JOHN MENADUE. The scourge of lobbyists.

There are many key public issues that we must address such as 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 and other important issues is becoming very difficult because of vested interests with their lobbying power to influence governments in a quite disproportionate way. We are rightly concerned and distrustful of governments and politicians. We need better political leadership but lobbyists are a major contributor to the awful political malaise. The corrupting power of lobbyists must be drastically curbed.  The swamp must be drained.

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.

Martin Parkinson, the Secretary of the Department of the Prime Minister and Cabinet, has warned  about ‘vested interests’ who seek concessions from government at the expense of ordinary citizens.  Some time ago the former ACCC Chairman, Graeme Samuel, cautioned us that ‘A new conga line of rent seekers is lining up to take the place of those that have fallen out of favour’. In referring to opposition to company tax and carbon pollution reform policies, Ross Gittins in the SMH said ‘industry lobby groups [have] become less inhibited in pressing private interests at the expense of the wider public interest. [They] are ferociously resistant to reform proposals.’

These problems are widespread and growing.

There are 252 lobbying entities registered in Canberra with the Department of Prime Minister and Cabinet. These entities employ a significant number of lobbyists, e.g. Barton Deakin employs 9 lobbyists, Newgate Communications 19, Crosby Textor 7 and GRACosway 19. Some accounting firms, including three of the majors who undertake lobbying, are not obliged to register. Charitable, religious and non-government organisations do not have to register. On top of these ‘third party’ lobbyists, there are the special interests who conduct their own lobbying, such as the Minerals Council of Australia, the Australian Pharmacy Guild and the notorious Business Council of Australia. These lobbyists encompass a range of interests including mining, clubs, hospitals, private health insurance funds, business and hotels that have all successfully challenged government policy and the public interest in many ways. Just think what the Minerals Council of Australia did to subvert public discussion on the Mining 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. Only recently we saw the socially damaging role of the Beverage Council of Australia in undermining expert opinion on ways to address the growing epidemic of obesity. It is a repeat of Big Tobacco.

I estimate there are over 1000 lobbyists, part time and full time, and of all shapes and sizes operating in Canberra. Secret lobbying is pervasive and insidious. It must be curbed and made transparent.

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, and 24 per cent of the content of those metropolitan newspapers had no significant journalistic input whatsoever, relying heavily on public relations handouts. The problem has increased since then.  So much of ‘news’ is based on propaganda hand outs by lobbying/public relations firms.

Many of the so-called economic and business economists we read, hear and see on our media are in the employment of the banks and accounting firms with their own self-interested agendas.

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 and our role in Iraq. Essential Media found that the ABC and SBS were the most trusted media in Australia. Not surprisingly the least trusted were the Murdoch papers: The Australian, Herald Sun, The Telegraph and the Courier Mail.

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 lobbying interests in health win time and time again. As I have often said, health ministers may be in office but the health providers and their lobbyists are in power.

The wealthy private schools with their lobbying and political clout are obstacles to needs-based funding, which is necessary for both equity and efficiency reasons.

Much of the policy skills in Canberra departments have been downgraded and ‘policy’ work is contracted out to accounting and consultancy firms with poor policy skills and no corporate memory.  This handing out of work is done in the name of  downsizing government but it gives a major advantage to those the  accounting and business associates are close to,  the large and powerful corporations who  are hostile to government.

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 eroded.  That makes it harder for the public service to safeguard the public interest against lobbyists with their incessant demands for favourable treatment.

Inexperienced and young ministerial staffers are much more likely to listen to vested interests. On Four Corners we were reminded of a staffer in the health portfolio coming from a lobbying firm and working against health ratings that would assist consumer choice

What can be done to assert the public interest against these powerful vested interests?

  • 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. That same rule should apply to vested interests like the Minerals Council of Australia that lobbies directly on its own behalf. A clear lesson to be learnt from the subversion of the public interest by the AMC is that giving in to rent seekers doesn’t appease them. It just makes them and others much bolder. The government is seen as a craven ‘patsy’.
  • All lobbyists should be banned from Parliament Houses across Australia. Let them lobby MP’s elsewhere.
  • All proposals by special interest groups should be accompanied by a public interest impact statement prepared by an independent and professional body. That statement should be made public. This public impact statement would be attached to representations from the vested interest group. Many of the major private consulting firms and the  four large accounting firms should be excluded from this process as many of them have shown themselves to be compromised in the interests of their clients.
  • Tax benefits for ‘think tanks’ like the Institute of Public Affairs and the Sydney Institute, which are secretly funded and act as fronts for vested interests, should be denied.
  • Departments such as Health which are so influenced by special interests should have different governance arrangements. The traditional minister/department model in Health is a happy hunting ground for lobbyists and vested interests that significantly undermine and sabotage urgent health reforms across the health field. 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.
  • Adequate funding of the Australian Broadcasting Commission to assert the public interest and promote public debate is now more important than ever. The ABC, despite its obvious shortcomings, is still the most trusted media institution in the country. News Corp is the least trusted.
  • Major reform of election funding to stop powerful groups buying political favours is essential.
  • A federal Independent Commission against Corruption and in each State is required to examine allegations of corruption.
  • Citizen Assemblies of randomly selected people who are fully informed on key public issues could assert the public interest and help governments counter powerful vested interests.

The problem of vested interests and their corruption of public debate must be addressed. It is urgent if we are to have democratic renewal, restore some faith in our public institutions and develop sound public policies.

The lobbying scourge and the undermining of good and open government must be urgently addressed.  A great deal is at risk.

This is an update of a previously posted article.


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10 Responses to JOHN MENADUE. The scourge of lobbyists.

  1. Michael Flynn says:

    My local Labor MP Andrew Leigh is not in an ALP left or right faction and is connected to his local community including the ANU. I hope a Shorten Cabinet will shake up the lobby networks and look to the APS for better advice and more APS implementation. I hope for more analysis of defence spending linked to real ADF preparation for the affordable defence of Australia: not ASPI on “threats from China” or why SA must have Chris Pyne. More members in trade unions might help. No tax deductions for the IPA?

  2. R. N. England says:

    The term “cryptogovernment” could be used for these organisations, most notably and dangerously the arms industry lobby, that shape policy in there own interest. It doesn’t imply a conspiracy, but just the way things turn out when government is emasculated by capitalist culture.

  3. John Bloomfield says:

    “There are many key public issues that we must address such as …… budget repair…”
    It is rather ironic that our capacity to address these and other important issues is made even more difficult when so many of our most socially aware trusted progressive thinkers unwittingly adopt ill-founded neoliberal objectives (such as ‘budget repair’) as being ‘key’ to reverse our seemingly inexorable drift towards serfdom over the last 40 or so years.
    The elevation of federal govt. finance objectives above citizen social needs and proper delivery of essential public services that occurred from the mid 1970’s is the root cause this damaging drift to inequality. In a word, monetarism.

    “…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…”.

    Courtesy of commenter ‘1984Aus’ over at the Guardian:
    “…The RBA external Board members are heavily involved in the banking and fossil fuel industry and the Liberal Party.
    Heather Ridout, Executive Director, Australian Industry Group who worked hard to weaken greenhouse gas abatement policies to “protect industry”. Read the Australian Industry Group submission to the Senate Select Committee Inquiry on Climate Policy.
    Allan Moss was appointed to the nine-member board of the Reserve Bank of Australia by Scott Morrison . Moss is ex Macquarie Bank and one of several wealthy contributors to Lucy Turnbull’s Wentworth Forum slush fund.
    Catherine Tanna Melbourne-based CEO of Energy Australia, the privately owned Hong Kong company who racked up $8.8 billion in revenue and paid no tax paid.
    Ian Harper of Deloitte Access Economics another legally challenged outfit
    Kathryn Fagg former employee of billionaire and Liberal large donor Lindsay Fox the truck haulage magnate a hungry fossil fuel industry
    John Akehurst former Woodside CEO who replaced the Liberal Party’s favourite, Hugh Morgan, who was appointed by the Fraser Government in 1981 for one term and by the Howard Government in 1996 for two terms. Akehurst is not an economist, but a representative of the resources industry.”

    Carol Schwartz – Director Stockland Group; $1.2b income 13/14FY. zero taxable income, zero tax paid
    The RBA is not keeping vested interests at bay, it is heavily loaded with big business vested interests.
    The RBA has overseen the application of Friedmanite monetarism/NAIRU since the 1980’s/90’s which has made waged workers & common consumers bear the brunt of inflation control.
    They have overseen the housing bubble, the rise of private debt to world record highs and now they sit on their hands apparently powerless to correct the economic mess – doing nothing, as consumer demand collapses because productivity increases have not flowed through to wages because of loss of wage-earner bargaining power.

    RBA should be providing govt. of the day with advice more in line with its chartered obligation to deliver full employment and prosperity to the citizens .

  4. Michael D. Breen says:

    Thanks again, John. this scourge empowering the best government money can buy is responsible for so much destruction of the body politic and the future we will leave future generations. The French philosopher Mause makes the point that a gift of its nature implies a favourable response. What hope have the ordinary punters against these forces ranged against them? Citizen Assembly a great idea.

  5. Geoff Davies says:

    Yes, fundamental and well said. Our system is near-totally corrupted.

    I would say NO private funding of election campaigns, perhaps with a low limit of say $50.

    ALL contacts with MPs and all connected people *immediately* disclosed on a public web site – official, social, golf course, erotic, doesn’t matter, we have to know who’s talking to our ‘representatives’.

    If we don’t start talking about it, it certainly won’t happen.

  6. Simon Warriner says:

    John, it all goes back to leadership and the nature of those doing it.

    My article published on puts forward a solution that does not involve expecting the crocodiles to pull the plug to drain the swamp.

    In summary what it proposes is a group that selflessly promotes to the electorate at large the role of independent representatives who represent the range of views and then particpate in deciding how to advance those that best serve the greatest common good, as opposed to the party political model of representation which has at its mode of operation the promotion of narrow ranges of interests that serve those who best serve the party.

    Part of the reason politics in Australia is populated by such drongos is because there is no push back against the party model which must inexorably draw to its membership people who do not understand conflicted interest. It has become the defacto way of doing government. This may come across as simplistic but it is not. A tendency towards stupidity is a truth built into the structure of all political parties and once understood it explains the progressive failure of modern government. There are many explanations for what is wrong, and they are all correct, but behind them all lies the nature/character of those passing the legislation and supervising those running the departments. A failure to understand and a willingness to accept conflicted interest is a character flaw. Without demanding and ensuring those in that role are of the highest possible standard we are on a collision course with failure.

    The malaise of journalism is no accident. That trade, and the arena in which it has been practised has been systematically debauched, dumbed down and prostituted by Rupert Murdoch and his coterie of suckholes over a very long time, to the point where only the most egregious of malfeasance gets mentioned and power is protected by not reporting the misdeeds of the powerful. Those powerful are best positioned to serve party interests through donations to enable election campaigns to be fought and won, and so the wheel turns.

    Like this:

  7. Michael Lester says:

    good one john. a neglected source of ‘political corruption’ distorting the ‘public interest’ in favour of privileged, money driven ‘self interest’. it is particularly disturbing in view of the equally important, equally neglected and closely related phenomenon of the ‘revolving door’ between government and business; a disturbing trend towards more and more politicians and bureaucrats moving into lobbying, corporate consulting, ‘think tanks’ and industry associations once they leave high and influential public office.

  8. J Deacon says:

    Great article John. It’s obvious Lobby groups are distorting Australia’s governance. NZ doesn’t seem to have this problem. Partly explains the difference. Have shared and hope it gets more attention!

  9. Evan Hadkins says:

    Also deliberative democracy.

  10. Albert Haran says:

    You ask
    “What can be done to assert the public interest against these powerful vested interests?”

    Greg Hamilton summed it up in his article
    No stomach or mind for democracy. 16 May 2018

    “We’re not a democratic people.
    We don’t have the stomach, the mind or the balls for it.
    Our heart’s just not there.
    You’d know all about it if it were otherwise. “

    How sad for the lucky country.
    And the really sad part is, we will get the opportunity to prove it again at the next election.

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