This chapter explores in detail the events surrounding and the examination of the post-ministerial appointments of the two former ministers at the centre of this inquiry—the Hon. Christopher Pyne and the Hon. Julie Bishop.
This chapter also discusses deficiencies with the existing Prime Minister's Statement of Ministerial Standards (Ministerial Standards), and suggestions from submitters for the improvement of the Ministerial Standards, including the enforceability of the standards.
The post-ministerial appointments
Mr Pyne and EY
This section sets out the evidence received by the committee in respect of Mr Pyne's employment with EY. This information is based on the appearances by Mr Pyne and EY representatives at the committee's public hearing on 5 September 2019, as well as a submission from EY.
Mr Pyne has held two ministerial positions that are relevant to the committee's inquiry. Most recently, Mr Pyne held the position of Minister for Defence in the Morrison Ministry from 28 August 2018 to 11 April 2019. Prior to this, also in the defence portfolio, Mr Pyne held the position of Minister for Defence Industry in the Turnbull Ministry from 19 June 2016 to 28 August 2018.
Undertaking to comply with the Ministerial Standards
Mr Pyne confirmed that he understood the obligations imposed on him by the Ministerial Standards and advised that he intended to abide by those obligations.
In relation to the 'undertaking' that ministers must comply with the Ministerial Standards, Mr Pyne explained his understanding of how ministers make such an undertaking:
My recollection is that when you become a minister—or, indeed, a parliamentary secretary—you get sent a document to complete about your financial arrangements, which also contains a copy of the ministerial code of conduct. You obviously study that. If you didn't, you wouldn't be very sensible. You fill out the form and then you sign it and send it back. In the action of doing that, that is, in my view, a contract that you have created with the Prime Minister at the time—whether it was Howard, Abbott, Turnbull or Morrison, as I served all four of them—that you will abide by the ministerial code of conduct. You have divulged your financial arrangements to the Prime Minister and if that changes, in terms of your financial arrangements, you're required to continue to update it. I took that at the time as establishing a contract with the Prime Minister to abide by the ministerial code of conduct.
Mr Pyne informed the committee that, once he had announced his retirement, the Prime Minister did not seek to remind him of his obligations under the Ministerial Standards.
Interaction prior to resignation as a Minister
In its submission, EY provided background to its initial interactions with Mr Pyne and his subsequent engagement as a contractor to EY—this information is set out in chapter 2 at Table 2.1. Mr Pyne had several encounters with EY while he was still the Minister for Defence. Following Mr Pyne's announcement of his intention to retire at the next federal election on
2 March 2019, EY contacted Mr Pyne on 7 March 2019 requesting a meeting to discuss his post-retirement plans. The following week Mr Pyne attended an event hosted by EY, the Future SA Forum, which had been postponed from
EY then met with Mr Pyne on 8 April 2019 to discuss his future and 'his interest in utilising his experience as a politician and Minister to assist a professional services firm grow their private sector defence industry business'. The 2019 federal election was announced on 11 April 2019, with Mr Pyne ceasing to be a minister on 29 May 2019.
At the hearing, EY reiterated the evidence provided in its submission that the meeting was only to discuss Mr Pyne’s future, and therefore appropriate under the provisions of the Ministerial Standards. EY continued:
What I can say is that we didn’t discuss any confidential information. And I am not a government official so, from our perspective, there is no issue in relation to the standards.
Mr Pyne denied that it was a breach of the Ministerial Standards to meet with EY while he was still a Minister to discuss a job after his retirement from parliament:
…having a meeting with EY about future jobs doesn't breach the ministerial standards, because I wouldn't have been needing to divulge any information to them that wasn't publicly available, and I wasn't lobbying, advocating or having business meetings on defence related matters. I would simply say…that every Australian is entitled to look for a new job.
Terms of employment and duties
Mr Pyne's employment as an Executive Consultant with EY commenced on 7 July 2019, a role that Mr Pyne will perform for two days per month for a period of six months, with an option of extension. In the public hearing, EY informed the committee that their engagement with Mr Pyne is through the services of his consulting firm, GC Advisory.
The submission from EY detailed some of Mr Pyne's expected duties. Mr Pyne has been asked to:
make defence industry clients aware of EY when a request is made of him for a recommendation of a relevant professional services firm;
meet with EY’s defence industry team to advise them on how best to engage with the defence industry, based on his 26 years’ experience as a politician;
attend initial meetings with private sector clients to introduce EY as a reputable provider of professional services;
speak at relevant defence industry events as a representative of EY;
advise EY’s defence industry team on our growth strategy; and
provide advice on the interpretation of Department of Defence policy documents, such as the Defence White Paper.
Mr Pyne declined to disclose the remuneration he receives from EY, noting however that it is 'not an outrageous sum', whilst observing that remuneration is immaterial to compliance with the Ministerial Standards.
When asked to describe the benefit he could provide to EY, Mr Pyne stated:
Of course, one of the things about the Defence portfolio over the last few years has been that we've put in place significant architecture around the white paper, the integrated investment plan, the Defence industry policy statement, the Naval shipbuilding plan, the Defence industrial capability plan and the Defence export strategy. The main thing that I can bring to a firm like EY is interpreting what those documents mean and how they work…A lot of people in business who are doing their daily work wouldn't have been part of this architecture that's been built, and the interpretation of that is an important skill. And, of course, having been around politics, parliament and government for 26 years, there is a sort of instinctive understanding of how government thinks and how political parties think that I would bring to such a job as well.
Meeting obligations under the Ministerial Standards
Noting the working he intended to do for EY, as outlined above, Mr Pyne explained how this work would not be in breach of the Ministerial Standards:
…I can do all of that without actually breaching the ministerial code of conduct, because it doesn't require me to divulge any information that would not otherwise be publicly available. A lot of people in business who are doing their daily work wouldn't have been part of this architecture that's been built, and the interpretation of that is an important skill. And, of course, having been around politics, parliament and government for 26 years, there is a sort of instinctive understanding of how government thinks and how political parties think that I would bring to such a job as well.
Mr Pyne also noted that he would not be able to advise EY, or their clients, of particular project of which he had knowledge as a Minister, but which was not publicly available.
Mr Mark Stewart, Partner, EY, sought to clarify to the committee that Mr Pyne had not been engaged to advise EY on how to win more government defence related contracts:
EY has engaged Mr Pyne to assist with growing our defence industry business. The defence industry business provides professional services to private sector clients that operate in the defence industry sector. This is an important distinction that I want to make to the committee. Mr Pyne has been engaged by the defence industry business that I lead to help grow our private sector business dealing with private sector organisations. These organisations are facing a range of challenges in areas such as workforce, procurement and supply chain efficiency. Because of this, they are seeking the services of firms such as EY to assist them with these challenges. Mr Pyne has not been engaged to lobby, advocate or seek business meetings with members of the federal government.
In responding to a question about mechanisms EY have in place to ensure that Mr Pyne complies with the Ministerial Standards and the EY Global Code of Conduct, Mr Stewart described five measures. These included trust in the integrity of Mr Pyne after 26 years of experience in parliament, a direct line of reporting to Mr Stewart, informing the defence industry team within EY about Mr Pyne's obligations, the enforcement of the EY Global Code of Conduct, and the right to terminate Mr Pyne's engagement with EY.
On the issue of compliance with the Ministerial Standards, EY stated that 'ultimately, only Mr Pyne can ensure compliance'.
Activities in relation to GC Advisory
As noted above, Mr Pyne's appointment at EY is through an agreement with GC Advisory, a public affairs, strategic communications advisory company
co-owned by Mr Pyne and Mr Pyne's former Chief of Staff,
Mr Adam Howard.
GC Advisory is registered on the Lobbyist Register and Mr Pyne is listed as a Registered Lobbyist. The committee questioned Mr Pyne about the prohibition on lobbying imposed on him both under the Ministerial Standards and the Lobbying Code of Conduct. Mr Pyne stated:
…I'm certainly not planning on doing any lobbying in the Defence portfolio, and I'll abide by whatever rules are required under the lobbying code…
…my firm hasn't done any lobbying since I joined it, obviously, for defence clients; I don't think we have any defence clients. Our clients are registered on the lobbyists register. My understanding is that, if we had any defence clients, we would have to be extremely cautious about what was done for them, but so far we haven't actually been asked to do any lobbying on behalf of defence clients.
Documents tabled at the hearing on 30 August 2019 showed that one of GC Advisory's client's, duMonde Group, has received $6 million in contracts from the Department of Defence. At the public hearing on 5 September 2019, the committee asked Mr Pyne why, since 30 August 2019, du Monde had been removed from GC Advisory's list of clients on the Register of Lobbyists:
…du Monde was a client before I was a director of GC Advisory and stopped working with my business partner in December 2018, so I assume that, if it's been removed from the register, it's because it's no longer a client. I didn't join the firm until July 2019, so du Monde as a client doesn't have anything to do with me.
Ms Bishop and Palladium
This section sets out the evidence received by the committee in respect of Ms Bishop's appointment to Palladium. This information is based on the appearances by Ms Bishop and Palladium's representatives at the committee's hearing, as well as submissions from Ms Bishop and Palladium.
Ms Bishop has held one Ministerial position that is relevant to this inquiry—Ms Bishop was Minister for Foreign Affairs in the Abbott and Turnbull Ministries from 18 September 2013 to 28 August 2018.
As set out in Table 2.2 in chapter 2, Ms Bishop was approved as a non‑executive director of Palladium on 28 June 2019, and Ms Bishop accepted her appointment on 30 June 2019.
Undertaking to comply with the Ministerial Standards
At the hearing Ms Bishop confirmed that she understood her obligations under the Ministerial Standards and intended to abide by those obligations.
Ms Bishop spoke to the nature of her undertaking to comply with the Ministerial Standards—which she made publicly, and also to Dr Martin Parkinson AC PSM and Palladium—specifically regarding the use of information gained in her former position as the Minister for Foreign Affairs:
The standards place the onus on former ministers to give an undertaking, which I have done and which I intend to honour. I have made it clear to organisations where I am a non-executive director that I will not provide information that is privileged—in other words, that referred to in the guidelines, information not readily available to the public. I have a very long history of time in the commercial sector, the private sector and the public sector. I had a 20-year legal career and a 20-year parliamentary career, and I've served on numerous boards. I believe that I will be able to readily determine the difference between information that I had obtained not readily available to the public and information otherwise. I'm confident that I can do that.
Ms Bishop did not make an undertaking to comply with the Ministerial Standards to the Prime Minister—Ms Bishop informed the committee that she had not spoken with Prime Minister about her role with Palladium or the Prime Minister's expectations about compliance with the Ministerial Standards.
Interaction prior to resignation as a Minister
In its submission, Palladium set out the extent of the interactions of its employees with Ms Bishop during her time as Minister for Foreign Affairs:
Palladium does not have a record of and is not aware of any official business contact between Palladium management and Ms Bishop during the period she served as Minister for Foreign Affairs.
Palladium notes there may be been interactions between Palladium employees and Ms Bishop of an incidental nature, such as at various forums, events or field visits. For example, Palladium is aware that Palladium employees have attended:
Budget Dinners held at Parliament House where Ms Bishop was in attendance.
Other official events including the “Foreign Policy White Paper launch”.
The “Humanitarian Supplies Challenge event” which was held at the DFAT Humanitarian Supplies Warehouse in Brisbane that Palladium manages on behalf of DFAT.
When asked during her appearance before the committee, Ms Bishop could not recall any of these interactions but did proffer that during her time as Minister for Foreign Affairs it was possible that she was 'introduced to Palladium staff during site visits, although I've no specific memory of any such interaction'.
In his submission, Dr Parkinson provided some information about a video on Palladium's Facebook site which featured Ms Bishop, which came to light after the initial investigation for the Prime Minister had been completed. Dr Parkinson noted that the Department of Foreign Affairs and Trade (DFAT) had advised the video was created for the Shared Value Leadership Summit in New York in 2017:
During the video, Ms Bishop mentions a range of aid related activities that the Australian Government is associated with and she also refers to the Business Partnerships Platform (BPP). At no point in the video does Ms Bishop refer to Palladium by name.
DFAT conducted a tender process in 2015 for the implementation of the BPP. DFAT sought a Request for Quotation from large suppliers on the DFAT Aid Advisory Services Panel. One submission was received for the tender, which was from Palladium. The submission from Palladium was assessed by an evaluation committee within DFAT, and the application was evaluated on the basis of technical competence to undertake the work and value for money objectives. Palladium was assessed as the preferred tenderer and awarded the contract.
Dr Parkinson advised that Ms Bishop had no involvement in the procurement process for the BPP. The video was provided by DFAT to the Shared Value Project event organisers. The video appeared on the Palladium Facebook page, along with a link to an article on the Palladium website titled Australia's Foreign Minister, Julie Bishop, commends Shared Value and the Business Partnership Platform.
Terms of appointment and duties
In its submission, Palladium set out how its board operates:
The Board has ultimate responsibility for the strategic management and corporate governance of the company. The Board has otherwise delegated responsibility for the management of Palladium to the Executive Chairman, the Chief Executive Officer and executive management.
Palladium also set out the responsibilities of non-executive directors—these appointees are not employees, nor are they involved in the 'day-to-day management of the company'. Rather, they are required to participate as members of the board in accordance with Palladium's Board Governance Policy, which includes the following matters:
providing leadership and guidance on the strategic objectives of Palladium, as well as overseeing management’s implementation of strategic objectives.
approving business plans and operating budgets.
monitoring the financial performance of the Company and approving major capital expenditure.
Undertaking governance activities such as the appointment and assessment of senior officeholders, approving governance documents, and overseeing external audits.
identifying significant risks to the Company and ensuring those risks are minimised or mitigated.
ensuring proper reporting to the Australian Securities and Investments Commission and any other relevant statutory bodies.
Palladium confirmed that Ms Bishop is remunerated as an individual rather than as part of her firm, Julie Bishop & Partners. Ms Bishop declined to disclose her remuneration to the committee in the hearing.
Meeting obligations under the Ministerial Standards
In her submission, Ms Bishop did not provide any details on her arrangement with Palladium, but expressed her view that she remains in compliance with the Ministerial Standards.
At the hearing, Ms Bishop reiterated that she was compliant with the Ministerial Standards, and informed the committee that her appointment as a non‑executive director with Palladium is focused on governance and accountability in relation Palladium's work 'overseas for governments and other entities overseas'. Ms Bishop emphasised that her role with Palladium does not relate to projects, Australian-based or otherwise, but did concede that she would be involved in 'strategic direction'.
Palladium echoed Ms Bishop's statements about the expectations of her role as a non-executive director, and stated their presumption that Ms Bishop would recuse herself from board discussions that may constitute a conflict of interest.
When asked about non-public knowledge that she may possess from her time as a minister, Ms Bishop stated:
Most of the information that I can think of is public, and, during my time as foreign minister, tenders were managed at arm's length from the minister. The minister would set at each budget the high-level budget parameters such as the amounts allocated to individual nations and the broad policy priorities such as the focus on a geographic area, for example. The department would then tender and contract the delivery of the development program. As minister I did not approve any tenders. Of course the committee can ask those questions of DFAT, but the Morrison government set a new budget for the aid program at a time when I was no longer a cabinet minister. The new aid budget priorities have been set by a new ministry and in the last budget, so I have no knowledge of any of those matters since I left the cabinet in August 2018.
In response to a question about whether Ms Bishop would use her national or international contacts for Palladium's benefit, Ms Bishop responded that she 'would not presume to call a serving foreign minister of another nation or others on a commercial matter'.
Extent of the inquiries by Dr Parkinson
At the public hearing on 30 August 2019, Dr Parkinson explained his approach to the inquiries that he had undertaken with respect to Mr Pyne and Ms Bishop. At the outset, Dr Parkinson reiterated the distinction between experience and information which informed his inquiries:
Essentially, there are two sets of issues that we've got to disentangle. One issue is that a parliamentarian, whether an MP or a senator—or a minister, for that matter—accumulates experience and understanding of government through their time in the parliament. The other issue is that a minister gains very specific information from being a minister and discharging their duties as a minister. We cannot expect them to forget the experience of 10, 20 or 30 years in the parliament…it is perfectly legitimate for them to utilise as part of their experience as a human being in any post-employment role. On the other hand you have a very specific set of information that you gain as a minister that is not available to the public and, in my view, is not appropriately shared with anyone. When you ask someone about what they are doing, you've got to try and disentangle those two things.
In his evidence to the committee, Dr Parkinson identified the discrepancy between the content of Ministerial Standards and the public's expectations of the standards:
There is a difference here between the standards as they exist and the standards that people seem to want to be in place. I'm responsible, when asked by the Prime Minister, to assess people's behaviour against the standards as they exist. I can't do anything more than that.
Dr Parkinson also spoke to the limited powers he does have in conducting an investigation, noting that the Ministerial Standards are 'not the law':
I have no investigative powers and I have no legislative backing. I speak to former ministers, I inquire, I collect as much information as I can and then I make a judgement based on that.
In Dr Parkinson's view, these investigations were complete, and the terms of the agreements between EY and Mr Pyne; and Palladium and Ms Bishop—such as remuneration received—were not relevant to Dr Parkinson's inquiry into breaches of the Ministerial Standards.
Dr Parkinson summarised how the distinction between experience and information informed his approach to his interview with Mr Pyne on 11 July 2019:
So when I spoke to former Minister Pyne, I was very clear in saying not 'Have you or will you use your experience as a minister in multiple portfolios and a parliamentarian?' but 'Will you use anything that you've obtained by being the Minister for Defence or the minister for anything else?'
Dr Parkinson continued:
We had a very explicit discussion about the distinction between the two sets of issues. Mr Pyne was very clear in saying to me that he was aware of his obligations under the standards. He said he was aware that he cannot use information known only to him because of his ministerial roles. He said he had made it clear to EY that he could not lobby or meet ministers in the Defence portfolio or officials from the Department of Defence or the ADF, and more generically. He said EY was aware that he can only give advice on issues in the public domain. He also emphasised to me that he had written to EY, and had conversations with the company's partners, to make them aware of the constraints of the standards and the limitations of what he could provide as a former minister.
Dr Parkinson stated that there was 'no reason to doubt anything that Mr Pyne had said' about his awareness of the limitations the Ministerial Standards imposed on his work for EY. Further, Dr Parkinson referred to EY's submission to the committee as evidence that the firm too was aware of the limitations on Mr Pyne.
Dr Parkinson stated that in respect of Mr Pyne, his inquiries did not include an interview with a representative of EY:
I had no reason to think, on the basis of things that I can see in the public domain, that there was any need to talk to EY. They had already made comments publicly about what he was doing.
Dr Parkinson also did not inquire about the remuneration Mr Pyne will receive from his employment with EY:
Frankly, whether he got $1 or $100,000, the number is completely irrelevant. I don't care whether he got $1; if he's breached 2.25 I would have called it out. If he got $100,000 and breached 2.25, it is, to me, absolutely no difference. Either you've breached it or you haven't, and there was no evidence in front of me to suggest that he had breached it.
Mr Pyne informed the committee that Dr Parkinson did not ask for any written advice or any documents relating to his business arrangements.
Dr Parkinson advised that he also did not make any inquiries of Mr Pyne in relation to the lobbying activities of the lobbying firm, GC Advisory, of which Mr Pyne is a co-owner. Mr Pyne doubted that he explicitly told Dr Parkinson that he intended to register as a lobbyist, stating that it was self-evident from his position within GC Advisory:
It is axiomatic, if you are a part-owner of a lobbying firm, that you would register on as many registers of lobbyists as states—or the Commonwealth—where you were doing business. I wouldn't have specifically said to the secretary of the Department of the Prime Minister and Cabinet 'and, of course, that means I will be registering as a lobbyist; because obviously if I am doing any work that requires lobbying I would register in the state or territory , or the Commonwealth, where the work is being done.
On 29 July 2019, Mr Pyne registered himself on the Australian Government Register of Lobbyist, as a lobbyist for GC Advisory. As noted above, one of GC Advisory's client's, duMonde Group, has received $6 million in contracts from the Department of Defence between the period November 2016 and April 2019. Dr Parkinson, noted that Mr Pyne's registration on the Lobbyist Register occurred after the advice to the Prime Minister had been finalised, and indicated that the information about Mr Pyne's registration as a lobbyist for GC Advisory, or du Monde's listing as a client of GC Advisory, did not impact his decision that Mr Pyne was not in breach of the Ministerial Standards.
When questioned as to why his inquiries into Mr Pyne's role at EY had not been more extensive, Dr Parkinson stated:
At the time I spoke to Mr Pyne, he had only just become a partner of this company, and he had made very clear to me that he understood what the limits were and that he would not—he was very explicit—be undertaking any lobbying, advocating or business meetings with government, with MPs, with parliamentarians, with the Public Service or with Defence. So you're asking me to, rather than presume innocence, presume guilt.
In relation to Ms Bishop's appointment to the Palladium Board, Dr Parkinson returned to the distinction between experience and information, noting that Ms Bishop's role at Palladium was as a non-executive director:
Undoubtedly, her expertise, understanding and knowledge of issues will be valuable, but let's remember what she is: she's taken the role of a non-executive director…[as] a non-executive director, you do not have an executive role in the organisation. It would be highly unusual—and I say highly unusual—for a non-executive director to be involved in contract negotiation or tendering or lobbying. In that sense, the fact that her knowledge is useful in the broad and beneficial to the company would be…absolutely consistent with the way I described that bit about experience.
Dr Parkinson stated that he had not asked Ms Bishop if she intended to recuse herself from board discussions about Australian business. By way of explanation as to why he had not asked this specific question, Dr Parkinson reiterated the point he had made in relation to Mr Pyne, that he was operating under a presumption of innocence:
On a presumption of innocence, yes, I'm accepting that until somebody tells me Mr Pyne or Ms Bishop—and can point to an example where the standards have been breached. What am I meant to do? Am I meant to assume that any member of this chamber or the other chamber is going to lie to me? If that's the implication of what you're trying to draw out, then I'm just not going to play that game.
Dr Parkinson also explained that he did not seek to interview a representative of Palladium. When pressed on why he had not pursued this line of investigation Dr Parkinson forcefully put his point:
Well, perhaps I'm naïve…but, when ministers or senators or MPs say to me that they are going to do something, I tend to take that at face value.
Dr Parkinson stated that if a minister, senator or MP did not do what they said 'then I am more than happy to deploy every lever at my disposal to ensure that there is a correction of behaviours'.
The appropriateness of referring inquiries to Dr Parkinson
The committee received evidence that an investigation into compliance with Ministerial Standards conducted by the Secretary of the Department of the Prime Minister and Cabinet (PM&C) 'may not be adequate'.
The Ministerial Standards provide that an allegation of improper conduct of a significant kind may be referred to an independent authority for investigation, and that the Secretary of the PM&C may provide advice on any matters within the standards:
7.3. Where an allegation involving improper conduct of a significant kind, including a breach of these Standards, is made against a Minister (including the Prime Minister) the Prime Minister may refer the matter to an appropriate independent authority for investigation and/or advice.
7.4. The Prime Minister may seek advice from the Secretary of the Department of the Prime Minister and Cabinet on any of the matters within these Standards, at any time. In providing such advice the Secretary of the Department of the Prime Minister and Cabinet may, as required, seek professional advice.
Indeed, several submitters called for the independent administration of Ministerial Standards. For example, Transparency International Australia (TIA) recommended that the Ministerial Standards 'should be independently administered' in order 'to build public confidence that the high standards of public office are respected and adhered to'.
The Grattan Institute advocated a similar approach calling for an independent body 'to investigate potential non-compliance with codes of conduct, publish its findings, and refer breaches when they occur'. Furthermore, this body could have an education function assisting 'parliamentarians, ministerial staff, and lobbyists understand their responsibilities and disclosure obligations'.
The Grattan Institute suggested that the existing Independent Parliamentary Expenses Authority 'could be extended to take on administration of the code of conduct'. The Grattan Institute also recommended that the Parliament appoint an ethics adviser 'to enable current and former parliamentarians to seek advice when they are in doubt'. The Grattan Institute explained how an ethics adviser works in New South Wales (NSW) Parliament:
In NSW, former ministers are required to seek the advice of the Parliamentary Ethics Adviser before accepting employment related to their former portfolio within the 18-month window. If they then choose to accept the employment offer, the advice they received must be tabled in Parliament. Parliament could use this information to determine whether a breach has occurred.
The Accountability Round Table (ART) agreed with the appointment of an ethics adviser, citing the Queensland experience where 'every Minister is required to meet the Integrity Commissioner routinely at least once each year'. However, ART disagreed with the proposal for administration of Ministerial Standards by an independent body on the basis that this would 'derogate from and further undermine Australia's parliamentary system'. Rather, ART considered that 'Ministerial Standards should be an instrument of the Parliament, either as a resolution of both Houses or (as in Canada) by Act of Parliament'. Furthermore, ART considered that the Prime Minister should be able to supplement the Parliamentary standards with their own standards.
Enforceability and penalties
The committee received evidence that there is insufficient enforceability and a lack of appropriate penalties for a breach of the Ministerial Standards.
For example, the Ethicos Group discussed the issues regarding the enforceability of paragraphs 2.25 and 2.26 of the Ministerial Standards in three aspects: the 'undertaking' of Ministers to comply with certain provisions of the standards, the lack of legal prohibition of particular categories of post-Ministerial employment and the role of public trust in the common law offence of misconduct in public office.
Regarding the Rudd Ministry's introduction of the requirement of Ministers to 'undertake' compliance with provisions in paragraph 2.25, The Ethicos Group observed:
The extension of effect of the restriction beyond the term of a Ministerial appointment was intended to be achieved through a binding 'undertaking' to be given to the Prime Minister by an MP as a pre-condition for their being appointed as a Minister.
The Ethicos Group suggested that this undertaking 'could take the form of a letter of agreement which created the legal relationship fundamental to a contract', which could be used as basis for legal action if required.
In respect of penalties for a breach of the Ministerial Standards, the Grattan Institute suggested range of sanctions for both individuals and employers, including:
Restricting access to Parliament House for former ministers and other lobbyists who breach the code of conduct.
Requiring the individual to report quarterly on contact with government officials during the 18-month ban (whether or not they had any contact). The reports should be published.
Restricting access to government officials via a Lobbyists Watch List (as exists in NSW). This should include not allowing access to political party functions – with fines for political parties that fail to enforce the sanction.
Extending access restrictions to the former minister's new employer (until the former minister no longer works for them or the 18-month ban is up).
Restricting the former minister's new employer from government tenders (until the former minister no longer works for them or the 18-month ban is up).
Other penalties imposed by the parliament and at levels that apply to contempt of parliament.
ART argued that it should be a matter for the Parliament to 'authorise the independent investigation of the facts of an alleged breach of ministerial standards'. If a breach is found to have occurred, then the Parliament should determine the sanction or sanctions'.
The Ethicos Group also discussed the possible use of the common law offence of 'misconduct in public office', including the assertion that the relevant test in this matter is not the former Minister's trust in his processes, but that of 'public trust'. This section explored the concept of this offence in its Australian context, including what was described as the 'fiduciary nature of political office', and concluded that it has 'stood the test of time and withstood many legal challenges in different jurisdictions. Its recent resurgence and continued existence serves as a vital safeguard of the people's entitlement to integrity in government'.
In her submission to the committee, Ms Bishop expressed support for improving the workability and enforceability of the Ministerial Standards by reversing the onus of proof with respect to former Ministers meeting with current serving Ministers and officials:
The onus could and arguably should be placed upon current serving officials to not hold meetings with former Ministers for the period of 18 months after those Ministers cease to hold office.
Current Ministers and Government officials are subject to ongoing scrutiny through the Parliament, including Question Time and Senate Estimates, and by the media.
There is obvious redress available with regard to current serving Ministers and officials, should they breach this protocol.
Mr Pyne stated that he did not believe that the Ministerial Standards were too weak, nor did he support the independent enforcement of the Ministerial Standards.
Strengthening the regulation of lobbyists and other integrity reforms
The committee also received evidence about broader reforms beyond the provisions for former minister and their employers that could prevent a breach of Ministerial Standards.
For example, ART suggested that strengthened Ministerial Standards would be more effective 'if supported by a range of other good governance and integrity provisions', including:
…the requirement to give reasons, administrative appeals, judicial review, the ombudsman, the auditor general and especially a combination of FOI/right to know, whistleblowing and journalistic freedom and anti-corruption commissions.
TIA's submission also focused more broadly on improved transparency and accountability in the public policy sphere with a particular focus on the regulation of lobbyists.
The Grattan Institute highlighted the need to 'improve transparency and accountability in policy making and reduce undue influence over public policy', again, particularly with respect to lobbyists:
Greater transparency is particularly important as an additional check on the revolving door ban. Ministerial diaries should be published, so voters know who our most senior policy makers are meeting. And the lobbyist register should be broader so that it includes in-house lobbyists, not just commercial lobbyists. This would mean former ministers employed by companies, unions, peak bodies, and other groups would be required to register themselves and abide by the Lobbying Code of Conduct.
Senator Jenny McAllister