Finally the secret is out – no one wants the current practice of political donations and campaign fundraising to continue.

Business became sick of it long before the GFC cut their lobbying budgets. Most realised that donating became more of a risk than an advantage and most influential business people realised they could get a meeting regardless of donations. Some have even worked out that you don’t need to pay $10,000 a month for a lobbyist to get you the appointment.
Politicians have grown to resent the drain on their most precious commodity – time. Time to think, time to work on policy and speeches, time to meet people without the unspoken pressure of donations and most importantly the precious remaining time to spend with family and friends.

 

They also resent the risk of meeting with someone or approving their project only to find themselves embroiled in a later scandal.
 
Party officials would much rather focus on winning elections and building their organisations than fly around the country knocking on doors and cold-calling donors.
 
All three groups are well and truly over being dragged to big evening functions full of crass auctions and hour long speeches. I well remember the seething anger of one state political leader who saw his 10th anniversary celebration become a massive fundraiser.
 
Most importantly, the public can’t stand it because, despite the codes of conduct that state otherwise, they know that a donation will at best lead to greater access and at worst preferential treatment. Sometimes, for all their disengagement from the politics, they have a pretty good understanding of what greases the wheels.
 
The pressure for reform has been slowly building and has, following events in Queensland and the swift response from Anna Bligh, now become unstoppable. No longer can people fob off the issue of reforms to donations and lobbying as an “insider issue”.
 
I don’t write this as a purist or from an academic perspective. I was at the heart of this system when both sides raised and spent record amounts on the last federal election – estimated to be over $80 million. I came away with a strong belief that we are well and truly into an arms race and the big money politics that has plagued the US has arrived.
 
The question is what to do? The Government (first under John Faulkner and now Joseph Ludwig) have put legislation into the Parliament that would reduce the Howard-era disclosure threshold from over $10,000 to $1,000, ban foreign donations and require parties to lodge returns every six months (rather than annually). For more than a year the Coalition has dilly-dallied with the excuse they need to see the full reform package from the Government. It seems they may soon get their wish. Either way it really is time they peed or got off the pot. The best reforms in this area need to be bi-partisan so they can last.
 
The answers aren’t as simple as just banning donations, but here are some six points to consider:
 
Simply banning donations won’t work – this is the most pure option but it won’t do the trick. If donations to the parties are banned then it will only open the way for third party groups to take over at election time. The “Swift Boat Veterans for Truth” campaign from the 2004 US Presidential election would become the norm. Banning donations to third parties to close down this loophole would be unconstitutional. It would also cripple the capacity of genuine opposition within civil society. People should be able to donate to organisations that are fighting government on issues such as climate change and workplace laws.

Spending limits must be part of the answer – no party is going to allow itself to be outgunned in an election campaign. Campaign Directors will always try to equal or better the other side and in Australia that means a donation arms race to fuel campaign advertising. Any solution has to deal with this escalation or otherwise it won’t remove the pressure for funds. This means a limit on campaign spending. This could be applied to both the political parties and third parties (who might be subject to a lesser limit).  Another scheme might ban TV advertising but allow an expansion of party allocated broadcasts (as operates in the UK)

Donation caps are easy to avoid – another simple option, placing a limit on or “capping” donations also has its problems. It’s very easy to spread donations under the cap over a number of individuals. In the US there have been scandals over people making large donations under capped limits by spreading the funds around. This should be considered as one part of the equation but needs watertight legislation.

Individual-only donations won’t fly – Malcolm Turnbull supports banning donations from anyone other than individuals on the electoral roll. This would give an unfair advantage to wealthy individuals (like ….. Malcolm Turnbull) and the party they are most likely to support (the Liberal Party) at the same time removing one of Labor’s historic funding sources – the unions. Nice try Malcolm, but this needs bi-partisan support.

100% public funding is not the answer – another part of the pure option is to ban all donations and have the parties funded totally by the taxpayer. This would not only lead to the problem with third parties outlined above but would change the nature of our parties from their historical connections (with business and the labour movement) to quasi-public sector agencies. Membership (which is already waning) would become irrelevant and the parties would become detached from broad campaigns in society. Public funding should be part of the solution, but only as a result of sweeping changes to the current system.

National legislation is needed – Anna Bligh should get points for pushing hard on this. State legislation can be helpful but will only be effective if it’s part of a national package of reforms. A national system is the only way to stop leakage of donations via state branches and national bodies.
 
So what is to be done? A limit on campaign spending must lie at the core of any reform - one that places limits on political and third parties but will allows for robust campaigns and freedom of expression but halts the proliferation of election advertising. So should low thresholds for disclosure and regular reporting (no less than once every six month). Foreign donations (a rarity in the western world) should be banned and donation caps (with tight laws to prevent leakage) should be put in place. Any reform must be national and mirrored in state legislation. Some additional public funding should be allocated to ensure the parties can continue to operate after such a massive change. After all, they are a necessary part of our successful democracy. We need them to develop policies, select candidates, run campaigns and provide support to MPs.
 
The legislation should have bi-partisan support. The system needs to last beyond one government. In order to make all this happen, the Coalition need to get their skates on and negotiate with the Government and the Government needs to ease their concerns that changes will only create (Labor) winners and (Coalition) losers.

- Tim Gartrell is the CEO of Auspoll and a former National Secretary of the ALP. 

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25 comments

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    • Jonathan says:

      08:06am | 04/08/09

      You’ve failed to really spell out why donations shouldn’t be banned outright.

      As you say yourself: “they know that a donation will at best lead to greater access and at worst preferential treatment”.  We are very well aware of what greases the wheels and I for one am sick of it.  It leads to ridiculous situations such as in NSW where Bob Carr sells all the roads to Macquarie, resigns as Premier leaving the state in a horrific financial mess and then gets a job at Macquarie.  Can’t tell me there’s not back scratching going on there.
      I think it happens all the time, on both sides of politics.
      So why not ban them?

    • iansand says:

      08:38am | 04/08/09

      Possibly there is another advantage to controlling funding.  It means that elections are fought in the news columns, not by paid advertisements.  I was in Canada during an election a few years ago.  They introduced funding restrictions in 2004 http://www.canadian-politics.com/CPWiki/tiki-index.php?page=Election+Funding .  Watching TV you would hardly have known that an election was on apart from news and current affairs programmes.  No negative advertisements.  No silly sound bites.  At the time I thought it was the Canadian way and a reaction against the crassness of the southern barbarians, but perhaps it was the limited funds.  Limited funding may be a way of restoring substance to political discourse with ideas that take longer than a 30 second spot to express.

    • Tim Gartrell says:

      09:14am | 04/08/09

      Hi Jonathon, As I outlined in the article, if you ban donations to political parties then third parties become a problem (front groups like the Swift Boat Veterans). If you try and fix that and ban third parties it would be successfully challenged in court as a restriction on free of political expression. I wouldn’t want a society where non-political parties can’t campaign against regressive laws. Pollies getting gigs after political life is another matter (and can be dealt with by having prohibitions on working in your former portfolio area). Cheers, Tim

    • Eric says:

      09:24am | 04/08/09

      I wouldn’t trust news columns to report on elections. They’re just as partisan as the ads, just less blatant.

    • Joe of Brisbane says:

      09:26am | 04/08/09

      Nice try Gartrell. When Labor’s Unions stop taking money from all their members and giving it to your party (often against the members will) then the Libs should start talking about cutting back their only means of funding.

      This is a bit like the Libs making union leaders pay to see them in government then all of a sudden saying, hmm this is dodgy maybe no party should take money from a union.

      Watch out even the Labor party can smell its own stink….

    • watty says:

      09:31am | 04/08/09

      Does this mean the Unions will only be able to donate $1000 per Union or will it be $1000 per member “voluntarily donated” from members fees?

      Only rich people like Turnbull? What about a Fox or a Lowy or even a Singleton? Don’t they all support Labor?

      I thought the most blatant hypocrisy was when the Labor Party actually sought and took many thousands of dollars in donations from Australian and overseas uranium mining companies whilst enforcing their 2/3 uranium mines policy.The Sussex Street bagmen excelled in those days.

      I

    • Eric says:

      09:38am | 04/08/09

      I assume from your harping on about the Swift Boat Veterans that your definition of a ‘front group’ is ‘any non-party group that says things I don’t like’.

    • Matthew says:

      09:55am | 04/08/09

      The “Swift Boat Veterans for Truth” campaign… or the “Your Rights at Work” campaign that bought the election for Labor in 2007? Of course that’s different, right?

    • Joe of Brisbane says:

      09:55am | 04/08/09

      What could be more of a ‘front group’ than Labor’s unions. Unions should give their members a democratic choice as to where their money goes. May I suggest on the membership form each year “What percent of your fee would you like to go to the Labor party?”

    • James says:

      10:41am | 04/08/09

      Joe of Brisbane - many unions do offer the option to opt out of having your membership fees counted towards ALP affiliation. The Community and Public Sector Union (CPSU) is one of them.

    • Richard Denniss says:

      10:51am | 04/08/09

      Well put Tim. Of course the biggest winner out of an arms race is always the arms dealers, so i wouldnt expect too much suport from sections of the media but there is no doubt the time has come for reform. Spending caps make a lot of sense. Banning TV ads and replacing them with regular publicly funded slots,not just on the ABC, seems hard to argue with and a pragmatic, and evolutationary, appraoch to third parties mean we can get the ball rolling and respond to the idiosyncracies along the way.

      If the Libs arent serious about reform I dont think there could be a better double D issue than donation reform.
      Bring it on

      Richard

    • Tim Gartrell says:

      11:33am | 04/08/09

      Matthew

      Swift Boat Veterans popped up overnight in the lead up to 2004 and no longer exists. Doesn’t that tell you something. The unions have been around as a major part of civil society in Australia since the late 1800s and will be around for a while to come.

      Tim

    • Eric says:

      11:39am | 04/08/09

      Well, duh. Of course the Swift Boat Veterans popped up and then disappeared. They were specifically a single-issue group campaigning against a particular candidate for President—on very valid grounds.

      When the candidate went away, so did the group. Sadly, the unions have not gone away yet, though their declining membership gives me hope.

    • miles says:

      11:46am | 04/08/09

      Richard, you hit it in one!
      In fact, considering that the government leases (or sells the rights to use) the airwaves to the telly stations in the first place ie. they are still publicly owned. This is a public service the networks should (be forced to) donate in return for allowing them to operate.
      Hell, this would mean even minor parties could get a shot at tv time.
      Maybe then they might actually talk about policy rather than just endlessly spinning. Bring that on!

    • Joe of Brisbane says:

      11:56am | 04/08/09

      Rudd talking policy and not spinning? Don’t hold your breath Miles.

    • Chris says:

      01:53pm | 04/08/09

      Tim why exsactly are you worried about “third parties”.
      Trying to hold onto the monopoly that ALP and Libs hold?

      ALP and Libs are virtually the same party these days anyway.

      Smaller parties like the Democrats, the Greens and Family First represent a whole lot of people which the two major parties don’t. Why shouldn’t they be able to participate in a more even playing field?

    • Tim Gartrell says:

      06:19pm | 04/08/09

      Chris, I mean the broader use of the term “third parties”, ie. organisations that are not registered political parties. Yes, the minor parties should be able to participate in a reformed system. A system with a spending cap (and the other measures outlined in my article) would allow that. (Not sure about the Democrats though - I think they are a museum piece these days and would struggle to reappear under even the most generous system). Tim

    • DWest says:

      07:40pm | 04/08/09

      Tim I disagree with the Swift example too. I would welcome Bikies in Speedboats For Truth if it unsettled and rocked ‘Forest’ (Gump) Rees and ‘Uranium’ Ranns boat and lessened their loud media chest beating. I also believe there is little difference now between Labor and Liberal. At the least bring back the biff or give us some entertainment for your sterile political cartels! Truce? You have become overly powerful, complacent, arrogant and copycat brands like Coles and Woolies.

    • Dallas Beaufort says:

      10:40pm | 04/08/09

      Chris,Why are you talking about how much cash? Why are you,not talking about the causes and symptoms. Why isn’t honesty a virtue for progressive labor?

    • Razor says:

      12:24am | 05/08/09

      I will believe that the ALP is serious about reforming funding when they announce that they are going to stop the Unions funding the ALP.  Until then it all a load of spin.

    • Steven says:

      08:25am | 05/08/09

      Tim, I note your concern about the prospect of limiting donations to individuals favouring parties with well heeled supporters. What in your view would be the effect of limiting donations to individuals, but with a low threshold such as $500 or $1000 per election cycle? The lesson from Obama seems to be that such a system would reward the party or candidate who could build the biggest movement of small donor supporters. I think we should consider the health (or otherwise) of our political parties in this debate. A solution that encourages our parties to rebuild and empower their supporter base should be favoured.

    • Catherine, Gold Coast says:

      05:28pm | 10/08/09

      By all means put an end to the large donations but there needs to be ongoing review of practices. It wouldn’t be popular with politicians but I think the ethics committees that have been established throughout the developed world to guard against excesses in research could offer guidance for similar in politics.  They would go a long way to making our democracies, democratic.

 

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