Pearls and Irritations

The major political parties largely control the process of electoral reform and judge any proposal by its possible partisan effects. Considerations of partisan advantage almost always take precedence over the restoration of public trust in the political system.  

According to the 2016 Australian Election Study, http://www.australianelectionstudy.org trust in the Australian government is at its lowest point since records began in the 1960s. The current parliamentary inquiry into the conduct of the 2016 federal election might seem an ideal place to look for ways to boost confidence.

Political finance is one of the areas that contributes most to public perception that government is run largely in the interests of the big end of town. And indeed the terms of reference of the Joint Standing Committee on Electoral Matters (JSCEM) inquiry include the current political donations regime, as well as the more specific question of foreign donations, on which a report is due by 1 March. http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election

The expenses scandal in January that led to Minister Sussan Ley’s resignation included use of parliamentary allowances to attend New Year’s Eve parties held by a Gold Coast businesswoman and party donor Sarina Russo. What was particularly eye-catching was that Russo was both a generous political donor and the recipient of lucrative government contracts to provide employment services http://www.smh.com.au/federal-politics/political-news/sussan-ley-travel-scandal-who-is-job-queen-sarina-russo-20170109-gtof3c.html

Unlike many other democracies, including the USA, Australia does not ban political donations from corporations with government contracts. This is but one example of Australia’s lax attitude towards political finance. The International IDEA political finance database shows how far Australia lags behind many other democracies in regulating the role of money in elections http://www.idea.int/data-tools/data/political-finance-database

As with previous inquiries, the 133 submissions to the current JSCEM inquiry canvass numerous ways to increase transparency. Like Voices for Indi (Submission 55), many recommend real-time disclosure of political donations. This is long overdue and indeed is happening in Queensland from this February. The Australian Electoral Commission, in contrast, only publishes party donation returns once a year, usually long after the relevant election. Lord Ashcroft’s famous $1 million donation in the 2004 federal election was not revealed until February 2006.

According to a 2016 ReachTEL poll commissioned by GetUp! over 85% of voters believe that the disclosure threshold for donations should be lowered and disclosure made as close to real time as possible. (Submission 81)

Inquiry submissions vary over how far the threshold should be lowered. Some support Labor and Greens policy of a $1000 threshold while others want it to be much lower.

Currently, donations under $13,200 do not have to be disclosed and there are many other loopholes. Donations can be split between different state branches of a party to stay under the threshold or be channeled through party fund-raising bodies to conceal the identity of donors. The GetUp! report ,‘Dark Money’, found that declared donations made up less than 25% of privately raised income in the 2013 federal election. Of the donations that were declared, about half came from party fund-raising bodies so could not easily be attributed to specific donors. http://cdn.getup.org.au/1969-Dark_Money.pdf

To address issues such as the gap between donations declared by donors and those declared by political parties, experts on the intersection of electoral and Constitutional law like George Williams (Submission 19) and Anne Twomey (Submission 24) recommend that all political donations be made via the Australian Electoral Commission. The Commission would then register and declare the donation and distribute it to the relevant party or candidate. This would:

remove the burden of receiving and reconciling disclosure returns from both parties and donors and it would allow the Electoral Commission to reject donations when insufficient identification is provided, when they come from foreign or other banned sources or when they exceed donations caps. It would also provide the public benefit of real-time disclosure prior to elections (Submission 24).

It is important that disclosure data is not only timely but provided in a form making it easier to analyse, as highlighted by Belinda Edwards (Submission 91). Currently few journalists have time to do the intensive work needed to make sense of the donation returns. While some media splashes can be expected following the publication of returns on 1 February, in-depth analysis is hard to find. The difficulty in tracking foreign donations is itself an important argument for banning them, quite apart from whether foreign interests should be involved in national elections.

At least 114 other countries do ban foreign donations, including Canada, the UK and USA. This does not mean that permanent residents or locally registered businesses need to be excluded. http://insidestory.org.au/taking-xenophobia-out-of-the-political-donation-debate

Under the NSW Election Funding Act there are exceptions for permanent residents and companies with an Australian Business Number.

Apart from real-time disclosure and source restrictions, limits on private donations are long overdue at the federal level. In the 2015 McCloy case, the High Court found that limits on private donations were legitimate for purposes both of electoral integrity and political equality; wealthy donors should not be able to purchase special access to power. eresources.hcourt.gov.au/showCase/2015/HCA/34 According to the 2016 ReachTEL poll almost 72% of voters supported caps on donations. (Submission 81)

The lack of donation caps contributes to political distrust in other ways as well – for example, the money pays for all the negative campaign advertising surrounding elections.

One issue not raised in the JSCEM inquiry is the use of political finance regulation to promote gender equality. Some 27 countries now have such earmarked or conditional public funding. ‘Gender-neutral’ limits on campaign expenditure and donation caps may also serve to promote gender equality, given women usually have less access to campaign resources than their male colleagues. http://www.idea.int/sites/default/files/publications/funding-of-political-parties-and-election-campaigns.pdf

Expectations are generally low concerning the likely inquiry outcomes. The major political parties largely control the process of electoral reform and judge any proposal by its possible partisan effects. Considerations of partisan advantage almost always take precedence over the restoration of public trust in the political system. Otherwise,, submissions to this inquiry could make a significant contribution to reform and renewal.

Marian Sawer is Emeritus Professor and Public Policy Fellow, School of Politics and International Relations, ANU.

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