GREG BAILEY. Lobbyists and the Privatisation of the Political Process

Recent exposures of the extent of lobbying in Canberra and the revolving door of politicians becoming lobbyists highlight the extent to which politics here and in other Anglo-Saxon countries has become privatized. The effectiveness of the lobbyists–who are essentially mercenaries–poses a threat to democratic process and contributes strongly to what I call “the privatization of politics.” Government has always to some extent been an oligopoly of vested interests. Lobbyists have cemented this situation even further.

In the past week organs of the Fairfax press have expressed shock at the large number–possibly as many as 5000–of lobbyists in Canberra (to which could be added those dealing in the state capitals) and what they perceive as their privileged position in influencing the way those in power exercise policy formation. Lobbying has always been part of political culture, yet has now refined itself such that it can no longer be considered a general form of political campaigning operating at the level of broad policy construction. Lobbying now is primarily directed at specific decision-making by a governing party (as opposed to political donations given nominally to both sides of politics), whereas other political activity of a more ‘general’ kind is directed at the changing of policies or the system as a whole. Lobbyists operate to tweak the system for the advantage of their clients or to modify existing policies for the same reason. And they thrive on uncertainty.

What creates deep concern is: the growth in the number of lobbying firms over the past two decades, the secrecy with which they operate, the privileged access they enjoy to sitting members of the government and opposition, the career paths they offer for existing politicians (whose voting patterns in parliament may conceivably be influenced by prospects of a future career with a particular lobbying or consulting firm) and, above all, the huge gap between the capacity of large vested interests working through lobbyists and the minimal influence of the average voter, even when organized into pressure groups. Whilst there has always been a knowledge and credibility gap between the voter and those who ideally represent the voter, the well-documented move from a position as political operative or politician, senior public servant, or senior union leader, to a senior position in a large consultancy firm or lobbying business has definitely exacerbated the reality and perception of this gap.

Historically, there is a significant paradox in the increased power of lobbyists. The strident advocates of the free market in the early nineties claimed the unconstrained workings of the market would reduce the ravages of lobbying and interest groups on the functioning of the economy. A typical view asserts that: “In essence, markets constitute a sensitive voting process through which people express the strengths of their preferences for the various goods and services available in a society. The capacity of market processes to elicit information about people’s preferences and to induce producers to respond appropriately to it contrasts markedly with political processes as a mechanism for allocating resources.” (my italics) (Competition and Economic Efficiency, EPAC Background Paper. No.19, AGPS, Canberra, 1992, p.69) Even then the emerging lobbying firms, the large industry groups and consulting firms were arguing in support of privatization and deregulation because it would impede the influence of interest groups.

All of this was really a ruse, because hand in hand with deregulation and privatization has developed a massive “industry of persuasion” which undermines the workings of the market in the manner just defined. Now such groups have been successful in, for example, placing limitations on the development of a rational and coherent energy policy, even where business is supporting the extensive transition to renewable energy. Lobbyists centrally associated with both the Labor and the LNP have been vigorously spruiking on behalf of Adani to construct a railway line to service a wholly uneconomic coal mine that nobody wants except for a few climate change deniers who completely ignore the lack of financial and environmental integrity of the Adani company. In such a clear situation the respective lobbyists are simply placing their own self-interest above the longer-term interests of the country. They are further entangling both main political parties into this web of self-interest, at least as this is seen by the mainstream media. Here the market is definitely not allowed to work.

Over the past two decades, if not earlier, we have witnessed the emergence of a new political class, encompassing all of the elites just mentioned, which takes decision-making away from the parliament, and which minimizes the influence of any advice from within the public service, universities and the CSIRO. It is tightly structured, focusses on the short term and effectively subverts any kind of large-scale decision making that at least has the appearance of representing the voters as a whole. Above all it removes political decision-making from the public sphere and so effectively reduces the integrity of public institutions built up over a long time. In this sense it is privatizing political decision-making.

The main stream media must take some responsibility for this situation, since it has been somewhat complicit in the shift of “expert knowledge” away from the universities and publicly funded research centres and has instead taken this from the large consultancy firms, who have been very successful in receiving press coverage–especially on matters of economy, budgets, tax policy, infrastructure and even social issues–from the mid-eighties onwards. But the consultancy firms perform a different function than the lobbying firms. The former produce position papers, many designed explicitly to influence government decision making in the short-term, that are released to the media, whereas lobbyists directly approach ministers, with whom they have cultivated a personal relationship, about a specific problem.

The proposals put by Jacqui Lambi, and others before her, to stop politicians becoming lobbyists in their area of expertise for two or five years after their retirement, and to establish a fully transparent register of lobbyists is a step in the right direction. Yet this in itself will not be enough to convince the majority of voters–at least those who are interested–that government decision-making has been substantially hijacked by private concerns. Because when the voters emotively conceive this activity as a further expression of the complete separation of political decision making from the main stream, the electoral response is identical to that epitomized by Brexit, the election of Donald Trump, and the ephemeral popularity of parties like One Nation. Such grouping of interests will do nothing to prevent the privatization of politics, they will only exacerbate it.

Dr Greg Bailey is Associate Professor, Program Coordinator (Asian Studies), College of Arts, Social Sciences and Commerce, Latrobe University.


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3 Responses to GREG BAILEY. Lobbyists and the Privatisation of the Political Process

  1. Paul Frijters says:

    Hi Greg,

    I agree with this but would call it corruption because politicians are meant to represent the public interest. When they dont and particularly when the top leaders allow the system to serve other interests, one should call it corruption, perhaps even treason.

    I also agree that the proposed rules on lobbyists are going to be useless. So the question is ‘what can we do’. In each policy area, it is not so hard to see what should be done. It is even obvious what initial steps to take in the political arena: have new anti-corruption parties come in and compete in elections, promising to clean up.

    A deeper question is what institutions to devise that would reduce the severity of rent-seeking in the future (one can never truly win. It’s a question of cleaning up faster). In my book with Cameron, I talk about citizen juries appointing top civil servants as a means of strengthening the power and integrity of the civil service.

    I also wonder whether something can be done about the revolving doors of politicians. Time-limits on where they can work are probably going to be very ineffective, and calling for moral revivals is useful in the short-run, but needs to be backed up with new institutions in the longer run.

    I have in particular been thinking what else we can do with ex-PMs and ex-ministers. They are the main ones that are a danger to our democracy, but they are also amongst our greatest assets. They should be kept working for the public good rather than working to drag us all down.

    The Brits have the House of Lords where the former PMs and ministers go to, which preserves them for the public good and from where they can monitor the behaviour of current ministers and party members. Its not perfect, but it does help, I believe. So Australia is now more corrupt than the UK. One might say that Australia has too many ex-politicians with no real skills and nothing to sell but their ability to subvert the system.

    In the Netherlands, the former top politicians are made majors of towns, which is not a bad way to go either in terms of preserving them for the public good.

    What can be done like this in Australia? We need some kind of council of elders that has a real role in our democracy and that has real prestige (enough to be worthwhile for former PMs and ministers). Or several councils. Ideas?

  2. Julian says:

    Thank you Professor Bailey for your perceptive summary.
    Essentially while your conclusion is that the “privatization of politics” will continue apace and little if anything will be done to prevent that, you hint at the seat of the malaise being the voters, with precious few among them taking an interest in this area and in the machinations of those who operate within it – all at the expense of said voters as you rightly point out.

  3. Yes the situation has become impossible for average citizens to contend with against the money and networks of these anything for a bob mercenaries. Many use the networks our taxes paid them to develop. How to deal with them and the situation is a vital question surrounded by the despair of not having either their money or networks. Maybe we need to help little people develop the contacts and networks they need for genuine reform. E.G. X advertises a cause they want to promote and asks others to volunteer contacts who can assist them. Is there some way of isolating, excluding, rejecting lobbyist enemies of democracy? After all their behaviour is anti social and anti democratic. But whatever we do will need creativity as they have the money and the contacts to avoid regulation. Maybe we need more articles like the above and more in the popular press about how impotent the elected politicians really are. They may resent being called impotent. We have the best/worst government money can buy.

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