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Public purpose - public interest

By Mark Bahnisch - posted Friday, 23 June 2006

The appointment of Keith Windschuttle to the ABC Board has certainly ruffled feathers - more so, it seems than the previous appointments of Janet Albrechtsen and Ron Brunton. But what’s been downplayed in commentary - whether negative or positive - is the propriety of using board appointments to push a particular political view held by the government.

Mark Colvin, for instance, interviewing Minister Coonan on ABC National, seemed to suggest that “wet conservatives” would be acceptable. The paucity of debate on the appropriate governance of the ABC reflects a climate whereby the government is thought of as the “owner” or the “100 per cent shareholder” rather than a trustee of the public aims and public interest inherent in the nature of the ABC.

This thinking is not confined to the ABC. Criticism of Robert Gerard’s appointment to the Reserve Bank of Australia (RBA) Board and the muted criticism of Peter Hurley’s simultaneous appointment to the ABC Board have revolved around their status as high profile Liberal Party donors rather than their ability to contribute to the public aims of these two organisations.


Underlying this phenomenon is a broad acceptance of privatisation, in terms of how debates are framed, if not in terms of public support. This is perhaps best reflected in the way Telstra is discussed. The government contemplates putting part of its shareholding in its Future Fund if a good price cannot be obtained for the third tranche of Telstra shares. There has been little or no discussion of the appropriateness of the Future Fund holding shares on behalf of the government (though at arms length) and what influence the Fund managers would exert on Telstra’s governance.

Similarly, the government is caught between a rock and a hard place when seeking to bend Telstra to its political will. Legislated community obligations are apparently not robust enough, and there are frequently moves (often in reaction to National Party pressure) to circumscribe how Telstra can run its business. One of the most striking examples has been the direct influence of the minister in stipulating the process and the scope of the review of public pay phones.

We often hear from the government that there is a conflict of interest between its role as regulator of Telstra and its interest in getting the best possible price for the T3 sale. There’s truth in this, but again the way the debate is couched is significant. Stories in the financial press, and the rhetoric of Treasurer Peter Costello, refer to the return the government will get on its holding, forgetful of the fact that the government doesn’t own Telstra shares because it is an investor, but because of the legacy of public ownership of a public corporation.

The debate over the Future Fund proceeds on a parallel track - the government is urged to set the criteria for investment to maximise its return. And Costello talks of the “balance sheet” of the government when claiming that it’s debt free.

The language and metaphors used here are significant. We’re being incited to think of the government not as a sovereign and democratic executive, but rather as some sort of glorified fund manager, whose eye is always on its bottom line.

Privatisation and corporatisation have given us “shareholding ministers”. Peter Beattie’s Queensland Rail announces that it has to operate outside of Queensland to make it competitive. We’ve completely lost the sense of the public reasons why certain corporations were in state ownership to start off with. We need some new thinking on exactly what purpose public investment in corporations serves. That is, what public purpose.


Lindsay Tanner is one of the few to have thought this through - with his excellent suggestion that the Telstra network be in public hands (allowing investment in public goods - fast broadband, new technologies) and that the retail arm of Telstra compete on a truly level playing field with other telcos. Such a proposal would avoid the confused mess we are currently in, with the government alternately thinking as a shareholder seeking to maximise its return, and sometimes applying pressure as an owner to maximise short-term political gain.

A renewed sense of the public purposes of public corporations is needed, and a consequent reform of their governance structures. We need to get away from the view that the government “owns” the ABC and therefore has the right to see its views represented on the board.

Rather, the ABC should be thought of in terms of its public role which transcends either the narrow political or financial interests of the government of the day. The ALP could do the public a great service by rethinking these issues and proposing a merit-based appointments process for the ABC Board, with transparency and bipartisanship built in. In an era of privatisation, we need to rethink what is private and what is public and to demand that the government act in the public interest rather than as if it were just another shareholder on its own account.

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About the Author

Dr Mark Bahnisch is a sociologist and a Fellow of the Centre for Policy Development. He founded the leading public affairs blog, Larvatus Prodeo.

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