Public Sector Informant: New Labor government faces test on integrity reforms

The Coalition government brought this result on itself by stubbornly refusing to introduce an effective anti-corruption commission in the face of flagrant pork-barrelling and abuse of process. During the campaign, Scott Morrison had doubled down on his opposition. He described the NSW Independent Commission Against Corruption as "a kangaroo court" and even cast doubt on the need for the Coalition's own half-hearted model.

But his comments simply strengthened the resolve of his opponents, especially the teal independent candidates for whom integrity had become a bedrock issue along with climate change and equality. Morrison's deeply-held conviction that matters of integrity, accountability and truth-telling do not resonate beyond the Canberra bubble was exploded.

The new federal anti-corruption commission will be the culmination of a decade-long campaign, begun by the Greens and later helped along by the Australia Institute, Transparency International and other integrity interest groups. The Australian Labor Party was a comparatively late convert to the cause, having previously shared a Canberra consensus that corruption was not a pressing issue at the federal level. Labor signed up before the 2019 election and was well-placed to exploit the recent anger at the Morrison government's pork barrelling.

An anti-corruption commission will be a valuable addition to the group of federal integrity agencies which include the Audit Office, the Ombudsman and the Office of the Information Commissioner. (It will probably absorb the functions of the Australian Commission for Law Enforcement Integrity.) As outlined in Labor policy, the commission will have broad jurisdiction over the public sector with the power to initiate its own inquiries as well as respond to referrals. It will be able to hold public hearings when justified and will be independently responsible to a bipartisan parliamentary committee.

However, the role that an anti-corruption commission can play in strengthening government integrity should not be exaggerated. Supporters of a commission have tended to claim it as a solution to every instance of unethical behaviour by ministers and public servants. This has made for effective advocacy but it has greatly inflated public expectations of the possible impact of an anti-corruption commission.

For instance, during the election campaign it was frequently assumed that an anti-corruption commission would put an end to electoral pork barrelling. This is most unlikely. If such a commission had been in place under the Coalition government, it could certainly have followed up possible illegalities and flagrant abuses of procedure in the award of sports rorts and commuter carpark grants as identified by the Auditor-General. But it would not have been able to prevent ministers from exercising some politically motivated discretion over grants or from making electoral commitments to communities. The current rules allow ministers to override recommendations from officials, provided they do so transparently and in terms of their own judgment of the public interest. Removing such discretion would be beyond the scope of an anti-corruption commission but would instead require a change in the rules.

In general, anti-corruption commissions are best left to investigate clear cases of individual wrongdoing for financial or political benefit. Prime areas of concern include improper influence on decision-makers, conflicts of interest undeclared or mismanaged, nepotism and cronyism in appointments, and breaches of rules relating to the letting of government contracts. But other aspects of corruption are more systemic and structural, for instance regulations relating to political donations, payment for access to ministers, lobbying and post-employment. In such areas, the fight against corruption must begin with the relevant regulatory regime which is determined by ministers and Parliament not by any integrity agency.

Even within a limited role, a federal anti-corruption agency still has plenty of potential scope. Morrison argued during the election campaign that the federal government has no need for an anti-corruption commission because it does not have the same exposure to corruption as state and territory governments which are involved in major development and planning decisions. Similar views have been common among ministers from both sides of politics and among senior public servants. But such comfortable complacency is no longer tenable. Given the large sums of public money involved in federal government decisions and the opportunities offered for major commercial gains and personal enrichment, a powerful and well-resourced commission is needed to investigate and prevent abuses of government power.

Even so, the new Labor government should not assume that, once an anti-corruption commission is established, it can tick the integrity box and move on to other policy areas. An anti-corruption commission can only be a first step not the final destination. A broad integrity agenda, as demanded by those who supported the Greens and independents, will require action on a number of policy fronts. In particular, Labor will need to consider curtailing some of the unfair advantages available to incumbent governments which it has been accustomed to exploiting itself.

One obvious case is the awarding of local grants for electoral advantage and the whole question of pork barrelling which has been so central to making integrity a major election issue. As already mentioned, current official policy, trashed by the Coalition, represents a compromise between bureaucratic assessment and ministerial discretion. Officials assess and recommend but ministers can overrule. The policy also includes a separate set of rules allowing specific election commitments to local communities, provided they comply with certain procedural constraints. This remains Labor's preferred policy, as demonstrated when Katy Gallagher introduced a Senate bill last year aimed at strengthening the obligations on ministers to disclose any departure from officials' recommendations.

But this compromise, even if honestly administered, will not satisfy the integrity campaigners, now well represented in Parliament. They will be expecting a significant reduction in opportunities for ministers to channel funds to their own supporters or to must-win marginal electorates. The whole practice of allocating federal funds to local communities will need to be radically cut back. Alternatively, ministers will need to be removed altogether from allocating such funds. Either option requires a major rethink of how major parties, both Labor and the Coalition, conduct electoral campaigns. How Labor approaches this issue will provide a good guide to how seriously it takes the demand for integrity.

Another area where Labor will face a potential conflict between partisan self-interest and government integrity is in the general exercise of patronage such as appointments to statutory authorities and the letting of government contracts. The Coalition shamelessly abused the power of an incumbent government to reward its supporters wherever possible. Now it's Labor's chance. A long queue of Labor party faithful and generous donors, having helped to dispatch the Coalition from the public trough, will be lining up to take their expected turn. But any blatant favouring of Labor mates will quickly raise the ire of those hoping for higher standards of governance.

Similarly, current Labor ministers will eventually start looking forward to a lucrative life after politics, passing straight through the revolving door to exploit their inside knowledge in the shadowy world of lobbyists and influence peddlers. But these expectations will come up against demands from the integrity lobby for stronger rules governing post-employment, such as strictly controlled "cooling-off periods" before taking up employment relevant to one's previous pubic duties.

Other contentious areas where Labor will be tempted to cling on to the unfair advantages of incumbency which it has enjoyed in the past include official information and government advertising. Labor's approach to all such issues will be closely scrutinised. Its hard heads will argue that it needs all available weapons for the bruising contest ahead. But if it disappoints the integrity lobby it risks alienating many of those who helped it to victory.