by Richard Denniss
[Originally published on the Guardian Australia, 29 October 2020]
Cartier watches, free rent and taxpayers picking up the tab for $118,000 worth of personal tax advice — Australia’s best paid public servants have been on quite the spending spree and the prime minister has made it clear that he is very, very angry.
But is Scott Morrison angry because his most senior bureaucrats have been living large on the corporate credit card, or because the public found out about it?
We only know that the chair of Asic billed taxpayers for his personal tax advice because the Australian National Audit Office (ANAO) told us, likewise for the $70,000 the deputy chair of Asic “mistakenly” received in rental assistance. But while senior bureaucrats at Australia Post get a Cartier watch for landing a big contract, those at the ANAO are rewarded with a $14m budget cut for their forensic accounting. Ouch.
The ANAO has played a blinder this year and if any public servants deserve some prestige, prezzies and promotions, it’s them. The office lifted the lid on the sports rorts affair, the overpayment by the Department of Infrastructure for land around Badgerys Creek airport and the overpayment by the Department of Agriculture for water for the Murray river; and in relation to the government’s Lobbying Code of Conduct, found that:
The Attorney General’s Department “did not develop a strategy to raise awareness of the code.”
“Limited activities were undertaken to inform lobbyists and government representatives of their compliance obligations under the code.”
The Attorney General’s Department “did not systematically assess risks to compliance with the code and did not advise government about the sufficiency of the current compliance framework in meeting the code’s objectives.”
If the purpose of high salaries, generous gifts and bonuses is to create incentives for staff to work smart and hard, then you would think that a prime minister concerned with the efficient use of taxpayer money would be personally pinning medals on the chests of the hard working folk at the ANAO. Indeed, you’d think he would be sending a note of thanks to the senators who uncovered the Cartier gifts at Senate estimates last week.
But alas, the Coalition government is instead ensuring the ANAO conducts fewer inquiries next year, and treating Senate estimates as a trial to be endured rather than an opportunity to scrutinise spending. The hypocrisy of attacking Australia Post management while defending budget cuts to the ANAO is truly staggering.
But the hypocrisy doesn’t end there. Apparently, it’s clear that taxpayer owned companies should not give gifts to senior staff, but it’s OK for privately owned companies to do precisely that. Why?
It has been recently revealed that privately owned companies receiving taxpayer support to help “get them through the recession” have been paying multi-million-dollar bonuses to their CEOs. If the prime minister, Scott Morrison, was really worried about taxpayer money being squandered, then why wasn’t he as outraged that the head of Star casino took an $800,000 bonus this year — after receiving over $64m in commonwealth government support — as he was at the $20,000 in watches handed out by Australia Post?
Even when privately owned companies aren’t spending taxpayers’ money on gifts for their executives, why isn’t the prime minister worried that multi-million dollar bonuses, corporate boxes at the footy and private jet travel are driving up the prices paid by ordinary Australians for their mortgages, electricity or groceries?
In theory, governments shouldn’t have to worry about excessive private sector largesse, as the combined forces of competition and board scrutiny would nip any opulence in the bud. But in reality, Australia is the land of cosy oligopoly overseen by an even cosier club of corporate directors and, in turn, ordinary shareholders and ordinary taxpayers — those whom the prime minister says he is so concerned about end up footing the bill for very expensive food, wine and watches.
Again, in theory we shouldn’t have to worry about corporate waste and opulence, but anyone who watched the royal commission into the big banks, or the recent inquiry into Crown casino, will know the boards of Australia’s biggest companies are very quick to place their faith in management — and very reluctant to dig into the “operational” decisions they are paid so handsomely to oversee.
There is no evidence that receiving cash bonuses or Cartier watches will make executive staff work harder and no evidence that the Morrison government’s new-found concern about wasting taxpayers’ money will lead to improved processes or structures. If — and it’s a big if — Morrison was determined to ensure public money was being well spent, he would boost the budget of the ANAO rather than cut it, speed up the establishment of a federal anti-corruption watchdog rather than delay it, and claw back every cent paid out in CEO bonuses from companies receiving taxpayer support. But he is not, so he will not.
Back in 2018, the then assistant treasurer, Stuart Robert, repaid $38,000 of taxpayers’ money he had somehow spent on his home internet bill. Mistakes, it seems, can happen. But when he was minister for human services, he oversaw the disastrous robodebt scheme that harassed and penalised people who — a deeply flawed algorithm concluded — may have been overpaid. There should always be scrutiny over the way taxpayers’ money is spent but, while attacking the head of Australia Post for $20,000 worth of luxury watches might generate some good press for the prime minister, it won’t generate anything near the savings a well-funded ANAO and a commonwealth integrity commission would deliver.
• Richard Denniss is the chief economist at independent thinktank The Australia Institute