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Political donations: time for reform?

As the scandal surrounding political donations continues, calls for reform are growing louder. Analysis with Fairfax political correspondent James Massola

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Two former Liberal leaders have called for sweeping reforms to political donations following revelations that Treasurer Joe Hockey's campaign fundraising body, the North Sydney Forum, offered VIP meetings to groups including business people and industry lobbyists in return for annual fees of up to $22,000.

A furious Mr Hockey hit back on Monday, labelling the report "both offensive and repugnant" and denying any suggestion of improper behaviour.

<i>Illustration: Rocco Fazzari</i>

Illustration: Rocco Fazzari

"The Treasurer will not let this distract him from the important task of putting the Budget together. As the matter is now in the hands of lawyers no further comment can be made,'' he said in a statement.

Former Liberal prime minister Malcolm Fraser and opposition leader John Hewson both called for "continuous disclosure" of political donations that would require parties to report to the Australian Electoral Commission within days of donations being made.

Dr Hewson went further in calling for a $1000 limit on individual donations, greater public funding and a ban on donations from organisations including businesses and unions.

Mr Fraser said it was “very likely” a federal version of the NSW Independent Commission Against Corruption was needed as he argued Liberal Party founder Sir Robert Menzies had been determined to keep party fundraising at arm's length from policy-making and politicians.

Opposition leader Bill Shorten offered to work with the government on Monday on any proposal to reform electoral donations as it emerged he will host a fundraiser in Sydney on Thursday for a pre-budget Federal Labor Business Forum event that will cost  etween $2500-$3300 a head. 

"I make this invitation to Tony Abbott, that if you want to improve transparency of political donations, so does Labor, we will work with you,'' he said.

“The Parliament of Australia should constantly be seeking to improve the election funding rules in this country ... I think like every other Australian we have been nauseated by the toxic revelations out of ICAC about NSW politics.”

Mr Abbott played down the significance of Mr Hockey's North Sydney Forum, a fundraising body run by his North Sydney Federal Electoral Conference, offering VIP meetings with the Treasurer in exchange for membership fees ranging from $5500 to $22,000.

The Prime Minister stopped short of committing to the creation of a federal ICAC but vowed he would ensure lobbyists had "no role in the running of political parties".

"All political parties have to raise money and typically you raise money by having events where senior members of the Party go, and obviously, they meet people at these events. The alternative to fundraising in this time-honoured way is taxpayer funding and at a time when we’re talking about a very tough Budget indeed, the idea that we should scrap private fundraising and fund political parties through the taxpayer I think would be very, very odd,'' he said.

The former Labor government had agreed a sweeping package of reforms to political donations last May but the legislation was shelved amid an outcry of the changes, which would have seen tens of millions in additional public funding handed to political parties.

Mr Fraser said he was certain Mr Hockey was "totally honest" but that he abhored the system that had developed around donations to political parties.

"If you go back to the [predecessor to the Liberal Party, the] United Australia Party, the people who funded the party thought they could control policy. Menzies was determined that that would not happen. That’s why he as founded it fund raising was the responsibility of the organisation, policy and politics the responsibility of members of parliament.”

"Public funding and banning private donations to political parties is not necessarily a simply solution...the easier thing is to establish total transparency, and to have that transparency immediate, reporting weekly or every few days."

Dr Hewson said declaring donations every few days would "create a different climate" in politics. 

"And if you can’t limit it to individual donations to a maximum of $1000 then you just have to go to public funding of elections to have a transparent process. It’s the lack of transparency and disclosure that is a fundamental problem,'' he said.

"My preference is to ban all donations by organisations, companies, associations, unions and research bodies, and then limit individual donations to a low maximum. And we need immediate disclosure of donations."

The NSW branch of the Liberal Party has been rocked by recent revelations at the ICAC that have seen Premier Barry O'Farrell resign and a slew of MPs, including two ministers, move to the cross bench amid allegetions of improper links to the controversial infrastructure company Australian Water Holdings, which has in turn been linked to the family of corrupt former Labor powerbroker Eddie Obeid.

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