We’re likely to see movement this parliamentary term to amend the Commonwealth’s shambolic and near-useless political donation disclosure laws — but the big parties are already moving to ensure their business models are protected from any changes.
Labor’s Sam Dastyari is only the latest politician to have been found accepting donations from foreign sources, but both sides now have a literally rich history of taking donations both from Chinese business figures — whose contributions usually come with an extra zero or two compared with local business donors — and the Chinese-Australian business community. Helpfully, Chinese-Australian businessman Huang Xiangmo, who is closely aligned with the Beijing regime, has recently complained about not getting enough in return from his big donations to both sides — thereby illustrating that rare is the donor who offers money to politicians without an expectation of something in return. Indeed, the ABC revealed today ASIO took the step of warning the major parties about accepting donations from Beijing-linked donors.
As Crikey noted yesterday, complaints from Liberals about foreign donations ring rather hollow given they voted against Labor’s proposed ban on foreign donations in 2009. At that time, Labor led the Chinese fundraising stakes fairly easily, especially with Kevin Rudd’s background, but the Liberals have since caught up and have been tapping the lucrative fundraising potential of Chinese businesses as effectively as their opponents.
Dastyari’s troubles will add to the growing pressure on both sides for reform, especially with the ongoing problems of the NSW Liberal Party and the Free Enterprise Foundation (hilariously, during the election campaign, Arthur Sinodinos promised to look at donations reform post-election; hopefully he hasn’t forgotten by now), the Parakeelia affair and the growing media interest in donations — which has been accompanied by an understanding of just how ridiculous the Commonwealth annual disclosure system is.
But both sides at the state and federal level have been moving to future-proof their fundraising models to ensure any reforms that expand disclosure and transparency are stymied. The strategy is to rely much more heavily on fundraising bodies that act as a buffer between donor and recipient. As the Free Enterprise Foundation model illustrates, this may help obscure who is contributing to whom. But the real benefit is to delink donations from individual events and attendees. Increasingly, parties are pressuring donors not to donate directly, or to buy access to individual fundraising events, but to purchase a membership of a fundraising body such as Progressive Business Association or the Nationals Policy Forum, which provides access to multiple events where donors can mingle with senior party figures without any direct link being made between a donor and a politician they may want to lobby. Becoming a “member” of a political party fundraising entity looks more innocuous than buying a seat at a particular fundraiser. It also delivers the parties a bigger up-front sum.
It also has the benefit that donors aren’t required under Commonwealth law to report such contributions — they’ve purchased a good or service from the party, rather than made a donation to it. The parties still have to report the contribution, but it becomes very hard to establish what donors attended individual fundraisers (donors must include the data of their donation in their return), and without donor returns there’s no way to check if a party branch has failed to include a disclosure, which they’ve been known to do. Just ask Bill Shorten.
The growth of such bodies is why, increasingly, political party returns are dominated by the line item “Other receipt” or “Subscription” and outright donations are becoming scarcer. “Other receipt” is especially useful because any payment of any kind other than a donation — such as a tax refund, bank interest or a legitimate asset sale — gets lumped into that category, further reducing the clarity of disclosure.
Unless reforms to donation laws impose much stricter requirements for disclosing memberships of fundraising vehicles, the parties will continue to move more and more of their fundraising into that space — and companies and individuals who prefer to stay out of the donations spotlight will follow them.
I don’t suppose this is anything along the lines of that “overseas political donation” by Toll, of a “fact-finding mission” for Morrison to check out Nauru, back in July 2013?
Toll – owned as it is – and so dependent on government to keep contracts/profits going their way – “tent cities” being worth what they are and all? …… Was it “$26 million” back then?
Individual political donations should be limited to natural persons (who are citizens) only, and capped annually at an amount attainable by most.
Let’s say, the equivalent of four weeks of minimum wage, or about $2,800.
Any individual found to be attempting to circumvent this cap (eg: giving money to a bunch of people to make donations on their behalf, suggesting their employees donate to a particular party for any reason, or just good old-fashioned forgery) should be subject to a mandatory minimum six month gaol term and a fine equal to ten times their attempted donation. Egregious or repeat offenders should be facing years in prison and complete financial ruination.
Donations should be immediately published by those who receive them. Donors should be centrally recorded (to track annual totals) but can remain anonymous.
Anonymous fundraisers (say, a sausage sizzle) should be subject to a “per transaction” profit margin or cap and anything donated in excess of that goes to charity.
MPs found to have knowingly breached (ie: accepted money from a donor in excess of the maximum) – or attempted to breach (eg: suggested circumvention measures or accepted material benefits in kind) – donation limits should face a mandatory minimum twelve month gaol term and lose any pension or defined-benefit superannuation benefits. If the donors are foreign or acting on behalf of foreign interests, they should additionally be charged with treason (treason laws to be changed appropriately).
Corruption isn’t hard to stop if we want to. But you don’t do it by pussyfooting around. Psychopaths care for nothing but direct and severe personal consequences.
To a degree I agree with you DrSmithy.
But individuals who own companies or are directors of companies would be free to donate under that system and could still try to gain influence.
What may be better is to have public funding of political campaigns. Instead of the votes based system as now, make it per candidate. Each dollar must rigorously be accounted for , limits on what it can be spent on and any left over would be returned.
As to declaring donations, it should be a minimum of $500, no more than $1000 and certainly not the current $13,000. Agree that the donations should be published immediately.
For breaches MPs should be removed from Parliament and their party banned from standing a candidate in that electorate for 2 election cycles. And their replacement should not be from the same party.
A breach by a candidate should have the same effect on their party.
I don’t understand your point. An owner of a company or director has no more ability to donate than anyone else.
Public funding (by which I assume you mean no political donations at all) only serves to embed the status quo, as it makes it difficult for new people with exciting and popular ideas to gain prominence and trivial for the incumbents. Or, alternatively, it is simply an avenue for corruption by handing money over to people who have no real interest in being representatives.
I’m not sure that a party should suffer because of a candidate’s actions – but that’s probably because I believe representatives should be first and foremost of their constituents, not a party. If I had my way parties wouldn’t even be allowed.
You have to wonder why they are going so hard on dastyari, listen to Brandis on the wireless a little while ago! Covering something else up e.g. Bishop’s dealing with the Chinese, or something else we don’t know about yet. Or to detract from turnbull’s many troubles.
As you pointed out, this should have happened in 2009.
The hypocrisy of Elites (in this case Party political); may continue to allow them to believe their grasp on power will never fade nor fail. On an individual level politicians are most certainly wrong in embracing such a belief due to the rise of social media. At a structural/governance level, political parties worldwide are under escalating pressure as electorates disconnect from party politic duplicity.
Issues such as the Commonwealth annual disclosure of donation system and the dominance of party political financial imperatives certainly ratchets up electorate disbelief and non compliance. “The Emperor has no clothes.” . . . . . and we all bloody well know it!
It is impossible to stop cash for favours but it would be simplicity itself to regulate the amount spent by political parties.
That would have the desirable side effect of abolishing an entire level of tax avoidance – the deduction for advertising expenses.
In the meantime, in the real world an honest pollie is defined as one who stays bought by the one wot brung them.