There is a strange disconnect between the debate on political donations laws, with yet more regulation proposed by the Prime Minister yesterday, and with the problems faced by Australian governments.

We have plenty of bad policies, yet very few of them have even plausible, let alone proven, links to political donations. As I noted last year, the people who are ‘bought’ in Australian politics aren’t politicians, they are voters. Politicians promise to spend billions to get themselves elected. Many bad or ineffective programs stay in place because they create their own constituencies that fight for them. In between donors and voters, donors lose every time. The incentives in the Australian political system aren’t to favour donors, but voters – donors are only ways of getting the campaign message to more voters.

As this theory of Australian political incentives would predict, there are very few cases of proven improper influence by donors, particularly at the federal level. Joo-Cheong Tham and Sally Young’s book on political finance laws, though proposing a bureaucratic extravaganza of regulation that would require the political parties to employ small armies of lawyers, provides little evidence that they are not proposing a solution to an imaginary problem. They suggest that a long-term donor to the Liberals may have received improperly favourable Ministerial discretion in an immigration case, and note that the unions finance the ALP, but they can’t actually nail a case.
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