Executive Experience Has Been All But Eradicated From Australian Politics By Career Staffers

The first cabinet meeting of the Tony Abbott government. Photo: Getty

Australia’s government suffers from a narrowing of the political gene pool, which produces parliamentarians without senior executive or commercial experience, according to John Colvin, the outgoing head of the influential Australian Institute of Company Directors (AICD).

Colvin dissects the “political class” and its shortcomings in his last article as CEO in the AICD’s magazine, Company Director.

He says there’s an alarming lack of career diversity among politicians on all sides. Very few parliamentarians have experience in senior executive or board roles at major commercial enterprises, according to research by the AICD.

A staggering 50% of the 226 politicians in federal parliament have a background as an adviser in a political office, or as a party or union official.

“We need to improve the inherent lack of diversity and ensure our policymakers better reflect the background, cultures, gender and experience of the communities on which our policies impact,” Colvin says in the article. “In particular, the business community needs to be better represented and involved.”

He says a vibrant and growing economy is necessary to allow governments to fund basic needs such as health, education, defence and civil order.

“The world we now live in is a highly complex and interrelated global economy, requiring far more sophisticated knowledge than ever before,” Colvin writes.

“From the government’s perspective, this encompasses the need to have a much deeper understanding of the private sector, including its drivers, issues and needs.

“There is no escaping the fact that those economies that tend to do well in terms of living standards are those that exhibit a symbiotic relationship between business and government.”

Analysis conducted by the AICD into the backgrounds of federal politicians now in office shows:

  • Only two out of the 226 (0.9%) federal parliamentarians had 10 years or more senior executive or board experience in major commercial enterprises: only one out of the 150 (0.7%) members of the House of Representatives and one out of 76 (1.3%) senators. (A decade or more is the length of senior business experience the company directors believe is required to gain full insight and have an in-depth understanding of business and commercial operations.)
  • Only 15 out of 226 (6.6%) had some senior executive or board experience in major commercial organisations: 12 out of 150 (8%) members of the House of Representatives and three out of 76 (3.9%) senators.

The previous Labor government (just prior to the 2013 election) was very similar:

  • Only three out of the 226 (1.3%) federal parliamentarians had 10 years or more senior executive or board experience in major commercial enterprises and only one out of the 150 (0.7%) members of the House of Representatives and two out of 76 (2.6%) senators.
  • Only 14 out of 226 (6.2%) had some senior executive or board experience in major commercial organisations: 10 out of 150 (6.7%) members of the House of Representatives and four out of 76 (5.3%) senators.

The Political Class

Elected representatives are likely to come through the ranks. They join a party early in their careers, work their way up in the political sphere or in unions as staffers, advisers or in other positions, eventually gaining pre-selection and entry into Parliament.

From there, some go into the ministerial ranks and then into cabinet, the centre of policy formation and decision-making.

As at July 2014, half the parliamentarians had a background as an adviser in a political office, or as a party or union official:

  • 113 out of 226 (50%) parliamentarians were previously employed as a political staffer or a party or union official prior to entering parliament: 71 out of 150 (47.3%) members of the House of Representatives and 42 out of 76 (55.3%) senators.
  • Of these 113 parliamentarians, 91 (82.1%) were staffers or party officials prior to entering parliament: 62 out of 150 (41.3%) members of the House of Representatives and 29 out of 76 (38.2 per cent) senators.
  • Of the 19 cabinet members, 8 (42.1%) were employed as a staffer, party official or union official before entering parliament.

And an examination of those in senior positions at the various Commonwealth departments shows a similar lack of diversity:

  • None of the 18 commonwealth department secretaries had 10 years or more senior executive or board experience in major commercial enterprises.
  • Only one department secretary had experience of three years or more in major commercial enterprises at the senior executive or board level.
  • No members of the senior executive team of either the Department of Treasury or Department of Finance and Deregulation had any senior executive or board experience in major commercial enterprises (all individuals had worked predominantly in the public service or academia).

John Brogden, CEO of the Financial Services Council, and a former NSW Liberal opposition leader, replaces Colvin next year.

* Disclosure: Chris Pash is a member of the AICD.

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