The Centre for Public Integrity has reported that lobbyist and industry group donations have increased by more than 500% in the past two decades. These lobbyists donated $2.6 million to the major political parties last year; this figure is expected to increase before the federal election next year.
The rules for lobbying and political donations at the federal level are weak compared to several state counterparts. There are no limits for federal political donations and very poor disclosure requirements for lobbying activities.
These issues surrounding lobbyists will be debated as part of a Senate committee inquiry into access to the Australian Parliament House by lobbyists.
Why do lobbyists donate?
In Australia, well-connected lobbyists are greasing the wheels of access and influence to public officials for those who have the funds to pay them. The secret to their access is their insider status: as I note in research, almost 40% of these lobbyists are former politicians, public servants and ministerial advisers. The oiled path from public office to a career as a lobbyist is known as the “revolving door” phenomenon, where former public officials capitalise on their networks to gain access to powerful decision-makers and policymakers — for profit.
Lobbyists and industry groups tend to donate to political parties for strategic, rather than altruistic, reasons. A major reason for these political donations is to secure greater access to politicians than ordinary people have.
As then US presidential candidate Donald Trump put it:
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.
Trump suggests it is possible to “buy” political access and influence through political donations. Similarly, managing director of Transfield Holdings Luca Belgiorno-Nettis has likened political donations to the Latin saying do ut des: “You give in order to have given back.”
Lobbyists have a greater need for access to politicians than the average person — their career and livelihood depend on their access and influence. This explains the large number of donations they make in order to curry political favour and access to key political decision-makers.
According to democratic principles, we are entitled to equal access to political office and 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 lobbyist to make decisions in their favour in exchange for a large sum of money.
But it is not just actual corruption that’s the issue; even the perception of corruption can damage trust in the political system.
What reforms are needed to our lobbying rules?
Lobbying regulation in Australian jurisdictions currently takes the form of a public lobbyist register and code of conduct. However, the regulation of lobbying at the federal level in Australia remains underdeveloped.
Those required to register in Australia are confined to third-party lobbyists, which only comprise 20% of the lobbyist population. This means a large proportion are not covered by regulation, such as those who operate in-house as employees. Such restrictive coverage fails to provide proper transparency of government decision-making in terms of lobbying by “repeat players”.
To enhance regulatory effectiveness, it is essential to expand the lobbyists required to register to both third-party and in-house lobbyists. This is consistent with comparable jurisdictions that have a long history of regulating lobbyists, such as Canada and the United States.
The level of disclosure of lobbying activity required at the federal level in Australia is dismal. The only disclosures required are the names and contact details of the lobbyist and the client they are representing. There is thus a complete vacuum of knowledge about when lobbyists are contacting government officials and over what policy issues.
In New South Wales and Queensland, ministerial diaries must be disclosed, which provides some visibility of who ministers are meeting with and the broad subject matter of the meeting. However, other logical targets of lobbyists, such as ministerial advisers and public servants, are not covered by this form of regulation.
Queensland has the most comprehensive regulation in this regard, with a requirement to disclose all lobbying contacts, as is required in Canada and Scotland.
To enhance transparency, all Australian jurisdictions should require lobbyists to disclose every lobbying contact, as well as require ministers, senior ministerial advisers and senior public servants to provide monthly disclosures of their diaries.
What reforms are needed to donations rules?
The lax rules on political donations at the federal level also need to be reformed. The best solution is to have a yearly cap on donations to each party and candidate of, say, $1,000. New South Wales has such caps, which the High Court has ruled are constitutionally valid.
With caps for each individual and corporation, we can ensure people do not have a larger voice just because they have a larger wallet.
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.
As part of the impetus to improve the declining public faith in democracy and political institutions in Australia, governments should seek to regulate the pernicious influence of money in politics, as well as the strong influence of vested interests and influence peddlers that can drown out other less well-resourced and well-connected voices within a democracy.
Reform of lobbying regulation in Australia should enhance the scope of its coverage and the level of disclosure of lobbying activity. This will improve transparency in an area currently hidden in the shadows, reduce the risk of corruption by lobbyists and public officials, and ultimately promote the democratic norms of political equality and fairness.
What changes would you like to see to political donation rules? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
You can’t fix donations – seriously the people who need to do it are literally in control – but we can fix how we treat politicians.
In short, nothing they say can be taken seriously.
Every question at press conferences should be – so which donor benefits from this policy?
Now of course the issue with that issue that press conferences are dominated by mouthpieces for the same vested interests.
At what point do you give up and start prepping for the end of days or lose yourself in some new series?
And start analyising Q&A ; is tge panel clearly balanced one ; do the biological women of all cultural backgrounds get equal air space or are they verbally bashed by the designed monolthic misogynist assumptions ? Oh and clean out the board rooms and get rid of tge established gatekeepers who are using women as foddet and gaslighting us
And stop the host from leading panel members along paths that don’t reply to the aidiences questions, as well as being boring and long-winded.
and check your spelling; too many “g”instead of “h”, “t”instead of “r”, & ‘i” instead of “u”
I expect very wealthy people to have more influence, good political donation regulation isn’t by itself going to stop corruption but it is still useful and clearly important for a more transparent democracy than we have.
The reason why our lobbyists have been able to reach plague ( plural for lobbyists) proportion is because of mainstream media, msm and lobbyists pretty much work for the same people.
It’s great that we can read a well researched article like this on Crikey, but this sort of information is swept under the carpet by msm so it won’t cut through because that conservative oligopoly dictates what the general public know, they set the tone for political discourse, it will be interesting to see how they respond . Thanks for the article.
Another related issue is how the Nats seems to act as a lobbying group* by big ag, big oil and mining, to wedge the Libs who follow climate science etc.
*Much like the Atlas or Koch Network ‘bill mill’ ALEC which is active via members who are also in Congress…..
Undeniably true. But governments are run by parties that depend on the money they get by peddling their MPs’ votes to anynody who wants to influence policy. It’s not really politics at all, it’s a business. As somebody said about the USA, it’s the best democracy that money can buy. Ours is not quite so developed, but it’s the same thing. So why would those who are making a very good living from operating this business, which is very much appreciated by those who buy the services and who are very wealthy and very powerful, give a monkey’s elbow for public faith in democracy and political institutions in Australia? Who is going to make them care? And how? Maybe bribe them to care about democratic principles, that could work.
How about a Kickstarter to buy policy in the public interest?
An interesting and useful piece.
Obviously full, prompt and frank disclosure. There should not be a barrier to this – donors should be happy to see their name and the amounts in public in the same month that they’re donated, or else their donations should not be welcome.
It immediately leads to two questions:
But based on what I’ve seen so far … is it only a Liberal/Neanderthal Coalition problem?
The whole structure of so-called representational democracy, where parties need money for elections, means it is a problem with all parties that have a serious prospect of power, at state and federal levels. It’s inevitable. On the other hand, nobody bothers much with bribing those who have no chance of providing a return on the investment. Handing money to an independent or minor party is quite likely a genuine donation, because there’s almost no chance of buying any useful influence from them.
The AEC publishes the data that the relevant legislation tells it publish. That’s it’s job. Of course the information is vague, lacks details, only lists a small number of the larger contributions, ignores many sources of revenue and is published too late to be any use; the parties in government wrote the rules.
Or, the donor expects the return when the minor (at the present time) moves into a more powerful position – protecting the future where one vote can make difference–ceasefire blocking, for example, by one vote.
The disclosure of donations is patently inadequate as a regulation of corruption by donation. Fixing our present partial disclosure does not approach a fix.
As the Crikey article clearly shows, political donations are meant and are permitted as a source of corruption. They cause the federal governments’ agendas to be far apart from the will of the people. Donors and lobbyists set the objectives, the aganda and the itineraries of our governments, oppositions, minority parties and even unelected candidates.
The fix is to make donations to candidates and parties illegal, prosecuted by police. Fund elections and electoral activities by entitlements authorised by the Electoral Act.
Which of course we do already, but your proposal would make it the sole source of funding. Are you sure? Funding parties according to the number of votes they received in the last election, with a minimum 4% of votes need to qualify, and denying any funding at all to anyone else, looks like a really good way to entrench the current major parties in power for all time. Would any new entrants to politics be obliged to be entirely self-funded (not so bad for Clive Palmer or Malcolm Turnbull, not so good for the riff-raff), or would donating to one’s own campaign fall foul of the rules too? How would you arrange this entitlement?
“some payments have additional eligibility terms, such as …possessing other attributes as a candidate”.
So being a first-time candidate or being not affiliated with a political party might be factors attracting some payments. And that would greatly improve their campaigns and compete more equally with sitting members and affiliated candidates.
How would you arrange these funding entitlements, Rat?
Yes, I am very sure that, at first attempt, I could write a bill which would greatly reduce corruption by donation and get us closer to being a democracy. Certainly, much effort would be expended by entrenched interests to design their electoral campaigns to best benefit from my new sole sources of campaign funds. With your contribution, Rat, we could become the leading Western Democracy at a stroke.
Simply restricting donations to registered voters only would probably fix half the problem overnight.
Further restrict to a max of a couple of grand a year and that’s probably all the significant change that needs to be made.
Only real remaining thing would be to make sure stuff like “meet a politician” dinners that charge a few grand a head are classified as political donations.
Australia has sunk to new lows in the world corruption Olympics (or highs, depending on how you like to rate these things). Just as the US has lost any pretensions to being a democracy, Australia is religiously following in those muddy footprints.
Lobbyists are the vermin that infest the body politic, and as has been said previously, anyone who believes that policy is developed by hardworking staffers in partnership with their ministers, remember that every political ear is open to an idea that will potentially get them a) votes, b) re-elected, or c) a big fat bag of money to whack their political opponents’ noggins come election time. Or, as so many lobbyists can confirm, a nice little sinecure in the company that the politician most faithfully represents during their political career.