The Coalition’s binge on consultants to replace “frank and fearless” advice from public servants has earned it the nickname The Dairy —  a place to be milked it for all it’s worth, especially if you’re a big donor. Tom Ravlic calls for a ban on donations from government contractors.

Accounting firms, law firms and other specialist organisations have become the de-facto public service in an era where outsourcing is king and government departments have been forced to meeting efficiency dividend targets often to meet what is for some in politics an unattainable state of perfection: a budget surplus.

Numerous stories have been written about the millions of dollars paid to various consulting firms for the provision of services to government. Look up anything by Michael West on this site, Edmund Tadrios and Tom McIllroy at the Australian Financial Review and Adele Ferguson at The Age and Sydney Morning Herald. We’re talking squillions. 

The justification may well be that the outsourcing of services removes particular overheads from a government’s point of view such as superannuation and other employee liabilities but still provides access to expertise that is required to run the administration, but there is a bit of a conundrum that needs further thought.

Independent advice has been the hallmark at least historically for those that served governments in the public service. Fearless advice given to Ministers has been the backbone of a public service and it ought to continue to be the case irrespective of whether the people providing the advice are career public servants or consultants hired for a specific task.

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This leads to the next question that could be inconvenient, vexed and unpalatable for some organisations current engaged in providing consulting services to the government. Are political donations from commercial entities irrespective of the profession they represent to any political party consistent with the notions of independence in the public sector and the giving of fearless advice to government?

Put differently: should the provision of political donations in any form be prohibited for those organisations that are seeking to tender for government contracts?

This does not mean Organisation A should not be able to donate to a political party of their choosing if they believe a political party merits support. They should be able to throw their money wherever they want in a democracy. People or organisations should be free to associate with whomever they wish in a democratic society. 

Does this compromise the ability of firms to provide fearless advice to government if they are hired as consultants? One argument is that the donations should not matter because an engagement team would deliver a professional service irrespective of which political party received a bundle of dosh from their employer. Who cares?

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A far more interesting alleyway to wander down is whether political donations to one or more political parties creates the perception that the consulting firm has been hired because they had curried favour with one or more sides of politics. Is this consistent with the fearless advice that the Australian public ought to expect from the public service given that outsourced parties are effectively getting taxpayer funds?

It is necessary for the government to remember that the funds being spent by government are taxpayers’ funds. They are not amounts that have been hived from the profits of a publicly listed corporation or a large private company. These are taxpayer dollars that are being paid for services.

A higher level of accountability ought to exist for the both the service provider and the government departments that award the tenders as a result. A prohibition on political donations by consulting firms eager to get government business may be one way to ensure that the advice received by government is in fact and can be seen as being independent.

There is an ethical standard in the accounting profession that talks about independence. It has two parts. The first relates to independence of mind and the second part talks about the perception of independence.

Accept for a moment that consultants are independent of mind. Does the existence of political donations to one or more parties create the perception that the work is compromised?

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https://www.michaelwest.com.au/mckinsey-co-clean-up-big-time-thanks-to-lnp-economic-bungling/

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