"Rank hypocrisy of the highest order" was the accusation levelled at the Australian Labor Party by the Finance Minister, Simon Birmingham, when commenting on Labor's growing list of campaign promises in marginal electorates. After constant attacks on the government over the pork-barrelling of community grants, for example "sports rorts" and "community carpark rorts", Labor was now courting voters with offers to fund popular community projects in its own set of must-win seats.
In response, Labor finance spokesperson, Katy Gallagher, argued during Senate estimates in February that the comparison was unfounded. The government had established community grants programs whose rules it had then deliberately broken for political purposes. Labor, on the other hand, being in opposition, had no access to public funds and was merely committing to future expenditure which would be subject to the normal public service vetting.
Who is right? On the one hand, Labor's case is strictly speaking correct. The opposition has not yet breached any rules or even committed to doing so in the future. There is no evidence that their commitments, if implemented, would necessarily incur the scathing criticism that the Auditor-General made of the government's programs..
On the other hand, the overall charge of hypocrisy resonates. The Auditor-General's reports have stimulated widespread public revulsion at the whole practice of targeting local expenditure for partisan advantage. Labor has been happy to ride this popular wave for its own purposes, linking it to concern about the government's lack of accountability and to the case for a federal anti-corruption agency. Many Labor sympathisers may now be disturbed to see their own side of politics engaged in what appears to be the very practices that they thought it was opposing.
Debate over community grants rorting has been over-simplified from the outset. The Auditor-General's reports have been aimed at clear breaches of existing regulations, including the Commonwealth Grants Rules and Guidelines administered by the Department of Finance. The CGRC require all proposals to be initially assessed by departments in terms of clear criteria based on demonstrated community need before being referred to ministers for approval. Ministers may overrule advice from their officials but only if they give a written justification, presumably in terms of the relevant criteria, and report to the Department of Finance by the end of the financial year. Party-political influence is not ruled out, though the regulations do carry a warning that "the Australian National Audit Office has emphasised that geographic and political distribution of grants may be seen as indicators of the general equity of a grant opportunity". Similar requirements for due process, clear criteria and relevant justifications apply to all local allocations of government funds even if they are not part of a competitive grants program.
Election commitments are the subject of separate regulation. Newly elected governments have the right to implement election promises made to local communities without any requirement for equal treatment between electorates. But decisions need to be consistent with existing policies and programs and justified in the public interest.
The regulations as a whole represent a hard-won and uneasy compromise between the need for procedural fairness and the right of elected ministers to be the ultimate judges of community need. If "pork-barrelling" is understood as targeting localised expenditure for political reasons, the regulations allow for a certain level of pork-barrelling provided ministers follow due process and give an accountable justification for going against departmental recommendations. In the case of competitive grants, the overall distribution should not be too skewed in the ruling party's favour. The structure provides a limited license for assumptions hard-wired into our democratic political culture: that parties promise local benefits to attract votes in individual electorates and that elected governments, if successful, reward their supporters.
As the Auditor-General's reports have demonstrated, Coalition ministers and their offices, with the connivance of public service officials, have destroyed this pragmatic balance by riding roughshod over the relevant regulatory constraints. They have acted without legal authority, sidelined their departments, and blatantly imposed their own political priorities with little or no attempt to offer their own criteria-based justifications. They have acted as if they had free rein to allocate funds entirely as they wished without any due process or accountability.
The solution implicit in the Auditor-General's recommendations is for governments to insist on the proper enforcement of existing regulations, thus restoring the former balance between due process and ministerial discretion. This is the approach officially taken by the ALP. Its parliamentary attacks concentrated on the role of the Prime Minister's office, essentially a side issue. Its positive suggestions have been confined to strengthening existing safeguards. Last year, Senator Gallagher introduced a bill aimed at giving more weight to departmental analysis and recommendations. Ministers rejecting office advice would need to report their decisions to the Finance Minister within 30 days and the Finance Minister would, in turn, table such reports within five sitting days. Beyond these procedural checks, there was no hint that an ALP government would radically reform the award of community grants or the rules around election commitments.
However, the wider public response to the rorting has been more far-reaching and radical. Disgust at flagrant pork-barrelling has prompted suggestions that politicians should leave the award of community grants wholly in the hands of public officials or that the federal government should withdraw altogether from local decisions. Influential members of the integrity lobby have argued that any distribution of funds to localities on the basis of party-political advantage is against the public interest and a form of corruption. The solution is the establishment of an effective independent anti-corruption commission that would constrain the misuse of funds for partisan purposes. In significant sections of the public and the media the connections have become fixed: localised government expenditure designed to assist a party's electoral chances is corrupt pork-barrelling which only a federal ICAC can fix. Conversely, support for a strong ICAC means opposition to the most egregious form of government corruption which is pork-barrelling.
This black-and-white view leaves little room for previous understandings that a degree of politically targeted decision-making is acceptable so long as it is procedurally constrained and provided ministers offer an explicit defence in terms of their own view of community need. Indeed, the current compromise has found few public defenders. Ministers cannot endorse it without drawing attention to their own glaring breaches of the relevant rules. Senior public servants are unwilling to stand up for procedural integrity against their political masters. Media commentary, for the most part, is unconcerned with detail and nuance, preferring simplistic anti-corruption narratives (colour-coded spreadsheets etc).
Labor, which has been planning a normal election campaign with a series of localised commitments in selected electorates, now finds itself exposed to charges of hypocrisy. Critics who look on all forms of pork-barrelling as illegitimate see Labor as no better than the government. How can it be in favour of a federal ICAC while still promising benefits for electoral advantage?
Senator Gallagher has been claiming that Labor's promises could all be implemented in accordance with existing procedures if it wins office and gains access to the relevant departmental advice. But she cannot deny that Labor will be emphasising promises to must-win marginal electorates. Any attempt to argue that a certain level of targeted expenditure is fully allowable within existing regulations, which is actually the case, faces charges of hypocritical hair-splitting.
Labor could have seen this coming and done more to distance itself from the more radical arguments of the integrity lobby. It could have emphasised its precise points of difference with the government (wholesale disregard for procedural integrity) while stressing that it still accepts much of the current system on which traditional election campaigning depends. Instead, it willingly fanned the flames of anti-corruption sentiment and is now in danger of reaping the whirlwind.
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