Handing political parties an extra $20 million-plus per electoral cycle, on top of the $70-odd million they already get, will do nothing to reduce their reliance on political donations.

Attorney-General Mark Dreyfus insists giving parties “administrative funding” of $1 per vote — as the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2013 (the text of the bill hasn’t been made public yet) will — would shift the balance more toward public funding.

Let’s test that. In 1983, the Hawke government established public funding for political parties, at a rate of 60 cents per first preference vote in the House of Representatives and 30 cents per Senate vote, indexed. In 1996, following changes by the Keating government, the Senate rate was lifted to match the House of Reps rate, then $1.57 — as we know, campaigning for a Senate spot on a party ticket is hideously expensive and arduous. It’s now $2.47 per vote in the House and Senate — and it will in effect be $3.47 when this bill passes.

Over that period, political donations have grown massively. In 1998-99 (the earliest year for which records are available), the Liberal Party obtained $50.4 million in funding (including public funding, which would have been less than $10 million). In 2010-11, considered a relatively poor federal election for donations compared with 2007, and despite a lot of money flowing from the mining industry into the Liberal camp in the 2009-10 financial year, the Liberals obtained $105 million.

Public funding does nothing to end the political donations arms race, and more public funding will do nothing more, not without a cap on donations of the kind put in place in NSW. It just enables parties to spend more on advertising, and allows hollowed-out, clique-ridden parties like Labor to continue to operate despite rapidly diminishing grassroots support.

The real winners, thus, are newspapers and broadcasters, which will probably pocket all of the $20 million-plus that will flow to the parties over the next three years. For an outfit like the beleaguered Ten Network, or News Limited, which is doing so poorly it has forced a huge writedown of Rupert Murdoch’s new publishing company, or Fairfax, which is still searching desperately for cost-cutting measures, it’s not to be sneezed at.

Liberal Party federal director Brian Loughnane must be delighted. Rather than the government passing a bill, with the support of the Greens, that would have reversed the Howard government’s appalling reduction in political donor transparency, Labor has come to him for a compromise that preserves anonymity for donors up to $5000 and signals just how badly Labor is currently faring in trying to generate donations for the forthcoming election campaign. Business is avoiding Labor in droves, and fundraiser prices have had to be significantly reduced to attract attendees. No wonder Labor wants more public funding.

And just to top it off, the whole business infuriates the one Labor politician who is a byword for integrity on all sides of politics, John Faulkner, and the impression of a shoddy, secret deal between Labor’s national secretary George Wright and Loughnane — which caucus members yesterday asked to be shown, only to be refused — overshadows the remaining positives in the reform bill have been ignored as Labor has another row.

Perhaps, in the name of transparency, Wright or Loughnane, or Mark Dreyfus, will release this deal struck between the Labor and Liberal brains trusts that will cost taxpayers tens of millions of dollars?

Don’t hold your breath.

Peter Fray

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