Time to ban all political donations

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Bernard Keane at Crikey has a good idea:

Short of towing the NSW Labor Party out to sea and sinking it, is there anything that can be done about persistent corruption in NSW?

It’s clear from evidence emerging at the NSW Independent Commission Against Corruption inquiring into political donations that the party that gave us a series of corrupt ministers persists in simply refusing to abide by the most basic rules of ethics and probity.

But while the media focus is on individual donors and party officials like NSW Labor secretary Kaila Murnain, let’s not forget the structural reason why corruption keeps happening in NSW — and most likely would be revealed at the federal level if the Coalition ever permitted a fair dinkum ICAC to be established in Canberra.

Political donations are at the centre of the worst scandals in Australian public life in recent years. It was donations that killed the careers of multiple Liberal politicians in NSW, ended the premiership of Barry O’Farrell — NSW’s and Australia’s best premier since Nick Greiner — and wrecked the prospects of Arthur Sinodinos. In 2016, the NSW Electoral Commission found that the NSW Liberals had “channelled and disguised” donations from prohibited donors, and withheld public funding from the party.

…The challenge of regulating donations effectively is that both donors and the parties have such strong incentives to game, circumvent or simply break laws restricting them. Donations are crucial to campaign advertising and voter research and marketing. They are a key tool by which interests both legitimate and illegitimate try to influence politicians. They are a means of buying access to key decision-makers. Yet, especially at the Commonwealth level, they remain relatively poorly regulated despite the best efforts of electoral authorities and anti-corruption bodies.

You could remove Kaila Murnain, and the NSW Labor Party, but poorly-regulated donations mean they’d be replaced by someone else, and by another party. The only structural solution is to remove donations altogether, or limit them to a small amount that would reward grass-roots organisation and campaigning, and apply the same rules to third-party groups like GetUp and trade unions. The only victims would be media companies that would be deprived of a regular injection of several million dollars from taxpayers for political advertisements that voters hate anyway, robopoll companies and printers of junk mail that goes straight to recycling.

The notion of “towing the NSW Labor Party out to sea and sinking it” is better.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.