Australian corruption priced at $72bn as federal ICAC advocates seize the day

By Stephen Easton

Thursday January 11, 2018

The year has barely begun and concerns about corruption are all over the news, with Australian Public Service survey data widely interpreted as a worrying sign and groups like Transparency International Australia and The Australia Institute continuing their advocacy for a federal anti-corruption agency.

In TAI’s latest report, the progressive think-tank estimates the nation’s gross domestic product could have been $72.3 billion higher this year, if the perception of how much corruption is going on had stayed at the same level as in 2012, according to Transparency International’s yearly Corruption Perceptions Index.

Australia’s CPI rank has dropped from 7 to 13 since 2012 and our national score declined six points to 79, as trust in government has eroded and surveys have shown citizens and public servants alike have gotten slightly more worried about crooked behaviour.

One of the report’s authors, TAI research director Rod Campbell, estimates the nation’s economic output drops $486 per capita for each point lost on the CPI. “This is in line with World Economic Forum estimates that corruption costs 5% of GDP worldwide,” he said in a statement published on Wednesday.

“The economic impacts of corruption are well-known. Business costs increase, capital is not allocated efficiency and inequality worsens.”

Campbell says this effort to quantify the cost of a slightly higher suspicion that corruption is happening demonstrates there is economic value in establishing a “federal ICAC” as well as an opportunity to increase public trust in government.

“The perception of corruption is on the rise, the number of public servants who have witnessed corrupt behaviour is on the rise and public trust in federal parliament is at an all-time low. As well as the obvious democratic cost, corruption and the perception of corruption also costs our economy,” he added.

“Not only does corruption cost business, businesses do not want to operate in countries where there is a perception of corruption.”

“This research shows that the business community also has a stake in perceptions of corruption and should be supporting calls for a federal ICAC.”

Parliamentary support appeared to build slightly at the end of last year, within opposition ranks in the wake of the Australian Federal Police raids on the Australian Workers Union and with Malcolm Turnbull musing that if he did come around to support a new federal watchdog, he would prefer it to be more like Victoria’s Independent Broad-based Anti-Corruption Commission than its counterpart in New South Wales.

Another model was proposed around the same time by the NSW ICAC’s inaugural inspector, Graham Kelly, who advocated for an anti-corruption commission with national reach on ABC radio. In Kelly’s view, a federal ICAC is “desperately” needed and anyone who thinks it isn’t has “their head in the clouds” but he would prefer that all state and territory governments and the Commonwealth came together to establish a national body.

The Australian Public Service Commission’s survey data on how Commonwealth public servants perceive the level of adherence to the APS Values and Code of Conduct has also been widely reported this week, with 5% saying they had witnessed corruption, among a range of other statistics. That is almost double the number in the 2013-14 survey.

On the other hand, as the commission points out in its blog post, the figures still broadly indicate “a strong culture of ethical behaviour in the APS” and a very low level of dodgy behaviour.

The Commonwealth may not have an overarching ICAC-style body but the integrity agencies it does have now hold regular meetings chaired by APS commissioner John Lloyd that aim to “coordinate, enhance, promote and embed integrity in Commonwealth agencies”, according to the APSC website.

One area particularly ripe for corruption and misconduct is procurement, and recently there have been investigations into this area of public administration in Queensland Fire and Emergency Services and in the Department of Defence.

Inappropriate gifts to public servants are usually at the less serious end of the scale but can chip away at a culture of integrity. Two local governments in Western Australia are the subject of a departmental inquiry into gifts and sponsorships, the Joondalup Times reports.

Of course anti-corruption agencies cannot hope to be effective at promoting integrity simply by wielding a big stick and a lot of their most effective work does not involve covert investigations and hauling people before public inquiries with no right to stay silent. They can also make a big difference through ongoing education in the public sector, as South Australian Independent Commissioner Against Corruption Bruce Lander is doing through a seminar for state public servants on February 26.

The year is young, and the drums are beating for a federal ICAC louder than ever. With the ACT government likely to establish its own anti-corruption body soon, it is perhaps only a matter of time before federal parliamentarians make a move of their own.

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