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NSW

May 5, 2014

Turn off the telly and let the sunlight in on political donations

Efforts to restrict the unedifying process of politicians selling access to themselves are unlikely to work, but greater real-time transparency of who is trying to influence politicians might.

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There are three very powerful forces aligned against any substantial overhaul of our political donations system: Labor, the Coalition and the television industry.

Treasurer Joe Hockey hasn’t done anything unusual, let alone inappropriate, in raising funding by selling access to himself. It’s one of the key ways the major parties raise funds; the Gillard government used to offer business $12,000-a-table dinners with a cabinet minister at each table, although as the election got closer, the price dropped considerably. And Labor depends heavily on union donations, which give unions tremendous power within the party and a big say over party policy. Power — the ability to make important decisions — is the key asset political parties possess. Selling access to themselves is a way of monetising that asset.

Even so, Hockey might now rather regret using Twitter to attack Kevin Rudd for the very thing he’s now been revealed as doing …

Selling access has the bonus that technically it’s not a donation, and so under Commonwealth laws it doesn’t have to be declared to the Australian Electoral Commission (though under NSW laws, it does). That’s no bonus for federal Labor: several years ago it took a decision to report all contributions, whether donations or “other receipts”, over $1000 (some state Labor branches only report what they are required to). Both sides of politics might use the same techniques to raise money, but that doesn’t mean they’re equivalent.

The Liberals virulently loath transparency for political donations and peddle the line, for which no evidence has ever been produced, that small business donors to the Liberal Party are the target of intimidation. The Howard government lifted the reporting threshold from $1000 to $11,000 (indexed), and the threshold is now over $12,000; the Coalition blocked John Faulkner’s efforts to return the threshold to $1000 during the Rudd government. A dramatically watered-down version of that reform, with the threshold set at $5000 and millions more in public funding handed to the parties, foundered last year after Tony Abbott went back on a commitment to back it and Labor MPs, led by Faulkner, objected.

What spurs these fundraising efforts, in which politicians from the Prime Minister down devote substantial time to raising money, is the cost of advertising, and in particular television advertising, during election campaigns. TV networks can expect to earn tens of millions of dollars from state and federal election campaigns as the major parties strive to outspend each other; newspapers and radio networks also earn considerable revenue. Public funding of political parties is, in effect, public funding of the media, because that’s where the bulk of political campaign spending goes. We thus have a democratic system that incentivises political behaviour that is at best undignified and inefficient — political leaders have better things to be doing than eating rubber chicken while having their ears bent by people on the make — and, as we’re seeing in NSW at the Independent Commission Against Corruption, at worst illegal, as party figures look for ways to game restrictions on donations.

Removing this incentive is complex and difficult. A ban or cap on political party advertising that survived a High Court challenge would be difficult to craft and require bipartisan support. In any event, it would be much more difficult to ban or cap non-party advertising or American-style “political action committee” advertising from, say, GetUp or the Australian Council of Trade Unions or the Business Council. Shifting parties to full public funding, as Michael Kroger has suggested, doesn’t address this third-party problem. And how does one deal with someone like Clive Palmer, who readily, and with brilliant success so far, has used his own personal fortune to buy his way to political power? The more restrictions we impose on political donations and campaign spending, the more parties and individuals will seek to game them.

But substantially greater transparency, however much it is loathed by the Right, would be a big step to civilising the process. Federal donation disclosure laws are the product of the pre-internet era; those of the states range from comprehensive to non-existent. A comprehensive national system of political donation disclosure, in which parties and donors report all donations and other contributions and do it in real time, i.e. placed online within 24 hours of the transaction, would shed considerable light on who is trying to influence politicians, rather than the current system in which we wait, literally, years before finding out. And a requirement for politicians to publicly log all their meetings, except lower house MP meetings with constituents, would provide the provide the other half of the influence equation.

Concerns about buying access and the influence of donors would be far more manageable if there were complete transparency about who is trying to influence politicians. If political parties want to monetise the asset that is power, let all voters see the transactions.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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