How to prevent pork-barrelling in Australian politics

From sports rorts to regional slush funds, there seems to be no end of pork-barrelling scandals, where governments have been caught using public money to target certain voters for political gain.

This week the Grattan podcast discusses the second report in the New Politics series, on what governments can do to stop pork-barrelling.

Host Kat Clay is joined by Grattan’s CEO, Danielle Wood, and her co-authors Kate Griffiths and Anika Stobart from Grattan’s Budgets and Government team.

Read the report

Transcript

Kat Clay: From sports routes to regional slush funds. There seems to be no end of pork barrelling scandals, where governments have been caught using public money to target certain voters for political gain. I’m Kat Clay and this week we’re discussing the second report in the New Politics series on what governments can do to stop pork barrelling.

With me at Bratton, CEO Danielle Wood and her coauthors Kate Griffiths and Annika Stobart from Bratton’s Budgets and Government team. Welcome Dani, Kate and Annika. So firstly, Dani, I’ll start with you. I mean, this past week has been a big week for questions of political integrity with Anthony Albanese declaring that our democracy is precious.

While we’re going to look specifically at pork barrelling on the podcast today, why is this series on new politics so vital at this time?

Danielle Wood: It’s a great question. I mean, I think integrity in politics is having a moment right now. we saw that it was a big issue in the federal election, and it was a big sort of push for many candidates around integrity.

It does feel like we’ve had a sort of a series of rolling scandals since then. I assume Anthony Albanese was involved. was responding to the revelations that our former Prime Minister was secretly sworn into five other ministries. We’ve had John Barillaro in the Trade Commissioner role that we’ve talked about previously on this podcast.

We’ve had Operation Watts in Victoria, exposing misuse of taxpayer funded staff for electioneering. and all of them, I think, highlight, the risks to our democracy. And it’s particularly the fact that we rely on these norms of behaviour by our elected officials. this kind of shared understanding of what the right thing to do is.

And we’re really exposed when ministers or prime ministers engage in behaviour that run contrary to those norms. It may not be illegal, but it does put the whole system under threat. So really that’s what the new politics series is about. It’s particularly about trying to identify areas where we see systematic breaches of those norms.

Ministers exercising their discretion, not in the national interest, but in the interest of their political party and their political fortunes. And Port Maryland, of course, is the quintessential example of that. It’s all about politics. It’s not supposed to happen. It clearly does. So, we think it’s a really opportune time to be putting forward constructive ideas about how to rebuild integrity in politics given that backdrop.

Kat Clay: So, Kate, we often hear reports in the media of pork barrelling, but what exactly is pork barrelling and how big of a problem is it?

Kate Griffiths: Pork barrelling is the use of public resources to target certain voters for partisan purposes. So, for example, spending public money in particular electorates to try to win more votes rather than spending the money where it is most needed or most effective.

In our report, we focused specifically on pork barrelling of government grants. Because this is the one-off, one of the most visible forms of pork barrel. There are, of course, other ways that governments pork barrel, including preferencing particular seats or states in infrastructure and procurement decisions.

And we also even see relocation of government agencies to particular electorates. But we did focus on grant programs because they allow substantial ministerial discretion. with very little transparency around decision making quite often. So, what did we find to the second part of your question? For a start, federal and state governments on both sides of politics engage in pork barrelling.

And we saw, for example, under the previous federal government, more than twice as much discretionary grant funding was allocated to government seats on average compared to opposition ones. For some state government grant programs, it was more than three times as much. And again, that’s average funding per seat.

When we looked at the federal stats, we excluded regional grant programs. The funding there is even more skewed if you wanted to include them too. Our report shows a pretty clear pattern of this kind of rewarding of government seats, but we also found a strong skew towards marginal electorates where governments look to be trying to buy votes.

And in the case of, the top 10 federal electorates with the most discretionary grant funding in the past three years, we found seven of that top 10 were marginal seats. Some grant programs though, of course, are much more prone to politicization than others. This is not across the board. There were some programs that looked to have been quite even handed, but then there were these egregious examples, like the New South Wales Stronger Communities Fund, which allocated almost six times as much per seat on average to government seats compared to opposition seats.

So, we go through all of that data in the report and and conclude basically that this is a really common practice. It shouldn’t be happening,

Kat Clay: but it is. Thanks, Kate. And we’ll get into a few of the proposed solutions in a second. But Anna Kate, your report shows that some programs appear more politicized than others.

And Kate’s just mentioned a few here. I mean, everyone’s heard of sports rorts, but what makes a grant program particularly at risk of pork barrelling?

Anika Stobart: We looked at a range of grant programs and identified some risk factors that make a grant program more likely to have politicization or pork barrelling.

And we realized that there were these three main risk factors. So, the first was programs that have a high degree of ministerial discretion. So, this is a consistent feature of grant programs where pork barrelling occurs. There are many recent examples of federal and state programs where ministers have Disregarded advice and overruled their departments to award funding for what appears to be political reasons.

So, as you mentioned, a recent high-profile case is the sports rorts, also known as the Federal Community Sport Infrastructure Program. And the Australian National Audit Office found that the minister disregarded departmental advice and program guidelines. And as a consequence, we see that government seats did receive higher levels of funding under this program.

The second risk factor we found also was where grant programs are closed and noncompetitive. So, this means where grant processes do not invite anyone to apply or aren’t vetted against other applications to ensure the best projects come to the top. These processes, you know, are run behind closed doors and it makes it easier for ministers to choose the projects, without considering merit and without justification.

And we found this is actually, quite common. so open and competitive processes. Only 13 percent of grant funding in 2021 went under these types of programs. For example, there was a 1 billion Federal Community Development Grant program, where ministers wrote to organizations confirming funding even before the department had assessed applications.

And then thirdly, there’s a higher risk for politicization when grants are awarded in the lead up to an election. so, several grant programs we looked at had more grant funding promises than usual just prior to an election. So, for example, almost all grants from the Building Better Regions Fund in 2018 and 2019 were approved just before key elections.

So Super Saturday in 2018, which was the five by elections around the dual citizenship crisis, and then also the federal election in 2019. But in contrast, we’ve also found no evidence of politicized spending for grant programs where there were guardrails around. Ministerial discretion.

Kat Clay: Dani, pork barrelling sounds like a huge waste of taxpayer money, but there are also other costs.

Danielle Wood: of pork barrelling.

What are they? First, it is a huge waste of taxpayer money. And I think it’s worth noting that, the schemes that we looked at were worth, several billions of dollars. And it’s not just a waste of money because worthwhile projects are missing out and less worthwhile projects are getting funded, I think it also encourages more of these types of schemes.

In a world where government can see a political advantage, they roll out a whole lot of probably low value grant schemes and that starves money off other activities of government. And we’ve got plenty of good ideas about what governments could do with some of those funds. Those other costs that you’re asking about, so one is just around public trust, I think.

Every time you have a scandal around these sorts of things, it just slowly chips away at public’s faith in government and this sort of view forms that the governments aren’t thinking about you, they’re not thinking about the national interest, they’re thinking about their own political interest.

And that’s, that’s really damaging and corrosive over time. Secondly, I think it really hurts culture within politics itself. So again, that kind of whatever it takes mindset, starts to undermine the broader ethical norms. and there’s a whole lot of, people that are in parliament that have really strong ethical foundations.

I think that’s worth noting. And this is, this is damaging to them to be part of an environment where this becomes normalized. The third thing we talk about in the report, which I think often gets overlooked is, is about the sort of potential skewing of election outcomes. If this If Port Barrowing actually works, and that, that’s a little bit contested in the literature, but it could create an uneven playing field in elections, obviously between the governments themselves that actually control the budget versus oppositions, but also between major parties who can at least make promises about what they might do when they’re in government and minor parties and independents that are not.

going to be able to form government and deliver these kinds of schemes. So that kind of does risk unbalancing our democracy.

Kat Clay: One of the most shocking things in the report I found is that it cites from multiple politicians who are brazenly defending pork barrelling, saying it’s what ministerial discretion is for.

It’s okay because everybody does it. And even that it’s what the government was elected to do. Dani, is advocating for a local community part of an MP’s role or are these simply excuses here?

Danielle Wood: Look, I mean, those, those kind of lists of quotes really bugs me as well. Frankly, I think there has been a worrying trend towards normalizing and accepting port barrelling.

So, we see that, in those quotes, but also in the fact that, you know, what used to be seen as something that you would need to resign for, is, is now no longer the case. and, you know, it’s worth, worth noting that, you know, the public do not like this behaviour. There’s, there’s a really interesting survey in the report that shows, 77 percent of Australians believe ministers should resign if they’ve engaged in port barrelling.

That is a higher percentage than those that think ministers should resign if they were subject to a corruption investigation or that were having a relationship with a staff member. both of those remain things that ministers do resign for. So, it’s interesting that, that this particular norm, is the one that has broken down.

On that other question about, you know, should it be ministers that make this decision because they’re kind of closer to the ground in their communities. That’s certainly an argument that’s often put forward, this kind of sense that we can’t rely on shiny bummed bureaucrats sitting there in Canberra to be allocating this money.

by definition that creates bias because the only people that are getting listened to in that kind of on the ground, intelligence are people that are in the government. So, the people that are in electorates where they don’t have a government MP are not getting that same sort of feed into the process.

so yes, members should use their local knowledge, but it should be about letting people in the electorate know about their grants. encouraging them to apply for grants. Everyone in Parliament can do that. And that’s the way that they can tap into their local knowledge and power. but then it should be, bureaucrats making the decision based on a clear set of criteria.

That’s what’s going to remove that, the risk of those kind of pork barrel, politicized programs that Kate and Anika were talking about.

Kat Clay: So, Kate, I mean, we’ve talked previously on the podcast about how the existing enforcements for breaching ministerial standards are weak. Why aren’t they effective deterrents for pork barrelling?

Kate Griffiths: So, at the federal level, minister spending decisions are regulated by both legislation and policies. There’s a lot of different rules here and many of them look pretty good on paper. The problem is that they’re generally unenforceable. So, if you let me give you an example of that, there are financial laws that say public money must be used for proper purposes, and proper purposes are defined as efficient, effective, economical, and ethical.

Now that sounds pretty good, and if a public servant were to breach those rules, they could lose their job and might be subject to further investigations. But there’s no penalties under the act for ministers who breached the law. And there are so many other rules at state and federal levels that have similar problems when it comes to enforcement.

When politicians say they’re not breaking any rules. That is absolutely not true. The trouble is enforcing those rules. And many in politics would argue that enforcement ultimately rests with the electorate, but an election once every three or four years is a pretty blunt mechanism for voters to set their expectations on proper conduct of government.

So, for now, the best defence we have against pork barrelling is our federal and state auditors general. They play a critical role in exposing pork barrelling, such as we saw with the sports rorts and commuter car park scandals, for example. We really need those auditors general to be well resourced, but it’s a shame that we don’t have better defences up front to prevent pork barrelling happening in the first place.

Kat Clay: And I mean, Kate, just on that, a lot of the time, if someone breaches ministerial standards, it’s up to the discretion of the prime minister or the premier to, deal with that in the way that they

Kate Griffiths: see fit. We should absolutely strengthen the ministerial standards. They’re pretty good as is, but maybe we need to be clearer that breaking the rules, breaking the law is not good enough.

And. Is cause for resignation. But ultimately those standards are still enforced by the prime minister or the premier of the day and fundamentally for political problems like pork barrelling, having the, the only enforcement be a political person is really tricky.

Kat Clay: So, I mean, it’s clear the rules need to be strengthened.

Annika, what. Does the report recommend and what do you as the authors recommend?

Anika Stobart: So as Kate said, we need better defences up front. So, a key thing for a starting point there is making sure that all grants are allocated in an open, competitive and merit-based way with clear guardrails around ministerial discretion.

So really addressing those risks. risk factors that I was talking about before, but we also recommend that, ministers should not be involved in choosing grant recipients, including during election periods. A proper process is where shortlisting and selection of grant recipients is done by the relevant department or agency.

This is an administrative function. We don’t want ministers to be sitting in their offices, going through spreadsheets and choosing particular projects. That’s not frankly, you know, not a good use of their time. Have bigger fish to fry. But of course, ministers should still be involved. They are after all responsible and accountable for these programs.

But their responsibility should be limited to establishing the grant program and defining the selection criteria. And then on top of that, we need stronger oversight. So currently parliamentary oversight is waning. We need to strengthen that. And we recommend a multi-party strategy parliamentary committee that should oversee compliance and interrogate any minister or public official who deviates from the rules.

And also, as Kate mentioned, we should strengthen auditors generals, by increasing their funding so that they can oversee and do investigations into our programs as well.

Kat Clay: Dani, I mean, there’s a lot of demand for a federal ICAC, and it was one of the significant policies of the last election. Would this prevent pork barrelling?

Danielle Wood: It won’t prevent pork barrelling alone, I think. I mean, it’s clearly the last line of defence against pork barrelling. hopefully it is a strong disincentive for ministers to engage in pork barrelling. It’s challenging to know, you know, where the kind of isolated incidents would, would meet the definition of systemic corruption needed to, to get to the ICAC level.

So, it’s a little bit unclear how it interacts, but what I would say is that the reforms that we are proposing would be a very, useful compliment for a federal ICAC. I think it sets much more clearly that the process that ministers should follow and their role within that process would actually give federal ICAC much more to work with if, if court barrelling were to occur.

But more generally, I think, you know, an integrity commission is incredibly important, but we should think of it as that last line of defence. what we’re doing in this new politics series is actually talking about a whole lot of things we can do up. upstream in the process to make these things less likely to happen.

so, this is kind of the low hanging fruit of integrity reforms, if you like, and we think alongside an integrity commission, they can really transform how we do politics in this country.

Kat Clay: Thank you, Dani, Kate and Anika for your insight into political reform and why it is so essential at this time that we consider putting those guardrails on political spending.

If you’d like to read more, you can read the report that’s been published at grattan.edu.au. It’s available there for free. As we are a not-for-profit organization, we are really sincerely grateful to all our supporters who’ve supported this series on new politics and to everyone who gave to us during our end of financial year giving campaign.

We really appreciate your support. If you’d like to continue to support us or become a new donor, please support us at grattan.edu.au/donate as always, please take care. And thanks so much for listening.