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Political integrity: The parliament, the public service, and the parties: address to the Integrity in Government conference, Melbourne



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Political Integrity: The Parliament, the Public Service, and the Parties.

Integrity In Government Conference, University of Melbourne Law School

John Faulkner

Labor Senator for NSW

4 December 2012

No-one ever argues that governments should have less integrity, that elected officials

should not be accountable, or that public servants should behave unethically. Broad

statements of the value of integrity, transparency, accountability and ethics gain

general agreement from all sides of politics and from all participants in public debate.

But government integrity demands more than general expressions of goodwill.

Enhancing transparency and accountability requires supportive structures as well as

declarations of priorities. And cultivating ethical behaviour needs more than simple,

sweeping statements of expectations.

Nor is integrity in government and in politics simply a declaration of the importance

of individuals behaving ethically.

Of course, they should behave ethically. But, ladies and gentlemen, human nature is

variable, and fallible. Individuals do, from time to time, succumb to temptation or fall

into error. As the eminent thinker, French renaissance essayist Michel de Montaigne

said more than four hundred years ago, “There is no man so good that if he placed all

his actions and thought under the scrutiny of the laws, he would not deserve hanging

ten times in his life.”

It is the responsibility of government, indeed of all institutions, to take that variability

and fallibility of human nature into account in their structures and processes.

Opportunities for, and temptations to, malfeasance must be minimised. Detection of,

and action in response to, unethical behaviour must be swift and it must be certain.

The general responsibility to ensure institutional accountability, integrity and ethical

behaviour, common to public and private sector alike, is the first reason integrity

measures are a key responsibility of all governments. But it is far from the only

reason.

Integrity in democratic governments has implications extending beyond integrity in

non-government organisations.

Politics and parliament are seen by too many as inimical to integrity. There is a

cynicism about politicians and their motives, not only here in Australia, but in many

Western democracies.

This cynicism is corrosive of democracy because it undermines the contract between

elector and elected: it undermines the concept of mandate if citizens cast their vote

without the expectation that their representatives will represent their views or act in

their interest. The electoral process is devalued when citizens have no faith in

government integrity, because the choice between competing policies and programs is

meaningless when there is no expectation such policies will be carried out.

Seen in this light, trust is central to the social contract of democracy. Such trust may

be personal, but it must be institutional: trust that the processes of government, the

deliberation of policy, the mechanisms of transparency and accountability, are robust

enough to ensure performance accords with policy: that deeds match words.

And parliamentary and political integrity is crucial to maintaining that institutional

trust. I am not talking here about the personal integrity of individuals in the political

process, even though that is a necessary component. I am talking about the integrity of

our political system - the processes, the checks and safeguards that ensure

transparency and ethics in the operations and decisions of government.

I have always believed that the accountability, scrutiny and review mechanisms of

parliament are fundamental to our democracy, critical to holding governments to

account and essential for good policy outcomes.

If the test of integrity is failed, if polling takes precedence over principle and

expedience over ethics, trust in not only the individuals involved but in the entire

process of democracy is undermined. This is an acute problem for parties of the left,

whose agenda of reform and progress presupposes a confidence in the electorate that

such reform and progress will indeed be carried out.

The rise of cynicism about politics and politicians benefits - and is encouraged by -

those who seek to trade on suspicion of government. Citizens who haven’t enough

interest in the democratic process to stay even vaguely informed of the issues of the

day have only one profound political conviction: that neither politicians nor a

government comprised of them can be trusted.

That belief makes assertions about the inefficiency of government service delivery

plausible, despite overwhelming evidence to the contrary. That belief undermines

community support for legislative reform and government action to protect the

vulnerable and promote equality. That belief renders vital infrastructure projects

contentious. And in destroying faith in the ability of our political processes to resolve

differences and balance competing interests, that belief sabotages the possibility of

achieving consensus in the face of national challenges.

Labor won government in 2007 with a suite of integrity commitments, and has

enacted a number of important reforms. But there are further key steps the

Commonwealth government can and should take to promote that transparency and

accountability that underpins political integrity and, in doing so, strengthens our

democracy.

The first step is the finalisation of the National Anti Corruption Plan.

The Australian Government is a strong supporter of the UN Convention Against

Corruption (UNCAC) Implementation Review Mechanism as a meaningful way for

nations to identify strengths and weaknesses in their anti-corruption systems.

The process has been taken seriously in Australia.

Earlier this year the review team finalised its examination of Australia’s compliance

with UNCAC, and encouragingly, the Australian government will incorporate the

comments of the review team in the development of Australia’s first Anti- Corruption

Plan.

The report of the Review team highlighted a number of sound anti-corruption

practices in Australia, including:

• the unexplained wealth provisions contained in the Proceeds of Crime Act

2002

• Australia’s development and expansion of a federal non-conviction based

forfeiture scheme

• the comprehensive range of investigative tools for fighting corruption, and

• Australia’s money laundering offences that go beyond the minimum UNCAC

standards.

But, the team recommended Australia continue to consult on and review the

effectiveness of its anti-corruption measures, and it highlighted the urgent need for a

“comprehensive scheme for public sector whistleblower protection and to expedite

access to existing protections for private sector whistleblowers”.

The findings and recommendations arising from the UNCAC review will be

considered as the National Anti-Corruption Plan - announced in September last year -

is further developed.

The Attorney General’s Department has conducted consultations and received written

submissions from a diverse range of academic practitioners, civil-society

organisations and private citizens as part of the Plan’s development.

The submissions provided both valuable analysis of the effectiveness of the systems

currently in place to respond to corruption in Australia, as well as ideas for

improvement.

I understand that many issues received in stakeholder submissions are now being

considered by the Attorney General for inclusion in the Plan, such as:

• The need for whole of government policy leadership on the issue of

corruption,

• The issue of mandatory reporting of suspected corruption, perhaps to the

Ombudsman

• The desirability, or not, of centralising fraud and corruption investigations

• How to integrate corruption into risk assessments

• Consider the breadth and reach of Integrity training needed, and

• whistleblower protections.

These will be important steps in improving and strengthening safeguards to fight

corruption in Australia and I look forward to the publication and implementation of

the Plan being a priority for the Government in the New Year.

The second step is legislation protecting public interest disclosure.

Ladies and Gentlemen, loyalty to a colleague, or immediate supervisor, or even to one's

own self-interest, should not overtake loyalty to the long-term interests of an

organisation, or to the wider public.

For some Australians, there comes a time in their life when they become aware that a

colleague, an employer, an employee, a consultant or contractor is doing something

wrong - perhaps bullying or harassing others in the workplace, perhaps misusing

resources or misappropriating funds, perhaps concealing important information because it

would damage the organisation. In this situation, some people will decide to keep their

heads down, turn a blind eye, not get involved.

But some courageous individuals will take a stand. They will report what they have seen.

They will - often at personal risk or personal cost - ‘blow the whistle’.

We depend on whistleblowers to alert us to misconduct or malfeasance and corruption.

People inside organisations are often in the best position to be the first to know

something is wrong, and their actions in raising the alarm can stop a problem before it

becomes a crisis. They should not have to risk their careers or their mental and physical

health, just to do the right thing.

Ladies and Gentlemen, an effective scheme which enables and encourages genuine

individuals to blow the whistle without fear of retaliation or reprisal is now broadly

accepted as an essential tool for strengthening accountability and transparency and

fighting corruption in the public and private sectors.

An act of retaliation against a protected disclosure of wrongdoing by a whistleblower

should be seen as a serious form of misconduct.

I accept that the current provisions relating to 'whistleblowing' in the Commonwealth

Public Service Act 1999, namely section 16, are limited and inadequate.

An improved and comprehensive legislative framework for public interest disclosure for

the Australian Public Service and the public sector more generally is desperately needed

now.

While the Labor Party has had a long standing commitment to strong whistle-blower

protections we still await the introduction of modern and comprehensive legislation to

deliver on this commitment.

In 2008, the House of Representatives Standing Committee on Legal and Constitutional

Affairs, chaired by Mark Dreyfus QC MP, was tasked to examine whistleblower

protection models and report their findings.

The Committee handed down its Report entitled, Whistleblower protection: a

comprehensive scheme for the Commonwealth public sector, in February, 2009.

The main recommendations of the report were that:

• new legislation be introduced titled the Public Interest Disclosure Bill;

• the primary objective of the legislation be to promote accountability in public

administration;

• the legislation cover a broad range of employees in the Australian Government

public sector including APS and non-APS agencies, contractors, consultants and their

employees and parliamentary staff;

• disclosures to be protected include serious matters relating to illegal activity,

corruption, maladministration, breach of public trust, scientific misconduct, wastage of

public funds, dangers to public health and safety, and dangers to the environment;

• decision makers to have discretion to include other types of allegations even if

they are not initially made through prescribed channels, as long as the whistleblower

shows good faith in the spirit of the Act;

• the scope of statutory protection should include protection against detrimental

action in the workplace, and immunity from criminal and civil liability and other actions

such as defamation and breach of confidence;

• the system comprise a two stage process of internal and external reporting with

the Commonwealth Ombudsman to oversee the administration of the Act;

• agencies and the Ombudsman to have a number of obligations and responsibilities

including the provision of procedural fairness and reporting on the operation of the

system; and

• the legislation be supported by an awareness campaign to promote a culture that

supports disclosure within the public sector, where people feel confident to speak out

when they are in doubt.

The Government broadly endorsed the findings of the Committee in 2010, however, no

exposure draft of a Bill based on the Report’s recommendations has yet been made public

- over three years later.

And here let me remind you that the Report’s recommendations were generally regarded

as sound in 2009, and they were generally consistent with the better whistleblower laws

of most of Australia’s States and Territories which have now been in effect for almost

two decades.

Ladies and Gentlemen, I support the broadening and strengthening of an effective pro-disclosure system across the Australian Government by the introduction of modern best-practice legislation.

It’s past time to get serious about whistleblowing, and whistleblower protection, and

implement the findings of the Dreyfus Report.

It’s past time for an exposure draft of the Government’s proposed Whistleblower

Legislation to be made public.

It is essential that a new, tough Public Interest Disclosure Act be in place at the federal

level of government before the next election.

The third key step the Commonwealth Government should take is to pursue the

introduction of a Code of Conduct for Members of Federal Parliament.

We have a code of conduct for Ministers, for ministerial staff, for public servants, even

for lobbyists. The Standards of Ministerial Ethics - which I sponsored when we came

into Government in 2007 - show that a properly designed Code can be meaningful, and

effective, in setting out public standards of ethics and integrity among Ministers, who are

expected to recognise that public office involves a public trust.

I can see no justification for there being no code which sets out the applicable ethics

standards for my conduct as a Federal Parliamentarian.

It did seem after the last Federal Election there was general agreement to right this

wrong.

Some history:

In September 2010, three independent members of the House of Representatives, and the

Australian Greens, agreed to support the formation of a minority Labor Government.

The introduction of a code of conduct applying to Federal Parliamentarians was part of

the argy-bargy of the negotiations at the time.

Even the Coalition jumped on board.

An “Agreement for a Better Parliament: Parliamentary Reform”, was negotiated and

agreed between the Labor Party, the Coalition and the Independents. It included a clause

to establish a formal code of conduct for Members and Senators.

The clause read - “A cross-party working group and enquiry process will be established

to draft a code of conduct for members of the House and the Senate. Once established,

this code will be overseen by the Privileges Committee”.

The House of Representatives Privileges and Members Interests Committee was tasked to

develop a draft code, consider the role of a Parliamentary Integrity Commissioner in

upholding a code, consider how a code might be enforced, and recommend on what

sanctions would be available.

The House Committee was to consult with the Senate Standing Committee of Senators’

Interests, with the aim of developing a uniform code for the whole Parliament, and a

process for its implementation.

The House Committee reported in November 2011, attaching a draft code of conduct and

observing that there was value in the appointment of an independent Parliamentary

Integrity Commissioner.

In May this year, Independent MP Rob Oakeshott proposed a motion that the House of

Representatives endorse the code of conduct contained in the House Committee’s Report.

That motion languished on the House Notice Paper until last Thursday evening, when in

the last minutes of the Parliamentary year, it was passed 60 - 58.

The Senate made its position clear, also on the last day of sitting this year. The Senators

Interests’ Committee tabled a report recommending the Senate not adopt the code

proposed by the House Committee.

Ladies and Gentlemen, this process has been unedifying.

I am not so unkind to suggest it was designed to fail, but its failure was inevitable.

I strongly favoured the successful Joint Select Committee model used to inquire into the

establishment of a Parliamentary Budget Office - also a commitment made between the

major parties and Independents after the 2010 Federal Election. I urged that the Joint

Select Committee model be the mechanism to progress the establishment of a code of

conduct for Members and Senators.

I failed to persuade my colleagues.

And so we all need to think again - the PBO Joint Select Committee model worked.

I know, I chaired it.

The Joint Select Committee’s terms of reference were clear.

Its reporting time frame brief.

Its representation broad - from both chambers; and from Labor, Coalition, Greens and

Independents.

That Joint Select Committee brought down a unanimous report with 28 recommendations

agreed to by each and every member.

The Government responded, accepting all 28 recommendations.

The Government funded the PBO, in the 2011 Budget providing $24.9 million over 4

years.

Legislation establishing a Parliamentary Budget Office was passed.

The independent PBO is up and running.

This is an integrity measure success story.

Ladies and Gentlemen, Federal Parliamentarians need to get serious about a code of

conduct to apply to them, not because I think Parliamentarians are ignorant or uncaring

about ethics and integrity matters - generally they are not - but because the public at

large is entitled to know that objective standards exist, and that these standards are open

to public discussion, and public assessment.

Openness and accountability, after all, underpin public trust in our system of

Parliamentary government.

I would like to see the Parliament try again on this issue.

We need a Joint Select Committee to inquire into the issue of a code conduct for

Members and Senators and into the establishment of a Parliamentary Integrity

Commissioner.

And, we need this to happen before the next election. The process should start in early

2013, and proceed quickly to a conclusion.

The fourth key step the Commonwealth Government should take is to become a

signatory and support the Open Government Partnership.

Launched last year in New York, the OGP was established to promote transparency,

tackle corruption, invigorate civic participation and, especially important in this digital

age, harness new technologies, so the ideals of freedom and democracy are strengthened

in implementing countries.

As the Open Government Partnership Declaration observes:

“People all around the world are demanding more openness in government, calling for

greater civic participation in public affairs, and seeking ways to make their governments

more transparent, responsive, accountable and effective”.

With its membership now numbering 57, national governments of the Open Government

Partnership commit:

• To be more transparent at every level, by increasing the availability of

information about the activities of government.

• To engage more citizens in decision making, so they participate more actively in

their democracy, thereby making government more effective and responsive.

• To implement the highest standards of professional integrity throughout

administrations, and

• To increase access to new technologies for openness and accountability.

Though it goes by the name “Open Government Partnership” - it is in equal measure a

partnership with civil society.

Government does not have a monopoly on wisdom.

The commitments of OGP member states are put into practice by working with civil

society organisations to implement concrete plans of action.

Already the OGP is setting a new global standard for good governance.

The OGP roll call of democracies committed to strengthening a global culture of

transparency and accountability includes some of our oldest friends: the United States of

America, the United Kingdom, Norway, and Canada.

I am disappointed that Australia is a notable absentee.

The Australian Government has indicated that it is considering the detail of the initiative

but has so far reserved its decision on participating in the Open Government Partnership.

Given the Government’s stated commitment to transparency, accountability and good

governance, we should not hesitate to join this international effort to promote these

fundamental values.

Australia has always embraced and benefited from participation in international

institutions and initiatives.

We should seize the opportunity to do the same with the OGP.

It is ironic that the largest recipient of Australia’s overseas development assistance,

Indonesia, is a very active member of the Open Government Partnership and currently a

co-chair, yet, Australia is nowhere to be seen.

When other recipients of Australia’s aid, such as the Philippines and Tanzania, are also

members, I find it very hard to justify Australia’s absence.

Membership of the Open Government Partnership would assist Australia to spread values

of transparency and accountability in our region - a region where 22 of Australia’s 24

nearest neighbours are developing countries.

In light of the Gillard Government’s recent Asian Century White Paper and Australia’s

new role as a member of the UN Security Council, Australia should utilise the OGP to

encourage and support continuing efforts in our region to strengthen democratic

processes and encourage greater scrutiny of government.

Australia has a wealth of knowledge and experience to share with other nations who

comprise the growing Open Government Partnership.

For example, last November the Government unveiled a new Transparency Charter,

which now publishes, online, detailed current information and results about what our aid

program is delivering.

Internal audit reports and strategic direction documents are also being published online.

Against this backdrop it is not surprising our Agency for International Development -

AusAID - was recently ranked 18 of 72 donors in the 2012 AID Transparency Index

developed by Publish What You Fund - The Global Campaign for Aid Transparency.

Encouragingly, the report notes that AusAID had improved its transparency score by 31

percentage points and its rank by 16 places, but, it also made quite clear that Australia

should consider joining the OGP.

One example of an international transparency and accountability initiative which

Australia has committed to is the Extractive Industries Transparency Initiative or EITI.

At last year’s Commonwealth Heads of Government meeting in Perth, Australia actively

urged leaders to recognise the importance of sustainable natural resource management

and commit to the EITI.

The EITI promotes better governance in countries rich in oil, gas and minerals by seeking

to reduce the risk of corrupt diversion or misappropriation of funds generated by the

development of a country’s resources.

Australia is a member of the EITI Management Committee and has so far committed

$17.45 million (2007 to 2015) to the World Bank administered Multi-Donor Trust Fund

and the EITI Secretariat.

With the only other EITI-compliant country in our region being Timor Leste, the OGP

would provide an excellent opportunity for Australia to encourage our other developing

resource-rich neighbours such as Indonesia, Papua New Guinea, and the Solomon Islands

to sign on.

The OGP presents a great opportunity for Australia - a technologically advanced and

open democracy - to underpin future commitments to openness, transparency, and

accountability through engagement with an internationally recognised and respected

multilateral initiative. Membership could only strengthen our democracy and governance.

Through the Open Government Partnership we can advocate strongly for more openness

in other nations while enriching our own.

The time for Australia to join is now.

The fifth key step for the Commonwealth Government is electoral funding reform.

Ladies and gentlemen, In a democracy, where the ultimate accountability is to the public

through the ballot box, the fair, open and transparent operation of our electoral system is

of paramount importance. Public confidence in the integrity of our democracy rests on it.





In Australia, as in other democracies around the world, the potential for political

donations and campaign financing to go undisclosed has become more and more a matter

of concern.

Public perceptions of the potentially distorting nature of large donations - either in cash

or in kind - to candidates and political parties degrades public trust in the integrity of

both the political process, and what should be its two main outcomes - well considered

policy and effective laws.

The perception of undue influence can be as damaging to democracy as undue influence

itself.

Confidence in government processes and policies can be undermined.

The public is left wondering if decisions have been made on their merits, and in the

public interest.

The full and timely disclosure of donations to election candidates and political parties can

address these concerns.

Following a report of the Joint Select Committee on Electoral Reform after the 1983

Election, public funding of election campaigns and laws governing the disclosure of

political donations commenced in 1984.

The new disclosure regime was opposed by the Coalition, and since that time, there has

never been a bi-partisan approach to setting the threshold level at which a political party

or donor must disclose a donation.

In 2006, in the dying days of the Howard Government, the Electoral Act was amended to

increase the disclosure threshold from $1500 to $10,000, with annual indexation. That

figure now stands at $12,100

In 2008, as Special Minister of State, I released a Green Paper on reform to political

donations, funding and expenditure.

The Green Paper clearly identified my concern that the spiralling cost of electioneering

had created a campaigning ‘arms race’ - heightening the pressure on political parties and

opening the door to the buying and selling of access and influence.

In 2008, I introduced legislation to tighten electoral disclosure laws. It was defeated in

the Senate.

That legislation contained reforms including:

- a dramatic reduction in the threshold for the disclosure of donations to $1000,

- Measures to avoid donation splitting between different branches of political

parties, and

- Prohibitions on anonymous and foreign donations.

A revised version of the Bill was passed by the House of Representatives on 16 March

2009. The Second Reading of the Bill was moved in the Senate on 17 March 2009, and

no further action was taken, as the Coalition with the support of the Family First Senator

had sufficient numbers to block the bill. That Bill lapsed at the end of the last Parliament.

After the 2010 election, the Gillard Government re-introduced very similar legislation. It

passed the House in November 2010 and was introduced to the Senate on 17 November

2010.

On 11 May 2011, the Senate tasked the Joint Standing Committee on Electoral Matters to

report on options to improve the system for the funding of political parties and election

campaigns.

The Committee was asked to examine a range of matters, including issues arising from

the Green Paper, the role of third parties in the electoral process, and the transparency

and accountability of the funding regime.

Unsurprisingly, evidence presented to the Committee demonstrated that a higher

disclosure threshold level meant a great number of donations received by political parties

were hidden from the public.

Analysis by the Parliamentary Library revealed that, when the threshold was set at $1500

the major parties were revealing 75 percent of their receipts.

But only half of their receipts were revealed when the threshold was raised to $10,000.

Of course, it’s just common sense. The higher the mandatory disclosure threshold for

political donations, the less openness there will be, and the greater will be the undisclosed

funding channelled to political parties.

During the hearings, the Chief Legal Officer of the AEC also made it clear:

“the lower the level, the more that is disclosed. That is a question of fact and I think the

evidence in the past bears that out.”

In its Report, the Committee noted that there is a balance to be struck between, on the one

hand, the private interests of donors and their freedom to legitimately participate in the

political system and, on the other hand, the public interest in ensuring transparency and

accountability of the financing of political parties.

The Committee recommended the threshold for disclosure of political donations be

reduced to $1000.

The Joint Committee also recommended reforms that would:

• introduce six-monthly disclosure of donations and political expenditure, rather

than just annual disclosure;

• introduce ‘Special Reporting Event returns ’ for donations over $100,000 so they

are disclosed within 14 days and made public within 10 days of disclosure to

the AEC;

• ban foreign donations totally, and ban anonymous gifts of over $50;

• close a loophole where multiple donations below the threshold to different

branches of the same party can be hidden;

• amend the definition of “gift” to include fundraising events, also closing a clear

loophole in the existing disclosure regime; and

• make the entitlement to receipt of public funding of political parties for elections

more accountable, by tying it to verified electoral expenditure, so that

candidates are not able to make a financial gain from public funding.

These recommendations were, and still are, strong and appropriate.

They are consistent with my earlier unsuccessful efforts as Special Minister of State to

tighten our funding and disclosure laws.

The agreement reached between the Labor Party, the Greens and the Independents before

the Government was sworn in included a clause to progress the substantive measures in

the Government’s previous electoral Bills, and, after a Committee inquiry, to deal with

legislation in 2012.

There is no excuse for further delay on these important integrity reforms.

The legislation is mostly drafted, the issues have been widely canvassed, the arguments

understood and the need for major reform urgent.

This needs to happen before the end of the current Parliament.

Ladies and gentlemen, transparency around political donations is vital to maintaining

public trust in our political system because our electoral processes are a fundamental

part of our democracy.

So too, political parties have an essential role in Australia’s political system. Very

early in Australia’s history as a nation, political parties became fundamental to the

electoral contest and to the formation of governments.

Political parties also have a privileged position in our electoral system.

Anyone can run for public office, but a registered political party can be formally

recognised on the ballot paper, nominate multiple candidates, and receive public funding

for its election costs if its endorsed candidates receive over 4 percent of the vote.

And let’s not forget just how much public funding is potentially available to a political

party.

In the 2010 election, public funding provided $2.31 for each primary vote cast in the

election for both houses of parliament.

Over $53 million was paid out in 2010, with $23.5m going to the Coalition parties, $21m

to Labor and $7.2m to The Greens.

In the past four Federal elections, over $180m of public funding has been dispersed, with

over 80 percent of that funding going to the two major parties in reimbursement of their

election costs.

Political parties also have privileged access to the Electoral Roll, and are exempted from

most of the provisions of the Privacy Act in their use of the Roll, as long as that use is for

‘electoral purposes’.

Donations to registered political parties of up to $1,500 are tax deductible. This tax

deductibility aims to encourage broad civic engagement in politics and public affairs, as

well as to reduce the risk of corruption which can arise where parties’ election campaigns

are funded covertly by wealthy private interests.

These entitlements should entail strict conditions and obligations for those political

parties which qualify for them. Surely it should be essential that parties meet some agreed

minimum standards of openness, transparency, and democratic process - all the more so

given the key role they play in the determination of governments and in public

understanding of our parliament, our government, and the integrity of both.

The time has come for all Australia’s registered political parties to be more transparent

and accountable, not least because Australian electors are entitled, in principle, to be in a

position to choose their preferred candidates on a properly informed basis. What is

unreasonable about that?

Corporations Law and industrial laws place a range of minimum standards and

obligations on businesses, associations and unions.

Those standards and obligations are designed to protect shareholders, members, investors

and consumers, and promote trustworthiness in the Australian business sector.

Of course companies and unions don’t always behave properly or legally, but they can be

held accountable for their actions - through scrutiny in the courts if necessary.

It is now time for political parties to satisfy comparable minimum standards of

transparency and accountability before they are registered, before they become

entitled to public funding, and before electors have to choose between them. I believe

that placing this requirement on political parties is important next step in electoral law

reform.

While I believe that all political parties have a responsibility to ensure their practices

and rules bolster, rather than undermine, public confidence in the integrity of our

political processes, I have, as I’m sure you can appreciate, a particular interest in the

Australian Labor Party, being as I always readily admit, a life-long member of the

NSW Branch and a product of its factional system.

Principles of integrity, transparency, and accountability are crucially important to

Labor’s reforming agenda, because faith in the political process is crucially important

to the necessary consensus building which makes reform possible. And those

principles are crucially important to Labor’s core values of fairness and equality,

because they safeguard our government and our polity against vested interests, self-interest and unfair advantage.

For these reasons, when it comes to political party accountability, Labor must set the

best example.

We have to practice what we preach.

In Labor, when we talk about the need for more democracy within the Party, we often

discuss it in terms of the self-evident virtue of democratic decision-making and

transparent decision-making. And I do believe that democratic processes and

transparent decision-making are, in and of themselves, a good thing. They do not need

to be justified as means to an end.

But, ladies and gentlemen, our Party processes are not an abstract debate. The way we

reach our decisions shapes what those decisions are. Our rules and processes ought to

be - and in fact they used to be - intended to give the best possible chance at good

outcomes through the exchange of ideas and wider examination of options that comes

through open and democratic processes. This is crucial for good government.

And it is crucial for the integrity of our political system. Decisions reflect the

perspectives of those involved in making them. In the case of the ALP, and

particularly the NSW Branch, the increasing limitation of those involved in decisions

about rules, disputes, and preselections, as well as policy, has meant that our Party’s

actions reflect the stunted perspectives of just a few, and bear little or no relationship

to the expectations of the Party members, the broader labour movement, or the

community.

A healthy political party has internal processes that ensure decisions are connected to

the values and the expectations of supporters, not just powerbrokers alone. This must

apply not only to our policies, but also to the men and women chosen to represent our

cause and argue our case in Parliament.

Ladies and gentlemen, to have integrity, politicians must have the courage to defend their

political principles and the strength to uphold their moral convictions. Fail either of these

two challenges and political integrity is an impossibility.

Recent ICAC hearings in NSW have seen serious allegations made that some Labor

Parliamentary and Party representatives in NSW have failed these two challenges.

It is time to publically acknowledge that there have been some in our Party’s ranks with

neither political principles to defend nor moral convictions to uphold.

They are a small minority, in a very big majority of decent, ethical, people. But the fact

that they are few in number does not diminish the gravity of the accusations against them,

or the seriousness of their acts.

To make that admission may leave the Labor Party open to criticism, but I am not so

brazen as to make a speech about political integrity at a conference such as this and

sweep issues in my own branch of my own Party under the carpet.

There are some key reforms to the rules and operation of the NSW Branch of the ALP

that would go some way to changing the practices and the culture that have produced

the recent unedifying spectacle in ICAC.

First, Party rules must be subject to the courts. Currently, Rule C1 “ Legal Status of

Rules” states that the rules of the NSW Branch of the ALP are not judiciable. There

are serious doubts if this rule is even enforceable, nevertheless, that rule should be

abolished, and replaced with a rule that makes it expressly clear that any action or

decision within the NSW ALP can be challenged in a court of law.

I further believe that the rules and decisions of all political parties should be

judiciable, and that State and Federal Governments should consider making a party’s

eligibility for public funding contingent upon it.

Secondly, all decisions about party disputes in NSW should be taken out of the hands

of party bodies controlled by the factions, such as machinery committees, the

Administrative Committee and Annual Conference.

Currently, the membership of the party bodies empowered to resolve disputes and

determine breaches of the rules are elected along factional lines. Those bodies

invariably rule in line with factional self-interest. Flagrant breaches of the rules are

swept under the carpet. Those with the numbers crunch through determinations

blatantly in contradiction of the facts. The factional minority is all too often quiescent,

perhaps benefiting from a blind eye turned to their own misdeeds.

All machinery committees in the NSW Branch should be abolished. They should be

replaced with a NSW ALP Appeals Tribunal comprised of eminent, ethical people,

independent of the factions, to be the arbiter on internal party disputes.

Such an approach was recommended nationally in the Hawke/Wran Review in 2001,

but was watered down by the factions. The existing National Appeals Tribunal is

weak and poorly resourced, and ultimately only makes “recommendations” to the

National Executive, which is then able to make a final decision on a factional basis.

I propose a NSW ALP Appeals Tribunal of, say, 5 members, chaired by a retired

judge, who hear cases as individual members determined by lot, with an appeal right

to the “full bench” of the Tribunal if required. After that process has concluded I

would favour no right of appeal to the Annual Conference - with decisions only open

to review by the courts.

Thirdly, the NSW Branch must establish a “one strike and you’re out” policy for any

Labor Party member found guilty of acting corruptly either within or without the

party. A culture has developed in the NSW Branch where, for some, being caught out

at sharp practices is worn almost as a badge of honour. Our party would be

immeasurably better off without such people.

Fourthly, we must change the party Rules to preselect Senate and Legislative

Councillors by a ballot of the full Party membership within NSW - where every party

member has an equal vote and an equal say. These ballots should be conducted by the

AEC. A new democratic preselection system will ensure that such decisions are not

left to only a tiny coterie of union and factional leaders.

I note that the Parliamentarians starring in ICAC’s recent hearings have been

members or former members of the NSW Upper House - and like all of us

preselected by NSW Labor for the State or Federal Upper Houses, they never needed

to seek support from the members of the Party, but only from the factions.

Fifthly, we must develop a Charter of Rights for members to ensure the integrity of

the workings of the ALP. The charter should include:

· A clear statement the Rules are binding on all party members

· Members have a right to equality before the Rules

· Members have a right to be heard

· Members have a right to stand for office

· Members have a right to seek redress of grievance before the NSW ALP Appeals

Tribunal

· Members have a right to be respected by the leadership, elected parliamentarians and

Party officials

Sixthly, a Party integrity advisory service - open to all Party members - should be

established. This must be independent. All Party members must have the right to take

concerns about the operation of the Party and its rules to an independent body for advice,

and all Party members must have the right to be protected from any reprisals for so doing.

Seventhly, the practice of factions, affiliates or interest groups binding parliamentarians

in Parliamentary Party votes or ballots must be banned. I have said before that there is

nothing wrong with people who share convictions on policy issues working together to

progress those issues. There is, however, a great deal wrong with a situation where a

Russian doll of nested caucuses sees a tiny minority of MPs exercising a controlling

interest over the majority. Labor’s principle of caucus solidarity, developed to ensure

consistency with the Party Platform and stability in Parliament, depends for its integrity

on democratic decision-making within Caucus.

Factional binding is inherently undemocratic. It allows a group with 51% of a subfaction,

which then makes up 51% of a faction, which in turn has 51% of the Caucus numbers, to

force the entire Caucus to their position.

These seven steps are, in my view, essential to Labor’s future - and, I believe, they

are essential steps to restoring public faith in our political party and in the political

system.

The concept of Party reform has received wide support. Indeed, in the ALP, we are all

reformers now! But not enough has been done, and what has been done does not

adequately address two key issues:

• making sure all our Parliamentarians are men and women who have the

support of the great number of honourable and honest members of the ALP

and not merely of a tiny coterie of self-interested factional warriors;

• making sure our rules are fair and are fairly and impartially enforced on all

members of the Party.

Support for Party reform in principle melts away when specific proposals that would

change the power balance within the ALP are put on the table. But, ladies and

gentlemen, it is clear that the current power balance, the current power structures,

have enabled too much disgraceful conduct and arrogantly corrupt behaviour. It is

clear, too, that some of those empowered by our current structures are resistant to

measures which curtail their power.

Ladies and gentlemen.

I believe the Commonwealth Government should be the standard bearer for good

governance.

As you know, I think there is more to be done to enhance transparency and

accountability at the federal level.

And I have outlined some of the reforms I think the Commonwealth Government

should embrace.

While it is critical that people like you - and me - continue to press for greater

transparency and accountability, we must not fail to recognise, support and maintain

key measures already in place.

Since 2007, Labor in office has implemented key reforms that have materially

enhanced the way we are governed:

• New standards of ministerial ethics which, among other things, ban direct

ownership of shares by Ministers and Parliamentary Secretaries

• A ministerial staff code of conduct

• The first Commonwealth lobbying code and accompanying public register of

lobbyists

• A merit selection process for agency heads and senior statutory appointments

• The Parliamentary Budget Office

• Reform to Freedom of Information laws including the abolition of conclusive

certificates and the creation of the office of the Australian Information

Commissioner.

I have been frank with you about my belief that further progress needs to be made in

some areas by the current Government.

Let me be equally frank about my fear for the future of the six key reforms I have just

outlined.

Why? Because none were adopted by the previous Coalition Government, some have

been actively opposed by the Coalition in Opposition, and none have been guaranteed

to remain in place under a future Coalition Government.

Ladies and gentlemen, no one is ever opposed to integrity. No one ever argues that our

political system needs less of it. But unanimous support for integrity in the abstract all too

often fractures in the face of specific measures. And they are deferred or delayed, or

even dropped, as lower-order issues.

They may not be the most urgent issues, compared to some. But they ought to always be

priorities.

For the health of our political system, of our democracy, political integrity is absolutely

fundamental. As Alan K Simpson, Republican Senator for Wyoming, said in a slightly

different context, “If you have integrity, nothing else matters. If you don't have integrity,

nothing else matters.”