in our politicians is itself strong evidence of the need for such a body.

In a poll commissioned by the Australia Institute, an overwhelming majority of those surveyed supported the need for a federal corruption watchdog: 80% of all respondents, and 84% of Coalition voters, support the introduction of a federal body modelled on the powers of New South Wales’ ICAC. Given that both major parties are yet to make the case for one, that’s a pretty good start.

The newspapers are full of reasons for voters to demand more transparency and accountability.

In July we learned that News Corp received $30 million of taxpayers’ money in a deal for which no paperwork exists. No doubt the minister for communications is convinced the payment represents good value for taxpayers’ money. And no doubt taxpayers would be more convinced if the minister were answerable to someone other than his own colleagues.

Peter Dutton, the minister for immigration, will soon head up the new Department of Home Affairs. He will be responsible not just for the Australian Federal Police and Border Force but also for the agency responsible for investigating corruption in the Australian Federal Police and Border Force. Making matters worse, this agency, the little-known Australian Commission for Law Enforcement Integrity (ACLEI), is so under-resourced that it outsources its investigatory role to the AFP, one of the agencies it is supposed to monitor. It is investigating multiple allegations of corruption within Border Force, something we know despite the fact that ACLEI has not held public inquiries into allegations of corruption in public bodies.

Then there is Barnaby Joyce. The deputy prime minister and minister for water resources is, proudly, no friend of those who care for the natural environment. When a farmer with a track record of illegally clearing trees shot and killed an inspector, Joyce chose that moment to tell us he understood that “many people have had enough” of state government’s concerns with illegal land clearing. And after Four Corners recently aired allegations that NSW farmers were stealing billions of litres of water, and revealed that the state government agency responsible for detecting such theft had abolished its investigation unit, the deputy PM was at it again. Speaking at a pub in Shepparton, the man responsible for developing and enforcing Commonwealth laws in relation to water was dismissive of the allegations of serious theft. “You know what that’s all about?” he asked rhetorically. “It’s about them [the ‘greenies’] trying to take more water off you, trying to create a calamity. A calamity for which the solution is to take more water off you, shut more of your towns down.”

No, Deputy Prime Minister, it was about law, order, and the kind of respect for property rights that conservative politicians are usually so enamoured of.

The former federal small business minister Bruce Billson is now the executive chair of the Franchise Council of Australia. He took up this position in March 2016 while he was still an MP. Although he failed to disclose to parliament at the time that he was collecting a second income, and working for it, he apologised when it was recently revealed by ABC’s 7.30. Well, that settles the matter, then.

In a parliamentary democracy, ministers have enormous discretion on a wide range of decisions. They are also privy to information that isn’t public, which is why, in a functional democracy at least, there are stringent oversights and appeals processes and restrictions on how a minister can use information obtained when they were in office. For example, there is a code of conduct to limit the lobbying activities of ministers after they step down, but it is up to serving ministers to decide how much effort to put into policing the activities of their predecessors and former colleagues.

Which brings us to former trade minister Andrew Robb. In 2016, before he had even left parliament, the MP had lined up an $880,000-per-year contract to work, part-time, for Landbridge, the Chinese company that controversially acquired the port of Darwin while he was trade minister. Robb, who negotiated Australia’s free trade agreement with China, was also appointed to the board of Network Ten by Gina Rinehart after he left parliament. Later that year Rinehart purchased S Kidman and Co, Australia’s largest cattle landholder. In March this year she bought the Aroona cattle station in the Northern Territory, and then, just weeks later, the darnedest thing happened. Australia and China announced an agreement to dramatically increase Australia’s access to the lucrative chilled-beef market in China. What are the odds! Luckily Robb had already started work on upgrading the “beef roads” in northern Australia with taxpayers’ money back when he was a minister, so Rinehart’s operations shouldn’t have any problems with infrastructure as they rapidly scale up exports.

Robb sits on the boards of four Rinehart-related cattle companies. He denies he is a lobbyist and denies that he used any information gained while trade minister to help the people who now employ him. We have no reason to doubt him and he is certainly not the first to sell strategic advice post-parliament. For example, the former ALP minister for resources Martin Ferguson is, most avowedly, not a lobbyist for the oil and gas industry’s “peak body”. He is merely the chair of their advisory board.

The minister responsible for overseeing the Statement of Ministerial Standards (it’s not a law) that seeks to prevent former ministers from lobbying in their portfolio areas is convinced that Robb has done no wrong. Indeed, Special Minister of State Scott Ryan reminded us to think about the financial challenges of post-politics life: “We have to be careful [that] someone [who] has a broad portfolio – particularly someone like Andrew who was a senior businessman before he came into parliament – isn’t prohibited completely from work after they leave public work.” Minister Ryan has obviously taken all reasonable steps to convince himself that there is nothing to see here. Move along.

But what if we didn’t want to move along? What if we wanted change? What might it look like? Not all watchdogs are created equal. While none of the state and territory models is perfect, the NSW model – despite being the first – is probably still the best. It has a broad definition of corruption that allows it to start investigations into poor public-sector practice as well as potential criminal breaches. History suggests that where there is smoke there is often fire, and by lowering the bar for initial complaints ICAC’s investigators can often find systematic failures and criminal behaviour where initially there was only evidence of waste and poor record keeping.

New South Wales not only allows public hearings but has also chosen to use that power frequently. While the Queensland corruption body has the right to hold public hearings, it has held barely any in its 28 years. Public hearings ensure that the public can see that justice is being done, and in New South Wales there is clear proof that they encourage more whistleblowers to come forward with more information.

And, finally, a commission needs to be as legally and financially independent as the judiciary. Commissioners need to have long-term appointments, budgets must be sufficient and stable, and the body must be respected by all in parliament.

It is not inevitable that the next Commonwealth parliament will create a federal corruption-fighting body. But unless our parliament moves to create one soon it will continue to lose the moral authority on which delegated democratic authority actually rests.

Some will argue that the benefits don’t justify the hundreds of millions of dollars required to run a body that is big enough, and well resourced enough, to oversee 226 MPs, thousands of staffers, and hundreds of thousands of employees, contractors and related parties. But given the government’s willingness to spend $60 billion on company tax cuts to attract foreign investment, and given that numerous economic analyses have shown that fear of corruption is a major deterrent to foreign investment, the costs can be justified.

Democracies thrive on high expectations, and citizens must be able to trust parliaments to make decisions on their behalf. Creating a federal corruption watchdog will not fix all of what ails our struggling body politic, but with luck and a bit of hard work the system may well right itself. If, for example, Opposition and crossbench MPs are desperate enough to gain votes and power at the next election, they might just be self-sacrificing enough to put the desires of the public ahead of their desire to avoid scrutiny. It’s happened before.

Richard Denniss
Richard Denniss is the chief economist at the Australia Institute.

September 2017

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