NSW lobbying reform bill passes lower house amid ongoing scrutiny

A new piece of legislation aimed at regulating third-party lobbyists has cleared the lower house of the New South Wales parliament. The bill, introduced by the Labor government, seeks to clarify the obligations of professional lobbyists who are hired by external parties. However, critics argue that the measures fall short of the comprehensive reforms recommended by the state's corruption watchdog, the Independent Commission against Corruption, five years ago.

The push for reform follows the findings of Operation Rosny, an inquiry that exposed how a group of former government staffers, known as the Reformers, operated within the Liberal party machine. These individuals, including Charles Perrottet, brother to former premier Dominic Perrottet, were allegedly paid two million dollars by developer Jean Nassif to advance his interests. The inquiry highlighted how easily these former staffers moved through the corridors of power, often without being registered as lobbyists or declaring their clients.

The proposed legislation establishes the NSW Electoral Commission as the primary regulator for third-party lobbyists. This body will gain enhanced powers to audit compliance with the Lobbying of Government Officials Act. The bill also extends the scope of the act to include interactions between lobbyists and local councils, a gap previously identified by Icac. Under the new rules, lobbyists engaging with councils will be required to register and adhere to a specific code of conduct.

Special Minister of State John Graham defended the approach, noting that third-party lobbyists are already subject to certain disclosure obligations. He stated that the bill allows the electoral commission to require relevant accounts and documents to ensure transparency. The government also plans to make ministerial diary disclosures fully searchable, moving away from the current practice of issuing them as quarterly PDF documents.

Despite these improvements, significant loopholes remain. The bill does not cover in-house lobbyists, such as staff employed directly by companies with titles like government relations or corporate affairs. These individuals make up approximately 80 percent of those lobbying politicians and are often former political staff. Graham argued that registering in-house lobbyists would create unnecessary red tape, as their interests are generally clear.

Another point of contention is the exclusion of key ministerial staff, such as chiefs of staff, from the disclosure regime. Operation Rosny demonstrated that these staff members often serve as crucial conduits to ministers. In one instance, material intended to discredit the building commissioner was passed through a chief of staff to the responsible minister's office. Graham maintained that regulation should focus on decision-makers, implying that ministerial staff do not hold the same level of authority.

The government has also modified Icac's proposal for a cooling-off period. While the watchdog recommended a six-month prohibition on certain public servants taking lobbying roles after leaving the bureaucracy, the bill offers a more limited approach. This change has drawn criticism from those who argue that stricter rules are needed to prevent conflicts of interest.

The future of the bill in the upper house is uncertain, particularly with an election looming. The Greens have introduced a competing private member's bill that would implement most of Icac's original recommendations, including extending the scheme to in-house lobbyists. Kobi Shetty, the Greens' anti-corruption spokesperson, emphasized the need to balance the influence of deep-pocketed industries with community interests.

Geoffrey Watson, senior counsel at the Centre for Public Integrity, described the government's bill as a step in the right direction. However, he expressed a wish for the legislation to be more ambitious in addressing the complex dynamics of modern lobbying in New South Wales.