October 22, 2019

Politics with Michelle Grattan: Arthur Sinodinos with some reflections and advice

Politics with Michelle Grattan: Arthur Sinodinos  with some reflections and advice

Arthur Sinodinos will soon leave the Senate, and early next year take up the position of Australian ambassador in Washington. A former staffer and one-time public servant as well as a former minister, in this podcast Sinodinos reflects on the challenges of pursuing reform, has some advice for ministerial staff in dealing with the public service, and warns about dangers for democracy and science posed by a polarised media.

A strong ally of Malcolm Turnbull, Sinodinos tells Michelle Grattan that the former prime minister was “prepared to make a stand for what he believed was right – and unfortunately there were others who didn’t seem to be too comfortable with that”.

On the current controversy about Liberal MP Gladys Liu and her past ties to groups with links to the Chinese regime, he says: “I think she’s trying to … make sure that she’s got her memory intact, as it were. And then I’m sure she will as necessary provide further information”.

On the contrast between the roles of staffer and politician: “One of the biggest differences is that when you’re the politician and the front person, the minute you say something … you own it, Whereas when you’re the adviser you give all the advice in the world but there’s not quite the same level of responsibility”.

Transcript (edited for clarity)

Michelle Grattan: Senator Arthur Sinodinos will leave parliament in a couple of months for a new career. He will succeed Joe Hockey in Washington as Australia’s ambassador to the United States. It’s one political figure following another in a post that’s both highly important for Australia, but also in the Trump era, very difficult. Arthur Sinodinos has seen politics not just as a parliamentarian and a senior frontbencher but also as a top level staffer when he was right-hand man to then prime minister, John Howard. In earlier years, he worked in the Treasury. He joins us today to look back and to look forward.

Arthur Sinodinos, can we start with your transition from being a senior staffer to a politician, albeit via a time in the business sector. What are the big differences between those two roles?

Arthur Sinodinos: Well I think one of the biggest differences is that when you’re the politician and the front person, the minute you say something, it’s out of your mouth … you own it. Whereas when you’re the adviser, you give all the advice in the world but there’s not quite the same level of responsibility [as] when you actually have to go out there and say things and take the rap for them. And that is one of the big differences. And that does influence the way people approach the job. For example let me give you a story about the American ambassador. He was one of a number of people in the Reagan administration who allegedly told Reagan around 1987/88, don’t use that phrase “Mr. Gorbachev, tear down this wall”. But it was Reagan’s instinct to use that phrase. Now they were being risk averse, or minimising risk for him, but he had the instinct, and this is what it takes at the end of the day. You have to also go on your own instinct as the front person when something needs to be said or when you need to push the button and change tack on something.

MG: You’re also a one time public servant. The bureaucrats these days often feel pushed around by ministerial staff. Do you think these staff too often become arrogant and feel everything is political, so therefore good policy is compromised?

AS: I mean the practice we had in the Howard Government – after some early hiccups when a number of secretaries were fired – was to recognise that staffers and public servants have complementary roles and that the place operates best when there’s a bit of a team in place and each understands and respects the role of the other. And I think that’s always important. And my advice to young staffers or people starting out in staffing who maybe haven’t worked in the public service is get to understand the public service. They’re also your stakeholders and it’s important for people to work together. The public service is a great resource and it’s like any workforce, you’ve got to motivate them. And that’s important to get the best out of them.

MG: You were one of Malcolm Turnbull’s closest supporters. Indeed you came back, I think, when you were on sick leave to support him in that last week. Looking back on the Turnbull government, do you think that there was any advice you could have given to help avoid the collapse of his prime ministership?

AS: Unfortunately, I don’t think any advice would have saved Malcolm’s prime ministership in the end. There were just forces at work who I think were just determined to blast him out and unfortunately a series of events came together which brought that to a head. What I do admire about Malcolm is that the irony is in a sense he was blasted out over climate change twice. The first time in 2009 and the second time over the National Energy Guarantee and in a sense it’s admirable that he was prepared – even though at the end he was prepared to defer the National Energy Guarantee for a while – he was still prepared to make a stand for what he believed was right. And unfortunately there were others who didn’t seem to be too comfortable with that. There’ll be debates going on for years about whether Malcolm had the right political instincts. Well my view is these days what you need is authenticity and he was authentic in his own way, but unfortunately he wasn’t allowed I think to do the job that he could have done.

MG: You’ve been at the political coalface now in one role or another over some four decades. How do you think politics has changed in that time and has it changed for better or for worse?

AS: I think politics in many ways is much faster now. The media cycle is certainly faster – the 24/7 cycle. I think it’s also much easier for parties to be fragmented because it’s much easier for individuals to get a platform, partly through the way the media itself is fragmented.
One of the dangerous trends has been that the media itself has become a battleground. We used to look to the media to be the the journals of record and today much of the media gets dragged into the actual fight and this is a danger for democracy in my view. It’s a danger for science which is increasingly being trampled in the public arena, and I think it’s a danger when we have a situation where people can essentially choose their own facts. And choose media outlets which feed their own version of reality and feed their confirmation bias. I think that’s dangerous for democracy going forward.

MG: Well the media gets dragged in, or does it opt in? Has it decided to get involved more as participants. Obviously always media were participants, but there’s an increasing trend now.

AS: Yes there is an element of that. And what that does is every action has an equal and opposite reaction. So if some start to go more one way others start to go the other way as if to try and bring back some balance. But the result of that is that overall it tends to create a greater feeling of partisanship.

MG: Well let’s cut to the chase here. Do you think News Corp has become particularly partisan?

AS: I think they have a particular business model, particularly Sky, and that’s attracted a particular viewership. But that that also has meant that other outlets, I’ve noticed with the ABC and others, have tended to therefore have to take stronger stands on certain things because they feel they’re pulling against a shift in the other direction. And so that’s the point – that these forces tend to sort of create this more partisan field out there.

MG: What is that business model?

AS: I think the business model is to try and corner a particular part of the market and become the champions of that part of the market.

MG: The conservative right-wing part?

AS: Yes. As opposed to just trying to cover the field as a whole.

MG: Do you think it’s harder to get reform these days? As part of the Howard advisory team you were at the centre of the tax debate. Are things more difficult now?

AS: Often we seem to act as if things are more difficult now and yet I just think if people are prepared to stand up on something and explain it and indicate clearly why people will benefit from something I still think it’s possible to get things through. But we seem to have somehow spooked ourselves overall that somehow the more difficult reforms are not possible these days. I think reform is still possible but it requires a lot of work and because there are many more outlets and many more bases to cover and more stakeholders to consider – and stakeholders who have their own capacity to do research and whatever – that does require a lot of groundwork to be done. Part of the reason the tax reform got through in 1998 was that there had been a whole year of actually putting the thing together and then a commitment at the political level to not only work out the technical arguments, but to try and anticipate the political arguments and have responses to them so that when we were ready to go on that GST reform we thought we had, in terms of the arguments, every base covered.

MG: The Coalition’s obviously riding high at the moment, but do you think it needs to do more to build resilience for the long term? That is, for the next election, and what should it be doing?

AS: The impression I get from what the Prime Minister has said particularly in the party room is that he knows that while we’re doing well at the moment relative to Labor, that Labor are not going to lie on the mat forever. There’s just this dynamic in politics that the pendulum swings one way and then it swings back. And so I think he’s very conscious of building resilience, and I think the way he’s doing that first of all is by trying to be stable and certain when it comes to policy. I think he’s sending out very clear signals as to what his priorities are, particularly in terms of who he’s working for. And also I think in terms of the economy he’s indicating that while we’ve put certain measures in place to help get the economy through the current softness that we’re experiencing, they’re prepared to contemplate further measures. For example, in the budget next year an investment allowance has been raised.

MG: The government’s been surprisingly aggressive I think towards big business at the moment – criticising it for social activism and for not being supportive enough of government policies. Do you think this is a sound strategy or will it just alienate the business sector, and what’s driving it?

AS: I think what needs to happen is business needs to sit down with the government and work out in terms of where the government is going, the government’s reform priorities, the sort of areas that need to be addressed. In terms of how to explain things to people, how it’s best to do that. I think what Ben Morton and others were saying is that every day as politicians we’re out there trying to persuade the “quiet Australians” to do things they might not necessarily immediately see in their interest. We want business and others to understand the challenge of that and not leave that just for us but to work as partners in that process. And business is vital to the Australian economy. Big business, small business. No one denies that. The question is how we work together to get the sort of outcomes that everybody wants.

MG: You speak of Ben Morton’s speech and he’s assistant minister to the prime minister and he’s part of Scott Morrison’s inner circle. So this has the Prime Minister’s imprimatur, but it’s almost as though he was thinking that big business should be an extension of the government. That’s not how things work these days.

AS: Now I think what he was saying is that, look we have certain objectives as a government. When you are dealing with government, please address those objectives when you’re asking for things from government. And I’ve often said this to people who are asking things and come to Canberra looking for things. Always understand who you’re dealing with, always adopt the language of the government of the day, understand where they’re coming from, and pitch yourself accordingly. And I think Ben is essentially saying that, and by putting it out in those stark terms, I think what he’s doing is saying look there’s a bit of a line in the sand here we’ve all got to get on with this now, and please come to the table and contemplate what we’re saying and why we’re saying it. Please listen.

MG: The government’s bringing in its so-called “big stick” legislation this week which would allow at the extreme for the divestment of parts of companies in the case of energy companies that weren’t playing ball. What happened to dry economics in the Liberal Party?

AS: Well I’ve never had the same reaction as some people to say divestment is not something that should ever be considered by the Coalition. It was a feature or has been a feature of the US anti-trust regime for decades and decades. So in the land of the free and the home of the brave, it’s been a feature of the landscape for a long time. So it’s not inconsistent with free market economics. It’s something that deals with areas where there’s excessive concentration and where firms are therefore able to exert market power and do things which frustrate, if you like, the more competitive operation of markets. So I think it has to be seen in that context. The other thing is, to some extent we’ve been driven to take those, what are perceived as extreme measures because there is such a mess in the energy sector and we need to find a way through in terms of making sure that when we take measures to reduce the cost of electricity those measures flow through to consumers and that companies with market power do not take some of those savings for themselves.

MG: But of course you could have got out to this mess by endorsing the NEG.

AS: Well look this is like the Irish question. You wouldn’t start from here but here is where we are, and we’ve ended up in a particular situation and we’re trying to work our way through. And what I think Angus Taylor’s tried to do since the election is essentially find ways. And now he’s doing, as I understand it, more talks with the states around how do we facilitate the transition in the energy sector and how do we create a bit more certainty around power supplies and all the rest of it. And I think that’s going to be important to providing a bit of investment certainty and help underpin lower prices.

MG: Don’t you think that if Bob Hawke [had] brought in the big stick legislation, John Howard would have cried “the socialists are here”?

AS: Well it depends on the context that the time and I think the context we’re in now has led as I say to these sorts of measures being undertaken.

MG: On another issue of the day, Gladys Liu has obviously still a lot of questions to answer. Shouldn’t she just call a press conference and answer them?

AS: As I understand, what’s happening is she is going through her history of donations and getting her information in order. I think she’s trying to sort of make sure that she’s got her memory intact, as it were. And then I’m sure she will as necessary provide further information. She has come under a lot of pressure very early on in her career and even seasoned politicians under the microscope of someone like an Andrew Bolt probably would have had problems. But I think she’ll be able to explain all of this. And certainly I think the treasurer, the prime minister, the minister for home affairs, standing by her is a clear indication that they are confident that there is nothing there that would suggest that she’s somehow been compromised.

MG: How serious do you think this issue of Chinese interference in Australian politics is? We’ve heard for example from Andrew Hastie saying people often underestimate the broad threat of China. We heard from Duncan Lewis, the outgoing head of ASIO, when he said this is a real problem. He didn’t mention the Chinese of course, diplomatically, but we all know what he was talking about.

AS: There’s no doubt that there is foreign interference going on and there’s no doubt that the security agencies are reporting to government about the extent of that interference. Certainly in the cyber space, there’s a lot of activity going on and it’s not just from one country. It’s from a number of countries and non-state actors as well. So that is the fact. The challenge for us as a country is, how do we accommodate the rise of China within our region while maintaining some sort of global rules based order? And that requires us to work with the Americans in terms of our traditional alliance relationship to ensure they have a presence in the area. It means encouraging all sides of the debate to come back to the table to global rules based order is a way of resolving disputes. We don’t want China to fail – a failing China or a stumbling China is a bigger problem than a prosperous and successful China that is taking its place rightfully within the Asia Pacific. But we have these teething problems because they’re the rising power. The Americans, particularly since the 1990s have been seen as the worst as the hyper power and they’re having to accommodate the rise of China. And we just have to stand up in the areas where we feel there is overreach, whether they are strategic areas or technological areas. But what we’ve got to do is not throw the baby out with the bathwater. We’ve got a strong relationship with the Chinese. We have a big Chinese community in Australia. We mustn’t make them feel at any stage that they are somehow viewed as a fifth column or whatever. It’s important for us to maintain the relationship and develop it while also at the same time seeking to do what we can to diversify our trading opportunities in the region and our strategic options.

MG: There are a lot of problems though at the micro level if you like to put it like that. For example are our universities becoming too dependent on Chinese students?

AS: Well I think that the universities do have to look at how dependent they are on international education, and certainly the incentives provided by governments over a long period in the way we’ve operated have certainly encouraged that dependence as well. But I think the universities understand that they can’t be too dependent on just one source of international students and I think they’re taking action to diversify. And certainly that should be encouraged.

MG: Now I want to turn to the United States, to your future.

AS: Yes.

MG: Scott Morrison will be in Washington at the end of this week. He gets on very well with the president. But are there any risks for Australia in this closeness?

AS: Well I think there are no risks as long as we are always very clear about the fact that while our interests are very close they’re not completely identical, given where we are in the Asia Pacific. And we have to keep explaining to our friends and allies what our national interest is. And our interest is, as I said before, in how we accommodate the rise of China in a way which maintains or seeks to restore as far as possible a global rules-based order.

MG: We’ve signed up to the Middle East operation to protect sea lanes. Are there dangers here though? Firstly we see the situation in the Middle East turning even nastier than previously. And secondly does our involvement compromise the Australian government’s efforts on behalf of Australian citizens who are held in Iran?

AS: Well it may be a hard thing to say but foreign policy can never be hostage just to the fear that your people may be taken hostage or there will be attacks on your soil. As we saw with 9/11. Your foreign policy can’t be hostage to those considerations. It has to be a foreign policy in your interest and certainly in our national interest for these seaways and laneways to be as open as possible and that’s a principle we’re prepared to stand up for and that’s what we’ve done with the Straits of Hormuz. And it’s true, the Middle East situation is always fragile and as we can see from recent events with the drone attack on the Saudi oilfields, it’s always subject to potential escalation. But precisely because it’s such a strategic part of the world and there’s such strategic significance, us doing things and standing up for principles like freedom of navigation is very important.

MG: Can I ask you finally about how you’ll approach the job of ambassador, which is a hard one in a place like Washington where you have to be across a whole lot of stakeholders and power is more diffused and so on. Joe Hockey engaged in golf diplomacy, including with the president. I don’t think you play golf?

AS: I’m not much of a golfer but I used to play. I’m a bad golfer and maybe that’s a good thing.

MG: Are you taking any lessons?

AS: No.

MG: But if golf’s not your go, what will be your way of operating?

AS: I think the most important thing is to establish personal relationships, whether it’s with the relevant people in the administration or in the congress. Understanding what our national interest is and what we’re actually seeking to pursue there. Identifying some priority areas to pursue. Some of those will come out of the state visit to the US that the Prime Minister’s undertaking now. There’s talk about rare earth minerals, for example, they’re critical minerals. There’s talk around what we do further in space. I’m interested in the whole science and innovation space and what we can do more there. I think the infrastructure space, there’s a lot we can help each other with.
So I’m happy to identify those priorities as well as the more broader issue which is the traditional diplomatic function of representing our interests in the US. And so I’ll go wherever is required, do whatever is required to do that. But everyone does this in their own way. So I think Joe’s done a great job and I have to sort of work out my modus operandi essentially when I get there I think.

MG: Well you’ll be going into an election year so that’s quite difficult. How do you balance your contacts with the incumbent team and the challenging team?

AS: Look I think people in the administration would understand that being an election year you do want to have contact with the other side. I mean one of the things that Joe has done is maintain fruitful contacts with both sides of politics because apart from anything else they’re both represented in congress.

MG: And he said that one of the ways he got in early with the Trump administration was that he reached out to that team during the campaign.

AS: Yes that’s correct.

MG: Is that a proper way of operating?

AS: Well during election years often ambassadors will be observers at the conventions and they’ll get to meet people from both sides, and I think that’s important because as I say ultimately both sides are also in the congress and that’s where a lot of legislation affecting Australia gets done.

MG: And you’ll be doing it too?

AS: Yes.

MG: And do you go to America with some network already in place of contacts from from your previous lives?

AS: Well I’ve been there through the Clinton era and through the George W. Bush era. There’ll be some contacts still there but there’s probably quite a few that I’ll have to now sort of restart or start anew.

MG: Well as Malcolm Turnbull might have said, it’s a most exciting time to be there.

MG: Thank you very much Arthur Sinodinos. All the best for your new life and your new career.

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Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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