At what point do deals between businesses and politicians fall into the bracket of corruption? (Image via Wikipedia)

Dr Barry Hindess says what the public see as political corruption is ever-changing and difficult to pin down.

AUSTRALIA IS CONSISTENTLY ranked among the least corrupt countries on Transparency International's Corruption Perceptions Index — 13th place out of 175 in 2016, its lowest ranking for many years. Yet within Australia, pressure is building for major reforms; The Greens, Labor and several Senate Crossbenchers favour a Federal version of NSW's ICAC, while Bill Shorten, taking up elements of an Australia Institute proposal, has promised that his Labor Government, which he hopes to form after the next election, will establish a National Integrity Commission. To understand this discrepancy between Australia's good international ranking and internal perceptions of a serious problem of corruption, we should recognise that corruption is not an easy idea to pin down. Transparency International's index is based not on the realities of corruption within different countries, but on perceptions, mostly by international businesses, of corruption as an obstacle to doing business. Many Australians are concerned by what they see as endemic political corruption, but what is seen as corruption varies over time and from place to place. This is the first of what I hope will be several pieces addressing the complexities of political corruption in Australia.

My first intimation of what would now be called political corruption came when I moved to Liverpool in the late 1950s and heard the story of The Pub in the Field. The story came in different forms depending on who you spoke to, but the basic elements are as follows: Like other large British cities, Liverpool faced a massive rebuilding task in the aftermath of World War 2, dealing partly with bomb damage and partly with slum clearance. The Pub/Field story went that a local brewer, closely linked to the Liverpool Conservative Party, built a pub at what would have been a prime location in a substantial public housing estate on the outskirts of the city, the plans for which were never made public. Zoning regulations would have ensured that this pub had no serious competition. Plans changed and, for a time, Labour took control of the City Council. There are no direct parallels between City Councils in Australia and Britain. Liverpool City Council managed local infrastructure, public transport and planning, including zoning regulations which restricted the locations of new businesses – including pubs – for a population of close to a million, much larger than most Australian City Councils. Brisbane City Council is probably the nearest Australian parallel to a British City Council.

The estate was not built as originally planned, except for the road on which the pub stood, which was constructed pretty much on schedule. Meanwhile, a perfectly serviceable pub was left looking for business in the middle of a field. I also learned that there were close ties between the brewer and the local Tories and that whoever became leader of the City Conservatives would normally be appointed to its Board of Directors. The brewer was not happy with the delay in building the estate, but while it clearly favoured the Conservatives and the small anti-Labour Protestant Party who always voted with the Tories, it had limited influence on the outcome of local elections. While newspaper columnists and letters to the editor argued that the brewer had been badly treated, Labour took the view that it served them right.


I don't recall anyone at the time describing the cosy relationship between the Tories and the brewer in terms of corruption.  It was dreadfully unfair, of course, but most of us on the Left took it for granted that the political odds would always be stacked against us — a perception that has since been powerfully reinforced by experience. I had already learned that many MPs, even in the Labour Party, retired from politics owning two or more homes – one in London, another in their electorate and sometimes a farm in the Home Counties – but nobody referred to this as evidence of corruption

The first memory I have of corruption being raised as an issue in contemporary British politics is of the Tories going after T. Dan Smith in the early 1970s. Smith had been born in Wallsend, next to Newcastle-upon-Tyne, on the north bank of the river and grew up to become a major figure in the Labour Party in North-East England. He was both leader of the Newcastle Labour Party and, from 1960 to 1965, leader of Newcastle City Council. In this last position, he talked of turning Newcastle into "the Brasilia of the North" and became known to his political opponents, inside and outside Labour, as "Mouth of the Tyne". Smith presided over massive redevelopment of the city and was admired and loathed in roughly equal measure for building many blocks of public housing apartments, and for demolishing fine historical buildings and destroying long-standing working class communities in the process.

In 1962, he established his own public-relations business, subsequently forming a semi-professional relationship with the architect John Poulson, who designed serviceable but architecturally unexciting apartment blocks. Smith sent work worth over a million in fees in Poulson's direction and Poulson gave him several thousand in return. Smith's PR firm was caught up in a minor scandal in the London Borough of Wandsworth, which lead to Smith being charged with bribery. On this charge, he was acquitted, but later, in connection with his Newcastle dealings, Smith was charged with corruption and finally sentenced to six years imprisonment. His Labour supporters argued that Poulson's payments to Smith were small and inconsequential and that what the Tories really hated was that he achieved results and that large numbers of new homes were built. His Tory critics cited the example of Smith's dirty hands to show that Labour, unlike the independently wealthy Tories, could not be trusted in Government. There is more to be said for and against both these views than I have space for here.

Since the Smith affair, I have never been able to take politicians' accusations of corruption at face value — there always seems to be an unstated political agenda in play. Thus, when the Dyson Heydon Royal Commission was established in 2014 by the Abbott Government, it seemed clear that it had been designed to damage the Labor Party.

I had settled in Australia some years earlier, after arriving just in time to see John Dawkins' disastrous neoliberal reform of Australian Higher Education and the Liberal Premier Nick Greiner's Government establish the New South Wales Independent Commission Against Corruption in 1988. While the magic word "independent" in its full title was clearly intended to suggest that, although it was funded by a vote of the NSW Parliament, ICAC was above politics and in no way dependent on the Government of the day, it was clearly designed by the Liberals to hit the NSW Labor Party while it was down. That Greiner himself was one of ICAC's first major victims was a kind of poetic justice. For a time, it looked as if the NSW Liberals would be ranked alongside NSW Labor in the Australian political corruption stakes, but neither of them came even close to the record established by Bjelke-Petersen's National Party in Queensland during the '70s and '80s.

Today's take-away is that in Britain, and also, I suspect, in Australia, mutually beneficial arrangements between pollies and local businesses were not widely regarded as corrupt, but this changed when a prominent Labour politician got in on the act. Of course, the details of the Australian history were different, but in both cases what was once seen simply as the way of the world is now regarded as corruption. Or, turning this around, what we now see as corrupt was once regarded as normal.

Who knows how much of what we now take for granted will one day be seen as corrupt. 

Barry Hindess is an emeritus professor at Australian National University’s School of Politics and International Relations. You can follow Barry on Twitter @barryhindess.

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