Rich Guys Finish First

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Is the era of political donations about to end in Australia? With continuing public pressure, there is a chance that far reaching reform could be achieved. The Electoral Reform Green Paper — Donations, Funding and Expenditure is out and Special Minister for State, John Faulkner, has committed to bringing legislation on this issue to the federal parliament before the next election.

Since senator Steve Fielding has already stated his opposition to any meaningful public funding of election campaigns, the Opposition’s support will be needed to get an electoral reform package through the federal parliament. So what is their position?

In an email to a Greens Woollahra councillor in February 2005, Liberal leader Malcolm Turnbull wrote that he believes "no political donations should be allowed unless they are: from citizens and/or persons on the electoral roll (ie, no companies, unions, associations etc); subject to a cap; and donors should certify that the donation is either their own or their spouse’s money and has not been given to them by a third party".

He maintains this position. However, there is no evidence to suggest that Turnbull is in favour of limits on campaign spending. While we have been able to meet with important leaders in the Labor Party about this issue, Turnbull has not responded to our request for a meeting on this matter.

The Greens agree that only individual Australian citizens (as well as permanent residents) should be able to make donations that are capped at a low level. However, as we have strongly argued for years, we believe limits on election expenditure are central to stopping the arms race for more and more campaign donations which are so destructive to the integrity of our democracy.

At present, the Australian Electoral Commission states that spending money on one’s own campaign isn’t considered a "donation" and doesn’t have to be reported. So caps on donations are not likely to bother Turnbull in another election battle in his marginal seat of Wentworth, as they would not limit how much he personally could spend. Expenditure caps, on the other hand, could seriously hurt him.

Most candidates running against Turnbull in 2007 for the seat of Wentworth estimated that he spent over $1 million to be re-elected. This figure seems accurate based on the amount of literature those of us living in his electorate received, the campaign office he rented, the many newspaper advertisements he ran each week and a full page ad in The Australian on election day. We will never know how much of Turnbull’s own money went into his 2007 campaign — although the Sydney Morning Herald estimated that it cost him $70,000.

Much of the other money used in his campaign probably came from the Wentworth Forum which was formed to support Turnbull’s re-election. Members could join the forum for an amount of up to $55,000. However, the small print at the bottom of the invitation to join reminded donors that any amount under $10,500 (the disclosure threshold at that time) could be contributed in secret.

Historically, the Liberals and the Nationals have been reluctant backers of reform in this area. Ironically for those of us living in NSW, it has been the Labor Party that has been the driving force within the parliamentary system for political donation reform and public funding of election campaigns. The first comprehensive scheme for public funding of elections and disclosing donations in Australia was introduced by the Wran NSW Labor government in 1981. This was followed at the federal level by the Hawke Labor government in 1983.

The Coalition parties initially opposed both schemes but their objections fell away when they had election expenses to meet.

When the Howard government won control of both houses of parliament in the 2004 election, the Coalition quickly moved to destroy what transparency there was of the identity of contributors donating to political party coffers.

As a result of the Coalition’s changes, the disclosure threshold was raised in 2005 from $1,500 to $10,000, adjusted yearly in line with the Consumer Price Index. Currently the threshold is over $10,900, meaning millions of dollars contributed each year by corporations, other organisations and individuals are permanently hidden from the public.

Although Turnbull voted for raising the disclosure threshold, he has argued for reform of the electoral funding system as detailed above. How committed he is to cleaning up the corrupting influence of political donations is now being tested.

The Rudd Labor Government introduced a political donations bill in 2008 to lower the disclosure threshold of donations to $1,000, to require donors to report when the combined value of their donations exceeded the threshold and to ban all foreign donations. The Coalition blocked the reforms in the Senate.

At the time, Turnbull stated that lowering the threshold to identify most donors would disadvantage the Liberal Party. He argued that the reduction of the threshold was designed to discourage individuals and small business from making donations but that it wouldn’t deter the unions. Turnbull believes that if more Liberal donors were identified, the ALP would contact them and demand they donate to Labor as well. However, since unions mainly donate only to Labor they wouldn’t be under pressure from the Coalition to contribute to them.

The Coalition’s refusal to ban foreign donations, something all other English speaking democracies do, sees millions of dollars donated by foreign individuals and companies continue to flood into the Australian political process. Much of this money is from property and gaming interests.

Interestingly, Malcolm Turnbull, who has argued against foreign donations for years, received a contribution of $US50,000 ($76,000) in his last campaign from the American citizen Peter Briger. Briger is chairman and director of controversial "vulture company", Fortress Investment Group. In 2007, prior to the share market crash, Briger was among the 500 richest individuals in the world.

It is time Turnbull engaged publicly with these issues and made his position clear.

The Greens are urging the major parties to support the recommendations of the recent NSW parliamentary inquiry into political funding and to concentrate their efforts on the complex issues of how to ensure public funding of elections and political parties is fairly distributed, what limits should be placed on election spending by all parties, including third parties, and how the whole scheme should be enforced.

Until the system is reformed, Labor and the Coalition parties would be wise to remember that they will be periodically caught up in political donation scandals. With NSW now reporting donations data every six months, such scandals as the NSW Liberal Party not disclosing $14 million in donations on time and before the 2008 local government elections will often be in the public domain, leading the public to further question the current system.

Faulkner and his team have done an excellent job with the very thorough 99 page report. It provides background on how we have arrived at the present predicament and useful information on funding reform in other countries. Each section ends with discussion points that act as a framework for submission writers. Submissions to the Green Paper are due on 23 February.

 

New Matilda

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