Karl Bitar's leap to Crown Casino

It’s hard to know whether to laugh or cry at the news that former Labor boss Karl Bitar is joining Crown Casino. The scriptwriters at the Simpsons couldn’t have cast a more delicious storyline, but at the same time it simply cements the public’s rock-bottom perception of politics and its practitioners.

It certainly does no favors for Julia Gillard, Bitar’s former colleague, at a time when Labor is trying to push through anti-gaming reforms through the Parliament.

What’s more worrying is what it says about the institutional barriers to good policy outcomes in Australia. Here we have the former national secretary of a political party that is committed to addressing disadvantage, in this case through gaming reform, jumping the fence to lobby against such reform.

Put aside, if you can, the personal morality of the decision. The real concern is that such behavior is now entirely respectable. And it’s part of a culture where it’s become entirely legitimate for corporations to use all means at their disposal to fight against policy proposals they don’t like, even in the face of a strong public interest argument.

In some sections of corporate Australia, it’s assumed that anything which threatens a company’s quarterly earnings is by extension a cancer on our body politic. Over the last year alone, a host of policy proposals have attracted organised corporate resistance: the resource rent tax, banking competition, pokies reform, MySuper, cigarette advertising and, not least, a carbon price. An American CEO is famously misquoted as saying in the 1950s that “what‘s good for General Motors is good for the country”. In the last few months, we might have rephrased this to say: “If it’s bad for BlueScope or Rio or British American Tobacco, it’s bad for Australia.”

Often, the outcomes of lobbying are successfully cloaked in the guise of personal responsibility. “Responsible gaming” is not just the catchcry of the gambling lobby, but is used to legitimise the proliferation of sports betting in which the big sporting codes acquiesce in the corruption of their own product. We are urged to “drink responsibly” and “enjoy in moderation”. Where does it end? Responsible smoking? Responsible pollution? The notion of the public good is a historical curiosity.

Australia is not alone here – the problem is common to most advanced democracies. Corporate lobbying has become part of democracy’s institutional fabric. In the U.S. direct lobbying expenditure reached US$3.5b in 2009, up from US$200m in 1983, an increase of almost seven-fold in real terms. As companies aren’t in the habit of paying something for nothing, the numbers suggest regulatory design is for sale.

One leading cause of the global financial crisis was weak regulation, secured by a banking sector that had fought for decades against tighter regulatory control. Success in resisting tighter control was achieved by staffing the regulators with bankers: U.S. Treasury Secretaries Robert Rubin and Hank Paulson were both former chiefs of Goldman Sachs. Their appointments were considered entirely respectable. When Bitar’s role was announced, Immigration Minister Chris Bowen defended the appointment on the grounds that he’ll be on the register of lobbyists, and as such, it was perfectly acceptable.

And therein lies the problem. No-one is too surprised when Bitar joins Crown. We’d be even less surprised if it was a conservative politician. Perhaps political careers are just stepping stones, with the end game being those lucrative private sector jobs that follow.

And so what is to be done? Clearly, we can’t rely on parliaments to curb these developments. Each side conveniently uses the other as an excuse not to act. If Labor really wants to improve its standing with a disillusioned public, it could do worse than implementing rules to prevent parliamentarians and senior staff from joining private organisations in a regulatory or lobbying capacity for three years after leaving office. The backlash from said staff and parliamentarians would be as loud as it would be predictable, but such a restriction should be the price of enjoying power.