KIM WINGEREI. Political Donations is a Scourge on Democracy

Despite the many rules in place to regulate it, donations remain a scourge on our democracy. The ill conceived ‘Funding and Disclosure’ bill is stalled in the Senate. What we need are simple regulations or maybe even banning political donations altogether.

In a previous post I argued for the banning of all political donations. It is a simple solution to the vexing problem of how to avoid politicians being swayed by their pecuniary interests.

The ‘Electoral Funding and Disclosure Reform Bill’, introduced to Parliament in December 2017, is anything but simple, which is one of the reasons it is currently stalled in the Senate. It is an excruciatingly complex bill that still doesn’t achieve its intended purpose – curbing foreign donations to political parties. (See Marian Sawer’s and Joan Staples’ on these pages for more details.)

One of the main criticisms of the bill is that it is not confined to parties or representatives, but attempts to throw a wider net that also covers charities and advocacy groups such as GetUp. Knowing how our current ‘liberal’ government is waging war against all opinions not their own, the inclusion of the latter an obvious intended consequence. (How charities got caught up in it is beyond me, so obviously ridiculous not even worth discussing.)

This bill, and others currently before the Parliament – such as the proposed amendments to the ‘Espionage and Foreign Interference Bill’ – are knee-jerk reactions to the Sam Dastyari debacle of last year and the other revelations about Chinese interference into our affairs. And indirectly the ongoing investigations in the US about Russian meddling in the election of Trump.

It all misses the point. The Funding and Disclosure Bill and other such proposed regulations are focused more on the donor than the recipient. But donors are not the main problem, nor where they come from. The recipients of donations is where the focus needs to be. Specifically donations to elected representatives and their parties. They are the ones open to being compromised which is what we want to avoid.

The Chinese Government, Vladimir Putin, and for that matter Donald Trump and Malcolm Turnbull, all have it within their remit to exert influence. So does Gina Rinehart when she wants to hand a fat cheque to Barnaby Joyce (under the disguise of a ‘farmers prize’); and so does any Gold Coast real estate developer bringing a bag of cash to the Mayors office (hypothetically speaking, of course).

Once upon a time in my early business career I was told by a consultant to a big contract I tried to close that all I needed to do was to contribute to his new yacht and the deal was mine. I could have, and thus been corrupt. I didn’t and lost the deal with my integrity intact.

I am not for a moment suggesting that the actions of the Chinese or the Russians or some business people or consultants are OK. As far as the latter goes, attempted bribery is a crime, it becomes corruption when the recipient accepts the bribe.

And the same goes for political donations. I don’t begrudge Gina Rinehart wanting to spend her money, but if it is not even an option for her to donate to a party or a favourite politician, she won’t. And if it is done covertly it’s a bribe and a crime. I would imagine including illegal donations would be a relatively minor amendment to existing bribery and corruption legislation.

There is, of course, a reasonable argument for allowing ‘general’ political donations, much of which is no doubt given without ulterior motives. Former Liberal leader John Hewson and others have long argued for limiting donations to individuals only. An idea with considerable merit as long as it also caps them (to an amount well below what billionaires would consider loose change). But even then, regulation wold be required for the necessary public scrutiny and to avoid multiple donations below the threshold.

The other argument for political donations is that they help to fund the political parties in general, and elections in particular. Both the Liberals and Labour are $100 million dollar enterprises that rely on donations – witness the unsavoury fight over the Cormack Foundation in Victoria to see just how desperately they rely on it – and thus they would fight hard against the abolishment of donations. Just as hard as they resist a federal corruption watchdog, another common sense reform long overdue.

Public funding of the 2016 federal election was $53 million, roughly one third of the total cost of that election. I would argue that in our very affluent country we can afford for the costs of elections to be paid in full by the public purse. It’s a small price to pay for having qualified candidates and representatives freed from funding worries and the potential risk of inducement that comes with it.

The only other alternative to banning political donations (and inducements of any kind) is to mandate immediate (real-time) and full public disclosure; not the mismatch of rules and regulations that exist today (such as the arbitrary $13,500 disclosure threshold for donations, but not 2 x $13,499). The best regulation is almost always to keep it simple, and it is also time the Australian Electoral Commission was told to enter the digital age and modernise its archaic operations.

In my book – “Why Democracy is Broken – A Blueprint for Change” – I propose a new model of democracy where the role of the political party is effectively removed from its current role as the unwanted middle-man between the voters and their representatives. In that scenario the political parties become more like advocacy groups – an important function in a modern democracy.

Advocacy groups, including ‘think tanks’ and other such forums, are cradles of ideas, arenas for fresh thinking and avenues for championing causes. Their role is paramount to an open, dynamic democracy where public debate is welcomed, not shackled by the narrow and adversarial prism of self-centered partisanship.

Advocacy groups must by definition be independent of the public purse and as such free to fund themselves, including from donations. We need more open debate in this country, advocacy groups help serve that purpose; hence channeling donations towards them away from political parties serves democracy. The Gina Rinehart’s of this world are free to set up and fund their own groups, as they do; and in that context I also have no problem with Xi Jinping establishing  a propaganda unit in Canberra. As long as it is open and transparent and adhering to Australian law; and doesn’t donate to politicians (or any government officials for that matter).

Mr Xi may even learn a thing or two about true democracy. Or he’ll tire of the lack of influence he’ll have when everything is in the open. Fact is, this whole debate is all about transparency.

 Kim Wingerei is a former business man, turned blogger and author. His first non-fiction book: “Why Democracy is Broken – A Blueprint for Change’’ is now available.

Follow @ kimwingerei.com

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4 Responses to KIM WINGEREI. Political Donations is a Scourge on Democracy

  1. Kien Choong says:

    Hi, are there any other countries (being electoral democracies) that ban political donations? Just wondering.

    The Espionage and Foreign Interference Bill seems to define “national security” so broadly that it covers not just the defence of the country and its territorial integrity, but also “the country’s political, military or economic relations with another country or other countries” .

    Just to illustrate how broad (and potentially arbitrary and controversial) “political, military or economic relations with another country” is:

    (i) suppose the government of the day decides to recognise Palestine as an independent State. Then does it mean any lobbying against that position prejudices Australia’s “national security”?

    (ii) suppose instead the government of the day decides to recognise Jerusalem as the capital of Israel. Then would any lobbying against that position prejudices Australia’s “national security”?

    If it is really that broad, then I wonder about the constitutional legitimacy of the Espionage and Foreign Interference Bill. As I understand it, the High Court has held that the Commonwealth Constitution has an implied freedom of political communication. Wouldn’t the Espionage and Foreign Interference Bill stifle public debate about such issues as whether Australia should recognise Palestine as an independent state, or whether Australia should recognise Jerusalem as the capital of Israel? Wouldn’t it stifle debate about Australia’s alliance with the United States – e.g., whether the alliance has in practice led Australia to enter into illegal wars and conflicts?

    If the Espionage and Foreign Interference Bill becomes law, would the defence/security establishment in Australia effectively dictate what Australia’s “national security” is? Is that not just unconstitutional, but harmful to Australia’s democracy?

    I’m not sure that this concern is dealt with by simply imposing an obligation to register as being an agent of foreign influence, but not prohibiting debate outright. If the obligation to register is asymmetrical (e.g., only proponents of recognising Jerusalem as Israel’s capital must register, but opponents need not, or vice versa), then it biases the political debate in a particular way.

  2. Malcolm Crout says:

    The current bill is a crock and seeks to stifle the likes of GetUp and the Australian Institute among others. Why does CEDA and The IPA get the taxation donation benefits of a charity I always wonder?
    I agree that political donations of any kind should be outlawed, but we need to do more than this. Politicians should be forced to a five year (at least) period where they are not permitted employment in the private arena. Kill the gold card and partner entitlements and just pat their parliamentary salary (no travel or other entitlements) for five years for doing nothing and then cut off any future benefits. Even the USA are amazed at the never ending benefits enjoyed by the discards of politics and and their partners as well!.
    The private sector that the current Government seem to wish to emulate do exactly this with senior executives, so why not?

    • Kim Wingerei says:

      Agree with removing politicians benefits and also extended “gardening leave”. But more than that, we need to remove the political parties from their role as custodians of democracy and return that role to the elected representatives. We no longer have representatives in parliament, we have party delegates beholden to their party and donors first and second, to the electorate a distant third.

  3. John Doyle says:

    “The risk of inducement” is a pretty grave reality. Look at the millions US representatives receive from wealthy donors and the biased legislation that results. It is now completely dysfunctional and here in Oz we are heading that way. Think tanks are given a leg up for helping influence elections and policy.
    Totally ban all donations and don’t give political think tanks any tax breaks either.

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