A federal Icac won't safeguard democracy unless it includes gifts and lobbying

Having long resisted, federal politicians now appear to broadly accept what Australian citizens have been screaming at them: that there is profound concern about the potential for bad lobbying to corrupt our democracy, and great desire for its proper policing. As a result, a plurality of the political parties appear willing to do what states and other countries did long ago, and legislate for an independent federal anti-corruption watchdog.

This is a good thing but unless we fundamentally rethink how modern corruption can occur such a move will be inadequate in the fight to keep democracy “of the people … and for the people”. Two great obstacles stand in the way of anti-corruption efforts: the prevalence of gifts to politicians, and the revolving door between politics and lobbying, in which there is an increasing likelihood that decision makers will move into the private sector that they once oversaw.

Traditionally, and when we think of political corruption, our minds turn to the proverbial – but sometimes literal – “briefcase full of cash”, pushed surreptitiously towards a politician, with expectation that they will furnish disproportionate favours. Such favours are externalised: paid by citizens, and they benefit only the briber and bribee.

But such corruption, if detected, is at least policeable. The law requires that a quid pro quo relationship is established: if a payment is offered, and received with the understanding that it will be somehow reciprocated, then it is illegal, and – as it should be – criminally punishable. The difficulty has always been in catching such cases, but it is at least plausibly possible to do so.

Yet gifts and the revolving door make it near impossible to establish that a payment (the “quid”) is for an explicit favour (the “pro quo). Consider alternative hypotheticals: the payment is not a briefcase containing a million dollars, but a job – upon retirement – that pays a million. Alternatively, consider that the envelope is not stacked with hundred dollar bills, but a free lunch that cost $500 a head.

Economists know that there are no free lunches, so too does the wider electorate. There is near universal recognition that a business or wealthy individual pays for access, or favours, and not for the pleasure of their recipient’s company. There is further recognition that when a decision maker is later employed for a king’s wage, or furnished with gifts befitting a king, they will almost certainly be positively biased towards their benefactors.

For this reason, the Australian public service code prohibits its adherents from accepting gifts that might bias their decisions. But the most senior government decision makers – members of parliament and ministers – are purportedly above such conflicts of interest, and not subject to similar restrictions.

That such laws do not extend to politicians smacks of the hypocritical line “Do as I say, not as I do”. The defence employed by politicians is predicated on the idea that it allows them to meet constituents: accepting a ticket to a grand final puts them among the fans, a lunch allows them to discuss key decisions in a friendly environment. This has become little more than a trope – it sounds reasonable at first, but melts away in the glare of any interrogation.

Who, precisely is being met, when a free ticket is given, or a lunch bought? Not the typical constituent, by any measure – most Australians can’t get a look-in at a meeting with a minister. But a billionaire or CEO? They are a phone call away from the most senior members of government. This has to change. A good democracy would require them to meet in the decision maker’s office, with no strings – or “gifts” – attached, along with a formal ministerial diary entry to record their meeting.

As for the revolving door, other countries have long recognised that the potential for a well-paid job upon retirement may influence decisions, so they prohibit a decision maker from moving to an industry they oversaw, often for five years (and sometimes longer). Moreover, unlike Australia’s weak federal lobbying and revolving door codes, foreign breaches are enforced by their countries criminal law, and punishable by fines and/or jail.

Bias is fundamental human nature, but is supposedly shirked by our politicians. The revolving door and gifts to politicians create all-but-unenforcable loopholes to any anti-corruption regime, including – if it is adapted from the New South Wales model without fundamental changes – a “federal Icac”.

The fight for democracy can often feel Sisyphean, but this is inherent to the system: it is an eternal struggle, and lazy electorates get bad politicians. The need for an independent regulator for bad lobbying is now well accepted by Australians, but the extent to which such a watchdog should have “teeth” has been largely ill-considered.

As an election looms, the need to legislate for an independent, well resourced “federal Icac” is clear, but we should be of no illusions on what is needed to underpin it: Australia needs to be much smarter about what laws such a body might enforce. Without prohibitions on the revolving door, and greater limitations on gifts, the ability of such a body to safeguard Australia’s democracy will be critically undermined.

• George Rennie lectures in politics at the University of Melbourne. His research expertise includes US politics, lobbying, interest groups, and political and advocacy advertising