One should always pay attention when an industry veteran reflects on changes in their industry over the years. One therefore should give close attention to Mitch Hooke’s observations in his letter asking for more financial help from Minerals Council of Australia members to attack the carbon pricing package, as reported in today’s Financial Review.

…over the period of the past four years, there has been a profound shift in the manner of public policy development and implementation. The new paradigm is one of public contest through the popular media more so than rational, considered, effective consultation and debate.

Hooke should know what he’s talking about. He is the king of the rent seekers. First as head of the Grains Council — Hooke is a son of the soil and still has a horse property in the Southern Highlands — then at the Australian Food and Grocery Council, and then at Minerals Council, and with a chairmanship of the Australian Industry Greenhouse Network along the way, his career has been dedicated to representing special interests no matter what the cost to good policy.

Hooke of course is too modest by half. Who, more than anyone else, has been responsible for the “new paradigm” than the Minerals Council, which coordinated the successful foreign multinational campaign to overthrow the Rudd Government and force its replacement to negotiate a vastly-watered down version of the mining tax? “There shouldn’t be any perception that we’re dancing on Rudd’s grave,” he sternly warned his colleagues the day Gillard became Prime Minister, but this was a victory — soon sealed by Xstrata, BHP-Billiton and Rio Tinto dictating the terms of the revised mining tax — in which Hooke played a key role.

But is he correct in his assessment of the way the policy process has changed? Hooke is making the elementary mistake of universalising from his own experience, which is that he struggled to exercise the same behind-the-scenes influence he had with the Howard Government, with Labor. Hooke had a close relationship with the Howard Government — as head of the Food and Grocery Council he negotiated a deal to ensure Australian consumers wouldn’t know if their food had been contaminated by GM products, with Hooke calling GM labelling “terrorist labelling” — and was an enthusiastic spruiker of the virtues of WorkChoices, something that ensured his access and influence under Labor would be limited. It was only because he was denied the sort of high-level behind-the-scenes influence to which he was accustomed that Hooke turned to the “new paradigm” of “public contest”.

Still, Hooke’s broader point is essentially correct — there has been a change in the public policy process.

The public policy model that dominated the 1980s reform period was a very traditional one — policy was the purview of senior officials and ministers (who usually had only limited personal staff) and was not contested. Key institutions like Treasury were unchallenged except by politicians themselves (think John Stone being overruled on floating the dollar). Opinion polling was rare. There were no private sector economic consultancies producing their own Budget forecasts, conducting economic modelling, constantly demanding media attention or claiming to be superior to Treasury. Business was slow to react to Hawke-era economic reform and struggled to adapt to a new environment in which economic policy and sectoral reform were constantly evolving.

That began to change under a number of influences. Business woke up to the need to influence reform. Labor insiders were hired by the biggest companies and most powerful business people to represent their interests and advise on dealing with government. Lobbyists became more important. The Hawke Government significantly increased the number of ministerial staff and poured resources into media management.

A whole class of public policy professionals began to emerge — not just politicians, public servants and peak industry bodies any more, but lobbyists, spin doctors, consultants, ministerial advisers and board appointees. Economic consultancies emerged, usually run by former Public Service economists and usually making most of their money off government tenders.

These offered modelling for hire, “independent modelling” that would say whatever you wanted it to say in order to bolster your case. Under the Howard Government, another innovation emerged — pollster lobbyists, who would detail not the economic impact of a reform, or preventing a reform, but its political impact — which seats were affected by a decision, how important the affected voters were, the margins, how many seats would be lost.

The public policy process has thus moved from one based almost entirely on authority to one in which the amount of money industries could throw at an issue played a key role. The Public Service, and particularly key institutions like the Productivity Commission, still wield significant authority, but now more than ever public policy is affected by how many economists rentseekers can hire to model something for you, whether they can afford the best-connected lobbyists to put their case, how much they can afford to spend on polling about an individual issue.

At some point, policy became as much a contest of ideas than a contest of budgets.

The change Hooke suggests isn’t really a new paradigm at all — it’s simply the old one, continuing to develop. Pumping money into an advertising campaign to overturn a policy is simply a continuation of the idea that public policy is heavily influenced by the amount of money you can throw at your campaign, and an inevitable consequence of the Howard-era embrace of poll-driven lobbying. If the political impact of a reform is important enough to monitor, it’s important enough to influence.

The goal remains the same — to convince politicians of the merits of your case even if there’s no evidence or logic behind you. It’s just that the money is now going to marketing executives and major media outlets rather than just economists and pollsters. And major media outlets don’t come cheap.

That’s why the real winners from this evolution are the mainstream media companies. They’re now a key mechanism for manipulating the policy process. On that, at least, the future of the media has never looked brighter.

Peter Fray

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