Coalition Senators’ Minority Report
Introduction
1.1
There is no question that
ministerial probity and transparency are essential pillars of our democracy.
The Coalition shares the view that public confidence in the integrity of
government is vital to the effective functioning of our parliamentary system.
But the Government has presented a proposal to create a register of lobbyists
that is seriously flawed.
1.2
The register, as proposed,
contravenes the principle of equality before the law by unfairly preferencing
one sector of the business community over another. This partisan attempt to
protect union political influence creates substantial legal loopholes that
defeat the Government’s professed purpose in this initiative. There is nothing
in the Code’s provisions that would prevent disgraced former WA premier Brian Burke from
lobbying the ministerial wing of Parliament, provided that he was employed as
an in-house advocate on the payroll of a union or corporation.
1.3
The Code invests the Cabinet
Secretary and the Secretary of the Department of the Prime Minister and Cabinet
(PM&C) with arbitrary power to exclude persons from the registry with few
and onerous avenues of appeal. This would create the potential for partisan or
personal abuse of this power that could have a chilling effect on the practical
ability of citizens and groups to petition government for redress of grievances
or in favour of their point of view.
Arbitrary powers of sanction
1.4
Clause 10.4 of the Code confers
absolute power on the Cabinet Secretary to decide the fate of a lobbyist:
10.4 The Secretary:
(a) must not register a lobbyist, a
person who is an employee of a lobbyist or a contractor or person engaged by a
lobbyist if the Cabinet Secretary, in his or her absolute discretion, directs
the Secretary not to register the lobbyist or the individual, and
(b) must remove from the Register a
lobbyist or a person who is an employee of a lobbyist or a contractor or person
engaged by a lobbyist from the Register if the Cabinet Secretary, in his or her
absolute discretion, directs the Secretary to remove the lobbyist or the
individual from the Register.[1]
1.5
While certainly not akin to a
criminal finding of guilt, or even a civil finding of liability, exclusion from
the register of lobbyists can have a profoundly pejorative impact on the
livelihoods of those involved. Such a sanction should not be imposed lightly.
And yet the Government’s proposal combines the arbitrary power to punish with a
dearth of procedural protections that makes possible the partisan misapplication
of exclusionary sanctions.
1.6
The Government may argue that it
is appropriate to impose a higher standard of behaviour on lobbyists than is
required by the bare bones mandate of the law. It may also contend that removal
from the register of lobbyists cannot reasonably be compared to a judicial
sanction and that, thus, conventional legal standards of due process and
fairness are not required.
1.7
Assistant Secretary Mr David Macgill
testified: 'it would be reasonable to assume' that the standard of proof
required to condemn a lobbyist would be directly proportional to the severity
of the allegations involved. 'I do not think' Mr Macgill added,
that the evidentiary standard needed to prove a minor transgression 'would be
as high as that needed to justify removal from the register.'[2]
But reasonable assumptions and thoughts are no guarantee of substantive or
procedural fairness. There is nothing in the text of the Code, or in the
explanatory testimony of PM&C officials, that would prevent its
exclusionary powers being used in a personally vindictive manner or to pursue
partisan political advantage.
1.8
The concentration of such
arbitrary power in the hands of two individuals creates substantial potential
for abuse, especially when the senior of the pair is an elected member of
parliament. The possibility of impropriety is exacerbated by the equivocal
language used by PM&C officials in testimony before the Committee on the exclusion
provisions of the Code.[3]
1.9
In essence, the Government is
saying "trust us." But the principles of proper governance are
rightly inimical to such informal and extemporised assurances because they
provide no protection against official abuse.
1.10
And the avenues of appeal against
such a decision would be limited and unduly onerous. The Commonwealth Ombudsman
would only have the power to address fairness of the administrative process
leading to exclusion, not the essence of the decision itself to exclude.[4]
The primary source of redress against a decision to exclude, according to First
Assistant Secretary Belcher, would be a financially onerous appeal to the High
Court.[5]
Mr David Macgill also
pointed out the possibility of common law appeal to the Federal Court under
Section 39B of the Judiciary Act 1903.[6]
1.11
Such avenues of legal recourse
against a decision of the Cabinet Secretary or Secretary of PM&C to suspend
or cancel a lobbyist's registration would involve substantial legal costs. Most
lobbying firms are small businesses which would have no financial capacity to
mount costly legal challenges.
1.12
It is all too easy to envisage a
scenario in which the improper wielding of such arbitrary power would create a
chilling effect on discourse and debate. And this disincentive to express views
unpopular with government would apply exclusively to lobbying firms, and
through them to their clientele of smaller businesses unable to afford in-house
advocates. Public policy that is wise and well considered is dependent upon
inputs from a wide variety of perspectives and interest groups. But by creating
a regime that lends itself so readily to abuse, the Government’s proposal could
inhibit the practical ability of certain sectors of the community to petition
government for redress.
Selective application
1.13
The preamble of the Code proclaims
that 'respect for the institutions of Government depends to a large extent on
public confidence in the integrity of Ministers, their staff and senior
Government officials.' But the integrity of government is, in turn, dependent
upon the perception that the law is being impartially applied without fear or
favour.
1.14
The Government’s proposed Code of
Conduct does injury to that principle. The Code is worded in such a way that
must inevitably give rise to the suspicion that its provisions were tailor-made
to absolve the trade union movement from the requirement of adherence. Clause 3
of the Code exempts organisations wealthy enough to employ in-house government
relations staff or lobbyists. And while this exemption would apply to large
private sector corporations, it would encompass trade union representatives as
well.
1.15
But any measure solely
preferencing labour unions would be a blatant stratagem too transparent for the
Government to get away with. And thus the Code brings large companies along in
order to provide plausible cover for the Government’s desire to exempt unions.
1.16
Clause 3 also contains a list of
other groups that enjoy a similar exemption from the Code. These include:
religious organisations, charities, non-profit groups, individuals making
personal representations, trade delegations, doctors, lawyers or accountants.
1.17
As Senator Fierravanti-Wells pointed out:
I have a concern that the main
players who do lobbying have been excluded. That really is the nub of the
criticism of this code: that the main players, particularly unions, other
industry bodies and other organisations are excluded. I quote again from the Sydney
Morning Herald article:
...unions,
other industry bodies, churches and charities or corporate executives who are
free to access ... government figures without having to disclose their details or
comply with the ethical standard.
That really is of concern. I would like
to understand what the thinking is for the government to specifically exclude
such a large component of people who probably make up the most substantial entity
of lobbying in this place.[7]
1.18
The only entities that would be
forced to comply with the provisions of the Code would be commercial public
affairs firms that lobby on behalf of third party clients. The clients of such
public affairs firms are generally smaller companies and entities that cannot
afford to retain their own in-house lobbyists.
1.19
Thus the selective application of
the Code would create a two-tiered system that would bestow unfair advantage
upon larger business entities over smaller ones. Companies sizeable and
affluent enough to feature in-house lobbyists would enjoy an uninhibited scope
of action.
1.20
But the ability of more modest
companies to petition government would be limited by the fact that the private
sector public affairs that represent their interests would be limited to the
restrictive provisions of the Code. The unlevel playing field created by the
Code is yet another manifestation of the Labor Government’s bias against the
small business sector.
1.21
The provisions of the Code are so
badly worded as to potentially render it impotent in dealing with the very
abuses it is intended to prevent. There is nothing to prohibit Brian Burke meeting
with ministers and staff as long as he was employed in an in-house capacity.
Use of vague terms
1.22
The vague wording that pervades
the text of the Code gives rise to potential restrictions on legitimate
advocacy by lobbyists.
1.23
Clause 8.1(b) enjoins lobbyists to
'use all reasonable endeavours to satisfy themselves of the truth and accuracy
all statements and information provided them to clients whom they represent,
the wider public and Government representatives.' Clause 8.1(c) prohibits the
making of 'misleading, exaggerated or extravagant claims about, or otherwise
misrepresent, the nature or extent of their access to Government
representatives, members of political parties or to any other person.' But 'misleading
or deceptive conduct' that passes the threshold of illegality is already
proscribed by Sections 51A, 52 and 53 of the Trade Practices Act 1974.
1.24
The Code seeks to proscribe speech
that falls well short of the illegality threshold. This has worrisome
ramifications for freedom of expression, particularly given that such
censorship would be applied to the realm of political advocacy. Potential civil
liberties concerns are exacerbated by the fact that the Code does nothing to
provide concrete definitions of, and differences between, the categories of 'misleading,
exaggerated or extravagant claims.'
1.25
PM&C was questioned on this
issue during the hearings:
Senator FIFIELD—I will move on
to clause 8, on the principles of engagement with government representatives
that lobbyists should observe, one of which is:
(b)
lobbyists shall use all reasonable endeavours to satisfy themselves of the
truth and accuracy of all statements and information provided by them to
clients whom they represent, the wider public and Government representatives—
and following on—
c)
lobbyists shall not make misleading, exaggerated or extravagant claims about,
or otherwise misrepresent, the nature or extent of their access to Government
representatives, members of political parties or to any other person ...
What criteria is PM&C intending to
use to determine what constitutes a misleading, exaggerated or extravagant
claim? Surely that is very much in the eye of the beholder. I am wondering what
criteria you have in mind, because I would not envy you being required to
police that requirement.
Ms Belcher—No, we
would not be able to, because that would be something that would have the
potential to occur in the actual lobbying activity and PM&C would not be a
party to that. I believe it would be for those being lobbied—that is, ministers
or public servants—to make judgements. If, after they had seen a lobbyist, they
came to understand that there had been exaggeration, then that is something
that they could bring to the attention of the secretary or minister.[8]
1.26
The power to define these vague
concepts would reside in the hands of ministers and their staff, who (apart from
Department Liaison Officers) are partisan political actors. The looseness of
the Code’s verbiage creates a potential for subjective application and the
danger of partisan or personal abuse.
Inadequate provisions
1.27
Clause 8.1(e) of Code appears
designed to prevent lobbyists from petitioning ministers while misrepresenting
or keeping secret the identity of the clients on whose behalf the
representations are made. But the knowledge of an advocate’s clientele is a
central pillar of any effective appeal to government. Most ministers would be unreceptive
to petitions made by a lobbyist on behalf of an anonymous client. It is highly
implausible that such elisions or misrepresentations would occur on anything
other than rare occasions. The section of the Code intended to deal with such
an infrequent scenario represents policy overkill.
1.28
And yet the Code simultaneously
encourages large private companies to camouflage their political advocacy
activities by putting former politicians – who would be exempt – on their
boards for lobbying purposes. This constitutes a loophole that completely
subverts the purpose of the Code. One part of the Code goes to ridiculously
disproportionate lengths to quash a rare form of subterfuge while excusing a
deceptive ploy that is much more common.
Post-employment prohibitions
1.29
The Code also places prohibitions
on post-government employment by staff that are both unfair and
counter-productive. Clauses 7.1 and 7.2 forbid former staff members to 'engage
in lobbying activities relating to any matter that they had official dealings
with' for 18 months (ministerial staff) and 12 months (parliamentary
secretarial staff) after leaving government service.
1.30
This provision ignores the protean
realities of government that are marked by periodic reshuffles and portfolio
changes. In the event of such a change of ministerial portfolio, a minister’s
subject matter expert staff members would be in serious jeopardy of employment
disadvantage. They may not be able to gain a position with the incoming
minister who could be arriving with his/her own staff, and yet they would be
precluded from seeking employment in the government relations arena. As the Community
and Public Sector Union notes in its submission:
The nature of MOPS staff employment is
fundamentally different to APS employment. MOPS staff employment is tenuous.
There is no job security and under the MOPS Act Part III & IV staff can be
terminated at any time.
At the same time, if a Minister is
demoted his or her employment continues, the DLO returns to the Department but
the Ministerial Advisor has to find a new job to put food on the table.
The effect of applying the
post-separation employment on all ‘government representatives’ fails to
acknowledge the disparate job security and superannuation entitlements that
exist between Ministers, APS employees and MOPS staff.
CPSU members are deeply concerned that
their employment opportunities post-separation have been severely curtailed
without their prior knowledge or agreement. Post-separation restrictions most
commonly exist in the private sector and these restrictions on trade have been
strictly defined at common law. They are a condition of employment at the point
of accepting the job offer, detailed in writing as part of the employment
contract, and are reflected in the remuneration package. The Lobbying Code of
Conduct as it stands changes the employment conditions of ministerial advisors
retrospectively, without individual agreement and in the absence of increased
remuneration.[9]
1.31
The post-employment prohibitions
also represent a retrospective change to the conditions of employment of MOPS
staff.
Confusion over Q&A
1.32
There is some ambiguity as to
whether the question and answers section on the PM&C website forms part of
the Code.[10]
Evidence presented to the Committee did not resolve whether the Q&A formed
a formal part of the Code or whether it was only guidance but not part of the
Code itself:
SENATOR FIFIELD—Would it
be fair to say that the questions and answers did, in effect, form part of the
code?
Ms Belcher—Certainly,
they provide the guidance on how to abide by the code.
Senator MOORE—In the
official Public Service way we talk, the Q&A would act as a quasiguideline.
Ms Belcher—Yes, we would regard
the Q&A as guidelines.
SENATOR FIFIELD—A
lobbyist could look at the code itself, in the absence of the Q&A , and
say, ‘I have satisfied the code.’
Ms Belcher—That is
right.
SENATOR FIFIELD—So the
Q&A does, in effect, form part of the code. Do you think the code itself
needs to make reference to the Q&A so that there is a direct link between
them?
Ms Belcher—Yes, we can certainly
make that link on the website so that it is quite obvious.
SENATOR FIFIELD—I must say I
think that could provide an opportunity, or an out, for some lobbyists, to say,
‘I have observed the code without reference to the Q&A.’[11]
1.33
Thus the question arises whether a
lobbyist could conform with the letter of the Code but not comply with guidance
in the Q&A, yet still argue that they were in full compliance with the
Code.
Wider application to non-executive parliamentarians and staff
1.34
In his submission to the
Committee, Mr Harry Evans, the Clerk of the Senate addressed the proposal that
the application of the Code be broadened to encompass all Members of Parliament
and their staff. Mr Evans explained that Constitutional restrictions would
mandate the creation of 'three separate but substantially similar regimes,' one
for either House of Parliament, and a third for ministers.[12]
1.35
And in pointing out the practical
need for a joint registration of lobbyists, Mr Evans noted that this would involve a joint capacity 'not
hitherto contemplated in Australia’s system of government: the three parties to the
joint process and register would be each of the two Houses and the executive
government.'[13]
1.36
But the enforcement of such a
broader scheme would be problematic, according to Mr Evans’
submission. A program to regulate the rights of members and their staff to
communicate would be unprecedented in the history of Australian democracy. And
the enforcement power would rely on the 'blunt instrument' of their contempt
jurisdiction. And cases would likely involve:
...a great deal of disputation about
the nature of the dealings, whether they really constituted lobbying, whether
the other persons concerned were acting in the capacity of lobbyist or simply
communicating with the member in some other capacity, and the nature of the
communications and so forth.[14]
1.37
An alternative enforcement
mechanism could be created through the codification of the lobbying code in
statute. But, as Mr Evans noted, 'such a course would obviously be fraught with
difficulties and would involve a very large intrusion by the judiciary into the
internal operations of the Parliament. The statute would [also] have to survive
constitutional challenge based on freedom of political communication.'[15]
1.38
The legal ability of both Houses
to regulate the conduct of their former members was also called into serious
question by Mr Evans’ submission: 'Such regulation would probably not meet
the test mentioned. Serving members could be prohibited from dealing with such
persons, but that would be another significant extension of the scope of the
regulation of members.'[16]
Conclusion
1.39
There is no widespread crisis of
public confidence in the probity of Commonwealth governance or institutions.
The proposed Code should be viewed in this context.
1.40
But if the aim of the Code is to
stop the occurrence in the Federal jurisdiction of the episodes witnessed with
the likes of disgraced former Western Australian premier Brian Burke and the
Wollongong development scandal in New South Wales, then this Code fails that
test.
1.41
The Code is marred by vague
wording and many inadequately considered provisions. The Government’s Lobbying
Code of Conduct, in unamended form, will fail to achieve its stated purpose and
could create a cure worse than the mild imperfections that might occasionally
afflict the realm of political lobbying at Commonwealth level. Opposition
Senators therefore propose the following amendments to the code.
Recommendations
Recommendation 1
1.42
That the Cabinet Secretary's
powers to exclude a lobbyist from the register be devolved to the Secretary of
the Department of the Prime Minister and Cabinet.
Recommendation 2
1.43
That a decision to exclude an
individual or entity from the register be subject to appeal to the
Administrative Appeals Tribunal, to ensure that legal recourse is not cost
prohibitive.
Recommendation 3
1.44
That coverage of the Code be expanded
to embrace unions, industry associations and other businesses conducting their
own lobbying activities.
Recommendation 4
1.45
That post-employment restrictions
on MOPS staff be removed from the Code
Recommendation 5
1.46
That the status of the Code
Q&A section on the PM&C website be clarified to establish whether it
forms part of the Code itself.
Recommendation 6
1.47
That the Code should not be
expanded to apply to non-executive members of either House of Parliament nor to
non-ministerial MOPS staff.
Senator Mitch
Fifield Senator Concetta Fierravanti-Wells
Deputy Chair
Senator Scott Ryan
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