Conflict of Interest: Pubs are in trouble, so who gets to write the new rules? The pubs!

It’s one of the oldest tricks in the lobbying handbook: if you want favourable regulations, write them yourself. 

The powerful Australian Hotels Association took that to new extremes this week with a promise to introduce new restrictions in New South Wales pubs to allow them to continue to open — even in the face of a growing outbreak at the Crossroads Hotel in Sydney’s south west.

In an extraordinary show of just who is in charge of the state’s coronavirus response, Premier Gladys Berejiklian handed over the microphone to AHA’s NSW chief John Whelan at a press conference on Tuesday, thanking Whelan’s organisation for “proactively coming forward” and working with the government to reduce the risk of COVID-19 spreading at large gatherings. 

“It was actually the AHA’s advice to us which said that if you reduce bookings from 20 to 10, it reduces the likelihood for people who may mingle,” Berejiklian said. 

“This is a good example of industry and government working together to reduce the risk during a pandemic.”

While acknowledging the virus spreads more rapidly in indoor environments (such as pubs), the premier declared that the new restrictions, developed in partnership with the industry, would be enough to curtail the virus without further shutdowns. 

The new restrictions include reducing the number of people sitting at a table from 20 to 10, and stationing hygiene marshals at pubs to take details and ensure businesses are meeting hygiene and “COVID-safe” standards such as socially distancing.

If the AHA’s motivations weren’t already clear, The Guardian revealed on Wednesday that the AHA, alongside powerful gaming lobby ClubsNSW, had been in urgent talks with the government since the cluster at the Crossroads Hotel began, in an effort to avoid measures that would potentially see the industry, or parts of the industry, shut down again.

Both groups had reportedly issued blunt warnings against further shutdowns, saying the move would cripple operators and result in some businesses not reopening.

With NSW staring down a potential surge of cases stemming from the Crossroads cluster, it raises the question of whether the new restrictions will do anything to slow the spread of the virus, or if it’s just a case of the industry writing its own rules. 

Crikey asked the NSW government who would be responsible for placing the marshals in pubs and policing the new restrictions. It didn’t respond to questions, but Crikey understands the marshals will be employed, trained and supervised by the hotels themselves.

‘Exhaustive’ negotiations

Tuesday’s brazen intervention by the lobby group was far from the first since the crisis began, with even health decisions being deferred to the industry for consideration. 

In May, when the government announced pubs, clubs and restaurants would be allowed to seat up to 50 people from June 1, the minister for Customer Service Victor Dominello said the decision had been made after liaising “exhaustively” with both the AHA and ClubsNSW. 

“This has been really considered and thought-out to make sure we have the best regulatory settings in place,” Mr Dominello said.

These liaisons continued as the government negotiated with the industry over the ability for people to be able to walk up to the bar and order a drink, rather than be confined to table service. 

Chief health officer Kerry Chant said at the time she was “absolutely concerned” about people mingling at bars. But Health Minister Brad Hazzard was more relaxed: “The preference at this stage for public health is that people sit at a table,” he said. “But let’s listen to the industry to tell us whether that’s practical and if that works.”

Then, when NSW became the first state to allow gambling on the pokies since the COVID-19 shutdown — even ahead of Prime Minister Scott Morrison’s own anticipated reopening date — the ABC revealed the industry boasted to its members that it had “heavily influenced” state government decision-making.

Minister Dominello said that the decision had been driven by both health and economic considerations. “We are working closely with a range of industry groups to save businesses and jobs, but they must comply with the rules and will be closely supervised,” he said. 

Power and influence

Gambling, alcohol and tobacco companies have been banned from donating to NSW election campaigns since 2010. But the laws still allow “not-for-profit” associations, such as industry groups, to donate, even if they represent these interests. 

Last year the AHA emerged as one of the largest federal political donors in the country, with declared political gifts soaring from $153,000 in 2016-17 to $1.1 million in 2017-18.

The AHA’s power also comes from its members and their political connections. It represents some of the biggest names in corporate Australia, including Woolworths-controlled ALH group, the country’s biggest poker machine venue operator, and James Packer-backed Crown Resorts.

Whelan himself is a former Labor party staffer, and son of former NSW police minister Paul Whelan. And representing the group’s interests in Canberra is Michael Photios, a Liberal party heavyweight and former NSW minister. 

With so many powerful forces pushing to keep NSW pubs open, will the government inadvertently allow these venues to be ground zero for a second wave? 

Is NSW putting industry profits before public safety? Are pubs ready to open? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section.