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
This crisis will cut hard and deep but one day it will be over.
What will be left? What do you want to be left?
I know what I want to see: I want to see a thriving, independent and robust Australian-owned news media. I want to see governments, authorities and those with power held to account. I want to see the media held to account too.
Demand for what we do is running high. Thank you. You can help us even more by encouraging others to subscribe — or by subscribing yourself if you haven’t already done so.
If you like what we do, please subscribe.
Peter Fray
Editor-In-Chief of Crikey
3 thoughts on “What to do about foreign political donations?”
drsmithy
March 17, 2017 at 4:25 pmYoung people, permanent residents and long-term Australian expatriates cannot vote. But they have interests in politics here.
This is poor reasoning.
Children’s interests are represented by their parents (in a lot more things than just politics).
There is no reason to pretend PRs deserve special treatment. It takes less than two typical election cycles to attain citizenship. They can wait (and if they aren’t prepared to commit to citizenship, they don’t deserve a say).
Long term expats have essentially abandoned the country. They don’t deserve a say either.
Should its political champions, like GetUp and other green groups, be included in any ban on parties receiving foreign resources?
No, because those “groups” do not directly create and enact policy, whereas political parties do. A fundamental difference.
The problem is not political donations per se, the problem is the disproportionate representation accorded to large individual donors.
Political donations should be restricted to natural persons only, who are resident citizens at the time they donate (per the ATO’s definition) and limited to an annual maximum amount achievable by most people. For a rule of thumb, let’s say about four weeks worth of full-time minimum wage labour.
Employing people to work on political campaigns for, or directly endorse, a party or politician should be considered a cash equivalent donation to that party or politician. As should purchases of goods or services like advertising.
Punishments for trying to work around donation limits should be severe – punitive fines at the very least. Mandatory gaol time for those who have done so from “the inside” or repeat offenders on “the outside”.
Matt Hardin
March 19, 2017 at 4:15 amSounds simple and enforceable.
Woopwoop
March 17, 2017 at 5:54 pmI agree with Dr Smithy.
Plus, “If we limit the size of contributions, why worry so much about their source?” asks the article. Because if the source is opaque, what’s to stop this shadowy entity making many, many donations of the legal size?