Even a brown paper bag filled with cash may not be enough to start an investigation

Feb 22, 2021

The recent release of Australian Electoral Commission political donation figures has put the lack of transparency back in the spotlight. This issue is also behind the push for a federal integrity commission. But the Coalition government, which is by far the largest recipient of political donations, has no intention of reforming the system and is pushing for a toothless integrity commission on purpose.

Credit – Unsplash

Four recent research papers produced by the Centre for Public Integrity (and media comment which followed) have demonstrated with great clarity the magnitude of political donations, and their effect, particularly in three areas: the resources and energy industry, the property and construction industry, and the unions.  The case made for immediate reform of Commonwealth law in relation to political donations is a very powerful one, as well as having impact on the call for a national integrity commission.

Some $400 million was received by the political parties, mostly by donations, in the period surrounding the 2016 federal election. Large political donations are usually bribes, either to gain access and influence to exert pressure, or less often for a direct “quid pro quo”.

The obvious argument against political donations is that it is critical for public trust in democracy that impartiality in government decision-making not only exist, but be seen to exist.  Many (such as Andrew Wilkie) assert that “favour for favour” goes on every day in the Commonwealth Parliament. The fact that donations regularly peak at election times demonstrates that the donors believe that their donations (bribes) are effective; and for the parties receiving these donations, the impulse to repay the favour must be intense – without a return the donations will cease.

Current disclosure regulations allow the majority of political donations to be hidden, with the threshold for reporting set at $14,300, and no aggregation of multiple donations.  Donations are inadequately defined (e.g. attendance at party fundraisers is not currently categorised as a gift). And donations above the cap, and disclosed, are only made public in the following year and may remain hidden for up to 18 months.

Reform of political donations would be comparatively straightforward. There should be a reduction in the reporting threshold for donations, with individual donations being limited to $1,000, and aggregated donations over three years to political parties, candidates, associated entities, third parties and political campaigners being limited to $3,000, and all required to be disclosed immediately.

All parties in Parliament, other than the Coalition, support reforms. The Coalition does not, and has made no move to legislate for such reforms. Why? Well, the Coalition is by far the largest recipient of such donations.

The Coalition Government is being completely consistent in opposing any such reforms. It is taking a similar approach to its plans for a Commonwealth Integrity Commission. As  proposed by the Attorney-General Christian Porter, the CIC is divided into two halves.

The stronger half consists of a law enforcement division, covering groups of bodies such as the Australian Federal Police and the Border Force, whose functions are concerned with law enforcement.  The weaker half covers the remaining public sector, including parliamentarians and their staff.  There is no obvious reason for the absence of the stronger investigatory powers in dealing with the public sector and parliamentarians, suggesting that the intention is to give added protection to parliamentarians.

If a question were to arise as to the integrity or otherwise of a ministerial action – say, in exercising a discretion as to the making of a grant – that decision would be almost impossible to investigate under the CIC if it is enacted in its current form.

The weaker half of the CIC may not start an investigation unless there is a reasonable suspicion of criminal activity of a particular kind.  As the Prime Minister, and others in his Cabinet, repeatedly asserted after the Sports Rorts were exposed, there was no criminality or misbehaviour of any kind involved – the minister was simply doing what ministers are supposed to do, making discretionary decisions in the interest of the public.

It was only because the Australian National Audit Office investigated, and issues such as the multi-coloured board were exposed, that the public became aware of what had happened. The ANAO’s funding has since been further cut. The fact that a minister decides to make a grant to a particular person or body will usually not have any obvious characteristic that might demonstrate any criminality or absence of integrity, and the grant would be beyond the CIC’s jurisdiction.

The Coalition maintains a strong resistance to transparency and accountability.  It does not want ministers’ actions to be open to public examination for scrutiny as to their integrity.  The CIC model, unless dramatically changed, will not permit any investigation of the Coalition’s returning of favour for favour; nor the revolving door movement of ministers and public servants into private industry.  And the CIC would not permit any investigation of electoral donations, unless a donor is so foolish as to arrive with a brown paper bag filled with cash. Even that may not be enough to start an investigation.

All of this leaves our Coalition government open to a series of hard questions, and its reputation for integrity very much in issue.

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