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For those who watched Insiders on Sunday, 14 Jul 19, you may have seen a brief discussion on Australian federal politicians’ Electoral Allowance.  This is an allowance of between $32k and $46k for sitting members of parliament to spend in their electorate as a discretionary fund.  There are a couple of key features of this fund, as highlighted in a Sydney Morning Herald report on 3 July 2019:

  • The allowance is paid directly into the bank accounts of the sitting members;
  • The sitting member is not required to declare how the fund is spent;
  • At the end of the financial year, any unused funds may be retained by the sitting member as additional taxable income;
  • In 2017, the two major parties blocked a move by one of the minor parties that would have required politicians concerned to prove how the money was spent.

The SMH article highlights concerns by some that this money is being misused.

I make no comment on whether the reports in the SMH are accurate and I want to outline there is no political bias here. I want to use the case-study above to talk about systems.

I suspect that when the electoral allowance was originally instituted it was done so with good intentions.  It was designed to allow money to be spent on areas in the electorate where a need was seen but where existing policy did not meet that need.

Culture, however, is built by what the system rewards, recognises or rejects.  In this case, there is a potential personal financial reward to the politicians concerned for not spending the money as it was intended; on the electorate.  The system has also rejected the need for accountability around how this money is spent. This means the system is potentially set up to build a culture where corruption is rewarded or, if not present, there is a perception that it is.

Other examples where the system creates second or third-order effects on the culture are:

  • When people are rewarded for higher sales figures over their colleagues a culture of completion may develop;
  • In a call centre, if the KPI is quick resolution times for callers, then there is an incentive to get customers off the phone quickly rather than a focus on resolving the problem properly;
  • A focus on people being at their desks for defined working hours, rather than focusing on getting the job done, may lead to demotivated employees;
  • Assigning funding to schools based on test performances may encourage teachers to the test rather than the curriculum.

What is your system rewarding, recognising or rejecting?