Parliamentary Disqualification for Financial Conflicts

AuthorGraeme Orr
Date01 December 2019
Published date01 December 2019
Subject MatterArticles
Parliamentary Disqualification
for Financial Conflicts
Graeme Orr*
When should financial interests bar someone from election to or service in Parliament? This article
critically analyses the case law on the Constitution’s provisions on pecuniary interests and offices
of profit. These cases are seeing the High Court sculpting new law out of old stone. The article is
structured both chronologically and thematically, and explores the case law’s litigational and
political context, and its relationship to pecuniary interest registers, as well as its jurisprudential
value. Ultimately, the Court is found to be grappling with—and somewhat at sea in — fixing
workable and consistent purposes for the constitutional provisions, especially given the need to fit
these provisions within the broader values of parliamentary and electoral law and practice. The
article concludes by assaying and proposing reform options.
I Introduction
When should financial interests bar someone from election to or service in Parliament? In 2017,
the High Court ousted Senator Day for having a significant interest in property leased to a
Commonwealth department. This was under s 44(v) of the Constitution, which concerns pecuni-
ary interests, whether direct or indirect, in agreements with the Commonwealth public service.
Within less than a year, the same Court seated Senator Martin in the face of a claim that his
membership of a local government was a disqualifying ‘office of profit under the Crown’, in
breach of s 44(iv). Taken together, the decisions reveal a Court grappling with—and, frankly,
somewhat at sea in—locating workable purposes for these provisions. The Court is having to
sculpt new law out of old but largely untouched stone. In doing so, it must also give purpose to
these laws in the wider sense of fitting them within the broader values of parliamentary and
electoral law and practice.
This article situates the constitutional law around the pecuniary interests of candidates and MPs
in its litigational and political history. It also considers the broader policy landscape of managing
the financial interests of parliamentarians whilst respecting the political value of preserving elec-
toral choice. Hovering behind all th is is the problem of the inflexibilit y of constitutionalised
* Professor, Law School, University of Queensland. This article has its roots in a presentation at the 2018 Constitutional
Law Conference (UNSW, 23 February 2018). The author thanks John Kalokerinos and several anonymous reviewers for
comments and suggestions; their input made the article longer but stronger. The author may be contacted at g.orr@law.
Federal Law Review
2019, Vol. 47(4) 583–605
ªThe Author(s) 2019
Article reuse guidelines:
DOI: 10.1177/0067205X19875033
barriers to election and parliamentary service (a problem which engulfed the Australian Parliament
in 2017, especially in relation to MPs who were, unknowingly, dual citizens).
The article is structured both chronologically and thematically. It moves from the 1975 reading
of s 44(v) by Barwick CJ in Re Webster (Webster’s Case),
on to the broader reading by the full
High Court in Re Day (No 2) (Day’s Case).
In the latter case, the High Court overruled Barwick
CJ’s narrow interpretation of the purpose of the pecuniary interest rule. The Court enlarged its
purpose, from only covering agreements which posed a risk of the executive government suborn-
ing the independence of MPs, to embrace situations where MPs appear to be acting venally rather
than being focused on the public interest. The article then considers the potential pitfalls and
process issues confronting s 44(v) cases, in the wake of Day’s Case. The fuzzy boundaries of this
disqualification are assayed, in particular the need to rein in the expansive reach of the disquali-
fication. As a former politician, Barwick CJ was acutely aware of that need; the expansion of the
rule leaves its boundaries unsettled.
The related ‘office of profit under the Crown’ barrier in s 44(iv) is compared and contrasted.
That disqualification also plays a role in policing conflicts of interest arising from an MP’s
financial interest in agreements with the public sector. Although in one way broader (it covers
the Crown in right of the States and not simply the Commonwealth public service), that provision’s
boundaries are not as expansive as the pecuniary interest rule. Since it relates to appointments to
public office or employment, its incidences are less likely to go unpoliced than the myriad of often
unnoticed arrangements involving the public service. The decision about Senator Martin arose in
Re Lambie.
There the Court adopted a rationale for the purpose of s 44(iv) as only embracing a
concern with the executive suborning parliamentary independence. This contrasts markedly with
the expansion of the purpose of the pecuniary interest provision in Day’s Case,
and suggests a
Court rethinking the risk of s 44 overreaching in financial matters.
The article concludes with reflections on the value of hard but fuzzy constitutional disqualifica-
tions like ss 44(iv) and (v), in light of the role played by pecuniary interest registers—registers
which did not exist when these disqualifications were first hatched. Given the rise of pecuniary
interest registers and the unfairness of applying disqualification rules to mere candidates, a better,
more flexible approach is needed. Such an approach could see Parliament set and audit rules about
the dealings of serving MPs with the Commonwealth. That process would involve the assistance of
an independent agency such as an Integrity Commissioner. MPs should be suspended, not dis-
qualified, whilst they deal with any significant conflicts of interest.
II Webster’s Case: s 44(v) as a Narrow Shoal
Webster’sCase arose through the firstparliamentary referral ofa Commonwealth MP.
It occurred in
1975, a year of deep constitutional fractures.
Senator Jim Webster, an opposition Senator from the
Victorian CountryParty, in a chamber tightly divided between Opposition and Government, was the
subject of s 44(v) allegations. The allegations curiously came to light during a joint select parlia-
mentary committee into the needfor a pecuniary interest register:a committee of which Websterwas
a part. WhileTh e Age newspaper in particularhad been campaigning for sucha register, Webster was
opposed to it.
Webster not onlylost that policy argument; he nearlylost his seat after a citizen, with
the support of an Age journalist, brought the allegations to the committee. The allegations were
referred to the Senate as a whole. With some reluctance, the Government and Opposition voted to
refer the allegations to the High Courtwhilst extending Webster’sleave of absence. This was thefirst
such referral on record, although the process had been available since 1907.
584 Federal Law Review 47(4)

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