Former Australian Foreign Minister Julie Bishop (AAP Image/Lukas Coch)

Julie Bishop wanted to to get out ahead of the PR surrounding her first post-politics gig — a board director role at international consultancy Palladium International.

After the outrage that followed Christopher Pyne’s stroll from the defence industries portfolio to advising on defence industries at EY, the former foreign minister had ample warning.

She managed the announcement via a front page interview with Jennifer Hewett at The Australian Financial Review. Indeed, she preemptively addressed the closest thing the story had to a tough question: 

‘I am just pointing that out in the light of recent [pause] commentary,’ she says firmly. ‘I am obviously aware of the obligations of the ministerial guidelines and I am entirely confident that I am and will remain compliant with them.’

Bishop goes on to state her conviction that the private sector is the way aid ought to be administered, saying “I’ve long believed the private sector is the key to lifting living standards and economic development. It’s a long-standing personal interest of mine and working with a private company like Palladium will help me continue to work for opportunities in the Pacific and PNG.”

And certainly this preference was ably demonstrated during her time as foreign minister. Palladium, which works on international development projects and strategic advice for governments, companies and NGOs, receives hundreds of millions of dollars annually in funding and benefited greatly from Bishop’s time in office.

Labor Senator Penny Wong has already pointed out that this may well breach ministerial standards, as well as the (equally unenforceable) pub test: 

‘She has been put on the board of a company that profited on decisions made when she was Foreign Minister,’ Senator Wong said. ‘Second, she has said she has been appointed in part, for example, for her extensive network of global contacts.

‘Now, the ministerial code says very clearly you can’t use information, knowledge, et cetera, that you have attained as a minister that is not available to the general public [and] I think the statement by Palladium Ms Bishop has been appointed because of her unique knowledge.’

Ministerial standards

As Wong alluded to, during Bishop’s five years as foreign minister, Palladium received hundreds of millions of dollars in federal funding. Indeed, Palladium is one of four private contractors to primarily benefit from changes undertaken by the Abbott government in 2014, when DFAT and AusAID were merged. Between 2013 and 2017, they received nearly $4 billion from the aid budget.

This raises the broader story of the percentage of aid going to an ever-shrinking group of large managing contractors like Palladium.

“Boomerang” funding

Back in 2011, then-foreign minister Kevin Rudd launched a review of the effectiveness of foreign aid, with specific focus on the issue of “boomerang aid”. It’s a term that refers to the huge proportion of foreign aid that went straight to Australian and international contractors, rather than providing on-the-ground assistance in the countries themselves. The review advocated reducing the proportion of aid delivered by private contractors, in favour of multilateral organisations like UN agencies or the World Health Organisation.

The 2014 merger of AusAID and DFAT was criticised as sending aid spending “further down the path of operating primarily in the national interest”. Indeed, at the time Bishop said that “DFAT will have a clear focus on promoting the economic interest of the Australian people and Australian businesses”.

Since then, the focus of aid spending has reversed, with more money paid to private companies and less to multilateral organisations.

At what cost?

The Development Policy Centre at the Australian National University runs a stakeholder survey every three years, and in 2018 found that the majority of those implementing aid programs — both private sector contractors and NGO executives — agreed that the emphasis on “facilities” (the large, multi-faceted programs run by consulting or contracting companies like Palladium) in the management of Australian aid has had a negative effect on the quality of that aid.

Further, in a submission to a parliamentary inquiry into the effectiveness of Australia’s aid programs last year, the Lowy institute’s Pacific Islands program director Jonathan Pryke argued the Abbott government’s overhaul had “come at the cost of the aid program’s­effectiveness”:

The Australian aid program has always relied on the private sector and consultants to varying degrees to supplement and provide as-needed independent reviews and assistance on project design. However, the volume at which this is happening under DFAT needs to be reviewed, and the department’s in-house capacity needs to be rebuilt so that the it does not run the risk of outsourcing its brain.

Does Australia’s aid program need a shakeup? How do we stop the revolving door of cushy post-parliament jobs? Send your thoughts along with your full name to boss@crikey.com.au