Almost a third of the Coalition Cabinet quit in the months following the Liberal party room’s decision in August 2018 to install Mr Morrison as Prime Minister. The ministers and cabinet ministers who resigned have since gone on to take a variety of roles in business, not-for-profits, and the public sector.
Post-ministerial careers have the capacity to be entirely uncontroversial and appropriate. Ministers can develop a unique set of skills during their time in office. Throughout Australia’s history, former ministers of all political persuasions have used these skills to contribute to the broader community in different ways.
Post-ministerial careers also have the capacity to undermine the public trust placed in our government and our political institutions.
There has been significant public concern that the post-ministerial plans of two recent former ministers – the Hon. Christopher Pyne and the Hon. Julie Bishop – may fall into this latter category.
Mr Pyne and Ms Bishop’s post ministerial employment
The close nexus between Mr Pyne and Ms Bishop’s former portfolios and their new private sector jobs raise serious questions of probity.
The Hon. Julie Bishop
Ms Bishop served as foreign minister for over five years. She ceased at the end of August 2018 and commenced as a non-executive director for Palladium less than twelve months later.
Palladium is a private aid contractor that had extensive dealings with the Department of Foreign Affairs and Trade (DFAT) during the time that Ms Bishop was minister. It benefitted from Ms Bishop’s decision to recalibrate Australia’s aid program, to increase the role of the private sector.
During the time that Ms Bishop was Foreign Minister, Austender searches reveal that Palladium and their associated companies received over $600 million in DFAT contracts.
While she was Foreign Minister, Ms Bishop appeared in a promotional video for one of Palladium’s programs funded by DFAT which was shared on their social media.
The Hon. Christopher Pyne
Mr Pyne served in the defence portfolio for almost three years, first as Minister for Defence Industry then as Minister for Defence. In April 2019, while he was still a minister, Mr Pyne met with EY to discuss 'his interest in utilising his experience as a politician and Minister to assist a professional services firm grow their private sector defence industry business'. Nine days later, EY made formal offer to My Pyne which he accepted within three days.
Mr Pyne formally ceases as Defence Minister on 26 May 2019. Within two weeks, Mr Pyne had commenced work for EY.
Mr Pyne is also a part owner of GC Advisory, a public affairs, strategic communications advisory company. GC Advisory is registered on the Lobbyist Register and Mr Pyne is listed as a Registered Lobbyist.
During the course of this committee’s inquiry, GC Advisory listed a defence supplier—duMonde Group—as a client. Austender records show that duMonde has received $6 million in contracts from the Department of Defence, including during the period that Mr Pyne was minister. GC Advisory removed duMonde Group from the registry after questions were asked about it during one of this inquiry’s public hearings.
Application of the ministerial standards
The Prime Minister issued his Statement of Ministerial Standards on 30 August 2018, shortly after taking office. It contains restrictions on post‑ministerial employment:
2.25. Ministers are required to undertake that, for an eighteen month period after ceasing to be a Minister, they will not lobby, advocate or have business meetings with members of the government, parliament, public service or defence force on any matters on which they have had official dealings as Minister in their last eighteen months in office. Ministers are also required to undertake that, on leaving office, they will not take personal advantage of information to which they have had access as a Minister, where that information is not generally available to the public.
2.26. Ministers shall ensure that their personal conduct is consistent with the dignity, reputation and integrity of the Parliament.
A provision of this kind has been included in the ministerial codes/standards issued by successive prime ministers since 2007.
Following public and parliamentary pressure, the Prime Minister sought advice from the then Secretary of the Department of Prime Minister and Cabinet (PM&C), Dr Martin Parkinson AC PSM, on the compliance of Ms Bishop and Mr Pyne with the Statement of Ministerial Standards.
Dr Parkinson spoke to each of the former ministers once via telephone before finalising his advice to the Prime Minister. This advice was tabled in the Senate by Minister Cormann following an Order for Production of Documents by Senator Wong, agreed by the Senate on Thursday 4 July 2019.
Dr Parkinson advised the Prime Minister on 19 July 2019 that:
On the basis of the information available at this time, I have no grounds to believe that either Mr Pyne or Ms Bishop have breached the Standards.
Several aspects of the investigation conducted by Dr Parkinson bear mention.
First, the investigation does not appear to have been a high priority. More than a week elapsed between the matter being referred by the Prime Minister and Dr Parkinson speaking to either of the former ministers.
Second, the investigation does not appear to have been particularly extensive. Dr Parkinson reported speaking to each of the former ministers once via telephone. His advice to the Prime Minister also references Mr Pyne’s public statement and cites a total of three media articles. When asked in the hearing for a copy of his notes from his phone calls, Dr Parkinson reported that he had only taken handwritten personal notes that may not be in a form useful to the committee.
Third, the investigation does not appear to have tested the claims made by the former ministers. Dr Parkinson did not speak to either EY or Palladium. He did not look at the relevant contracts or employment documentation. He did not ask crucial questions about what actions were being taken to avoid conflicts, for instance whether Ms Bishop would recuse herself from board discussions about the Australian business.
Dr Parkinson explained to the committee:
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?
Fourth, the investigation failed to reconcile the inconsistencies apparent on the public record. The report to the Prime Minister states:
…Ms Bishop’s knowledge about Australian government policies regarding aid and development, and her contacts with international leaders, will be utilised by and benefit, Palladium.
Clause 2.25 prohibits former ministers from taking advantage of information to which they have had access as a Minister where that information is not generally available to the public.
Likewise, the investigation failed to properly consider the interaction between the prohibition on ministers undertaking lobbying for eighteen months after leaving office, and Mr Pyne’s interests and activities as a part owner of a lobbying firm and a registered lobbyist.
Fifth, the investigation appears to have only considered clause 2.25 of the Ministerial Standards. Clause 2.26 provides a generally applicable principle that:
Ministers shall ensure that their personal conduct is consistent with the dignity, reputation and integrity of the Parliament.
A reasonable observer would conclude that there is at least a question to be answered as to whether Mr Pyne and Ms Bishop had fallen foul of this requirement.
The committee considers that these deficiencies undermined the investigation.
Given the additional information that emerged during the course of this inquiry, it was not appropriate for the Prime Minister to conclude on the basis of Dr Parkinson’s original investigation that Mr Pyne and Ms Bishop were not in breach of the Statement of Ministerial Standards.
The committee recommends, in light of the new information uncovered by the inquiry and media reporting, the Prime Minister should request the incoming Secretary of his Department to re-open the investigation of Mr Pyne and Ms Bishop to determine if they have breached the Statement of Ministerial Standards.
The locus of responsibility
Dr Parkinson has had a long and respected career as a public servant. He has been trusted by governments of all political persuasions to undertake important work with diligence and discretion.
The committee does not believe that the deficiencies in Dr Parkinson’s investigation reflect in any way upon him. The committee is confident that Dr Parkinson did the job the Prime Minister expected him to in the manner expected by the Prime Minister. The problem lies in the Prime Minister’s expectations.
The Statement of Ministerial Standards belongs to the Prime Minister. The Standards are issued on his authority, and rely on his expectations of ministers to uphold its obligations. Standards are not laws. They are able to be applied flexibly. The current Standards make this plain, stating:
This Statement is principles based and is not a complete list of rules.
Ministers are directly answerable to the Prime Minister for their compliance with the Standards. The current Standards, for instance, state at the outset that:
Ministers are expected to undertake whatever actions may be considered by the Prime Minister to be reasonable in the circumstances to meet the general obligations set out above, including the following specific requirements and procedures.
These attributes mean that in practice the treatment of a particular issue says as much about the Prime Minister as it does about the minister in question.
There is no such thing as getting off on a technicality—a close reading of the text of the standards will not help a minister if their conduct breaches a Prime Minister’s expectations.
The Prime Minister’s response to the circumstances of Mr Pyne and Ms Bishop suggests that he either sees nothing wrong with their post-ministerial employment or he is unwilling to exercise his Prime Ministerial authority to determine whether ministerial obligations have been breached.
The committee is significantly concerned that this Prime Minister appears unwilling or unable to ensure his Ministerial Standards are appropriately upheld in relation to Ms Bishop and Mr Pyne.
The precedent set by this Prime Minister’s indifference raises the question of whether he has the political courage to enforce his Ministerial Standards in relation to the conduct of his Ministers currently under scrutiny.
Need for reform
Some submitters to this inquiry have suggested that the conduct of ministers should be subject to oversight by an independent body.
There presently is an external body that does so—the courts.
A minister who abused public office for private ends can expect to find themselves facing consequences under the law.
A significant number of prosecutions have arisen from investigations undertaken by state anti-corruption and integrity commissions. It is time for there to be a federal equivalent.
After a long resistance, the government has finally agreed. However, the proposal put forward by the government lacks details, and the details that have been provided lack the support of experts and practitioners. Australia deserves a proper national integrity commission.
The case for an independently enforced statement of ministerial standards is less well made out.
None of the submitters has identified a deficiency with the current model that could not be remedied by having a prime minister who cared about integrity and was prepared to hold their ministers to account. The Australian people are entitled to expect this.
Proposals to have an external body enforce ministerial standards are still in their nascent stage of development and would face significant implementation issues. For example, unlike other public officials—such as public servants or judges—ministers bring a set of opinions and preferences to their decision making, and are elected because not despite this.
Ministerial standards are ethics, not laws. Their consequences are political, not legal. This is appropriate as they speak to conduct that, whilst not illegal, nonetheless falls short of public expectations.
The Prime Minister should hold his ministers to account. The Australian people should hold him to account if he does not.