When is a gift too much? New policy framework provides welcome certainty

At a time of increased public awareness and discontent about the use of public resources, the Victorian Public Sector Commission’s new policy framework on gifts, benefits and hospitality provides welcome certainty.

Confidence in public institutions has never been more important in light of the probity challenges that our bigger companies and financial institutions are currently facing. The community legitimately expects that public officials will discharge their duties with integrity, impartiality and accountability. This is non-negotiable for a professional public service.

Investigations by Victoria’s Independent Broad-based Anti-corruption Commission (IBAC) demonstrate that the offer of gifts and hospitality to public officials can be part of broader and significant corruption.

For this reason, the Victorian Public Sector Commission’s (VPSC) new policy framework (which a variety of Victorian public sector organisations are now implementing in their own policies) is very welcome.

What is the framework?

The VPSC framework establishes clear rules which are simple to understand and administer, and encourages public officials to ask who is offering the gift, benefit or hospitality and, critically, why?

In most cases, the obvious answer will be that the person making the offer is seeking to influence public decisions to their advantage – and the gift, benefit or hospitality must not be accepted.

The framework also prohibits offers of gifts, benefits or hospitality which are likely to generate an actual or potential conflict of interest. Public officials must not accept offers from those about whom they make (or may make) business decisions (such as current or prospective providers of goods or services). This goes far beyond restrictions on accepting gifts, benefits or hospitality during procurement or tender processes.

What are the benefits of the framework?

The VPSC framework gives rise to five key benefits:

1. Clarity. The framework provides clear guidance that it is no longer possible for current or prospective suppliers of goods or services to provide gifts, benefits or hospitality. Even if outside the general rules, offers valued at more than $50 are non-token and should generally be refused and, in any event, require managerial approval. Accepting a cup of coffee at a meeting, or a modest token of appreciation for a speech is fine. But the framework removes a public official’s discretion to accept more expensive gifts, benefits or hospitality.

2. Flexibility. Subject to the general rules, a non-token offer may only be accepted if it is for a legitimate business benefit to the public sector organisation, the public sector or the State. Attending a free seminar offered by a non-supplier (who is not a potential supplier) which delivers such a benefit is fine. But suppliers can only offer such free seminars if their existing public contracts require it. In this way, the public sector can still benefit from the perspectives of the private sector – but the ground rules are now clear.

3. Transparency. Subject to the general rules, the framework establishes a clear distinction between token and non-token offers. Token offers of trivial value ($50 or less) may be accepted without managerial approval (although it should be noted that repeated token offers become a non-token offer). All non-token offers must be registered and published on the internet. Importantly, all token or non-token offers must be registered and published, regardless of whether they are accepted.

4. Consistency. The framework applies across the whole public sector (including public sector employees, statutory office holders and directors of public entities).

5. Translation. Public sector organisations are required to develop their own policies in accordance with the framework and communicate these to their employees and contractors – including explaining the consequences of a breach (such as contract termination). Some existing public contracts prevent the contractor from making offers which are inconsistent with applicable public sector policies (which will now encompasses the revised policy framework).

The VPSC policy framework needs to be properly embedded within public sector culture. In turn, the private sector needs to develop its own appropriate cultures of behaviour in engaging with the public sector.

Together, this will ensure that community expectations are met.