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What should retired public servants do?

August 23rd, 2004

Rafe Champion alerted me to this piece by John Stone on the politicisation of the public service, and the role of retired public servants. Stone makes some valid points, but since he refers to his own dealings with government, I think it’s reasonable to point out that Stone himself is responsible for the first big breach in one of the most important conventions that used to prevail in Australia; namely that retired public servants and politicians should retire fully, or at least not take jobs that involve a potential conflict of interest with their previous positions. Stone had barely retired as Secretary of the Treasury when he started attacking the government vigorously in newspaper columns, and not long after that he was elected to the Senate for the National Party (as I recall, double-dipping his public service pension in the process). Since then, we’ve seen a steady erosion of the notion of the public service as a lifetime career, and of political office as the final stage in a career, preferably one marked by achievements outside politics.

A stint in politics or the public service is now seen as a routine stepping-stone to a more lucrative career in business, particularly highly-regulated businesses or lobbying and PR firms, where the contacts and inside knowledge acquired in the public sector represent a valuable asset. Given that people are starting with that expectation, it’s bound to affect their dealings with the business sector. Everyone they meet there is a potential future employer. And, of course, as the transition approaches, the temptation to do some more explicit mutual backscratching becomes stronger. The disgraceful behavior of former Health Minister Michael Wooldridge[1] before his departure for the private sector is one of the more egregious examples.

fn1. As noted here, Wooldridge approved a $5 million grant to the Royal College of GPs for a building to help co-locate several doctors’ groups. That same organisation subsequently employed him as a consultant.

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  1. August 23rd, 2004 at 19:14 | #1

    It works the other way too, and at much more unglamorous levels of the public service – if you expect to move (back) into industry, is it wise to antagonise people who might employ you in the future? Better to be flexible on the rules..

  2. August 23rd, 2004 at 19:27 | #2

    Politicians have an obvious incentive to create regulatory regimes with high levels of ministerial and bureaucratic discretion that create opportunities for a lucrative career as a rent-seeker in retirement. Expecting people to be angels is unrealistic when the rule of law has been displaced by bureaucratic and state power. The solution lies in wholesale deregulation and privatisation.

  3. Mark Bahnisch
    August 23rd, 2004 at 19:32 | #3

    Wholesale privatisation encourages regulation, and thus the interchange between public servants and industry associations and companies.

  4. kyan gadac
    August 23rd, 2004 at 23:36 | #4

    John Stone was always regarded as a bit larger than life, even when he was the head of Treasury he was never backward in coming forward. His later political career would, all things being equal, have been forgiven as a one off.

    Historically, he may be regarded as part of the erosion of public service morality (or ‘independence’ as it used to be kown). But I don’t think he can be tarred with the same brush as the current crop of department heads who are political appointees as opposed to being maverick bureacrats.

    More constructively though, the problem is one of the old order of ‘independent impartial advice’ being due to tradition rather than rule. Good old British nod and a wink stuff, don’t you know.

    Options include vetting of appointments by the Senate, fixed term appointments, appointments by an ‘independent’ body, defining the role of Department Head more precisely, etc. Any others? Any favourites?

    Mind you , what they will do is tighten the rules about Ministerial staffers appearing before the Senate. That they will make them feel good, but it won’t get to the substantive issue!

  5. August 24th, 2004 at 10:58 | #5

    Mark: that’s why I put deregulation ahead of privatisation!

  6. August 24th, 2004 at 13:49 | #6

    Stephen Kirchner, in an unusual lapse from his scientific standards, gives an example of Santayana’s definition of a fanatic.

    Expecting people to be angels is unrealistic when the rule of law has been displaced by bureaucratic and state power. The solution lies in wholesale deregulation and privatisation.

    But “bureaucratic and state power” systems were very much more influential under regulatory and public-sectored Whitlam/Fraser than under the more deregulatory and privatised Keating/Howard regimes. Yet abuses of Westminster political, and Whitehall bureaucratic, conventions have spread under the latter regimes.
    Australian politicians and public servants were fairly uncorrupt in the good old days of High Keynsian interventionism. Socialistic Chiffley lived very humbly. The Melbourne Club had to whip the hat around for Mandarin-reliant Menzies when he retired. Coombs, Tangue & Wheeler got their rewards from Honours rather than graft.
    Rent-seeking industrial lobbyists, politicised & cowed public servants and mercenary politicians are as plentiful as locusts and as thick as thieves these days. Hawke & Keating, whose reigns coincided with all the entrepreneurial go-go, are the richest politicians in Australian history.
    Privatisation allows monopolistic utilities to hide their price-gouging rackets under the cloak of “commercial-in-confidence” (eg California energy). Deregulation has improved the remuneration, rather than the accountability, of the financial industry (eg the S & L’s).
    The solution to this is not more capitalism or socialism. It is more democracy and a critical press.

  7. Andrew
    August 24th, 2004 at 23:39 | #7

    I’ve heard tales that Neville Wran is pushing $50 mill net worth. Trust a Sydney politician to make the most money.

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