2
Multiple demands and resource constraints make it imperative that senior managers have the skills to undertake strategic analysis and make great strategic choices. Macquarie Graduate School of Management’s two day, leading edge, best practice program STRATEGIC MANAGEMENT FOR THE PUBLIC SECTOR has been specifically designed for senior executives working in the public sector. Sydney 2nd & 3rd December MGSM Campus, North Ryde Canberra 9th & 10th December Rydges Hotel Cnr Canberra Ave & National Circuit Places are limited. Register now: Call Jane McLaughlin on (+61 2) 9850 9974 or email [email protected] or go to www.mgsm.edu.au/smpps NO. 1 IN AUSTRALIA FOR EXECUTIVE EDUCATION IN PUBLIC PROGRAMS (2008 and 2009 London Financial Times) MACQUARIE GRADUATE SCHOOL OF MANAGEMENT WHERE SUCCESSFUL PEOPLE GO TO GO FURTHER PUBLIC SECTOR STRATEGY EXCELLENCE IN POSTGRADUATE & MBA PROGRAMS YEARS 1969~2009 [JULY 2009] 30 THE PUBLIC SECTOR INFORMANT [P OLITICS :R ICHARD M ULGAN] Public opinion remains the wiser judge Ministerial responsibility Courts have no place in deciding whether a minister should stay on the front bench Ministerial responsibility has never required ministers to take the blame for the actions of subordinates when such actions were beyond their reasonable knowledge or personal responsibility M inisterial respons- ibility is regularly pronounced dead, or at least moribund. But events of the past month have confirmed its continuing potency as an accountability mechanism. One minister, Joel Fitzgibbon, was forced to resign while another, Wayne Swan, was severely buffeted and is not yet completely in the clear. Taken together, these incidents reinforce the central fea- ture of ministerial responsibility: that its conventions are primarily political in interpretation and appli- cation. Constitutional experts can try to encapsulate the principles of ministerial responsibility into textbooks or into codes of conduct. But how the principles play out in practice always depends on the politics of the moment, on public perceptions of ministerial culpa- bility and on the prime minister’s judgment of potential damage to the government’s standing. The trigger for Fitzgibbon’s resignation was evidence that his office staff had organised and attended a meeting in the minister’s office between the minister’s brother and other health insurance executives. The purpose was to discuss Defence Department health contracts. The minister had not been told of the meeting. He had earlier told his staff that he could not become involved with any of his brother’s business dealings. Prime Minister Kevin Rudd immediately referred the issue to then special minister of state John Faulkner, the general keeper of the Government’s constitutional conscience. After dis- cussion, Fitzgibbon agreed, in his letter of resignation, that he ‘‘was not satisfied that [the meeting] leaves it clear that I have entirely conformed with [the] Ministerial Code of Conduct’’. What is most striking about this case is the admitted tenuousness of the fault. The minister admits his guilt very indirectly – it was not clear that the code was conformed with – a form of words that leaves open the possibility of doubt. It was certainly not clear that the code had been actually been breached. More- over, placing the emphasis on a possible breach of the code rather than on the supposed impropriety itself, suggests further doubt about the minister’s culpability. If the minister had clearly acted impro- perly, as for instance in actually seeking an advantage for his brother or in misleading Parliament, that would have been given as the reason for his resignation. Instead, Rudd, sensing that the fault was more technical than actual, sent Fitzgib- bon off to the architect of the code, Faulkner, for a legalistic interpret- ation and penalty. The real reason for Fitzgibbon’s resignation, as generally recognised, lay elsewhere. The meeting in his office, though not a hanging offence in itself, was the last straw in a long line of indiscretions. He had already come under attack for failure to disclose gifts and hospitality as well as for his dealings with Helen Liu, a businesswoman with Chinese gov- ernment connections. Another inci- dent, however minor and contest- able, would be a further distraction for the Government. All in all, Fitzgibbon had become a liability. If evidence of a similar meeting had been used to incriminate one of the Government’s key ministers with no previous personal blemishes, such as Julia Gillard or Lindsay Tanner, we can easily imagine the response. The meeting, we would have been told, had been held by members of the minister’s staff on their own initiative behind the minister’s back and against the minister’s express instructions. The staff responsible had been dismissed and all remaining staff reminded of their professional obligations. No breach of the code of ministerial conduct would have occurred. Responsibility for the acts of ministerial staff remains a grey area. Labor, in opposition, criticised ministers in the Howard govern- ment who sought to avoid respons- ibility by passing the buck to unaccountable advisers. Ministers, it was argued, should accept full responsibility for the actions of their staff. The code of ministerial con- duct, however, is less categorical. It merely requires that ministers ensure that ‘‘the conduct, represen- tations and decisions of those who act as their delegates or on their behalf are open to public scrutiny and explanation’’. Ministers should not shield their staff from scrutiny. But they need not take responsibility and shoulder possible blame for all the culpable acts of their advisers. Such a position makes sense. Ministerial responsibility, despite perennial claims from misguided purists, has never required ministers to take the blame for the actions of subordinates when such actions were beyond their reasonable know- ledge or personal responsibility. When departmental officials are at fault, ministers must answer questions and impose remedies, but they do not need to accept personal blame, still less resign. Given the current size of minis- terial offices, this principle now needs to be extended to advisers as well as to departmental officials. It was open to Rudd to let Fitzgib- bon’s staff take the fall. That he

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Page 1: [POLITICS MULGAN Publicopinionremainsthewiserjudge · Novated leasing is available to all Federal Government employees who are eligible to salary package. Eligibility criteria and

Multiple demands and resource

constraints make it imperative that

senior managers have the skills to

undertake strategic analysis and

make great strategic choices.

Macquarie Graduate School of

Management’s two day, leading edge,

best practice program STRATEGIC

MANAGEMENT FOR THE PUBLIC

SECTOR has been specifically

designed for senior executives

working in the public sector.

Sydney 2nd & 3rd December

MGSM Campus, North Ryde

Canberra 9th & 10th December

Rydges Hotel

Cnr Canberra Ave & National Circuit

Places are limited.

Register now: Call Jane McLaughlin

on (+61 2) 9850 9974

or email [email protected]

or go to www.mgsm.edu.au/smpps

NO. 1 IN AUSTRALIA FOR EXECUTIVE

EDUCATION IN PUBLIC PROGRAMS

(2008 and 2009 London Financial Times)

MACQUARIE GRADUATE SCHOOL OF MANAGEMENT

WHERE SUCCESSFUL PEOPLE

GO TO GO FURTHER

PUBLIC SECTOR STRATEGY

EXCELLENCE IN POSTGRADUATE & MBA PROGRAMS

YEARS1969~2009

[JULY 2009]

30 T H E P U B L I C S E C T O R I N F O R M A N T

[POLITICS: RICHARD MULGAN]

Public opinion remains the wiser judgeMinisterial responsibility

Courts have no place in decidingwhether a minister should stayon the front bench

Ministerial responsibility has never requiredministers to take the blame for the actionsof subordinates when such actions werebeyond their reasonable knowledge orpersonal responsibility

M inisterial respons-ibility is regularlypronounced dead, or atleast moribund. But

events of the past month haveconfirmed its continuing potency asan accountability mechanism. Oneminister, Joel Fitzgibbon, wasforced to resign while another,Wayne Swan, was severely buffetedand is not yet completely in theclear. Taken together, theseincidents reinforce the central fea-ture of ministerial responsibility:that its conventions are primarilypolitical in interpretation and appli-cation. Constitutional experts cantry to encapsulate the principles ofministerial responsibility intotextbooks or into codes of conduct.But how the principles play out inpractice always depends on thepolitics of the moment, on publicperceptions of ministerial culpa-bility and on the prime minister’sjudgment of potential damage to thegovernment’s standing. The trigger

for Fitzgibbon’s resignation wasevidence that his office staff hadorganised and attended a meeting inthe minister’s office between theminister’s brother and other healthinsurance executives. The purposewas to discuss Defence Departmenthealth contracts. The minister hadnot been told of the meeting. He hadearlier told his staff that he could notbecome involved with any of hisbrother’s business dealings. PrimeMinister Kevin Rudd immediatelyreferred the issue to then specialminister of state John Faulkner, thegeneral keeper of the Government’sconstitutional conscience. After dis-cussion, Fitzgibbon agreed, in hisletter of resignation, that he ‘‘wasnot satisfied that [the meeting]leaves it clear that I have entirelyconformed with [the] MinisterialCode of Conduct’’.What is most striking about this

case is the admitted tenuousness ofthe fault. The minister admits hisguilt very indirectly – it was notclear that the code was conformedwith – a form of words that leavesopen the possibility of doubt. It wascertainly not clear that the code hadbeen actually been breached. More-over, placing the emphasis on apossible breach of the code ratherthan on the supposed improprietyitself, suggests further doubt about

the minister’s culpability. If theminister had clearly acted impro-perly, as for instance in actuallyseeking an advantage for his brotheror in misleading Parliament, thatwould have been given as the reasonfor his resignation. Instead, Rudd,sensing that the fault was moretechnical than actual, sent Fitzgib-bon off to the architect of the code,Faulkner, for a legalistic interpret-ation and penalty.The real reason for Fitzgibbon’s

resignation, as generally recognised,lay elsewhere. The meeting in hisoffice, though not a hanging offencein itself, was the last straw in a longline of indiscretions. He had alreadycome under attack for failure todisclose gifts and hospitality as wellas for his dealings with Helen Liu, abusinesswoman with Chinese gov-ernment connections. Another inci-dent, however minor and contest-

able, would be a further distractionfor the Government. All in all,Fitzgibbon had become a liability.If evidence of a similar meeting

had been used to incriminate one ofthe Government’s key ministerswith no previous personalblemishes, such as Julia Gillard orLindsay Tanner, we can easilyimagine the response. The meeting,we would have been told, had beenheld by members of the minister’sstaff on their own initiative behind

the minister’s back and against theminister’s express instructions. Thestaff responsible had been dismissedand all remaining staff reminded oftheir professional obligations. Nobreach of the code of ministerialconduct would have occurred.Responsibility for the acts of

ministerial staff remains a grey area.Labor, in opposition, criticisedministers in the Howard govern-

ment who sought to avoid respons-ibility by passing the buck tounaccountable advisers. Ministers,it was argued, should accept fullresponsibility for the actions of theirstaff. The code of ministerial con-duct, however, is less categorical. Itmerely requires that ministersensure that ‘‘the conduct, represen-tations and decisions of those whoact as their delegates or on theirbehalf are open to public scrutinyand explanation’’. Ministers shouldnot shield their staff from scrutiny.But they need not take responsibilityand shoulder possible blame for allthe culpable acts of their advisers.Such a position makes sense.

Ministerial responsibility, despiteperennial claims from misguidedpurists, has never required ministersto take the blame for the actions ofsubordinates when such actionswere beyond their reasonable know-ledge or personal responsibility.When departmental officials are atfault, ministers must answerquestions and impose remedies, butthey do not need to accept personalblame, still less resign.Given the current size of minis-

terial offices, this principle nowneeds to be extended to advisers aswell as to departmental officials. Itwas open to Rudd to let Fitzgib-bon’s staff take the fall. That he

Page 2: [POLITICS MULGAN Publicopinionremainsthewiserjudge · Novated leasing is available to all Federal Government employees who are eligible to salary package. Eligibility criteria and

[JULY 2009]

T H E P U B L I C S E C T O R I N F O R M A N T 31

Things you need to know: Offer closes 31 August 2009. Terms and Conditions apply for this promotion and are available from www.msa-online.com.au/guaranteedsavingsTCs. Novated leasing is available to all Federal Government employees who are eligible to salary package. Eligibility criteria and terms and conditions apply.

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Judgement day: Joel Fitzgibbon makes his way to the back bench after resigning as defence minister last month.

made Fitzgibbon himself resignindicates a judgment that publicopinion had turned against theminister. Further support wouldprove unpopular and offer easypickings for the Opposition.

In some respects, the case ofSwan leaves less wriggle roomthan Fitzgibbon’s. The heat

over the OzCar affair has been onhim personally rather than on hisstaff. Did he intervene to makespecial representations on behalf ofLabor supporter John Grant? If so,did he lie to Parliament about it?Swan’s statements to the House areequivocal and omit reference to aphone conversation with Grant.Unlike Fitzgibbon, however, Swanis a minister the Government cannotafford to lose, especially over theGrant connection, which would alsodamage the Prime Minister.Swan has also been lucky, in that

the Opposition’s attack on Rudd,based entirely on the notorious fakeemail, failed so spectacularly.Indeed, Rudd audaciously added anew variation to the conventions ofministerial responsibility, urging theOpposition Leader, Malcolm Turn-bull, to resign. Of course, onlyministers have a constitutional res-ponsibility to Parliament. Oppo-sition members have no obligation

to offer explanations or to acceptconsequences such as resignation.Their role is to ask, not to answer.Yet in the gladiatorial theatre ofParliament, where alternativeleaders stand trading blows toe-to-toe, mutual demands for resignationcarry a certain symmetry. Certainly,Turnbull could not afford to denyRudd’s right to seek his resignation.The Auditor-General has been

left to deal with Swan’s actions overOzCar, but in the much widercontext of looking at all represen-tations to Treasury on this matter.

Much will depend on what view theAuditor-General takes of thescheme and of how arm’s-lengthministers should have remainedfrom its administration. Represen-tations via ministers are a constantfeature of government, as attested toby the multimillion-dollar lobbyingindustry. If a company is big andpowerful enough, ministerial help isno problem. If it is acceptable tohelp GM Holden, what is wrongwith helping a car dealership?Another complicating factor is

that politicians often exaggerate

their influence in order to boost theirlocal reputations. Ministers andtheir staff pretend that represen-tations from the minister will makeall the difference when, in fact,decisions are made by officialsusing strict guidelines. The reporton OzCar will require all theAuditor-General’s tact and will beworth waiting for!

That decisions on ministerialresponsibility are ultimatelypolitical reflects the com-

plexity and uniqueness of each case.

The prime minister makes the finalcall after weighing up all individualcircumstances. But the effectivedecision is often made less by theprime minister than by the public atlarge, as the punters either endorseor reject the opposition’s attack. Itwas public opinion, in the end, thatdetermined that Fitzgibbon shouldgo and that Swan should stay, atleast for the time being.The court of public opinion is

greatly to be preferred to a court ofjudges. In NSW, constitutionalexperts are looking anxiously at thelegal case being brought against thestate government by sacked ministerTony Stewart. Stewart wasdismissed on the basis of a reportcommissioned by Premier NathanRees, which found he had intimid-ated a female staffer. Stewartcontests the report’s conclusionsand has produced witnesses whosupport his version of events. If hisclaim is upheld, he could havegrounds to be reinstated as aminister. Giving ex-ministers theright to sue for unjust dismissalwould be fun for lawyers but chaoticfor governments.

Richard Mulgan is a former professor

at the ANU’s Crawford School of

Economics and Government.