Australia's national anti-corruption agency arrives. Will it stand the test of time?

Australia’s long-awaited National Anti-Corruption Commission (NACC) has become a legislative reality, after the House of Representatives today accepted a final amendment imposed by the Senate on Tuesday.

It’s the biggest reform to federal public accountability for over 40 years.

It’s also an historic step internationally. Specialist anti-corruption agencies are now widespread across many Asian, eastern European and developing countries, especially since the UN Convention Against Corruption in 2003.

But Australia is one of the first OECD countries to adopt such a far-reaching model at national level. Most others – like the United Kingdom, United States and New Zealand – still rely on traditional law enforcement agencies to root out official corruption, using just the criminal law.

By contrast, Australia has translated its state-based model of standing royal commissions against corruption to the national level.

Instituted in NSW in 1988 and Queensland in 1991, and since repeated everywhere but South Australia, this model differs from overseas approaches by extending strong inquiry powers to serious corruption risks, even if not necessarily criminal.

So after an 18-year gestation, how does this new national agency measure up against expectations, including other international standards?

Some key final debates of the last week provide the answers.

The best news is that the commission has been born with the unanimous support of all political parties. This multi-partisanship was initially reflected in a Senate Select Committee in 2017. But it disappeared after the Morrison Coalition government was pressured into putting forward, and defending, a deeply flawed model.

Read more: How does the government’s long-awaited anti-corruption bill rate? An integrity expert breaks it down

Forced to reverse this approach after losing the 2022 election, Coalition MPs contributed to six consensus recommendations from the joint select committee that reviewed the new Labor government’s vastly superior bill.

Accepted by the government, five of these led to positive improvements, from respect for media freedom and secrecy exemptions for health care support, to monitoring powers for the proposed parliamentary inspector.

However, against these “lowest common denominator” improvements, four final controversies raise question marks for the future.

1. Public hearings

Most prominently, independent and Green members failed in attempts to either remove, or define, a threshold of “exceptional circumstances” before compulsory public hearing powers can be used by the commission.

Added late, in a relatively naked breach of the government’s pre-election promises, the test copies one used in Victoria. Fortunately, that has not proved fatal to the work of that commission. But almost everyone but the government and Coalition agrees the test is unnecessary and either legally or politically dangerous.

Given wide categories of “sensitive” evidence that the commission can never receive in public, it will have the most restrictive public hearing powers of any Australian anti-corruption body, as shown by a Griffith University and Transparency International Australia analysis (barring South Australia which has no such powers at all).

2. Scope of corruption

The government also slightly walked back the scope of corruption that can be tackled. It resisted cross-bench attempts to ensure corrupt non-government actors are fully covered, along with political “pork barrelling”. It also removed a catch-all that the commission could investigate “corruption of any other kind”.

But while less flexible than originally proposed, the scope remains simpler, less legalistic and uncomplicated compared to most state definitions.

3. Role of the inspector

The only area where the government was forced to accept an amendment by the Senate was a proposal by the Greens, supported by the Coalition, to provide clarity and purpose to the roles of the commission’s inspector.

A victim of the haste with which the government prepared its bill after being elected in May, this key safeguard of the legality and propriety of the commission has now been lifted to the standard of national best practice.

4. True independence?

The fourth and final controversy points to the challenges facing every anti-corruption body, but especially Australia’s outdated federal integrity system as it strives to catch up with the rest of the country.

Will the commission be seen as truly independent, financially and politically? This question lies at the heart of international standards, such as the 2012 Jakarta Principles, backed by the United Nations.

The NACC’s financial independence gets some support from a dedicated parliamentary oversight committee, which can review and support its budget.

But the government rejected cross-bench attempts and expert advice to give the commission the same status and budget support as the federal auditor-general. It also failed to heed the emerging best practice in New Zealand, NSW, Victoria and Queensland of a separate parliamentary budget track for core integrity agencies, which in Victoria are even recognised in the Constitution as independent officers of parliament.

Read more: Will the National Anti-Corruption Commission actually stamp out corruption in government?

Similarly, the government refused to embed a principle that the government of the day cannot just pick the commissioner all by itself. Cross-bench and Coalition amendments for more than just a government majority vote of the committee, to support or reject the recommended appointment, were vigorously opposed by the government.

By contrast, a requirement for bipartisan support is explicitly recognised in Queensland and Western Australia, and assumed in NSW and Victoria’s arrangements. It’s also often followed overseas. For example, the selection committee for the head of India’s Central Vigilance Commission includes the leader of the opposition.

Transparency International Australia recommended entrenching this principle through a two-thirds majority vote of the committee. In the select committee, and in amendments not ultimately put to a vote, the Coalition proposed an even stronger, three-quarters majority.

After reacting apoplectically to that idea on Tuesday morning, the government refused an attempt by the Greens and independent Senator David Pocock to require even one non-government member of the committee to also support the proposed appointment.

The lack of understanding of this important principle, now left out of the bill, is the clearest reminder that the Commonwealth’s integrity system is built on some shaky, out-of-date ground – even if this new commission itself is otherwise strong.

In fact, the government refused to support any amendments proposed by independent Helen Haines, to bring the government’s bill up to the standard of her own ground-breaking proposal.

Attorney-General Mark Dreyfus had told voters before the election the government’s package would be “extremely similar” to Haines’. But it has proved not to be, in significant respects.

The fact that Australia will now have a national anti-corruption commission is testament to the attorney-general’s leadership, over more than five years. And its many strong features promise to be a positive game-changer for public integrity in Australia, and likely beyond.

But as always, question marks remain over whether the new commission has been designed sufficiently to weather the future political storms that go with the job.