Public appointments will test Albanese’s ‘new politics’

Australians backed this new politics – not only in their support for a new government, but also for a wave of ‘Teal’ candidates who put integrity front and centre in their campaigns.

Now, almost a year into the job, the Albanese Government faces a test of this commitment to new politics.

A culture of jobs for mates

Australians endured a ‘jobs for mates’ culture under the previous government, and many governments before it. There had been a long tradition of appointing ‘friends of the party’ to cushy public roles.

Research by Grattan Institute shows that about one in five of the top public appointments – to well-paid, powerful, and/or prestigious boards – are held by people who have worked as a politician, political adviser, candidate, or party employee. Individually, many of those people may have the right qualifications, but collectively their presence undermines these important positions.

On the boards of Australia Post and other federal government businesses – companies employing thousands of people and managing income in the billions – more than 20 per cent of members have a direct political connection to the party that appointed them (p 14). This is in stark contrast to ASX100 boards with very similar responsibilities, where fewer than 2 per cent of board members have a direct political connection (p 13).

The boards of powerful independent government bodies, including regulators and commissions, are also heavy with political appointments. These institutions are set up to be at arms-length from government and have significant power to influence public policy and its implementation. For example, our research has shown that half of the members of the Productivity Commission and Commonwealth Grants Commission boards have a direct political connection to the party that appointed them (p 14).

Political stacking is also starkly evident on the Administrative Appeals Tribunal (AAT), an independent body that reviews government decisions on everything from child support to migration status. About 20 per cent of the AAT’s 320 tribunal members have a direct political connection to the government that appointed them (p 18). These positions are among the most powerful and prestigious public appointments available, with salaries ranging from nearly $200,000 to nearly $500,000 a year.

Political appointments to the AAT grew substantially in the five years before the 2022 election, with a large number made in the immediate lead-up to the 2019 and 2022 elections. Yet independence is particularly important for institutions such as the AAT, whose purpose is to review government decisions. Public trust in that process relies on both the perception and reality of independence.

New government, new politics?

Now the tables have turned, will the new government be able to resist the temptation to ‘reward’ friends and allies with plum jobs? Will the government be willing to relinquish some control over public appointments, in order to clean up the system?

Since taking office, the Albanese Government has made several key appointments with little transparency of process. The most obviously political was the appointment of former Labor prime minister Kevin Rudd as Australia’s next ambassador to the United States. But this position has been regularly held by former politicians since its inception, so the Rudd appointment is not necessarily indicative of a broader trend.

More radically, the government plans to abolish the AAT and replace it with a new federal administrative review body. In announcing the decision, Attorney-General Mark Dreyfus said the AAT had been ‘fatally compromised’ by previous political appointments. While abolishing the AAT makes room for a clean start, whether it actually resets the culture will depend largely on how appointments to the new body are made – the detail of which is yet to be seen.

In February, the government also launched a review of public sector board appointments, to change the culture of jobs for mates. The review, led by former Australian Public Service Commissioner Lynelle Briggs and due to report within a matter of months, is the first sign that the new government may be open to more wholesale reform.

In parallel, Independent ‘Teal’ MP Dr Sophie Scamps introduced a private members’ bill to parliament, detailing a new process for all public appointments. The Transparent and Quality Public Appointments Bill 2023 (‘Ending Jobs for Mates Bill’) aims to improve the calibre and diversity of appointees, while boosting transparency around appointments processes.

Why the Ending Jobs for Mates Bill matters

The government has promised ‘merit-based appointments’ in the context of specific boards and tribunals. But the Ending Jobs for Mates Bill goes further by aiming to establish a better, more transparent process for all public appointments. This is the model we recommended in Grattan Institute’s 2022 report, New politics: A better process for public appointments.

Wholesale – rather than piecemeal – reform is needed to properly tackle the jobs for mates culture in Canberra.

In isolation, handing a cushy job to a political mate might seem harmless. But politicisation of public appointments – and the casually cynical way it is normalised – has real, pervasive consequences for Australian democracy. Political appointments can compromise the independence and competence of institutions, reduce public trust in government, and promote a culture where loyalty is valued over merit.

Furthermore, ‘captain’s picks’ do not always have the skills and experience needed to carry out their responsibilities effectively. Grattan Institute analysis of performance data shows AAT members with political affiliations perform worse on average than those without. Almost a quarter (24 per cent) of political appointees fall well short of their performance targets, compared to 17 per cent of non-political appointees.

Even if the person appointed is fully capable of the job, the perception of politicisation can affect the morale and culture of an organisation. Organisational culture matters to decision-making and to policy outcomes. Other members of a public board or tribunal may be less willing to provide frank and fearless advice if they think doing so will damage their chances of reappointment or promotion. Those concerns may be justified: one study showed that migration tribunal members who made decisions against the minister were less likely to be reappointed.

A proper process that applies to all public appointments would help restore trust in the system – even if politically affiliated candidates sometimes rise to the top. Sometimes the person with political connections will be the best candidate for the job, but under the current system their appointment will always raise suspicions and calls of cronyism. Only an open, competitive process, with independent oversight, can resolve these concerns.

A simple fix

Grattan Institute’s 2022 report recommended establishing a new process, overseen by a new ‘Public Appointments Commissioner’, to help restore public confidence in appointees and lift the performance of public sector boards and tribunals.

Under our proposed new process:

• All public board, tribunal, and statutory appointments would be advertised, along with the selection criteria for each position, to provide transparency on what the relevant minister is looking for before an appointment is made. Advertising allows for unexpected expressions of interest and does not preclude running a head-hunting process in parallel.
• The Public Appointments Commissioner would assemble an independent panel with appropriate expertise, to assess applicants against the selection criteria and provide a shortlist of suitable candidates to the minister. A diverse group involved in assessing applications and preparing the shortlist would give the best chance of making appointments in the public interest. Panel members’ names would be published, to enable public scrutiny of the panel’s independence.
• The Public Appointments Commissioner (or their representative) would also sit on the panel, to provide oversight of the full process. The Commissioner would then report to Parliament – including responding to any questions or concerns – to provide transparency around appointment decisions.
• The relevant minister would retain the discretion to choose a candidate. However, the minister would only be able to choose from the panel’s shortlist, which would include only candidates who have been assessed as suitable for the position and are recommended by the panel.
• If the minister is unhappy with the shortlist, they could choose to redefine and republish the selection criteria. But the minister would not be able to directly select someone else who was not shortlisted.

The Ending Jobs for Mates Bill reflects this process and makes additional provisions for the appointment of ‘significant integrity officers’. These officers lead agencies that play a particular role in ensuring integrity in government, including the Public Appointments Commissioner themselves, the Auditor-General, and the Commonwealth Director of Public Prosecutions (among others). In recognition of the significance of these appointments, a former superior court judge would be required to sit on the selection panel, and a multiparty parliamentary oversight committee would make public whether they endorse the appointment or not.

This process is not radical. Open, competitive selection processes are common in the private sector and apply to all public service positions. It is remarkable that well-paid, high-profile public appointments can currently be made with so little transparency of process.

What next?

From a policy perspective, the Ending Jobs for Mates Bill shows the solution to Australia’s ‘jobs for mates’ problem is really very simple. However, the new process it would introduce would still require the federal government to choose to limit its own powers and put the public interest ahead of short-term political interests.

The fate of the Bill will be a test of ‘new politics’ at the federal level. Will the government come to the table on an Independent’s Bill, working collaboratively across the new parliament? Will the government take the advice of its own review when it reports back mid-year?

The Albanese Government in its first year has stuck almost exclusively to its election platform – and reforming public appointments was not an election promise. But by narrowly focusing on election promises, the government risks ignoring the much broader push at the 2022 election for greater transparency and integrity in politics.

If the government is serious about doing politics differently, then cleaning up public appointments is the easiest win available.