John Menadue. How vested interests are subverting the public interest.

Feb 27, 2015

There are many key public issues that we must address. They include climate change, growing inequality, tax avoidance, budget repair, an ageing population, lifting our productivity and our treatment of asylum seekers.

But our capacity to address these hard issues is becoming very difficult because of the ability of vested interests with their lobbying power to influence governments in a quite dis- proportionate way.

Lobbying has grown dramatically in recent years, particularly in Canberra. It now represents a growing and serious corruption of good governance and the development of sound public policy. In referring to the so called ‘public debate’ on climate change, Professor Ross Garnaut highlighted the ‘diabolical problem’ that vested interests brought to bear on public discussion on climate change.

These problems include:

  • There are over 900 full time independent lobbyists working in Canberra, more than 30 lobbyists for every Cabinet minister. On top of these ‘third party’ lobbyists, there are the special interests who conduct their own lobbying, such as the Australian Pharmacy Guild.
  • These lobbyists encompass a range of interests including mining, clubs, hospitals, private health funds, business and hotels that have all successfully challenged government policy and the public interest. Just think what the Minerals Council of Australia did to subvert public discussion on the Super Profits Tax and the activities of Clubs Australia to thwart gambling reform, or the polluters over an Emissions Trading Scheme and the Carbon Tax. With its lobbying power over the major parties, the hotel lobby at the State level effectively determines hotel operating hours. Violence and crime are a result.
  • With journalism under-resourced, the media depends increasingly on the propaganda and promotion put into the public arena by these vested interests The Australian Centre for Independent Journalism at UTS found in a survey of major metropolitan newspapers published in Australia in 2010 that 55 per cent of content was driven by public relations handouts from lobbyists and their associated public relations arms, and 24 per cent of the content of those metropolitan newspapers had no significant journalistic input whatsoever., relying heavily on public relations handouts.
  • The Media Council of Australia has drawn attention to how media independence is increasingly compromised by ‘advertorials’, a deliberate confusing of advertising and editorial content. The Council also drew attention to trips financed by large corporations and organisations that were not disclosed. It’s not just travel companies that do this.
  • With over 60 per cent of metropolitan newspaper circulations in Australia, News Ltd is a major obstacle to informed debate on key public issues like climate change.
  • The health ‘debate’ is really between the Minister and the Australian Medical Association, the Australian Pharmacy Guild, Medicines Australia and the Private Health Insurance companies. The debate is not with the public about health policy and strategy, it is about how the Minister and the department manage the vested interests.
  • The wealthy private schools are obstacles to needs based funding which is necessary for both equity and efficiency reasons
  • Much of the policy skills in Canberra departments has been downgraded and much of the policy work is now in the hands of young staff in ministers’ offices that are much more inclined to listen to vested interests.
  • Policy work within the government is now undertaken more in specialist organisations such as the Productivity Commission rather than in the departments. Departmental policy capability has been seriously denuded.

What can be done?

  • Federal lobbyists have to be registered with the Department of Prime Minister and Cabinet, but this is inadequate. They should also be obliged to promptly, publicly and accurately disclose the discussions and meetings they have had with ministers, shadow ministers and senior public servants.
  • All proposals by special interest groups should be accompanied by a public interest impact statement prepared by an independent and professional body. This public impact statement would be attached to representations from the vested interest group. Many of the major private consulting firms should be excluded from this process as many of them have shown themselves to be compromised in the interests of their clients.
  • Refuse tax benefits for ‘think tanks’ like Institute of Public Affairs which are secretly funded and act as fronts for vested interests.
  • Departments such as Health which are so influenced by special interests should have different governance arrangements. The traditional minister/departmental model in Health is a happy hunting ground for vested interests that significantly influence outcomes in health. The Reserve Bank, composed of independent and professional persons, has shown the benefit of such governance arrangements in keeping vested interests at bay and promoting an informed public debate. We need such an arrangement in the health field particularly.
  • No minister or senior official should work with a vested interest group that they have been associated with for at least five years after retirement or resignation.
  • There should be increased funding to the Parliament to provide alternate public advice in key policy areas. The Parliamentary Budget Office is a good start. The current policy vacuum must be filled by independent and professional advisers. At the moment the policy vacuum is filled by special interests assisted in many cases by a compliant and under-resourced media.
  • Adequate funding of the Australian Broadcasting Commission to assert the public interest and develop good public policy is now more important than ever.
  • Major reform of election funding to stop powerful groups buying political favours.
  • A federal Independent Commission Against Corruption and in each State to examine allegations of corruption.
  • Citizen Assemblies of randomly selected people who are fully informed on key public issues to advise governments.

Action to assert the public interest in the face of powerful vested interests is necessary on many fronts. The problem is urgent.

This article is part of a series ‘Who speaks for and protects the public interest in Australia? published by Australia 21. Other articles in this series can be accessed by clicking on my website at the top of this page.

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