What role should “foreign money” play in Australian political campaigns? Many people would say “none”, and a parliamentary committee report released last Friday seems to agree. The committee recommends banning foreign donations to Australian parties. The government members would go further and add lobby groups to parties.

Three questions arise. Why a ban? Whose campaigns would be denied overseas assistance? And how might we define “foreign money”?

From its colonisation, Australia has been built on immigration and trade. So xenophobia is no reason to deny campaigners access to foreign resources. Current interest in foreign money has been spurred by contributions from Chinese countries or nationals. 

This transcends the controversy about Senator Sam Dastyari having a Chinese higher education institute pay a travel bill. By one estimate, over 80% of foreign donations in recent years are sourced from the People’s Republic or Hong Kong.

Yet rewind to the 1940s, to the heart of the bank nationalisation debate, and the Liberal Party was actively recruiting UK business donations to bankroll its campaigns. After all, Australia was still growing out of the empire. We were “subjects of the crown”. The idea that only citizens should vote was decades off.

[Rundle: tiny Dasher, count the headlights on the highway — to ruin]

A simple metric is that if only citizens can enrol to vote today, then only citizens should participate. That is naive. Young people, permanent residents and long-term Australian expatriates cannot vote. But they have interests in politics here. As a result, the report recommends a carve-out, to allow permanent residents, dual citizens and expats to continue to contribute.

Besides interwoven business interests, many political causes transcend lines on maps. Environmentalism is the most obvious. Its creed is “think globally, act locally”. Should its political champions, like GetUp and other green groups, be included in any ban on parties receiving foreign resources?

Resentful of progressive campaigns, the Coalition thinks so. Yet in the 2000s, the Howard government solicited a $1 million donation from noted Tory Lord Michael Ashcroft. At the time, Ashcroft was chair of the International Democrat Union (the term “democrat” being applied loosely here, as this is really an international union of political conservatives).

This takes us to the question of “whose campaigns?” It is rational to fear that donations to parties create integrity risks. Money buys access, there is a widespread perception it buys influence, so why let foreign interests play that game?

It is a step further, as the Coalition recommends, to extend regulation to all manner of “third party” political actors like lobby groups. The rationale, besides self-interest, is the waterbed argument. Money is fluid so you need to regulate it in politics broadly, and not just within parties.

For its part, Labor for years proposed a ban, but on money sourced from overseas accounts or property. A foreign entity could still donate from assets held onshore. In turn, an Australian would have to restrict herself from using money held offshore.

The government report includes three dissents. So steering any bill through the Senate will need deft navigation, to say the least.  The government will be on surer ground with One Nation, by playing to resentment of globalisation.

If the Coalition negotiates a compromise, enforcement challenges will remain. A ban on donations to lobby groups will need careful drafting. If it goes beyond campaigns around election time and affects civil society’s ability to speak on political issues broadly, it may breach the constitutional balance of equal opportunity to participate and freedom of political communication.

As a regulator, the Australian Electoral Commission has no extraterritorial reach. It will have to rely on tracing sources via Australian parties, campaigns and their bank records. The usual means of trusts and other intermediate conduits will be tried to circumvent the ban. The commission will have little practical, extraterritorial reach. Interpol isn’t likely to lend a hand to an Australian political integrity law.

[Committee recommends wide-ranging crackdown on foreign donations]

Ultimately, is it worth the effort? Coalition MPs think so. Besides antiglobalisation sentiment, they will sell this as an integrity measure by appealing to cynicism about parties. I, however, have doubts about the issue.

It is a distraction from holistic reform of lobbying and political finance. On lobbying, the Commonwealth needs to embrace better disclosure. Queensland has just launched a real-time, online political donations system. It will map, geographically, the sources of flows into state and local government politics.

Ministerial diaries and lobbying activities need to be more transparent, especially for foreign entities. The current imbroglio in the US about President Donald Trump adviser Mike Flynn’s contract with Turkish interests, illustrates that clearly.

Finally, any reform needs to balance political equality, liberty and integrity. Focusing on “foreign” donations neglects the equality problem. New South Wales now caps political donations and campaign expenditures; the Commonwealth should too. If we limit the size of contributions, why worry so much about their source?

*Graeme Orr is a UQ professor and author of books on The Law of Politics, and Elections as Rrituals

Peter Fray

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