tag:theconversation.com,2011:/au/topics/political-finance-in-australia-27860/articlesPolitical finance in Australia – The Conversation2016-06-02T20:24:05Ztag:theconversation.com,2011:article/594532016-06-02T20:24:05Z2016-06-02T20:24:05ZEight ways to clean up money in Australian politics<figure><img src="https://images.theconversation.com/files/124255/original/image-20160527-22083-1jxjtec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An integrated reform blueprint for federal and state politics could comprise eight elements.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/cwilso/2580985266/">Chris Wilson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Political funding in Australia is governed by <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">different rules</a> for state (some of which do not require disclosure) and federal governments. Both levels <a href="https://www.newsouthbooks.com.au/books/money-and-politics_the-democracy-we-cant-afford/">suffer significant weaknesses</a>; foremost is the lack of transparency associated with the place of private money. </p>
<p>When devoted to lobbying, donations can sometimes result in covert influence over the political process. And when made directly to political parties and candidates, they can be shrouded in secrecy. </p>
<p>Neither is public money free from such afflictions; corruption through the misuse of public resources occurs when parliamentary entitlements and government advertising are used for electioneering. </p>
<p>The flow of money into Australian politics also results in various forms of unfairness. The sale of access and influence provides another avenue for the rich to secure greater influence over the political process because of their wealth. And lobbying too can lead to corruption and misconduct. </p>
<p>All these practices are fuelled by the increasing demand for campaign funds, and this is unlikely to change. What then can be done to improve the system of political finance?</p>
<h2>Eight steps</h2>
<p>An integrated reform blueprint for federal and state politics could comprise eight elements.</p>
<ol>
<li><p>Schemes requiring – at the minimum – disclosure twice a year generally, and weekly during the election period, and with a threshold of A$1,000.</p></li>
<li><p>Ministerial and parliamentary codes of conduct in relation to political donations that require meetings between members of parliament or ministers and party contributors to be recorded. And ban such officials attending fundraising events.</p></li>
<li><p>Contribution limits set at a low level (such as A$2,000 per year), with an exemption for membership fees (including <a href="http://www.smh.com.au/federal-politics/political-opinion/union-fees-to-the-alp-are-a-special-case-20100114-ma0h.html">trade union affiliation fees</a>).</p></li>
<li><p>A party and candidate support fund comprising election funding payments with a low threshold and calculated according to a tapered scheme; annual allowances calculated according to the number of votes and party members; and policy development grants for new parties.</p></li>
<li><p>Strict regulation of the amount and use of parliamentary entitlements, including limiting their use to the discharge of parliamentary duties (thus preventing their use for electioneering).</p></li>
<li><p>Effective processes of accountability <a href="https://theconversation.com/election-explainer-what-are-the-rules-governing-political-advertising-57880">in relation to government advertising</a>.</p></li>
<li><p>Election spending limits that apply six months before polling day. In jurisdictions where there aren’t fixed terms, the application of these limits can be timed from the last polling day. Spending limits for federal elections, for example, can apply two years after the last polling day.</p></li>
<li><p>Rigorous regulation of lobbying that extends to all lobbyists (not just commercial ones) and provides for transparency in relation to all their activities, especially meetings with ministers.</p></li>
</ol>
<p>These reforms would not just counter the plutocratic tendencies of Australian politics arising from private funding of parties and candidates. They would also minimise the kleptocratic risks of incumbent governments and MPs (ab)using public resources, such as election funding, parliamentary entitlements, and government advertising for partisan gain. </p>
<p>Specifically, they seek to meet the danger – and reality – of incumbents gaining an unfair electoral advantage through the use of public resources.</p>
<p>Many elements of this blueprint have been adopted – in one form or another – by the states and territories, particularly New South Wales.</p>
<h2>Constitutional constraints</h2>
<p>There are concerns that limits on contributions and spending may be unconstitutional because they breach the freedom of political communication implied under the Constitution. </p>
<p>In 1992, the High Court <a href="http://www.austlii.edu.au/au/cases/cth/HCA/1992/45.html">struck down</a> a federal scheme that banned election advertising and provided for a “free-time” regime. But in 2015, it <a href="http://eresources.hcourt.gov.au/downloadPdf/2015/HCA/34">found</a> the New South Wales caps on political donations to be compatible with the implied freedom.</p>
<p>The High Court had, in 2013, <a href="http://eresources.hcourt.gov.au/downloadPdf/2015/HCA/15">struck down</a> a measure limiting political donations to those on the electoral rolls (that banned donations from non-voters including non-citizens, organisations and corporations) on the basis of its selective scope. </p>
<p>But, its 2015 decision clarified that measures limiting political contributions on a selective basis can be compatible with the freedom implied in the Constitution if properly justified. This decision upheld the NSW ban on political donations from property developers.</p>
<p>The constitutionality of election spending limits were not directly at issue in the 2015 case. But the court also made strong comments that broad-based spending limits would compatible with the implied freedom.</p>
<p>What stands in the way of genuine reform of the federal political funding system is not the availability of effective and practicable measures, but the lack of adequate political will.</p>
<hr>
<p><em>This is the last piece in our series on political donations. <a href="https://theconversation.com/au/topics/political-finance-in-australia">Catch up on other articles</a>.</em></p><img src="https://counter.theconversation.com/content/59453/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 and has 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 New South Wales Electoral Commission, Victorian Electoral Commission and Melbourne Law School.</span></em></p>Political funding in Australia is governed by different rules for state (some of which do not require disclosure) and federal governments. And both levels suffer significant weaknesses.Joo-Cheong Tham, Associate Professor, Melbourne Law School, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/595972016-06-01T20:16:28Z2016-06-01T20:16:28ZAustralia trails way behind other nations in regulating political donations<figure><img src="https://images.theconversation.com/files/124706/original/image-20160601-1943-10gwwm4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The UK has limits on expenditure by political parties and third parties, and doesn’t allow paid advertising in electronic media at all.</span> <span class="attribution"><span class="source">Reuters</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>Australia was once a pioneer in developing mechanisms for electoral integrity. We gave the world the secret ballot, for instance, as well as non-partisan electoral administrators and non-partisan processes for electoral redistribution. But our political finance regulation now falls way behind international standards.</p>
<p>To take just one issue, <a href="http://www.idea.int/political-finance/bans-and-limits-on-private-income.cfm">Australia is not one</a> of the 114 out of 180 countries that ban donations to political parties from foreign interests. Transparency can be impossible to achieve when donations come from other countries.</p>
<p>The federal government introduced public funding for political parties in 1983, to reduce reliance on private donations. But corporate donations have continued to grow – reaching <a href="http://periodicdisclosures.aec.gov.au/">A$202 million in 2013–14</a>. The only federal restriction on private money in politics is the <a href="http://periodicdisclosures.aec.gov.au/">requirement to disclose donations</a> of more than A$13,200. But this information doesn’t become public until well after the relevant electoral event. </p>
<p>Unlike similar democracies, Australia limits neither political donations nor campaign expenditure by political parties at the federal level. But states and territories have <a href="https://theconversation.com/explainer-how-does-our-political-donations-system-work-and-is-it-any-good-60159">different rules</a>.</p>
<h2>Other jurisdictions</h2>
<p>Canada has extensive regulation, banning corporate and union donations, imposing caps on individual donations and limits on candidate, party and third-party expenditure – that is, expenditure by groups other than candidates or political parties during an election campaign. </p>
<p>New Zealand also limits expenditure by parties and third parties. Its electoral commission is responsible for party broadcasting allocation (free time and money for paid advertising).</p>
<p>The United Kingdom has limits on expenditure by political parties and third parties. Paid advertising in electronic media isn’t allowed at all.</p>
<p>In 2008, the <a href="http://www.publications.parliament.uk/pa/ld200708/ldjudgmt/jd080312/animal-2.htm">House of Lords upheld the prohibition</a>. It argued the ban was necessary to maintain a level playing field and prevent “well-endowed interests” from using “the power of the purse to give enhanced prominence to their views”.</p>
<p>In Australia, the cost of television advertising and associated market research has driven political parties to chase ever-greater donations. Both political donations and the negative advertising these buy increase distrust in politicians and political parties.</p>
<h2>Regulating for democracy</h2>
<p>The aim of political finance regulation is twofold: to ensure the integrity of elections and to promote a level playing field for electoral competition. Both aims are equally important. </p>
<p>To safeguard integrity, we need transparency and other measures so that those with vested interests in government contracts or regulation cannot buy access and influence.</p>
<p>The second reason for regulating political donations is to promote political equality, a defining feature of democratic citizenship. </p>
<p>Parties without wealthy backers should not have their message drowned out by those that do. And corporate donors should not be able to buy political access far in excess of what other citizens enjoy. </p>
<p>A third reason for regulating donations is to ensure those elected to be political representatives don’t instead spend their time chasing donations.</p>
<p>But despite repeated calls for political donations reform, progress at the federal level has been stalled since then senator John Faulkner’s <a href="http://australianpolitics.com/downloads/voting/2008/08-12-01_electoral-reform-green-paper.pdf">2008 Electoral Reform Green Paper</a>. </p>
<h2>States, territories and reforms</h2>
<p>There’s been more movement at the state and territory level. New South Wales now has the most comprehensive regulations. These include: donation caps; source restrictions (no donations from property developers, for instance, or gambling, tobacco or liquor industries); and expenditure limits for parties and third parties. </p>
<p>The NSW government even appointed an expert panel to investigate the possibility of a total ban on political donations, and their replacement by full public funding of parties, in 2015.</p>
<p>The Australian Capital Territory has expenditure limits. The ACT also requires continuous disclosure for donations more than A$1,000. </p>
<p>In South Australia, expenditure limits are a condition of public funding. The state also imposes a A$500 cap on “cash for access” events.</p>
<p>But this patchwork of regulation creates many loopholes. NSW Premier Mike Baird has tried to get a national system of political donation law onto the COAG agenda – so far without success. </p>
<p>In the past, many believed any reform of Australia’s political donations regime wouldn’t survive a challenge because the High Court has found that the Constitution implies freedom of political communication. All this changed with the <a href="http://eresources.hcourt.gov.au/showCase/2015/HCA/34">2015 McCloy decision</a>. </p>
<p>In this case, brought by a property developer, the High Court decided that “guaranteeing the ability of a few to make large political donations in order to secure access to those in power” was antithetical to the underlying constitutional principle of political equality. Political freedom needed to be balanced by “equality of opportunity to participate in the exercise of political sovereignty”.</p>
<p>This was a very welcome recognition that political equality is central to representative democracy. And it should give heart to all electoral reformers.</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/59597/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marian Sawer has received funding from the Australian Research Council for the Democratic Audit of Australia and from the Academy of the Social Sciences in Australia for her current project with Anika Gauja on party regulation.</span></em></p>Unlike similar democracies, Australia neither limits political donations nor campaign expenditure by political parties at the federal level.Marian Sawer, Emeritus Professor, School of Politics and International Relations, Australian National 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>
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<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>
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<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>
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<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>
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<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>
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<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.