Originally published in The Australian Financial Review on January 17, 2017

Is it any wonder that voters who don’t believe politicians’ travel expense claims are fair dinkum won’t believe their claims about the benefits of economic reform either? Trust is hard to earn and easy to lose.

First published by the Australian Financial Review here

While much has been made of “the optics” of the government simultaneously cracking down on welfare and spending up on weekends away with family, the substantive issue is that voters are less likely to believe claims that company tax cuts are a good way to boost wages from politicians who claim they needed five trips to Broome with their wife to consult with small business.

In announcing Sussan Ley’s resignation as Health Minister, and that a new watchdog for parliamentary “entitlements” would be created, Malcolm Turnbull said “sunlight was the best medicine”. But at the same press conference the PM also said there was no need to release the results of his Department’s inquiry into Ms Ley’s travel. The Attorney General is refusing to comply with a court order to release details of his own diary. So much for sunlight.

Just as it was taxpayers’ money that flew the Health Minister to the Gold Coast 23 times, it was taxpayers’ money that funded the Secretary of the PM&C inquiry into the appropriateness of that travel. In deciding to bury the PM&C report Turnbull clearly thinks he is best placed to decide when sunlight might heal and when it might burn. And that’s the problem. Few Australians now trust politicians to make such decisions.

A recent survey by the Australia Institute found 85 per cent of voters believe there is corruption in federal politics, with 55 per cent of voters saying there is “a lot” of corruption. Unsurprisingly, the same survey found that 82 per cent of Australians support the creation of an independent federal corruption watchdog, with support highest among the older Australians – who disproportionately vote for the Coalition. But the PM’s new body to oversee the use of charter flights and toner cartridges, while a small step in the right direction, will ignore political donations, favour trading, the awarding of government contracts, appointments to government bodies and old fashioned bribery.

Turnbull fails to confront issue

In refusing to set up a federal corruption watchdog the Prime Minister is arguing that the same ministers who can’t draw a line between personal benefit and public benefit when it comes to flights to Broome are impeccably credentialled to draw the line between personal benefit and public benefit when it comes to the awarding of multibillion-dollar contracts to major political donors, the appointment of political allies to statutory positions and the development of new policy that impacts on their old industry.

Turnbull’s refusal to confront the issue of corruption is a gift to the rapidly expanding Senate cross bench. Business leaders are often quick to blame a fickle and “populist” electorate, and the cross benchers they are electing in growing numbers, for the difficulties of introducing economic policy reforms. But perhaps peak bodies such as the BCA should direct as much, if not more, of their fire at the political class that have given the population so many reasons to distrust political promises.

Not only has the business community been soft peddling on the recent travel rorts, they have been virtually silent about calls for a broad based corruption watchdog as well. If the business community was serious about building faith with the public, and serious about creating a political environment that could deliver reform, they would be leading the charge on corruption busting and political rorting.

The OECD estimates that corruption costs about 5 per cent of global GDP and that bribes of more than $1 trillion are paid each year (none of course in Australia). Like the vast majority of politicians, the vast majority of businesspeople are honest and hardworking. But, as has been revealed by state-based corruption watchdogs such as the NSW Independent Commission Against Corruption, it only takes a small number of business people and a small number of politicians to not just ruin the reputations of many, but to harm to community as a whole.

On behalf of the majority of law-abiding business people, and in the interests of a strong economy, the business community should lead the charge for a federal corruption watchdog given that the Prime Minister will not. I won’t hold my breath.

Richard Denniss is the chief economist for The Australia Institute

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