PAUL MCCLINTOCK – SVHA CHAIR AND CHA BOARD DIRECTOR – ON PAYING FOR AGED CARE, FAMILY INFLUENCES AND A LIFE IN BUSINESS AND POLITICS

Much like many Australians during COVID, Most days Paul McClintock can be found at the end of a teleconference call from dawn to dusk looking at the camera on his screen, steering board meetings, contributing a word of wisdom or just listening. 

He is what is known as a professional director. And as sedentary and cloistered as his life may be during these months of enforced seclusion he is anything but inactive. At any given time he sits on three or four boards, including those of Catholic Health Australia and St Vincent’s Health Australia, of which he is chairman. 

There are a few signs of him easing off some of his commitments so that he can spend more time with his family but he is as active now in Australian business and corporate life as he was in another when as a young man in his mid-20s he was plucked from a law firm to lead the office of a then up and coming Liberal minister John Howard. 

As big breaks go they don’t come much bigger. Paul went on to run Mr Howard’s office as Treasurer and capped his career in government when he returned to work for now Prime Minister Howard as Secretary to Cabinet and Head of the Cabinet Policy Unit. 

A committed Catholic who last month gave an impassioned speech to St Aloysius imploring high-profile lay Catholics to stand up and be counted for their Catholicism, Paul sat down with CHA to discuss family, politics, government, business and the business of health, and leadership. 

On family

Paul’s father was Eric McClintock, hailed from a family of newspapers owners in NSW, who became a successful public servant and businessman who was posted as an Assistant Trade Commissioner to the US, rose through the ranks to oversee the trade department when it was being liberalised and ended up as chairman of Woolworths in the 1980s. He describes his father as an extraordinarily good and impressive man” and an “easy role model”. 

“I was used to that sort of environment [of business and politics] from when I was a child and that didn't change. Even up until the moment he died at 99 we were still sitting around, talking about the issues of the day. 

In fact [John] Howard asked to interview him for the Menzies book - because dad was probably the last person still living who actually attended some of the key cabinet discussions around some of the liberalization of the trade deals, which Howard's book was covering. And I called dad, and he pulled out all of the books that he had of the original documentation of that period. He was getting ready for the discussion with Mr. Howard. Not many fathers are quite like that, I think.

His mother, Eve, hailed from a much more modest background. 

“It was a depression family and whoever was earning kept it all going... Her father was a saw miller who'd had his hand chopped off, so he was, in that sense, disabled, and it was pretty much hand to mouth. Mum got married in Perth, where dad was posted during the war, and then found herself in Washington. 

“If you think about it by the time she died she was Lady McClintock (Sir Eric was knighted in 1981) and a lady of great substance, but when you think about the early lives of these young Aussies, you wonder how on earth they pulled it off, but they did.

“The thing I admire about my parents, which I can't replicate, is that they were the generation that really cut themselves out. Dad, not so much. Dad's father was the local newspaper provider up in the Hunter Valley, up in Muswellbrook, so he was a small business person so he didn't travel quite so far.  But Mum travelled a very long distance. And, of course, people like me that are brought up in that middle-class environment, it's not quite as easy to understand... you're not going to be the breakthrough generation. I don't pretend that I am. I started with a great head start from mum and dad.”

On working for John Howard:

Paul reflects on the changing nature of being in government and how it has become inexorably intertwined with politics, in particular party politics. 

“You’ve got to remember that it sounds terribly important to be the chief of staff and it sort of was in a way, but those roles have grown since then. The offices are bigger, the staff are more involved in stakeholder management than they used to be. So it's not entirely comparable. I think what you did get, particularly running a successful minister's office, is you got this amazing window into a lot of things. So you weren't so much a frontline player, or you try not to be, but there was almost nothing you didn't get to see walk past. And that was a lot of fun.”

I was interested in government. And to be honest, John Howard didn't use his personal staff for party political things. So overwhelmingly it was a liaison between him and his department. And even when I came back as cabinet secretary, that was the same thing. He wouldn't ever allow me to go to a party political function or get involved in that side at all. He felt that it was important that his staff didn't get to do that. I suspect if more ministers actually had that role, it would be a really good idea.”

On being a director

Paul addresses some of the myths around being a director - he was at one point the chairman of Myer and Medibank Private - and talks about the pressures on boards today. 

“The nature of being a director is changing, I guess. It's always been harder than people thought. I watched my father being a director of places like Woolworths during very difficult times; the stores were being bombed and profitability tumbled in one particular year, and he was very much a front line player. 

“The idea that board members used to just turn up and have long lunches really isn't true. That isn't the case. I'm sure there were some cases where that was so, but largely boards have always been the last place where responsibility landed and that's always been a tough gig. 

“What has happened now is there's a lot more unrelenting public scrutiny, which was not the case [then]. Investors tend to be much more open in their criticisms, the media is certainly more probing, government is more critical, so I think directors do work in a much more contested space that they used to.”

And the focus of directors has also changed. 

“It is certainly taking some of the satisfaction away because, while I think they always work hard… they used to work more hard on where the company was going and how to make the company great. I think now they spend a lot more time... I don't want to exaggerate this, but more time, anyway, on just feeding all the stakeholders and keeping everybody happy, and that's less satisfying work, to be honest.

“If I'm going to have pressure, I would like pressure related to the work the company's doing. I don't mind pressure, and I think, to be fair, being the chairman of St. Vincent's Health Australia has absolutely enough pressure for most people and as much pressure as I've ever experienced in a listed company. But it's pressure in relation to the quality of the work we do and, at this stage of my life, that's what I'm looking for.”

On the private v public health debate:

Paul has worked in a number of health businesses and organisations. He says serving on the boards of companies in the health space, which have included St Vincent’s, I-Med Radiology, Laser Clinics Australia, Symbion Health, Affinity Health, and the Woolcock Institute of Medical Research, has “delivered to me my sense of wanting to give back”. Intellectually it also ticks the boxes as it is hard to imagine a sector where commerce and public policy intersect so neatly as they do in health. Reform is needed and the global pandemic might just be the impetus for it. 

“I think that the current settings are largely unsustainable, I think that the logic of the way we've set up public and private health, and Commonwealth and State divisions…. the last time somebody seriously tried to think through the logic of that was a very long time ago. It's largely a product of history and the interests of the powerful players. 

“The pandemic won't change, won't create new directions, but will potentially accelerate them. I think that the whole balance of the health system was heading towards some significant need for rethinking and the pandemic I think, has accelerated that. The public hospital system has been largely in sort of denial, and has sort of said if we ignore the private system that it [private hospitals] won't go away, but we can sort of pretend they're not there…..

“The pandemic killed it off a bit, because it became clear that you couldn't do that. A private sector was a very important part of that total system, and so I think the public system has been forced to look at the totality of the health system for the first time in a long time and say, what do I think, how does it work? How well are we using those resources? I think that's productive and could be a good base for a different sort of conversation.”

“I'm hopeful that we will come out of this and when we sit down and say, well, what does the health system look like? And what we want it to look like, people will say, do we want the balance of public and private? Is the balance right? Why do we want it? What purpose does it serve? And if it is still important?”

On paying for health and aged care: 

Then there is the equally vexed issue of how we do pay for it all, and ensure there is equal access to excellent health systems. Do we have the right settings in our health system to deliver on the promise of access for all? He thinks not, and that more Australians will be required to pay into the future, a position that CHA has adopted in the face of sharply rising costs. 

“The truth is if you have a private health insurance system and you mandate it for the group of people who have got the ability to pay, it is in fact saying to those people, you are expected to make contributions to your healthcare. And that was always the way the system works and that created the apparent illusion that now everybody can get free healthcare at all times with no cost. And the truth is that didn't last very long, and we reverted to a system which requires people who have a certain level of wealth to make a contribution. 

“The private health system is designed partly to give people an incentive to make a contribution and partly to give the doctors a reasonable range of practice opportunities. I think we need to retest whether we still think that those things are logical. If so, we’ve got to go and explain them, because at the moment private health insurance is being sold as some sort of elitist product that is too expensive and it’s almost antisocial to have it in the first place. 

“And we've got to break that down or the whole thing is going to fall on its face. And then we've got to make sure the settings are right so that we can say, well, all right, it's affordable. People will actually see that as a fair contribution to make to their health care depending upon their income. And then we're going to make sure that there's enough money going into the systems to justify the investment.”

And that means people like him are going to have to pay more for our aged care, which he thinks is perfectly acceptable. 

“I've been a successful businessman, I live in a very nice home so why on Earth should I decide at some point when I'm frail, to go into shared accommodation and the taxpayer picks up almost everything - I see no justification for that. I'm not happy with it either, because in order to achieve that you basically force a standardization of services, which means that I don't get anything like the standard of living that I want. It forces me to actually stay out of the system altogether and live at home and get a nurse or something; the settings are wrong. And undoubtedly, we've got to accept the fact that this was not a public hospital we're providing, it is a home and yes, the government support is required in order to make that affordable and is absolutely expected for people who don't have the income to be able to make a significant contribution. But a lot of people can afford to fund their end of life activities. I don’t think the taxpayer is going to be willing to deliver to people like me, a lifestyle that I find attractive through my later frail years, entirely funded by them. That doesn't sound right to me.”

 

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