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These Paddy McGuinness columns are on ethics, especially in business, politics and journalism, where he, and his father, had some experience.
(1), (2) & (3) “Ethical questions: how to keep the businessmen honest,” The Australian, March 11, 1992, p. 11; “Right or wrong? Ethical questions above the law,” The Australian, April 8, 1992, p. 13; and “Lying can be good, as long as you know when it’s not,” The Australian, April 9, 1992, p. 11. Those three report on St James Ethics Centre’s “Truth in Business and the Professions” conference.
(4) & (5) “The journalists’ ‘shield’,” City Ethics, Spring 1992, p. 1; and “Risk of jail comes with the job for journos,” The Australian, July 23, 1993, p. 15.
(6) “Corporate honesty is the best policy,” The Australian, Dec 1, 1992, p. 44.
(7) “Those bold entrepreneurs may not have been all bad,” The Sydney Morning Herald, October 6, 1994, p. 21.
(8) “Elusive ethics,” The Sydney Morning Herald, November 17, 1994, p. 20.
(9) “Ethical standards for journalism should not become a pretext for control of media,” The Sydney Morning Herald, September 5, 1995, p. 12.
(10), (11), (12), (13) & (14) “Lies, damn lies, and politicians,” The Sydney Morning Herald, August 24, 1996, p. 35; “The silly season of electioneering is about to begin,” The Sydney Morning Herald, December 2, 1995, p. 32; “Labor has invented an Opposition capitalist tiger rather than debate policy,” The Sydney Morning Herald, October 31, 1995, p. 12; “May the best tax liar win,” The Weekend Australian, September 5-6, 1992, p. 2; and “Home truths on the politics of lies,” The Australian, June 6, 1991, p. 11. These final five focus on politicians and lying.

1.
Padraic P. McGuinness, “Ethical questions: how to keep the businessmen honest,” The Australian, March 11, 1992, p. 11.

It is obvious that there was a fair amount of behaviour in financial markets and in other sectors of the economy during the 1980s which was marked by dishonesty, cheating, sharp practice and deception.

There is nothing particularly unusual about such behaviour in economic matters, nor about bouts of frenzied speculation and greed — they have been documented in the best recent contribution to the writing of Australian economic history, Trevor Sykes’s Two Centuries of Panic. There have been similar episodes in modern history, dating as far back as the Dutch tulip boom or the South Seas bubble.

The now little-read economist Joseph Schumpeter, who had a far better grasp of the workings of economic and political systems than most of his pupils, including Paul Samuelson, considered that the great virtue of capitalism was its enormous creative potential (in this he was in agreement with Karl Marx) but, like many Asian religions, realised that creation and destruction are two sides of the same coin.

Crises are an inevitable product of a vigorous and innovative economic system. The destruction of the obsolete is an aspect of the creation of the new and more productive.

This has been little realised in the present fashion for talking about business ethics, in the United States and here. The “robber barons” of the financial system in the ’80s are being treated as a unique and historically unprecedented phenomenon, and as a product of the malfunctioning of the economy and of markets.

On the contrary, they are only too typical. Where you have free markets, you have speculative greed rampant from time to time; where you have heavily regulated markets you have institutionalised greed, whether of unions, protected industry, the Melbourne Club, the teaching profession, the academics, the legal profession, the medical profession, the social welfare industry or myriad others.

It would of course be better if people did not behave badly. But the real problem is to decide how to behave well. This is realised from time to time, especially in the aftermath of speculative excesses. There is no doubt that the ’80s was a period in which business ethics were pretty near non-existent in many cases. But what is ethics?

Roughly it is about standards of good behaviour — what are sometimes called moral principles. People do not talk too much about morals these days, partly because it often has a sexual connotation, and partly because it has religious overtones. There is also the problem that, without religion, there is no clear basis for ethics — although there are a number of philosophical approaches of great significance to the proper basis for ethical standards.

It is pretty clear that most people want to behave ethically, when they think about it. Indeed, it is only the genuinely desocialised, the psychopaths, to whom ethical ideas are totally irrelevant. But there is a chronic conflict between self-serving behaviour and ethical standards, which is really only brought home to most people when things fall apart — in the simplest sense, when you get caught with your fingers in the till.

Various professions and trades have codes of ethics. However noble the origins of these, pretty soon they tend to degenerate into a set of empty slogans rather than standards seriously thought through and observed. How many of the ethical principles of the legal profession are actually observed seriously by most lawyers? Precious few, I would think. The same goes for journalists, and many other trades who fall back on ethical principles when they want to avert blame or claim the high ground.

But it is obvious that our economic system, our social system, cannot function without some underlying agreement on ethical standards. How this is to emerge, and above all to be incorporated into people’s behaviour, is the real problem.

Too often those who talk most about ethics do pretty terrible things in their private lives. Self-righteousness is rife amongst those who preach about the failures of business ethics over the last decade. There is a kind of gleeful exulting in the bankruptcies of the high-flyers among those who like to talk about the low ethical standards of business in the period.

It could be suggested that the low standard of ethics in public, business and professional life of recent times is an aftermath of the ’60s and ’70s, when rejection of traditional moral and ethics reached its high point and any religious and philosophical foundations for ethical behaviour were blown away, while a gimcrack philosophy of ideological correctness, sometimes based on a genuine though inarticulate desire to do what is good, was substituted.

It was easy for many of the ambitious Turks of the financial markets to reject the ethics of their contemporaries and come to the conclusion that nothing mattered except their own short-term gratification and advancement. After all, they had not really been imbued by the educational system or their parents with any alternative to self-indulgence, the dominant cult of the ’60s. Post-coital sadness has now set in.

Whether this will give rise to a new attention to ethical standards, or whether the talk about ethics is simply a way of preparing the ground for a new attack on the capitalist system by those who find capitalism inimical either to their own advancement or to their own ethical standards and preferences, remains to be seen. There is always an element of that.

There is an organisation in Sydney set up in the latter part of the 1980s, the St James Ethics Centre, which is trying to address itself to the question of business ethics and ethical behaviour in the professions and other similar areas. This is (as its name implies) of Christian inspiration, but not confined to religious or doctrinal conceptions of ethics and morals.

The St James Ethics Centre (02 232 6932) is organising a conference early next month on “Truth in Business and the Professions”, which should provide an interesting touchstone for whether it is possible to talk seriously about how to improve the ethical standards of business and the professions without revealing an agenda which has no ethical basis at all, but is really an aspect of the struggle of the clergy, in the widest sense, to regain control of events.

At least the centre does not begin, like many of the religious purveyors of ethics these days, from the presumption that business, profit-seeking or markets are in themselves bad. Indeed, a cursory glance at the market system makes clear how much it relies on common ethical standards of behaviour — absence of deliberate deception, keeping one’s word (contract), fairness of dealing, respect for other people’s property, and so on. The issue of business ethics is that neither social nor legal sanctions have been effective in making these standards the norm.

Whether the conference will add much remains to be seen; does truth in business including telling the truth to tax authorities, to competitors, to employers, to shareholders, to governments? Does it (ICI is a contributor to the centre’s funds) involve operating in business in free and open markets, and is it compatible with propagandising for more government handouts?

When governments lie, wheel and deal, and impose arbitrary policy changes as a result of the “ethical” standards of loony idealists and anti-business groups, can business afford to be straight in a crooked world? The hardest dilemmas of all are ethical dilemmas.

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2.
Padraic P. McGuinness, “Right or wrong? Ethical questions above the law,” The Australian, April 8, 1992, p. 13.

A few years ago a lawyer threatened me with a defamation action because a story by a junior reporter in the newspaper I then edited had said that he had appeared before the Bar Association’s ethics committee. The reporter insisted that the story was true.

Shortly after receiving this threat I met at a social occasion a now very eminent lawyer who was in a position to know, and asked him whether the report was true. He replied that he could assure me that the lawyer in question had not appeared before the ethics committee. So we apologised.

However, subsequently I discovered that there were two ethics committees, A and B, and that the lawyer had indeed been called before one of them. Was the now eminent lawyer a liar? To me, the answer is yes, and I would never trust his word on any matter.

But of course he would probably respond by saying that I had no right to ask the question (of course he could simply have refused to answer it), that the appearance was a matter between the lawyer in question and the ethics committee(s), and he was entitled to mislead me. So he probably feels secure in his conscience and thinks himself justified in claiming adherence to the ethics of his profession, and individually upright and honest.

Of course, he did harm to the reputation (and indeed the income) of the reporter, whose promotion was undoubtedly delayed until he proved himself trustworthy — editors tend to remember errors by reporters for a long time. He did harm to his own reputation in my eyes, and to the standing of the legal profession.

And I still wonder whether, if the matter had gone to court, the truth would still have been suppressed by the lawyers’ club even to the extent of awarding damages and costs against the paper. I also wonder whether my misinformant ever considered that it was not just a matter of protecting his legal brother. The result, of course, was the suppression of information to which I think the community was entitled. The lawyers no doubt think otherwise.

This anecdote is typical of the kind of problem which was being discussed yesterday at the conference of the St James Ethics Centre in Sydney on the very difficult subject of truth in business and the professions.

Everyone was ever so ethical, and at one stage in the proceedings I began to reflect on two things. One was how much I would have enjoyed it if a genuine villain had stood up and declared that he lied to make money and to deceive the government, and felt no guilt about either.

How you would feel about such a confession (and of course he would be a fool to make it — the true villains always profess virtue) partly depends on what you feel about the people from whom he makes money and the government he lives under.

Most people who lived under communist governments perceive the State as their enemy — which it was — and have little social morality or ethics when it comes to dealing with government. This seems to me inappropriate in Australia, but thoroughly appropriate in Moscow when the Soviet Union was a going concern.

The other reflection was that I did not particularly enjoy hearing professionals preach ethics, especially doctors and lawyers. As far as I am concerned, a doctor or lawyer is on a level with a plumber — I will tell the plumber where I want the bathroom, and although he should advise me as to any risks or special difficulties, he should arrange the plumbing accordingly.

I do not want any half-baked law graduate, accountant or pill roller telling me what is right or wrong. What is legal and illegal, yes, but no more. Nor do I want a doctor or a lawyer who has spent years studying professional ethics. I would rather they had spent the time studying medicine or law.

However, as Stephen Leeder, professor of community medicine at Sydney University pointed out, there are special problems for doctors when dealing with patients when both they and the patients can be suffering from high levels of emotional stress and anxiety. The intensely personal relationships which can exist in medical practice often make the decision to tell the truth, and how to tell it, especially difficult.

Of course, lawyers, doctors, etc should have personal and professional ethical standards. These can only be manifested when they actually refuse to undertake work, or to lie on behalf of their customers in a way which they believe is improper. That is the proper scope of ethics in professional life.

What of lying by business? As Mark Burrows pointed out, the Trade Practices Act already has provisions which forbid lying (or bluffing, which he rightly considered a form of lying) in the form of false or misleading conduct. And the Corporations Law now includes extensive provisions for adequate, truthful and continual disclosure of information by corporations.

Ian Temby, head of the Independent Commission against Corruption, also remarked on the prohibition of lying under the Trade Practices Act, but complained that the Trade Practices Commission had been more interested in pursuing monopolies than commercial liars. The latter had been left to consumers.

It seems to me that, unfortunately, consumers have not been well served by their self-appointed representatives, who have pursued the Tobacco Institute for saying that there is room for disagreement as to the supposed link between passive smoking and lung cancer. There is indeed room for honest disagreement on this issue. The verdict against the institute is at present on appeal.

Temby’s point was well taken. Surely there were many cases during the ’80s when corporations were obviously and publicly engaging in misleading conduct — the way in which Adelaide Steamship disguised its affairs through a complex of interlocking companies was notorious even then. Why was nothing done? Our watchdogs hardly barked during the ’80s, and barely even growled.

Of course, it is desirable that the law should be tightened up, as it has been through the new Corporations Law. But the law itself whether precise, black-letter and extraordinarily complex or fuzzy and more understandable, will never be enough. This was the point of the conference. Unless ethical standards in business and professional life can be improved, no law is going to be really effective in imposing truthfulness in commercial and professional life. That depends on people wanting to be truthful and ethical, and having the courage and perception to know what that is, and to insist on it.

But even if people want to act ethically, it is often difficult to see clearly what to do, or even to perceive what the truth is. This is often blurred by economic and political beliefs or ideology as well as self-interest. Thus it is not enough for Michael Deeley, chief executive of ICI, to argue as he did that “we should be guided in our business behaviour by what we know to be right in our personal lives”. For while that is a worthy aim, how do we know that what we know to be right is right?

Many of the policies espoused by people of the highest ethical standards in the past are now seen to have been wrong or misguided. So while one’s personal behaviour is a matter for oneself, the public and business policy implications drawn from one’s behaviour and beliefs are another matter entirely.

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3.
Padraic P. McGuinness, “Lying can be good, as long as you know when it’s not,” The Australian, April 9, 1992, p. 11.

The St James Ethics Centre’s conference on truth in business and the professions (which I wrote about yesterday) nearly ended up as a cross between a prayer meeting and a public confessional. As a pre-Vatican II atheist, brought up in the Catholic Church as it was before that milestone in the progressive collapse of Christianity, neither appeals to me. Public confessions are either embarrassing or hypocritical.

There was a certain amount of (temporarily) private confession going on. Freelance journalist Elizabeth Wynhausen, Australia’s leading, and most amusing, exponent of the cheeky question, enjoyed herself asking various respectable people when they last told a lie. The sensible ones (like me) replied that they weren’t silly enough to answer her. It is amazing that the same response is not heard more often to the impertinent nagging of ABC reporters.

After the moralising of the morning, the afternoon got under way with the public confessions. John Bevis, an advertising man, delivered a ’60s-style homily on the evils of advertising agencies which had me wondering where his Indian shirt and beads were hidden. Later he confessed that he had always wanted to be a hippie.

Richard Farmer, a Canberra political consultant, journalist, sometime wine merchant and restauranteur, and adviser to many Hawke election campaigns (and, he confessed, much to the horror of many present, lobbyist for Rupert Murdoch) gave sample policy speeches for both Labor and Liberal parties as if they were both for once telling the truth. The nervous laughter confirmed his point, that in a democratic system no one believes that politicians would get away with telling the unvarnished truth to the electorate, even if they knew what the truth was. However, while the electorates in democratic countries expect to be lied to, dictatorships are even less truthful when dealing with their people.

This point of the complicity of the audience in the telling of lies was effectively raised by Max Suich, editor of the Independent Monthly, in his contribution to the orgy of breast-beating.

“Media,” he said, “whether it is A Current Affair or the back page SMH gossip column, The 7.30 Report, New Idea magazine, ABC TV’s The Investigators or the restaurant reviews, are in the entertainment business as well as the information business. Exaggeration, sensationalism, hyperbole, bias, one-sided reporting is met with at least sceptical sometimes amused, and often approving reactions. The audience often joins the romance of the media. Thus stars such as Laws, Hinch and every gossip column that writes about stars.

“In this half-world of half-truths I guess at least half the audience is knowledgeable, knowing and consenting. Why else the sales of the Women’s Weekly, People, Penthouse, New Idea, the ratings of A Current Affair and 60 Minutes?

“There is a second and separate aspect of this theory of the consenting audience. Almost all successful media in some form or another embrace an orthodoxy or even a fully developed myth. This myth can have many dimensions. At its simplest it is the myth of the TV presenter newsreader — ace reporter, brilliant interviewer, scourge of the ungodly.”

This very realistic account of what the media is largely about — and the ABC, for all its pretensions, is no better and often more hypocritical about what it is doing that the commercial media — did not go down terribly well at the conference. Suich was accused of pessimism and cynicism. Of course, few people took account of the fact that this very realism is why he works his guts out creating and producing a little monthly which tries to be more than a simple entertainment medium.

This was where the prayer-meeting aspect of the conference tended to emerge again. It is all too common for such discussions, especially when organised by the religiously inclined, to degenerate into disapproving and shocked accounts of the evil of the world and demands that something be done about it.

As one member of the audience pointed out, what is unusual about the kind of post-coital guilt and sadness which follows a boom and bust? It is now the fashion to prate of the “corporate excesses of the ’80s”, as if there had never been any kind of excess before. The current concern with ethics and business morality might well prove to be just a passing fad.

Indeed, the danger is, as another remarked, that a rash of law-making intended to deal with the offences of the past will end up tying the hands of the great majority of directors who were and are perfectly honest and ethical in their dealings.

This, of course, is the fundamental point of talking about ethics (and morals). That is, there are many things in our community which most people would accept as unethical or immoral which nevertheless should never be illegal. Thus it is both unethical and immoral to be unfaithful to one’s spouse; but it is a common enough human failing and should never in any circumstances be illegal. It is always difficult to draw the line between behaviour which should be penalised by law and behaviour which should merely be frowned upon and avoided by people who want to be good.

This is where an organisation like the St James Ethics Centre, if it can avoid the atmosphere of the prayer meeting and the public confessional, can be useful. Its director, Simon Longstaff, as a professional philosopher who understands the dilemmas of ethical behaviour, can make a useful contribution in this respect. I am not sure that the God-botherers can — even though religion is the best substitute available for philosophical ethics for people who are either unsophisticated or who want a simple guide to what they should do.

Tony Coady, Professor of Philosophy at Melbourne University, gave as good a short guide to the ethical problems of lying as is possible in 20 minutes — and I am sure he left those who were not already familiar with the philosophical problems of lying and casuistry even more confused than they were before he stood up. In essence, he said that lying was not a good thing except when it was a good thing. This depends on the circumstances and the effect of the lie.

Here again the issue of complicity in lying raised by both Farmer and Suich is relevant. A lot of the time people want to be lied to — when you ask someone how he is, unless you really mean it you do not want any answer except, “Fine, thanks.” When you face an electorate, you know that a large proportion of the electorate both wants to be lied to and takes pride in its ability to discriminate between the lies of the parties. The real skill is in knowing when not to lie.

Of course, deliberate deception when this implicit consent is not present must be condemned, and in some cases should be illegal. The Trade Practices Act goes a long way in this direction; perhaps the Corporations Law is going too far. For while widows and orphans ought to be protected, they cannot be protected against their own greed and desire to have their cake and eat it too. You cannot have both security and high returns. This too is an ethical question.

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4.
Padraic P. McGuinness, “The journalists’ ‘shield’,” City Ethics: Newsletter of the St James Ethics Centre, Spring 1992, p. 1.

A code of ethics can be said to be an attempt to apply general ethical principles to a particular trade, occupation or activity, taking account of the problems which experienced practitioners who want to act ethically have encountered in their working lives.

One of the best known examples of such a code is the Australian Journalists’ Association code of ethics, drafted in its original form by the eminent Melbourne jurist Jack Barry, who had extensive knowledge of and contact with journalists. It has been modified by the additions of the concerns which emerged in the seventies (gender, race, sexual preference, etc). Overall, it has always seemed to me a pretty good attempt to codify the specific ethical concerns of journalists.

But in practice it seems to many people, both inside and outside journalism, to have little practical force. It is virtually never debated seriously by journalists, nor have I encountered any examples of its being taught to young journalists. When it is cited, it is usually in the context of an assertion of journalists’ right to defy proprietors or editors if instructed to write something which they believe is untrue or improper. This is in the context of article 9, which says that members of the AJA (a matter to which I shall return), “shall respect private grief and personal privacy and shall have the right to resist compulsion to intrude on them.”

This was clearly intended to deal with “foot in the door” journalism in circumstances like a family tragedy, and discourage scandal-mongering about personal lives. It was obviously felt when it was drafted that editors and/or proprietors might push journalists to do things they felt were distasteful. But these days it is often interpreted to mean that journalists should not be compelled to reflect the supposed political views of their bosses. There are in fact very few cases of this happening, but a great deal of paranoia amongst those who wish to justify external control of the commercial media that it might.

Thus right at the centre of modern debate about journalistic ethics is the issue of who shall control the media and how. Whether this is properly an ethical issue for journalists individually or collectively is itself debatable, even if it is admitted to be a legitimate issue of political and social policy.

Part of this debate should be the role of a journalists’ union itself. The AJA began of course as a primarily professional association and gradually evolved into a union; and it is at present a section of the Media and Entertainment Alliance, which came into existence as a result of government policy as to the minimum size of unions for purposes of the industrial relations system. It seems obvious that ethical considerations should apply to all journalists, not just to those who are members of the union. When the code of ethics was first drafted it was intended that it would reflect the professionalism and honesty to which journalists aspired, not become an instrument of unionism, however desirable that may be for other reasons.

Probably the most cited of all articles of the code of ethics is 3, which says that “in all circumstances they shall respect all confidences received in the course of their calling”. This proposition is often treated with contempt by lawyers, who argue that there is no justification for any kind of special status for journalists, and asserted by journalists as so essential to the revelation of information which might discomfort those in authority that it ought to be entrenched by special legal protection, tantamount to the protection given to the confessional.

It needs to be said at the beginning that, of course, priests (or indeed professional advisers of a purely secular status) do not receive confessions with the intention of broadcasting them to the world. This is a fairly important difference.

But if this is to be treated as a genuine ethical principle, not just as a shield for a journalist pursued by the authorities, it has to be considered in all its implications. A journalist has to consider whether it means that he or she has not only a duty to refrain from naming their sources without their permission, but also a duty not to name a source when it might be embarrassing to that source but to the benefit of the journalist involved, or a matter which the journalist feels should be made public.

There is here a classical conflict between an oft-cited, but unmentioned in the code, principle of the public’s “right to know” and the journalist’s duty to respect confidences. In recent times this ethical principle has been selectively interpreted to allow journalists to breach confidence whenever it seems appropriate to them.

This illustrates one of the greatest traps of codes of ethics — they become statements of high-falutin principle which are rarely considered in their entirety or discussed in their application to specific cases.

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5.
Padraic P. McGuinness, “Risk of jail comes with the job for journos,”
The Australian, July 23, 1993, p. 14.

It is not surprising that the case for “shield laws” for journalists when it comes to identification of sources should get such a good press: after all it is a matter of self-interest as well as principle.

There are important principles involved. It is undoubtedly true that the possibility of a journalist protecting the identity of an informant is extremely important to the exposure of corruption, abuse and wrongdoing. Most organisations have heavy penalties (often informal) for employees or members who reveal what they would rather keep hidden, and the journalist who obtains information for such people is frequently performing an important public duty.

But let us not be too pretentious or hypocritical about it. The vast majority of cases in which unnamed sources are used involve stories which editors hope will sell papers and from which the journalist hopes to gain professional prestige and advancement. There is nothing wrong with that. But there is rarely such a matter of high importance involved that all other considerations of public policy should be prohibited from requiring the naming of a source when they believe that it is in the interests of justice that they should do so.

And despite the position of highfalutin principle which journalists like to take in these matters, there are plenty of examples of sources being named when it seems convenient, desirable, or justifiable for the journalist to do so without obtaining the source’s permission.

Let us start by dismissing the comparison with priests or lawyers. Priests in the confessional are not obtaining information which they intend to publish to the world. On the contrary. Nor are lawyers, who if they are behaving ethically (and some do) will acquire information from their clients that would not be admissible in a court, and which ought not to be revealed to the other side in our adversarial system of justice. There are, however, cases in which a court might well require a lawyer to convey information to the court which he would prefer to claim as a matter of professional confidence.

Journalists, by contrast, obtain information with the intention of publication. They hope to profit by it. They really cannot complain if they are occasionally asked to provide the source of that information.

It is of course contrary to the journalistic code of ethics. But this is a code which, while admirable in its overall thrust, is not without defects. There are (inevitably) conflicting imperatives contained in it. Thus Article 1 requires journalists to “report and interpret the news with scrupulous honesty by striving to disclose all essential facts …” Article 3 provides that “in all circumstances they shall respect all confidences received in the course of their calling”. There will be many occasion on which these two conflict: who shall decide which is the more important on any particular occasion?

Other defects of the code include the fact that it is claimed by a union which breaches it every time it demands a closed shop or exclusive access for its members (Article 5, “they shall not allow their professional duties to be influenced by any consideration, gift or advantage offered …”), and which enforces it behind closed doors. That is, supposed breaches of the code of ethics are considered in secret, and there is no public information about how this is done, how often, to what effect, and what if any penalties are imposed. There may be reasons for this — but the same applies to, for example, the internal affairs of the Bar, which, however, no journalist would hesitate to reveal given the opportunity.

As long as the application (if any) of the journalists’ code of ethics is a matter of secrecy it can hardly be taken seriously, as the South Australian Attorney-General has pointed out. Thus, to judge the significance of the demand for “shield laws”, it would be necessary to know how often, if ever, a journalist has been censured by his or her peers for having revealed sources. There have been cases of such revelations, but if the source has been sufficiently unpopular this is usually applauded rather than condemned.

It is easy enough to construct extreme cases in which a journalist should be by any reasonable person expected to reveal a source to the police or a court (an accomplice to a dangerous criminal, for example). Most cases, however, are not clear in real life.

In the final analysis, the judgment of what is an appropriate time to demand the revelation of a source will have to be left to the courts. It is then up to a journalist to make the difficult decision of whether the protection of a source is the ultimate ethical imperative. In some cases it will be. In those circumstances, it will be necessary simply to defy the court and take the penalty, whether a fine or a jail sentence.

That is one of the risks of a journalist’s life, and there is no reason why we should feel any sorrier for a victim of it than for, say, a war correspondent who is injured by a stray bullet. It is one of the risks of the job, voluntarily incurred.

The principle of free speech was never established any other way but by the attempts to suppress it which aroused, either at the time or subsequently, either public outrage or the conscience or the courts. In mature legal systems, judges are usually sensible enough to realise that to press a witness like a journalist too hard where the merits of forcing the revelation of a source are not at all clear will harm the reputation of the courts, and may indeed not serve the cause of justice at all.

If there is an unjust law, oppressively used (as in the case of the NSW Independent Commission Against Corruption’s action against a Sydney Morning Herald journalist), the ultimate result will be to bring about a change in that law. A judge who believes that the application of an unjust law is incumbent upon him or her will rarely forgo the opportunity to make that abundantly clear. And the higher one goes in the legal system, by means of appeal, the purer becomes the font of justice, at least in countries with written constitutions.

It is true that the mutual tension and dislike between the journalistic and legal trades has never been greater, at least not this century. Lawyers are prone to arrogance and a presumption that their claims should have precedence over everybody else’s, often abusing their position in the legal [system] to assert this.

The remedy, however, is not to demand special protection for journalists — which they will never get, and should not get, in any case — but to accept that the struggle for a free press and media is a Sisyphean task which will never be completely and fully successful. It is true that a constitutional guarantee of freedom of speech and of the press can be of great assistance, as the 1963 Sullivan decision of the United States Supreme Court made clear. But even that is not an absolute shield, and no one rational thinks it should be.

The real problem for the media in defending its freedoms and that of its journalists is to obtain the respect if not of the lawyers then at least of the community. Unfortunately, in neither camp is the media held in high regard at present, for a number of reasons.

It is, however, merely ridiculous to complain about the attacks of the legal system on the press on the one hand, and to appeal to changes in the law as a means of defence on the other.

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6.
Padraic P. McGuinness, “Corporate honesty is the best policy,”
The Australian, December 1, 1992, p. 44.

How do we keep business honest? Should business be honest? What social obligations should a business have? These are all questions which as a result of the so-called excesses of the 1980s have become fashionable issues.

They are important issues, too, and the debate about business ethics, and the relationship between ethics in business and professional practice on the one hand and the law on the other is an important one. It is of course not just a matter of the private sector — the same kinds of abuses as exist in business can exist in the public sector, whether in government departments or government business enterprises.

We are fortunate in having a number of people in public and commercial life who are now very active in pursuing issues of corruption, embezzlement, corporate crime and malpractice. But as the disagreements with respect to the degree of success of the Australian Securities Commission have shown, there is a lot of scope for argument as to the right way to go.

However, as a fallible mortal who would, if I believed in such things, have many sins to confess, I often wonder about much of the rhetoric about public and private sector honesty and ethics. I absolutely agree that they are important — and why they are important needs extensive debate. But there is something about the defenders of public morality and ethics that gets my back up. Even when they are right, they too often seem to be far too convinced of their own virtue to be convincing.

Perhaps it is just that I have an instinctive dislike of the “sea-green incorruptibles”, of the wowsers and the ascetics who find it easy to denounce those who succumb to temptation because they themselves have never had to struggle with it. Maybe it is unfair, but this is how some of our most eminent citizens appear to me.

Then when I hear Ian Temby of the Independent Commission Against Corruption in NSW speak, he makes me uneasy. I hold Mr Temby in high regard, and believe his commission to be one of the best and most important innovations in the machinery of government in NSW, and yet when he speaks I get uneasy. There is a huge distance between the hurly-burly of everyday life and the purest of moral standards, and while the standards should exist and be defended, it is neither surprising nor particularly worrying if they are breached, provided the breaches are not on a massive scale.

There are others who worry me like this, too. There was a seminar a couple of weeks ago organised by the NSW Parliament’s public accounts committee on the subject of internal audit. This is a matter of great relevance for both the public and private sectors. One of the speakers was Jim Kropp, an impressive figure and very influential in his field. Just about everything he said was to the point and of value — his integrity, as was confirmed by everybody in the business, is absolutely unquestionable.

But in a way that is the trouble. For when the issue of the same firm providing internal audit staff and then acting as an external auditor came up, his own transparent honesty seemed to prevent him from realising that even the possibility of conflict of interest is an issue of concern. He said it all depended on independence of mind, and added, “I don’t have any conflict of interest.”

Well, as somebody who perceives conflicts of interest all the time in what I do, I found that amazing. While I have no doubt that Mr Kropp is right as far as he is concerned, can he speak for those of weaker character who might be involved on both sides of an audit process?

The whole point of rules about Chinese walls, or even having external auditors, or in the case of a government minister putting shareholdings into a blind trust, or in the case of a journalist taking a salary from an employer who expects you to be disinterested and not in receipt of money from an outsider who has an interest in what you write is to prevent the less than incorruptible from temptation.

(It is also about protecting your own credibility — not so long ago, I was offered a handsome payment to write the annual report of a large corporation, a “household name”, which I believe I could have done with no threat to my integrity and considerable benefit to it. But anything I wrote about that corporation thereafter could have been criticised on the grounds of my having done the job.)

That is, quite often ethics is about laying down easily comprehensible rules for those who wish to act, and be seen to have acted, properly — not relying on their virtue to guide them to the right decisions.

But should business be ethical anyway? This is quite a difficult issue. It is discussed in a very clear and illuminating fashion in a recent pamphlet published by the Institute of Public Affairs, Why Worry About Business Ethics, written by a professional philosopher at the University of Western Australia, Bob Ewin.

Should a business, a corporation, tell lies, in order to increase its profits? Should it engage in theft, deception, fraud, and so on rather than refrain from all of those at risk of lower profits? In rather different terms, should a corporation engage in acts of altruism, such as making gifts to worthy causes, donating food and clothing for the poor, or sponsoring the arts? In brief, the answer to all these questions, even the last set, is no.

Should corporations be generous with their shareholders’ money? The sensible answer is not unless the shareholders are likely to benefit in the long run. Thus McDonald’s is not really being generous when it donates money to help sick children and so on. It is making a shrewd investment in its own corporate image and longevity. A secret donation to a charity is an act of high virtue in an individual — it is folly, and virtual theft of shareholders’ money, in a corporation. Corporations have no moral right to make donations of their shareholders’ money unless there will be a real return to their shareholders. They have not got the right to be generous or altruistic.

The directors of a corporation have their primary duty to their shareholders, under the law. They should obey the law because not to do so is to risk to the profits of the shareholders and the survival of the corporation (and maybe their own liberty). But where the law is not clear, and they can get around it, what should they do?

Essentially, there are moral obligations here. Honesty, which includes the avoidance of everything from fraud to deliberate failure to observe safety standards for workers, as well as culpable negligence, is the primary value here. This does pay in the long run for a corporation; but there are always individual directors or executives who will see it as a short-term path to success and promotion.

Those corporations which do not put into effect their own safeguards against malpractice (not just embezzlement), for example by way of effective internal audit procedures, are likely to suffer corporately; indeed they may suffer more than the individual culprits. The real difficult thing, however, is how to distinguish between dishonesty and tough competition. That is where there are grey areas in law and morality, and where the study of business ethics starts; and let’s not have too much high-falutin’ preaching.

***
7.
Padraic P. McGuinness, “Those bold entrepreneurs may not have been all bad,” The Sydney Morning Herald, October 6, 1994, p. 21.

Were the entrepreneurs of the ’80s such a disaster for Australia, economically or financially? It certainly was an epoch of greed leading to financial crisis, and one which led to a lot of people losing a lot of money. But the real costs of the decade were not imposed on us by the cowboys who conned billions of dollars out of banks and other financial institutions, not to mention governments, but by the economic policies initiated by Paul Keating.

Otherwise, though it is hardly fashionable to say so, the benefits of the ’80s were pretty great. The history of modern capitalism, the most productive economic system ever stumbled upon, is one of periodic financial crises most of which have had enormous long-term benefits to the system as they shake out inefficient and the wasteful enterprises and allow rapid change and evolution. Just as sudden environmental changes stimulated the process of biological evolution, so does fiscal crisis stimulate economic evolution. The Australian economy has benefited enormously from the shake-out of the ’80s — businesses of all kinds are more efficient, the economy has been reoriented towards exports and, perhaps most of all, we have once more, after decades of lazy reliance on regulation, learned that neither business nor government is to be trusted.

The textbook of this period is none of the ponderous academic tracts which demonstrate the ignorance of their authors, nor the shallow journalistic essays into misunderstood theory, but the latest book by Trevor Sykes, The Bold Riders (Allen & Unwin, $45). Of Sykes little need be said except that he is the best as well as the most amusing of our financial journalists. This book is the successor to his 1988 volume, Two Centuries of Panic, which laid out the history behind the last great decade of crooks, cowboys, con men and crawlers which is still being sorted out. It is still impossible to tell the full truth about the ’80s, thanks to our libel laws, which are designed to protect the dishonest and punish the innocent. Not until they are all tucked safely away in jail, and sometimes not even then, can the real truth about many of the people who fleeced gullible banks, governments and punters be told. May they all die early.

But the point is that there had to be a lot of gullible, ignorant and pretentious people in positions to encourage, lend to, and protect the big names we all now know. Not enough — indeed very few — of this tier of culprits are even destitute, let alone in jail. The accountants, the public relations flacks, the bankers, the real-estate dealers, the builders and, indeed, the financial journalists who contributed to all this are most of them still living comfortably and tut-tutting about the evils of greed and deregulation.

As are many of the bureaucrats who participated enthusiastically in the whole business. It was not the regulators who did not regulate who were a problem but the regulators who became promoters and beneficiaries.

Not so long ago I spent a few years doing a bit of teaching in one of our leading business schools. Most of what the students were taught for their MBAs were pretty worthless. They were taught by some very good academics who tried to tell them about their fields. They also were taught by a lot of mediocrities, who had nothing useful to teach or convey. But they were taught nothing about the realities of business in Australia. If the students had spent most of their time working through Trevor Sykes’s first book they mostly would have learned far more useful lessons. Now anybody who went through a year’s discussion and examination on the case histories of that and his new book would be far better qualified than most MBAs. They at least would be introduced to the fact that a curious and cynical turn of mind is a far more valuable business tool than any formal training.

Possibly the best evidence that we need more women in senior managerial positions in business and government that I have encountered was at an ethics seminar run by the NSW parliamentary public accounts committee a few years ago, when I was amazed to hear responsible people argue that there was no conflict of interest in performing both internal and external audit functions for the same organisation.

I asked the auditorium full of accountants and auditors how many of them had seen malpractice and had not been game to blow the whistle. Several women put up their hands. Not a single males. Clearly, the women were the only ones willing to tell the truth.

So what are the fundamental lessons which Professor Sykes teaches us? One is that, in the old days, you should never have gone into a room with Alan Bond without your writing arm in a sling, so you would be unable to sign anything.

More generally, they are so obvious that only grown men with high social standing and qualifications could not have been expected to know them.

Number one: never trust bankers. That is, do not accept the word of a banker that he knows a good investment, do not accept the report of banker to a supervisor without checking it, do not assume that a banker has the faintest idea of the real creditworthiness of the person to whom he is lending.

I know bankers will object to this — but how can they dare, after the record of what they did in the ’80s is so clearly set forth?

Number two: never trust a balance sheet, even (or especially) after it has been signed off by the auditors. Sykes lists example after example of balance sheets that showed companies to be in profit when they were losing heavily. None of the responsible auditors is in jail. There is more useful information in Who’s Who, sanitised as it is, than in a balance sheet.

Number three: never trust a chief executive. When they are not lying to their boards they are pulling the wool over their eyes. I suppose the definition of a good chief executive is one who makes a success of the business while still telling lies to his board.

I particularly like the account of the way in which the funds of TEA (the Melbourne-based Trustees Executors & Agency) were poured down a hole in full view of the Sydney public, as well as one of their directors, right beside the Cahill Expressway — the Quay apartments. While hundreds of thousands of people a day witnessed the building going up, the directors did not.

Number four (of course): never trust governments. They regulate the wrong things and get into bed with the people they should be putting in jail.

Number five (perhaps even more important): never trust financial journalists, especially the boosters and the boy scouts. The more enthusiastic they are about the greatness of any particular businessman, the more likely he is to be a crook.

Finally, if you don’t know anything about finance the best place to put your money is under the bed.

***
8.
Padraic P. McGuinness, “Elusive ethics,”
The Sydney Morning Herald, November 17, 1994, p. 20.

Ethics, according to the old journalistic adage, is a county in England. It seemed just about as remote when I was listening to the fourth annual lecture of the St James Ethics Centre in Sydney’s Banco Court the other evening, delivered by the chairman of Woolworths, Paul Simons.

It is difficult, perhaps impossible, to criticise Mr Simons as a businessman. He took over as chairman of Woolworths in 1987 when it was in crisis, with its profits having plunged from $100 million in the previous year to almost zero. The company was in dire trouble, and its slogan “Woolworths’ Lower Prices” was a lie however interpreted. More than half of its managers had resigned during 1986 declaring that Woolworths’ prices were uncompetitive, its product range worse than those of its competitors, its stores rundown, and their complaints ignored.

Within a few years, Simons had restored Woolworths to profit, and ensured that it is now one of the best run and most competitive, as well as most profitable, supermarket chains in the country. This was achieved by the classic management techniques — which sound simple but are not at all simple in their implementation — of cutting costs, giving local autonomy to managers and, above all, honesty — telling the truth and dealing fairly with suppliers, staff and customers, with the customers being the primary focus of concern. In other words, Simons insisted that Woolworths should be not only run efficiently but should be an honest shopkeeper. Honesty is the best policy was the burden of his lecture. With engaging modesty he describes himself as just a shopkeeper, and with perfectly justifiable pride he adds that he just has a lot of shops to keep.

Present in everybody’s mind, though politely left unmentioned, was the current appearance in court of another shopkeeper in Melbourne.

Now I was quite puzzled as I listened to Paul Simons’s talk. He is an engaging speaker, a man of gentle disposition and transparent honesty, even naivety. He is certainly one of the best retail managers in Australia, if not the best. One could not help but admire his honesty, and even the asceticism of his policy on managers (no posh company cars, no posh hotels and economy class air travel between Sydney and Melbourne), which was absolutely appropriate when reconstructing his company on a basis of equality of treatment of shopfloor and head office staff. Entirely appropriate when a company is losing money. He, and his successful managers, are clearly paid handsomely for their performance — whether they take it out in fringe benefits or cash hardly matters. So long as it comes out of profits rather than being added to losses, it is not a big issue.

But it certainly matters that a company which lives or dies according to the morale of its staff and their treatment of customers should encourage an egalitarian and performance-based culture.

It also is important for its long-term profitability and viability, its successful competitive hold on its market share that a supermarket chain should have a reputation for honesty and service. In all this Woolworths has been outstandingly successful under Simons.

But what has all this to do with ethics? That is, why is there any ethical issue in a company being well-managed in such a way as to retain the loyalty of its customers and staff, and to earn a profit for its shareholders commensurate with their investment? So I could not forbear to ask Mr Simons in the question period whether he had ever faced a decision or a choice in which an unethical action would have benefited his company more than an ethical one. I do not think he understood the question, or perhaps he is a man of such uncomplicated goodness that the issue could not arise. Anyway, he could not conceive of any action by a supermarket chain which could in any respect not be both ethical and good business. He also deftly handled a question from another member of the audience who suggested that the destruction of corner stores by supermarkets might raise ethical considerations by pointing out the great benefits to the consumer of the rise of supermarkets.

Now this is not good enough. The St James Ethics Centre is an interesting organisation, rather overpopulated with god-botherers (religion and ethics are not the same thing) but headed by a sophisticated philosopher, Dr Simon Longstaff. They can make an important contribution to ethics in business and commercial and professional life generally. But the real enemy of business ethics is the notion that ethical behaviour is just good business.

Of course, it is easy to talk about honesty, fairness, good staff relations, openness and so on. And, of course, a good manager employs all these. But ethical issues are far more complex than that — they are about solving difficult and complex problems of the nature of “How should I behave, even if it disadvantages me?” Since Mr Simons could not think of an example of any decision he had made on purely ethical grounds to the disadvantage of himself or his shareholders, he could hardly be properly said ever to have behaved ethically — even though there is no doubt that he has always behaved well.

Ethical questions involve also the resolution of conflicts between principles. Thus, these days, journalists talk a lot about ethics. But one ethical principle they claim to uphold involves the importance of public disclosure, and another stresses the protection of sources, that is denial of often relevant information to the public. Serious ethical thinking is about how to reconcile both these principles, and when to err on one side or the other. (I have known journalists to blithely waive one in favour of the other according to their own preferences — for the sake of the story, that is for their own advantage.) So, where are the equivalent ethical conundrums in retailing? Where are they in business, generally? Of course, there are and always have been plenty of crooks in business, as in other occupations. There are always those who are in it for the quick buck. But if it is generally in the interests of managers, and of the community generally, for business to behave honestly, and if there are only the rewards of long-term viability and success as a result of such behaviour, what if anything is business ethics about? Perhaps it is totally inappropriate for business organisations to hold to ethical standards at all — after all, it is individuals who have ethics, not organisations. If it is good business to be honest, and good business for a manager to be honest, efficient and hardworking, the only lapse of ethics would be in a failure to take account of the interests of the business. A dishonest, incompetent and lazy shopkeeper struggling with his own temptations might have something to teach us about ethics.

***
9.
Padraic P. McGuinness, “Ethical standards for journalism
should not become a pretext for control of media,”
The Sydney Morning Herald, September 5, 1995, p. 12.

At the top of the agenda of everyone complaining that the new draft code of ethics for journalists does not go far enough is one thing — control. Those who demand enforceable standards and accountability of journalists have in mind a regime which would give them and like-minded censors power to control the content of the news media.

When journalists are licensed and have entry and educational requirements imposed on them; when journalists, media, and proprietors can be punished for breach of ethical as distinct from legal standards; when the media are regulated by government; when judges or tribunals can prescribe and proscribe content — then freedom of speech will be at an end in our society. That is of course the objective of most of the would-be regulators. They would permit freedom of speech only to those who agree with their prejudices, and deny it to “tycoons”, to big business, to small business, to community organisations not on an approved list, to racists, to sexists, to eccentrics, to dissidents, to offenders against fashionable moral and ethical sensibilities.

At the same time, the would-be censors and arbiters only too frequently demonstrate their own bias, lack of elementary fairness, refusal to accept pluralism of ideas and media, ideological obsessiveness, and often downright incompetence.

Journalists have for a long time recognised that they have a duty to apply some ethical standards to their own behaviour, partly because they are essentially moral people who want to behave well and fairly in their working lives and partly as protection against the pressures of proprietors, editors, advertisers, politicians, bureaucrats, and ideologists of all kinds. The code of ethics of the Australian Journalists’ Association was drafted mainly by a former president of the AJA, George Godfrey, with the help of Otto Beeby and Rupert Lockwood (before his Document J days). Its precise form was given it by the late Jack Barry, a civil libertarian lawyer and judge of great ability; there have been some later modifications to make it more politically correct. Because of Barry’s lapidary drafting, the code has often been admired.

Now a new and revised draft has been proposed by a committee set up by the Media Alliance, the body which has swallowed the journalists’ union.

It really adds very little to the old code, and improves it not at all; indeed some principles become less certain. There is nothing of course wrong with exhortations to respect privacy and grief, nor to take care not to endanger life and safety, nor to exercise care for the welfare of children. No journalist would do other than subscribe to them — except, however, when they are most important but when there is a real public interest in the subjects.

At such times a journalist’s motivations are likely to be mixed. He or she will recognise the very real public “interest” — call it if you like curiosity, prurience, sympathy, human feeling — in matters of grief, of privacy, and of crisis in a family. This has its commercial aspect, in that the public will pay (buying a paper, turning on a program which carries advertising) for such information and entertainment. There are likely to be rewards for a journalist who gratifies public curiosity best, as well as for media which promote such material. This can often lead to the momentum of a story pushing aside all ethical considerations, or at least considerations of privacy. This is not just a matter of money making, since the ABC is especially prone to ignore ethical standards in pursuit of the kind of story which appeals to its prejudices and prurience as well as those of its audience.

The media are prone to bouts of groupthink — whether in the coverage of a particular gory murder, or the pursuit of a political scandal. At such times when ethics are most needed they are most likely to be shoved aside. What is the solution to this? At the time, the collective enthusiasm needs to be modified — but how and by whom? At such times nobody wants a nay-sayer. In general, the only discipline which applies is that of experience and professionalism. The ethic of the “fair go” is likely to be as powerful as any other sanction.

But the censors would like to introduce a system of threats and penalties.

There is already such a system — everybody is aware of the law of defamation, with all its faults. Sometimes in the heat of the moment it is forgotten, and that can be expensive, often unfairly so. It is more likely that the law of contempt of court will be forgotten or ignored, for example in the belief that the public has a right (or will pay) to know what an accused in a notorious criminal case looks like.

What the regulators want is more. They want to pillory those they see as having overstepped boundaries which they, not the public, have laid down. Further, they would like to expel from or refuse entry into journalism to those of whom they disapprove. Unlike a medical registration board or a professional institute, they are not concerned with competence in basic skills but with imposing their own ideological, moral and ethical preferences, often questionable, on the whole of the media.

In the long run, the only proper discipline is that exercised by the community. Not by self-appointed tribunes of the community, not even by legislators and the murky processes of political wheeling and dealing, but by the consumers who can buy or not buy, tune in or turn off, according to what they, the consumers, really want. That is what freedom of speech is about.

***
10.
Padraic P. McGuinness, “Lies, damn lies, and politicians,”
The Sydney Morning Herald, August 24, 1996, p. 35.

The Government broke many of its election promises in its first Budget and everyone knows it. But this is the inevitable outcome of an election process — and the media — which demands that candidates must lie or be subjected to a hurricane of unfair criticism.

There is a premium on public lying in Australia which is established not by the politicians but by those who want to attack them.

Take the increase in the Medicare levy on high-income earners. This is clearly in breach of John Howard’s promise not to meddle with Medicare. This, however, is a promise that no honest government could keep — everyone who looks squarely at the health-care system knows it is a financial and administrative disaster.

It was totally dishonest of the Labor Party to pretend that there was nothing fundamentally wrong with Medicare and that there was no case for either increasing the levy or introducing direct charges to those who could afford them.

At one time, Labor nearly screwed up the courage to introduce a “co=payment” — that is, doctors’ fees — but squibbed it, preferring to continue to lie to the electorate.

The lie has been compounded by the pretence that the Medicare levy in some way finances the health system, when the revenue it produces is less than 15 per cent of the total cost, with the rest coming out of general revenue.

If the Medicare levy were to be increased to a level sufficient to finance the whole system, the electorate would realise just how expensive and wasteful the present system is.

The churches and welfare industry lobbyists, those bastions of hypocrisy, have never had the courage to advocate a Medicare levy which would be adequate to finance the system they support. They talk of higher taxes, but not in practical terms.

The great lie of the election campaign was, of course, the pretence that it would be possible for the Coalition to keep its promises not to change anything significant, since there would be no urgency about cutting the Budget deficit. In this lie it was supported by the Labor Government, which itself was peddling the lie that there was little or no prospect of a deficit but would not publish up-to-date Treasury estimates.

Both sides knew there would be a substantial deficit and the tiny number of journalists who understand the public accounts knew and wrote that there would be a deficit, as did the hordes of economists employed by the finance sector to get their employers’ names into print.

But the greater part of the public debate was conducted as if neither side was lying, when both sides of politics were lying, the Democrats and Greens were lying (if they can tell the difference between lies and fantasy) and the great majority of those employed in the media to tell the truth to the public were lying either explicitly or by omission.

The debate was presented as if it were possible not to lie. The most dishonest were those who represented explicitly or by implication that one side of politics was more untruthful than the other.

In this climate of huge dishonesty, to ask a politician not to lie is to ask him to commit political suicide. When John Hewson went to the electorate frankly promising a reform of the tax system which most people now agree is desirable and urgent, he was ruthlessly misrepresented. The worst offenders were not full-time politicians, but the godbotherers who preach so frequently about ethics in public life.

The electorate has a lot more nous than those who berate it for conservatism or redneckery like to think. Everybody knows that politicians lie, and have to lie. The reality of an election campaign is that we vote for the party which, on other grounds, is thought capable of government, and which can be trusted to break its promises to the extent that they are irresponsible. Only the politically purblind vote for a government which is demonstrably dishonest, keeps no promises and acts as if between elections it has no responsibility to the electorate.

Of all the changes announced in the Budget, the most important in its future implications has been barely mentioned. This is the statement on the Charter of Budget Honesty, which will be enacted in the current financial year and certainly before the next Federal election.

This will compel any government to be more honest than is customary in the formulation of fiscal policy and above all require an assessment of the economic and fiscal outlook to be published within 10 days of the announcement of an election. This will have to be signed by the secretaries of Treasury and Finance, who will be staking their reputations and future careers on its truthfulness.

If this had been in force before the last election, the Government could not have pretended that there was no prospect of a large deficit, and therefore could not have forced the Coalition to lie and dissemble. In the final wash-up, the credit for having the honesty to break its promises will accrue to the Howard Government.

In addition, the charter will compel future governments to publish annually an Intergenerational Report, which will “assess the long-term sustainability of current policies, including taking account of the financial implications of demographic change”.

That is, it will no longer be possible to lie about the huge burden the baby boomers are placing on their children, or to pretend that superannuation and pensions can continue to be unfunded without heavy increases in taxation.

Naturally, not a single political priest has had a word to say in favour of these momentous commitments to honesty.

***
11.
Padraic P. McGuinness, “The silly season of electioneering is about to begin,” The Sydney Morning Herald, December 2, 1995, p. 32.

So the last session of Parliament this year, and perhaps of the current parliamentary term, has finished. Let government begin. For so contemptuous of Parliament is the Government these days that it deliberately plans its initiatives and announcements for times when they cannot be questioned or debated there.

Not that this is the fault of the Government alone. It seems to be a kind of three-way bind, in which Government, Opposition and the media are caught in a ritual of trivial sloganising and avoidance of any real debate.

Fewer and fewer things of any moment are said in Parliament and when they are they are not reported anyway. The Prime Minister picks and chooses the days on which he condescends to a charade of responsible government by appearing in Parliament. When motions of no-confidence are pointlessly proposed by the Opposition, which does not have any chance of getting the numbers, the Government even more pointlessly turns them around into motions of no-confidence in the Opposition, which does not have to resign when it loses on the numbers.

The press gallery turns the Parliament into a source of entertainment, mainly for its members rather than the public, since the number of people who read even a fraction of the Canberra outpourings must be minimal.

There is some basis for the belief that one of the main reasons for the declining per capita sales of newspapers is the volume of boring political speculation and reporting they carry.

Once the easy story of the daily clashes in Question Time is removed — and how often is anything else reported of what happens in Parliament? — rather than a blessed relief from political, as distinct from policy, reporting, we get the fallback positions. Leadership challenges are always a good filler. No-one believes that there will ever be a leadership challenge against Paul Keating. If he loses the election, he will not be challenged, but run out of town on a rail. Nor will there be a challenge to John Howard. If he loses the election he will resign immediately. So we are left with the National Party, where Tim Fischer is being challenged by the ghost of country parties past, Ian Sinclair. Hardly worth more than a few pars. Of course, there might be a leadership challenge story about the Democrats, since they have one every now and then; unhappily, Cheryl Kernot does not seem the type for sex scandals.

And as for the Greens, how could you tell? So there’s not much milage in that one. But we will not be left in peace.

Instead, there will be endless speculation about the ups and downs of polls, sometimes based on special polls with sample sizes so small that the margin of error is greater than any swing they could possibly show.

This is the serious newspaper’s equivalent of cheque-book journalism. As every politician now says in his sleep, it is only the last poll that matters.

The Opposition will, in effect, be endlessly charged and charged again with cruelty to dumb journalists for refusing to produce detailed statements of policy for them to nitpick over. The “Opposition as a policy-free zone” line will be run daily until Christmas.

Meanwhile, the Prime Minister — now that he is free of Parliament — will be making policy decisions, or at least policy statements and glittering promises, also virtually daily. We are promised a National Innovations statement next week, which was clearly too important to be presented to Parliament. It will be long on rhetoric, replete with meaningless baubles like a “national investment library” and technobabble worthy of Barry Jones, and of no practical significance at all. It will be meant, of course, to convince another few interest groups in the electorate that they had better support Labor if they want to get on yet another gravy train.

The only sensible advice on how to deal with any policy statements or promises by either side of politics from now to the election is to file them unread. That applies doubly to news stories and comments based on them. The promises, etc, of the winning side can then be looked at after the election as a guide to what they will talk about while doing something else. Everybody knows that policy has nothing to do with the election anyway — it is about judgments on Paul Keating and his fitness to be Prime Minister, judgments on the corruption, tiredness and incompetence of the Government versus the inexperience and dullness of the Opposition, and personal advantage. As Neville Wran once said: “If those greedy bastards out there were interested in principles they’d join the f—ing Hare Krishnas.”

There will be the usual spate of demands from interest and lobby groups of all kinds and those which are accompanied by effective blackmail threats will elicit favourable responses and delaying action. Thus the Australian National Line will not be disposed of until after the election, at which time the Maritime Union of Australia will wreak its revenge on a defenceless Australian economy. The sillier ones will be given plenty of space in the political coverage, in the pretence that policy issues are relevant to the election.

There will be demands for “national strategies” to deal with everything from the weather to ingrown toenails. My favourite so far has been the proposal by one of the usual Chicken Little conservationist groups for a “national strategy on koala handling”. Koalas, which breed like rats and are so prolific in Victoria they have to be culled for their own good, are not a rare or threatened species any more than kangaroos or political pundits.

***
12.
Padraic P. McGuinness, “Labor has invented an
Opposition capitalist tiger rather than debate policy,”
The Sydney Morning Herald, October 31, 1995, p. 12.

It used to be that incumbent conservative governments would foment scare campaigns against the Labor Party, with graphic images of the “socialist tiger” about to pounce on an electorate quaking in its boots, and warnings to worthy citizens to hide their savings under the bed before the evil socialists could grab them.

This latter line was employed by Malcolm Fraser as recently as the election campaign of 1983, to which some Labor apparatchik invented the riposte that you couldn’t hide your savings under the bed since the reds were already there.

In these less innocent days the whole thing has been reversed. A conservative Labor Governments warns the electorate against the evil plans, the hidden agenda, of the Coalition, suggesting that the capitalist tiger will cut wages, raise taxes, abolish Medicare and smite the electorate hip and thigh.

John Howard does not make a very convincing capitalist tiger, preferring to present himself as rather a pussy-cat, but nevertheless the Coalition has to some extent been intimidated by this line. Given its record of blowing elections it should have won, and particularly the clear evidence that it would have won the March 1993 election but for the scare campaign against the goods and services tax, this is not surprising. The capitalist tiger image being purveyed by the Government is intended to suggest that the policies which the Coalition refuses to reveal in detail, so presenting itself as a target as with the GST, are all about destroying the supposed gains of 12 years of Labor rule.

However, it is probable that indeed the Coalition has very few concrete policies, and in pretending to be developing them is simply responding to the strange notion popular among the political elites these days that parties should have detailed programs rather than a commitment to good government. Elections are really about discontent with an incumbent government rather than a choice by the voters of the program of an Opposition. It makes sense for an Opposition to point to the failures of the Government and promise to make things better.

Most of the failures of government are a matter of inadequate political will to do things which will antagonise the electorate or alienate any powerful interest groups. So the essence of the Keating Government’s tactics against the Coalition is to suggest that it might do all the things which the Government knows should be done, but which it does not dare do itself, at least until it enjoys greater support.

Thus the latest absurdity is its suggestion that the Coalition plans to reform the tax system so as to correct the vertical fiscal imbalances between State and Commonwealth taxing powers. It is not surprising that Access Economics has reported to the West Australian Government that States should be given a better tax base and more control over the raising of the funds they expend. Every responsible economist argues the same. But the States, despite their rhetoric, are not terribly keen on having additional tax powers which they would have to exercise directly; while the Commonwealth has always been reluctant to give up the levers of power over the States which it exercises through its monopoly of income tax and sales tax revenues. With the exception of consumption taxes (which are identical in effect to excise taxes), which the High Court has conceded on a very shaky logical and constitutional basis and in a very limited sphere to the States, the States have no secure source of tax revenue.

What Keating and company are doing by attacking any Opposition discussion of tax reform and by untruthfully suggesting that it is contemplating some form of a GST and some kind of State income taxes is to prevent any rational political discussion of tax reform. It is all about scare campaigns. Similarly, with wages and inflation beginning to rise again and the Industrial Relations Commission undermining any serious enterprise bargaining, the Government is trying to prevent realistic discussion of labour market reform.

The irony of all this is that the bureaucratic advisers of the Government will put forward just the kind of proposals the Opposition is being attacked for whenever they think that the Government might be persuaded to implement them. The abandonment of traditional Labor opposition to privatisation by the Commonwealth Government is only one piece of evidence that policy-making is purely a matter of expediency for it.

It is pure farce when a government busily privatising Qantas and the Commonwealth Bank, and hoping to flog off the airports at some time, turns around and points the finger at anyone in the Opposition who suggests that there might be scope for privatising Telstra.

As with vertical fiscal imbalance, competent economists know that the only way we are going to fix our current account deficit problem is by increasing national savings, and since we do not know how to increase private savings (the Prime Minister has just done his bit to lower the savings ratio still further, by describing funds managers as “donkeys”), it is necessary to increase public savings. That is, taxes have to rise and government expenditures have to be reduced. This is the reality which whoever wins the election will have to face up to.

But the Government is determined that the election will not be fought on real policies, but on the pretence that only it has policies while the Opposition has hidden agendas.

The worst aspect of the Labor tactic of depicting the Coalition as a ravening capitalist tiger is not that it involves telling lies, but that it prevents any politician telling the truth about any policy at any time.

***
13.
Padraic P. McGuinness, “May the best tax liar win,” The Weekend Australian, September 5-6, 1992, p. 2.

A couple of weeks ago, I was talking to an eminent German professor of constitutional law who did not know much about Australia, and I was explaining our prospective federal election campaign to him.

The Opposition, I explained, was standing on a platform with three main planks: a value added tax (which is what the Europeans call a goods and services tax), collective bargaining instead of centralised arbitration, and a fully independent central bank (along the lines of the German Bundesbank.)

Oh, he said, that sounds like a good social-democratic platform!

The frontbenchers on both sides of Parliament to whom I have related this have been rather embarrassed especially those on the Labor side — since they are a social democratic party. It is nevertheless true, and serves to illustrate that a good deal of the apparent conflict between the major parties is about who should sit on the government benches, not about any real disagreement of substance.

Far from being a bad thing, this means that although the behaviour of our politicians has never been more criticised, they are grappling with real, as distinct from ideological, issues to a greater extent than ever before.

The differences between the leaders are immaterial. The Government has now decided to attack the Leader of the Opposition, John Hewson, for his criticisms of particular groups and his divisiveness — but this is a bit rich, coming from a party whose leader, Paul Keating, is acknowledged as the leading exponent of gutter abuse in the Parliament. The truth is that there is no significant difference between the leaders of the parties.

Whoever wins the next election, we can be sure that Australia will be very much the same five years hence as it is now, that the rate of unemployment, the rate of inflation, the exchange rate, the living standard, and even the industrial relations system will be not very different whoever is in charge. We will still be living under a not very well-managed liberal democracy. Not that there are no differences between the parties — but they are both essentially social democratic parties committed to reform, with some differences about details and rates of change. Both can be trusted not to do anything really foolish.

However, the emerging conflict between the Liberal-National Coalition and some sectors of the business community is a fascinating new development in Australian politics. Who would have thought 20 years ago that the time would come when business would be fearful of the Liberals, and looking for protection to the safe, conservative and protectionist embrace of the Labor Party?

What the Coalition parties are doing is of course only what any honest party offering to govern Australian in our present circumstances would do — that is, emphasising that business has to stand on its own feet, since there is no capacity for assistance to any industry in our economy any more. The best it can offer is to reform the taxation system, the industrial relations system, the financial system, and the regulatory system so as to remove barriers to and burdens on efficient business.

This really is also what the Labor Government is offering, though it has been dilatory about genuine labour-market reform because of the demands of the ACTU. It is just that the Government has now become tired and conservative, and beholden to vested interests, while for the first time the Coalition is courageously, or recklessly, rejecting commitments to vested interests in advance.

There are no minor parties and no Independents yet to have emerged on the federal scene who have any policies on economic management, social issues, taxation, industrial relations, or any other major issue — save that of parliamentary reform, where Ted Mack is moving in the same direction as the Independents in the NSW Parliament — which are sensible alternatives.

Neither of the major parties is prepared, or able, to face up to our problems honestly, because measures which would offer a genuine, rapid solution to unemployment while maintaining low inflation are unacceptable to the majority of the electorate. Whoever gains government next year, taxes in Australia are going to have to increase. Neither side is prepared to admit this, and when the Treasurer, Mr Dawkins, made a partial and accidental admission of the likelihood of tax increases in the future, it was seized upon as a huge blunder.

The only solution to unemployment which could have a rapid, even dramatic, effect in lowering the rate of unemployment would be a very considerable expansion of what are called “active” labour market policies, that is retraining and the subsidisation into work of those who are on the margins of employment. This, combined with increased taxation (that is, a reduction in take-home pay for everybody in employment) to pay for it and a wage-freeze (a difficult thing to implement, with only temporary usefulness) could deliver substantial reductions in unemployment very quickly.

But no political party is going to win an election by advocating higher taxes and lower real wages, however temporarily. Unemployment apart, it is still the case that our living standards have to fall, and our savings rise, if we are to obtain higher levels of investment and cope with the rising external debt. This also requires higher taxes.

However, no-one wants to pay higher taxes, especially not the relatively well-off middle-class people who are going to determine the outcome of the election. They all perceive themselves as having been squeezed in recent times, and many of them are in fact worse off. But the 11 per cent of the workforce who are unemployed are far worse off than anyone with a job — but the employed simply refuse to accept that it is their fault that unemployment is high, and their refusal to do anything about it which will keep unemployment high.

So the real issue at the next federal election should be, which party can lie convincingly that it will never raise taxes while at the same time can be trusted to raise taxes as soon as possible after the election?

It is not a very satisfactory way to have to face the democratic process. Perhaps we should not be forced to vote for anybody in such a situation; and it is perfectly legitimate to take the view that it hardly matters if or how you vote.

The more vociferously the parties declare their differences, in particular the more the Government accuses the Coalition parties of being dangerous radicals, inexperienced, wanting to test untried policies on an unsuspecting populace, irresponsible, divisive, etc, the more the appropriate response is a horse laugh. Any day now Paul Keating will be talking about the Socialist Tiger Hewson and warning people to keep their savings under the bed if the Liberals get in.

But there are genuine differences between the parties. It is just that nobody in the electorate or the media really wants to know about them.

***
14.
Padraic P. McGuinness, “Home truths on the politics of lies,” The Australian, June 6, 1991, p. 11.

Let’s not have too much hypocritical cant about politicians lying. They are just about as honest as they are allowed to be by the conventions imposed on them by our political culture and above all, by the media who take such a high-minded view of how everybody but themselves should behave.

Of course politicians tell lies, to each other, to the public and especially to journalists. Show me someone who does not, and I’ll show you a person whose political career never even started; and the same applies to the whole field of everyday life and work. Our whole culture is built on a complex structure of permissible, or “white”, lies, lies of convenience and conventional dissembling.

There are areas in which lies are not socially approved — this is where the law comes in and tries to define concepts of fraud, misleading and deceptive behaviour, and so on. But before the social workers got active in the area, most sensible lawyers realised that there has to be a limit to the extent to which adults can properly be protected from their own gullibility, carelessness, or need to be deceived.

Politics has always been about lies. And so it should be. For the telling of the simple, unvarnished truth is something electors do not want; any more than a husband and wife, if they are sensible, ever tell each other the full truth about what they are thinking and feeling at every moment of the day. But there is a kind of honesty which goes beyond conventional lying — and it is that which both electorates and spouses expect.

Most politicians would prefer to be as honest as the courtesies demand with the electorate. Some make a serious effort to be so, and can expect to be denounced by the hypocrites for telling it. Look at the way one of the most honest politicians in federal Parliament, Senator Peter Walsh, is treated. Another member of the Senate, John Button, shocked many people by telling the truth and saying that yes of course politicians tell lies.

Consider the case of the Hawke-Keating conspiracy. Such a deal to hand over the prime ministership on a personal basis was objectionable, and should not have been made in the way it was. To the extent that both men subsequently gave the impression that no such deal had been made, they were lying to the community.

Indeed, it was an agreement to lie to the voters about what they should expect if they voted for a Labor government led by Hawke at the 1989 election. But it was also an agreement which could hardly be said to be a binding contract, since political circumstances change from week to week. Nor is a contract to perpetrate a fraud enforceable by law.

It is necessary, however, before condemning the deal outright to consider the alternatives. Could there have been any open discussion as to the ambitions of the then Treasurer and the future of the Prime Minister which did not harm the Government? Would not the electorate rightly expect both to be determined by future performance at the next election?

Paul Keating forced the Prime Minister to lie to the electorate by threatening to destroy the stability of the Government. In the end the PM, by repudiating the deal, kept faith with the electorate rather than Keating. At the end of the day, who was the worse liar? Perhaps it is the case that Bob Hawke lied to Keating in November 1988 and never lied to the electorate. Keating was aggrieved; but has he any right to be?

Here, however, we come to what is the nub of the issue in Australian politics (it is not quite the same elsewhere, but similar issues arise). This is the role of the media, and in particular the press gallery. How can a politician afford not to lie when if he tells the truth it will not be possible to formulate policy or follow plans in a proper manner?

We all know how the media, especially radio and television, nag and niggle at politicians, desperately trying to elicit a slip of the tongue, an ambiguous statement or an admission which will then become the main story for the next couple of days, regardless of the overall thrust of policy or intention.

Over and over, questions of the “Have you stopped beating your wife?” kind are asked — once I was astonished to hear during the last election campaign, when a politician complained of this, the interviewer asked what that meant.

The whole game of political reporting and commentary these days (with a small number of honourable exceptions) seems to be directed towards preventing any serious discussion of policy by ensuring that any speculation, any suggestion of a policy which might not be immediately attractive to the electorate but which ought to be discussed, any admission of error in the past, will be blown up and treated as a terrible mistake.

Only Hawke has been able to get away with admission of past personal sins, and this only by admitting them on a scale beyond misrepresentation.

Of course, Oppositions do this kind of thing too. But it is the media which make it difficult for politicians to concentrate on policy rather than charge and counter-charge. The debate, such as it is, on a consumption tax, a Goods and Services Tax, has been atrophied by the insistence on the unpopular aspects of such a tax with little attempt to spell out the detail which makes clear that it would have many offsetting virtues and benefits which overtime offset the initial impact.

So politicians are left with little choice but to take refuge in platitudes or to lie. Equivocation usually takes the form of refusing to answer “hypothetical” questions — as if any question about future action could be anything but hypothetical — or stonewalling. (I have often wondered what would happen if a minister were to simply refuse to respond to the kind of radio or television interviewer who keeps on repeating the same question, but smiled sweetly and stayed silent.)

Of course it is not just the fault of the media. There are plenty of people in the community who cannot understand that politics is about compromise, the peaceful resolution of conflicting interests and demands, and who want a clear and unqualified commitment to some particular demand.

Or they think that political promises can be something more than a statement of intention (or a proffered bribe) which will have to be reconsidered in government in light of available resources and competing priorities.

Happily, the days when elections involved competing offers of handouts are past (or so it seems); and there really are many in the electorate who, realistically, cast their votes for the party which can best be trusted not to keep its promises. Not that all promises to electorates are unworthy or mere bribes.

It is often forgotten that the commitment to budgetary restraint of the Hawke Government — the so-called Trilogy — was elicited from Bob Hawke in the course of the 1983 election campaign, and it was only later that Keating became a convert to fiscal rectitude. That is the kind of promise which we should expect our politicians to keep. It is a promise to govern well and responsibly.

So the real problem is for responsible adults to distinguish between the various kinds of political lies — the lie which is conventional, the lie which is really a statement of wishful thinking, the lie which is forced upon the politicians by naïve journalists or community figures trying to play a kind of game of truth and consequences, and the lie which amounts to out and out fraud.

Few of our politicians frequently resort to real lies of this nature. But may the Good Lord preserve us from politicians who do not lie.