Dirty Funding Deal Collapses


Over the last six years covering politics for New Matilda, I've witnessed some amazing things. A prime minister replaced overnight, for instance. The power of big corporations to bend taxation law to their will. The bias of the mainstream media.

But this week's secret deal between the ALP and Coalition over public funding for their party apparatus surprised even a hardened observer of political self-interest. My surprise was not so much that the parties cooked up a bipartisan deal to get the taxpayer to fund their ongoing activities. It was the shamelessness of it all. In a political environment in which the two major parties can't agree on anything, suddenly an issue was found that miraculously brought them together.

At least for a day or so. This morning, Tony Abbott fronted the media to announce “this bill is dead”. After a backbench revolt and some uncomfortable headlines mocking Abbott's hypocrisy in approving extra funding in the face of a “budget emergency”, the Opposition Leader went into reverse. The Coalition had “listened”, the Coalition had “learned”. Here was an opportunity for the Opposition to turn a policy difficulty into partisan gain. In characteristic fashion, Abbot seized it.

The Government has tried to discomfort Abbott and the Coalition by releasing a letter in which the Opposition Leader apparently signs off on the agreement. But that's not really the issue. While certainly embarrassing for the Coalition, it hardly exonerates Labor, which is after the governing party and the sponsor of the bill.

There's no doubt this was a terrible policy. The windfall was to have benefited the major parties to the tune of around $20 million, on top of the roughly $53 million they already receive each election cycle. Funding per vote would have been upped to $1 per electoral term, or 33 cents a year. Amazingly, the bill even backdated the funding, with new money to flow before the federal election. Attorney-General Mark Dreyfus called it "administrative funding". A more accurate description is graft.

In the current climate, the idea of political funding for political parties is profoundly undemocratic. Ordinary voters loathe perks and perquisites for politicians. The pollsters are no doubt rushing to their phones to get a quantitative measure of the public's dislike of the measure, but you don't need 1000 interviews to realise this policy is unpopular.

It's hard to see how it's in the public interest to give political parties extra funding simply for the votes they receive. Nor will it do anything to cap political donations, which is the supposed justification for public funding in the first place. On the whole, Australians are rather better engaged in their democratic responsibilities than we're given credit for, but decisions like this can only further erode public trust in our political institutions.

Shame, and the lack of it, was a repeating theme of comments about the bill. Labor's John Faulkner reportedly told his caucus colleagues he was “ashamed” of the deal. Independent MP Rob Oakeshott voiced similar sentiments. “People aren't angry, people aren't disappointed, they're ashamed of this attempt at so-called political reform that looks like cartel behaviour and collusion,” Oakeshott said. 

“We need to have genuine political reform in the interests of all political parties and all candidates and all voters in Australia,” he continued. “This isn't it.”

Another independent, Tony Windsor, made the point that the new deal fundamentally advantaged the big parties, at the expense of the minor parties and independents. Yes, every sitting member gets the funding, but the most money obviously would have accrued to the ALP and the Liberal Party. “So they have this massive advantage over anybody else who wants to enter the playing field,” he told journalists yesterday. “They're quite comfortable having both sides of the tennis court occasionally. But they don't want other players in the game.”

This is undoubtedly why the details were negotiated behind closed doors – apparently for nearly a year. Neither Labor nor the Coalition wanted to openly support extra funding for their own parties. In the grand tradition of power politics, the major parties were doing this because they could. Any law can pass with the support of the two key groups in the parliament, and although they rarely agree on anything, a special law that gives them an extra funding stream from the public purse is manifestly in both major parties' interests.

There are a few different aspects to the hypocrisy. Labor's betrayal is garden variety electoral desperation, from a party struggling to raise money for an election most think it will lose. Infrastructure Minister Anthony Albanese reportedly told the caucus that the government had to support the bill, if only because the party is broke.

The Liberal Party's hypocrisy is more byzantine, coming as it does from a party ostensibly committed to small government. There's no way you can square the idea of a “budget emergency” with extra funding for political parties, and today's backflip scarcely excuses the detailed negotiations Abbott was in favour of as late as Friday.

Indeed, you could argue that the real reason Abbott is backflipping is that it will hurt Labor. The federal Liberal Party is awash with donations from the mining industry and other big corporates, who look forward to an Abbott government with ill-concealed glee. With Labor on the ropes, removing the lifeline of public funding can only help the Liberal cause in the run-up to September.

Perhaps the saddest aspect of this whole dispiriting exercise is the fact that the positive aspects of the bill will now be lost. Labor had abandoned most of the reforms proposed by Senator John Faulkner, but a minor improvement was in the offing in the form of a cut to the threshold for the public declaration of party donations from $12,000 to $5,000. It was well short of the sweeping, Canadian-style reforms to political donations originally envisaged by Faulkner, but it was something. Now even this is in jeopardy.

Trust is a critical factor in any working democracy. And that's why this sort of “dirty deal” (as some Labor MPs have apparently been calling it) is so dangerous. It erodes trust. A Liberal backflip will do little to repair the serious damage done to Australia's democratic institutions in this Parliament.

Ben Eltham is New Matilda's National Affairs Correspondent.