The fifth inquiry term of reference required the Committee to review and evaluate mechanisms used by the Victorian Government to protect the public interest.
A range of ideas exist as to what constitutes 'the public interest'. Everyone working in government, as well as those associated with government, likes to believe that they work towards 'the public interest'. As a consequence, the term is usually cited in support of all policy proposals.
The idea of the public interest is simple enough: it represents the common good, the collective good, the public benefit or the national benefit.213 The task of defining the benefit held in common in a community is given to government. Indeed, government is given special powers and resources and is elected to use those powers and resources to further the public interest. But it is also more than this, because accountability and transparency in the operations of the public sector, is fundamental to good government.
As previous Public Accounts and Estimates Committee inquiries have found, determining the veracity of claims for the public interest as a whole inevitably involves some balancing of competing claims and criteria.214 The optimal balance between the individual on the one hand and sectional interests and common community interests on the other is wholly contestable and best made explicit through the political process. As one academic has pointed out:215
judgements [regarding the public interest] are inherently complex and contestable … policy choices in the public interest cannot be reduced to objective, technical calculations … and … assessments of the public interest always involve political assessments, whether taken by politicians, public servants, courts, advisory councils or any other citizens.
While efforts have been made to define the public interest to more manageable statements, they have inevitably risked criticism of severe over simplification, for example, viewing the public interest in terms of 'community service obligations' or the 'effective and efficient provision of works and services' leaves aside a raft of much wider issues for the public, ranging from the place of economic markets in serving social objectives, citizen involvement in defining the role of government itself, and the contestability of claims to the public interest. Quite simply, while there is universal agreement that the public interest must be considered, there is a divergence of views on what constitutes the overall 'public interest' when determining benefits arising from PPP projects.
Trends towards outsourcing and contracting of government activities over the past decade, including the private finance of public infrastructure through PPP arrangements, has led to an accountability paradox whereby some parts of accountability appear to have improved while others have weakened. Professor Hodge argues that while managerial accountability for outputs, financial performance and competitive market results often appear to have been strengthened, political accountability and accountability in public interest matters relating to PPP projects seem to have weakened.216
While the current government makes judgements on today's public interest, it is also critical to ask the question as to how the public interest is protected in the medium and longer term, given that contractual arrangements for infrastructure deals can span several decades. Further, the public interest is by its nature dynamic and changes over time. In Australia, for instance, what constitutes the public interest has changed remarkably over the last three years in light of terrorism threats and globalisation.
So how may the medium and long term public interest be protected? Victoria's network of accountability mechanisms including parliamentary committees, the Auditor-General, the Ombudsman, freedom of information provisions, and other mechanisms, such as transparency requirements, all protect the long term public interest. It is through this accountability network and through high levels of transparency that risks to the pursuit of public interest can be minimised. Such risks might include undue influence of interest groups or suppliers, undeclared conflicts of interest, or too few independent evaluations of policy directions with PPP projects.
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213 R Mulgan, 'Perspective on the Public Interest', Canberra Bulletin of Public Administration, (9), 2000, pp.6-12
214 Public Accounts and Estimates Committee, Commercial in Confidence Material and the Public Interest, March 2000, p.24
215 R Mulgan, 'Perspective on the Public Interest', Canberra Bulletin of Public Administration, (9), 2000, p.7
216 Professor G Hodge, 'Who steers the state when governments sing Public Private Partnerships', Presentation, International Research Symposium on Public Management, April 2002, p.9