WHEN it comes to buttonholing politicians, Westpac has staked out the nation’s best location. The bank’s tiny branch inside the walled-off areas of Parliament House dutifully looks after the savings accounts of some of the nation’s most senior politicians and bureaucrats.
But for years the branch has also been a de facto base for Westpac’s government relations staff, who have plotted high-level strategies from a cramped office behind the tellers.
The Westpac branch, no bigger than a country post office, sits right beside Parliament’s only real meeting spot — Aussie’s cafe.
During the global financial crisis and recent bouts of interest rate rises, the tab at Aussie’s was running hot as Westpac frantically pushed its views to politicians from all sides and their staffers.
On the surface, the Westpac branch is one of the more obvious symbols of where business and politics meet. But corporate Australia is increasingly turning to more secretive methods to wield influence in Canberra.
Sometimes, a business will employ strategy as complex as any election campaign. At other times, it is as crude as a $70,000 political donation by Macquarie Telecom to the ALP. As a vote of support, it attracted Kevin Rudd to drop by to deliver the keynote speech at Macquarie Telecom’s last Christmas bash in Sydney.
The release this week of the Australian Electoral Commission’s register of donations to political parties has refocused attention on lobbyists and the business of political influence.
With dozens of big-ticket reviews under way — including reviews on tax, the environment, executive pay and the retirement savings industry — Canberra is awash with reform agendas that will have profound effects on the economy and the way business works for decades. It is not surprising, then, that the lobbying industry is in overdrive.
But money is only one tool. Over the years, business has also proven adept at the art of political threat.
In a campaign that had the potential to change the banking landscape earlier this decade, National Australia Bank tried to convince the Howard government to topple the four pillars policy that restricts mergers between big banks.
A proposed merger of NAB and its smaller rival ANZ — a proposal referred to in NAB circles as Operation Edwin, but which never saw the light of day — also contained sweeteners put to prime minister Howard, according to sources who worked on the deal.
These included establishing a financial services centre and incentives for small businesses, including fee and rate cuts and other innovative measures.
If the sweeteners did not work, there was always the threat of relocating overseas.
As part of the operation, the bank formulated a campaign, which cost tens of millions of dollars, to win acceptance for rationalisation from the public, the Australian Competition and Consumer Commission and the government.
An advertising campaign was prepared, including two versions of television advertisements designed to apply political pressure to accept the proposal.
Pollsters were hired to undertake electorate-by-electorate research on attitudes to bank mergers. The data showed that about 60 per cent of respondents opposed a merger, but they softened their opposition as more financial offsets were promised by the banks and when it was put to them that a merged entity could take on the world. While the merger never got off the ground, it is believed Howard was not against the proposal if it was a friendly merger.
It is believed that the only thing that derailed the bid was ANZ chairman Charles Goode, who has also been a prominent Liberal Party fund-raiser. Under Operation Edwin, Goode had no role in the merged entity and lobbied the prime minister hard.
Such expensive campaigns to sway political opinion are not rare. The stakes are high and business is prepared to pull out all stops to get its way.
More recently, a high-profile listed mining company is believed to have adopted a similar strategy in seeking support it knew it was unlikely to get.
It developed two media campaigns, according to sources.
One campaign demonstrated the economic and regional employment benefits of the plan, praising the minister and the local member.
The second campaign showed the negative economic outcomes and job losses, pinning blame on a weak local member and the member’s political boss.
The company made television commercials and newspaper advertisements, and planned a regional telemarketing and public relations campaign, proposing to back it with a seven-figure budget.
It backed this up with consumer research from regional focus groups, showing how the positive campaigns reinforced the status of the minister and the sitting member. The negative campaign led to large shifts in voter intentions and changed voter views about them.
The warning was brutally simple: which campaign should run?
The impact of a thinly veiled political threat dressed as an information campaign can lead to two responses: offended rejection, or more serious consideration.
Campaigns of this type almost never reach the media because the target is a tiny audience: the political decision-makers. Lobbying tactics like this sometimes do not even reach ministers. Instead, they are delivered to political advisers or sitting members as an off-the-record warning to take the request seriously.
Lobbying is big business, but since efforts by the Rudd Government to shine a spotlight on the sector, it has gone deeper into the shadows. Traditional lobbyists, who are required to register their clients and meetings with ministers, are being left at the front door as business bolsters its in-house government teams with former senior politicians and high-ranking staffers.
Toby Ralph does not have a formal title, but in his job he does not need one.
His number is in the address books of many blue-chip boards, but he regards himself as a marketing strategist who sometimes works on political issues. His name never appears on lobbyist registers.
He has worked on more than 40 elections in Australia, Africa and Asia and most recently Afghanistan.
Look behind big political and corporate events — such as the four pillars banking debate in the late 1990s, the republican debate, corporate reviews, conflicts, takeovers, mergers and restructures in the media, construction, transport, superannuation, mining, export, gaming, and finance industries, environmental debates, many big listed company issues, and under-budget major infrastructure projects — and find his handiwork.
“I’m certainly not a lobbyist and don’t believe that companies should be represented by them,” he says. “When a company needs political change or support, that argument is best mounted by an informed, impassioned CEO or chair, not a political hack.
“Too often a vaguely connected former apparatchik in a shiny suit is hired to run a political pitch. On Monday the minister will listen to them arguing passionately against pineapple imports, on Wednesday they’ll be seeking subsidies for some worn out manufacturing business and by Friday they are back trying to wangle the inside running on a tender for another client. It doesn’t ring true — they are liars for hire.”
An executive with a big bank, who has worked for a senior minister in the Howard government, says most directors and executives regard Canberra as a “black box”, highlighting the lack of understanding of government by corporate Australia.
“The laws of gravity in politics in Canberra are very different to the private sector,” the executive says. “You have a command and control culture within a large corporation whereas in Canberra MPs deal . . . with what is possible, not what the guy in charge actually wants.”
Ralph says that while companies tend to focus on shareholder return and economic benefit, the political agenda is more complex, so issues that are simply not considered by business can often derail what seems a sensible idea.
“Arguing the business case is usually pretty straightforward, but framing the political argument may need research in marginal seats to measure vote impact, a range of social and economic undertakings, a preparedness to take political heat by being the lightning rod for criticism, communications campaigns and a raft of other initiatives,” he says. “This can be anathema to business, but political decisions need political solutions.”
There is little doubt that with recent reforms forcing traditional lobbyists to out their clients on a tell-all register, business has become even more covert. It is opening its pockets further to the big accounting firms and law firms, which are lobbying on their behalf.
They are also hiring former political staffers and former politicians in-house, again to escape the scrutiny of the register and the requirement to write a detailed explanation of what they want to talk about to a certain politician.
But clandestine meetings between business and government have been going on for years. This symbiotic relationship was formed because business wants to influence government and help shape policy in its favour, and political parties need to raise money to fund elections and win power. The losers are those precluded from the private talks.
Various political parties have set up groups to raise money from business. Put simply, it is cash for access.
The most high profile, the Millenium Forum, was set up in NSW in 1998 to raise money for the Liberal Party, to help it out of a financial crisis. It brings in at least $700,000 a year from subscriptions alone, according to Democracy4Sale.
Millenium offers different levels of subscriptions, with the price determining access to politicians. Not surprisingly, the list of donors is the who’s who of business, including accounting firm Deloitte.
The ALP has its own version with groups such as Progressive Business, which similarly offer packages and access to politicians for cash.
Canberra insiders say there is much more of a culture of lobbying and trying to influence ministers when there is a Labor government than a Liberal government, partly because Labor has an internal culture of consultation.
With the recent corruption scandals in NSW, Queensland and Western Australia, mainly relating to property developers, all sides of politics have made a commitment to clean up the political system by making it more transparent.
This resulted in federal and state governments introducing a lobbying register to try to clean up the mess. They have adopted a code to regulate contact between ministers and senior public servants and professional lobbying firms.
The code, across five jurisdictions, requires firms lobbying on behalf of third-party clients to disclose details on a public register and to follow ethical standards, in return for being granted access to federal ministers, ministerial staff and public servants.
But the regime does not cover unions, industry associations, churches and charities or company executives, who can access senior government figures without having to disclose details or comply with the ethical standards.
More than 630 lobbyists are registered to walk the halls of Canberra, working for about 1800 clients.
Special Minister of State Joe Ludwig says the code aims to introduce trust and integrity into how government deals with the professional lobby industry.
“So it’s about ensuring there is both openness and transparency . . . the lobbyists’ register has done that — so expectations have been met,” Senator Ludwig says.
Most traditional lobbyists and some law academics believe there are so many gaps in the code you could run a truck through it.
Bruce Hawker, managing director of Hawker Britton, one of Canberra’s most influential lobby firms, says
corporates and accounting firms are exempt. . . . “So it’s an unsatisfactory state of affairs.”
Monash University associate professor Ken Coghill argues the activity of lobbying should be registered, rather than lobbyists.
“The very important thing is to have a very complete and comprehensive list of lobbying activity,” he says.
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