The Impact of South Australian Political Scandals

Australia’s state premiers often make decisions that have profound and sometimes destructive impacts on their citizens. These include imposing lockdowns and curfews, suspending parliament, and enacting emergency powers.

These policies test whether a country’s liberal institutions of checks and balances, transparency, and rights can function during crisis. This is a key question for democracy promotion.

1. The Gupta Scandal

The Gupta family – Atul, Rajesh and Ajay – built an empire in mining, computer technology, media, and agriculture after moving to South Africa in 1993. Their close relationship with President Jacob Zuma allowed them to amass a fortune and wield undue influence in government, earning the family the name “the Zuptas.”

The brothers are accused of using their proximity to Zuma to profit financially and influence senior appointments. They are also accused of buying and selling state assets. The three brothers have denied the allegations. But it seems like the Guptas’ days in South African politics may be numbered. Last week, police arrested two of the brothers in Dubai on corruption charges. The arrests followed an Interpol red notice – a global alert that allows law enforcement agencies to arrest people wanted for prosecution and detain them pending extradition.

According to public reporting, the Guptas offered members of the South African government money or elevated positions in return for their cooperation with the family’s business efforts. One example involved a member of parliament, Mcebisi Jonas, who said that the Guptas promised him a cut of the upcoming development of a new coal power plant in exchange for his cooperation. Another example involved a provincial minister, who was reportedly offered a job as the Minister of Finance in return for his assistance in removing members of the cabinet who were seen as stumbling blocks to the Guptas’ business efforts.

But it was the gutsy action taken by South Africa’s former public protector, Thuli Madonsela, that triggered the collapse of the Guptas’ influence in government and ultimately led to their downfall. Madonsela’s investigation of the relationship between Zuma and the Guptas was cited by the UAE as a reason for the brothers’ arrests.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has also sanctioned several individuals in connection with the South African state capture scandal. These sanctions are part of the Global Magnitsky Human Rights Accountability Act. The sanctions target the brothers and others who “leveraged overpayments on government contracts, bribery and other corrupt acts in an attempt to preserve their wealth and power by manipulating institutions, policies, and rules of procedure.” The US sanctions against them are part of a continuing effort to crack down on corruption in South Africa.

2. The AEC Scandal

South Australia was once a place where political scandals took hold and reshaped politics. In the 1930s, a series of scandals saw the collapse of the local banking system and the state’s stock exchange. The state’s leaders were arrested on a range of corruption charges and many others were reprimanded for their involvement. This led to a wave of resignations by politicians and a number of major public inquiries.

These events left a lasting impact on the politics of the state. The public began to lose confidence in the state’s institutions and a scepticism about government actions pervaded the community. The scandals eroded the credibility of the state’s political leadership and contributed to a sharp decline in voter turnout in state elections.

The scandals shook the governing coalition and led to the resignation of Deputy Premier Steven Marshall. The saga also led to the first royal commission into state government operations.

Despite these setbacks, the Liberal-National Coalition retained control of the state. The state’s economy was resilient and continued to thrive during the downturn, but the damage to public trust had been done.

In a dramatic political turn, a series of revelations about the AEC’s handling of electoral processes threatened to undermine the legitimacy of the election results. The AEC was stung by claims that it had allowed the spread of Sovereign Citizen-style conspiracy theories, which claimed that the election was compromised. The AEC faced questions about its relationships with big tech companies and about the way it vetted and reported fraudulent content.

The ANAO’s report into the AEC’s handling of the 2013 state election was damning. It found that the agency had failed to implement a number of recommendations from a previous audit. It had wasted opportunities to reduce the number of temporary polling staff and lacked a plan for recruiting and training permanent election officials. It had not vetted all of its election officials and had failed to record performance assessment ratings.

The AEC’s failure to address these issues raised concerns about its commitment to equity and about the extent to which it was able to influence policy decision-making across the government sector. The AEC strategy shifted the focus of its work away from equity as a goal and towards an emphasis on facilitating joined-up policy development.

3. The Bushfire Scandal

During the 1974-75 bushfires, huge areas of pastoral country were burnt. A quarter of Victoria’s land was affected, and 12 people were killed. The fires were caused by lightning strikes and were exacerbated by hot, dry conditions.

Various scandals rocked South Australian politics over the course of this period. The most significant was the resignation of the Minister for Agriculture, Food and Forestry, John Kelly, over pork barreling. The resignations of his deputy, Tony Burke, and parliamentary secretaries Ian Short and Michael Prosser were also linked to conflicts of interest with their small businesses. Revelations about the use of spit hoods at Don Dale youth detention centre also dominated public debate and led to the Northern Territory banning their use.

The public was also concerned that political interest may influence disaster recovery funding decisions. This was a concern expressed in the 2020 Eden-Monaro by-election, which was held to elect a member of parliament to the House of Representatives, and was a key issue during the hearings of the Bushfire Royal Commission. The public was worried that government announcements of financial support for disaster-affected communities would be made just prior to an election.

Social media discussion around this topic spiked in late-2019 and into 2020. A viral post claimed the Red Cross had been “fleecing Australians to the tune of hundreds of millions of dollars during the bushfires” and only distributed a fraction of the donations it received.

AAP FactCheck found that the claims were not substantiated. Rather, the Red Cross’s distribution of funds was guided by the deed governing the New South Wales RFS trust which permits donations to be spent on equipment, training and administration costs.

In addition, the Royal Commission heard that many displaced people were facing long-term economic and emotional stress and needed longer-term assistance than had been available in previous emergencies. This is consistent with research by the Salvos that supports their model of providing grants for people with a range of needs including housing, financial counselling and material support. The organisation also pointed to research by Melbourne University that shows that financial relief has the greatest impact on a person’s well-being three years after a disaster.

4. The White House Scandal

South Australians have long had a remarkably flexible attitude to governance standards. The decisive intervention of British authorities during the financial crisis of 1841-42 curbed many experimental pretensions, but in the 1850s there was a fresh surge toward self-government and popular representation. The colonists extended the vote to women, enacted civil marriage laws, and disestablished religion (thereby separating church and state). They adopted some of the most advanced electoral arrangements in the empire, including triennial parliaments, manhood suffrage for both the Legislative Council and House of Assembly, and an absence of property qualifications for the latter.

But progress toward democratic principles was fitful. One senate seat was thrown to a candidate who had endorsed an unpopular stance on China’s South China Sea policy; another was lost because of a bribery scandal involving a Chinese-Australian businessman. A government minister resigned over false travel expense claims, and others were sacked for breaching conflict of interest rules or allowing themselves to profit from secret payments to parliamentarians.

The scandals involving Huang Xiangmo and other wealthy Chinese nationals shook the media and political world, and revealed that South Australia is a canary in the coalmine for covert attempts by Beijing to interfere with politics in advanced democracies. The country has a unique opportunity to learn from its experiences and to help other countries develop effective counterstrategies.

But, if the country is to reap the rewards of its remarkably flexible political system, it must also overcome its longstanding complacency about governance standards and deep ignorance about the proper workings of institutions. This is particularly evident amid the ongoing pandemic stress, as Australians tolerate arguable overreach by various levels of government without a clear sense of how such power should be exercised and when it should end. How the nation assesses and responds to these governance challenges, and whether it can avoid being lulled into a false sense of security, will have profound implications for its future. This will determine whether the country emerges as a more resilient and adaptable democracy when the health crisis is over. The following are some of the lessons that can be learned from South Australia’s experiences and the way it has been shaped by its political scandals.