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New South Wales

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.

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.

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21 comments

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21 thoughts on “Turn off the telly and let the sunlight in on political donations

  1. klewso

    Do they rent their bodies out by the hour too?

  2. rhwombat

    BK: Good piece.
    Klewso: No, only their ‘minds’.

  3. paddy

    Good stuff BK.
    While it’s never going to be a perfect solution, speeding up the reporting of donations would be a huge improvement on the current situation.

  4. Yclept

    The fact that the Right is so keen to hide donations can only mean that know they are bribes – pure and simple!

  5. Bill Hilliger

    Moral of the story is that politicians are owned by those who can afford to buy at the highest price.

    Saw a sad rent seeker on the TV this morning complaining that the coalition government must not take away the diesel fuel levy. Went on to complain about the live cattle trade being stopped last year and that it was a cruel blow to the cattle industry. Didn’t say however that the real cruelty was mainly being perpetrated on the animals being sent by the farming fraternity. I guess nowadays with the venal government we have that animal cruelty must be tolerated and be ok if there is a dollar to be made …after all, its the Australian way.

  6. DiddyWrote

    As any sensible suggestion regarding reeling in political donations and curbing their corrosive effect will be of course be ignored, I’ve decided to offer this instead.

    All current and would be politicians must wear their team kit at all times. The Liberals would be in blue, Labor in red and the Greens in …. well you get the picture.

    Donors logo’s (Corporate or Union) would be stitched onto the team kit and the size of the logo would be proportional to the size of the donation.

    Instantly voters would be able to see who is expecting a payback from which party and how much they have stumped up for it. The donors would also have the benefit of a bit of free advertising as well.

  7. zut alors

    What’s more interesting than the concept of Hockey selling himself is the fact that Murdoch media is running such headlines.

  8. klewso

    There’s no such thing as free lunch – if there was these donations would be anonymous?
    Who pays the piper usually calls the tune.

  9. zut alors

    Or if you’re a media baron you simply pay in kind.

  10. The Pav

    Perhaps Bernard after writing “The Liberals virulently loath transparency for political donations ” you could ask the Liberals which party has the “Faceless men”

    Good luck getting a rational answer.