tag:theconversation.com,2011:/uk/topics/political-finance-18833/articlesPolitical finance – The Conversation2018-02-02T00:14:55Ztag:theconversation.com,2011:article/910032018-02-02T00:14:55Z2018-02-02T00:14:55ZThe truth about political donations: there is so much we don’t know<figure><img src="https://images.theconversation.com/files/204495/original/file-20180201-123862-b6n55t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">AEC disclosures revealed Malcolm Turnbull to be the single biggest donor to a political party in 2016-17.</span> <span class="attribution"><span class="source">AAP/Dan Peled</span></span></figcaption></figure><p>The big story about the Australian Electoral Commission’s annual release of <a href="http://periodicdisclosures.aec.gov.au/">political donations disclosures</a> is how little they really tell us. Over the last decade, the major parties have routinely only <a href="http://onlinelibrary.wiley.com/doi/10.1111/1467-8500.12283/full">transparently disclosed 10-20%</a> of their incomes as donations.</p>
<p>There is another 20-35% of party incomes that falls into a grey area, where accounting enables them to conceal the source of the money. Then there is another 50-70% of party incomes the public knows absolutely nothing about.</p>
<p>The precise splits for 2016-17 are:</p>
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<p>This situation is able to happen because, federally, Australia has some of the most lax political donations laws in the developed world.</p>
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Read more:
<a href="https://theconversation.com/australia-trails-way-behind-other-nations-in-regulating-political-donations-59597">Australia trails way behind other nations in regulating political donations</a>
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<h2>A system full of holes</h2>
<p>Political parties in Australia at the federal level only have to disclose payments of more than A$13,200. They are requested – but not required – to distinguish between “donations” and “other receipts”. </p>
<p>There are no caps on how much people can give, or who can give. And the disclosures are only released annually, in February each year, with no more than a name and address attached.</p>
<p>This might not sound too bad. But it is actually a system full of holes that can be exploited to hide where parties’ incomes are really coming from.</p>
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Read more:
<a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">Explainer: how does our political donations system work – and is it any good?</a>
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<p>The first problem is what parties declare to be “donations” and what they declare to be “other receipts”. In many cases, parties claim more than half of the payments they receive over the threshold are “other receipts”, even though the payments come as round numbers from those you would expect to be lobbying government.</p>
<p>One <a href="http://www.abc.net.au/news/2016-02-19/%241.7m-of-political-donations-missing-from-party-disclosures/7178228">journalistic analysis</a> found 80 cases where the donor had declared a payment as a donation, only to have the party claim it as an “other receipt”. An <a href="http://www.tandfonline.com/doi/abs/10.1080/10361140802267035?journalCode=cajp20">academic study</a> concluded that most “other receipts” should be treated as donations for analytical purposes. However, there are some legitimate “other receipts”, such as union fees, share dividends, and proceeds from property sales.</p>
<p>There are also some crafty schemes parties use to make donations technically qualify as “other receipts”. They hold fundraising dinners, charging people large sums to attend, then report the payments as a fee for a service rather than a donation.</p>
<p>The second problem is parties using fundraising bodies to effectively “launder” the donations they receive. Donors give money to a fundraising body that then gives it to the party. This makes it difficult to work out where the money originally came from.</p>
<p>The very high disclosure thresholds also enable parties to engage in “donation splitting” – when a large payment is split into smaller amounts and paid to different party branches so each payment comes in under the reporting thresholds. Parties don’t even need to aggregate payments made on different days.</p>
<p>Donors are technically supposed to declare their payments if the combined value of their donations is over the threshold. However, they don’t have to disclose payments to fundraising bodies. And if a donor doesn’t disclose, there’s no way to know if anything is missing. The disclosure laws are notoriously weakly enforced.</p>
<p>Finally, a year’s worth of donations data is released in one huge data dump on one day. Thousands of lines of data are released. The data cannot be meaningfully sorted, or tallies that mean anything easily calculated.</p>
<h2>Who is funding our political process?</h2>
<p>In today’s resource-starved media environment, journalists are reduced to identifying the biggest payment that hasn’t been split or concealed, and attempting to make hay of those unsophisticated enough to have allowed themselves to stand out.</p>
<p>The story fades after a day or two, and the real secrets of who is funding our political process remains buried.</p>
<p>Perhaps the most insidious aspect of the disclosure process is that the payments are only revealed months after they were made. </p>
<p>While small businesses have to pay tax quarterly, and the Australian Tax Office has apps that enable us to collect our receipts in real time, politicians only have to release their accounts annually. This means we only get to see the money that changed hands between stakeholders in the midst of major policy battles months after the issue has disappeared from the headlines.</p>
<p>The annual February festival of lampooning the largest visible donor lulls Australians into a false sense of security that there is a functioning political donations disclosure regime in place. Few realise how ineffective our political donations disclosure regime is, and how badly it is in need of reform.</p><img src="https://counter.theconversation.com/content/91003/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lindy Edwards does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The annual February festival of lampooning the largest visible donor lulls Australians into a false sense of security that there is a functioning political donations disclosure regime in place.Lindy Edwards, Senior Lecturer in Politics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/885672017-12-06T19:19:56Z2017-12-06T19:19:56ZBan on foreign political donations is both too broad and too narrow, and won’t fix our system<figure><img src="https://images.theconversation.com/files/197904/original/file-20171206-31128-1rojv0z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia is among the one-third of countries that allow foreign political donations.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>The government has announced a <a href="https://www.pm.gov.au/media/protecting-australia-foreign-interference">suite of reforms</a> targeting foreign interference and espionage in Australia’s political process. This will include a bill imposing a ban on political donations from foreign bank accounts, non-citizens and foreign entities.</p>
<p>The ban will apply broadly – not just to political parties and parliamentary candidates, but also to trade unions and advocacy groups such as GetUp!.</p>
<p>These proposed reforms <a href="http://www.news.com.au/national/politics/foreign-interference-malcolm-turnbull-launches-fiery-attack-on-sam-dastyari-in-question-time/news-story/36f7732cddf516bd81ce607cc72170bc">follow revelations</a> that Labor senator Sam Dastyari had warned Chinese Communist Party-linked donor Huang Xiangmo that his phone might be tapped by intelligence agencies. Both the Labor and Liberal parties <a href="http://www.abc.net.au/news/2017-06-06/the-labor-party-the-chinese-developer-and-seat-in-nsw-parliament/8593684">have benefited</a> from donations by Huang to the tune of almost A$3 million since 2012.</p>
<p>But it’s not just foreign donations that can skew the system. If the government is serious about restoring faith in our politics and politicians, there’s much more to be done.</p>
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<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/green-groups-and-charities-could-be-collateral-damage-in-governments-foreign-donation-ban-88641">Green groups and charities could be collateral damage in government’s foreign donation ban</a></em></p>
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<h2>Why ban foreign donations?</h2>
<p>The rationale for banning foreign donations is to stop the threat of foreign interests undermining Australian democracy. The concern is that foreign people or entities could exercise an unduly large influence on our politicians through generous donations.</p>
<p>Internationally, Australia is among the <a href="https://theconversation.com/factcheck-qanda-is-australia-one-of-the-few-countries-worldwide-to-accept-foreign-political-donations-65343">one-third</a> of countries that allow foreign political donations. This is in contrast to comparable liberal democracies that ban foreign donations, such as the <a href="https://www.idea.int/data-tools/country-view/137/55">UK</a>, <a href="https://www.idea.int/data-tools/country-view/295/55">US</a> and <a href="https://www.idea.int/data-tools/country-view/74/55">Canada</a>. New Zealand caps them at NZ$1,500.</p>
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<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/factcheck-qanda-is-australia-one-of-the-few-countries-worldwide-to-accept-foreign-political-donations-65343">FactCheck Q&A: Is Australia one of the few countries worldwide to accept foreign political donations?</a></em></p>
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<p>Banning foreign donations will certainly reduce the ability of foreign people and entities to influence Australian policy and decision-making. In turn, this will reduce both actual corruption and the perception of corruption in politics. Ultimately, this may improve public confidence in the Australian political system. </p>
<h2>But is this ban too broad?</h2>
<p>The proposed reforms follow the recommendations of a <a href="http://parlinfo.aph.gov.au/parlInfo/download/committees/reportjnt/024053/toc_pdf/Secondinterimreportontheinquiryintotheconductofthe2016federalelectionForeignDonations.pdf;fileType=application%2Fpdf">Senate committee majority</a> that foreign citizens and entities be banned from making donations to political parties, associated entities (such as trade unions and dedicated fundraising bodies), and third parties (such as GetUp! and other campaign groups).</p>
<p>Labor and the Greens supported a ban on foreign political donations to political parties and their associated entities, but rejected extending it to third parties. They argued that banning foreign donations to third parties would restrict the capacity of NGOs to draw attention to their causes, and endanger robust public discourse by civil society.</p>
<p>There may be <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">constitutional issues</a> with such a broad ban on foreign political donations. For instance, banning donations to advocacy groups may be found to stifle the implied freedom of political communication protected by the Australian Constitution. </p>
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<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">Banning foreign political donations won’t fix all that ails our system</a></em></p>
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<p>Advocacy groups are one step removed from being able to directly change government policies and decision-making. It may be disproportionate to ban these groups from raising funds to robustly debate controversial policies.</p>
<h2>And will this fix the system?</h2>
<p>If ruled constitutional, a ban will certainly reduce the impact of overseas interests on domestic policy. </p>
<p>But the proposed ban is both too broad and too narrow. It is too broad because it may stifle legitimate public debate by targeting activist groups. It is too narrow because it does not capture all donations that might corrupt our political system.</p>
<p>Foreign donations are but one element of influence in our political system. The rhetoric on donations to date has focused on the fear of foreigners – the Chinese, in this case – exercising undue influence on Australian politics. </p>
<p>Yet, in 2015-16, foreign donations were a paltry 2.6% of total donations to political parties. In the last seven election periods from 1998-99 to 2016, foreign donations have <a href="http://insidestory.org.au/taking-xenophobia-out-of-the-political-donation-debate/">amounted to</a> between 0.03% and 6.13% of all donations.</p>
<p>Donations from rich Australians, unions or corporations can also influence our politicians to behave in corrupt ways. There <a href="http://www.smh.com.au/federal-politics/political-news/political-donations-are-an-unregulated-arms-race-senate-committee-told-20171102-gzda0o.html">have been concerns</a> over donations by big business influencing mining, alcohol or gambling policy. Large donations have been followed by government decision-making that benefited these industries. </p>
<p>Caps on political donations of, say, A$1,000 that apply to all individuals, unions and corporations would better level the playing field. New South Wales <a href="http://www.elections.nsw.gov.au/fd/political_donations">already has caps</a> on political donations of A$5,800 per party and A$2,500 for candidates. The state also bans donations from property developers and those in the tobacco, liquor and gambling industries.</p>
<p>Victoria <a href="https://theconversation.com/victoria-gets-serious-on-its-political-donations-rules-now-its-the-federal-governments-turn-84265">has announced</a> that it will implement a cap on donations by individuals, unions and corporations of $4,000 over a four-year parliamentary term.</p>
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<p><em><strong>Further reading:</strong> <a href="https://theconversation.com/victoria-gets-serious-on-its-political-donations-rules-now-its-the-federal-governments-turn-84265">Victoria gets serious on its political donations rules – now it’s the federal government’s turn</a></em></p>
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<p>The Australian government has started to take action to reduce the pernicious influence of money on our democracy. But more needs to be done to restore faith in our political system.</p><img src="https://counter.theconversation.com/content/88567/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If the government is serious about restoring faith in our politics and politicians, there’s much more to be done beyond banning foreign donations.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/842652017-09-20T02:52:48Z2017-09-20T02:52:48ZVictoria gets serious on its political donations rules – now it’s the federal government’s turn<figure><img src="https://images.theconversation.com/files/186683/original/file-20170919-22691-1bdcijx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Andrews government's proposed reforms will significantly improve Victoria’s donations system.</span> <span class="attribution"><span class="source">AAP/Mal Fairclough</span></span></figcaption></figure><p>Victorian Premier Daniel Andrews <a href="http://www.abc.net.au/news/2017-09-18/victoria-to-introduce-new-political-donation-reforms/8956102">has announced</a> a suite of reforms to the state’s political donations system. It includes:</p>
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<li><p>a cap on donations by individuals, unions and corporations of A$4,000 over a four-year parliamentary term;</p></li>
<li><p>public disclosure of donations above $1,000;</p></li>
<li><p>a ban on foreign donations; and </p></li>
<li><p>real-time disclosure of donations. </p></li>
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<p>Harsh penalties will be imposed on those who breach the rules, with fines of up to $44,000 and two years in jail.</p>
<p>These proposals follow several dubious events, including Liberal Party fundraiser Barrie Macmillan <a href="http://www.abc.net.au/news/2017-08-09/liberal-insiders-plot-to-deliver-donations-to-matthew-guy/8787118">allegedly seeking</a> to funnel donations from a mafia boss to the party after Opposition Leader Matthew Guy enjoyed a lobster dinner with the mafia leader. </p>
<p>According to Andrews, these changes are <a href="http://www.premier.vic.gov.au/victoria-to-have-nations-strictest-donation-laws/">intended to</a>:</p>
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<p>… help put an end to individuals and corporations attempting to buy influence in Victorian politics.</p>
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<h2>Are these reforms good?</h2>
<p>The proposed reforms will significantly improve Victoria’s donations system. </p>
<p>The caps on donations will level the playing field and reduce the risk of corruption in the state’s political system. It will prevent rich donors from exerting greater influence over politicians than those who lack the means to do so. Parties will no longer be able to rely on these wealthy donors to fund their election campaigns. </p>
<p>The caps equally target individuals, unions and corporations, meaning that money cannot be channelled through shady corporate structures to evade the rules. However, donations can still be channelled through the federal level, where there are no caps. </p>
<p>Real-time disclosures, which have already been <a href="http://statements.qld.gov.au/Statement/2017/2/23/palaszczuk-government-delivers-realtime-donation-disclosure">introduced in Queensland</a>, will improve the timeliness of disclosures. Combined with the lower disclosure threshold of $1,000, these are commendable steps towards enhancing transparency. </p>
<p>The move to ban foreign donations may face <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">constitutional issues</a>.</p>
<p>The tough penalties may deter people from breaching the rules. But proper enforcement by the Victorian Electoral Commission is still essential for the laws to be effective.</p>
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<p><em><strong>Further reading: <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">Banning foreign political donations won’t fix all that ails our system</a></strong></em></p>
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<h2>How will elections be funded?</h2>
<p>Election campaigns are currently funded by a mix of public funding and private donations. As there will be caps on private donations, public funding of Victorian elections from taxpayers’ pockets will need to increase. </p>
<p>There will be debate as to the level of public funding that should be given. Public funding should adequately compensate parties, but not be overly generous or allow them to rort the system.</p>
<p>Detractors may argue that, in the age of social media, there may be cheaper ways for political parties to get their messages across, so less public funding would be needed. </p>
<p>It is tricky to work out how to allocate public funding between established political parties, minor parties and new parties. There is also a question of whether public funding should cover activities such as policy development and party administration.</p>
<p>But public funding is already part of Australia’s system. In the <a href="http://australianpolitics.com/2016/08/17/election-funding-payments-2016.html">2016 federal election</a>, $62.8 million of public funding was provided, which is about half of federal campaign costs.</p>
<p>Victoria’s move toward more public funding is not unprecedented. New South Wales <a href="http://www.elections.nsw.gov.au/fd/political_donations">already has caps</a> on political donations of $5,800 per party and $2,500 for candidates, as well as a ban on donations from property developers and those in the tobacco, liquor and gambling industries. This was accompanied by an increase in public funding of elections, <a href="http://insidestory.org.au/why-we-need-full-public-funding-of-election-campaigns/">amounting to</a> about 80% of campaign costs.</p>
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<p><em><strong>Further reading: <a href="https://theconversation.com/nsw-is-introducing-full-public-funding-of-major-political-parties-by-stealth-33028">NSW is introducing full public funding of major political parties – by stealth</a></strong></em></p>
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<p>In Europe and Canada, there are <a href="http://insidestory.org.au/why-we-need-full-public-funding-of-election-campaigns/">high levels</a> of public funding: between 50% and 90% of costs. </p>
<p>Another worry is that enterprising people and businesses might still circumvent the rules through creative means. </p>
<p>In the US, <a href="https://theconversation.com/us-election-what-are-super-pacs-and-what-role-does-money-play-in-the-race-65559">super PACs</a> (political action committees) are special interest groups involved in fundraising and campaigning that are not officially affiliated with political parties. These groups can raise unlimited sums of money from corporations, unions, associations and individuals, and then spend this money to overtly advocate for or against political candidates.</p>
<p>If this possibility is not regulated in Australian jurisdictions, then our system will remain broken. </p>
<h2>How can we improve our national system?</h2>
<p>Australia’s political donations system <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">remains fragmented</a>. Ideally, we would have a uniform system with tough rules at both the federal and state levels, so that donors cannot easily evade the rules by channelling their money through more lax jurisdictions. </p>
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<p><em><strong>Further reading: <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">Explainer: how does our political donations system work – and is it any good?</a></strong></em></p>
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<p>The time is ripe for reform. A federal parliamentary committee is <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Political_Influence_of_Donations">looking into</a> how to improve the federal donations rules. The committee will issue its report by December 2017. </p>
<p>Victoria has thrown down the gauntlet – and it’s now time for the federal government to take heed.</p><img src="https://counter.theconversation.com/content/84265/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia’s political donations system remains fragmented, but proposed reforms in Victoria are a good step forward.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/818212017-08-01T01:07:44Z2017-08-01T01:07:44ZA full ban on political donations would level the playing field – but is it the best approach?<figure><img src="https://images.theconversation.com/files/180361/original/file-20170731-5295-wobin7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sam Dastyari was the Labor Party's chief fundraiser in New South Wales from 2010 to 2013.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>Labor senator Sam Dastyari <a href="http://www.abc.net.au/news/2017-07-31/senator-sam-dastyari-calls-for-ban-on-political-donations/8731048">has called</a> for a full ban on all political donations from individuals and corporations. Dastyari is no stranger to this issue: he was <a href="https://theconversation.com/dastyari-resigns-but-will-labors-proposals-fix-the-political-donations-system-64966">forced to resign</a> from the shadow frontbench in 2016 following revelations that a Chinese company paid his travel expenses. </p>
<p>Opposition Leader Bill Shorten <a href="http://www.sbs.com.au/news/article/2017/07/31/shorten-rejects-dastyaris-call-ban-all-political-donations">has said</a> he is not in favour of Dastyari’s position:</p>
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<p>When it comes to donations, I don’t think the taxpayer is ready to foot the bill for all political expenses in Australia, so I still think there is a role for donations.</p>
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<p>Both Labor and and the Liberal Party are <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">in favour of</a> banning foreign political donations, but not all donations generally. </p>
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<p><em><strong>Further reading: <a href="https://theconversation.com/banning-foreign-political-donations-wont-fix-all-that-ails-our-system-73908">Banning foreign political donations won’t fix all that ails our system</a></strong></em></p>
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<h2>Why ban donations?</h2>
<p>The key issue with political donations is whether large donations secure greater access to politicians than ordinary people have. </p>
<p>Another issue is whether large donations sway politicians to bestow illegitimate favours or adopt policies that directly benefit donors.</p>
<p>Dastyari was the Labor Party’s chief fundraiser in New South Wales from 2010 to 2013. He explained that some donors give money for philanthropic reasons or to support an ideological cause, while those in ethnic communities may donate as a sign of prestige. But he also explained:</p>
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<p>Frankly, some people do it because of that very, very murky world of access. And they want access for outcomes. </p>
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<p>The suggestion is that it’s possible to “buy” political access and influence through political donations. </p>
<p>The managing director of Transfield Holdings, Luca Belgiorno-Nettis, <a href="https://www.theguardian.com/australia-news/2016/may/23/transfield-boss-says-political-donations-bought-access-to-mps?CMP=soc_568">has likened</a> political donations to the Latin saying <em>do ut des</em>: “you give in order to have given back”.</p>
<h2>Where will the money come from?</h2>
<p>Campaigning for election is expensive. To promote their cause, political parties tend to spend big bucks on high-impact slots on TV and radio, travel extensively, and perhaps hire fancy political consultants.</p>
<p>Membership of Australia’s political parties <a href="https://www.crikey.com.au/2013/07/18/the-partys-over-which-clubs-have-the-most-members/">has declined over the years</a>, so they’re now less able to raise money from membership fees. Parties do receive some <a href="http://www.aec.gov.au/parties_and_representatives/public_funding/index.htm">public funding</a>, but not enough to pay for an expensive election campaign. This has led to the parties being very reliant on political donations. </p>
<p>If we ban all donations from individuals and corporations, funding for political campaigns must come from elsewhere. Public funding of elections would need to increase, meaning taxpayers would bear a bigger burden in funding elections.</p>
<p>The current level of federal public funding is about half of what an election campaign costs. In some parts of Europe and in Canada, the level of <a href="https://insidestory.org.au/why-we-need-full-public-funding-of-election-campaigns/">public funding</a> of elections is higher, amounting to between 50% and 90% of costs.</p>
<p>There are challenges in calculating how much public funding should be allocated to parties, including the entitlement of new or micro-parties. </p>
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<p><em><strong>Further reading: <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">Explainer: how does our political donations system work – and is it any good?</a></strong></em></p>
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<h2>Is a ban constitutional?</h2>
<p>Any regulation of political donations needs to be consistent with the Constitution. Australia has a <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1997/25.html?stem=0&synonyms=0&query=lange%20australian%20broadcasting">constitutionally protected</a> freedom to communicate on political matters. </p>
<p>A ban on donations limits political communication by restricting the source of funds available to political parties and candidates to meet the costs of political communication. </p>
<p>The High Court has ruled that any limitations on the freedom of political communication must be proportionate and have a legitimate purpose. Banning donations would seem to have a legitimate purpose: to reduce undue influence on Australian politics and public policy. But it is difficult to predict how the court would rule on proportionality. </p>
<p>The High Court has not previously ruled on a complete ban on political donations, but it <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2015/34.html">has held</a> that caps on donations are constitutional.</p>
<h2>Is this a good idea?</h2>
<p>Dastyari’s proposal would definitely even up the playing field. It would eliminate the perception and reality that rich donors are able to “buy” access or influence in politics.</p>
<p>Besides fully banning donations, another option is to have a low cap on donations of, say, A$1,000. For example, <a href="http://www.elections.nsw.gov.au/fd/political_donations">NSW has a yearly cap</a> of $5,800 per party and $2,500 for candidates. This would also level the playing field and reduce the influence of rich donors. </p>
<p>Dastyari is right: it is time to take action on the murky world of political donations. Let’s hope the government will heed the call for change.</p><img src="https://counter.theconversation.com/content/81821/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If we ban all donations from individuals and corporations, funding for political campaigns must come from elsewhere.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/739082017-03-10T05:28:36Z2017-03-10T05:28:36ZBanning foreign political donations won’t fix all that ails our system<figure><img src="https://images.theconversation.com/files/160247/original/image-20170310-2293-1fjq65j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malcolm Turnbull has foreshadowed changes to Australia's foreign donations laws.
</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>A federal parliamentary committee has today <a href="http://parlinfo.aph.gov.au/parlInfo/download/committees/reportjnt/024053/toc_pdf/Secondinterimreportontheinquiryintotheconductofthe2016federalelectionForeignDonations.pdf;fileType=application%2Fpdf">recommended</a> foreign citizens and entities be banned from making political donations. Such a ban will not apply to dual Australian citizens in Australia or overseas, or to permanent residents. </p>
<p>The report also recommended further investigation into a ban on foreign donations to other political players, such as activist groups like GetUp!. </p>
<p><a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election/Report_1/section?id=committees%2freportjnt%2f024053%2f24544">Labor</a> and <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election/Report_1/section?id=committees%2freportjnt%2f024053%2f24545">the Greens</a> separately produced dissenting reports that supported a ban on foreign political donations, but rejected extending it to activist groups. </p>
<p>Liberal Democrat senator David Leyonhjelm <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election/Report_1/section?id=committees%2freportjnt%2f024053%2f24537">rejected</a> a ban on foreign donations. He claims there is no evidence of a problem specific to foreign donations.</p>
<p>It’s unclear whether such a ban would be compatible with our constitutionally protected freedom of political communication. And banning foreign donations is just one element in the reform Australia’s system desperately needs.</p>
<h2>Why ban foreign donations?</h2>
<p>The rationale for banning foreign donations is to stop the threat of foreign interests undermining Australian democracy. The concern is that foreign people or entities can exercise an unduly large influence on our politicians through generous donations. And we don’t want our politicians beholden to foreign powers at the expense of Australian interests.</p>
<p>Other liberal democracies similar to Australia, like the UK, US and Canada, <a href="https://theconversation.com/factcheck-qanda-is-australia-one-of-the-few-countries-worldwide-to-accept-foreign-political-donations-65343">ban foreign donations</a>. New Zealand caps them at NZ$1,500. </p>
<p>The British laws banning foreign donations were introduced <a href="http://www.telegraph.co.uk/news/politics/conservative/3236088/Funding-scandals-led-to-foreign-donation-law.html">after scandals</a> arising from the government accepting donations from dubious sources. After the Conservative Party refused to send British troops to intervene to stop Serbian atrocities in the Bosnian War, the party received a donation of £18,000 from London associates of the then Serbian leader Slobodan Milosevic.</p>
<p>The Tories also <a href="https://www.theguardian.com/business/2012/aug/22/tories-return-donation-asil-nadir">received £440,000</a> from the fugitive Polly Peck tycoon, Asil Nadir, who fled to northern Cyprus in 1993 after being charged with fraud.</p>
<p>In Australia, the Liberal Party <a href="https://theconversation.com/why-only-now-are-we-finding-out-who-the-biggest-donors-in-an-election-year-were-70482">received</a> major foreign political donations in the last financial year. Hong Kong Kingson Investment and Kingold Group, two companies owned by property billionaire Chau Chak Wing, gave A$700,000 in total. Kingson Investment also gave A$100,000 to Labor. </p>
<p>Yet, in 2015-16, foreign donations were a paltry 2.6% of total donations to political parties. In the last seven election periods from 1998-99 to 2016, foreign donations <a href="http://insidestory.org.au/taking-xenophobia-out-of-the-political-donation-debate">have amounted to</a> between 0.03% to 6.13% of total donations. </p>
<h2>Is a ban constitutional?</h2>
<p>Australia has a <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2015/34.html">constitutionally protected</a> freedom to communicate on political matters. This allows us to make a free and informed choice about who we vote for to represent us in parliament. </p>
<p>Accordingly, the High Court has ruled that any limitations on the freedom of political communication must be proportionate and have a legitimate purpose. So, any ban on political donations has to be carefully limited to be compatible with the constitutional freedom of political communication.</p>
<p>A ban on foreign donations clearly limits political communication by restricting the source of funds available to political parties and candidates to meet the costs of political communication. Banning foreign donations would seem to have a legitimate purpose: to reduce undue foreign influence on Australian politics and public policy. </p>
<p>The bigger issue is whether banning foreign donations is a proportional response to justify limiting freedom of political communication. The High Court has devised a very complex multi-pronged test for assessing proportionality. This includes considering whether:</p>
<ul>
<li><p>there is a rational connection to the purpose of limiting the freedom;</p></li>
<li><p>there is a compelling alternative that is less restrictive; and </p></li>
<li><p>the importance of the purpose served by the law outweighs the extent of the restriction on the freedom. </p></li>
</ul>
<p>It is difficult to predict how the court might rule on this. </p>
<p>The High Court has previously permitted laws that banned donations from a certain class of people. The court <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2015/34.html">has upheld</a> a New South Wales scheme that banned donations from property developers due to the history of corruption in the state. This means it is possible to ban donations from a certain group, such as foreigners, where there is evidence of a serious risk of corruption. </p>
<p>But in this particular case, there was evidence of corruption implicating property developers borne out in <a href="https://www.icac.nsw.gov.au/investigations/past-investigations/investigationdetail/220">several reports</a> by the NSW Independent Commission Against Corruption. It is unclear whether it can be proven there has been corruption in Australia due to foreign donations.</p>
<p>Australia does not have a federal anti-corruption body that has investigated these issues. Also, the proportion of foreign donations in Australia is small. There may not be enough proof that foreigners pose a particular threat to the integrity of the Australian electoral system. This means the High Court may strike down a law banning foreign donations as unconstitutional.</p>
<p>Casting the net too wide and banning all donations from non-citizens, unions and corporations will be unconstitutional. The High Court has <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2013/58.html">struck down</a> a scheme in NSW that only allowed donations from individuals on the electoral roll, thus banning donations from corporations, unions and non-citizens. There was no evidence that donations by non-voters had a greater corrupting influence than other donations.</p>
<h2>What about activist groups?</h2>
<p>A ban on foreign donations to activist groups reduces the ability of these groups to engage in political communication; it decreases their funds to launch political campaigns seeking change in government policy and decision-making. The ban’s purpose would again be to reduce foreign influences on Australia’s political system. </p>
<p>The ban may not be a proportionate response to reducing the influence of foreign interests on domestic policy. </p>
<p>Again, there is unlikely to be evidence that foreigners donating to activist groups corrupts Australia’s electoral system. There is a more tenuous link between activist groups and foreign influence on domestic policy, compared to political parties who are elected to government. </p>
<p>Also, the proportion of foreign donations to activist groups might not be significant. GetUp! <a href="http://www.afr.com/news/politics/foreign-donors-keep-out-of-oz-politics-turnbull-20170201-gu2wdk">receives</a> about 1% of its annual income, and about A$300,000 in the past two years, from foreign sources.</p>
<p>So, a ban on foreign donations to activist groups may not be constitutionally valid.</p>
<h2>Will this fix the system?</h2>
<p>If ruled constitutional, a ban will certainly reduce the impact of overseas interests on domestic policy. </p>
<p>But our system needs more holistic change. For one, the donation rules do not promote <a href="https://theconversation.com/turnbulls-1-75-million-donation-is-bad-news-for-australian-democracy-72358">political equality</a>. Caps on political donations of, say, A$1,000 would better level the playing field, and are more likely to be constitutional. </p>
<p>Donations should be disclosed in real time, rather than once a year. The rules also need to be tightened to eliminate loopholes, like donation-splitting between associated entities. </p>
<p>Governments of all stripes need to do more to reduce the influence of money in our politics and give people a more equal voice in democracy.</p><img src="https://counter.theconversation.com/content/73908/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The rationale for banning foreign donations is to stop the threat of overseas interests undermining Australian democracy.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/723582017-02-02T04:32:21Z2017-02-02T04:32:21ZTurnbull’s $1.75 million donation is bad news for Australian democracy<figure><img src="https://images.theconversation.com/files/155277/original/image-20170202-22560-us9bmw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malcolm Turnbull's donation of $1.75 million to the Liberal Party is the largest single donation in Australian political history. </span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>After some obfuscation, Prime Minister Malcolm Turnbull <a href="http://www.abc.net.au/news/2017-02-01/turnbull-admits-donating-1.75-million-to-election-campaign/8233244">has finally revealed</a> that he made a A$1.75 million donation to the Liberal Party in the lead-up to the 2016 federal election. Turnbull said on the ABC’s 7.30 on Wednesday:</p>
<blockquote>
<p>I’ve always been prepared to put my money where my mouth is. Now, here’s the difference: I put my money into ensuring that we didn’t have a Labor government.</p>
</blockquote>
<p>Labor <a href="http://www.smh.com.au/federal-politics/political-news/labor-accuses-malcolm-turnbull-of-buying-his-way-out-of-trouble-with-175-million-donation-20170201-gu3ifw.html">has accused</a> Turnbull of “buying himself an election”. Labor’s finance spokesman, Jim Chalmers, said:</p>
<blockquote>
<p>I think the Australian people will be shocked by this admission – it stinks. Malcolm Turnbull had to buy his way out of trouble in the dying days of his disastrous election campaign.</p>
</blockquote>
<p>So, how does Turnbull’s donation compare to others? And what does it all mean for Australian democracy?</p>
<h2>Turnbull’s donation in context</h2>
<p>Turnbull’s donation is the largest single donation in Australian political history. </p>
<p>The runners-up for this title are Wotif founder Graeme Wood, who donated $1.6 million to the Greens in 2011, and mining magnate Paul Marks, who donated $1.3 million to the Liberals in 2016.</p>
<p>Ahead of the 2016 election, Immigration Minister Peter Dutton donated $50,000, while Education Minister Simon Birmingham and Finance Minister Mathias Cormann donated $20,000 each. However, The Australian <a href="http://www.theaustralian.com.au/national-affairs/australian-political-donations-disclosed/news-story/b1b5551eb88a3b9ee667ec8ce4add37e">reports</a> that these donations were declared incorrectly and were not personal donations, but donations their local branches collected.</p>
<p>Other major individual donors during the last election campaign were Wood and <a href="http://www.canberratimes.com.au/act-news/greens-benefactor-duncan-turpie-reclusive-highend-gambler-emerges-as-acts-largest-donor-20140909-10csq5.html">Duncan Turpie</a>, a reclusive gambler, who donated $630,000 and $500,000 respectively to the Greens. </p>
<p>Former industry minister Ian Macfarlane, who retired at the last election, contributed almost $70,000 to the Queensland Liberal National Party. Greg Mirabella, husband of former Liberal frontbencher Sophie Mirabella, donated $35,000.</p>
<h2>Implications for democracy</h2>
<p>There are two competing issues about large political donations. </p>
<p>First, there’s the freedom of individuals to express their political preferences, including giving money to political parties they support. This includes prime ministers with a lot of money to spare. They have the freedom to bestow their largesse on their own party. </p>
<p>This has to be counterbalanced with the pernicious influence of money in politics. In the Liberals’ struggling campaign, $1.75 million carefully spent in marginal electorates could have been the difference between winning and losing. Indeed, the Coalition won the election with only a one-seat majority. The question is whether that $1.75 million donation made a difference to the election outcome. </p>
<p>The second issue involves the principle of political equality. We do not want a system where a rich person running for political office has a greater ability to get elected than a poor one.</p>
<p>More broadly, we don’t want individuals who can afford to give large donations to secure greater access to and influence on politicians than ordinary people have. The managing director of Transfield Holdings, Luca Belgiorno-Nettis, <a href="http://www.theguardian.com/australia-news/2016/may/23/transfield-boss-says-political-donations-bought-access-to-mps?CMP=soc_568">has previously likened</a> political donations to the Latin saying <em>do ut des</em>: “You give in order to have given back.”</p>
<p>According to democratic principles, we’re entitled to equal access to political office and representation by our elected representatives. </p>
<h2>How can we fix the system?</h2>
<p>The best solution is to have a yearly cap on donations to each party and candidate of, say, $1,000. <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/efeada1981443/s95a.html">New South Wales</a> has such caps, which the High Court has ruled are constitutionally valid.</p>
<p>With caps for each individual and corporation, we can ensure people do not have a larger voice just because they have a larger wallet. </p>
<p>Obviously, it is not ideal that Turnbull revealed his donation only under political pressure. The current rules don’t legally oblige him to reveal his donation until almost two years after the election, in February 2018. Like <a href="https://www.ecq.qld.gov.au/candidates-and-parties/funding-and-disclosure/disclosure-returns">Queensland</a>, Australia should move to real-time disclosure of donations at the federal level. </p>
<p>Other problems include the way donations disclosures are structured, in allowing donation-splitting and donations through associated entities. It must be hoped the parliamentary committee <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election/Terms_of_Reference">investigating</a> this matter will look holistically at the system and recommend strong reforms. </p>
<p>The struggle for political equality has shaped Australian democracy. But it’s undermined by having a political donations system that benefits the rich at the expense of other Australians.</p>
<hr>
<p><em>Catch up on what the 2015-16 donations data revealed <a href="https://theconversation.com/interactive-a-snapshot-of-political-donations-in-australia-for-2015-16-71998">here</a>.</em></p>
<p><em>This piece was amended to correct Luca Belgiorno-Nettis’ job title.</em></p><img src="https://counter.theconversation.com/content/72358/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The struggle for political equality has shaped Australian democracy. But it’s undermined by having a political donations system that benefits the rich at the expense of other Australians.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/719982017-02-01T02:21:02Z2017-02-01T02:21:02ZInteractive: a snapshot of political donations in Australia for 2015-16<p><em>The Australian Electoral Commission on Wednesday <a href="http://periodicdisclosures.aec.gov.au/">released data</a> showing donations to political parties for the year 2015-16. The interactives below show the total donations to Australia’s major parties, who the biggest donors to the parties were, and how donations to parties have changed in recent years.</em></p>
<p><em>You can read Yee-Fui Ng’s analysis piece on what the donations reveal <a href="http://theconversation.com/who-are-the-big-political-donors-in-the-2016-federal-election-70482">here</a>.</em></p>
<hr>
<p><iframe id="tc-infographic-226" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/226/c269fcda953cfc70a70149869f6b402cf4db38f9/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p><iframe id="tc-infographic-225" class="tc-infographic" height="2000" src="https://cdn.theconversation.com/infographics/225/83e5eb80d020503c896a1bb9c7c0250d23f6ee81/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<iframe src="https://datawrapper.dwcdn.net/iTNGo/2/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="600"></iframe><img src="https://counter.theconversation.com/content/71998/count.gif" alt="The Conversation" width="1" height="1" />
Check out our interactives showing the total donations to Australia’s major parties in 2015-16, who the biggest donors to the parties were, and how donations to parties have changed in recent years.Michael Courts, Deputy Section Editor: Politics + SocietyWes Mountain, Social Media + Visual Storytelling EditorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/704822017-02-01T02:20:57Z2017-02-01T02:20:57ZWhy, only now, are we finding out who the biggest donors in an election year were?<figure><img src="https://images.theconversation.com/files/155070/original/image-20170131-3251-55fwvh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malcolm Turnbull’s rumoured personal donation to the Liberal Party was not disclosed as part of the AEC's donation disclosures for 2015-16.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>The Australian Electoral Commission <a href="http://electiondisclosures.aec.gov.au/">has released</a> disclosures on political donations for the financial year 2015-16.</p>
<p>The <a href="https://www.legislation.gov.au/Details/C2016C01022">Electoral Act</a> requires donors, candidates, political parties and associated entities to give details to the commission about the political donations they received for each financial year. All donations above A$13,000 must be disclosed. Parties and candidates must also disclose the total amount of donations and number of people who donated to them.</p>
<p>So, what do the disclosures for 2015-16 reveal? And is the system in need of further reform?</p>
<hr>
<p><em>You can check out our interactive graphics on the 2015-16 donations data <a href="http://theconversation.com/interactive-a-snapshot-of-political-donations-in-australia-for-2015-16-71998">here</a>.</em></p>
<hr>
<h2>Who were the big donors?</h2>
<p>In the 2015-16 financial year, the Liberal Party received $14.7 million in donations. Labor received $10.4 million. The Greens received $2.9 million. As 2016 was an election year, this is an increase from 2014-15, when the Liberals received $10.4 million and Labor received $7.2 million.</p>
<p>The largest donors for Labor were unions. The Shop, Distributive and Allied Employees’ Association, the Community and Public Sector Union, the Australian Manufacturing Workers’ Union, the Health Services Union, the Construction, Forestry, Mining and Energy Union and United Voice donated a total of $3.7 million across various branches. </p>
<p>Progressive Business, Labor’s fundraising arm, channelled donations worth $400,000 to the party. </p>
<p>The largest donors to the Liberals were mining entrepreneurs and property developers. Mining magnate Paul Marks donated $1.3 million, while Aus Gold Mining donated $460,000. Former Liberal minister Stuart Robert’s alleged involvement in Marks’ business dealings <a href="https://theconversation.com/will-heads-roll-ministerial-standards-and-stuart-robert-54479">led to his resignation</a> from the ministry. </p>
<p>The Cormack Foundation, a Liberal fundraising entity, channelled $2.9 million to the party.</p>
<p>The Liberals also received major foreign political donations. Hong Kong Kingson Investment and Kingold Group, <a href="http://www.smh.com.au/national/chinese-billionaire-funding-our-mps-20090703-d7s9.html">two companies owned</a> by property billionaire Chau Chak Wing, gave $700,000 in total. Kingson Investment also gave $100,000 to Labor.</p>
<p>The Waratah Group, a Chinese-Australian company with mining and property development interests, gave the Liberals $300,000. Pratt Holdings donated $500,000.</p>
<p>Prime Minister Malcolm Turnbull’s <a href="http://www.theage.com.au/federal-politics/political-opinion/swallow-the-money-malcolm-turnbulls-donation-disclosure-delay-is-foolish-and-unconscionable-20170131-gu2rya.html">rumoured personal donation</a> to the Liberal Party was not disclosed. This means it will be yet another year before we know what the donation was. In the last election, donors who donated on July 1 can <a href="http://www.smh.com.au/federal-politics/political-news/loophole-will-allow-donations-made-in-dying-days-of-federal-election-to-stay-secret-20170131-gu2533.html">escape scrutiny</a> for 20 months after the vote.</p>
<p>Wotif founder Graeme Wood donated $630,000 to the Greens. </p>
<h2>What can we learn from the disclosures?</h2>
<p>Disclosures add to transparency. They allow us to follow the money and scrutinise who has made large donations.</p>
<p>But mere disclosure does not remedy the inequity in Australia’s current system. Rich donors can splurge millions on a political party or candidate in the hope of <a href="https://theconversation.com/no-bribes-please-were-corrupt-australians-59657">securing future favours</a> in the form of access or influence on public policy or decisions.</p>
<p>If money indeed does talk, this compromises the principle of political equality by unfairly giving the rich a more prominent voice in our democracy. </p>
<h2>How can we fix the system?</h2>
<p>To entrench equity, the best way to reform the system is to have a yearly cap on donations to each party and candidate of, say, $1,000. There are caps in <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/efeada1981443/s95a.html">New South Wales</a>, which the High Court <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2015/34.html">has ruled</a> as constitutionally valid. </p>
<p>At the very least, the glaring loopholes in the system must be closed. The disclosure threshold of $13,000 is too high and should be reduced. In <a href="https://www.ecq.qld.gov.au/candidates-and-parties/funding-and-disclosure">Queensland</a> and <a href="http://www.elections.nsw.gov.au/fd/political_donations">NSW</a>, donations above $1,000 must be disclosed. </p>
<p>The rules should be tightened so donations can’t be split among associated entities to avoid disclosure. Donors can currently give multiple payments of $12,999 to different branches of a party to escape scrutiny. They can also channel money through associated entities, like unions, think-tanks or party fundraising groups. </p>
<p>Another loophole is that the law does not force parties to accurately classify the funds they receive. </p>
<p>Parties divide the money they receive into “donations” or “other receipts”. Donations are cash and non-cash payments made without enough consideration – that is, transactions not at market value. Everything else is an “other receipt”. Parties <a href="http://www.abc.net.au/news/2016-02-19/$1.7m-of-political-donations-missing-from-party-disclosures/7178228">have previously been found</a> to have wrongly categorised gifts as “other receipts”. So, reported donation figures are lower than the reality. </p>
<p>Disclosures should be published in real time to avoid a large time lag between donations and disclosures. Queensland will <a href="https://www.ecq.qld.gov.au/candidates-and-parties/funding-and-disclosure/disclosure-returns">implement</a> real-time disclosures this month. </p>
<p>And finally, to police the system, a federal body modelled on NSW’s Independent Commission Against Corruption should be introduced. This way, any illegal donations can be thoroughly investigated. </p>
<p>Currently, the regulation of political donations is weak at the federal level. It is time to institute enduring change. </p>
<p>A parliamentary committee <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election/Terms_of_Reference">investigating</a> the political donations regime will report later this year. The government should seize this opportunity to comprehensively reform Australia’s flawed system.</p><img src="https://counter.theconversation.com/content/70482/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Disclosures add to transparency. They allow us to follow the money and scrutinise who has made large donations. But mere disclosure does not remedy the inequity in Australia’s current system.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/650982016-09-12T06:19:49Z2016-09-12T06:19:49ZWhen political self-interest decides donations rules, what chance reform in the public interest?<figure><img src="https://images.theconversation.com/files/137305/original/image-20160912-13363-kek8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malcolm Turnbull has suggested the political donations issue is complex.</span> <span class="attribution"><span class="source">EPA/Made Nagi</span></span></figcaption></figure><p>Amid debate over Labor senator Sam Dastyari accepting A$1,600 from a Chinese company to <a href="http://www.abc.net.au/news/2016-08-31/dastyari-says-he-was-wrong-to-let-china-linked-company-pay-bill/7800930">cover a travel bill</a>, Opposition Leader Bill Shorten last week <a href="https://theconversation.com/dastyari-resigns-but-will-labors-proposals-fix-the-political-donations-system-64966">put forward some proposals</a> to reform Australia’s federal political donations regime.</p>
<p>This was an attempt by Shorten to shift the spotlight from Dastyari’s indefensible conduct onto an issue he knew would capture the attention of the electorate and media. His proposals <a href="http://www.smh.com.au/federal-politics/political-news/labor-steps-up-pressure-on-malcolm-turnbull-over-foreign-political-donations-20160904-gr8drd.html">included the suggestion</a> that the disclosure threshold be lowered from A$13,200 to A$1,000.</p>
<p>But this does not go far enough. The matter that needs urgent attention – one Shorten did not advocate – is the cap that should be placed on all donations from corporations, trade unions, individuals and third-party entities.</p>
<p>A cap at $1,000 would tackle the issues of undue influence and policy capture that <a href="https://theconversation.com/no-bribes-please-were-corrupt-australians-59657">swirl around</a> the current donations regime. To ignore the need for a modest cap places personal and party interests before the public interest, yet again.</p>
<p>However, it was good to hear Shorten admit that much harsher penalties are needed for those who do not comply with political donation laws. This is particularly pleasing because for seven years Shorten <a href="https://www.theguardian.com/australia-news/2015/jul/08/bill-shorten-2007-donation-declaration-updated-within-last-144-hours">failed to declare some donations</a>, including $40,000 from a director of Unibuilt. This money was used to hire his campaign manager when Shorten first stood for parliament, and covered the period February to November 2007.</p>
<p>Shorten’s memory was only jogged a few days prior to his appearance before the trade union royal commission in July 2015. He suffered no penalty because of inadequate disclosure laws.</p>
<p>It will be interesting to see how harsh the penalties for non-compliance will be in the soon-to-be-introduced Labor bill on donations reform.</p>
<h2>But what about the government?</h2>
<p>Prime Minister Malcolm Turnbull <a href="http://www.smh.com.au/federal-politics/political-news/tony-abbott-speaks-out-on-donations-reform-challenges-turnbull-government-20160908-grbo4u.html">has suggested</a> the political donations issue is complex. In relation to third-party entities in particular, it is.</p>
<p>He has also indicated that the Joint Standing Committee on Electoral Matters (JSCEM) should be asked to examine the issue. This is particularly worrying given the disregard the government showed for that <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=em/political%20funding/report.htm">committee’s 2011 report</a> and to the committee process more generally.</p>
<p>The JSCEM issued a 268-page report in 2011 that has proved to be a total waste of taxpayers’ money. Not one of its recommendations has been implemented. This is a disgraceful waste of what is akin to investment in research and development. If any private enterprise experienced the same return on its research and development budget, it would no longer exist.</p>
<p>The JSCEM saga gets worse on two fronts. The first refers to the government’s relatively recent reply to a JSCEM inquiry. The second concerns the committee’s chairpersonship.</p>
<p>The Senate <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/Political_Donations">referred an inquiry</a> into political donations to the JSCEM in October 2015. It was asked, among other things, to inquire into:</p>
<blockquote>
<p>How many of the recommendations made by the Joint Standing Committee on Electoral Matters in its 2011 report … into the funding of political parties and elections campaigns were accepted by government and how may have been implemented?</p>
<p>What factors, if any, are contributing to any delays in implementing the accepted recommendations of the report?</p>
</blockquote>
<p>In light of this direction, the JSCEM wrote to the government in early December 2015 seeking a response. The government replied in the Speaker’s schedule of outstanding responses. It included the following:</p>
<blockquote>
<p>… given the passage of time and the change of government, the government does not intend to respond to the report.</p>
</blockquote>
<p>I have <a href="http://www.johncainfoundation.com.au/come-clean-stopping-the-arms-race-in-political-donations-by-dr-colleen-lewis/">written elsewhere</a> that “this is an unacceptable – some might think disgraceful – response to a key public policy matter”, particularly as political donations policy has the potential to affect most other public policy issues. </p>
<p>Regrettably, the JSCEM saga does not end there. In a little over a year <a href="http://www.johncainfoundation.com.au/come-clean-stopping-the-arms-race-in-political-donations-by-dr-colleen-lewis/">five different people</a> have chaired the committee, with some serving for only a matter of weeks.</p>
<p>This is an unacceptable approach to the formulation, implementation and evaluation of the federal political donations regime. It demonstrates the importance the government places on the committee’s workings.</p>
<p>At the time of writing, we are yet to learn who will chair the newly constituted JSCEM. It could well be a different person, which would bring the number of chairpersons, within a very short period, to six.</p>
<p>If the issues raised here signify the best Australia’s federal politicians can do to reform political donations, the public interest is in peril. The electorate and media need to maintain pressure for meaningful reform, and every reform politicians put forward needs to be motivated solely by the desire to enhance the public interest.</p>
<p>In any well-functioning democracy, the public interest must always take precedence over personal and party interests.</p><img src="https://counter.theconversation.com/content/65098/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span> Dr Colleen Lewis has been a Chief Investigator on two Australian Research Council Grants that examined parliaments and parliamentarians. She is a Director of the non-partisan Accountable Round Table and was commissioned earlier this year by the independent think tank, The John Cain Foundation, to write a paper on political donations. </span></em></p>Every reform politicians suggest for Australia’s political donations regime needs to be motivated solely by the desire to enhance the public interest.Colleen Lewis, Adjunct Professor, National Centre for Australian Studies, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/649662016-09-07T03:04:35Z2016-09-07T03:04:35ZDastyari resigns, but will Labor’s proposals fix the political donations system?<figure><img src="https://images.theconversation.com/files/136826/original/image-20160906-25231-2n9gri.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Labor senator Sam Dastyari admits he 'made a mistake' by accepting money from a Chinese company to cover a travel bill.</span> <span class="attribution"><span class="source">AAP/Dean Lewins</span></span></figcaption></figure><p>Labor senator Sam Dastyari <a href="https://theconversation.com/dastyari-forced-off-frontbench-65048">has resigned</a> his shadow frontbench position after a week-long saga over a Chinese company <a href="http://www.abc.net.au/news/2016-08-31/dastyari-says-he-was-wrong-to-let-china-linked-company-pay-bill/7800930">having covered</a> his travel expenses. This payment led to questions about <a href="http://www.smh.com.au/federal-politics/political-news/sam-dastyari-contradicted-labor-policy-backed-chinas-position-in-sea-dispute-at-event-with-donor-20160831-gr60hv.html">his support</a> for China in the South China Sea dispute in defiance of Labor policy. </p>
<p>These issues have sparked concern about <a href="https://theconversation.com/better-regulation-of-all-political-finance-would-help-control-foreign-donations-64597">foreign political donations</a> and the effect these might have <a href="https://theconversation.com/a-chinese-company-gave-3-6-million-to-labor-while-bidding-for-government-work-and-its-totally-legal-64810">on Australian democracy</a>. The question is whether such donations might lead to politicians being swayed by their foreign benefactors to favour and support foreign policy positions that conflict with Australian interests.</p>
<p>In response to these issues, Labor leader Bill Shorten has <a href="http://foreignaffairs.co.nz/2016/09/06/doorstop-melbourne-tuesday-6-september-2016/">proposed a package of reforms</a> to Australia’s political donations system.</p>
<p>The pernicious influence of money on politics is a problem of political donations more generally, not just from foreign donors. <a href="https://theconversation.com/after-operation-spicer-what-more-needs-to-be-done-to-clean-up-political-donations-in-nsw-64547">Investigations</a> from the New South Wales Independent Commission Against Corruption have shown that politicians have been willing to act corruptly based on donations from local entities, such as property developers, as well.</p>
<h2>What are the problems with the political donations system?</h2>
<p>Australia’s <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">political donations system</a> is fragmented across the country and can be easily evaded. </p>
<p>This is because money can be channelled through different jurisdictions to avoid disclosure. Donations can be made through “associated entities” to disguise the true donors. </p>
<p>Also, donations are published only once a year, long after elections are over and the donations were made. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=818&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=818&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=818&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1028&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1028&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1028&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
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<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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</figure>
<h2>What has Labor proposed?</h2>
<p>First, Labor is looking to ban foreign donations. It also wants to ban anonymous donations of more than A$50. In addition, Labor proposes to reduce the disclosure threshold for corporate donations from the current $13,200 to $1,000. </p>
<p>Labor is also proposing to ban donation splitting, which allows various organisations to provide donations to different branches of political parties and so effectively hide the overall donation and the donor’s identity.</p>
<p>Labor wants real-time reporting of political donations, rather than just disclosure once a year. Queensland <a href="http://statements.qld.gov.au/Statement/2016/7/19/realtime-disclosure-of-political-donations-to-be-introduced-in-qld">has already committed</a> to real-time reporting by the end of the year.</p>
<p>Labor also proposes to link public funding to campaign spending. Candidates with enough first-preference votes <a href="http://www.aec.gov.au/parties_and_representatives/public_funding/index.htm">are allocated</a> a certain amount of public funding for election campaigns. Labor’s proposal will ensure the funding is actually used for the campaign, rather than for other purposes. </p>
<p>Finally, Labor wants to increase penalties for breaches of the rules.</p>
<h2>Will this fix the system?</h2>
<p>Labor’s proposed reforms are definitely a good step forward in terms of transparency and timeliness. </p>
<p>The increased disclosure requirements and ban on donation splitting will allow donors to be more clearly identified. It will also reduce the loopholes in the system that the NSW Liberals have exploited. <a href="http://www.abc.net.au/news/2016-03-24/nsw-liberal-party-disguised-political-donations-free-enterprise/7272446">They used</a> an associated entity, the Free Enterprise Foundation, to disguise donations from donors banned in the state, such as property developers.</p>
<p>Real-time disclosure of political donations is also desirable. It will increase the timeliness of disclosure and allow for public scrutiny at the time of the donation.</p>
<p>A ban on foreign-sourced donations may ease concerns about any undue impact of foreign interests on policy. But any ban must be <a href="https://theconversation.com/better-regulation-of-all-political-finance-would-help-control-foreign-donations-64597">carefully circumscribed</a> to avoid infringing constitutional limitations, such as the <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1997/25.html?stem=0&synonyms=0&query=lange%20australian%20broadcasting">freedom of political communication</a>.</p>
<p>Increasing penalties for a breach may act as a deterrent. But it’s even more important that these breaches are discovered and enforced. It is thus incumbent on the regulators to ensure they regularly monitor and vigilantly prosecute any breaches. </p>
<p>Other potential reform options could be to impose a yearly cap on donations to each party and candidate. For example, <a href="http://www.elections.nsw.gov.au/fd/political_donations">NSW has a yearly cap</a> of $5,800 per party and $2,500 for candidates. This could be combined with an increase in public funding for election campaigns to reduce the reliance on and influence of private political donations. </p>
<p>Australia’s political donations system is out of step with community expectations. The rules are too lax and can be avoided. Labor has made some commendable recommendations for reform and it is now up to the government to heed the call for change.</p><img src="https://counter.theconversation.com/content/64966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The pernicious influence of money on politics is a problem of political donations more generally, not just from foreign donors.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/645972016-09-01T01:46:26Z2016-09-01T01:46:26ZBetter regulation of all political finance would help control foreign donations<figure><img src="https://images.theconversation.com/files/136162/original/image-20160901-30768-6rskev.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Labor senator Sam Dastyari has faced questions over his decision to accept money from a Chinese company to cover travel expenses.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>There is growing controversy surrounding foreign political donations in Australia. Contributions <a href="http://www.smh.com.au/federal-politics/federal-election-2016/chinese-interests-play-an-increasing-role-in-australian-and-political-donations-20160517-goxl8b.html">made by Chinese companies</a> to <a href="http://www.abc.net.au/news/2016-08-21/china-australia-political-donations/7766654">the major parties</a> have received the most attention, recently <a href="http://www.smh.com.au/federal-politics/political-news/foreign-minister-julie-bishops-links-to-chinese-political-donors-20160823-gqzauy.html">through reports</a> of donations made by the Yuhu Group and Chinese billionaire Chau Chak Wing (and his company, Kingson Investment) to the Western Australian Liberal Party.</p>
<p>Foreign Minister Julie Bishop, the most senior federal MP from WA, has <a href="http://www.smh.com.au/federal-politics/political-news/foreign-minister-julie-bishops-links-to-chinese-political-donors-20160823-gqzauy.html">reportedly singled out</a> three key Chinese donors for praise. </p>
<p>And, this week, <a href="http://www.abc.net.au/news/2016-08-31/dastyari-says-he-was-wrong-to-let-china-linked-company-pay-bill/7800930">revelations</a> of the payment by the Top Education Institute, a company with links to the Chinese Communist Party, of Labor senator Sam Dastyari’s travel expenses have also prompted concern. Especially in light of Dastyari having <a href="http://www.smh.com.au/federal-politics/political-news/sam-dastyari-contradicted-labor-policy-backed-chinas-position-in-sea-dispute-at-event-with-donor-20160831-gr60hv.html">contradicted Labor policy</a> in relation to the South China Sea dispute.</p>
<p>Controversies over foreign donations are nothing new. Barely a fortnight before the October 2004 federal election, British Lord Michael Ashcroft <a href="http://www.abc.net.au/worldtoday/content/2006/s1559893.htm">donated A$1 million</a> to the federal Liberal Party. And, earlier this year, <a href="http://www.smh.com.au/national/mafia-advisers-meetings-with-malcolm-turnbull-mps-20160522-gp0slh.html">links</a> between the Italian Calabrian mafia and key Liberal Party MPs – facilitated by political contributions – were exposed.</p>
<p>These incidents have <a href="http://www.abc.net.au/news/2016-08-22/foreign-donations-could-skew-australias-democracy-politicans/7775060">prompted calls</a> for a ban on foreign political donations. Together with the claim that Canada, the UK and US have adopted such a measure, the case for such a ban in Australia seems irresistible.</p>
<p>This, however, puts the cart before the horse. Before we jump straight into “how” we should regulate foreign political donations, two questions need to be answered. First, what is meant by a “foreign” political donation? And why should such donations be better regulated?</p>
<h2>How do we define ‘foreign’?</h2>
<p>There seems to be two understandings of “foreign” in this context: a narrow one that refers to overseas-based donors, and a broad one that extends to all non-citizens, whether or not they are residing overseas.</p>
<p>The “what” connects to the “why”. The concern with overseas-based donors or foreign-sourced donations is one of compliance; enforcement of Australia’s electoral laws overseas is all but impossible.</p>
<p>There is a clear and compelling case here to severely restrict – if not ban – foreign-sourced donations. Queensland has <a href="http://www.austlii.edu.au/au/legis/qld/consol_act/ea1992103/s270.html">banned such donations</a>; the UK has <a href="http://www.legislation.gov.uk/ukpga/2000/41/section/54">done similar</a>.</p>
<p>But what the UK has not done is ban “foreign” political donations in the broad sense – that is, ban donations from all non-citizens. Neither, for that matter, has Canada or the US.</p>
<p><a href="http://www.legislation.gov.uk/ukpga/2000/41/section/54">“Permissible donors”</a> under UK law include companies carrying out business in the UK. In <a href="http://laws.justice.gc.ca/eng/acts/e-2.01/page-43.html%23h-118">Canada</a> and the <a href="https://www.gpo.gov/fdsys/pkg/USCODE-2006-title2/pdf/USCODE-2006-title2-chap14-subchapI-sec441e.pdf">US</a>, permanent residents are not banned from making political donations.</p>
<p>A ban on political donations from all non-citizens would be unconstitutional in Australia; the <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2013/58.html">High Court</a> has previously struck down such a ban. A central part of its reasoning was that non-citizens residing in Australia are entitled to voice their concerns in the political process by virtue of being subject to the laws of the land.</p>
<h2>Why should they be more regulated?</h2>
<p>A blinkered understanding of Australian society seems to inform some calls for a ban on donations from all non-citizens. </p>
<p>Being exclusively focused on Australian citizens, it fails to recognise how our richly multicultural society includes those who are not citizens, notably permanent residents and long-term residents on temporary visas. These people should not be denied their legitimate role in the democratic process.</p>
<p>Worryingly, this understanding sometimes tips into xenophobia; that “foreigners” should have no role in our political process. More specifically, there seems to be a strand of Sinophobia. Fears of the “yellow peril” has formed an undercurrent of the debate over donations from Chinese companies.</p>
<p>The misdiagnosis runs even deeper. A distorted focus on “foreignness” results in a failure to appreciate how “foreign” political donations simply highlight broader problems with how political money is (not) regulated at the federal level.</p>
<p>The absence of caps on political donations and spending – <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/efeada1981443/">like those in New South Wales</a> – has allowed unsavoury fundraising practices <a href="https://theconversation.com/after-operation-spicer-what-more-needs-to-be-done-to-clean-up-political-donations-in-nsw-64547">to thrive</a>. A laissez-faire culture within political parties has left systemic conflicts of interest unaddressed. Both have undermined public confidence in the political process.</p>
<p>Foreign-sourced donations should be banned. But, more importantly, federal political finance laws <a href="https://theconversation.com/eight-ways-to-clean-up-money-in-australian-politics-59453">need broader reform</a> to protect the integrity of Australia’s democracy.</p><img src="https://counter.theconversation.com/content/64597/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joo-Cheong Tham receives funding from the Australian Research Council. He has previously written commissioned reports for the New South Wales Electoral Commission. He is also the Director of the Electoral Regulation Research Network, an initiative sponsored by the Melbourne Law School, New South Wales Electoral Commission and the Victorian Electoral Commission.</span></em></p>What is meant by a ‘foreign’ political donation? And why should such donations be better regulated?Joo-Cheong Tham, Associate Professor, Melbourne Law School, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/645472016-08-30T07:04:39Z2016-08-30T07:04:39ZAfter Operation Spicer, what more needs to be done to clean up political donations in NSW?<figure><img src="https://images.theconversation.com/files/135903/original/image-20160830-28244-1m2hxfv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Former police minister Mike Gallacher is one of a number of current and former MPs to be caught up in Operation Spicer.</span> <span class="attribution"><span class="source">AAP/Joel Carrett</span></span></figcaption></figure><p>The New South Wales Independent Commission Against Corruption (ICAC) has handed down <a href="http://www.icac.nsw.gov.au/docman/investigations/reports-1/4865-investigation-into-nsw-liberal-party-electoral-funding-for-the-2011-state-election-campaign-and-other-matters-operation-spicer/file">its report</a> on illegal political donations from property developers during the 2011 state election, dubbed Operation Spicer. </p>
<p>In Operation Spicer, ICAC investigated allegations that the NSW Liberals used associated entities to disguise donations from donors banned in the state, such as property developers, in exchange for favouring the interests of the donors. The money was channelled back to state campaign coffers. </p>
<h2>What does the report recommend?</h2>
<p>ICAC confirmed the NSW Liberals used two entities, the Free Enterprise Foundation and Eightbyfive, to “launder” banned political donations from developers and channel the money back to the NSW election campaign. </p>
<p>ICAC was hampered by a <a href="http://www.hcourt.gov.au/cases/case_s302-2014">High Court challenge</a> to its jurisdiction, which meant it was unable to make findings of corrupt conduct for breaches of electoral laws. </p>
<p>Nevertheless, ICAC found former Labor MP Joseph Tripodi engaged in serious corrupt conduct. He misused his position as a MP to improperly provide an advantage to property developer Buildev, which wanted to create a fifth coal terminal at the port of Newcastle. Tripodi helped Buildev with this, and leaked confidential government information in the hope he could secure future personal benefit from the company.</p>
<p>ICAC recommended the Director of Public Prosecutions (DPP) charge former energy minister Chris Hartcher for an offence of larceny. ICAC found Hartcher had stolen A$4,000 of donations to the NSW Liberal Party for his own personal use. He had also orchestrated a scheme where banned donations were “laundered” through an entity called Eightbyfive. </p>
<p>ICAC also recommended the DPP prosecute Samantha Brookes, Andrew Cornwell, Tim Gunasinghe, Tim Koelma and Bill Saddington for giving false or misleading evidence to the commission.</p>
<p>ICAC also found nine state MPs acted with the intention of evading election funding laws: Hartcher, Cornwell, Mike Gallacher, Chris Spence, Tim Owen, Garry Edwards, Bart Bassett, Craig Baumann and Darren Webber. It also made similar findings about property developer and former Newcastle lord mayor Jeff McCloy, and former Australian Water Holdings CEO Nick Di Girolamo. </p>
<p>In the hearings, McCloy <a href="http://www.smh.com.au/nsw/i-feel-like-a-walking-atm-newcastle-lord-mayor-jeff-mccloy-admits-giving-tens-of-thousands-of-dollars-to-liberal-candidates-20140813-103plf.html">infamously said</a> he felt like a walking ATM and admitted to ICAC that he made illegal donations by giving envelopes stuffed with $10,000 in cash to three MPs before the 2011 election. He then rather shamelessly <a href="http://www.smh.com.au/nsw/jeff-mccloy-apologises-over-paper-bag-birthday-cake-20141013-1159ko.html">posted photos</a> of himself with a birthday cake shaped as a brown paper bag overflowing with cash.</p>
<h2>What are the issues with the NSW political donations system?</h2>
<p>Operation Spicer is part of a broader problem with NSW’s system of political donations. </p>
<p>Within the span of two years, ICAC has undertaken nine investigations into alleged corrupt conduct by NSW government ministers. The investigations sparked the <a href="http://www.smh.com.au/nsw/nsw-premier-barry-ofarrell-resigns-20140416-36qwv.html">resignation of Barry O’Farrell</a> as premier over a bottle of wine, and caused ten MPs to <a href="http://www.abc.net.au/news/2014-05-02/political-scalps-of-nsw-icac/5427260">resign or leave</a> the Liberal Party. </p>
<p>The scandals have raised questions about political donations and the role of lobbyists. The concern is that money can buy political access or influence. This is amply borne out by ICAC inquiries laying bare that politicians have acted to secure policy benefits for lobbyists or those who have opened their wallets to them.</p>
<p>Although NSW has <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">one of the strongest</a> political donations regimes in Australia, it can be evaded. There are loopholes and inconsistencies in political donations laws across the nation.</p>
<h2>Is this enough to fix our political donations system?</h2>
<p>There are a few necessary ingredients for effective regulation of any political donations system. </p>
<p>The first is the ability to uncover any illegal donations that have occurred. ICAC has done admirably well in bringing to light some shady dealings that would have otherwise been hidden. There is thus a strong case to introduce a federal ICAC, so these issues can be uncovered federally as well. </p>
<p>The next is an effective set of laws to regulate this area. In the wake of these scandals, the NSW government has introduced <a href="http://www.legislation.nsw.gov.au/acts/2014-30.pdf">new legislation</a> regulating lobbyists and tightening political donation rules. But there is still no consistency in political donations laws across Australia.</p>
<p>Just as important is the enforcement of any breaches of law. The NSW Electoral Commission has <a href="https://theconversation.com/electoral-commission-makes-a-stand-on-liberal-breaches-of-nsw-donations-laws-56920">sprung into action</a> and become more active in pursuing breaches of electoral laws. It penalised the Liberal Party for breaching electoral rules <a href="http://www.abc.net.au/news/2016-05-23/electoral-comm-defends-decision-to-withdraw-funding-from-libs/7435900">by withholding</a> $4.4 million in public funding from the party.</p>
<p>The electoral commission has also <a href="http://www.smh.com.au/nsw/icac-former-liberal-mps-forced-to-repay-illegal-donations-20160829-gr3tcv.html">recently issued</a> letters of demand to politicians involved in Operation Spicer to repay the illegal donations. The <a href="http://www.legislation.nsw.gov.au/inforce/27ca53b3-96cb-6b43-f472-a3bac3e2f368/1981-78.pdf">law</a> allows the commission to recover any unlawful donations, and double that amount if the politician knew it was unlawful.</p>
<p>The reforms to date and increased enforcement of breaches of electoral law do improve the NSW system. But we need a more holistic solution to this problem at the federal level to stamp out the corruption in our political system.</p><img src="https://counter.theconversation.com/content/64547/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng has co-written a commissioned report for the New South Wales Electoral Commission on lobbying regulation. </span></em></p>There are a few necessary ingredients for the effective regulation of any political donations system.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/626972016-07-20T02:24:47Z2016-07-20T02:24:47ZQueenslanders will soon see in real-time who’s paying politicians – now Canberra must act<p>At long last, Australia has a government that is prepared to introduce real-time disclosure for political donations. The Queensland government – and independent Speaker Peter Wellington, who has been crucial in <a href="http://www.brisbanetimes.com.au/queensland/peter-wellington-wants-premiers-promised-political-donations-inquiry--now-20160602-gpaenp.html">pushing for the change</a> – deserve praise for this <a href="https://theconversation.com/labors-first-test-putting-integrity-before-politics-in-queensland-37373">long-awaited</a> reform. </p>
<p>The significance of Premier Annastacia Palaszczuk’s <a href="http://statements.qld.gov.au/Statement/2016/7/19/realtime-disclosure-of-political-donations-to-be-introduced-in-qld">promise to implement</a> “an electronic real-time disclosure system” by the beginning of 2017 should not be underestimated. </p>
<p>I have spent many years researching and writing on public sector accountability matters and more recently on Australia’s mismatched <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">nine sets of political donations laws</a>. In my opinion, the introduction of real-time disclosure – already in place <a href="http://www.dpc.nsw.gov.au/__data/assets/pdf_file/0004/167521/Volume_1_-_Final_Report.pdf">in New York and Ontario</a> – is the most important reform in a suite of <a href="https://theconversation.com/eight-ways-to-clean-up-money-in-australian-politics-59453">much-needed political funding reforms</a>.</p>
<p>I say this because it allows the electorate to know, before casting a vote, who has made a donation, how much they have donated, and to whom. The introduction of real-time disclosure will mean that at least Queensland voters will soon be making an informed decision at the ballot box – an informed choice denied to Australian voters on July 2.</p>
<p>If other state and territory governments and the federal government can display the moral courage shown by the Queensland government, it would mark an important first step toward an open political donations system. It may also prove to be an important first step toward addressing the <a href="https://theconversation.com/now-for-the-big-question-who-do-you-trust-to-run-the-country-58723">widening trust deficit</a> between the community and those we entrust with the power to make decisions on behalf of us all.</p>
<p>But as welcome as it is, this reform does not go far enough. What is required – and quickly – is a national approach to how politics is funded in this country. This needs to be accompanied by changes to other key elements of what constitutes a <a href="https://theconversation.com/au/topics/political-donations">political donations</a> regime. </p>
<hr>
<blockquote>
<p>Read more on <a href="https://theconversation.com/au/topics/political-finance-in-australia">political finance in Australia</a>, including an <a href="https://theconversation.com/infographic-a-snapshot-of-political-donations-in-australia-60112">infographic</a> of donations at glance.</p>
</blockquote>
<hr>
<p>These elements include (but are not limited to) the disputed issue of placing a ban on certain types of donors, setting a cap on all donations regardless of their source, and meaningful penalties for those who break the law. Without these reforms, many politicians and the parties to which they belong will continue to game the federated system and to adopt a minimalist approach to the democratic principles of transparency and accountability.</p>
<p>The issue of governments banning donations from particular donors has been <a href="https://www.theguardian.com/australia-news/2016/jun/03/turnbull-restates-belief-in-donations-cap-but-does-not-commit-to-act">widely contested</a>, including in the High Court of Australia. There is a strong possibility that imposing bans could again end up in the High Court. Therefore, it might be prudent, in the short term at least, to settle for placing a cap on all donations.</p>
<p>Restricting donations to a maximum of say $500 or $1000 addresses the possibility of “policy capture”. When this occurs, inappropriate, unfit-for-purpose polices can be implemented. This in turn fuels the perception that those capable of donating considerable sums of money to a political party can, in return, exert inappropriate influence over public policy.</p>
<p>The penalties currently imposed for breaking political donations laws require urgent attention. To be frank, they are totally inadequate. If they are to have a preventive dimension, which is one of the primary reasons sanctions are imposed in the first place, they must be significantly increased.</p>
<p>The federal government should take the lead when it comes to reforming Australia’s political donations laws. Perhaps there is a glimmer of hope that they will act to do so in the near future. Cabinet Secretary Arthur Sinodinos made it clear when <a href="https://theconversation.com/disclose-political-donations-in-real-time-sinodinos-59017">interviewed by Michelle Grattan</a> in May 2016 that he thought political donations should be disclosed in “continuous real time”. As he explained:</p>
<blockquote>
<p>I think the time has come to do that because I think that will be a major step forward in transparency.</p>
</blockquote>
<p>Sinodinos is correct in his assessment. He was also correct when he said that inconsistencies between federal and state laws needed to be examined.</p>
<p>Sinodinos is a senior member of the recently re-elected Coalition government. As such, he is in a position to put in place the mechanisms needed to turn his words into action, including plans to have a national approach to political donations placed on the next <a href="https://www.coag.gov.au/">Council of Australian Governments</a> agenda. </p>
<p>He must also act to have real-time disclosure laws introduced into the federal parliament. If the Queensland government is able to do so by January next year, there is no reason why the federal government cannot do the same. The <a href="http://insidestory.org.au/new-york-where-political-finance-never-sleeps">technology already exists</a> and has for some time to implement a real-time disclosure policy. </p>
<p>What has not existed is the desire to place the public interest before personal and party interests. The Palaszczuk government has just shown it is possible to do so. It will be interesting to see how long it takes the federal government and all other governments around Australia to come to the same decision.</p><img src="https://counter.theconversation.com/content/62697/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Colleen Lewis has previously received funding from the Australian Research Council for research into parliaments and parliamentarians. She is an Adjunct Professor with the National Centre for Australian Studies, Monash University and a Director of the Accountability Round Table. Dr Lewis was recently commissioned to write a report on political funding for The John Cain Foundation. The commission came with no conditions, restrictions or suggestions as to the direction or findings of her research. She has never received any funding from the Palaszczuk Government or been approached by them to undertake any research.</span></em></p>At long last, Australia has a government that is prepared to introduce real-time disclosure for political donations – a crucial change that lets voters make an informed choice at the ballot box.Colleen Lewis, Adjunct Professor, National Centre for Australian Studies, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/596012016-05-31T19:49:37Z2016-05-31T19:49:37ZWhat do businesses get in return for their political donations?<figure><img src="https://images.theconversation.com/files/124527/original/image-20160531-7678-16k9yfc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Politicians often argue lobbying is going to happen anyway, so there's little harm in demanding donations from those seeking their time.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms.</em></p>
<hr>
<p>My surfing companion looked glum. He invested in start-up companies and it had been a bad year.</p>
<p>“I lost more than $200 million this year,” he said.</p>
<p>“That was careless,” I said.</p>
<p>“Yes, my boss thinks so too,” he replied. “But I’ve realised my mistake. I selected companies on the strength of their technology, when I should have picked them based on their relationship to government.”</p>
<p>His companies had crashed and burned while companies with inferior products flourished as government incentive schemes underpinned their take-off.</p>
<h2>Paying for access</h2>
<p>Government schemes and regulation are central to the profitability of many sectors of our economy. Economists Paul Frijiters and Gigi Foster <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2571042">have found</a> the majority of Australia’s rich list made fortunes in sectors such as mining, property development and banking, where success is built on favourable government decisions.</p>
<p>Even industries whose fortunes aren’t as obviously determined by political decisions still need to have strong relationships with government. </p>
<p>Governments often don’t understand the nitty-gritty of the industries they regulate; they need the reality check of talking to people on the ground. And when they’re arbitrating between competing stakeholders, their decisions are shaped by who is in their ear.</p>
<p>Politicians often argue lobbying is going to happen anyway, so there’s little harm in demanding donations from those seeking their time. They argue that as long as they’re collecting small amounts of money from a lot of different players, there isn’t really a problem. And they claim this is a better way of funding election campaigns than calling on the public purse.</p>
<p>Those who disagree argue that the logic of “paying for access” is that people who pay more get better access. The risk, they say, is that big business gets a louder voice than small businesses, communities and ordinary people.</p>
<h2>Not so miscellaneous</h2>
<p>More worryingly, it’s unclear whether access is the only issue. Our political donations disclosure regime is so opaque that we don’t really know who is paying how much and what they get in return. </p>
<p>But the lengths players go to hide donations suggests we should be suspicious. The Liberal Party holds its donors closer to its chest than Labor, so consider this graph of Liberal Party receipts over the last decade.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124422/original/image-20160530-874-7dnax8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>The gap between the top two lines is the money we know nothing about. Laws dictate that only donations of more than <a href="http://www.aec.gov.au/Parties_and_Representatives/public_funding/threshold.htm">A$13,200</a> have to be disclosed, but as the major parties have seven state and territory branches as well as a federal branch, a large donation of, say, A$100,000 can easily be hidden by breaking it into small chunks and giving a portion to each branch.</p>
<p>Second, we have the gap between the “Other receipts” and the “Donations” line. Little information is released publicly about these payments, but it’s supposed to be money the parties receive that is not from donations. </p>
<p>Close examination reveals companies are making payments in this category that are many <a href="http://periodicdisclosures.aec.gov.au/">multiples</a> higher than their declared donations.</p>
<p>In the last ten years, for instance, ANZ Bank has publicly declared that it gives the same donation to each side of politics – A$50,000 to A$100,000 each year. But, in election years, it increases the donation to the Liberals to A$150,000. </p>
<p>But, the “Other receipts” show the total was up to nine times the size of the ANZ’s declared donations. This money flowed much more strongly to the Liberal Party and peaked (almost doubling) in the years crucial decisions were made about financial sector reforms. </p>
<p>These payments may be entirely legitimate, but based on the publicly released information we can’t really tell.</p>
<p>Even declared donations that appear in the bottom (blue) line in the graph above are not transparent. Many of the biggest listed donors are shell organisations, such as the Free Enterprise Foundation, which take payments from companies and then pass that money onto political parties with no names attached, effectively laundering donations.</p>
<h2>Missing transparency</h2>
<p>This lack of transparency makes it hard to speak with certainty about the impact of money politics on government decisions. But looking at the trend lines, we can see worrying signs that suggest donations are used to coax and punish governments for their decisions.</p>
<p>The Rudd government, for instance, received A$85 million on the eve of its first election victory when business was keen to get in its good books. But donations slumped to just A$22 million in the 2009-10 financial year. A drop-off in non-election years is normal, but this drop was extreme and not echoed for the Coalition. </p>
<p>Interestingly, the dip happened while Labor was still flying high in the polls and before the Rudd/Gillard divisions began; it was while Labor was seeking to implement changes to the WorkChoices industrial relations law, banking sector reform and the mining tax.</p>
<p>It was at the end of this same period that the then treasurer, Wayne Swan, published his notorious essay in The Monthly, <a href="https://www.themonthly.com.au/rising-influence-vested-interests-australia-001-wayne-swan-4670">The 0.01 Per Cent: The Rising Influence of Vested Interests in Australia</a>. He argued corporate elites were pouring their considerable wealth into trying to pervert the political process, and that “the rising power of vested interests is undermining our equality and threatening our democracy”.</p>
<p>It’s clear that having a close relationship with government is an important part of business success in Australia, but the precise role of political donations in that relationship is opaque. </p>
<p>The only thing we know for certain is that, in this election campaign, millions of dollars is changing hands, the relationships created by these donations matter, and we don’t know as much about political donations as we should.</p>
<hr>
<p><em>Catch up on <a href="https://theconversation.com/au/topics/political-finance-in-australia">other articles in the series</a>.</em></p><img src="https://counter.theconversation.com/content/59601/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lindy Edwards does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our political donations disclosure regime is so opaque, we don’t really know who’s paying how much and what they get in return. But the lengths players go to hide donations gives cause for suspicion.Lindy Edwards, Senior Lecturer in Politics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/596572016-05-30T20:23:43Z2016-05-30T20:23:43ZNo bribes please, we’re corrupt Australians!<figure><img src="https://images.theconversation.com/files/123302/original/image-20160520-4478-am7qpl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia’s two major political parties are highly dependent on contributions from business by the standards of other rich democracies.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms.</em></p>
<hr>
<p>Attorney-General George Brandis <a href="http://www.theguardian.com/australia-news/2016/mar/04/public-submissions-open-on-proposed-national-anti-corruption-body">recently said</a> that federal public administration in Australia had been:</p>
<blockquote>
<p>… remarkably free of corruption. </p>
</blockquote>
<p>In the narrow sense, Brandis is absolutely right. The purchase of policy in Australia is really, really difficult: Australian politicians and civil servants do not accept bribes. </p>
<p>International surveys bear this out. Australia may have <a href="http://www.abc.net.au/news/2016-01-27/australia-perceived-as-more-corrupt/7118632">slipped a little</a> in Transparency International’s recent rankings, but it’s still near the top. And only very big changes in those numbers are likely to be both statistically and substantively significant.</p>
<p>Corruption is the abuse of the political system. Debates about corruption in Australia <a href="http://www.oup.com.au/titles/academic/social_science/politics/9780199665709">occur at cross-purposes</a> as commentators disagree on what is an abuse of the political system.</p>
<p>In recent decades, <a href="http://www.cambridge.org/ie/academic/subjects/economics/public-economics-and-public-policy/corruption-and-government-causes-consequences-and-reform-2nd-edition?format=PB&isbn=9781107441095">scholars have preferred</a> narrow legalistic definitions of corruption. However, restricting the ambit of corruption exposes a disconnect between legal standards and popular norms, and between the view of the political and business elite and the rest of society. </p>
<p>Australia’s political finance system is corrupt – but not because of bribery, or indeed any substantial quid pro quo. Here’s why.</p>
<h2>Why donate, if not to influence?</h2>
<p>By the standards of other rich democracies, Australia’s two major political parties are <a href="http://www.oup.com.au/titles/academic/social_science/politics/9780199665709">highly dependent</a> on contributions from business. If all this money isn’t buying policy, what’s going on? </p>
<p>On the Liberal Party side, much of it is <a href="http://doras.dcu.ie/608/">still ideological</a>. It gets a lot of <a href="http://doras.dcu.ie/18170/">business money</a>, whether it’s in government or not. These contributors are not trying to gain special access to the system – they believe in free markets and feel flush enough to spend a little money on the general business climate.</p>
<p>Some business donors are naïve. They think donations are legal bribery, but soon find out that politicians like elected office and will run away from anybody trying to make a direct connection between policy and political funding.</p>
<p>Savvy people know that the political finance system is not built on discrete exchanges like bribery. Reciprocal exchanges of money for future special consideration are the <a href="http://www.oup.com.au/titles/academic/social_science/politics/9780199665709">dominant rationale</a> for business donations to Australian politics.</p>
<p>The political reciprocation is unstated, uncertain and unlikely to be simultaneous with the financial contribution. Business money says, softly and subtly but insistently, that, in exchange for small but certain financial benefits, contributing businesses expect to receive special consideration when lobbying. </p>
<p>Regular donations, even small ones, cannot help but oblige a politician to the donor. The biggest donations are small in relation to the value of public decisions to businesses. </p>
<p>Sure, even through reciprocal exchange the chances of getting a decision that would not otherwise be taken are still pretty slim. Nonetheless, any real increase in the chances of winning big is worth it.</p>
<h2>Still an abuse</h2>
<p>The system of reciprocal exchange is an abuse of the political system, because it insinuates private interests where only the public interest should be considered. It is corrupt because government can end up producing private goods instead of public goods.</p>
<p>But this is not bribery. There is no quid pro quo. There is no direct connection and no price on political decisions. </p>
<p>A legalistic definition of corruption protects this corrupt system by exonerating reciprocal exchanges as uncorrupt. </p>
<p>It’s not just the definition that protects this type of corruption; it is the nature of the exchange. It is difficult to deny that reciprocal exchanges exist, but it’s more difficult to identify any particular reciprocal exchange.</p>
<p>Australians should be outraged at much of what is exposed by <a href="http://www.abc.net.au/news/2014-06-05/icac-finds-eddie-obeid-and-joe-tripodi-corrupt/5502106">corruption commissions</a> and <a href="http://www.theage.com.au/interactive/2016/the-bribe-factory/day-1/getting-the-story.html">investigative journalism</a>, but they can rest easy that bribery is not widespread in their country. Nonetheless, Australia is exposed to the corrupting influence of business, perhaps more than in any other rich democracy except the US.</p>
<p>Opening up foundations that mask the identities of donors and their links to parties and politicians and maintaining vigilance against bribery will help. Taking business money out of politics would help a lot more.</p>
<hr>
<p><em>Catch up on other articles in the series <a href="https://theconversation.com/au/topics/political-finance-in-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/59657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Iain McMenamin has received funding from Irish Research Council and has done volunteer work for Transparency International Ireland.</span></em></p>Australia’s political finance system is corrupt – but not because of bribery, or indeed any substantial quid pro quo.Iain McMenamin, Associate Professor of Politics, School of Law and Government, Dublin City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/593662016-05-29T20:59:34Z2016-05-29T20:59:34ZAustralians care about political finance – and they want to see the system tightened<figure><img src="https://images.theconversation.com/files/124060/original/image-20160526-17530-13ywndh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Political finance is an issue where there is a lot of agreement in Australia among people who vote for different parties.</span> <span class="attribution"><span class="source">AAP/Joel Carrett</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms, starting today with an examination of public attitudes.</em></p>
<hr>
<p>Debates around <a href="http://www.smh.com.au/nsw/nsw-liberals-concealed-illegal-donors-before-2011-election-win-20160323-gnpsn6.html">breaches</a> – and reform – of Australia’s system of political finance are usually conducted by elected politicians or party officials, media pundits, or academic experts. </p>
<p>These are people who have easy access to the media, so we get to read or hear their views. So, we know fairly well what they think. We know much less about what ordinary Australians think about how their politics is financed. </p>
<p>Every time there’s a scandal, politicians from unaffected parties talk about the public’s outrage. But how much do people actually care?</p>
<p>In a <a href="http://www.tandfonline.com/doi/abs/10.1080/10361146.2014.989810?#.V0V-o01f1i4">recently published study</a>, I investigated what ordinary Australians think and feel about the financing of politics. This research drew on a survey designed to be broadly representative of the national population. It provides the basis for answering some basic but important questions about public opinion on political finance. </p>
<h2>How much do people care?</h2>
<p>The survey asked:</p>
<blockquote>
<p>How much priority would you like to see your state and the federal government give to reforming political finance laws?</p>
</blockquote>
<p>Just over a third of respondents (34%) thought reform should be a “high priority” for Australian governments. A further 52% considered it a “medium priority”. Only 14% said reforming political finance laws should be a “low priority”. </p>
<p>The survey also asked respondents to rate the current financing system. Is it “broken and needs to be replaced”? Does it have “some problems” that need to be repaired? Or, is it “alright the way it is”?</p>
<p>A small fraction (7%) of respondents were satisfied with the status quo. Most people (73%) were eager to see reform. About 20% thought a root-and-branch upheaval was needed. </p>
<p>Clearly, the public do care about political finance and they see flaws in the current system. But they don’t think there’s a crisis in political finance. Figuratively, a new car is not needed – just a competent mechanic. </p>
<h2>What reforms do people want?</h2>
<p>We can’t expect ordinary people to know the details of political finance laws. But if they are told some facts about current laws, they may have views about the direction reform should take.</p>
<p>With this approach in mind, the survey sought respondents’ views on several mooted reforms, after providing them with details about the federal laws in that area. The results are summarised below:</p>
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<p>Overall, it appears ordinary Australians support tighter regulation of political donations and spending. The vast majority are likely to oppose the idea that regulations should be <a href="https://theconversation.com/power-imbalance-why-we-dont-need-more-third-party-regulation-2304">loosened or removed</a>. </p>
<h2>How much does partisanship matter?</h2>
<p>We might expect that people’s attitudes on political finance issues will reflect their partisan preferences. </p>
<p>We might think, for instance, that a typical Liberal voter worries more about the effects of trade union donations than a typical Labor voter. We might expect Labor supporters to worry more about corporate donations than Liberal voters. And we might expect supporters of minor parties and independents to be most disillusioned with the system – and worried about both corporate and union donations.</p>
<p>To test this hypothesis, I analysed the statistical relationship between respondents’ party preference and their opinions about political financing. I found partisanship is only a weak predictor of respondents’ attitudes.</p>
<p>A better predictor of how ordinary people feel about such matters, including what kinds of reform they would like to see, is the strength of their scepticism about the current system. </p>
<p>Strong critics, irrespective of their preferred party, worry about corporate and union donations. They want radical reform. Weak critics are less worried about donations and, unsurprisingly, less eager for change. </p>
<p>My study shows political finance is an issue where there is a lot of agreement among people who vote for different parties. This is unusual for Australian politics, but such broad agreement on reform by politicians <a href="http://www.abc.net.au/radionational/programs/breakfast/the-crunch:-arthur-sinodinos-and-chris-bowen/7447480">seems unlikely</a> in a hyperpartisan enviroment.</p>
<hr>
<p><em>Catch up on other articles in the series <a href="https://theconversation.com/au/topics/political-finance-in-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/59366/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Zim Nwokora has received funding from the Institute of Public Administration Australia and the Electoral Commission of NSW for academic research on political finance. </span></em></p>Every time there’s a scandal involving political finance, politicians from unaffected parties talk about the public’s outrage. But how much do people actually care?Zim Nwokora, Lecturer in Politics and Policy, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/601122016-05-29T20:59:29Z2016-05-29T20:59:29ZInfographic: a snapshot of political donations in Australia<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=2820&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=2820&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=2820&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=3544&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=3544&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124283/original/image-20160527-869-taf5z1.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=3544&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<hr>
<p><em>Catch up on other articles in the series <a href="https://theconversation.com/au/topics/political-finance-in-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/60112/count.gif" alt="The Conversation" width="1" height="1" />
Who are the major donors to Australia’s big political parties? And what are the rules around disclosure at state and federal level?Reema Rattan, Global Commissioning EditorMichael Courts, Deputy Section Editor: Politics + SocietyEmil Jeyaratnam, Data + Interactives Editor, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/601592016-05-29T20:59:09Z2016-05-29T20:59:09ZExplainer: how does our political donations system work – and is it any good?<figure><img src="https://images.theconversation.com/files/124392/original/image-20160529-888-18dc4o9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia’s system of political donations was the subject of a recent Senate inquiry. </span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p><em>Money makes the world of politics go around and, as recent scandals afflicting both major political parties have shown, keeping it clean isn’t easy. Our <a href="https://theconversation.com/au/topics/political-finance-in-australia">series on Australia’s system of political finance</a> examines its regulation, operation and possible reforms.</em></p>
<hr>
<p>Campaigning for election is an expensive affair. To promote their cause, political parties have to spend big bucks on high-impact slots on television and radio, travel extensively and perhaps hire fancy political consultants.</p>
<p>Membership of Australia’s political parties <a href="http://www.crikey.com.au/2013/07/18/the-partys-over-which-clubs-have-the-most-members/">has declined over the years</a>, so they’re now less able to raise money from membership fees. Parties do receive some <a href="http://www.aec.gov.au/parties_and_representatives/public_funding/index.htm">public funding</a>, but not enough to pay for election campaigns. Instead, they have to bolster their coffers by appealing to the public and corporations to donate funds.</p>
<p>It’s against this backdrop that Australia’s political donations system operates. </p>
<h2>Who can donate?</h2>
<p>At the federal level, all donations above A$13,000 must be <a href="http://www.aec.gov.au/Parties_and_Representatives/financial_disclosure/index.htm">disclosed</a> and disclosures must be made once a year. Anyone can donate any amount they like. </p>
<p><a href="http://periodicdisclosures.aec.gov.au/AnalysisPartyGroup.aspx">In the 2014-15 financial year</a>, $10.4 million was donated to the Liberal Party and $7.2 million to Labor. Major donors included large banks, property developers and mining magnates. </p>
<p>At the state level, Western Australia and South Australia have similar systems; these states require annual disclosure of donations of more than <a href="https://www.elections.wa.gov.au/candidates-and-parties/funding-and-disclosure">$2,300</a> and <a href="http://www.ecsa.sa.gov.au/parties-and-candidates/funding-and-disclosure-for-state-elections">$5,000</a> respectively. </p>
<p>Victoria and Tasmania are the most lax jurisdictions. They do not have donation disclosure rules for state election candidates – parties just have to comply with federal disclosure laws. Political parties that are registered only in Victoria or Tasmania – and not federally – don’t need to disclose anything.</p>
<p>In Victoria, donations from casino and gambling licensees are <a href="http://www.legislation.vic.gov.au/domino/web_notes/ldms/pubstatbook.nsf/f932b66241ecf1b7ca256e92000e23be/3264bf1de203c08aca256e5b00213ffb/$FILE/02-023a.pdf">capped at $50,000</a>. But this law can be sidestepped: it doesn’t stop associated entities of these industries from making unlimited donations.</p>
<p>Queensland and New South Wales have stricter regimes. </p>
<p>In Queensland, <a href="https://www.ecq.qld.gov.au/candidates-and-parties/funding-and-disclosure">donations above $1,000</a> must be disclosed. And political parties must publicly disclose donations twice a year, which is more timely than other jurisdictions. Large donations – totalling $100,000 or more within six months – must be reported to the electoral commission within 14 days. These are published within five days of the disclosure, adding to transparency.</p>
<p>NSW has the <a href="http://www.elections.nsw.gov.au/fd/political_donations">strongest regime</a>: donations of $1,000 or above must be declared once a year. And there’s a yearly cap of $5,800 per party and $2,500 for candidates.</p>
<p>NSW also bans donations by property developers and the tobacco, liquor and gambling industries. In 2015, the <a href="http://eresources.hcourt.gov.au/showCase/2015/HCA/34">High Court ruled</a> that these restrictions don’t infringe the freedom of political communication, as they legitimately aim to reduce the risk or perception of undue influence and corruption. </p>
<p>The ruling may pave the way for other jurisdictions to introduce caps on political donations.</p>
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<img alt="" src="https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=818&fit=crop&dpr=1 600w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=818&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=818&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1028&fit=crop&dpr=1 754w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1028&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/124264/original/image-20160527-22060-18lwblv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1028&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<h2>Good for democracy?</h2>
<p>Any regulation of political donations has to balance two competing interests.</p>
<p>First, there’s the freedom of individuals and corporations to express their political preferences, including giving money to political parties they support. </p>
<p>This has to be counterbalanced with the pernicious influence of money in politics. The key here is whether large political donations secure greater access to politicians than ordinary people have. </p>
<p>Another issue is whether large donations sway politicians to bestow illegitimate favours or adopt policies that directly benefit donors. </p>
<p>As US presidential candidate <a href="http://www.rollingstone.com/politics/news/what-donald-trumps-political-donations-reveal-about-him-20160425">Donald Trump put it</a>:</p>
<blockquote>
<p>I gave to many people before this – before two months ago, I was a businessman. I give to everybody. When they call, I give. And you know what, when I need something from them two years later, three years later, I call them. They are there for me. That’s a broken system.</p>
</blockquote>
<p>Trump suggests it is possible to “buy” political access and influence through political donations. In Australia, the managing director of Transfield Services, Luca Belgiorno-Nettis, <a href="http://www.theguardian.com/australia-news/2016/may/23/transfield-boss-says-political-donations-bought-access-to-mps?CMP=soc_568">recently likened</a> political donations to the Latin saying <em>do ut des</em>: “You give in order to have given back.”</p>
<p>But, according to democratic principles, we’re entitled to equal representation by our elected representatives. We can also expect politicians to be transparent and accountable in exercising their public duties. In particular, politicians should not engage in corrupt behaviour, such as bartering with a wealthy donor to make decisions in their favour in exchange for a large sum of money. </p>
<p>But it’s not just actual corruption that’s the issue; even the perception of corruption can damage trust in the political system. </p>
<p>As such, requiring political parties to disclose their donations is good for democracy. But the requirement has to be coupled with strong enforcement to be effective. </p>
<p>Traditionally state and federal electoral commissions haven’t taken action even when politicians didn’t disclose donations. Recently, however, the New South Wales Electoral Commission penalised the state Liberal Party for breaching electoral rules. </p>
<p>The party used the Free Enterprise Foundation to <a href="http://www.abc.net.au/news/2016-03-24/nsw-liberal-party-disguised-political-donations-free-enterprise/7272446">disguise donations</a> from donors banned in the state, such as property developers. So the commission <a href="http://www.abc.net.au/news/2016-05-23/electoral-comm-defends-decision-to-withdraw-funding-from-libs/7435900">withheld $4.4 million in public funding</a> from the party. </p>
<p>The political donation system is riddled with loopholes and is inconsistent across the nation. It lacks transparency as money can be channelled through different jurisdictions to avoid disclosure. Donations can also be made through “associated entities”. This makes it difficult to track the actual donor. </p>
<p>Under federal rules, it’s unclear whether fundraisers charging large sums for access to politicians must be reported. And donations are published only once a year, long after elections are over. </p>
<p>The struggle for political equality has shaped Australian democracy. But it’s undermined by having a fragmented political donations system that can easily be evaded.</p>
<hr>
<p><em>Catch up on other articles in the series <a href="https://theconversation.com/au/topics/political-finance-in-australia">here</a>.</em></p><img src="https://counter.theconversation.com/content/60159/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yee-Fui Ng does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The struggle for political equality has shaped Australian democracy. This is undermined by a fragmented political donations system that can be easily evaded.Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/594842016-05-17T09:46:00Z2016-05-17T09:46:00ZThe Conservative election expenses saga explained<p>Since late January, a story about political party finance and spending in the 2015 UK election (and three by-elections) has been simmering. Now it seems to be boiling over.</p>
<p>For brevity, it’s probably best to concentrate on the allegations related to the 2015 general election, rather than delving into the 2014 by-elections.</p>
<p>This story begins with the dogged, excellent, investigative journalism of Michael Crick and <a href="http://www.channel4.com/news/election-expenses-exposed">Channel 4 News</a>. </p>
<h2>Two types of spending</h2>
<p>The crux of the matter is the distinction between two types of <a href="http://www.electoralcommission.org.uk/_media/guidance/party-campaigners/to-campaign-spend-rp.pdf">spending in British elections</a> – local and national – each of which has different limits.</p>
<p>Local or <a href="http://www.electoralcommission.org.uk/find-information-by-subject/political-parties-campaigning-and-donations/candidate-spending-and-donations-at-elections">“candidate spending”</a> is money spent on a specific parliamentary constituency to campaign for a specific candidate. Local spending limits are not uniform but are often around £15,000.</p>
<p>National spend, or <a href="http://www.electoralcommission.org.uk/find-information-by-subject/political-parties-campaigning-and-donations/political-party-spending-at-elections">“party campaign spending”</a>, is spending that promotes the party more generally across the country. </p>
<p>The national spending limits have never been met at a general election and, in truth, it’s not even very close. The limit at the last general election was £19.5m and the Conservatives came closest, spending £15.6m. </p>
<p>That leaves quite a shortfall. Consequently, there is widespread suspicion, among all parties, that local spend potentially is misreported as national spend, where there is more budgetary room for manoeuvre. </p>
<p>There are entirely legitimate ways to push at these boundaries. Big billboard advertising campaigns, for example, are often targeted at marginal constituencies. Even if they don’t mention the constituency specifically, they can be positioned in places where they will be seen by lots of voters from the area.</p>
<h2>What happened here?</h2>
<p>The allegations being levelled at the Conservatives concern 33 constituencies (five of which did not go over the constituency spending limit) in which 29 winning Tory MPs are implicated. They mainly centre around whether spending on the <a href="http://www.telegraph.co.uk/news/general-election-2015/11504188/On-the-buses-General-election-campaign-battle-buses-in-pictures.html?frame=3257513">Conservative battle bus</a> and hotel rooms for activists have been inaccurately reported.</p>
<p>First, Channel 4 has identified thousands of pounds of hotel bills that have simply not been reported – neither as national nor local spend. This has been accepted by the Conservative party as an <a href="http://www.bbc.com/news/uk-politics-36094111">“administrative error”</a>.</p>
<p>Second, and more contested, is the battle bus, which transported activists around the country to campaign for the Conservatives ahead of the election.</p>
<p>Channel 4 has uncovered evidence – from canvassing scripts to Facebook posts – which suggests that these activists were campaigning for specific candidates in constituencies, not the Conservative party more generally. Despite this, the battle bus is recorded as national spend.</p>
<p>The Conservatives have faced this allegation <a href="http://www.channel4.com/news/battlebus-conservatives-admit-election-expenses">head on</a>:</p>
<blockquote>
<p>The party always took the view that our national battle bus, a highly-publicised campaign activity, was part of our national return – and we would have no reason not to declare it as such …Other political parties ran similar vehicles which visited different parliamentary constituencies as part of their national campaign.</p>
</blockquote>
<p>Liberal Democrat commentator Mark Pack <a href="http://www.markpack.org.uk/139980/how-tory-hq-advice-to-marginal-seat-agents-contradicted-official-electoral-commission-advice/">argues</a> that the Conservatives have contradicted themselves on this matter by telling local candidates that all hotel and transport “is accounted for out of central campaign spend” but then that “transport costs for you or your campaigners” are included in local spending.</p>
<p>I’m less convinced by this charge. One can make a distinction between a nationally touring bus and local constituency vehicles – and, of course, “your” local campaigners and “our” national campaigners.</p>
<p>This does serve to demonstrate how fiddly the details are though. And, in truth, how serious you consider the transgression to be probably depends on where you sit on the political spectrum. </p>
<p>With at least ten different police forces, the Electoral Commission and now the <a href="http://www.channel4.com/news/high-court-challenge-over-conservative-election-expenses">High Court</a> involved in these allegations, one must tread very carefully around commenting too much on specifics.</p>
<p>Guilt or innocence (and, indeed, the severity of any charges) will rely on two factors. Whether those in charge of the investigation accept that these buses should, in some circumstances, be classified as local spend and, second, whether there was any conspiracy – i.e. people deliberately omitting, or deliberately misreporting certain spending.</p>
<h2>Why haven’t I heard more about this?</h2>
<p>There have been allegations from some quarters that certain media outlets (often the BBC) have shied away from reporting these allegations. First, this is simply inaccurate. Though Channel 4 has very much spearheaded this investigation, both the <a href="http://www.theguardian.com/politics/2016/may/13/tory-election-expenses?CMP=twt_a-politics_b-gdnukpolitics">Guardian</a> and the <a href="http://www.bbc.com/news/uk-politics-36271515">BBC</a> have covered the allegations in detail.</p>
<p>And really, accounting just isn’t very sexy. Party funding is a <a href="http://www.tandfonline.com/doi/full/10.1080/17457289.2011.609296#.VzX-zPmDGko">“process-issue”</a> and you don’t tend to hear about it unless something goes seriously wrong – and that hasn’t yet been proven here.</p>
<h2>What happens next?</h2>
<p>Legally, a long process awaits. It is a criminal offence to fail to declare election spending during a campaign. Charges range from a fine (most likely) to a year in jail (fairly unlikely).</p>
<p>On a wider level though, this episode might change the way elections are run. During my research, I have heard mention of local spending limits largely being disregarded on numerous occasions. If this is the case – and if this story does indeed run and run – the Conservative Battle Bus might only be the beginning.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"732174738601193478"}"></div></p>
<p>All kinds of interesting <a href="http://blogs.spectator.co.uk/2016/01/trying-to-analysis-the-election-spending-data-follow-deep-throats-advice/">questions</a> arise when you try to separate national and local spend. How do you classify Facebook adverts targeted at marginal constituencies, for example? </p>
<p>It’s worth noting how little scrutiny the Conservatives have faced in parliament over these allegations – aside from a question from the SNP’s <a href="http://www.parliament.uk/business/news/2016/may/prime-ministers-questions-11-may-2016/">Angus Robertson</a>. One might wonder whether the silence from the other parties is indicative of a fight that, frankly, they have little interest in getting involved in. </p>
<p>Indeed, <a href="http://order-order.com/2016/05/16/labour-battle-bus-not-declared-in-local-spending/">allegations surrounding</a> Labour’s battle bus surfaced just yesterday. This is unlikely to remain a Conservative only issue.</p>
<p>Will those of us who spend an inordinate amount of time poring over party accounts on the <a href="http://search.electoralcommission.org.uk/?currentPage=0&rows=10&sort=AcceptedDate&order=desc&tab=1&et=pp&et=ppm&et=tp&et=perpar&et=rd&prePoll=false&postPoll=true&optCols=AccountingUnitsAsCentralParty&optCols=IsSponsorship&optCols=RegulatedDoneeType&optCols=CompanyRegistrationNumber&optCols=Postcode&optCols=NatureOfDonation&optCols=PurposeOfVisit&optCols=DonationAction&optCols=ReportedDate&optCols=IsReportedPrePoll&optCols=ReportingPeriodName&optCols=IsBequest&optCols=IsAggregation">Electoral Commission</a> website finally be recognised for doing incisive, sexy, cutting-edge research? Are we about to get the respect we so clearly deserve?</p>
<p>Sadly, I fear, the wait goes on.</p><img src="https://counter.theconversation.com/content/59484/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sam Power receives funding from the Economic and Social Research Council. </span></em></p>Bringing you up to speed on the political hot potato that may have passed you by.Sam Power, Doctoral researcher, Sussex Centre for the Study of Corruption, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/570312016-03-31T02:36:24Z2016-03-31T02:36:24ZReforming political donations is essential if we are to trust our politicians<figure><img src="https://images.theconversation.com/files/116837/original/image-20160330-15137-nxkpxn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Political funding is a fundamental public trust matter. It deserves to be debated at COAG.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The electorate is growing increasingly weary of being treated as a plaything by too many of its elected representatives. If MPs do not believe just how disillusioned the Australian community is with their approach to representative democracy, they should consult, among other things, the surveys that <a href="http://www.roymorgan.com.findings/5531-image-of-the-professions-2014-201404110537">rate the level of trust</a> people have in the profession. It is not good and would be of great concern to any other profession.</p>
<p>As MPs contemplate how they might go about adopting new behaviours, they should keep in mind that actions speak louder than words, especially when it comes to their oft-cited mantra that politicians do not underestimate the intelligence of Australian voters.</p>
<p>Disenchantment with that mantra arises in large part from observing MPs’ actions, which too often fail to reflect their words. But the voters’ low opinion can be fixed if MPs are willing to make a few basic changes to the way they operate. </p>
<p>The public interest should take absolute precedence over party and personal interests. To assist in this regard, MPs may find it helpful to recall that the high office they hold, as the people’s representative, means that they occupy a position of public trust. </p>
<p>This special trust obliges them to ensure that their actions – as opposed to words – serve to strengthen the health of Australia’s democracy and the institutions that are its foundation.</p>
<p>Politicians must knowingly stop making false promises to voters in the lead-up to an election. Post-election, when solemn promises are too often broken, the electorate uses its intelligence to judge such behaviour. They perceive it as nothing more than a desperate, unethical bid to win power. </p>
<p>Some MPs should also cease engaging in retaliation politics. It contributes nothing to the public interest and only discredits those who choose to follow this path. Retaliation politics is also a waste of taxpayers’ money. Taxes pay the wages, expenses and perks of the MPs who engage in this form of destructive politics. It has gone on for far too long. The electorate is well and truly over it.</p>
<p>The <a href="http://www.smh.com.au/federal-politics/political-news/bronwyn-bishop-5000-helicopter-ride-to-liberal-fundraiser-fails-the-sniff-test-joe-hockey-20150715-gidee9.html">abuse of the scheme</a> grossly misnamed as politicians’ “entitlements” must be overhauled. MPs should receive a reasonable salary and be reimbursed for genuine expenses. But those expenses must be fully justified.</p>
<p>We do not wish to hear any more tortuous and at times incredulous explanations that try to defend the spending of public money on what are clearly personal and/or party political matters, especially when those explanations are an insult to voters’ intelligence. </p>
<p>The time has come, it has nearly past, for all MPs to address the trust deficit that surrounds their profession. Action in this regard needs to start immediately if our system of democracy is to be protected. </p>
<p>Reforming political donation laws would be an excellent starting point. It has been, and still is, a <a href="http://www.dpc.nsw.gov.au/__data/assets/pdf_file/0004/167521/Volume_1_-_Final_Report.pdf">major reason</a> for people’s growing disgust with the behaviour of politicians and political parties. This was recently tipified by the NSW Electoral Commission <a href="https://theconversation.com/electoral-commission-makes-a-stand-on-liberal-breaches-of-nsw-donations-laws-56920">condemning the NSW branch of the Liberal Party</a> for failing to disclose its major donors in 2010-11.</p>
<p>The Council of Australian Governments (COAG) is meeting on Friday. This provides the perfect opportunity for political leaders to agree to introduce uniform political donation laws across Australia. Political leaders will recall that this matter <a href="http://www.theguardian.com/australia-news/2016/jan/15/overhauling-political-donation-laws-what-a-great-new-election-years-resolution">was raised</a> by NSW Premier Mike Baird at a dinner prior to the previous COAG meeting, but there has been little action. </p>
<p>As a starting point, those attending COAG could agree to adopt the NSW model, as recommended by the <a href="http://www.dpc.nsw.gov.au/__data/assets/pdf_file/0004/167521/Volume_1_-_Final_Report.pdf">Schott report</a> into political donations. Taxpayers have a right to assume that their elected representatives have read this report and all the parliamentary committee reports funded by them. </p>
<p>Political funding is a fundamental public interest matter. It goes to the heart of the public trust principle and as such deserves to be placed on the COAG agenda. Doing so will demonstrate political leaders’ commitment to act to ensure Australia has fair, equitable and transparent political donation laws. Taxpayers expect no less.</p>
<p>The electorate’s concern about political donations includes the behaviour of political parties as well as the conduct of MPs who pass laws to reform political funding regimes and then spend their time, and hence public money, devising ways to circumvent exactly the same laws. Something is very wrong with this type of behaviour. It graphically highlights why the system needs fixing. </p>
<p>In an effort not to tarnish all politicians with a less-than-flattering brush, the time has come for all honourable members to speak up and publicly demand a change to the way politics is funded in this country. </p>
<p>Actions rather than words will send a positive message to the electorate – one that makes it clear that MPs are truly motivated by the public interest, and that they respect and will adhere to the public trust principle.</p><img src="https://counter.theconversation.com/content/57031/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Colleen Lewis is a member of the Accountability Round Table. She has received ARC grants in the past.</span></em></p>Friday’s COAG meeting is a perfect opportunity for politicians to govern in the public interest: and that should start with reforming political donations.Colleen Lewis, Adjunct Professor, National Centre for Australian Studies, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/569202016-03-29T23:58:35Z2016-03-29T23:58:35ZElectoral commission makes a stand on Liberal breaches of NSW donations laws<figure><img src="https://images.theconversation.com/files/116593/original/image-20160329-13709-32g3f9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The NSW Electoral Commission's withholding of public funding to the NSW Liberal Party may yet again imperil Arthur Sinodinos.</span> <span class="attribution"><span class="source">AAP/Dan Himbrechts</span></span></figcaption></figure><p>The New South Wales Electoral Commission last week <a href="http://www.smh.com.au/nsw/nsw-liberals-concealed-illegal-donors-before-2011-election-win-20160323-gnpsn6.html">condemned the NSW Liberal Party</a> for failing to disclose the identity of major donors in 2010-11. These donations, totalling more than A$690,000, occurred in the lead-up to the 2011 state election.</p>
<p>By the Liberal Party’s admission, these included donations in excess of the cap on donations to NSW parties, and prohibited property developer donations. As a result, the commission is withholding about $4.4 million in public funding to the party.</p>
<p>These findings are significant but not new. These issues, and others, were ventilated in the <a href="https://www.icac.nsw.gov.au/investigations/current-investigations/investigationdetail/203">Operation Spicer</a> hearings before the NSW Independent Commission Against Corruption (ICAC) in 2014. But the commission’s actions may yet imperil former NSW Liberal Party treasurer and finance director, federal senator Arthur Sinodinos, for the second time. Sinodinos <a href="http://www.abc.net.au/am/content/2016/s4432118.htm">continues to deny</a> any knowledge of wrongdoing.</p>
<p>What is the legal basis and consequence of all this? And what might it say about the trajectory of political finance regulation and enforcement?</p>
<h2>The legal background</h2>
<p>Despite much public discussion in recent decades, political financing law has remained relatively laissez-faire federally. But innovation at state level has helped offset this.</p>
<p>NSW has generally been the leader in political finance law in Australia. It introduced the first public funding and donation disclosure laws <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/efeada1981443/">in 1981</a>. </p>
<p>And since 2009, state governments of both hues have erected Australia’s most comprehensive election finance regime. This includes limits on individual donations (now $5,800 per year to a party), limits on electoral expenditure by parties and others, and bans on donations from property developers and alcohol, tobacco or gaming interests. </p>
<p>It also includes increasingly regular disclosure of donations above $1,000. In comparison, the national disclosure threshold at the relevant time was $11,500.</p>
<p>Supporters of broad regulation – especially caps on donations or expenditure – argue that when money speaks, it <a href="https://theconversation.com/the-wa-senate-election-and-the-rise-of-money-in-australian-politics-25477">sometimes screams</a>. Policing money in politics is not just a matter of accountancy and disclosure. Unrestricted flows of money threaten the fundamental promise of equality of voice and respect that universal suffrage is meant to emblemise.</p>
<h2>A trust to be trusted?</h2>
<p>Into this web, in 2010, elements in the NSW Liberal Party appear to have tried to circumvent the law or game the system. </p>
<p>According to the NSW Electoral Commission and evidence before ICAC, one aspect of this involved the use of an existing trust, the Free Enterprise Foundation, as a conduit for donations. Paul Nicolaou was <a href="http://www.smh.com.au/nsw/icac-arthur-sinodinos-and-the-lunch-that-destroyed-careers-20141016-1173it.html">paid commission</a> to solicit gifts to the foundation. Nicolaou was then a chief fundraiser for the NSW Liberal Party, including as chairman of the party’s Millennium Fund (a vehicle to attract business donors by facilitating access and networking with political figures).</p>
<p>A “major part” of the Free Enterprise Foundation’s activities, the commission <a href="http://www.elections.nsw.gov.au/__data/assets/pdf_file/0004/214672/23_March_2016_Liberal_Party_of_Australia_NSW_Division_ineligible_for_further_public_funding_and_supporting_information.pdf">found</a>, was to seek to offer anonymity to those who wanted to donate to the party, and a means to wash developer donations through the system.</p>
<p>Through this, it was assumed that funds could be donated to the foundation on the understanding that they would be channelled to the NSW Liberal Party, but that there was no strict legal obligation to so do.</p>
<p>The foundation had opened the financial year in question, 2010-11, with just $3,443.23 in its coffers. Within six months, it had passed on $787,000 to the NSW Liberal Party. The NSW election was held in March 2011. In the same half-year, a further $294,000 was paid to the Liberal Party National Division – most of it just prior to the August 2010 federal election.</p>
<h2>What are the consequences?</h2>
<p>The NSW Electoral Commission <a href="http://www.austlii.edu.au/au/legis/nsw/consol_act/efeada1981443/">is obliged</a> to withhold all public funding payments to a party that is in breach of its disclosure obligations. The $4.4 million at stake includes a mix of funding outstanding from the Liberals’ successful 2015 election campaign and this year’s “administration” funding. </p>
<p>The Liberal Party had been banking on this money. In correspondence from its solicitors to the commission, <a href="http://www.theguardian.com/australia-news/2016/mar/24/nsw-electoral-commission-withholds-44m-from-liberals-over-donations-scandal">it said</a> the money was “critical [to] its operations” and flagged “emergency measures”, including “retrenchment of staff”. It even pleaded for $3.7 million to be released, reasoning that only around $700,000 of undisclosed donations were the issue. But the act clearly requires the commission to withhold all public funding.</p>
<p>Could the NSW Liberal Party challenge the commission in the Supreme Court? It might press a claim that promoting “free markets” or “individual freedoms” could be – at least on its face – charitable and that, on the basis of the High Court in the <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2010/42.html">AidWatch case</a>, political activities did not taint that status. But this is not an easy argument to mount given the facts. </p>
<p>The party might also seek to argue some ambiguity in the concept or agency or “intention” to benefit, in the definition of a state “political donation”. It might even seek to question aspects of due process or fact-finding by the commission.</p>
<p>However, NSW Premier Mike Baird <a href="http://www.skynews.com.au/news/top-stories/2016/03/24/nsw-libs-did-the-wrong-thing--baird.html">has told</a> the party’s state director to declare the donations and admit the party machine has “done the wrong thing”. </p>
<p>The Free Enterprise Foundation could take action. It might say it is protecting its honour, having led donors to believe it could keep their anonymity. If it does not take action, that will reinforce the impression that the foundation was never more than a wing of the party.</p>
<p>However common such administrative law gambits are when corporations confront governments, the regulator holds the upper hand here. NSW parties are heavily dependent on public funding. And the law – to its credit – now requires a significant level of disclosure and even probity in the financial affairs of parties. </p>
<p>The NSW Electoral Commission’s statement is important less for its findings of facts – most of which have already been ventilated – but for its forthright pursuit of the matter and willingness to act as a robust regulator. </p>
<p>In the past electoral commissions have seen their role as mere administrators of the law. For too long, electoral law in Australia has been subject to limited enforcement and minimal interpretive development. This is because commissions tend to lack the resources or powers to pursue infringements, and referrals to police or prosecutors meet a dead-end of time limitations and low penalties.</p>
<p>But in pursuing this matter, and using clean public funding as leverage to an outcome where parties will think twice about resorting to formalities of trust law to hide donations, the NSW Electoral Commission is to be congratulated.</p>
<hr>
<p><em>This piece was adapted from an <a href="https://auspublaw.org/2016/03/never-too-late-to-regulate/">earlier article</a> on the <a href="https://auspublaw.org/">Auspublaw blog</a>.</em></p><img src="https://counter.theconversation.com/content/56920/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Graeme Orr has previously written a report for the NSWEC on drafting principles for general electoral/voting law, but never worked with that body on political finance issues. </span></em></p>What does the latest donations scandal enveloping the NSW Liberal Party say about the trajectory of political finance regulation and enforcement?Graeme Orr, Professor of Law, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/448882015-07-23T04:19:05Z2015-07-23T04:19:05ZMoney makes world of politics go round, and keeping it clean isn’t simple<figure><img src="https://images.theconversation.com/files/89267/original/image-20150722-31241-yywzz3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The haste to deregulate political finance has led to political participation in the US becoming highly unequal.</span> <span class="attribution"><span class="source">Reuters/Jason Reed</span></span></figcaption></figure><p>What do Russia, the US and South Africa have in common? Not often lumped together, all three countries face significant challenges regulating money in politics.</p>
<p>Through the careful manipulation and extreme regulation of political finance, Vladimir Putin and his United Russia party have been able to entrench their rule. In South Africa, the complete lack of regulation – bar public funding – has served the African National Congress well to maintain its dominance. The US has created a system of political finance that ensures inherently unequal opportunities for participation.</p>
<p>But Australians need not look offshore to see how debilitating the misuse of money and state resources is for representative government. The Independent Commission Against Corruption has revealed the extent of <a href="http://www.abc.net.au/news/2014-08-21/untangling-the-web-how-the-icac-scandal-unfolded/5686346">scandals in NSW politics</a> in recent years.</p>
<p>The role of money in politics challenges both rich and poor countries. Its abuse raises problems of graft, corruption and cronyism. It undermines legitimacy and governance.</p>
<p>However, money is essential for mobilising election campaigns, sustaining political party organisations and communicating with citizens. And countries like Sweden have managed to avoid falling foul of malfeasance and graft, despite almost no regulation of money in politics.</p>
<p>So, how can the role of money in politics be cleaned up most effectively? New evidence is available from a comparative report and dataset just released by the <a href="http://moneypoliticstransparency.org/">Money, Politics and Transparency</a> project, produced by <a href="https://www.globalintegrity.org/">Global Integrity</a>, the <a href="http://www.sunlightfoundation.com">Sunlight Foundation</a> and the <a href="http://www.electoralintegrityproject.com">Electoral Integrity Project</a>.</p>
<p>The Money, Politics and Transparency project investigated three crucial questions: </p>
<ul>
<li><p>How do countries around the world attempt to regulate the role of money in politics? </p></li>
<li><p>What triggers landmark reforms? </p></li>
<li><p>What “works”, what fails, and why?</p></li>
</ul>
<p>The <a href="http://www.moneypoliticsandtransparency.org">project website</a> presents evidence from its political finance indicators, comparing 54 countries worldwide. The report compares how this problem is tackled in emerging economies as diverse as India, Mexico, South Africa and Russia, as well as in established democracies such as Britain, Japan, Sweden and the US.</p>
<h2>How do states regulate money in politics?</h2>
<p>Policies regulating the role of money in politics include disclosure requirements, contribution limits, spending caps and public subsidies. Most countries use a combination of these policies to try to regulate the flow of money into the political arena. </p>
<p>Another way to think about regulation is the degree to which governments intervene in the system of political finance. This can range from laissez-faire or minimal intervention, such as having only transparency requirements, to extremely comprehensive regulations involving all four policies.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=198&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=198&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=198&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=249&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=249&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89253/original/image-20150722-31244-11fnup.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=249&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Supplied</span></span>
</figcaption>
</figure>
<p>Using <a href="http://www.idea.int/political-finance/">data</a> from the International Institute for Democracy and Electoral Assistance, the project used statistical techniques to show that while countries such as South Africa, Sweden and India have more laissez-faire policies, others such as Brazil, Indonesia and Russia are more interventionist.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=289&fit=crop&dpr=1 600w, https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=289&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=289&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=363&fit=crop&dpr=1 754w, https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=363&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/89254/original/image-20150722-31203-8kcn1e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=363&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The degree of state regulation of political finance around the world, from less (yellow) to more (red).</span>
<span class="attribution"><span class="source">Supplied</span></span>
</figcaption>
</figure>
<p>It is difficult to say whether more or less legal control is better. This is, in large part, because effective regulation requires enforcement. India has a highly regulated system of political financing but its enforcement capabilities are so weak that more laws simply lead to almost all political actors increasing their efforts to find loopholes. </p>
<p>And not every country is like Sweden. Its unique social and political culture allows it to have a highly effective and egalitarian system of political funding. Sweden has high levels of transparency and a level playing field in party competition – despite almost no regulation.</p>
<p>The project’s political finance indicators find that transparency requirements are one of the most common reforms implemented during the last decade. But disclosure rules are often inconsistently applied. </p>
<p>The results suggest that eight out of ten countries have statutes requiring parties and/or candidates to submit contribution and expenditure reports. But this rarely happens during campaign periods. The public is therefore unable to access much of the information reported to oversight authorities.</p>
<p>Further, restrictions on contributions and expenditures are often undermined by loopholes. For example, laws often limit the amount an individual can donate directly to a political party or to a candidate, but not both. Similar loopholes in regard to anonymous and corporate donations are common. </p>
<p>Spending limits also fail in many cases. Few countries also regulate election spending by non-profits, unions and independent groups. This is regarded as a private activity.</p>
<p>Finally, states have adopted public funding and subsidy laws to reduce dependence upon private sector donors and the dwindling band of party members. In practice, however, funds can be unfairly allocated or subject to misuse and abuse by incumbent parties and candidates.</p>
<h2>How do we clean up politics?</h2>
<p>Designing a “good” system of political financing will necessarily entail trade-offs between values such as individual freedom of expression and equitable political competition. </p>
<p>There is no one-size-fits-all design. Much will depend on country-specific factors that determine which values are emphasised. </p>
<p>For example, the US is all about individual freedoms. This is acutely reflected in its haste to deregulate political finance. The trade-off is that political participation becomes highly unequal.</p>
<p>Effective laws depend upon enforcement capabilities, political will and autonomous oversight agencies. However, oversight bodies are often hamstrung through a lack of merit-based appointments, independent leadership, technical capacity and authority. Partisan appointments, insufficient staff and budgets and/or a lack of substantive legal power hinder oversight bodies in countries as diverse as the US, Romania, Nigeria and Russia.</p>
<p>Countries should not rely on a single policy tool to try to control money in politics. And policies must be applied in a consistent way. </p>
<p>For instance, public funding without spending or contribution limits can lead to a campaign finance arms race. Disclosure requirements without spending caps or equitable public funding may erode public trust in the electoral process. The project finds that it is more effective to use a balanced mix of regulations fitting each country.</p>
<p>Lax regulation can lead to skyrocketing campaign costs, corruption, cronyism and winner-take-all politics. And yet, excessive regulation can lead to loophole-seeking and entrenched elites.</p><img src="https://counter.theconversation.com/content/44888/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrea Abel van Es does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The role of money in politics challenges rich and poor countries worldwide. Its abuse raises problems of graft, corruption and cronyism, undermining legitimacy and governance.Andrea Abel van Es, Senior Research Fellow, Electoral Integrity Project, University of SydneyLicensed as Creative Commons – attribution, no derivatives.