Christopher Pyne: Consultancy as government

Jul 5, 2019

The sudden elevation of Christopher Pyne – formerly Minister for Defence Industries – to defence consultant with Ernst & Young may have taken some people by surprise. Surely, though, it was always on the cards, especially since he retired from parliament at a relatively young age of 51 and with a pre-election likelihood of not being returned as the member for Sturt. However, his appointment points directly to wider developments in the politico-economic culture of this and other countries.

Pyne’s engagement by Ernst & Young is surely an attempt by that firm to become more heavily involved in what it sees as a lucrative growth area: defence spending and production. This is consistent with the Morrison government’s stated objective to position Australia to be more aggressive in tapping into defence supply contracts. Opportunities abound here, but in a more idealistic world one might hope a retiring politician could aspire to a higher goal than advising about getting access to increased defence revenue, instead using his experience to focus on peaceful solutions to potential crises.

However, the opportunism of many politicians knows no bounds and the move into consulting falls into a pattern employed by many other politicians and senior public servants over the past three decades. It is part of the privatisation of politics and is one of the factors undermining the integrity of a democratic system. Pyne is as much a symbol of what has happened over the past two decades as a winner from the process.

If we leave aside the question of whether he has acted within the rules–and, of course, he claims he has–it seems there are at least four basic aspects to his appointment deserving of comment. Firstly, is the question of whether the rules governing ministerial appointments to consultancy/lobbying positions should be extended from eighteen months to five years as this would create a greater distance between current inside knowledge possessed by the aspiring consultant and that to which the retiree subsequently has access.

The weakness in this proposal is that it underplays how long networks of connection continue to operate in the kind of bubble environment in which the large accountancy firms, the lobbying groups and the parliament–complete with the party operatives–function. That is, politicians/consultants move in a relatively tight circle having a considerable historical awareness, a depth of knowledge and a limited range of social contacts who know intimately how the game is played. This enables them to influence the rules of the game, such that they always deal themselves in over an extended period.

This dovetails with the second point: the functional integration of lobbying with consultancy. The large consultancy firms would like to have us think they offer independent advice – worth about $3.1 billion from government over the last six years as reported by Michael West, but they are so integrated into the neoliberal system it would be difficult to see how it could exist without them–that their mere presence is a kind of permanent symbol of the continuance of this system.

This militates strongly against their independence. More specifically, government preference for consultants’ advice, over that of public servants, means that members of the large firms are consistently interacting with ministers and senior-public servants, and this interaction must involve a form of lobbying. This does not even take into consideration the reports, both solicited and unsolicited, provided by the big four.

Even if certain consultancy companies have developed expertise that will never exist in the public service, the integration of consulting–giving ‘independent’ advice–and lobbying–pushing hard for certain policies to be imposed–is now almost complete. This is the third and underlying point, the one most often ignored except by a few journalists such as Jack Waterford.

It rests on the assumption that acquiring a job as a consultant/lobbyist is part of a politician’s career path, but to be successful it is necessary to inculcate oneself into the top-level private sector bubble before retirement. This must surely mean expressing–even if just subliminally–a readiness to bend to the demands of the large consultancy firms (and the other business lobbies) when the aspirant is still in office.

Its influence is seemingly so powerful and its members’ personnel interlinking with government so blatant, its capacity to receive media coverage so strong, that the consultancy industry can almost be seen as a fourth wing of the state-after the legislature, the public service and the judiciary. How much of their revenue is derived from non-government sources? As my fourth point, I call this the privatisation of politics in the sense that a body of unelected people strongly influences, down to the level of offering close detail, the making of major decisions affecting the running of the country for many years to come.

This is not saying anything new and it has been explored many times before on this forum. What is perhaps innovative is the extent to which neoliberalism, as reflected in the constant handouts to the large consultancy firms and other corporations, has essentially-despite the libertarian theories of Friedman, Hayek and Buchanan–become a system of politico-economic rule where the government functions in large part to benefit the legatees of the private sector.

And the way the application of neoliberal thinking has developed in building up powerful institutions means that what might have once been class-based politics has now been demonstrably replaced by an asset/knowledge based politics, where government is integrally intertwined with those possessing most assets. In a democratic system government’s role should be to equitably redistribute those assets.

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