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Soft corruption

The 2014 budget is a corrupt document.

A few words about corruption are necessary. Much has been said about potential conflicts of interest and corruption on the part of Tony Abbott with regards to his daughters. Some have intimated that Tony Abbott was bought and paid for with a scholarship for Frances to the Whitehouse Institute of Design. It is important to be clear that it is unlikely that there is malfeasance or corruption (as legally defined) in either the scholarship for Frances Abbott, or the appointment of Louise Abbott to a plum post in Geneva.

Frances Abbott, image by

Frances Abbott, image by

In the case of Frances Abbott, it appears that the Whitehouse Institute sought her out, courted her for a position, and sealed the deal with the scholarship. This happened during Labor’s term in office when Tony Abbott was Opposition Leader. There has been an indication that having Frances Abbott associated with the college might be good for its profile, although I find this unconvincing; but having Frances Abbott associated with the college has certainly proved good for its budget and its future. The budget has, for the first time, allocated government funds to private educational institutes such as Whitehouse, which will be of direct financial benefit to the Institute. Nevertheless, I am not claiming that this is a quid pro quo for favours given to Tony Abbott’s daughter.

It doesn’t have to be.

There is certainly preferential treatment being given to Whitehouse and its ilk, but this does not necessarily denote corruption or “payment in kind” – at least, not in a legal sense. It is more indicative of a culture of privilege. The age of entitlement has certainly not ended for the political class. For our politicians, the world is entitlement.

Where does privilege end and corruption begin? In Tony Abbott’s world, people do favours for others all the time. You give priority attention to a stakeholder’s needs. You give donations and gifts (money, bottles of Grange, scholarships). In most cases, it’s not illegal unless there’s an immediate expectation of a specific reward. But you do it in the expectation that there will be a reward. The reward for your efforts may be a policy friendly to your interests, a budget that bulldozes through the economy but carefully detours around your patch, a rebate extended rather than curtailed, or a convenient directorship of a government board. The reward doesn’t come in direct trade for your favour, but every favour you offer earns brownie points and neither you nor they will forget them. And things can turn ugly if it ever appears that your favours are not going to be duly returned.

Frances Abbott’s scholarship was probably like this. Tony Abbott likely didn’t press for it; he didn’t have to. It was a favour, offered freely, with no specific return in mind. But even if there was no expectation of a specific benefit that the Institute would gain, there was certainly an expectation that the government would look kindly upon it when the time came, and Tony Abbott and his government have not disappointed on that front.

In Tony Abbott’s world, money is quite literally no object. On a salary of over half a million dollars annually (plus entitlements) he could afford to pay the way of all three of his daughters and barely miss the money. At the time of Frances’ scholarship, however, Tony Abbott was not Prime Minister.

When he moved from government into opposition in 2007, his salary dropped from ~$200,000 to ~$110,000 – which is still an awful lot of money compared to what most people in Australia earn. This wasn’t enough to support the luxurious lifestyle to which he had become accustomed, so he took out a $700,000 mortgage on his family home. (It’s interesting to note that he was happy enough to personally go into debt equivalent to 700% of GDP, with an understanding that he could service the loan. It’s interesting also that he failed to declare the mortgage on his pecuniary interests register for over three years.)

To be fair, the salary earned by politicians is at the lower end of their natural constituency; the rich and powerful routinely earn six-figure salaries and seven-figure salaries are not uncommon. This is why the Coalition can throw dinner parties for sixty guests and spend $50,000 catering; not because they’re being unwarrantedly profligate, but because ten thousand dollar dinners are not unusual. This is a world which I, and the vast majority of Australian taxpayers, can only imagine. For most Australians, ten thousand dollars is a windfall, a goodly proportion of their annual salary. To Tony Abbott’s people, ten thousand dollars is a watch.

This is why the 2014 budget has given rise to such anger in the Australian community. It’s not that it’s harsh, specifically, although it indubitably is. It’s not even because the budget will directly strike at the daily cost of living of so many. Rather, it’s because it’s so patently inequitable.

The $7 medicare co-payment has been written largely by people who don’t know what $7 looks like. The restrictions on Newstart were designed by people who have never needed to contend with unemployment, not while family friends own large businesses which can give a deserving youngster an internship, no questions asked. Increases to the price of petrol, of education, of medicines, of fresh food (coming soon to a GST near you!) mean little to people who’ve never set foot inside a Woolworths.

It is this pervasive culture of privilege that the budget seeks to shelter. The sad fact is that the beneficiaries of this system don’t see anything wrong with it. Tony Abbott, with his one-million-dollar-a-year entitlements claims, believes with all his heart that he deserves the privileges that come with office. To him, this is the kind of opportunity that the Coalition offers to all Australians: the opportunity to better yourself and reap the spoils.

The problem with this model of opportunity is that it depends on the existence of a downtrodden class. The powerful and the privileged can only remain so at the expense of the masses; not the poor, who are of little economic benefit to society, but the battlers. Our system depends on families on the median wage struggle month to month, paycheck to paycheck, and aspiring to the kind of luxuries and riches those in power have already left behind.

The system cannot support a migration en masse to the upper classes. Those who occupy the rarefied heights know this. The system defends itself, and it does so with the collusion of our leaders. The salary earned by politicians is high enough to give them exposure to this other world, but they are not really of it. The salary of a shadow minister apparently cannot support three children at expensive public schools, let alone a new car every two years. Ministers do slightly better and the Prime Minister does best of all, but even his half million is dwarfed by the real puppet-masters. The favours offered by the powerful allow their politician puppets to climb one rung higher; to sit at the table for a little longer and to feather their own nests just a little more. This is the real corruption: not of direct trade of favours for favourable treatment, not of service-in-kind, but the kind of soft corruption that says we have no expectations of you but we’re sure you’ll remember where your priorities should lie.

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  1. Leroy Lynch

    I think this article is very relevent to your blog post. I’ve copied some of it, but its well worth reading in full.

    The smaller the gift, the larger the fallout
    April 17, 2014
    Peter Martin
    Economics Editor, The Age

    The shocking thing about the gifts and favours uncovered by the NSW Independent Commission Against Corruption is that they are small.

    Australian Water Holdings gave the Liberal Party $75,000 – a tiny sum compared to the $1 billion contract it was seeking. It sent the premier a $3000 bottle of wine. Its behaviour is typical. At the height of the ferociously fought battle over the plain packaging of cigarettes in 2010-11 British American Tobacco gave the Liberal Party $184,565. It did it in small parcels – $2200 to the NSW branch, $10,000 to the Victorian branch, a further $5500 to the NSW branch and so on.

    Most political donations are even smaller. Away from politics they are puny. Doctors routinely get pens and free samples from drug companies. They cost the companies nothing compared to what’s at stake.

    Yet they work. Equally shocking is the finding from laboratory experiments that small gifts achieve more than big ones. Truly.


    Their explanation for the effectiveness of small donations is that they create a special bond, what they refer to as the “dark side” of our desire to be social. Put starkly, we find it hard not to be nice to someone who has just been nice to us, even if we know it’s a trick.

    And we do seem to know. Asked whether the donors were trying to influence them or just being nice, almost all of the decision makers said the gifts were an attempt to buy influence. Doctors would doubtless say the same thing about gifts from drug companies.

    Big gifts may be less effective than small gifts in part because they are so visible as to be unsettling. Few people like to admit to themselves that they being bribed.

  2. Minbani (@Minbani)

    Thank you. This is a very good article and says very well the psychology of the 1%’ers.

    I wonder if any of the ‘enablers’ (ie: MP’s) ever wake up to the fact that they have been used and emotionally abused by the really rich? As soon as the MP’s usefulness ends, so will all those invitations and special gifts. Emotional abuse could well be being let into that rarefied world of great wealth & privilege for a short time only to be kicked out again when your usefulness ends. Sad really….because I doubt they will ever again be able to live a simple life.

    I would put John & Janette Howard into this category. Also Peter Reith – they “pop-up” for another dose of public appearance at any opportunity.

    But nothing excuses living off the backs of the deliberately downtrodden.

  3. mars08

    …Where does privilege end and corruption begin?

    That is the REAL danger right there!!!

    Most people who are accustomed to privilege aren’t even aware of it. They don’t see it because it’s a “natural” part of their lives. It is all around them…. every day. While they might back away from obvious corruption, they (and their associates) accept their privilege without a second thought.

    It’s part of the “born to rule” mentality.

  4. sjmckenzie

    Thanks for this.

    Stock market took an initial blow after the budget but is now recovering fast. I’m guessing it’s a good time to invest in mining stocks. For rich people, the money given to mining and infrastructure development could be a real win and easily offset the levy imposed on their high earnings.

    The next step – all those students are going to have to borrow money, or their parents are. Real good time to invest in banks and other lenders. Nice if you already have the money to do so. Working and middle class go into debt. Rich do well.

    And for the Trifecta – when they mess up health insurance badly enough, people will have to start paying private premiums. Good time for rich people to invest in health insurers.

    The rich will win out of this, and no mistake.

  5. sjmckenzie

    (PS – I get that your article is more specifically about soft corruption and donations. My comment is about the sort of financial settings that the rich would like to see, and why I think the budget is rigged up the way it is.)

  6. Fed up

    Yes, his government knows how to do it better.


    Bill Morrow: former company PG&E has been accused of putting profits before safety. Photograph: /AAP

    An executive appointed by the Australian government to run the national broadband network is named in a legal action connected to his management of an American gas company subsequently responsible for one of the largest utility disasters in California’s history.

    Bill Morrow, appointed as chief executive of NBNCo in December 2013 by the newly elected Abbott government, has run a number of major infrastructure companies including San Francisco’s Pacific Gas and Electric (PG&E).

    PG&E stands accused of putting profits and bonuses before safety.

    Morrow joined PG&E in 2006 as chief operating officer, and became chief executive a year later. He was paid $3.8m in 2007 and another $4.48m in 2008 in wages, benefits and stock, according to regulatory filings. Morrow left PG&E in September 2008..


  7. mary mannion

    So well said. Thank you for putting into words the lack of respect Mr.Abbott and his colleagues have for the average austraslians and their welfare.

  8. corvus boreus

    Looking back over the details of Tony Abbott’s record regarding “entitlements”, gifts and family favours, you can see why he was awestruck and bewildered by Barry O’Farrell’s resignation. A man who routinely lodges such patently dodgy claims as fun runs and cycle tours, and when publicly caught out shrugs and says “oops, yet another honest mistake, trust me” must be mystified that our Bazza resigned over something as small as misleading a corruption commission about a measly $3000 bottle of wine. That’s less than you (don’t) pay for a good set of bike gears, or around 1/20th of a special scholarship.
    Federal ICAC anyone?

  9. Gail Clarke

    The things we actually know about wouldnt even come close to the bribes that actually exist, Im sure they are too clever to be caught with too much, the Liberals scream the loudest about corruption in the Unions and yet is is far more obvious in Politics, what amazes me is that normal Joes just dont see it, of course with the help of the MSM, Murdoch and the Shock Jocks its all yelled down and covered up with distractions and lies, but we have 3 more years of their incompetence and Budgets for the rich, they wont survive the next election, a whole nation of honest workers and Uni students will be ready to vote them out

  10. corvus boreus

    For me, Gail the most baffling thing is the public outrage over the Craig Thompson’s abuse of union funds, which is principly an outrage against union members, when there is such public apathy about the ridiculous claims upon public funds by politicians.
    There seems to be an underlying attitude that anything remotely pragmatic politically is claimable, from media weddings to sporting events. In reality poilticians currying favor with the rich and powerful, and increasing their own profile and appeal serves no real public good, and is unjustified.
    The sooner there is investigation and reform of the soft and hard corruption in national politics, the sooner good governance can resume.

  11. jagman48

    Federal ICAC anyone?

  12. corvus boreus

    No objections here, jagman.

  13. scaper...

    “good governance can resume” Resume???

    The governments we get are a reflection of the people so don’t expect good governance because in reality, we don’t deserve it.

    Whom in their right minds would want to enter into the political arena when their histories will be dissected by the media to confirm their biases and families attacked? We are a nation of bludgers, con artists and spivs lacking in patriotism but plenty of apathy. Whinging has become our national pastime.

    But who is to blame, the politicians or ourselves?

    The Lucky Country comes to mind by Donald Horne. “Australia is a lucky country, run by second-rate people who share its luck.”

    Nothing has changed since Horne penned it in 1964 and nothing will change in the future so get used to it!

  14. corvus boreus

    What an utterly pessimistic and openly contemptuous view of our fellow countryfolk, scaper. You decry our apathy, then close with an exhortation to inaction.
    To refute your portrait of our national traits, I work 2 jobs, try to be honest and professional in my dealings, dress modestly, have been a member of our armed forces(and thus under personal contract to fight and if need be die for this country) and try not to be apathetic but engage in facing of our shared challenges. I also try not to offer criticism without analysis and suggestions of solutions.
    And yes, I do stand by my inference that there have been periodic outbreaks of good governance during the history of our nation, although they seem rarer and rarer.

  15. scaper...

    The only decent federal government I’ve seen in my life was the Hawke/early Keating era. The high water mark that will never be achieved again.

  16. mamaplayspiano

    great article. Good to see someone explain the madness of thinking that is not actually thinking. Us ‘bottom feeders’ look up at the whales and sharks and can’t imagine what it’s like to go where you want or do what you want when you want to…. The whales and sharks never think like that…. they just do it. They probably don’t spend a great deal of time wondering where their shit ends up either, but when you live this close to it, bottom feeders have to think about it.

  17. Paul Raymond Scahill

    At least when you read some of the comments, one gets the impression that there are a lot of good people out there. When one sees a lost wallet returned, or some good samaritan work offered freely we are rewarded with the belief that there are many good people out there. However when we see self regulation practised by our elected officers and others, we are loathe to believe that our politicians and the like are subject to the same qualities. Now, I am one who believes that people like Tony Abbott, Mr. Eleventy, benefit in any way shape or form, however, it would appear there is some sort of( “pink batt”) insulation, involved Now, I may be a little harsh, but I do solemnly believe that the people who receive these same benefits and those who purvey them should go to jail I have never considered that this is the way it was meant to be, and I am certainly, not naive enough, to think that this dishonesty is one-sided, however, it has been my understanding that the offering of gifts is some thing that is more prevalent amongst co-allition voters than those of any other ilk. I am reminded that the only way for corruption to survive is for good people to do nothing. My perception may be a little narrow but I cannot for the life of me stand by and see the Abbotts Hockeys, Corman, Brandis and the like making a complete mockery of our system. I feel sure there are plenty of others out there, who like myself are well aware of what goes on and would welcome a change in the present regulations.

  18. bjkelly1958

    It appears that middle Australia has never gotten over the con John Howard pulled on them. They are still trying to be “aspirational”, they still believe in the Power of One, they still believe that they too can get a seat at the top table if they just try hard enough.
    The poor buggers are watching that table get further and further away, while the “enablers” are happy to get short term kickbacks to stash away for when they get cast adrift, as they inevitably must. No-one is that useful forever.

  19. margaret Millar

    I think that you are correct bjkelly -Out west in John Howard’s ”Battlers” area there is still an aspirational idea of becoming affluent and able to climb up the wealth ladder of success-It will not happen -and then they will blame Labor for their failure ! Jobs are not plentiful and the dole, pensions welfare will be cut

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