Parliamentary Ethics Adviser
Consideration of the Legislative Assembly's message of 8 June 2006.
Debate resumed from 5 September 2006.
Ms LEE RHIANNON [11.09 a.m.]: This Legislative Assembly motion about the activities of ex-ministers and ex-premiers is totally inadequate. It provides no solution to the increasing propensity of ex-ministers and ex-premiers, on leaving the public sector, choosing to take their knowledge of the networks and the workings of government to the private sector. The people of New South Wales have been reminded time and time again that rules need to be in place that determine when ex-ministers and ex-premiers can take up corporate jobs. The quick exit to the private sector of the likes of Bob Carr, Nick Greiner, Richard Face and Craig Knowles has been an embarrassment to the major parties. But when it comes to Labor in this motion today we clearly see that it is wishy-washy.
The action of those ex-ministers—the rush to work for the private sector—damages not only the major parties but also the democratic process. People become more cynical about the role and independence of our leaders. The Greens have no trouble with anyone taking up jobs with the private sector: the issue is the timing of it. We need substantial restrictions on the conduct of Ministers when they first leave Parliament. We need a cooling-off period. Other countries have faced up to this problem. The United States of America and Canada have good models. The United States of America places a two-year ban on Ministers taking up positions in areas covering their former portfolio responsibilities, and a breach attracts imprisonment, a fine, or both.
Today the House should be debating legislation to enact such a cooling-off period and not this motion, which is a weak excuse for dealing with a very real problem. The Legislative Assembly passed this motion but it fails miserably to increase the level of accountability for retiring Ministers as recommended by ICAC. The new rules are very weak, nothing more than self-regulation. All they do is require retiring Ministers to ask for ethical advice about their future job prospects. Former Ministers—Bob Carr, Nick Greiner, Richard Face and Craig Knowles—all demonstrated that the self-regulation of ethics does not protect the public from a conflict of interest. The double standards of the Labor Government and the Coalition are clearly on display.
This State has legislation that restricts the jobs that ex-police and liquor and gaming officials can take, but it has no legislation for members of Parliament, who have far greater power and influence. If anyone believed former Premier Carr, this issue would have been solved long ago. More than four years, on 11 February 2003, Mr Carr gave a commitment to ban retiring government Ministers from starting up private consultancies. Mr Carr made his promise six weeks before the last State election. But post-election the former Premier did nothing on this issue. Then in June 2004 the Labor Government was given more reasons to act. ICAC released its recommendations following its investigation into the actions of Mr Richard Face on leaving Parliament. But still Premier Carr did not act.
We had to wait another two years, and all the Government comes up with is this washed out motion which contains no sanctions and no cooling off period. By thumbing its nose at ICAC's June 2004 recommendations, Premier Iemma has failed to deliver on his predecessor's promise. This is ugly politics—ignoring the need to increase public confidence in the process of government so ex-ministers can pick up a nice little earner. Again, I am emphasise this is not about stopping ex-premiers and ex-ministers taking up corporate jobs; it is about bringing in a cooling-off period. ICAC pointed out that Ministers receive substantial incomes and entitlements while in office which provide padding for such a cooling-off period. The potential for corruption is significant when ex-ministers leave Macquarie Street and immediately take up jobs with big business. ICAC recognised that problem and in its report "Investigation into conduct of the Hon. J. Richard Face" it states:
Restrictions on post-separation employment are not exclusively a public sector concern and restrictive covenants in employment contracts are common in the private sector. They typically occur in occupations that rely on specialised technical or professional expertise and are designed to protect the proprietary interests of employers in the information, knowledge or relationships that help sustain their business.
Post-separation employment restrictions in the public sector protect the public interest in two principal ways. They are designed to ensure that government decisions are made on their merits, unaffected by any personal interests of their members or former members. At the same time, by attempting to prevent former public officials taking inappropriate advantage of information or influence acquired in their previous positions, restrictions can also help to minimise unfair competition in business practice.
The report continues:
Post-separation employment restrictions are intended to prevent several kinds of corrupt conduct including:
_ Public officials modifying their conduct to improve their private sector employment prospects, for example, by making decisions while in office to unfairly favour a potential employer;
_ Confidential government information being used to advantage former officials or their new employer or clients; and
_ Former public officials trying to improperly lobby or influence serving public officials to make decisions in their favour.
These proposed guidelines deal only with confidential information; but influence, as ICAC said, is just as important. I move:
That the question be amended by omitting all words after "That" at the commencement and inserting instead:
Reverend the Hon. FRED NILE [11.17 a.m.]: The Christian Democratic Party agrees with Ms Lee Rhiannon and is also concerned about the best way to deal with this very important and sensitive issue, particularly with a State election next March, when a number of Ministers and honourable members will willingly or unwillingly leave Parliament. I believe that the Government's proposals for the functions of the Parliamentary Ethnics Adviser should remain and not be deleted—Ms Lee Rhiannon's amendment would delete them—so that the adviser has a formula to follow. The motion gives guidance to Ministers and honourable member as to what is required of them. I move:
the Government introduce legislation to provide for post-separation employment practices of Ministers and former Ministers in accordance with recommendations 9 and 10 of the Independent Commission Against Corruption report on investigation into the conduct of the Hon. J. Richard Face, dated June 2004.
That the question be amended by inserting after paragraph 5:
2. That the Government introduce legislation to provide for post-separation employment practices of Ministers and former Ministers in accordance with recommendations 9 and 10 of the Independent Commission Against Corruption report on investigation into the conduct of the Hon. J. Richard Face, dated June 2004.
If that amendment were adopted the Government would have to introduce new legislation in place of guidelines. With the dilemma of an election next March the legislation will take some time to draft and it is unlikely it will be introduced before then. However, in the interim the role of the Parliamentary Ethics Adviser would be clearly defined.
Ms SYLVIA HALE [11.19 a.m.]: I support the amendment moved by my colleague Ms Lee Rhiannon. One could well ask: What do Bob Carr, Craig Knowles, Larry Anthony and Michael Wooldridge have in common? At first glance, not all that much. The first two are from the Labor Party and were leading members of the Government that has run this State for the past decade; the latter two were Cabinet members of the Federal Coalition Government, which also has been in power for a decade. But it is in the field of lucrative post-ministerial jobs that we can see their commonalities.
Since leaving ministerial office, all have fallen, if not onto their feet, then certainly into nice, very well remunerated jobs. While I would hesitate to accuse our former Premier of hypocrisy, it was only in February 2003 that he publicly addressed the issue. He assured us that "the concept of a cooling-off period in Federal or State politics ... has some value. I'll have a look at it and make an announcement before the [election] campaign". As we know, he never managed to look too closely at it, but he certainly did manage to gain some lucrative employment for himself with Macquarie Bank after leaving office.
And it was only a year ago that the current Premier, on taking office and trying to pretend that this was a new Government, also promised to look into a code of conduct for Ministers. But, despite the Cabinet Office having worked on options since the 2004 Independent Commission Against Corruption report on Richard Face, Premier Iemma was not quick enough to have them in place before Bob Carr took up his job with Macquarie Bank. And we all know that Macquarie Bank can certainly afford the best ex-politicians that money can buy. In January this year the current Premier assured us that Cabinet would consider new rules "shortly". We can only presume that Cabinet is still considering them.
While other countries have introduced strict laws to govern the employment of Ministers immediately after they leave politics, in New South Wales those proposed laws are like the horizon—forever in the distance, never quite within our grasp. Why do we need laws with such strict provisions? The fact is that departed Ministers enjoy impeccable access not just to their colleagues still in office but also to their former departments. Many senior bureaucrats of those departments may owe their jobs to the Minister's patronage. So it is in this context that we are here today to debate introducing legislation that would put into place recommendations 9 and 10 of the Independent Commission Against Corruption's report on its investigation into the conduct of the Hon. J. Richard Face.
The ICAC report was quite clear on what should be done. It recommended that the Government introduce rules to restrict the range of employment that Ministers can take up immediately after leaving office. Given the examples of not only former Minister Face and former Premier Carr but many others, is it any wonder that public confidence in the integrity of parliamentarians needs to be bolstered? It is to address both the ethical issues involved and to help restore public confidence in us as parliamentarians that we should legislate to introduce the ICAC recommendations. And we need to do this now, not sometime in the never-never. As John Maynard Keynes pointed out when someone assured him that certain things might occur in the short term, if we wait for the short term, "in the long-run we will all be dead".
There is material readily available to assist the Cabinet Office to speed up its rigorous search for the best model. One option is the British model, where, for two years after they retire, Ministers are required to use an ethics advisory service within Parliament before taking jobs in the private sector. In the United States of America a different approach is taken. The 1978 Ethics in Government Act introduced limitations on future employment of members of the executive government, including officeholders equivalent to Ministers.
The limitations are aimed mainly at lobbying and include a permanent restriction on lobbying or advocacy on transactions in which the Government is a party and the official participated "personally and substantially" while in office, plus broader two-year restrictions on lobbying on anything in which the former politician would personally have known about in the final year in office. Penalties are a year in prison, a fine, or both. The restriction can be waived by the President or the Office of Ethics, but only on certain conditions.
At the Federal level in Canada, the system is similar to that in Britain, with Ministers and certain officeholders required to consult an ethics counsellor before taking any offers of employment after they resign. But the Canadian system goes further, making it mandatory for ministers to disclose any offers of employment they received while in office. It also combines elements of the United States regime by imposing a two-year ban on employment with any company with which the former Minister had significant dealings in the last year in public office, as well as more general limits on advising on lobbying on areas of policy for which they were responsible in the year before leaving.
If legislation like this were in place here, perhaps people like Bob Carr, Richard Face, Craig Knowles, Larry Anthony, Peter Reith, Michael Wooldridge, John Fahey and Richard Alston might be financially poorer, but Parliament and its members undoubtedly would be richer in their standing in the community. And, what is more, the Government might also impress the voters!
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [11.26 a.m.]: This is an absolutely extraordinary motion. Indeed, it is made for the satirists. I wonder what Mike Carlton might do with it—if it is not too abstruse for him to have a bash at. The motion provides that if an ethics adviser is asked, he must give advice. It provides further that if he considers the proposition put to him to be unethical, he must refer it to the Presiding Officer. Of course, this assumes that he is asked. If he is not asked, presumably he will not have to do anything.
It is extraordinary that the motion would compel him to give an answer if he is asked. Presumably, someone paid to give advice will give advice. It would be quite extraordinary if he did not give such advice when asked. Anyone who has such a job would do that, if that is what the adviser is paid to do. But the motion says that the Ethics Adviser must give advice if he is asked. It does not stipulate that he has to be asked. So if he is asked and gives advice that the proposal is unethical and then sends it to the Presiding Officer—
The Hon. Jan Burnswoods: He could be she.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: My understanding is that the current holder of the office is a male. I acknowledge the interjection that at some future date the Ethics Adviser could be a female. The point is that if the Ethics Adviser is asked and thinks what is being proposed is unethical, he or she will then contact the Presiding Officer. It might well be that the person taking the position does not want to ask the Ethics Adviser, and does not therefore ask the Ethics Adviser and simply ploughs on—in which case this motion, happily for that person, becomes irrelevant.
I note the comments made by Ms Sylvia Hale about Richard Face, Premier Carr, Craig Knowles, Larry Anthony, Michael Wooldridge, Peter Reith and so on. The motion, of course, does not mention senior public servants. The head of the Cabinet Office, Mr Wilkins, went to a job that certainly involves dealings with government but, since he is a fine chap, it does not matter! The motion must be considered in the broader context. It and legislation should deal not only with politicians but also with senior public servants who skip in and out of direct government employ to positions with major contractors.
Contractors, under private-public partners, have huge dealings with government. Indeed, they have replaced huge chunks of the public service and take over the exercise of their public functions, entering into arrangements that increasingly are subject to Cabinet confidentiality. Suddenly we hear, "This is business, commercial in confidence, and the terms and conditions cannot be transparent." The result is that the public and the Opposition cannot know anything about it. In this environment, it is even more concerning that people moving from government employment into the private sector, and possibly back again, provides immense opportunities for advantage for their employers over other competitors, or venality in what they do.
It is worrying that the former Minister for Housing is criticised for having an interest in a company that bought surplus housing at what would appear to be below market price. The houses were resold at a huge profit in an almost negligible time, which would suggest that the price was not right. Suggestions of a relationship between Ministers and the private sector are of grave concern. The motion is like throwing a feather at a tank. If the satirists get hold of this I reckon they will have a field day. The Greens have moved a very sensible amendment to the motion that Reverend the Hon. Fred Nile has incorporated within his motion to make the original fairy floss motion more hard hitting. However, the Greens amendment does not set a date by which the Government should be ready to enact legislation. Therefore I move:
That the amendment of Reverend the Hon. Fred Nile be amended by inserting at the end "and that a draft of this legislation be made publicly available by 28 February 2007."
It would then become an election issue and we would know the Government's intention. If the Opposition had the courage to do so, it would consider the appropriate legislation and its policy on it.
The Hon. Don Harwin: Why don't you wait until I speak before you say nasty things about the Opposition?
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: I have stated that the Opposition has the choice. I would be delighted to hear Don Harwin take up the challenge and state the Opposition's good intentions. I suggest that a draft should be available by 28 February next year, which is just before the election, so that people can lock in a concrete proposal to the election process. We know very well what the public thinks about this issue. The Greens amendment has improved this fairy floss motion, and my amendment will put some teeth into it in an election context. I commend the amendment to the House.
The Hon. PETER BREEN [11.32 a.m.]: The motion should be supported as it stands. The amendment by the Christian Democratic Party to retain the Ethics Adviser and, at the same time, to enact legislation that requires Ministers to remain out of public employment for two years following their resignation would give the government of the day an option of either referring the matter to the Ethics Adviser or enforcing the legislation. My experience with the Ethics Adviser is that he or she—he, as it is at the moment, Mr Dixon—runs what I would call a very haphazard organisation. I recall writing to Mr Dixon in 2002 about two matters, one being a question about the Sydney allowance. I received a letter from Mr Dixon on exercise book stationery. There was no letterhead and there were no phone numbers on the letter. It was what I would call an unprofessional response to a serious request, which became very important in the subsequent ICAC investigation into my use of parliamentary resources and allowances.
Similarly, in September 2002 Ms Lee Rhiannon and I wrote to Mr Dixon about the Malcolm Jones matter, which concerned parliamentary resources being used to set up front parties. Mr Dixon's response was, in my opinion, very unprofessional and very unhelpful as things turned out. Mr Dixon is not in a position to advise Ministers appropriately to achieve the high standard of responsibility required of those who have served the people of New South Wales and move into the private sector. The opportunities for corruption and paying back old debts are simply too open and too obvious for such a move to be regarded as credible. It is interesting to note that under Nick Greiner the Coalition had a ministerial code of conduct, a copy of which I obtained from the Parliamentary Library.
The Hon. Don Harwin: Have you ever tried to get a copy of the current Government one, or are you coming to that?
The Hon. PETER BREEN: I have a copy of the current Government one. The current code of conduct for Ministers is in the handbook for members.
The Hon. Don Harwin: How old is it?
The Hon. PETER BREEN: It is dated July 1995.
The Hon. Don Harwin: Is it the current one?
The Hon. PETER BREEN: It is the current, enforceable code of conduct for Ministers. As a matter of interest—and the Hon. Don Harwin would be interested in this—it is word for word Nick Greiner's ministerial code of conduct, with the exception of item 7, which is headed "Post-Separation Employment". In other words, under Nick Greiner a ministerial code of conduct in relation to post separation employment was in place. It clearly provided:
A Minister shall not, within two years of retirement or resignation, accept offers of employment from or become otherwise engaged in the internal management of the affairs of persons, companies or other bodies, any of which is here referred to as a relevant organisation.
A number of items are listed, all of which relate to Ministers' conduct being in conflict with the position they held as Minister and their subsequently going into the private sector. It is a rort of their position in Parliament and it is an affront to the people of New South Wales that Ministers would spend time in government, taking money from the public purse, and then use that experience, opportunity and privilege to move into the private sector and, in many cases, double their income. Some proper restraints should be in place.
The recommendation of the ICAC inquiry into Minister Face is a good place to start. The findings of ICAC in relation to Minister Face were an anomaly. Honourable members will recall that Minister Face's problems started when he used a staff member to apply for the registration of either a business name or a company. In that case ICAC found that his conduct could not be termed corrupt conduct, nor was it a serious misuse of Parliament's resources and allowances. The adverse finding in the case of Minister Face related to the taking of stationery and stamps.
It is worth comparing the finding regarding Minister Face with the findings in relation to other Ministers who have left their office, gone into the private sector, and obtained vast amounts of money in excess of what they were receiving as Ministers. As I recall, Minister Face used his own resources to set up his parliamentary office when he was first elected. He believed he was simply getting back what he was entitled to. It is laughable that he should be the subject of a finding of corrupt conduct in relation to the taking of stationery and stamps when one compares those circumstances with, for example, Bob Carr going into Macquarie Bank, Craig Knowles going into his employment, or Ministers of the Crown taking on any other employment as a matter of course.
It was interesting to hear the Treasurer, when leaving the Chamber during debate this morning, use the words "I can't listen to this crap." I suspect that the reason he cannot listen to it is that he knows how important it is for Ministers of the Crown to have some kind of restraint. As things stand, it is open slather for them to leave their ministerial positions, take advantage of their privilege and their important position in the community, go off into the private sector and, in effect, exploit their position and the people of New South Wales. I urge honourable members to support the original motion as moved by the Greens. It should not be watered down, as Reverend the Hon. Fred Nile has suggested, because we do not need an Ethics Adviser who is not in a position to provide—
Reverend the Hon. Fred Nile: I am not watering it down; I am adding to it.
The Hon. PETER BREEN: Reverend the Hon. Fred Nile is providing an option for the Government to either go down the track of the Ethics Adviser or enforce the legislation.
Reverend the Hon. Fred Nile: No, it is not an option.
The Hon. PETER BREEN: In my opinion, that is what Reverend the Hon. Fred Nile's amendment will do.
Reverend the Hon. Fred Nile: My amendment enhances it.
The Hon. PETER BREEN: If that is the position, I withdraw my remarks about the amendment moved by Reverend the Hon. Fred Nile because we need as many enforcement mechanisms in place as is possible. If we have the Ethics Adviser and the legislation, that is a good position and I support it.
Debate adjourned on motion by the Hon. Peter Primrose.