04/09/2015 - 06:28

Perceptions count in politics

04/09/2015 - 06:28

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Governments must not only do the right thing, they must be seen to be doing the right thing.

NO DEAL: The government rejected Colin Murphy’s requests for information on costings for Perth Stadium.

Governments must not only do the right thing, they must be seen to be doing the right thing.

Judging by recent events, the excesses relating to the business dealings of the Labor state government in the 1980s, which became known as WA Inc and were roundly condemned, seem to have faded into the mists of time.

However two recent decisions suggest it would be timely for Premier Colin Barnett’s Liberal-National alliance to reacquaint itself with those actions, which cost taxpayers hundreds of millions of dollars, if similar situations are to be avoided.

Unless it’s already too late, that is.

The first cause for alarm was the failure by Auditor General Colin Murphy to get answers on the designing, building, financial and maintenance costs for the new Perth Stadium, adjacent to James Packer’s Crown complex at Burswood.

Mr Murphy is no ordinary public servant answerable to the premier or treasurer; he reports directly to the parliament. And all MPs, and the public, should be concerned his efforts to get answers have been blocked within the bureaucracy, and that some ministers have gone along with it.

The second case is far less complex, but equally worrying. It involves the chairwoman of the Water Corporation, Eva Skira, who is also a director of the company, RCR Tomlinson, which bought the corporation’s construction division for $10.4 million.

Apparently Ms Skira was involved in the initial decision to sell the division, but Water Minister Mia Davies says she took no further part in the discussions. As part of the deal, RCR Tomlinson has been guaranteed work for the corporation valued at $130 million over the next three years.

Those close to government know the importance of perceptions of transparency for big decisions, and the need for decision-makers be made accountable.

That’s not happened this time; how quickly they forget. So let’s jog the memory.

The WA Inc Royal Commission report, which documented how huge sums were squandered during the 1980s, also recommended an inquiry into how government operates, and how it can be improved.

Senior industrial relations commissioner Jack Gregor chaired the extensive hearings in a process ran for two years and produced a major report in 1996 on reform and correct process.

With regard to the awarding of government contracts, it noted that regardless of whether a contract involved spending, royalties or the sacrificing of revenue rights, the final document should be lodged for public inspection in the State Supply Commission or tabled in parliament.

And this recommendation is telling: “The State Supply Commission guidelines should provide that, as a pre-condition for doing business with government, tenderers must be prepared for the details of any contract to be made public.” 

Former long-term under-treasurer, Les McCarrey, who gave evidence to the Gregor inquiry, said that if the obligation to disclose basic information was known up front, companies would then have the choice whether to deal with government agencies.

“I do not think many would decline to do so if the rule were universally applied,” he said. “ … the whole of this commercial confidentiality argument runs very deep, its roots run very deep in government, and I think this is wrong.”

Mr McCarrey was highly regarded in the public sector, and he was certainly right on that score.

The commission on accountability, chaired by former chief justice Sir Francis Burt, and which reported in 1989, had also sounded a warning about confidentiality provisions in the contracts of state-owned entities.

“The secrecy arrangement denies accountability to the parliament,” the Burt report said. “It denies public scrutiny and it may even deny ministerial scrutiny.”

Sadly, the limited follow up by subsequent governments has not resolved the issue.

Almost 20 years on, Mr Gregor is adamant that action is still needed. The recent events support his case. He says that government use of taxpayers’ money requires accountability (following the taxpayers’ dollar), which in turn requires transparency.     

He says governments usually claim they are trustworthy and don’t need the check provided by disclosure. They also insist arrangements with private contractors should be kept under wraps otherwise the contractors will look elsewhere for business.

“This is the whole basis of commercial confidentiality and it is a complete furphy,” Mr Gregor says.

“Private contractors have been shown to chase government business with full disclosure, as long as they know the rules to start with.”

Mr Gregor says one argument for non-disclosure is that the government will get a better deal. That might be valid during the bidding process, but disclosure should occur after the contract is awarded.

“Government is notoriously incompetent at negotiation, and confidentiality cloaks that incompetence,' he adds. 'This would never come to public notice if there is a mechanism for hiding the process behind a veil.'

Taxpayers must be told the full cost of the stadium project because it’s their money. And Ms Skira would have been well advised to quit her Water Corporation post. 

It’s all about accountability, and transparency.                     

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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