Jeffrey H Birnbaum from The Washington Post
argues today: “For several years now, corporations and other wealthy
interests have made ever-larger campaign contributions, gifts and
sponsored trips part of the culture of Capitol Hill. But now, with
fresh guilty pleas by a law maker and a public relations executive,
federal prosecutors – and perhaps average voters – may be concluding
that the commingling of money and politics has gone too far.”

This
is an implied comment on the Australian RBA board affair. Mr Gerard, or
his companies (and in this case, does the distinction matter?), is an
acknowledged large Liberal Party donor. One naturally wonders if this
is the rule, or just an unfortunate exception.

I was struck with
the essentially legalistic defence of Mr Gerard’s appointment. He had
no personal dispute with the ATO, but his company did. The great
complexity of the tax act means many companies have such disputes, and
there is no necessary wrongdoing involved. The matters were settled
out of court in any case, so ATO allegations are not fact, etc, etc.

All this is fair comment, but it seems to Henry this is a perfect illustration of a point once made by Henry’s editor.
“Should society rely on black letter law or morality? The more we use
the former, the more moral values will decline.” Former RBA Governor
Bernie Fraser has said: “If what I read is correct, then I’d have
thought the decent thing for (Mr Gerard) to do would be to resign”
(quoted by The Australian.)
That might be the morally correct action, but it seems it is not the
action required by a close student of Australia’s complex black letter
law in the field of taxation.

Members of the Board of the
Reserve Bank need to be above reproach, and to be seen to be above
reproach. It is time to introduce a process of ratification by
parliament of those nominated to this board. A Senate Committee would
do the job nicely.

The article quoted by Henry
is by Peter Jonson, a former Head of Research at the Reserve Bank, and
Elizabeth Prior Jonson. It was published by Quadrant in 1994 and is an
argument against Australia’s overly complex regulatory framework with a
specific focus on tax law.