It's hard to find an Australian who doesn't have an opinion on the post-ministerial employment of Christopher Pyne and Julie Bishop, who, until recently, were the defence and foreign affairs ministers. All shades of view appear on the spectrum, from those of former deputy prime minister Barnaby Joyce to Department of the Prime Minister and Cabinet secretary Martin Parkinson.
Many opinionistas apply to Pyne and Bishop what they call "the pub test": an Australian version of the British "man on the Clapham omnibus" although much worse, as it could be hoped that half of the omnibus's passengers would be sober, at least in the morning.
Can we ban "the pub test" from Australian life, with those who use it subjected to lengthy confinements in a super-max prison? Why should any matter be arbitrated by a random "cohort" of tipplers whose judgment is impaired by alcohol, some seriously? This is one of the most irresponsible inventions of the modern age, along with citizens' juries, accrual accounting for public service departments and the delivery of pizzas via drones. This "test" puts aside consideration of matters on their merits in favour of a judgment equivalent to a mob of unruly inebriates pulling opinions from the alcoholic haze. It's intellectually lazy and arrogant, and those on the end of such boozy verdicts can expect rough justice. Enough, please.
But back to Pyne and Bishop.
From July 2016 to May 2019, Pyne was the minister for defence industry and then the defence minister. He left Parliament at the last election. In June, EY (formerly Ernst & Young) announced it had "established a relationship" with Pyne for him to "provide occasional high-level strategic advice". EY has lots of defence contracts, but Pyne said "I am looking forward to providing strategic advice to EY, as the firm looks to expand its footprint in the defence industry" - that is, in the industry whose "footprint" Pyne has been expanding for the last three years.
Bishop was minister for foreign affairs from September 2013 to August 2018, when machinations in the parliamentary Liberal Party plonked her on the backbench; collateral damage in Malcolm Turnbull's undoing. She, too, left Parliament at the last election. In July, Palladium, a provider of international development programs with dozens of aid contracts with DFAT, announced Bishop had joined its board of directors.
The Statement of Ministerial Standards, which Prime Minister Scott Morrison re-issued in August 2018, says: "Ministers are required to undertake that, for an 18-month period after ceasing to be a minister, they will not lobby, advocate or have business dealings with members of the government, Parliament, public service or Defence Force on any matters on which they have had official dealings as ministers in their last 18 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."
The standards also say the prime minister may refer matters arising under them "to an appropriate independent authority for investigation and/or advice", and that he/she "may seek advice from the secretary of the Department of the Prime Minister and Cabinet on any matters within these standards at any time".
These rules are hopelessly inadequate. They're vague and ambiguous, they focus insufficiently on conflicts of interest, they provide a single remedy of a blanket 18-month prohibition and they don't contain a satisfactory procedure for ministers to have their cases considered.
In the circumstances, Pyne and Bishop could be semi-excused for not asking Morrison about their new jobs before taking them on, and it appears they didn't. Their cases were only officially considered after they'd been chased by the hounds of enraged public opinion. Then, Morrison didn't refer them to "an appropriate independent authority" but to his department's secretary, Parkinson, who is subject to prime-ministerial direction and who holds his position on the prime minister's indulgence. That's an unattractive example of the extent to which standards of governance have eroded.
Parkinson was put in an awkward position. He shouldn't have been asked to investigate the Pyne and Bishop cases, and he was required to do so on the basis of rules through which trucks can be driven. Thus, in a report to Morrison on July 19, Parkinson gave the former ministers the "all-clear". His report, however, is materially flawed and it's little wonder the question of the former ministers' compliance with the standards was referred to the Senate's finance and public administration committee.
On the ABC's 7.30, Parkinson gave a glimpse of the attitude he brought to his task, saying "it's almost the case that ... people who are critical of former ministers are really implicitly saying ministers should never be allowed to hold a job again. No prime minister can ever work again because they cover so many issues. No treasurer could ever work again because they're involved in so many issues ... it's just a case where people have not thought through enough about what is actually required."
It's true that many comments on the Pyne and Bishop have not been "thought through enough". However, it's hard to find in those comments, no matter how silly, either implicit or explicit suggestions that former ministers should "never be able to hold a job again". And even if Parkinson can cite half a dozen examples, they cannot be used to brush aside what is at the heart of current concerns.
Nevertheless, some of Parkinson's report is reassuring. For example, it contains:
- a statement from Pyne saying he will abide by the standards;
- an EY statement, reported in a newspaper, that it has "rigorous processes and procedures" to ensure Pyne remains compliant with the standards;
- an indication from Pyne that "he will not impart direct or specific knowledge known only to him by virtue of his ministerial position";
- extracts from a newspaper report quoting Bishop saying she is "aware of her obligations" and is confident she'll comply with them (Bishop didn't give Parkinson a written statement);
- reports of a conversation with Parkinson, in which Bishop said her position on Palladium's board would "not extend" to that company's "tendering processes for projects"; and
- a reminder that Bishop ceased to be a minister about 12 months ago.
However, the relevant issues are not "thought through enough" in Parkinson's report.
First, he tells the Prime Minister "there are no specific actions that can be taken by you in relation to former ministers once they have left the Parliament". That's not right.
Parkinson shouldn't have been asked to investigate Pyne and Bishop, and he was required to do so on the basis of rules through which trucks can be driven.
It's open to governments to seek undertakings from private companies about how they will avoid conflicts of interest arising from their employment of former ministers, which, if not given, could adversely affect business relations between government and those companies. This power is central in any system of post-separation employment and was used to great effect with public servants taking up business appointments in the 1980s and 1990s.
Second, not appreciating the power of undertakings from private companies, Parkinson made no direct contact with either EY or Palladium to obtain assurances, preferably in writing, that they will take steps to avoid any conflicts of interest that may arise with their new recruits. Instead, he's relied on media reports for EY and there's nothing comparable from Palladium.
Third, while the report emphasises that the former ministers accepted obligations not to "impart direct or specific knowledge", it did not seek to identify specific matters - e.g. knowledge and awareness related to contractual arrangements on offer or in prospect where the former ministers could give their new employers an unfair advantage over competitors without disclosing any information whatsoever. It also seems no checks were made with the ministers' former departments about such contracts. Conflicts about insider knowledge should be resolved not only by undertakings about disclosing information but by assurances, including from new employers, that former ministers will refrain from involvement where conflicts are possible.
Fourth, undertakings from former ministers that they will not meet with or lobby government officials are all very well but they neglect, as does Parkinson's report, their capacity to advise others to do so in ways that could give unfair advantage to their employers.
Unfortunately, the horse has bolted on Pyne and Bishop, and what they've done may remain controversial. They've sustained self-inflicted wounds, created political trouble and put another dent in the public's confidence in government institutions.
What can be done to minimise a repeat of such misfortunes? As indicated, the current procedures for post-ministerial employment are hopeless and partly to blame for what happened. So the government should turn for inspiration and guidance to the excellent 1979 report of a committee on public duty and private interest, chaired by Liberal Party notable Sir Nigel Bowen, a minister and long-serving Federal Court chief justice.
While Bowen didn't recommend rules for post-ministerial employment, he expressed hope that former ministers "would give careful consideration before taking up any private employment which might reflect on the previous conduct of their public duties or imply the possibility of their seeking to apply influence on their former departments or give the appearance of their being in a position to afford improper advantage to their new employers by reason of their previous position".
He recommended that: "Rules should be adopted which require senior public servants or equivalents, and those in sensitive areas of public employment to obtain official assent if they wish to take up employment within two years of resignation or retirement from public employment in the following businesses:
- those in or anticipating contractual relationships with the government;
- those in which the government is a shareholder;
- those in receipt of government loans, guarantees or other form of capital assistance;
- those in which the officer's department is otherwise in a special relationship; and
- those associations whose primary purpose is to lobby ministers, members of Parliament, and government departments and authorities."
Bowen suggested consideration of applications for assent that would have regard to:
- the importance and sensitivity of the official position held;
- the nature of the outside appointment and its relationship to the official's former position;
- the relationship of the firm concerned with the government; and
- the period during which information gained or contracts made with the public service would continue to be of value to the official and his new employer.
Bowen felt that blanket bans, such as provided in the current Statement of Ministerial Standards, should be used as a last resort, but with approvals to take up outside employment being conditional on undertakings, including by outside employers, for individuals not to be involved in activities that could give rise to conflicts.
These procedures were adopted in the public service and they worked well. They put the onus on individuals to make applications where there were possibilities of conflicts and they provided a graduated response to avoiding conflicts, such that it was largely unnecessary for blanket bans on individuals taking up outside employment. Sadly, these procedures seem to have withered on the vine - another example of the erosion of governance in the Commonwealth.
Another of Bowen's procedures, however, could easily be adapted for ministers, with applications for assent to take up outside employment being considered not by the PM&C secretary but perhaps by the auditor-general or some properly independent authority. If the Prime Minister wants to avoid the damage and irritation of repeats of the Pyne and Bishop cases he, should fix the ministerial standards in line with Bowen's recommendations. As Morrison is fond of saying: "How good would that be?"
- Paddy Gourley is a former senior public servant. email@example.com