Disgraced former ALP kingpin Eddie Obeid

It’s hard to see Australia as a totally corrupt nation. Where do you think we sit alongside other countries?

Obviously we’re not a totally corrupt nation. By global standards, we’re a governed liberal democracy with strong institutions. [The report] isn’t about saying we’re a corrupt nation. But it is about looking at how we’re going. Australia’s ranking and score on Transparency International’s Corruption Perception Index has declined substantially since 2012. We went from 7th to 13th place in terms of lists of countries. But ranking of countries is really a conversation starter. The points score is more important: that we’ve gone from 85 to 79 [out of 100]. 

We’re looking at the potential costs to the economy from this. There was a little study done looking at the Transparency International index in particular. These economists got all the data of all the countries’ scores and their GDP per capita, and drew a line through it and came up with their best estimate: for every point lower on that score, a country is likely to have $480/head less GDP per capita.

So this is how the figure $72 billion came about. Do you feel confident in that figure? Even PricewaterhouseCoopers said the “correlation does not necessary imply causation”

I mean, you can never know. We can’t go back to 2012 and re-run the country’s economy for five years. But there are other estimates, particularly by the World Economic Forum, that estimate the cost of corruption to world GDP is 5%, so that $72 billion figure represents 4% of Australia’s GDP, suggesting it’s relative to our place in the world. We’re still, on average, better than average. But there’s still something we can do something about. 

It’s not just economists coming up with numbers. We’ve had some really serious corruption scandals. I still can’t believe that a government-owned body were bribing Saddam Hussein, and no one ever went to jail … Eddie Obeid, the Central Coast NSW scandals and so on … But also smaller things. We’ve seen a lot of concern about politicians’ travel entitlements, Michael Danby was in the news yesterday with taxpayer-funded personal trips to the Gold Coast. I’m not surprised by the changing in score; it feels like transparency and accountability are going backwards in Australia.

What do you think has actually changed between 2012 and now? Obviously the things you’re talking about are influential, but were there not issues like this before? What’s the tipping point?

I think you could look across both federal parliaments: there are real changes in the way ministers are held to account. Under John Howard, there were quite strict ministerial codes of conducts, and when you stepped out of them, you were sacked. Now… I was shocked when Ian MacFarlane walked out of being the mining minister to becoming the head of the Queensland Resources Council. Whether these things are ‘corruption’ or not, I think standards of public behaviour and leadership are on the decline.

Think of Martin Ferguson. You can go from being a workers’ representative to suddenly working for the bosses of the gas industry. Matt Canavan is following in their footsteps. When he stepped down he wrote it was a privilege to represent the mining industry. He doesn’t represent the mining industry, he represents the people of Queensland! It’s examples like that that make people think they’re just representing other interests.

Both sides of politics have shown an amazing ability to sell out to corporate interest and pervert policy in doing so. 

In your view, what are the sectors and industries in which Australia has corruption issues? 

Industries that have perceptions of corruption issues are mining and property development — both of which are pretty serious industries in Australia. They have that perception because they’re so reliant on government decisions: whether or not to grant a mining lease, whether or not to hand over a subsidised loan, whether or not to re-zone some outer suburban block from rural to urban… Where an enormous amount of money can be made or lost based on a government decision; you’re at high risk there.

Your recommendation to fix this is a federal anti-corruption body. How would this help in a tangible sense?

It would help by just telling the public that we have a federal anti-corruption watchdog, which we currently don’t have! It might encourage people like Michael Danby not to take taxpayer funded trips to the Gold Coast. It would go a huge way to increasing public trust in our institutions. 

Are there examples of that happening in other countries in similar situations?

I’m actually not fully across what other countries have as their anti-corruption infrastructure. 

Is there anything else you wanted to add? 

I was actually surprised we got such a good run with this in the press. The correlation between corruption and economic impacts is really well studied — it’s not just Pricewaterhouse Coopers. It’s not surprising: if you’re in a country where you have to pay bribes, that’s going to increase the cost of business.