March 9th 2002

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Articles from this issue:

The Hollingworth Affair

Federal Cabinet decision on cloning

Media putsch overwhelms Governor-General

Will CHOGM bite the bullet, oust Mugabe?

Straws in the Wind: Rumpole arising

Environment: National parks are an unacceptable fire risk

Agriculture: Bar lowered on quarantine once again

Media: Crude but effective

Environmental optimism (letter)

Bias: in the eye of the beholder (letter)

Economics: Privatisation: the promise and the reality

Comment: Trust: a commodity in short supply

Culture: How the media exploits the US$150 billion American youth market

ASIA: WTO entry will put pressure on China-Taiwan ties

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Comment: Trust: a commodity in short supply

by Bob Browning

News Weekly, March 9, 2002

A spate of local and overseas incidents is raining blows on public confidence in governments, political parties and other important institutions ranging from corporations to churches.

One of the latest incidents involves three former federal government ministers. These senior ministers accepted lucrative private contracts as lobbyists almost immediately after resigning from public office.

Those payrolling them now had and retain a special interest in the portfolios recently entrusted to them.

Peter Reith, former defence minister in the Howard government, is now a consultant for a major government contractor - the defence company Tenix.

The former health minister Michael Wooldridge is a consultant for the Royal Australian College of General Practitioners. The former finance minister John Fahey is with the investment bank J.P. Morgan.

Conflicts of interest

Unlike most other democracies, our political system allows ministers to jump out of public office straight into the beds of private lobbies. While it continues to do so, incentives obviously exist for ministers to earn the good will of future paymasters while in positions of public trust.

In the manner of the biblical unjust steward, some ministers may be tempted to feather their future nests. Their time in public office may be utilised to curry favour with special interest lobbies, possibly to the neglect and cost of the public who entrusted them with power.

Concern over contemporary political and corporate behaviour arises at a time when trust in government is threatened by other major incidents. Foremost on the local political front are allegations that the Howard Government benefited during the last election by either deliberate or negligent deceit over the Tampa refugees.

Refugees in general were cruelly demonised as a bad lot. Government heavily implied during electoral campaigning that they were the sort of undesirables who would throw their children overboard to blackmail entry into Australia.

Although the refugees claimed to be fleeing oppression and terror, the Government claimed they were mainly "economic refugees", merely out to better their economic position. In the process, the Government claimed, they were disadvantaging less affluent asylum seekers unable to afford the criminal services of smugglers.

Close on the heels of the controversy over the denigration of refugees came mounting public doubt over the appropriateness of the Government's choice of Governor-General.

Polls indicate that a majority of Australian citizens now think the Governor-General should step down. Many believe that child abuse was being excused and had in effect been covered up by the former Anglican archbishop. Wounded trust spread to the Church itself.

At a lesser local level, but one that still affects public morale, other controversies arose to shake public confidence in authority.

One involved allegations that Melbourne University had manipulated the selection system to create a place for Olympic official Kevan Gosper's son after he failed to get his first preference choice.

Another involved the Victorian Premier. He was accused of giving a lucrative public job to a close personal friend. Allegations included that one of the Premier's senior public servants had asked the executive search agency to remove negative statements about the Premier's friend from its search summary. The Premier's friend was subsequently forced to resign amid public controversy


On the corporate front, two issues in particular keep arising, adding to the public mood of cynicism and distrust. One is the rush of local and overseas incidents in which managerial élites have walked away from bankrupt companies leaving employees and shareholders bereft, while they pocketed multi-million dollar bonuses.

The other is the increasing dependence of political parties on financial support from corporate favour seekers. Rising corporate influence comes at the cost of party membership and branch participation. The importance of democratic grass roots members is being marginalised. So, too, is the general electorate, except for swinging voters in marginal electorates.

In Australia recently there has been the collapse, in dubious circumstances, of HIH, OneTel, and Ansett. Overseas, there has been the internationally reverberating scandal around the giant Texas-based energy trading company Enron.

Enron employees, like numerous others in failing companies, were robbed of their entitlements. Minority shareholders were either prevented from selling their plummeting shares or duped into keeping them while Enron's captains of industry secretly abandoned ship.

Corporate financial scandals focus further attention on the disproportionate and generally non-transparent influence of corporations on political decisions.

The US Congress, for example, is suing the Vice President Dick Cheney. It is the first time in its 80-year history that Congress' General Accounting Office has been used to file suit against a member of the executive branch for failing to turn over records to Congress. (New York Times, February 23, 2002)

The Bush Administration has so far refused to hand over to that democratically elected body the identities of energy industry executives who helped the administration develop a national energy policy.

Congressional investigators are trying to determine whether executives from corporations, including Enron, that contributed hugely to President Bush's election campaign, helped shape the administration's policy.

Collateral damage from the Enron collapse has spread even to universities and research institutions. The UK New Statesman, for example, editorialised (February 18, 2002):

"Suspicion now permeates academia ... [e.g.] In the US, Harvard has been tainted because Enron gave millions of dollars to centres that, by happy coincidence, then did 'research' supporting the deregulation of energy markets.

"Which brings us to Enron and the role of Arthur Andersen, its auditors. Here the effect is truly alarming ... Auditors, who are supposed to guarantee to shareholders and potential investors that a company is trading solvently and publishing honest accounts, prove unreliable ... You will not find letters saying: 'Approve our dodgy accounts and you get the contract for sorting out our next merger'; but, again, the notion of the reliably disinterested professional disappears ... the doubt now cast on all paper profits after the Enron affair may be enough to trigger a deep economic downturn. Capitalism, after all, depends on confidence ...".

Major incidents of corporate carpet-bagging seem to have escalated since economic ideology based on "enlightened" self interest, "rugged" individualism, and utilitarian rationalism became globally ascendant.

War on terrorism

Yet another assault on public trust is emerging in the war against terrorism. There are reasons to fear that incumbent politicians are using the on-going war against terrorism for opportunistic party political and special interest purposes.

Britain provided an example of contemporary political behaviour at is grubbiest when within two hours of the September 11 attack Tony Blair's chief spin doctor sent a memo to Cabinet Ministers advising them that it was a good time to bury any bad political news in the otherwise preoccupied media.

In Australia, during the last elections, the Howard Government emphasised the terrorist threat in reference to the refugees. Now, at a time when members of the public and armed services are casting doubt on the Government's credibility, the Government proposes including domestic whistle-blowing in the heavy new penalties foreshadowed for espionage and terrorism.

In America, a controversy is erupting over reports that the Pentagon has set up a new Office of Strategic Influence to spread false information to foreign media and officials as part of a broader propaganda effort to support the war on terrorism. Covert disinformation activities were previously the province of the CIA.

Defence Secretary Donald Rumsfeld denies that the new office headed by an Air Force Brigadier will deliberately spread lies. But as the Christian Science Monitor noted (February 22, 2002):

"Over the past decade, the use of such 'information operations' to sway opinion and deceive adversaries has become an integral part of virtually all US military actions around the world, as strategists increasingly view 'information superiority' as the key to keeping peace and winning wars.

"Such operations run the gamut - from 'white' media campaigns based strictly on truth to 'grey' disinformation where sources are left unclear to 'black' deception efforts aimed at fooling an enemy."

Even economic rationalists recognise that trust is a key ingredient of social cohesion. Their concern however is mainly with maintaining the reliability of commercial contracts. They know that regulation alone, without general trustworthiness, is incapable of sustaining the viability of contractual relations on which the capitalist system depends.

Fortunately many citizens value trust more deeply. For them, trust is not just a useful economic lubricant. It is a cornerstone of a decent society, and indispensable to good governance. Communist leaders found that telling lies resulted in people distrusting everything they said - a fact that eventually undermined the legitimacy of governmental authority.

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