Time for party donation reforms

There is a perverse fact sitting in the middle of the current hearing at the Independent Commission Against Corruption: the donation reforms supposed to clean political parties of the venality of corporate fundraising have in fact created the system by which moneys appear to have been laundered through various shady fronts before being tipped into party coffers. The solution, that is, has worsened the problem.

At issue here is a lack of consensus. When New South Wales went through its previous wave of donation reform, in 2009, a waning Labor Party looked to clean up some parts of the donations business but left others filthy. Unions could continue to donate money, as could the undisclosed small donor, but property developers were locked out. Tobacco would soon follow, as would liquor and gaming interests. To the outside observer, and certainly to the Liberal Party, the reforms seemed skewed towards outlawing the kind of money conservative parties rely on while leaving the sort of funding Labor needs largely untouched.

The reforms weren’t so much about cleaning up politics as rigging it. Hence the front companies now being pursued through ICAC. By only going halfway, these reforms proved just how important it is to outlaw all political donations and publicly fund elections.

Counsel assisting ICAC Geoffrey Watson, SC, has done more than anyone to establish the case for removing the taint of fundraising from political life. This week he rightly called the public funding of elections “a mechanism to expunge the corrosive culture of political donations”.

NSW Premier Mike Baird has offered hopeful support on this. “The time has come for a public debate on this matter,” he said, “with decisive action to follow.”

The timing on this is important. Gough Whitlam had a shot at it, without senate support. Bob Hawke gave it a go. Julia Gillard got close before the last election. Without public support for what looked like an indulgent use of money, Tony Abbott withdrew his bipartisanship. Which is why this ICAC is so important: it has well established what is wrong with the current system and provided a clear argument for change.

Donations are not just about the influence they give private individuals; they are about the influence they give politicians who happen to excel in the sleazy art of fundraising.

For long it was clear that Eddie Obeid and Joe Tripodi were not Labor’s finest parliamentary performers. Obeid rarely spoke in the chamber, except to complain about journalists who had been cruel to him. Tripodi once spent $6683 on a trip to Newcastle, eating only “pies and pizzas” while he waited for the stricken Pasha Bulker to be refloated. But both enjoyed undue influence because of their skills as fundraisers. On the Liberal benches, Chris Hartcher now looks to have occupied a similar position.

The public funding of elections – with appropriate caveats, to protect against a system that would disadvantage minor parties and independents – is now the clearest way to end this influence both in and out of parliament. It can be hoped that Watson, in his careful, awful detail, has made the case for sweeping and bipartisan reforms.

This article was first published in the print edition of The Saturday Paper on May 3, 2014 as "Time to get out from under the influence". Subscribe here.