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Federal

Aug 30, 2016

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What’s the difference between a federal budget that is “good in parts” but “has not fully grasped the opportunity to set a clear direction for the future”, and “a sound, sensible and thoughtful budget which takes pragmatic steps”? Or even “a solid, responsible budget … heading in the right direction”? If you’re the Business Council of Australia, about $100 billion.

Not $100 billion better — $100 billion worse.

The Business Council of Australia is our self-appointed guardian of fiscal rectitude, and it’s unapologetically hardline. “Fiscal policy in Australia should be predicated on a strategy that delivers budget surpluses on average over the medium term,” the BCA said in its 2013 Action Plan for Enduring Prosperity. That’s surpluses over the medium term, not balance. It urged that taxes be capped at 23.7% of GDP as an upper limit, with “a percentage surplus based on ‘recharging’ fiscal readiness around every 13 years such that fiscal policy is able to make a 3 per cent of GDP contribution to the economy should the need arise.” To give an idea of that order of magnitude, three per cent of GDP would be around $60 billion in 2020. Government spending would therefore need to be set at well below 23.7% of GDP to build up a war chest of tens of billions over 13 years.

In that Plan, it also recommended a national commission of audit – which the Abbott government promptly launched after the election, headed by former BCA head Tony Shepherd and supported by BCA staff. The audit, the BCA suggested, would “come to terms with the appropriate size of government” and “identify current activities that should not be performed by government”.

Given the fiscal hair shirt the BCA wanted the nation to put on, how has it reacted to the Coalition’s ongoing failure to reduce spending, which currently stands at 25.7% of GDP, well above the level inherited from Labor, or rein in the deficit, let alone produce substantial surpluses? After all, the BCA did not look kindly on Labor’s budgets, even those predicting a return to surplus. When Labor announced — prematurely, as it turned out — a return to surplus in the May 2012 budget, accompanied by a projection of $16 billion worth of surpluses over the Forward Estimates, the BCA was underwhelmed. Wayne Swan had “not fully grasped the opportunity to set a clear direction for the future,” the BCA said. The budget was “good in parts, but the hard yards lie ahead”.

Of course, the budget never got back to surplus — the $19 billion deficit that year was the closest we’ve come since 2007-08 ended with a $20b surplus. The following year, after abandoning the pursuit of surplus, Wayne Swan unveiled a net deficit across forward estimates of $21.5 billion, and the BCA was furious. Labor “gives us no reason to believe the government’s projected return to surplus in 2015–16 is any more deliverable than last year’s promise,” it said in a budget statement. The budget “hasn’t addressed the lack of confidence in the economy.” And looking forward to the election that year, the BCA warned “whichever government is in place after September is left with no excuses”.

Except, the BCA would be happy to find excuses once the Coalition was in government. Despite trying to pile spending into 2013-14 financial year and blaming Labor in its first Mid Year Economic Forecast the previous December, the Abbott government’s first budget was a marked deterioration compared to the previous year’s and the 2013 Pre-Election Fiscal and Economic Outlook prepared independently by Treasury and Finance: then-Treasurer Joe Hockey unveiled $43.7 billion in deficits across the Forward Estimates.

This, you’d assume, would draw heavy fire from the “no excuses” crowd at the BCA. But no — in fact that budget was “a solid start to putting the fiscal strategy back on track … the budget has had to grapple with difficult choices, it should give business and the community greater confidence the government deserves credit for taking important steps”.

From “no excuses” to “difficult choices” in just one year — and a doubling of the deficit.

The following year, when spending had risen and tax revenues had been written down again, Joe Hockey revealed another deterioration — now we were looking at over $80 billion in deficits over four years. Still, the BCA was all nods and understanding. It was “a sound, sensible and thoughtful budget which takes pragmatic steps to get Australia’s fiscal strategy deserves to be passed by the Senate … The budget is without doubt a shot in the arm to small business, and creates a better environment for business confidence”.

A few months later, their own party ousted Abbott and Hockey. The new treasurer complained publicly about his predecessor’s high spending, which had reached 26.2% of GDP.

With even the Coalition admitting it had lost its fiscal discipline, had the BCA learnt anything? When Scott Morrison unveiled yet another deterioration in May this year — $84 billion in deficits, the return to surplus pushed back yet another year — the BCA was quick to applaud. It was “a solid, responsible budget … tonight’s budget is heading in the right direction. A budget which is fiscally responsible as well as supporting growth”.

What was a “failure to grasp the opportunity” when Labor predicted $16 billion worth of surpluses had become “fiscally responsible” when the Coalition was predicting $84 billion in deficits.

The BCA said nothing about the surge in spending under the Coalition, or about the dumping of taxes such as the carbon price or the mining tax or Labor’s superannuation tax changes which significantly worsened the deficit. Indeed, BCA head Jennifer Westacott attacked Labor’s carbon price as “unconscionably high” and backed the Abbott government repealing it despite its massive revenue impact. When the new government dumped superannuation tax changes that would have yielded billions in extra revenue from curbing overly generous super tax arrangements favouring high income earners, the BCA actually cheered it as “[boosting] business certainty and confidence by clearing the decks”.

One could argue the BCA doesn’t support any tax rises — except that’s not right: it still wants an increase in the GST. The hair shirt is only for Labor and low and middle income earners — companies, high income earners and the Coalition are exempt from the BCA’s fiscal lash.

The inconsistency even continues in key areas like foreign investment, where you would expect, given the strong multinational composition of the BCA’s membership, strident opposition to the Coalition’s xenophobia and regular rejections of foreign investment applications. After all, they gave Wayne Swan a whack in 2011 for not being “clear and open” about his rejection of a merger of the Australian Stock Exchange and the Singapore Stock Exchange. So presumably Scott Morrison’s recent rejection of not merely a state-owned Chinese company but a private Hong Kong company, that already has extensive investments in Australia, from purchasing Ausgrid drew the BCA’s ire? Especially given Morrison’s refusal to provide any rationale for the decision beyond “national security”?

Alas, no — the BCA “respected” that decision. As for that need to be “clear and open”, well: “while we are obviously not privy to the details, we would expect that the FIRB would make this assessment based on firm evidence from relevant agencies”. So that’s OK then.

No wonder the Liberal Party itself is now dismissive of the BCA: no matter what they do in government, no matter how much they ignore the BCA’s most sacred tenets on the budget and foreign investment, they know the Council will always bend over backwards to support them.

Media

Sep 9, 2015

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Media lobbyists to Canberra. With Canberra back in session, all sorts of figures are making the trip to lobby for their version of reform, and that’s as notable in the media sector. Today the Media Entertainment and Arts Alliance is in Canberra to meet with Treasury officials to stress the importance of the ASIC registry continuing to operate as it currently does.

The issue hit a bit of a flashpoint earlier this year when the Productivity Commission partly adopted recommendations first made by the Governance Institute of Australia, which requested the removal of certain identifying personal information for company directors on the registry, replacing it with just their names and unique PINs. The issue was fiercely opposed by journalists, who argued details like date of birth were crucial to making sure they had the right person when comparing across databases. (The Governance Institute said that wasn’t the point of the registry, and that there were other good reasons for not having the information publicly available). Over 100 journalists signed an MEAA-co-ordinated petition to Assistant Treasurer Josh Frydenberg asking him to leave the registry alone.

In other bits of media-related lobbying, regional media chiefs were in Canberra yesterday to talk about removing the bitterly contested “reach” rule. And we had the domestic violence round table on Monday. — Myriam Robin

The great US sell-off. Despite the sell-off in media shares in the past month (or perhaps in spite of it), America’s third-biggest local TV group will be formed after US-based Media General said it would buy Meredith Corp for US$2.4 billion in cash and shares. Including Meredith’s US$700 million in debt, the total value of the bid is US$3.1 billion (A$4.5 billion). The merged company will own Meredith’s suite of magazines, including some of the biggest sellers in the US, such as Martha StewartBetter Homes & Gardens and Family Circle. 

Media General either operates or services 71 local TV stations across the US for all major networks. It bought Lin Media last year. Meredith owns or operates 17 local television stations. The merged company will have stations in 54 of America’s biggest markets, and the 88 stations will reach around 38% of the US audience. The new company, which will be called Meredith Media General, will have about $3 billion in annual revenue. Media General shareholders will own about 65% of the new company, while Meredith shareholders will own about 35%.

The merger move comes as the great media sell-off slows after many media companies separated their broadcast and content businesses from their print operations. In June, Gannett Co. completed the spinoff of its broadcasting and digital-media business, now called Tegna Inc. That followed similar moves by Tribune Media Co, Tine Warner, which sold off Time Inc, and News Corp. Media General sold its papers in 2012.

With Meredith comes the basis for a major digital publishing platform reaching more than 200 million monthly unique visitors via national and local consumer, and business-to-business, sites. Digital revenues are expected to exceed US$500 million in the first full year of operations, according to yesterday’s statements.

The future ownership of the magazines by the new company is up in the air, with some analysts immediately predicting they will be sold, possibly to Time Inc. Back in 2013, Time Warner (Time Inc was still a part of the business then) tried to buy Meredith. Despite long talks, the deal never happened. The two parties never got around to talking price. Time Warner had wanted to buy Meredith, merge it into Time Inc, and then spin off the new group. — Glenn Dyer

Front page of the day. 63 years a Queen …

Australia

May 14, 2015

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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 the power of vested interests with their lobbying power to influence governments in a quite disproportionate way.

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.

Ken Henry, a former secretary of Treasury, said in the foreword to this policy series: “I can’t remember a time in the last 25 years when the quality of public policy debate has been as bad as it is right now.” He was followed as secretary of Treasury by Martin Parkinson, who warned us about “vested interests”, which seek concessions from government at the expense of ordinary citizens. Former Australian Competition and Consumer Commission chairman Graeme Samuel cautioned us: “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 Sydney Morning Herald 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 266 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 12 lobbyists, Newgate Communications 12, Crosby Textor 7, Government Relations Solutions 7, and GRACosway 17. Some accounting firms, including three of the majors, that 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, and the Australian Pharmacy Guild.

These lobbyists encompass a range of interests, including mining, clubs, hospitals, private health funds, business and hotels, which have all successfully challenged government policy and the public interest. 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. 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, in a 2010 collaboration with Crikey, found in a survey of major metropolitan newspapers published in Australia that 55% of content was driven by public relations handouts from lobbyists and their associated public relations arms, and 24% of the content of those metropolitan newspapers had no significant journalistic input whatsoever, relying heavily on public relations handouts.

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

With over 60% of metropolitan newspaper circulations in Australia, News Corp 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 Daily Telegraph and The Courier-Mail.

For example, the health “debate”’ is really between the Health 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 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. 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 is the real story behind the problems of the pink batts scheme.

*Read the rest at John Menadue’s blog, Pearls and Irritations.

Federal

Sep 5, 2014

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So you wanna be a lobbyist …

Reading headlines about ICAC and Eddie Obeid might have you thinking successful lobbying is mostly graft with some slippery footwork thrown in. But Alistair Nicholas, senior adviser in the government relations and public affairs practice of Weber Shandwick Australia, says there's quite a bit more to it.

Lobbying, in the popular imagination, is a profession made up of ex-politicians and former political staffers who act, at best, as door-openers to current politicians and their staffers. In its worst permutation the perception is that these former politicians and staffers are bagmen to those in power. But the real day-to-day picture is a bit more complex.

Lobbyists thrive on corruption and line politicians’ pockets, right?

Who can blame the Australian public for this perspective given the number of high-profile cases of political corruption involving such crass forms of influencing? Lobbyists’ making large donations to political parties and providing expensive gifts to politicians have not helped paint a positive picture of the craft of presenting a point of view.

But the truth of the lobbyist’s work is very far away from the activities that appeal to that basest of instincts — greed. Although the likes of disgraced NSW politician Eddie Obeid might have thought that the “art of politics is to turn influence into affluence” (to borrow from the American poet and humourist Philander Chase Johnson) most politicians are not seeking to line their own pockets. And most lobbyists are not engaged in facilitating the corruption of those in office. Nor are they involved in quid pro quo negotiations or blackmailing of politicians — misconceptions created by popular American TV dramas like Scandal and House of Cards. Bribery, blackmail and phoney negotiations with politicians might make for good television, but they are very far away from the reality of professional lobbying.

Is lobbying regulated in any way?

The Commonwealth and all the state governments require lobbyists and their clients to be listed on their respective lobbyist registers. The registers have to be updated both quarterly and every time a new client is acquired. And, of course, we, like everyone else, are subject to national and state laws regarding graft and corruption. For many of the large, international public affairs and lobbying firms that operate in Australia, such as my employer, a further disincentive for unethical and illegal lobbying behaviour exists in the form of the United States’ Foreign Corrupt Practices Act (FCPA). A US-incorporated entity found to have breached that piece of legislation in any way, even in far away Australia, could incur fines and even serious prison time in the United States. Consider that News Corporation is currently under investigation for possible breaches of the FCPA in relation to the activities of its subsidiaries in the phone-hacking scandal in the UK. In the case of the FCPA, the arm of the law is indeed long and to be feared.

Are lobbyists mostly past-it political hacks?

It’s an odd question for me as I used to be a federal Coalition staffer, but no, it is not necessary. In fact, the majority of people engaged in lobbying are sophisticated professionals, rather than has-been politicians and past party apparatchiks. Lobbyists are usually trained in law, economics or political science. And they usually have spent the early parts of their careers as journalists, policy analysts, political advisers or bureaucratic boffins. A good government relations firm will comprise people whose skills and experience bring together a number of these backgrounds. These people know how things get done in government and they know how to influence changes as policies or legislation flow through the system.

How do you go about lobbying, anyway?

Successful lobbying campaigns are about much more than knocking on a politician’s door. That is part of it, but it’s the smallest part. A good lobbyist needs to understand the policy issues and explain why a policy or piece of legislation needs to be changed. A more sophisticated lobbyist also engages independent advocates such as academics and other experts to put forward their client’s or company’s case. And the best lobbyists will engage the media in their cause, particularly the opinion page writers. These days we also leverage social media channels like Twitter and Facebook to obtain grassroots support for campaigns.

Take me through a typical lobbying campaign. 

  1. Understand the issue — Research the background to the issue to understand the arguments for and against a particular perspective.
  2. Messaging and outreach strategy — Based on the understanding of the issue, work with the client to develop their messaging and outreach strategy. Sometimes, especially for complex issues that require a “long-game plan”, the strategy might require much more than cruising the corridors of power at Parliament House or a government department.
  3. Map the stakeholders — Identify which politicians, government departments and bureaucrats are key to a policy or legislative change and find out where they stand on the issue. This is done by reading speeches and articles they may have written but also by “intelligence gathering”, by asking people who may know them what they know about the stakeholder’s position on the issue.
  4. Influence the influencers — Identify non-stakeholders who might be able to influence the decision-makers. These might be backbenchers, parliamentary committee members, academics and media commentators. We would usually map them in terms of degrees of separation from the decision-makers, sway they might have over the decision-makers, and stance on the matter at issue.
  5. Climb the hill programs — Take the clients to meet with politicians and bureaucrats you are seeking to influence, as well as with influencers such as backbenchers or parliamentary staff, in Parliament House to explain the client’s position on the policy or legislation.
  6. Influencer outreach — Where necessary, design programs to get the influencers engaged and, hopefully, to support the client’s program. This might mean having academics and commentators pen opinion pieces for the media and speak on relevant TV and radio programs, or, it might mean holding seminars on the subject and inviting key stakeholders and media to attend.

How long does it take?

Positive outcomes are rarely achieved in a short period of time for complex issues. Programs seeking to change mindsets and policies can take months and even years. Occasionally progress is piecemeal. One program this author worked on took eight years before the desired outcome was finally achieved.

What kind of lobbying campaign gets results?

In actual fact the success or failure of a lobbying campaign doesn’t depend on the industry the issue affects. What’s critically important in achieving success is the quality of the argument and the strategy to demonstrate broader community support for a particular perspective.

The most successful lobbying campaigns — such as the one for seat belts in cars or the one by a drug company to make a vaccine that protects women against cervical cancer affordable and accessible — have been based in highly effective, strategic public affairs campaigns. This approach has and will always fare better than one that calls in political favours.

Australia

Jul 16, 2014

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As the 12 new senators who took their seats last week are finding out, being a member of Parliament brings with it both perks and liabilities. Along with the comcar, a plush seat inside the chamber and the discreet lapel pin (red for senators, green for reps) that all 226 MPs receive comes another certainty: a steady stream of lobbyists through the door. I witnessed this during three years as a political staffer dealing with lobbyists of all stripes.

The return on your lobbying dollar starts with getting in the MP’s door. The most reliable way to get a meeting is to know somebody within the MPs or minister’s office and call in a personal favour. This is a key reason why former staffers make such attractive recruits to government relations agencies, especially those with contacts inside the current government. (The door swings both ways, by the way — lobbyists also show up on ministerial staffs.) Other tactics employed by the pros include holding morning teas, meals or cocktail events in Parliament House.

A lobbyist can often get an appointment for themselves or a client merely by virtue of representing a powerful or important group, but when that fails they have other plans of attack. When a professional lobbyist asks for “five or 10 minutes” they generally mean it, and that can be harder for a diary manager to refuse. Although any stakeholder prefers a meeting with a member of Parliament, the professionals have a good appreciation for the role of staff and show that appreciation by asking for a meeting with an adviser, even just for a coffee at Aussie’s. And who doesn’t need a coffee by afternoon on a sitting day?

During a meeting you can also see lobbying professionalism at work. Lobbyists are efficient, make it clear who they represent, and have an actionable request to make of the minister or member. They have the key facts ready, which as a rule relate to how tough the industry is doing, the number of jobs at stake, and the economic costs of “uncertainty”. They hand over reading material no longer than is likely to get read, which may mean just half a page of key points — no glossy annual reports to languish in an adviser’s in-tray. They offer to help with any work that needs to be done including research, writing a speech, or preparing briefs. If the lobbyist is there with a client, they sit patiently while the industry representative (and who doesn’t belong to an “industry” nowadays?) makes their case, but will pipe up when necessary to keep things on topic and moving along.

The key thing, though, that separates the heavy-hitters from the amateurs is a keen understanding of political power. One often sees real reluctance to rock the boat from civic society groups. They fear losing government funding or their seat at the table. Often they are worried about appearing overly partisan. They are more likely to be satisfied with getting some meetings in Parliament House, hearing encouraging words from MPs, and going home hoping for the best.

Contrast this to vested interests and the lobbyists they can afford to hire. They have done their homework. They know the numbers — on the crossbenches, inside the caucus, and in the marginals — and who has the most influence on the outcome they seek. They’ve done polling. They make it clear, sometimes subtly and sometimes not, how many people they can reach and what the costs of inaction will be. They are happy to be partisan when it helps their cause but make it clear that support is only as good as the party’s last statement on the issue. And they have the means to back it up; carrots in terms of contributions, sticks in terms of ability to mount a negative campaign.

There’s nothing necessarily evil about understanding this power and wielding it carefully, but doing so requires expertise, and finesse and that does not come cheap. Lobbyists like the Minerals Council or Clubs Australia aren’t worried that making trouble will bring revenge from the government. They are ensuring, by causing as much pain as they can, that everyone in Parliament knows any further moves in the wrong direction will come at a cost. A calculated, political cost.

And that is the currency in which the professional lobbyists prefer to deal.

Federal

Apr 24, 2014

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In the aftermath of Barry O’Farrell’s resignation as New South Wales premier over a forgotten bottle of Grange, both Prime Minister Tony Abbott and new Premier Mike Baird are cracking down on party officials acting as lobbyists. It’s a good move, one that future Labor governments should also consider.

Lobbying is endemic to politics. Most people who walk into a minister’s office are lobbying for some cause or another. Even the humble constituent who writes a letter to their MP is in one sense lobbying. Lobbying arrives from all conceivable policy perspectives and backgrounds. It is an essential part of parliamentarians becoming informed about opinion. Indeed, some MPs would have great difficulty ever delivering a speech without notes penned for them by an outside interest group.

Within government parliamentarians themselves lobby key ministers and cabinet to further the interests of their electorate, state, mining tycoon, or whatever other constituency propelled them into Parliament. It is what we expect.

The lobbying that the public, rightly, regards with more suspicion is conducted by people paid by other people to use inside influence to have government bend policy to benefit their paymasters. That is essentially the definition of lobbying applied by anti-corruption bodies such as Western Australia’s Crime and Corruption Commission and the NSW Independent Commission Against Corruption .

There can be a fine line between this kind of lobbying and corruption. ICAC was so concerned about it that it launched an independent investigation, Operation Halifax, producing a comprehensive report — Investigation into Corruption Risks involved in Lobbying — in 2010. It included a prophetic section on gifts:

“The giving of gifts or provision of other benefits to a public official by a person seeking a favourable decision … poses an obvious corruption risk.”

The best defence is transparency; if the processes and the grounds for the decision are open, it is less likely to be corrupt. That is where lobbying by party officials poses particular problems.

At least with lobbyists who are registered (here, for example, is the Commonwealth list; states have similar registers), ministers know where they stand. The lobbyist comes to the minister representing a particular concern or interest. If they present effective arguments and good evidence they can assist the decision-making process. Ministers and their advisers, provided they are aware of the source of the advice, are generally smart enough to be able to distinguish between genuine evidence and special pleading.

With a party official the lines are blurred. Are they putting an argument on behalf of the client, or because party members are concerned? And if the latter, thinks the minister, is my preselection at risk? Are they giving me a gift because they like me or because they want to influence my thinking?

At least we are better off than in the United Kingdom, where parliamentarians can be and have been employed as lobbyists, leading to widespread perceptions of corruption. Their anti-corruption committee wants them sent on ethics training to improve behaviour.

The United States has the world’s largest and best-funded lobby groups. The National Rifle Association infamously is reputed to be able to make or break political careers, but hundreds of other equally influential bodies represent various industry and other groupings (oil, pharmaceuticals, defence, farming, whatever). An essay by Alex Mitchell suggests lobbying there is worth $3.3 billion and employs more than 12,000 people.

There, too, it can lead to corruption, as in the Jack Abramoff case (a highly influential lobbyist found to have made illegal and corrupt payments to influence decisions). But such cases do tend to come to light because of strict disclosure rules and severe penalties for corrupt lobbying behaviour.

Mitchell worries “we will slip further down the American path”. We may already be further than he thinks — lobby groups like the Minerals Council, Australian Food and Grocery Council and Medicines Australia wield heavy influence in Parliament. The Business Council of Australia’s previous president, Tony Shepherd, chaired (and its chief economist headed the secretariat for) the National Commission of Audit, which will be the key influence on the coming federal budget.

So while the Abbot and the Baird government announcements will help clear up one of the grey areas around lobbying, the problem of influence peddling will not go away. The best way to deal with them is to have clear and transparent rules, and independent oversight.

Art & Design

Mar 24, 2014

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The best government money can buy. If Australia had a version of the “revolving-door rule”, then Senator Arthur Sinodinos would not now be sweating on his appearance before the New South Wales Independent Commission Against Corruption. The alleged conflicts of interests in the dealings of Sinodinos and Eddie Obeid have highlighted the completely unregulated traffic between private enterprise, government and the lobbying industry in this country and why this should be changed.

It is a scandal that Australia does not have a rule aimed at preventing politicians and staffers from leaving government and going straight to work in the sector they have previously regulated, or to a highly paid job in a lobbying firm.

Although a recent crop of NSW politicians is gaining all the attention, this situation has been going on for decades. Former National Party ministers Larry Anthony, Mark Vaile and John Anderson “retired” to the private sector, former Labor Minister Mark Arbib went to work for James Packer, and Sinodinos, now reported to have vacated Rose Bay for Roselands, got a job in the banking sector. With one eye on their post-political careers and the expectation of “cashing in” after a stint in government, there is no incentive for pollies to change the law and cut off their future job prospects.

The federal Greens have tried to change this. Last year leader Christine Milne took to the election a policy to impose a five-year ban on ministers taking jobs as lobbyists. The policy would further ban ministers from becoming involved in any private enterprise related to their ministerial connections for two years. The policy has not been introduced to Parliament as yet.

France has rules about the revolving door, but it is the United States that has the strongest regulations, which include criminal sanctions for their breach. However, there are several loopholes that can be easily exploited. Generally speaking, US federal ethics rules are intended to limit lobbying by former senior officials within one year after they leave the government.

Independent South Australian politician Dr Bob Such presented a bill on lobbying and ministerial accountability to the South Australian Parliament in 2008, though it did not pass. Such, currently on sick leave following a tumultuous post-election week in South Australia, said in 2009 that relationships in the small state were too close:

“In Adelaide, the opportunities for undue influence are greater and the public would not have any idea of what goes on. The reality is that once parliamentary opponents leave Parliament, it’s a bit like the extended family mentality … Those ex-ministers or whatever are welcomed with open arms. It’s like they have been through the same private school together, mixed it in the playground, but now we’re mates, so let’s see how we can help each other.”

Now that he and his fellow SA independent Geoff Brock are powerbrokers, Such may find a better reception for his bill.

As the ICAC hearings roll on, Mark Twain’s maxim becomes more and more relevant. He often said that “we have the best government that money can buy”.

Hiding in plain sight. What do you do when you leave the house but need to be alone? Many of us who work from home have a sacrosanct daily ritual involving a local cafe, the newspaper and 30 minutes of peace. For years, I’ve worn sunglasses and earphones, but full protection is not guaranteed. If, like me, you are a misanthrope until lunchtime, then help is at hand. Last week I discovered the existence of a new app called Cloak, which can help to make you invisible.

After downloading Cloak for the first time, you can connect it with Foursquare and Instagram (with more networks to come soon). Cloak then plots where your Foursquare and Instagram contacts are, according to their most recent check-ins. You can casually check the map, or — for people you really want to avoid, like exes and the head of the tuckshop roster — “flag” them to receive an alert when they pass within a certain radius.

It is the latest in the recent trend of “anti-social”, or secretive, apps. Cloak describes itself as a method to “avoid exes, co-workers, that guy who likes to stop and chat — anyone you’d rather not run into”. Co-creator Chris Baker told The Washington Post that Cloak was typical of the direction social networking was taking:

“Personally, I think we’ve seen the crest of the big social network. Things like Twitter and Facebook are packed elevators where we’re all crammed in together… I think anti-social stuff is on the rise. You’ll be seeing more and more of these types of projects.”

I have mine programmed to tell me when the local trainer has entered the pub, so I can swap merlot for mineral water. There are times you don’t want to be caught red-handed.

Biennale art blitz. After all the shouting and arm-waving, the 2014 Sydney Biennale is finally open, and visitors can concentrate on the art. You Imagine What You Desire, curated by Juliana Engberg, contains more than 200 works from more than 90 artists celebrating the power of the imagination, with artworks ranging from site-specific installations to multimedia projects …

Biennale

The Biennale is presented across five venues — the Art Gallery of New South Wales, the Museum of Contemporary Art, Carriageworks, Artspace and the World Heritage-listed Cockatoo Island. It is open until June 9.

Companies

Oct 18, 2013

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Commercial lobbying of the New South Wales government is under increasing scrutiny with a state upper house inquiry into ministerial propriety commencing hearings this week. In this environment, ministers can’t be blamed for declaring registered lobbyists shall not darken their doorstep.

While avoiding meetings with registered lobbyists lends a clean veneer to a minister’s office, the reality is that only one small class of lobbyists will be barred from contact with the minister and only under certain circumstances. So, while the ban might look good on paper, it actually runs the risk of simultaneously increasing the amount of commercial lobbying and reducing the regulation of this contact.

Although this sounds counter-intuitive, there’s a simple reason why it will occur. The much-vaunted system of lobbyist regulation, which defines lobbying behaviour and lobbyists, only applies to one type of lobbyist: those who work in a third-party consulting capacity. Not one word of it applies to the squadrons of highly paid in-house lobbyists working for Australia’s, and the world’s, biggest companies or many others undertaking commercial lobbying of government.

In-house lobbyists are likely to be exactly the same people as work for regulated lobbying firms. They’re former politicians, former staffers and, very often, senior officials of the party in power. They represent their employers’ interests into government and seek advantageous commercial outcomes from government decisions. Yet these lobbyists are not in any way regulated by any of the Australian lobbyist codes of conduct and thus go below the radar.

Ministers enjoy the political sugar-hit of taking a muscular approach to the regulation of consulting lobbyists. It plays well with a public rightly sceptical of lobbying activities. But in doing so, they’re tacitly giving the go-ahead to another class of lobbyists to work in a totally unregulated way. Certainly not what the public would want.

The current lobbyist regulation system provides a high level of probity and transparency for the community. Who is permitted to lobby, the fact they’re of good character and which companies they represent is a matter of public record. In the internet era, this is a very public record indeed. It is a valid piece of regulation that meets the public demand for integrity in our political process.

“The reality is that only one small class of lobbyists will be barred from contact with the minister and only under certain circumstances.”

However, allowing the vast bulk of commercial lobbying to go unregulated while only one class of lobbyist has an appropriately bright light shone upon it runs the risk of achieving the opposite of the regulations’ meritorious aim. Worse still, by repeatedly restricting the activities of the single regulated part of the lobbying industry, government runs the risk of driving lobbying out of the public spotlight and behind the scenes.

The current lobbying regulations provide numerous loopholes by which an individual can lobby government on behalf of business. For example, a lobbyist could take several part-time jobs with different firms and lobby government on their behalf without being covered by the regulation. Along with the thousands of in-house lobbyists, the regulations exempt lawyers, accountants and engineers. Presumably, these types of for-hire lobbyists remain welcome in ministers’ offices.

Sound public policy always begins with the desired outcome in mind. If the community and the NSW government are serious about the laudable outcome of transparency in lobbying contact between business and ministers, they’ll need to go well beyond blocking one class of lobbyist.

Individual ministers’ moves to “ban” lobbyists are not new. There were several ministers in the former Labor NSW government who took the same approach to third-party lobbyists. Part of their challenge came from their informal associations with lobbyists (generally through party circles) rather than more formal in-office contact. Do these ministers ban this contact too?

Of course, ministers are on solid ground if they wish to decline meeting business people with an interest in their work if they feel it’s commercially inappropriate. But a blanket ban on one limited corner of the massive industry of lobbying will do little to achieve such an outcome and runs the risk of creating future political and probity headaches as more lobbyists work outside the regulatory envelope.

Consistency, probity, fairness, transparency and a focus on outcomes should be a minister’s guiding light on engagement with lobbyists of all types, not glib bans.

*Justin Di Lollo is the head of government relations consulting companies for STW Group. He has been a prominent consulting lobbyist in Sydney for 15 years and is a registered lobbyist in every Australian lobbyist registration scheme.

Federal

Oct 15, 2013

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Crosby Textor, the consultancy firm co-founded by the Liberal Party’s chief pollster, has re-emerged as a major lobbying force in Canberra.

The firm now has 20 clients listed on the federal lobbyists register, up from zero immediately after the September 7 federal election. That number is expected to grow as businesses and other organisations seek to influence the Abbott government.

Founded in 2002 by former Liberal Party federal director Lynton Crosby and polling guru Mark Textor, Crosby Textor prospered as a lobbying outfit during the Howard years. But the firm withdrew from the Canberra scene soon after Kevin Rudd’s election to focus on political campaigning, corporate advice and lobbying Liberal state governments. The firm also lobbies for clients in Britain which has caused political headaches for the ruling Conservative Party, given Crosby is also the party’s election campaign director.

Crosby Textor’s current federal client list includes the Australian Petroleum Production and Exploration Association, the Australian Rugby League Commission and Reconciliation Australia. Infrastructure, health and renewable energy companies also feature.

APPEA is the leading lobby group for the oil and gas industry, and is campaigning to increase community and government support for the contentious coal seam gas sector. Reconciliation Australia is leading the push to recognise Aboriginal and Torres Strait Islanders in the constitution. And the ARL hired Crosby Textor earlier this year to help the traditionally Labor-aligned code build bridges with the Coalition, as Fairfax’s Roy Masters has noted. Tony Abbott pledged millions of dollars in federal funds for league stadium upgrades during the election campaign.

The client list of Liberal-aligned firm Barton Deakin, led in Canberra by former Howard chief-of-staff Grahame Morris, has also ballooned. Barton Deakin now boasts 48 firms on the federal register including Apple, Leighton Holdings and McDonald’s. As Crikey reported last month, there has been an influx of Liberal-aligned lobbyists in Canberra since the federal election.

Rival lobbyists will be closely watching whether Crosby Textor re-opens its Canberra office, which the firm closed in the early Rudd years. Crosby Textor was previously represented in the capital by Jannette Cotterell, who has since gone on to found her own consultancy.

It appears, at least for now, Textor has no plans to work the corridors of Parliament House on behalf of his firm’s clients. Crosby Textor’s lobbyist profile lists eight employees who conduct lobbying activities — including CEO Remo Nogarotto — but managing director Textor is not among them.

Despite their impeccable Liberal credentials, Crosby and Textor have long maintained that firms use their services because of strategic nous rather than access. Earlier this year Textor, who works as a pollster for the Liberal Party at a state and federal level, described lobbyists as a “pathetic miserable industry” of door-openers. He told Crikey last month: “The days of people winking and nodding and saying ‘I’ve got influence’ are over. Today, clients want people with campaigning and research expertise.”

Textor did not respond to calls this morning.

Politics

Oct 1, 2013

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False alarm on lobbying ban. Presumably federal cabinet has changed its mind about imposing a ban on officeholders in the Coalition parties acting as lobbyists. Either that or Alexander Downer is about to step down from his role as a consultant in the Adelaide-based firm Bespoke Approach.

For Downer, it seems, is the unanimous choice of the various factions of the South Australian Liberal Party to become state president. That title should help persuade potential clients that his firm is capable of providing that “discreet, strategic, corporate and political advice”.

Chris Bowen proving his credentials. I am eagerly awaiting the apology that Stephen Conroy will surely deliver any day now to his colleague Chris Bowen. It was Senator Conroy, you might recall, who declared early in September that Labor would look like a laughing stock if it did not have a leader for up to eight weeks because of new party rules that were a “farce”. The ALP, Conroy argued, was spending time “gazing at our own navels” and not taking the attack up to the Abbott government while it went about the business of conducting an election by the party’s members. As he told Sky News:

“These rules that have been put in place will make us an absolute laughing stock. We’ve got no leader, no front-bench, no shadow spokespersons who are able to lead the debate for us. And this will descend into complete and utter farce.”

As things have turned out, the interim measure of having the most senior member of the defeated government not contesting the leadership ballot as an acting leader has worked extremely well. While Anthony Albanese and Bill Shorten proceed with their gentlemanly debates, Bowen has shown that further down the track the party would work well with him in charge. His calm and measured manner has kept Labor on television screens in a way that suggests the party actually could be a viable opposition.

Chief executive responsibility. In political life there used to be a concept called ministerial responsibility whereby the person at the top took the rap when something went terribly wrong, whether directly responsible or not. It has faded into virtual nothingness these days, in politics and elsewhere.

A wonderful recent example is the reaction in the financial community to the greatest fine in the history of Wall Street regulation, recently handed out to JP Morgan. Should the chief executive of the bank, Jamie Dimond, be allowed to keep his job? You will find an interesting difference of opinion in this video clip:

One panellist said: “I think that any time you’re looking at the greatest fine in the history of Wall Street regulation, it’s really worth asking should this guy stay in his job. In any other industry — I can’t think of another industry. If you managed a restaurant, and it got the biggest health department fine in the history of restaurants, no one would say ‘Yeah, but the restaurant’s making a lot of money. There’s only a little bit of poison in the food.’ ”

Another said: “The company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue. How do you criticise that?”

News and views noted along the way.