Mike Steketee. Buying favours of politicians.

Oct 1, 2014

You might be interested in this repost. John Menadue


If the staggering evidence before the NSW Independent Commission Against Corruption has taught us anything, then it must surely be to end the charade that democracy can function properly when people are buying favours of politicians, directly or indirectly.

The standard argument that political fund-raising is conducted at arm’s length and that the politicians making decisions are not involved or even aware of who the donors are, no longer has an ounce of credibility. The Chinese wall is rice paper thin.

Geoffrey Watson, SC, a person who does have credibility, arrived at this position a few months ago. The counsel assisting in recent inquiries by ICAC brought up the idea of full public funding of political campaigns. That is, taxpayers would foot the bill and all private donations would be banned.

It seems a radical idea and it may be unattainable in pure form, given the constitutional hurdles. But it also is a logical extension of where the debate about corruption in politics is heading. If politicians so readily and willingly get around NSW laws that they themselves introduced for the purpose of cleaning up their act, or giving the appearance of doing so, and that on paper are the toughest in Australia, then drastic alternatives deserve consideration.

After prosecuting the case against Eddie Obeid, Ian Macdonald and sundry other malefactors with Labor connections, Watson turned his attention to the Liberals. In his opening address for Operation Spicer, he laid out another remarkable saga of politicians rorting the rules to their own advantage. As he put it, “this inquiry will expose the systematic subversion of the electoral funding laws of NSW”.  Watson detailed how the office of Chris Hartcher, who resigned as minister after ICAC launched the investigation, had used front organisations to accept some $165,000 from property developers, who were banned from making political donations and some of who had planning applications before the state government.

He argued that the systemic failure of the system of political funding encouraged and rewarded corruption. “Something must change,” he told the Commission hearing, adding that “the problems caused by election funding are not intractable.” One suggestion that had been floated, he said, was full public funding as a way “to free political decision makers from the insidious effect of improperly motivated donations”. While ICAC was not the place for the debate, he pointed out that the Commission had an arm devoted to corruption prevention, whose experts “would be more than pleased to assist”.

Tony Abbott didn’t think much of the proposal. “At a time when we’re talking about a very tough budget indeed, the idea that we should scrap private fundraising and fund political parties through the taxpayer, I think, would be very, very odd.”

Hello! We’re already doing that. Last year’s federal election cost taxpayers $58 million, calculated on the basis of $2.49 per vote received. Four of the six states also have public funding systems – NSW, Victoria, Queensland and Western Australia – as well as the ACT.

The implication in Abbott’s comment and the assumption of many others is that public funding would have to be increased to fill the gap left by the withdrawal of private donations. Politicians can make that argument if they like, though Abbott obviously doesn’t have the appetite for it. The major parties even could agree on a bipartisan approach and justify it on the need to end the corruption, which is the position that NSW political leaders have taken.

But there also is a clear alternative: restrict spending to the present amount of public funding. It is not as though the taxpayer contribution is parsimonious – given they have a vote for the House of Representatives as well as the Senate and that not all voters pay taxes, taxpayers are contributing well over $5 each to federal elections.

The major parties in particular might complain long and hard about such belt tightening. But what a relief it would be to be spared of much of the largely fact-free deluge of election advertising that soaks up most of the money donated to the major parties. This competition between the parties has turned into an obscene arms race, in which parties feel compelled to spend more and more on advertising just because the other side is doing so, all the while admitting that they may not be getting much return on their investment.

The campaign managers are coming up with ever more far-fetched schemes for raising money, like conducting auctions at fundraisers for private meetings with prime ministers, premiers and ministers, all the while arguing that no favoured treatment ever flows from this. And they wonder why public trust in them keeps falling.

NSW Premier Mike Baird thought Watson’s idea had enough merit to send it off for review. Or perhaps more correctly, he didn’t feel he could dismiss the idea out of hand. He may have been relieved when the head of the panel he appointed – former senior public servant Kerry Schott – said she thought full public funding would fall foul of the High Court. Last year, the court declared invalid the law by the O’Farrell government banning all corporate and union donations on the grounds that it breached the freedom of political communication implied in the Constitution.

Graeme Orr, a law professor at Queensland University and an expert on electoral funding, does not see the High Court as an insuperable barrier. Rather, he says, the court said in last year’s case that the NSW government had not given a proper rationale for the legislation. “The court is really saying we require you to have an evidence-based explanation for these laws that restrict the implied freedom of political communication.”

He believes a system can be designed that could withstand challenge. It would need to allow for some private funding but a low limit could be applied – perhaps $1000 a year – that could not be considered potentially corrupting.

What about fabulously wealthy individuals like Clive Palmer funding their own parties? Caps can be set on campaign expenditure as well as on donations. They already exist in NSW and Queensland, although the Newman government has announced it will abolish them, together with the cap on donations.

There would be complications in implementing a system relying predominantly on public funding. While it may be possible to stop third parties, like trade unions or business lobbies, from donating directly to parties, they could still run their own partisan campaigns. But if the argument against radical reform is that loopholes will emerge, we may as well throw up our hands and give up. As Watson says, “something has to change”.

Mike Steketee is a freelance journalist.

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