Interesting Conflicts of InterestPosted: March 9, 2013
My mum, Kay Rollison, is now blogging under her own name on the Australian Independent Media Network and is also guest blogging on this blog. Here is her latest:
In a recent post, I noted that the final report of the Queensland Audit Commission, chaired by Peter Costello, had recommended a ‘sell everything’ approach to Queensland government assets, in particular electricity assets and some elements of the health care system.
This hardly comes as a surprise; if you really want an independent assessment of the state’s economic prospects, you don’t ask a Liberal ex-Treasurer and member of the HR Nichols society to do it for you. Privatisation is a tenet of neoliberal ideology; just have a look at the website of the Institute of Public Affairs. I use the word ‘ideology’ advisedly, as it seems to be blind faith in the free market that drives the thinking behind the report rather than a reasoned assessment of the true economic consequences of such a move. The report hasn’t been released in full yet, but I don’t expect, for example, to find a detailed argument in it about the pros and cons of carrying debt that is more than covered by returns. It’s also worth remarking that free market objections to government monopolies don’t seem to apply to private ones.
But what if there is more to it than ideology? What if privatisation is also about return on investment for party donors and supporters? If so, shock horror, wouldn’t there be questions about conflict of interest?
Fascinating as the story of Queensland’s Audit Commission is, it ought, on the scandal scale applied by the media to the Labor Party, to be totally eclipsed by a different story –yes, one about conflict of interest. Of course it isn’t, at least as far as the Murdoch press is concerned. Journalists writing in The Sydney Morning Herald, however, have revealed that Peter Costello is being accused of having a major conflict of interest in what he has recommended for Queensland. An unnamed former liberal party donor has lodged a complaint with Queensland Crime and Misconduct Commission to the effect that Costello’s lobbying business, ECG Advisory Solutions, has a number of clients in areas such as the management of electricity assets, who would directly benefit from the privatisation he has recommended. These include our old friend Serco (Serco Asia Pacific this time). A post on MacroBusiness says ‘Expect the friends of the government to make a mint during the privatisation process.’ Who would have thought?
Quite by chance, conflict of interest issues are being raised in another LNP state government. Ted Baillieu has suddenly decided to spend more time with his family. Has his attempt to impose greater transparency on political donations irked his Liberal colleagues both inside and out of the parliamentary party? In 2011 Baillieu introduced a fund-raising code of conduct for MPs which prohibits Ministers meeting one-on-one with party donors. Never mind that it’s nudge nudge wink wink; any astute politician or lobbyist can easily subvert the rules. Even so, it interrupts business as usual, which can’t be allowed to happen, so maybe Baillieu gets the tap on the shoulder? It was stated on the ABC’s Thursday evening 7.30 Report that Upper House Planning Minister Matthew Guy’s supporters were gathering numbers for a challenge to Baillieu, so maybe he jumped before he was pushed. You can read about some of the conflict of interest antics of Matthew Guy in The Age – secret fund-raising events with developers whose projects may require Ministerial approval, and zoning irregularities.
Nasty as all this is, these local examples of benefitting mates are completely eclipsed by the scale of it in the UK. As I wrote in a previous post, now that most of the UK government assets have been flogged off, the Conservatives have turned their attention to selling services, such as the National Health Service. Watch this video, which uses publicly available information to document just how much companies that have benefited from the sale of services have contributed to the Conservative Party. Ramsay Health Care’s $100,000 to the Liberals in 2010/11 looks puny in comparison. (And thank you to the reader of my previous post who pointed out that Paul Ramsay Holdings gave $505,000 to them. Now that’s more like it).
Reading about all this recalled the words of the late and great historian Tony Judt, who coined the phrase ‘privatisation as kleptocracy’ to describe the obscene profits made from the sale of former Soviet Union state owned assets to various mates. The scale was greater there, but the principle is the same. Of course Labor privatised assets, though selling them for too little to multinationals, rather than cronyism, is often the complaint about their processes (in addition to oppositions to selling them at all). And I can’t deny that state Labor government decisions have benefited mates – though it should be noted that the contract to run Sydney Water that so enriched the Obeid family was given to them without tender by a Liberal state government. Benefiting mates is an age-old political practice. But only the Liberals and their free market apologists dress it up and sell it as being for the public good – whatever other motives they may have.
It’s all too easy to say that politics is a dirty business and leave it at that. My point is that when selling off assets and services is a party’s main policy, it institutionalises conflicts of interest that might otherwise be sporadic and controllable. We know that Tony Abbott is promising his own Audit Commission, details to be announced after the election should he win it, and it’s not rocket science to figure out that it will about as independent as the Queensland one. His mates must be rubbing their hands.
PS. Here is a good article about why privatisation of electricity assets by either Labor or the LNP is a crock.
By Kay Rollison