Paying the piper: the lobbyists who need to be rigorously controlled

Dec 6, 2021
parliament house canberra politics night
“Democracy” has been narrowed down to a view that it is only about elections and not about well-functioning institutions. Image: Unsplash

Australia’s lobbying laws only apply to a small part of the lobbying industry, do not identify who is lobbying who and the sanctions are laughable.

Lobbying works because politicians are sitting ducks for influence-peddling.

According to the Australian government’s lobbyist Register, in March 2020 there were 590 registered lobbyists. That is three registered lobbyists for every member of the Australian Parliament.

Counting only registered lobbyists greatly understates the problem. There are 2380 people holding a Parliamentary orange pass, which permits unescorted wandering around Australia’s Parliament. That is 10 lobbyists for every politician.

Lobbyist and pollster Mark Textor once said: “If Canberra is ‘Hollywood for ugly people’, then the tour guides must be lobbyists.”

The lobbyists certainly know how to run tours of Parliament. Australian National University research found that 56 per cent of registered lobbyists have previously held roles in government as a politician, political staffer or senior public servant.

The 1800 corporations using registered lobbyists are either making a commercially savvy investment designed to improve their firm’s bottom line or sadly mistaken that a lobbyist is getting them an advantage over those who oppose their commercial interests.

As public servants, we experienced many sad mistakes at lobbying. It starts in a windowless room. The minister’s chair remains empty. Following an introduction from the lobbyist, the client drones on. Staffers are called away to deal with “issues”, leaving the most junior staffer and the public servant as the recipients of the lobbyist’s 57-slide PowerPoint presentation.

As entertaining as failed lobbying is, the reality is the opposite. Lobbyists strike with unerring accuracy. As public servants, too many times we saw carefully argued briefings die slowly as ministers lapped up lobbyist’s platitudes.

Lobbying gets results. A comprehensive study of the US firms listed on the S&P 500 stock market index identified that every dollar spent on lobbying increased shareholder value by $200.

In Australia, we only have anecdotes and suspicions about the effectiveness of lobbying. It is not in the interests of lobbyists, the clients or politicians to admit anything. The Australian lobbying industry is worth upwards of $1.5 billion and growing. The increase in the industry over the past 20 years shows that our captains of industry believe the payoff is worth it.

Lobbying is not a victimless crime. When a corporation gets a result from lobbying, the taxpayer or another part of society pays.

The threat of lobbying is not just the distortion it causes to the policy framework of a government. Lobbying also undermines democracy. The OECD notes that disproportionate, unregulated influence of interest groups may lead to state capture. One quarter of the politicians and senior officials surveyed across 20 European countries said that the worst aspect of lobbying was that it gave undue weight to elites and the wealthy, while 14 per cent considered that it facilitated undue influence in the democratic process.

What can be done? Banning lobbying entirely is preferable, but no country has successfully stamped out all influence peddling. If banning all lobbying is too much to ask, then regulation of the lobbying industry is needed urgently.

If you are a lobbyist, Australia’s lobbying laws are just dandy.

The lobbying laws in Australia are woefully inadequate. The rules only apply to a small part of the lobbying industry, do not identify who is lobbying who and the sanctions are laughable. So, here are four reforms to meaningfully regulate this part of the swamp.

First, have a meaningful disqualification period for those leaving politics and the public service for a life of lobbying. The revolving door of former politicians and staffers popping up in a new suit and haircut as a neophyte lobbyist are legendary. Australia’s lobbying rules make politicians ineligible to register as a lobbyist for 18 months after leaving politics. Staffers are ineligible for one year after leaving politics.

The qualifying periods Australia has adopted are ridiculously short — it is barely enough time to sulk, get your political memoirs ghost-written and line up your Order of Australia. The United Kingdom and the United States both ban former politicians and staffers for a minimum of two years. Canada has a five-year cooling off period. Even former US president Donald Trump banned his political appointees from working as lobbyists for five years after leaving government. Australia should adopt a disqualification period of five years.

Second, Australia must broaden the definition of lobbying and lobbyists. Its lobbying rules only require “third party” lobbyists to register. This means that the bulk of the industry can be in-house lobbyists working inside big corporations, industry bodies, think-tanks and unions, without regulation or transparency.

Canada and the USA regulate all lobbyists, regardless of how they structure their corporate arrangements. The rules should apply to any person, lobbying government for fee or reward. The Canadian rules state that if 20 per cent of your job involves lobbying, then you are a lobbyist. This approach is sound, as the activity being targeted is the regular and systematic engagement with government to persuade or influence government policy.

Third, Australia must regulate the lobbying, not just the lobbyists. How good are lobbying rules that don’t report lobbying? Australia’s lobbyist register identifies the lobbyists and their clients, but not their targets or activities.

Again, Canada and the USA provide workable arrangements to increase transparency and regulation. Lobbyists are required to report quarterly on their lobbying activities. The reports include details about those lobbied by which clients, and the subject matter.

Finally, Australia must impose meaningful sanctions for breaches of lobbying laws. These need to be laws, not policies, rules or a pirate’s code. Canada, the UK and the USA all have monetary fines available to be imposed on lobbyists who breach their laws. In Canada and the US, the most egregious breaches are punishable by imprisonment.

Australians looking forward to laws which effectively regulate the lobbying industry will need to be patient. There will be strong opposition from an industry in Australia which makes its money by opening the doors to power and who are experts at bending the minds of the politicians they master.

Ian Hunter and Don Jones’ book, authored with Clarrie Bidwell, Thought and Prayers: Fixing Australia’s Government, is available now through Amazon.

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