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Parliamentarians, Outside Employment and Outside Income
Liz Young
Statistics Group
Introduction
This note discusses potential and actual conflicts of interest involving
Senators and Members that may arise from their participation in outside
employment or receiving outside income.[1]
Constitutional Arrangements
The Constitution provides scant guidance for Senators and Members in
their approach to the issues of outside employment or income. In fact,
it only stipulates that parliamentarians should be prohibited from the
following activities:
- holding offices of profit under the crown s.44(iv)
- acting as government contractors s.44(v)
- taking fees or honoraria for services rendered to the Commonwealth
or in Parliament s.45(iii).
Conventions
Particular conventions have also evolved in the past 25 years regarding
the conduct of Ministers and their capacity to engage in outside
employment or receive outside income. These include:
- resigning directorships in public companies
- resigning directorships in private companies if they are akin
to public companies
- Ministers have been instructed not to accept retainers or income from
personal exertion other than that laid down as their remuneration as
Ministers and Members of Parliament.
These conventions apply solely to Ministers, and not to Members of Parliament
more generally, because of Ministers' degree of political influence, the
additional responsibilities they hold and their greater access to privileged
and confidential information.
In 1996 Prime Minister acted in accordance with these conventions by
tabling a guide outlining appropriate ministerial conduct, regarding employment
issues. This reconfirms established conventions without adding anything
new.[2]
The Broad Ethical Standards
There are a number of ethical standards, widely accepted in the Commonwealth
Parliament, that are relevant to how Senators and Members deal with issues
of outside employment and income. These were defined by the Bowen Inquiry
(Public Duty and Private Interest) in 1979, which stated that an
officeholder should:
- ... avoid situations in which his [sic] private interest, whether
pecuniary or otherwise, conflicts or might reasonably be thought to
conflict with his [sic] public duty...
- ... not use information obtained in the course of official duties
to gain directly or indirectly a pecuniary advantage for himself [sic]
or for any other person...
- [avoid the impression] that any person can improperly influence the
officeholder or unduly enjoy his [sic] favour.
- not allow the pursuit of his [sic] private interest to interfere with
the proper discharge of his [sic] public duties.[3]
What Senators and Members Are Expected to Do...
None of the above provides specific advice to Senators and Members in
their dealings with issues relating to outside employment and income.
This is because the Commonwealth Parliament does not have a code of ethics
that standardises such activities. Rather, Members of Parliament are expected
to look to the broad ethical standards assumed by the Australian Parliament
for guidance on how they ought to respond to specific instances in which
outside employment and income are involved.
The Application of these Principles
In summary, Members of Parliament, when engaging in outside employment
or receiving outside income should
- avoid conflicts between public duty and private interests
- ensure that confidential information is not used to benefit private
interest
- not be influenced, or seen to be influenced, by outside interests
- not allow private interests to undermine the undertaking of public
duties.
According to Atkinson and Mancuso, two Canadian based academics who
specialise in political ethics, a conflict of interest involves 'a situation
in which private interests interfere with the discharge of public responsibilities.
The public official who experiences a conflict of interest cannot convincingly
claim that he [sic] judges an issue entirely on its merits.'[4]
When a Senator or Member is employed or receives income from a source
outside parliament, the potential for a conflict of interest is greatly
enhanced.
These conflicts of interest include:
- the use a Senator or Member's time that would be otherwise employed
in parliamentary duty
- the misuse of confidential information, made available to the Member
of Parliament because of their public office
- the use by a Senator or Member of his/her position in parliament to
benefit an outside employer or external source of income.
In addition it is worth noting that:
- a Minister's role provides far greater scope for a conflict of interest
And a perceived conflict of interest requires the Senator or
Member to
- demonstrate that there is no conflict of interest,
or
- to surrender their private interest.
Mechanisms to Help Senators and Members to Deal with Conflicts of Interests
In the Lower House, Standing Order 196 prohibits Members' voting when
they have a direct pecuniary interest in the question before the house,
excluding those of public policy. Membership of Committees is restricted
in both the Houses when Parliamentarians have a personal interest (House
of Representatives Standing Order 326) or a conflict of interests (Senate
Standing Order 21(5)) in the Committee's business. For instance, a parliamentarian
with shares in an oil company would be restricted from participating in
a Committee assessing a proposed oil drilling venture.
In 1984 new standing orders were adopted in the House of Representatives
incorporating the Bowen Inquiry's recommendation for a Register of Members'
Interests. This is found under the House of Representatives Standing Order
"Registration of Members' Interest" new Standing Order 28A.
The Senate equivalent can be found in Senate Standing Order 17(1). Although
a Register of Interest for the Senate entered into debate around the same
time as its House of Representative's equivalent, Standing Order 17(1)
did not come into effect until 1994 after a long series of delays and
disputes about the effectiveness of such a Register.
The Register of Interests for both Senators and Members are kept with
the Clerks of their respective houses and are available for public scrutiny.
At times party leaders may stipulate rules to guide parliamentarians
from their own party in dealing with such issues. When this occurs, it
is up to the leader to ensure that these guidelines are complied with.
The Significance of Remuneration
When the Constitution was written it was taken for granted that ordinary
Members of Parliament would earn a living outside of parliament, thus
s48 makes reference to their allowance rather than a salary. By
the 1950s it was widely acknowledged that the role of a parliamentarian
had evolved in such a way to make it difficult for them to engage in outside
work and fulfil their parliamentary duties. For this reason the Report
of the Committee of Enquiry into the Salaries and Allowances of Members
of the National Parliament (1952) asserted that ordinary members should
have a salary that was 'a sum sufficient to enable a man to live
comfortably and honourably, but not luxuriously...'[5] From around this
time, the work of an ordinary parliamentarian was considered to be full
time employment.
The work of a Minister has always been considered to a full time occupation.
Thus the Constitution (s66) stipulates a salary for Government
Ministers.
The notion that the role of a parliamentarian is a full time job highlights
the potential conflict of interest that arises should s/he engage in outside
employment. Of particular significance is the question of time and popular
perceptions of a conflict of interest. Outside work will regularly raise
questions of a conflict of interest because to the external observer it
can always be interpreted (accurately or otherwise) as time that ought
to be spent on parliamentary activities. The inexhaustible nature of a
parliamentarian's work means that it is virtually impossible for a Senator
or Member to demonstrate that there is no conflict of interest.
Conclusion
Many Senators and Members are involved in either outside employment
or have an external source of income. Issues to be taken into account
when assessing this activity include:
- remaining consistent with the Constitution or subsequent conventions
- avoiding a conflict of interest or a perceived conflict of interest
- when questioned, to demonstrate that no conflict of interest exists
or to surrender this interests.
Past debates have focused on pecuniary conflicts of interests. The principle
that a parliamentarian's job is full time, or exclusive employment, suggests
that there may need to be greater consideration given to conflicts of
interest that arise over the use of a parliamentarian's time.
Endnotes
- This research note does not consider income from investments such
as shareholdings.
- Hon J. Howard A guide on Key Elements ofMinisterial Responsibility
Canberra April 1996.
- N.Bowen 1979 Public Duty and Private Interest Report of the
Committee of Inquiry established by the Prime Minister on 15 February
1978, Canberra, AGPS: 31-32.
- M. Atkinson and M. Mancuso 1992 'Edicts and Etiquette" Regulating
Conflict of Interest in Congress and the House of Commons' Corruption
and Reform 7: 5
- Commonwealth of Australia 1952 Report of the Committee of Enquiry
into the Salaries and Allowances of Members of the National Parliament:10.
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