Friday, September 28, 2012

Get rid of secret deals

There's a simple way to stop governments and businesses going to court to keep their deals between each other secret.  This week The Australian Financial Review has been in the NSW Supreme Court trying to get the federal Industry Department to reveal the details of the government's subsidies to the car companies.

Put simply, the Gillard government is using taxpayers' money to pay lawyers to argue that taxpayers should not be told why taxpayers' funds are being handed over to Ford, General Motors and Toyota.

The way to overcome this is easy.  It should be mandatory for all governments (federal, state and local) to publicly disclose all payments to external parties.  And the terms and conditions of those payments would also be disclosed.  External parties would include corporations, trade unions and non-government and international organisations.

There are laws against what's called secret commissions which aim to stop companies paying bribes.  But if the bribe is big enough and obvious enough the rules that apply to everyone else don't apply to government.  And in Australia there's no bigger bribe than the $1.2 billion paid last year by the government to the automotive manufacturing industry.

The main objection to disclosure of government payments is that commercially sensitive information about the recipients may be made public.  It's quite possible that if the Financial Review wins the right to publish the advice that the public service gave to Industry Minister Greg Combet, information could be released that the car companies would prefer to keep confidential.  But that's bad luck.  If a company doesn't want commercially sensitive information to be disclosed then they shouldn't take taxpayers' cash.

Governments have been allowed to hide behind the convenient phrase ''commercial-in-confidence'' for too long.  State politicians are serial worst offenders.  For years successive Victorian Coalition and Labor governments refused to reveal how much they paid Bernie Ecclestone for the privilege of holding a car race.  Two days ago we found that this year's Formula One Grand Prix cost the Victorian government $56 million.  When the figure was announced the sky didn't fall in.

In a liberal democracy like Australia, secret deals between governments and business have no place.  One of the reasons liberal democracy works is because by making the activities of government transparent, government is held accountable.  Even if there's no outright corruption, there's the possibility that without accountability for what they do, public servants and ministers will be more generous in handing over taxpayer funds than they would otherwise be.

Secrecy now pervades a growing range of government activities.  The secret negotiations on the mining tax between the federal government and BHP Billiton, Rio Tinto and Xstrata were an appalling abuse of the legislative process.  The government secretly disclosed to these three companies the details of the tax, yet did not reveal this same information to any other company liable to pay the tax.

A few months ago, the Prime Minister wrote to Australia's media proprietors offering them the chance to negotiate with her over the government's proposals to regulate the media.  This letter has not been made public.  I had made a request to get that letter under freedom-of-information laws.  So far the request has been refused.

When the head of the Business Council of Australia complained last week about out-of-control ministerial advisers she made headlines.  However, on the list of problems of public administration, that ranks about 77th.  If a deputy secretary of a department with 25 years' experience in the public service can't handle a 23-year-old press secretary shouting at them over the phone at seven o'clock in the morning then that deputy secretary is in the wrong job.

Secret deals between government and business are a far bigger threat to democracy than the behaviour of ministerial advisers.  But business leaders aren't going to speak out about secrecy because so many of them are beneficiaries of their own secret deals with government.

As this newspaper said earlier this week, Kevin Rudd pledged to end the ''culture of secrecy''.  That promise has gone the way of those other promises like taking a meat axe to the public service, and stopping all the reckless spending by the federal government.

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