The Prime Minister John Howard acknowledged yesterday that he had considered sacking Assistant Treasurer Jim Short over a potential conflict of interest involving his continued shareholding in the ANZ Bank. But he had accepted Senator Short’s explanation the issue was an oversight and that the minister was guilty of no wrongdoing.
Mr Howard came to the wrong conclusion. Indeed, he should never have been put into that position by Senator Short. Senator Short should have resigned as soon as the potential for the conflict had been pointed out.
Senator Short should go for several reasons.
The first is that both Mr Howard and Senator Short have agreed that Senator Short had breached the Government’s own code of ministerial conduct which Mr Howard had drafted and which he had circulated to ministers upon coming to government. If Senator Short is not to resign upon an acknowledged breach, of what value is the code? Is it advisory only? In fact, it is of no effect. The new state of affairs is that we have a code of conduct, but if in the opinion of the Prime Minister a minister who breaches it should stay, then the minister stays. The test, then, for ministerial conduct is not the code, but prime ministerial opinion. Any idea that Mr Howard was to bring new, objective, elevated standards to ministerial conduct has now gone out the window. The same old standard applies: whatever the prime minister thinks he can get away with goes.
The next reason Senator Short should go is that he allowed himself to get into a position of potential conflict of interest. He, as assistant treasurer, was responsible for banking and for the scheme under which banks were to be given the business of receiving savings bond with special tax concessions. This scheme was likely to make banks more profitable and improve their share price. Further, the ANZ was subject to foreign investment interest with which Senator Short would have to deal.
The third reason is that Senator Short has profited from his share ownership at a time when he was assistant treasurer, even if no-one can prove any direct link between any decisions he made and the increase in ANZ shares. The value of Senator Short’s shares increased $9000 while he was assistant treasurer.
Mr Howard defended his minister saying it would have been unreasonably harsh to have sacked him. He said Senator Short was careless and “”had overlooked the requirement to comply with the guidelines”. But no-one could point to any decision taken by Senator Short where he was influenced by the shareholding or had acted differently than he would have without the shares. And he was satisfied of Senator Short’s personal honesty in the matter.
Mr Howard seems to be requiring a criminal burden of proof here, or at least a level of proof that requires a direct provable link between ministerial decision making and personal profit. That is the wrong standard. Moreover, Mr Howard knows it is the wrong standard because he set the standard in his guidelines.
The correct standard is that a Minister should not allow himself to be put in a position of potential conflict of interest. Senator Short should have resigned and not returned to the ministry until after the cleansing event of another election. It would have been harsh, but not, as Mr Howard asserts, unduly harsh. It was necessary to insist on Senator Short’s resignation as a message to the public that federal politics is squeaky clean, that not even the merest hint of the possibility of potential for conflict of interest will be tolerated. In this instance five irrefutable facts stand out: Senator Short had a beneficial interest in banking shares; he was responsible for banking in his portfolio; the government had made decisions that favoured banking; the price of the shares went up; Senator Short, on paper made a profit.