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More light needed on the dark arts at the intersection of politics and business

Lobbying was not an issue for Prime Minister Tony Abbott when he was in opposition. AAP/Alan Porritt

Cabinet minister Christopher Pyne has proposed a drastic change in the rules covering political donations. Pyne on Sunday said organisations – including trade unions and corporations - should be banned from giving money; only individuals should be allowed to do so.

Such a move would transform the funding landscape. Liberals calculate that it would hit Labor harder than the conservative side, because of the ALP’s heavy dependence on money from the trade unions.

When the NSW Liberals brought in such a provision, the unions managed to have it struck down by the High Court.

But whatever one thinks of the Pyne proposal (which Malcolm Turnbull also floated some years ago), it’s clear both political donations and the role of lobbyists are becoming big issues in Australian politics, and not just in NSW.

They are also among the more intractable, because scams will be developed to try to get around any reform. Much of the NSW Liberal wrongdoing being exposed was to circumvent toughened regulation. Labor legislation, notably the ban on donations from property developers, is what Liberals now in the gun were avoiding.

The most recent revelations in NSW, embroiling a swathe of Liberals and bringing down premier Barry O'Farrell, have seen his replacement, Mike Baird, promise to do everything needed for a clean-up.

But federally too, action is required - to help shore up state attempts, and also because the increasing trend to commercialisation of political access will almost inevitably end up triggering federal problems.

This commercialisation has brought the intersection between government and business into sharp focus.

The lobbying industry in Canberra has become very extensive and its participants change when the government does. In anticipation of Tony Abbott’s election, its colour turned bright blue, with Coalition ex-staffers recruited, firms re-orienting their structures and new Liberal-leaning entrants appearing.

It’s commonplace now for parties to sell access to politicians, including through high-priced intimate soirees, especially in the run-up to an election.

Business people attending next month’s Liberal federal council in Melbourne (or next year’s Labor national conference) will pay thousands of dollars. In return they will get briefings and the opportunity to chew frontbenchers' ears. Such charges to watch these gatherings were once unheard of.

Donations often grease the wheels of influence and access, yet legislation by the federal Labor government to lower the disclosure level (now more than $12,400) to $1000 and make disclosure more timely was stymied by the Coalition opposition. Obviously those reforms are needed but parties play hardball on anything they think will disadvantage them.

The bids to buy influence in NSW have put new life into the question of whether elections in that state or elsewhere should be entirely publicly funded.

In theory, it might look attractive; in practice it would encourage third-party groups to raise and spend a lot more money, and might run into free speech problems.

The role of lobbyists didn’t seem to worry Tony Abbott in opposition; he rejected pressure from Clive Palmer, then still a member of the Liberal National Party, to curb them.

Suddenly in government it became an Abbott concern. The Prime Minister declared people could be either lobbyists or party officials or not both, which led to the resignation of a number of people from Liberal party posts. Even Liberals think this has not fully dealt with the problem of those with inside political knowledge getting a business break from it.

It’s clear more should be done on a wider front.

There is a federal register of lobbyists but it does not cover those in companies holding the title of “government relations manager” and the like, who seek favours, or some who may dub themselves “strategic consultants” rather than lobbyists. Nor does it give detail of the timing, frequency and nature of representations.

NSW has seen shocking behaviour by some players on both sides of politics. Federal politics has, on the whole, been relatively “clean”. But the Independent Commission Against Corruption revelations are an important warning of what can happen: they reinforce the need for electoral funding changes to make the money trail more transparent, and for the activities of lobbyists, broadly defined, to come under a much brighter legislative spotlight.

Listen to the new Politics with Michelle Grattan podcast with shadow assistant treasurer Andrew Leigh here.

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29 Comments sorted by

  1. Dave Bradley

    logged in via email

    A great understatement! on Thursday Tony shepherd dropped his vicious extremist anti Australian society list of demands on us then on Friday he appeared before the Independent Commission Against Corruption and guess what he suffered the same ICAC virus memory loss symptoms that seem to affect all the liberals as they try to hide their greed and lack of common decency before the people. Just like Arthur Sinodinos and the other High Finance Genius’s of the Liberal party the only things that seem to…

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  2. Dave Bradley

    logged in via email

    We need get a limiting and transparency on funding or maybe a non corruptible funding model with only public money, to avoid going the way of America where it takes up to $30,000,000 for a Senator to run for office and it is inevitable that powerful wealthy lobbies end up with increasing amounts of control, it can only end up corrupting democracy and justice by limiting who we can vote for to those chosen by money and it’s ideology and representing money and it’s ideology. Might as well be voting in Russia or China. Our outcomes are already becoming increasingly limited, and biased. A Government for all the people.

  3. John West

    logged in via email

    Spot on! We have a serious problem. Not only limited to the dysfunctional LNP and the arguably the worst government in Australia's history.
    Unhappy with Labors overall performance and direction, tell them in no uncertain terms!

    Maybe there is a slight chance of drastic internal party reform. If not, the country is going down the tube. It can only get worse with the current crowd on the tiller!

  4. Bart Brighenti


    We also need full transparency of all meetings politicians and public service officials have with the business people.

    1. John West

      logged in via email

      In reply to Bart Brighenti

      "More light needed on the dark arts at the intersection of politics and business".

      Soon Abbott will be replaced, posssibly by Turnbull. What can we expect? More of the same. Backroom deals.


      'Australian people are being denied the quality of essential communication infrastructure'.

      This is what Turnbull's NewsCorp’s Foxtel Fraudband (ex NBN) looks like.
      It is slow, less reliable and less productive.
      Lagging speed, inevitable costly updates, the creation of a digital divide ... There are many questions to be asked about the Coalition's Fraudband plan, but don't expect to get a reply.

    1. Jane Middlemist


      In reply to Peter Ormonde

      Peter, Bart, John, and Dave: thanks for saying what (by me) "oft was thought but ne'er so well expressed".
      Most of the recommendations in the report are about spending by the government (of our money ) while revenue-raising was ignored because it was not in the crafty 'terms of reference'.
      But what made me feel sick was the attempt to demolish the "social contract' which has built Australia into a society of people instead of a grasping, no holds barred, mob - of greedy competitors.

    2. Ron Bowden

      Entropy tragic

      In reply to Jane Middlemist

      I was about to respond to Peter, Jane, because he so succinctly articulated my thoughts.
      But then you added to it and whaddaya know, so did you.
      I've never tried to express these ideas here because no matter how brilliant the concept, which government would implement it to its own perceived disadvantage?

    3. Trevor Kerr


      In reply to Peter Ormonde

      But, but, how will those transnational airfares be funded, Peter? You know, during the campaign the contenders flash from one side of the continent to the other, gutting fish here, firing a captive bolt into a Droughtmaster there, flying a mock jet in the North, then up a cherry-picker in the South.
      No, we should not begrudge Mr Hockey his slush fund. Remember, North Sydney is such a marginal seat he needs all the help he can get. To be perfectly honest, Mr Frydenberg's "This is an absolutely outrageous story" has laid this one to rest. Although, I'm willing to take a small wager that the loathsome ABC will run it as the first question on tonight's QandA. In fact, Tony Jones should be arraigned for "hooliganism motivated by religious hatred".

    4. Doug Melville


      In reply to Peter Ormonde

      One issue that might be addressed is whether if we block political donatios, do we not then just hand over control of our political system to media proprietors?

      Perhaps I am being cycnical, but if parties, or groups of individuals cannot fund their own advertising or media presence, then those that get a massive media presence for free (for example by overt editorial support from a media company with 70% of the newspaper readership in Australia) will have an even greater advantage.

      An interesting and not dissimilar debate is taking place in Scotland in relation to the upcoming independence referenudm with shock horror over the weekend when one newspaper (of 37 published in Scotland), declared it was editorially in support of a 'Yes' vote in the referendum.

      The Platonic ideal of a 'well-informed populace' as one of the pillars of democracy has never been so necessary.

    5. Michael Wahren

      Self employed

      In reply to Trevor Kerr

      It is very simple Trevor, if a candidate feels the need to travel outside their electorate they do so at there own expense.We live under a Westminster system not a presidential US style system (just because the main parties treat as such does not make it right), the PM should be chosen at the first parliamentary sitting day (just because it may be a fait accompli does not make it wrong). Stop the slush funding influences and send the elections back to the people and the individual candidates seeking election on their own merit.

    6. Ron Bowden

      Entropy tragic

      In reply to Doug Melville

      Fair comment and not so cynical - there's plenty of precedent.
      Since media morals are very hard to legislate for, it's a problem. Can't assassinate Murdoch - that would impinge on his right of free speech.

    7. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Trevor Kerr

      Quite right Trevor, 'the age of entitlement is over', and those wealthy cronies who wish to cough up to Joe's slush fund, now will be asked for $30,000. That's only fair, the price has gone up. They have to do some extra lifting, after all, Joe is doing much good work on their behalf, and everyone has to contribute to Joe's ears. Priceless really.

  5. Dave Bradley

    logged in via email

    I suggest all politician incomes expenses and "perks" all be public knowledge, as we pay for them, and I would suggest that their income tax arrangements should be public as a matter of proof of their probity. They say we need to pay more to get a better quality of politician, then I feel we are entitled to proof their character to be able to due diligence on them they are the people we are employing in such powerful and responsible positions to run our country and our lives and the future of our children.

  6. Janeen Harris


    Let's call all this funding what it is. Corruption! Nobody in politics should accept money from vested interests asking for favors. No one sector of the community should have a louder voice simply because they can pay for the time of a public official. Where is the fairness if politicians can take money from individuals but not businesses? Politicians would still be for sale. The issue needs to be addressed for the sake of democracy. Public funded campaigns seem a sensible avenue and then they can all be hobbled into sensible campaigns that avoid lots of the verbal diarrhea.

  7. Margo Saunders

    Public Health Policy Researcher

    Sigh.... campaign financing -- an issue that US public interest groups such as DC-based Common Cause have been working on since I worked there in the glory days of the1970s, when everything seemed bright, shiny and possible, and we issued a report entitled 'How Money Talks in Congress'. It was fairly demoralising to realise that my son, who interned at Common Cause 30 years later, was involved in the same battles on the same issues.
    If, as the politicians claim, most of the money is needed to pay for media advertising, why not limit the advertising? It is my understanding that many European countries restrict political broadcast media advertising specifically to create a level playing field. Surely some model could be developed whereby election-related political broadcast advertising is limited to given time slots as public service announcements, removing the need to buy air time?

  8. David Stein


    Excellent post Michelle.
    Some perspective - despite the huge, mind boggling sums of money spent lobbying in the US, it is considered very good value for money. Not just money well spent, but a vastly superior return on investment than attempting to achieve outcomes in any other way.
    I'm pointing this out to make the point that the scope for a dramatic increase in lobbying in Australia is enormous. The payoff is huge. Taxes saved, markets opened, competition trashed, monopolies created, handouts given.
    It will be an enormous fight to make sure it doesn't get any worse - we will see if things can actually improve. At this rate, the number of ex-Liberals sitting on the cross benches in NSW will soon outnumber the Labor members. If the initiative is not seized now, the moment may well pass.

    1. Dave Bradley

      logged in via email

      In reply to David Stein

      Taxes saved, for the rich at the expense of the poor,markets opened, for the rich at the expense of the poor, competition trashed, for the rich at the expense of the poor,monopolies created, for the rich at the expense of the poor, handouts given, for the rich at the expense of the poor. love the consistent focus.

    2. David Stein


      In reply to Dave Bradley

      Indeed - the only reason lobbies exist is to encourage some sort of wealth transfer. Not all lobbies are bad, mind you - some actually represent the disadvantaged like ACOSS. But they don't have enormous campaign contributions to splash around.

  9. Pat Moore


    That the SMH Mark Kenny story (and thankyou sincerely Mark for some real journalism of principal) is so quickly "now in the hands of lawyers" puffs Joe Hockey, we know that it hit the nail fairly and squarely on the head...and it deserves quoting at length for the light that it shines into those dark corners...."Hockey's centrality to the government has itself become a commodity-a product to sell.....Through vehicles such as the North Sydney Forum the most senior public offices have been quietly…

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    1. John West

      logged in via email

      In reply to Pat Moore

      Well said.

      I am not sure we can call this a democracy anymore.

      Liberal party - supported and parachuted into government by Murdoch.
      National Party - supported and financed by Rinehart.
      PUP - created and financed by Palmer.

      Australia, where you can buy your own political party!
      Come and get it!

    2. David Stein


      In reply to Pat Moore

      The threat of litigation does seem surprising, Pat. Freedom of speech, a robust press, scrutiny of government - all the screaming we heard from the Liberal Party on these issues.
      How can it be defamatory to say access to someone is "for sale" when such access is available for purchase?

    3. James Hill

      Industrial Designer

      In reply to Pat Moore

      And lest some think thatPat is indulging in hyperbole, no less an authority on political Economy than it father adam smith said that those lobbyists have an interest to deceive and oppress the public using all means at their disposal to have governments intervene in the market in their favour.
      And for a strong if not good reason, for as the wealth in the hands of the general community increases interests rates on loans and profits tend to fall.
      Hence Howard's Machiavellian coup convincing his fellow…

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  10. Jeremy Culberg

    Electrical Asset Manager at Power Generation

    My preference is to ban funding from any form of private entity, be it corporation, union or individual (to a political party). If donations are to allowed, disclosure levels must be very low, and reporting should be instantaneous - make all donations pass through the Electoral Commission (as in to donate, you log on to their website, pay the AEC the money, and it is passed through to the relevant registered party / politician). In the same time it takes the electrons to flow across to the nominated account, the AEC could publish the donation to their website - John Doe sent $X to the Laboral party on this date and time.

  11. Alex Fletcher

    retired medical practitioner

    The airwaves are a natural resource so the government has a right to control how that resource is accessed.

    The licensing agreement with public airwaves owners could allow free advertising time for political parties in elections.

    This would have a huge effect in reducing the power of big money and corporations over politicians and government policy.

    This idea was first put to the American Congress by Joseph Stiglitz.

    Congress did not take up his advice, meaning the American politicians like the game as currently played. All the fundraising events, lunches with billionaires and maybe opportunities for kickbacks are just too good to jeopardize.

  12. Michael Shand

    Software Tester

    "Federal politics has, on the whole, been relatively “clean”. " - LOL, if you don't look for corruption at the federal level....turns out you don't find corruption

  13. James Hill

    Industrial Designer

    How much did the Liberals pay to get the support of Murdoch's press?
    A $900 million tax break?