The new persuaders

Mathew Dunckley and Nick Lenaghan

Australian Financial Review

10 March 2011

 

Governments are thrown out but the lobbying goes on, even if the faces change

 

The day after the Victorian election last year, Andrew Scannell’s phone rang with a job offer. It was former NSW opposition leader-cum-lobbyist Peter Collins. He rang to discuss a plan the pair had hatched months earlier.

 

Scannell, a former adviser to Jeff Kennett, would kickstart the Victorian arm of new conservative-leaning lobbying firm Barton Deakin.

 

Lobbying firms offering “government relations” advice and stacked full of former Labor MPs, advisers and hacks mushroomed in Melbourne over a decade of Labor state government. These lobbyists have sold their ability to get companies in front of decision-makers to explain their problem – or less commonly their affection – for a government policy on topics as wide ranging as re-zonings to food labeling and everything in between.

 

There’s no indication that Labor’s demise in Victoria and pending immolation in NSW spells the end to the professional influence game. Instead, the election of Ted Baillieu’s Coalition government in Victoria simply flicked the switch from red to blue.

 

Scannell’s mission now is to get a slice of the action and he is not alone. There are any number of firms now spruiking their connection to the Coalition government.

 

Many of the existing Labor-flavoured firms have moved quickly to hire advisors with a discernibly different political pedigree in recent months while at the same time talking up – something they do well – a supposed new “post-partisan” approach to the craft.

 

Collins, unsurprisingly, disagrees with that analysis and approach.

 

“The election immediately opened a chasm in Victoria for a lot of lobbying companies, particularly those that are Coalition-oriented,” Collins says.

 

The Victorian phenomenon is just a taste of what is about to occur in NSW. Barton Deakin, Collins says, was created in anticipation of Barry O’Farrell’s looming victory in the NSW state election.

 

“We are now entering a blue cycle,” he says. “That era of all the planets being aligned with the Labor Party will be effectively over. It will just be one of the seismic changes.”

 

Barton Deakin is owned by listed company STW, which also owns the majority of Hawker Britton, the firm whose name became synonymous with influence as Labor surfed to power around Australia over the past 15 years.

 

“Hawker Britton is the most effective lobbying company established in this country to date. About 18 months ago I was asked to consider setting up what is essentially a Liberal equivalent of Hawker Britton.

 

“We have got a very healthy client base and that will rise significantly with the change of government. The clients that we have picked over the last year, often for the first time, are looking to establish links with what will be the next government.”

 

Grahame Morris was recruited following the hung parliament after the last federal election.

 

“There was an immediate demand for business to know precisely what the opposition thought about different proposals and legislation,” he says.

 

The model is “overtly” partisan. Barton Deakin operates out of the same building as the Liberal Party in an office formally opened by O’Farrell.

 

“We are absolutely transparent and upfront about that,” Morris says.

 

STW also part owns Parker and Partners, which touts itself as bipartisan, although one of its tow joint managing directors, Sarah Cruikshank, was in the Howard government.

 

Collins believes the key to avoiding accusations of undue influence is to avoid any formal connection with political party life. Lobbyists should not be voting in preselections, for example.

 

Since Bailieu’s win in Victoria, feelers have certainly been extended. Firms have called the authors of the story and others asking is they could recommend a good “Liberal lobbyist” as they seek to engage with the new government.

 

“The business community has been taken by surprise, no doubt about that,” says one Liberal staffer turned lobbyist.

 

Many describe a business community that had not spent a lot of time getting to know the Coalition or its shadow ministers.

 

“I think the business community is still coming to grips with this. This always happens at state level,” says the lobbyist. “In Canberra you need to know the opposition because of the Senate. State oppositions, on the other hand, are always neglected. The issue our clients are interested in at the moment is who are the government? Who are the key people? Who are the ministers? What drives them? There is also a lot of interest in staffing.”

 

The lobbyist notes that states still have power over areas of policy delivery that are important to business.

 

“State governments have a lot of regulatory power. A lot of things that commonwealth does in energy, infrastructure, planning…all the execution is with the state government.”

 

Of course, the business of lobbying has changed. Further crimping the style of an old-school piece of arm twisting in Victoria is the Bailieu government’s pledge to introduce an independent corruption commission and code of conduct for ministers.

 

Knowing who to approach and how can be half the battle, argue those in the business. Clearly lobbyists who know the backgrounds and networks, not only of the ministers but their staffers, and are privy to battles over policy and seats within parties, have an advantage in crafting their argument.

 

John Ridley, a former state director of the Liberal Party and now director of Clifton Group, says the need for this advice is amplified when a government unexpectedly changes. “We got some of our business from clients who find government a black box, a mysterious thing that doesn’t operate by any known rules,” he says. “So companies think, even quite sophisticated companies, ‘oops! Change of government, who knows them, who can get us in the door.’ That is the reality of what happens.”

 

Ridley says there value from being familiar with how certain government operates. “You understand what matters to them, you understand their values and what their objectives are in policy and you can think about what collateral issues there may be and that might be important to them. It may be as basic as understanding the relevant seats.

 

“Where your links matter are in your research, you can learn much more quickly if you know the people and you are trusted and then shape your strategic advice to you client.”

 

But he says a key element of any successful attempt to convince government will usually be convincing a non-partisan public service.

 

“It is a very rare minister who will act against the advice from the public sector.”

 

He concedes the change of government has seen business come his way but insists his firm walks both sides of the political street. “You are mad if you forget opposition or left attitudes.”

 

Several insiders say the defeat of the Brumby government sparked something of a scramble in the industry. “Some people were caught a bit off guard,” says one lobbyist.

 

“The sector was probably assuming the most likely outcome was a Brumby victory. There was a bit of a rush to go out and get someone who was clearly branded ‘Liberal’.”

 

Bill Forwood, a former leader in the upper house for the Liberal Party when it was in opposition, has worked with CPR Communications, a firm renowned for its Labor links, for a number of years.

 

He plays down the importance of being painted with a blue brush.

 

“Knowing someone is no guarantee of anything at all in this job,” he says. “You always need to actually make a case and even that doesn’t guarantee you will get an airing either, let alone a result.”

 

A breakaway group of former CPR executives formed the Civic Group in May last year and included in their ranks Liberal Party office holder Jason Aldworth.

 

Earlier this year, the firm also hired former deputy leader of the federal Liberal Party Neil Brown and former Howard government advisor Margaret Fitzherbert.

 

Civic Group director Brett Miller plays down the importance of politics behind the appointment.

 

“We are a bipartisan firm, we are actually in the business of running communications campaigns. Government relation is only part of that,” he says.

 

As well as employing people from both sides of the political spectrum, Civic also has staff with no direct political experience, he says.

 

This trend is also evidenced at the Agenda Group, which is dominated by former Labor staffers, but recently acquired the services of Richard Allsop, former advisor to Rod Kemp.

 

InsideOut Strategic’s Phil Staindl gained notoriety under the previous Labor government as its fundraiser-in-chief at the helm of donation Progressive Business.

 

Since Bailieu’s election, he has formalised a business arrangement with former Kennett government whip Geoff Leigh, who says the strength of an argument, not the political alignment of its bearer, is the most important ingredient. “In modern politics you deal with both sides, you don’t just deal with one and you are silly if you do,” he says.

 

He actively campaigned on behalf of the Liberal Party but insists he keeps his political activities separate from the representations he makes on behalf of his clients. “I have got a constitutional right, as far as I see, that I can be a member of a political party if I want.”

 

Leigh stresses though that he has not held any significant office in the party and that to do so could present issues for lobbyists.