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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 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.

  11. CML

    Very good Bernard! So, what can we, realistically, do about it? I heard today that BHP had written to Abbott/Hockey asking that the diesel fuel rebate not be touched. Very shortly after that news item, it was announced that the government had ‘assured’ the mining/agriculture industries, that they has no intention of reducing this rort.
    So much for everyone doing their share of the ‘heavy lifting’. Maybe BHP is one of those companies/individuals who donate to the LNP without expecting any kickbacks?
    Worked out well, NOT!!

  12. AR

    Given how much corrupt funding occurs now, when it is legal, imagine what would happen were it to be prohibited.
    Hint – think drugs/gambling/abortion.
    At least currently there is a certain limited, & misleading, transparency and the very fact that they still bribe & make covert payments proves, as Yclept notes, that even those involved know that what they are doing is unacceptable.
    Paddy is spot on – make the details available asap, not 18 months afterwards.

  13. david spottiswood

    The rise of lobbying in the last 30 years or so is the real threat to democracy around the world. For Tony Abbott or any politician to comment that lobbying or donations do not influence policy will be news to lobbyists and donators. To think that special interest groups and huge companies spend billions and billions of dollarsa year around the world and they don’t have any political influence nieve to say the least

  14. Tyger Tyger

    Diddy @6: Love it! Brilliant.

  15. jamie shaw

    transparency only works if media report all donors n reporting mechanism and publication is instantaneous. ban donations all together n combine with fed icac to investigate nsw like rorts

  16. prodigy

    Can Crikey revisit its revelations regarding NAB, Brogden etc on reform of the financial services legislation? It seems that money does indeed achieve results. Just read “Gina Reinhart” – enough to scare the hell out of anyone trusting the processes. No wonder Abbott is shutting down any dialogue on climate change.

  17. Exactly!

    The article is too mild. Accepting money for access is prima facie corrupt. It should be stopped. Businessmen do not pay for things that bring no return. When it occurs in the third world we snigger.

    We do not know what the corrupt politicians do in return for the money necessarily, although it does not take a genius to connect the lobbying of corrupt politicians with the triumph of neo-liberalism in the last 30 years.

    Privatisation? What a money making scheme that is for contacted insiders. Public private partnerships? Just give them the money, easier. Subsidised private health, private child care, private education? Let your public be public and let your private be private, and stop spending my dollars subsiding private business!

    The selling of public policy has to stop.

    The High Court ruled on a particular piece of legislation and there is nothing in the Constitution that categorically limits controlling this activity.

    Bring a bill on, someone, before we are completely third world.

  18. MJPC

    OK BK, if Uncle Joe is not breaking any laws in selling himself to high rollers in industry, can we have a voxpoll at his electorate of ordinary folks and their access to him through the democratic process as their local member.
    I’ll bet a months wages that they get short shrift trying to see their local member, yet the big end of town get privileged access by passing over the $$$. Is there something wrong here?
    If he wants to be a public speaker, get off the public financial teat and go on the Liberal speaker circuit. Don’t expect us taxpayers to pay for his other job he was voted in to do.

  19. Dez Paul

    Good stuff, BK. I add that the IPA (and other “think” tanks) would also be examples of American-style “political action committee”. That the IPA pointedly refuses to disclose its donations speaks volumes about Tories virulently loathing transparency when it comes to influence.

  20. ajcroker

    The debate about TV advertising is the one we really have to have. It could be argued that we need to encourage more active participation in democracy, rather than letting people just sit back and get their information “by accident”.

    Would it really be so difficult to ask people to tune in to a few major policy broadcasts in an election campaign, or just watch a news bulletin or current affairs show every now and then ?

  21. ajcroker

    If you are interested in a petition to ask governments to reduce the cost of election campaigns, please see the link below.



https://www.crikey.com.au/2014/05/05/turn-off-the-telly-and-let-the-sunlight-in-on-political-donations/ == https://www.crikey.com.au/free-trial/==https://www.crikey.com.au/subscribe/

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