The Andrews government has used its large majority in Parliament to block a proposal to reform Victorian laws, which would have banned lobbyists from serving on public boards relating to their areas of work, despite the bill being supported by the Coalition, Greens and crossbench MPs in the Legislative Council.
The government blocked the proposal in the shadow of the PwC scandal, which has served as yet another reminder that in this country, well-connected lobbyists are greasing the wheels of access and influence to public officials for those who have the funds to pay them.
The secret to their access is their insider status: almost 40% of these lobbyists are former politicians, public servants and ministerial advisers. This has been described as the “revolving door”, where former public officials capitalise on and monetise their networks to gain access to powerful decision-makers and policy-makers — for profit.
The relatively straightforward reform was recommended by Victorian anti-corruption watchdog IBAC in its report on Operation Clara, released in February. IBAC found that former Labor minister turned lobbyist Theo Theophanous had allegedly misused his position in 2018 and 2019 to lobby for a $31 billion “super city” in the western suburbs of Melbourne for a Chinese-backed consortium, the Australian Education City consortium (AEC), while he was on the board of the Victorian Planning Authority.
Theophanous rejected IBAC’s findings, saying in a statement: “IBAC has once again demonstrated a complete disregard for the principles of democracy and its responsibilities within it.”
IBAC found Theophanous had failed to declare a conflict of interest when discussing matters relating to the AEC consortium at planning authority board meetings and that he failed to comply with Victorian lobbying rules that required him to register a lobbying client. As direct compensation for his lobbying efforts, the AEC consortium made political donations to Theophanous’ daughter’s campaign for election to Victorian Parliament.
Theophanous resigned from his position on the board of the State Trustees after these revelations. The IBAC report stated that Theophanous’ daughter, current member for Northcote Kat Theophanous, didn’t have knowledge of her father’s conduct.
Duty calls
Members of public sector boards, including those on the Victorian Planning Authority, have certain duties. These include not using their position to seek an advantage for themselves or another person, and not to use information obtained during their board duties to benefit themselves or another person. They are also obliged to comply with the board’s policy on managing conflicts of interest.
These duties are in place because public entity boards give advice and take actions that can influence government decisions. This means high standards of integrity are required. In this context, where we need board members to act with integrity, we cannot have the perception that influence can be “bought” through lobbyists sitting on these boards.
Conflicts of interest
IBAC made four recommendations to the Andrews government, including preventing lobbyists from being appointed to public entity boards that relate to their line of work. This would bring Victoria into line with two other states: NSW bans lobbyists from being appointed to public sector boards in their area of work for 12 months, and Queensland bans them from sitting on public sector boards altogether.
There are two main reasons to impose this ban. The first is to prevent lobbyists from putting forward favourable positions for their private clients on these boards, which are supposed to be run in the public interest. There is a risk that a client may say to a lobbyist: “I will give you a lot of money if you use your board position to advocate for my company to get these approvals.”
Where lobbyists are in a position of conflict of interest, they may act in a way that gives them personal financial benefit against the broader public interest. So there is a corruption risk there, which justifies the ban.
There is also the risk of the possession and use of confidential information. If the lobbyist has certain confidential information from a public sector board, such as that contracts would be awarded to a certain party, or certain government policies that would be implemented in the future, they may be able to capitalise on that information in their favour for their private clients.
Consulting firm PwC has recently come under fire for similar behaviour, in misusing confidential government information for the benefit of its private tax clients: actions which a Senate committee has condemned as an “egregious breach of trust”.
Our democracy relies on public sector boards acting in the public interest when making decisions and influencing government policy, rather than being swayed by narrow sectional interests for the financial benefit of lobbyists or their clients.
Imposing a ban on lobbyists sitting on public sector boards would reduce the risk of corruption and improve public sector governance. The question for the Victorian Labor government is: how it can justify blocking an attempt to enhance the democratic norms of political equality and fairness?
How indeed? It’s just a typical political calculation. ‘Democratic norms of political equality and fairness’ are airy-fairy notions that only bother a small and insignificant number of voters. Politicians with power care far more about looking after their mates and pay-masters and arranging opportunities for cronies and themselves. All very cosy. So it’s really no contest, of course Dan Andrews and Labor killed the bill, they did not have to think twice. (There was a good article in Slate magazine about the delusion of ‘democratic norms’ which are so often cited in the USA when opponents of the Republicans complain of the Republicans ignoring them. The article argues there are no universal or national norms, just the beliefs that underpin different political movements, and the Republicans’ norms include winning whatever it takes, by doing anything you can get away with. In Australia the norms are not quite so far remote from the theories of representative democracy, but there’s still a large gap.)
The most interesting element in this depressingly predictable little story is the Coalition supporting the bill. If the VIC Coalition had the slightest hope of being in power itself any time soon it would be no more enthusiastic for such measures than VIC Labor. It is a measure of the VIC Coalition’s despair and disarray that it is behaving like a minor party rather than half of a ruling duopoly.
The latter is quite telling, an opposition that is unfit for purpose, has followed IPA &/or News etc. for too long and became complacent, and unwilling to reform itself.
Pesuto is actually electable. That’s new for Vic Libs. May mean the Credlinites will depose him!
Power corrupts. No one is immune from it.
Politicians shouldn’t remain in power for such a long time, as it only worsens.
Thought the same. Have had several discussions with mates calling him Dictator Dan, pointing out the Covid response was fair and on medical advice / opinion. However, it’s decisions like this that will have more people starting to think the slipper fits.
Agree. But why does the Coalition support this? It’s anathema to them.
Would be nice to know what reasons Vic Gov gave for rejecting the legislation. Is it possible they may be considering some form of alternative legislation ?
Objecting to lobbying controls is pretty openly saying corruption is OK
It’s their next job for many of them.
I hope the Vics turn on Labor next election. Obviously they cant vote LNP so anyone who wants to have a go as an independant should get their canvassing shoes on and start doorknocking. They have a good story to tell.
This is my pick. I don’t see the Vic Liberals ever recovering. However, I think there will be a splintering of the vote and a swathe of independents will start getting in, especially in the North and West.