Election Countdown: The Ethics Of… Political Donations

It’s a topic that has claimed a Premier and a half-dozen MPs in other states, but goes completely under the radar here in Victoria – it’s simultaneously one of the most important, and one of the most ignored topics in politics.

The issue of political donations by individuals, businesses or lobby groups is one of those topics that bubbles away quietly in the background; everyone knows it’s a problem, but it’s been there so long that no one’s really all that worked up about it anymore. Occasionally an opposition might go on about “corruption”, and the government at the time will shout back “freedom of speech”, but all the while both sides get their payments and nothing actually happens.

Only one thing is clear – political donations must have a significant impact on politics to be worth all this fuss. So, is there anything wrong with them?

At the time of writing, Australia is one of the least regulated nations in the world when it comes to political donations. There are no caps or limitations on donations and federally-registered political parties are only required to disclose donations of over $10,900. This figure is pretty meaningless however, as there is nothing to prevent someone giving multiple donations under this limit to any value they wish, completely bypassing the requirements for disclosure – bizarrely this practice is known as ‘Smurfing‘. The mind boggles how that name cam about.

Each state has its own additional restrictions; Victoria in particular places a cap on donations from the gambling industry ever since the Crown Casino was built, but has no other donation limitation or disclosure requirements whatsoever, meaning that a party registered only in Victoria can receive donations of any value without having to disclose them publically.

This might seem pretty lax, but is it actually a problem? Depends on who you ask;

On the one hand, advocates of the current system claim that placing any restrictions on political donations curtails free speech. Without funding, political parties cannot communicate with the public, raise awareness of their policies and achievements, and ask the people what they want them to do.

Providing donations is one of the most effective ways for individuals and lobby groups to get action on their particular concerns; the rise of the Greens in Australian politics was fuelled almost exclusively by the party’s individual members, and has was instrumental in tabling a number of policies that otherwise would never have seen the light of day – the carbon tax and the debate about gay marriage both come to mind.

And since Australia’s political systems have very few real issues with corruption, with Transparency International ranking Australia as 8th best in the world in 2011, why change a winning formula?

But on the other hand, what would you call it if Group A gives Group B some money, and then Group B does what Group A wants? I’d call it bribery, myself. And just because it’s legal to make ‘donations’ to political parties to get them to do what you want, does that change the fact that it’s still corrupt?

Bribery with a business suit on is still bribery. Call it ‘freedom of speech’ all you want, but why else would third parties contribute large sums to the electoral success of a political party, if they didn’t think their election would be in their interests? Doesn’t such influence completely undermine the ‘one man, one vote’, representative democratic system that Australian politics is based on?

Even if these donations were made in the best of faith, based entirely on the existing values of the donors and the party, how long would it take before that party began to become very aware of the importance of keeping those donors happy to ensure the money kept flowing? While removed from the old ‘suitcase full of cash’ level of bribery, such an influence on government policy is still corruption – the threat of removing a relied upon source of advertising funding is a dire threat for a political party, and one they are going to listen to pretty strongly.

When the current Victorian government swept to power in 2011, one of their earliest actions was to intervene in the planning scheme surrounding the Shrine of Remembrance, preventing further high-rise development over 60 meters nearby. While such a specific intervention was a bit odd, many were happy with the move to prevent the Shrine being blocked out by high-rise development. And then it surfaced that the decision would prevent one specific development from blocking the harbour views of the Domain building. The Domain building, who’s investors just happen to includ several prominent and very vocal Liberal Party donors.

While no formal allegations of corruption were ever raised, the spectre of influence is clear to see; it’s nothing as obvious as a sack of cash on the Planning Minister’s desk, but is he seriously going to risk pissing off some of the most powerful backers of his own party? Of course not. Too bad that this means those party backers have far, FAR more power over the government than the entire rest of the state combined.

Sure we could cry foul and demand justice, but since the only body that could effectively act on any solid accusation of corruption is the Parliament itself, by way of a joint investigatory committee, majority vote and internal sanctions if any wrongdoing is found, why would anyone bother?

The Australian public’s attitude to all of this appears to be one of disinterest. The vast majority of us don’t know anything about political donations or where to find any disclosures, and given there’s nothing you can really do about the information we did, this is pretty understandable. But it’s more than simple disinterest; far too many of us, in fact the vast majority of us, seem to think that this is normal. That this sort of overwhelming, corrupting influence on our elected representatives by tiny (but extremely wealthy) minorities is just par for the course; what else do you expect from politicians?

When your system of government is based on representation of the public by a small group of people, this sort of disengagement is a serious problem. Democracies don’t just require public scrutiny to function well, they need scrutiny to function at all. And as membership in political parties has steadily decreased in Australia as public disengagement grows, the influence of third-party donors in only likely to increase to fill that gap.

So what is the answer? Should political donations be restricted at the potential cost of freedom of speech and voter consultation? Should disclosure be expanded and enforced to maximise transparency? Or should the current system be maintained, even though it may encourage undemocratic influence on politicians?

None of these options are satisfying, but a third option might already be provided by Parliament; the Register of Interests. This is a simple system used by the Commonwealth, State and local governments that requires MPs to register any private interests, gifts or memberships that might create a conflict of interest with their duties to uphold the ‘public good’ (a term that is strangely undefined by parliament, in case anyone asks them to uphold it). Combined with the Standing Orders of each house of parliament, any MP (or local Councillor) with a ‘registered interest’ cannot speak or vote on any issue directly affecting that interest.

To put it a bit more clearly, any MP who happens to get a nice gift from ‘We’d Quite Like Wind Turbines Banned PTY LTD’, can’t vote on anything to do with wind turbines. Simple, solid and pretty much make that donation pointless. It’s like making it legal to dope a racehorse, except that then the racehorse immediately dies – not a lot of point to it.

By extending this well-established system to political donations, parties would still be able to receive external funding to conduct campaigning, but would be prohibited from voting on policy that directly affect the interests of those donors. This makes giving donations in the hope that the recipient party might happen to see things your way, becomes completely pointless; if receiving that donation means you can’t vote on anything affecting the donor, then why even bother?

It’s a simple solution, consistent with current parliamentary practice and easily implemented given it’s already in place for individual MPs. You never know, such a move might even improve the public’s confidence in politicians and see a bit more of that crucial engagement that democracy so desperately needs.

In the meantime, there’s not much we can do, what with a total lack of information about who donates to which party and how much. But you can do that one thing that we should all be doing; staying informed. Learn about what each party is proposing to do if elected and find out what they did last time (a far more reliable indicator). Are these policies in the best interests of the state? Do you personally agree with them? Do the experts? Or are they just celebrated by people who have something to gain from them?

There’s a phrase that’s always useful if you ever need to know if a person, group or political party is acting in everyone’s best interests, or just their wallet’s:

“Follow the money”.

5 thoughts on “Election Countdown: The Ethics Of… Political Donations

  1. As I was going to make this comment under your last post, but it kind of applies to this one too.

    In regards to money in politics, no place is more out of control than the U.S. The Supreme court decision that corporations are people allows corporations to make massive donation. There was $3.67 billion dollars spent on the mid-term elections. That’s a year’s college tuition for 367,000 students, or who knows how much in art supplies and textbooks to public schools. Elections have really nothing to do with what people want anymore.

    In relation to your last post and this one, the real problem is, that even if we kept the money out of the campaigning, it’s the fact that money is being used to choose the candidates here in the U.S. So an interest group can give a bunch of money to convince somebody to run and all of a sudden you have somebody from the outset with a money driven agenda. The people don’t control who gets nominated so we end up getting a choice between politicians who are in the pocket of some corporation already.

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