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Overhauling political donation laws: what a great new election year's resolution Overhauling political donation laws: what a great new election year's resolution
(7 months later)
As this election year gets under way, we’ll go through an annual ritual that is supposed to enhance our faith in the political system. Except everyone knows it’s a sham.As this election year gets under way, we’ll go through an annual ritual that is supposed to enhance our faith in the political system. Except everyone knows it’s a sham.
Sure, there’s lots of useful information in the February disclosure of donations to political parties from the Australian Electoral Commission.Sure, there’s lots of useful information in the February disclosure of donations to political parties from the Australian Electoral Commission.
Related: Australian major political parties reveal nearly $85,000 in undeclared donations
But we also know it’s very easy for a donor to retain anonymity. Parties and donors only need to declare donations over $13,000. By donating just under that amount to each state and territory branch a donor could give more than $100,000 and remain in the shadows.But we also know it’s very easy for a donor to retain anonymity. Parties and donors only need to declare donations over $13,000. By donating just under that amount to each state and territory branch a donor could give more than $100,000 and remain in the shadows.
And anyway the companies, unions and individuals whose generosity is reported all insist they are motivated by an altruistic desire to help the functioning of our democracy, and in no way by an expectation that they are buying influence or access to decision makers.And anyway the companies, unions and individuals whose generosity is reported all insist they are motivated by an altruistic desire to help the functioning of our democracy, and in no way by an expectation that they are buying influence or access to decision makers.
That may be true. Except we keep getting examples where it isn’t. Like the 2008 Wollongong council scandal in which donations were made in return for favourable development decisions. That led to a New South Wales ban on donations from property developers in 2009. But six years later the Independent Commission Against Corruption heard evidence that NSW Liberal figures circumvented the state ban by “washing” money through the federally controlled Free Enterprise Foundation.That may be true. Except we keep getting examples where it isn’t. Like the 2008 Wollongong council scandal in which donations were made in return for favourable development decisions. That led to a New South Wales ban on donations from property developers in 2009. But six years later the Independent Commission Against Corruption heard evidence that NSW Liberal figures circumvented the state ban by “washing” money through the federally controlled Free Enterprise Foundation.
The NSW premier, Mike Baird, has written to his federal colleagues asking that they work on a national system similar to the NSW laws, which include a $1,000 threshold for donations to be disclosed and caps on total allowable donations. National laws would mean the state laws could no longer be circumvented. That led to ... well, so far that’s led to absolutely nothing. Baird raised it at the dinner before the last Council of Australian Governments meeting in December, but he didn’t get far.The NSW premier, Mike Baird, has written to his federal colleagues asking that they work on a national system similar to the NSW laws, which include a $1,000 threshold for donations to be disclosed and caps on total allowable donations. National laws would mean the state laws could no longer be circumvented. That led to ... well, so far that’s led to absolutely nothing. Baird raised it at the dinner before the last Council of Australian Governments meeting in December, but he didn’t get far.
Perhaps it’s just a coincidence that last year’s federal financial disclosures showed property developers and investors among the biggest donors to the major parties.Perhaps it’s just a coincidence that last year’s federal financial disclosures showed property developers and investors among the biggest donors to the major parties.
The truth is every political party knows the system has to change. The cost of election campaigns has increased beyond their capacity to pay. They are forced to effectively beg for funds and that leaves them potentially dangerously beholden to corporate interests and, in the case of the Labor party, to the union movement. But the fear that any change might advantage an opponent – and the risk of a public backlash against higher rates of public funding, which is the only possible funding source – has stymied reform for decades.The truth is every political party knows the system has to change. The cost of election campaigns has increased beyond their capacity to pay. They are forced to effectively beg for funds and that leaves them potentially dangerously beholden to corporate interests and, in the case of the Labor party, to the union movement. But the fear that any change might advantage an opponent – and the risk of a public backlash against higher rates of public funding, which is the only possible funding source – has stymied reform for decades.
Electors are left wondering if decisions have been made on their meritsElectors are left wondering if decisions have been made on their merits
A former Liberal party president and treasurer, Shane Stone, recommended in 2007 that all corporate, trade union and third party donations be banned.A former Liberal party president and treasurer, Shane Stone, recommended in 2007 that all corporate, trade union and third party donations be banned.
And Labor’s elder statesman John Faulkner warned for years that the cost of electioneering had created a campaigning “arms race”, “heightening the danger that fundraising pressures on political parties and candidates will open the door to donations that might attempt to buy access and influence”.And Labor’s elder statesman John Faulkner warned for years that the cost of electioneering had created a campaigning “arms race”, “heightening the danger that fundraising pressures on political parties and candidates will open the door to donations that might attempt to buy access and influence”.
He said the current system was pernicious even if the donors weren’t actually demanding political favours.He said the current system was pernicious even if the donors weren’t actually demanding political favours.
“The perception of undue influence can be as damaging to democracy as undue influence itself,” he said in his Light on the Hill lecture in 2014.“The perception of undue influence can be as damaging to democracy as undue influence itself,” he said in his Light on the Hill lecture in 2014.
“It undermines confidence in our processes of government, making it difficult to untangle the motivation behind policy decisions. Electors are left wondering if decisions have been made on their merits.”“It undermines confidence in our processes of government, making it difficult to untangle the motivation behind policy decisions. Electors are left wondering if decisions have been made on their merits.”
There have been numerous parliamentary reviews, the latest set up in October at the urging of independent senator John Madigan. Its first act was to write to the government asking why there had been no response to the last inquiry, which was finalised in 2011.There have been numerous parliamentary reviews, the latest set up in October at the urging of independent senator John Madigan. Its first act was to write to the government asking why there had been no response to the last inquiry, which was finalised in 2011.
The major parties came incredibly close to an agreement in the last parliament to increase public funding by $1 a vote (it is $2.62 for all parties or candidates that get more than 4% of the vote) and to reduce thresholds for declaring donations back down to $5,000. Tony Abbott had even signed the deal but after a backlash from his party room he reneged and it all fell apart.The major parties came incredibly close to an agreement in the last parliament to increase public funding by $1 a vote (it is $2.62 for all parties or candidates that get more than 4% of the vote) and to reduce thresholds for declaring donations back down to $5,000. Tony Abbott had even signed the deal but after a backlash from his party room he reneged and it all fell apart.
Labor still supports a reduction in the disclosure threshold to $1,000, with caps on donations and campaign spending, extra public funding and nationally consistent laws.Labor still supports a reduction in the disclosure threshold to $1,000, with caps on donations and campaign spending, extra public funding and nationally consistent laws.
The Greens have long championed change. Baird has the backing of other premiers.The Greens have long championed change. Baird has the backing of other premiers.
And in the current parliament both major party leaders have something to gain from breaking the decades-long deadlock and actually agreeing on change.And in the current parliament both major party leaders have something to gain from breaking the decades-long deadlock and actually agreeing on change.
Malcolm Turnbull championed donations reform when he was first elected, remarkably similar to that suggested by Labor and Baird.Malcolm Turnbull championed donations reform when he was first elected, remarkably similar to that suggested by Labor and Baird.
“No political donations should be allowed unless they are: from citizens and/or persons on the electoral roll (ie no companies, unions, associations etc); subject to a cap; and donors should certify that the donation is either their own or their spouse’s money and has not been given to them by a third party,” he wrote at the time.“No political donations should be allowed unless they are: from citizens and/or persons on the electoral roll (ie no companies, unions, associations etc); subject to a cap; and donors should certify that the donation is either their own or their spouse’s money and has not been given to them by a third party,” he wrote at the time.
And he sought the Liberal leadership in 2015 by pledging to restore voters’ trust and confidence in the political process. This would be a very good way to do it.And he sought the Liberal leadership in 2015 by pledging to restore voters’ trust and confidence in the political process. This would be a very good way to do it.
Bill Shorten is battling the evidence to the royal commission about the influence of unions over his party. But the truth is Labor is deeply dependent on union donations. Implementing party policy for a cap and tougher disclosure rules could work for Shorten too.Bill Shorten is battling the evidence to the royal commission about the influence of unions over his party. But the truth is Labor is deeply dependent on union donations. Implementing party policy for a cap and tougher disclosure rules could work for Shorten too.
Opponents often argue that cracking down on donations disclosure would just mean the rise of single issue or legislation-specific spending, like the “pacs” that operate in the US.Opponents often argue that cracking down on donations disclosure would just mean the rise of single issue or legislation-specific spending, like the “pacs” that operate in the US.
But that wouldn’t be all that different from the campaigns the mining industry or the union movement or various other business groups have run already. And at least things would be in the open – the interest groups would be clearly spending their money in support of a particular policy outcome and putting their names to their arguments.But that wouldn’t be all that different from the campaigns the mining industry or the union movement or various other business groups have run already. And at least things would be in the open – the interest groups would be clearly spending their money in support of a particular policy outcome and putting their names to their arguments.
I’ve even got an idea for where the cash for the extra public funding could come from.I’ve even got an idea for where the cash for the extra public funding could come from.
After the 2013 election political parties and candidates were eligible for a total of $58m – it was then $2.48 a vote. Adding $1 a vote wouldn’t cost much more than the advertising campaigns governments run in election years which are really political but are dressed up as government advertising to qualify for taxpayer funding.After the 2013 election political parties and candidates were eligible for a total of $58m – it was then $2.48 a vote. Adding $1 a vote wouldn’t cost much more than the advertising campaigns governments run in election years which are really political but are dressed up as government advertising to qualify for taxpayer funding.
Related: Revealed: political parties' widespread failure to disclose donations
The Turnbull government is conducting “research” before an $18m advertising campaign about infrastructure. It’s unclear exactly what they will advertise. Turnbull overturned Abbott’s roads-only obsession and said he would also give money to public transport. And some of the old prime minister’s pledges haven’t really weathered the test of time. The $1.5bn for the now-abandoned Melbourne East West link, for example, was found by the audit office to have been handed over despite warnings that it had not been properly assessed and was not yet even needed.The Turnbull government is conducting “research” before an $18m advertising campaign about infrastructure. It’s unclear exactly what they will advertise. Turnbull overturned Abbott’s roads-only obsession and said he would also give money to public transport. And some of the old prime minister’s pledges haven’t really weathered the test of time. The $1.5bn for the now-abandoned Melbourne East West link, for example, was found by the audit office to have been handed over despite warnings that it had not been properly assessed and was not yet even needed.
The Turnbull government is also planning to spend $28m advertising innovation. In late 2014 the Abbott government spent almost $10m advertising higher education changes that were never legislated, in the hope that they might be. And this is not a new racket. Both sides have done it forever.The Turnbull government is also planning to spend $28m advertising innovation. In late 2014 the Abbott government spent almost $10m advertising higher education changes that were never legislated, in the hope that they might be. And this is not a new racket. Both sides have done it forever.
The official guidelines say advertising “must not be conducted for party political purposes” but also that “governments may legitimately use public funds to ... encourage informed consideration of issues or to change behaviour”.The official guidelines say advertising “must not be conducted for party political purposes” but also that “governments may legitimately use public funds to ... encourage informed consideration of issues or to change behaviour”.
If they were tightened so only the explanation of new legislation or a new program qualified as official government advertising, the millions being spent on back-door political advertising could be used to increase public funding to the parties. They would probably use it for actual political advertising, which would be more effective for them anyway.If they were tightened so only the explanation of new legislation or a new program qualified as official government advertising, the millions being spent on back-door political advertising could be used to increase public funding to the parties. They would probably use it for actual political advertising, which would be more effective for them anyway.
And a combination of stricter disclosure rules for donations and an end to political ads dressed up as government information might actually enhance voters’ faith in the system.And a combination of stricter disclosure rules for donations and an end to political ads dressed up as government information might actually enhance voters’ faith in the system.