How lobbyists shape the budget

As soon as possible after Treasurer Jim Chalmers finishes delivering his third budget address on Tuesday, Prime Minister Anthony Albanese will duck into a car at Parliament House for the short drive to his second most important budget night priority. About 400 guests who have paid $5000 each will be waiting to hear him speak at Barton’s luxury Hotel Realm.

At this Federal Labor Business Forum event, the dry cadence of numbers and economic forecasts will give way to a coming-together of Australia’s power elite. Visa is a long-time sponsor of these events; last year PwC reportedly paid $80,000 for the honour but pulled out at the last moment as the tax leaks scandal unfolded.

“It’s like Derby Day, but without the hats,” says Christopher Pyne, a former Liberal cabinet minister, who joined lobbyists GC Advisory as director a couple of months after leaving the role of defence minister in 2019. He now chairs his own national firm, Pyne & Partners, whose clients include the Business Council of Australia, Google Australia, Saber Astronautics Australia, the Taipei Economic and Cultural Office and Andrew Forrest’s private investment vehicle, Tattarang, according to the Australian Government Register of Lobbyists.

“Budget night is the most important night of the political year,” Pyne says.

With attendance at most budget events coming at a significant price – and given money’s obvious power to move the political world – the networks of money and influence that intersect across the political divide during budget week come at a cost to the public.

“It’s a fundamentally unpalatable proposition,” says Catherine Williams, executive director of The Centre for Public Integrity and an advocate for changes to rules and regulations surrounding lobbyists and political fundraising.

“Attendance at such events buys influence, it buys the opportunity to put your issue to a person who has the power to make a decision,” says Williams. “Just the ability to establish a social relationship with such a person can be enormously helpful in the future when it comes to influencing decision-making.”

Williams is careful to point out that while lobbying is integral to the democratic process – it’s the high price of access as well as the lack of transparency that creates the potential to distort public policy.

Lobbying and the business of political fundraising are hotly contested issues in Canberra, with the two major parties often lining up against the Greens and some independents over where the lines should be drawn.

A report on access to Parliament House by lobbyists, tabled this week by the Senate Finance and Public Administration References Committee, found as of April 3 this year there were 691 individual lobbyists and 331 lobbying organisations with 2285 registered clients. That doesn’t include people working in-house as a government relations adviser for a business or company, or even people working for an industry association or other type of organisation. These are the people with “orange” sponsored passes, whose unfettered access to politicians allows them to walk the halls of Parliament House unaccompanied. Greens and other accountability advocates have called for greater transparency with the publication of ministerial diaries.

“It looks like another missed opportunity as the inquiry’s recommendations did not offer any concrete solutions to strengthen the Lobbying Code of Conduct or increase transparency,” says Clancy Moore, chief executive of Transparency International Australia.

One of the recommendations of the independent review of the Lobbying Code of Conduct was to consider, among other things, an expanded definition of who exactly is a lobbyist.

That’s because their access represents the capture of key state functions, according to Greens Senator Barbara Pocock, who helped lead the recent Senate inquiry into the tax leaks scandal that brought the Australian arm of global consulting firm PwC to its knees.

“In the last 10 years the Big Four professional service firms [Deloitte, KPMG, PwC and EY] have donated more than $4.2 million to the two major parties,” Pocock says. “It’s hard to argue that this persistent lobbying does not play some part in them securing $8 billion in government contracts over the same time period.”

The mutually beneficial relationships between government and lobbyists should worry people, adds Pocock, because it sets a precedent for anyone with a big enough cheque to buy the ear of the Australian government.

“Why would a multinational give large sums of money to an Australian political party unless they were confident of a return?” she says. “If a political party is serving the interests of a private firm, they are likely doing this at the expense of public interests. Banning donations is how we reduce the undue influence of big firms on the political process and break the cycle of favours.”

Another concern raised by Clancy Moore is the so-called “revolving door” that allows former ministers, advisers and public servants to quickly establish themselves in the private sector, offering advice to corporate clients.

“Ministers and MPs can be very effective lobbyists after they leave parliament, as they have inside knowledge of policy [and] government programs, and decision-makers on speed dial,” says Moore. “This creates an unfair advantage, raises issues of integrity and can have a corrupting influence on policymaking.”

Moore argues closing the revolving door and preventing MPs and advisers from parachuting into highly paid lobbying roles would bring Australia into line with much of the rest of the world.

“Australia should follow international standards by extending the cooling-off period for ministers, MPs and senior public servants to at least three years after they leave parliament.”

The budget is the culmination of a submissions process that begins in October the year before, and continues through months of horsetrading and evaluation by the Expenditure Review Committee. Then there’s the last-minute tweaking by the prime minister and treasurer of the day.

Budget day begins in earnest at 1.30pm with the commencement of the lock-up, when Treasury officials make the budget papers available to select members of the media and other stakeholders. They are barred from sharing the contents externally until the treasurer rises to speak, so as to prevent any advance warning that might prove profitable for traders.

About 6pm on Tuesday, those with the connections to snaffle a ticket to Treasurer Jim Chalmers’ half-hour budget speech – captains of industry and finance, union leaders and community representatives of all political hues – start filtering into Parliament House.

After Chalmers commends the budget to the House about 8pm, the air infused with the aura of nation-building and the promise of future success, those watching from the public galleries will disperse to not one party but many, inside and outside the building.

The headline act at the Hotel Realm will be Prime Minister Anthony Albanese and Treasurer Jim Chalmers, both introduced by Deputy Prime Minister Richard Marles, with a supporting cast of cabinet ministers, MPs and senior advisers seated at every table.

Though it is a Labor fundraising event, this budget dinner is not a strictly family affair. When Albanese got to his feet last year, he noted the very last person he expected to see sitting closest to the lectern at a Labor dinner was Christopher Pyne, whose roar of laughter carried the room.

Some ministers love the interaction, relishing the chance to advance the government’s agenda with corporate movers and shakers. Others are less enthusiastic, preferring long toilet breaks and lonely corners to the crush of people wanting a return on their investment.

“All the rent-seekers come to town to see if the money they spent on logrolling in the months leading up to budget night has paid off,” said one former Labor minister.

The sit-down dinner at Hotel Realm is not the only game in town.

Next door at the National Press Club is a $1500-a-head cocktail reception where the other architect of the budget, Finance Minister Katy Gallagher, will be the key speaker.

For those with the stamina, at 7am on Wednesday the Institute of Public Accountants and the Canberra Business Chamber host their annual federal budget breakfast in the Great Hall of Parliament House. This crowd must clear the room within two hours, however, so staff can set up for the day’s main event – the treasurer’s traditional post-budget address to the National Press Club, followed by questions from the working press.

The 600-plus guests attending this year’s event – which sold out months in advance – will be celebrating the 50th consecutive post-budget address to the National Press Club by a federal treasurer.

“Alongside the Midwinter Ball, it’s the ultimate networking event in Canberra,” says Steve Lewis, a former National Press Club vice-president and a senior adviser at SEC Newgate. “It attracts a who’s who of corporate Australia and more senior ministers than almost any other event.”

For some, but not all, that marks the week’s halfway point.

The following days bring a range of events hosted by industry associations, lobbying firms and other organisations. These include the Future Women’s dinner on Wednesday, where Katy Gallagher will speak in her capacity as the minister for women.

Capping the week off is Opposition Leader Peter Dutton’s address-in-reply on Thursday night, followed by what is marketed as the “highlight of the Parliamentary Calendar for the Liberal Party in the Federal Parliament”, the Bradfield Budget in Reply Function. At $1200 a head ($600 for Liberal Party members), or $10,000 for a table of 10, a ticket to the event includes drinks before the speech at Parliament House, followed by dinner at Old Parliament House.

 

In additional comments provided to this week’s Senate report on lobbyist access to Parliament House, Labor senators Louise Pratt and Jana Stewart were keen to note lobbyists played an important role.

“While many people seeking to influence decisions might be lobbying, and many do this professionally, there are also many lobbyists paid by third parties who are valued by their clients for their understanding of how parliament and government work and their ability to support clients to communicate their views,” noted Pratt and Stewart.

They also referred to the role of lobbyists highlighted by then Labor senator John Faulkner when he tabled the first federal lobbying Code of Conduct in May 2008:

“The government recognises that lobbying is a legitimate activity and part of the democratic process,” Faulkner said. “Lobbyists can help individuals and organisations communicate their views on matters of public interest to the government and, in doing so, improve outcomes for the individual and community as a whole.”

Labor insiders are also keen to point out changes introduced by Anthony Albanese to the way business is conducted. In October 2022, Albanese wrote to the parliament’s two presiding officers asking them to stop taking bookings for political fundraisers in parliament’s public areas.

The ban – a pre-election demand of independent MPs Helen Haines, Rebekha Sharkie and Zali Steggall – came into effect before Chalmers’ first budget in October 2022. Citing the need to maintain the dignity of Parliament House, it put an end to the more lavish fundraising activities seen over the past 15 years, particularly during budget week.

Albanese wasn’t always so averse to the public display. In 2012, then transport minister Albanese emceed the post-budget gala dinner in the Great Hall where participants reportedly “paid $2300 a head for the privilege of dining with a minister, $1300 to break bread with a parliamentary secretary and $550 for the pleasure of an evening just with friends and associates”.

During the Abbott, Turnbull and Morrison governments, the practice continued to flourish.

In 2014, Labor accused then speaker Bronwyn Bishop of compromising the independence of her office after she held a budget-night Liberal fundraiser in the speaker’s office, one of Parliament House’s most lavish suites.

And in 2022, then treasurer Josh Frydenberg hosted a Great Hall dinner at which a table cost $14,000, and attracted the likes of pub baron Justin Hemmes, mortgage boss James Symond, Google managing director Mel Silva, National Australia Bank chair Philip Chronican, Westpac chief executive Peter King, then PwC chief executive Tom Seymour and KPMG chair Alison Kitchen.

Other practices, such as ministers hosting exclusive pre-budget cocktail parties, also appear to have fallen out of favour.

In 2014, then foreign affairs minister Julie Bishop was in newspaper headlines after four members of that year’s Department of Foreign Affairs and Trade graduate intake were made to serve drinks and nibbles at her pre-budget bash, and then had to stay behind to clean up.

The toned-down version of the budget night festivities reflects a government more cognisant than some of its predecessors of how such displays may be a turn-off for voters – and a government, Labor insiders point out, that established the National Anti-Corruption Commission.

One senior adviser does, however, admit to a “serious mistake” in Labor’s first year in office. The budget-night dinner was held at the National Arboretum, which was so far away “it made people feel like we imprisoned them in a Siberian labour camp”.

“Lesson learned,” the adviser said. “Until we can all agree on a new model for public financing of political parties that obviates the need for fundraising, I guess we’ll stick to the Hotel Realm.”