Australians sick to death of the obvious rorting and corruption of electoral donations might find attractive the sudden enthusiasm for banning donations altogether.
But the consequence, if it were done Australia-wide, could well be to entrench the power of party organisations at the expense of would-be candidates, to effectively prevent the formation of new parties or strong Independents, and, probably, to kill off strong proportional voting systems of the sort operating in the ACT and Tasmania.
It will also, most likely, lead to the development of sinister political action groups on the United States model, campaigning at elections for candidates with their world view, but without any responsibility or broader accountability to the people. The slush money presently being used to bribe, influence and intimidate politicians would still continue to flow to the benefit of political parties, and sometimes, given the essential venality of the process, into the pockets of some of the players. The big difference is that the system would probably be even more secretive, unaccountable and open to abuse than the present system, itself hardly a model of transparency or accountability.
Some think Labor's conversion to the idea of "no donations" might involve an ultimate nobility in the face of self-interest. It it has been Labor, after all, which in recent times has been doing best from the donations system, and it is Labor which has a guaranteed income because of the support and affiliation of unions. But the last election provides a good example of why Labor would not necessarily be hurt.
The greatest support the trade union movement gave Labor at the federal election was not from direct donations to the party, or to individual candidates, but by its funding of a massive advertising campaign against the Howard government's workplace reforms. The cost of this campaign will not figure in Labor's own returns of income and expenditure at the election. (Any more, the cynic might say, than the cost of the equally partisan government ads will figure in the Liberal Party's returns).
As public funding works in Australia, political candidates who garner a certain minimum of votes, say, 5 per cent, get paid for such votes, say, $2 a vote. They can use this money to defray their expenses, or as a war chest for the next election. Typically, the money is controlled by their party, but as some candidates have discovered, it is quite possible to make a handsome profit from a campaign. Some think this scandalous, and want the law changed to be, at maximum, a refund of expenses, but closing off the rort will probably have the effect of further assisting big incumbent parties at the expense of Independents and new parties.
As it is, the system adds to the war chest of incumbents. A party that wins government because of a majority of votes gets more money than a party that falls short.
A new party, or a would-be Independent member, has no public money, and, if deprived of the right to raise funds, can campaign only from within the resources of members. Only if it does well enough to cross the threshhold will it get funding for a second chance. Even established minor parties who do less than well are sometimes wiped out. The Democrats were dead in the water from 2004, because their base vote did not cross the threshhold. They had next to no money to redeem their image with electors in 2007, even though they still had continuing members in Parliament.
In the Hare-Clark system, such as in the ACT, even party candidates are at a disadvantage. Their party will use public funding to campaign generally for a vote for the party, rather than for other parties or independents. But one of the party's candidates must defeat other candidates from her/his own party to win a seat. New faces find it particularly difficult to get any profile compared with party incumbents.
The ACT experience is that a new candidate must devote at least half of her/his resources to campaigning against her/his own, rather than against the other side, if she/he is to have any chance of success. Some take this very seriously: at the last ACT election Richard Mulcahy spent a fortune advertising his wares as (then) a Liberal candidate.
It is unlikely that party machines will subsidise such campaigns because they fear that too fierce an inner contest might damage the overall vote for the party.
That does not mean that outsiders will not have a keen interest in seeing that some candidates from a particular slate succeed at the expense of others. People and groups who traditionally give money to parties would be strictly forbidden to do so if the NSW proposal, which has some federal support, succeeded. In practice a good many would still donate money to their causes, either because of their vested or their intellectual or academic interests. The money would simply come in different ways.
Thus people who favour abortion choice, or environmental policies, will raise money to make sure their voice is heard, candidates take notice of their interests, and voters know which candidates are thought to support their causes. Likewise with business groups, whether ones favouring broad or narrower aims.
A High Court decision has already established that whatever regulation is put over the activities of such interest groups, one cannot suppress their right to free speech or to spend their own money on their causes.
Attempts to reform the American scandal of election corruption has seen efforts to register, regulate and control, and have public disclosure of the activities of such lobbies and interest groups.
But experience has shown it is almost impossible to regulate them, the more so since party officials connive with such groups to find fresh loopholes and ways of avoiding public disclosure. We have the same problem here: some of our politicians sound idealistic, passionate and sincere when they propose new "reforms", but soon the party fund-raisers, on either side, have found a way around any fresh controls.
This is not entirely a counsel of despair. There are things which can be done to make the system more fair, more transparent and more accountable. The question is whether parties actually have any appetite for them.
One can ban donations by corporate entities or anyone other than identified citizens. One can centralise and make much more accessible the full suite of disclosure statements from politicians' declarations of interests, election returns, party election returns, and donation lists so that they are all quickly accessible and can be compared with each other. (Now, and not by accident, comparison can be done only manually, and never in the same place.)
One can create legal presumptions that undeclared payments (even the ubiquitous "oversights") conceal some sinister purpose. One can even create some policemen to enforce and prosecute breaches, even of its own motion. The Electoral Commission is a neutral corner, but has neither the time, the capacity, or generally even the inclination to be anything but a postbox. Its function is the integrity of an election itself, not of the parties or the candidates. For that we need a new body and a new commitment.
Jack Waterford is Editor-at-Large.