Success fees banned for NSW lobbyists

The O'Farrell Government in NSW was off to a quick start on the election commitment to abolish success fees for lobbyists, with the Legislative Assembly passing the Lobbying of Government Officials Bill 2011 this week on the first full day of parliamentary sittings. The bill is now before the Legislative Council. Labor in opposition for the first time in 16 years didn't oppose but criticised the fines as not enough!

The bill bans agreements for a success fee and the giving or receiving of payments, creating a criminal offence for both parties punishable by a fine of $55,000 for a corporation and $22,000 for an individual, plus potential forfeiture of the amount of any payment to the Crown. It applies to agreements entered into and payments after commencement of the bill, allows payment after commencement for work carried out before that date, and voids any agreement to pay a success fee entered into before commencement.

The bill includes a more detailed definition of what constitutes lobbying than the Lobbyist Code of Conduct, the basis for the registration scheme in place in NSW for some years.

All good stuff if only a step on the long path of cleaning up, as the Premier acknowledged (Hansard debate commencing at 10.37 am)

This bill is part of a series of measures that the Government will take to restore confidence in public administration in New South Wales—confidence destroyed, confidence sapped after 16 years of Labor government and a culture and a decisions-for-donations culture that had grown up. We are determined to ensure that people see how decisions are made. We are determined that people understand that decisions are made on the basis of public interest. We are determined to ensure that we are a government for all of New South Wales, and that we are accessible for all of New South Wales....This bill .... is part of a series of measures that we will take not just in relation to lobbying but in other areas to restore the confidence that people in New South Wales voted for on 26 March. Every member of this House—even those opposite—surely got the message out of the election that people in New South Wales want clean politics: they want openness and transparency; they want the public put at the heart at government again. The New South Wales Liberals and Nationals Government is determined to achieve that.

The ban applies to lobbying a (State) Government official, but Government MP Andrew Fraser floated the good idea that it should extend to the local government sphere. Far more extensive improvements to regulation of lobbying were recommended by the Independent Commission Against Corruption last year, including disclosure of lobbying activity, on which the Government has been silent so far.

Another gap concerns the lobbying of Government backbenchers, Opposition parliamentarians and crossbenchers who are not Government officials as defined, but may have a significant influence on legislation particularly in the Legislative Council where the Government doesn't have the numbers.  A success fee for this sort of activity is unaffected by the legislation.

The offence provision states:

(1) A person must not give, or agree to give, a success fee for the lobbying of a Government official to a lobbyist or to any other person at the direction or with the agreement of the lobbyist.
(2) A lobbyist must not receive or agree to receive, or agree that another person is to receive, a success fee for the lobbying of a Government official.
(3) A person (other than a lobbyist) must not receive, or agree to receive, a success fee for the lobbying of a Government official.
Maximum penalty: 500 penalty units (in the case of a corporation) or
200 penalty units (in the case of an individual).

If a person is found guilty of an offence under the act a court may order the amount forfeited to the Crown.

As to definitions:

Lobbyist means a person or body (incorporated or unincorporated) that carries on the business of lobbying Government officials on behalf of third parties and that generally does so for money or other valuable consideration, but does not include a person or body, or a member of a class of persons or bodies, prescribed by the regulations for the purpose

Lobbying a Government official means:

communicating with the official (in person, in writing or by telephone or other electronic means) for the purpose of representing the interests of another person or a body in relation to (a) legislation or proposed legislation or a government decision or policy or proposed government decision or policy, (b) a planning application, (c) the exercise by the official of the official’s official functions

Government official means any of the following:

(a) a Minister or Parliamentary Secretary,
(b) a staff member of a Minister or Parliamentary Secretary
(including a staff member in an electorate office),
(c) a chief executive officer or senior executive officer within the
meaning of the Public Sector Employment and Management Act
2002,
(d) a person employed under Chapter 1A of the Public Sector
Employment and Management Act 2002,
(e) an individual who is engaged under a contract to provide services
to or on behalf of a Division of the Government Service,
(f) a member (however expressed) of, or of the governing body of, a
statutory body.

A success fee for the lobbying of a Government official is

"an amount of money or other valuable consideration the giving or receipt of which is contingent on the outcome of the lobbying of the Government official by or on behalf of a lobbyist or on the outcome of a matter about which such lobbying is carried out.