Since I last posted on political donations, the debate in NSW has escalated beyond disclosure to prohibition. The SMH was endorsing this route again yesterday. As usual, no serious consideration has been given to the likely consequences of such a move.
Arguably, in the Labor Party unelected party officials and conference delegates already have too much power over elected Labor MPs. They were trying again to exercise that influence at the NSW Labor conference yesterday. If ‘outsiders’ have less access to politicians, then the party insiders, in Labor’s case the unions, will have even greater relative influence. That is not to say that they will always get their way – politicians will usually be more concerned with the broader real-world and electoral implications of policy. But the insiders will proportionately get more of the decision-makers’ time.
But a ban on political donations won’t help political parties, even while it will help party power-brokers. Most of what parties do between elections is fundraising. Much of the social capital element of political parties would disappear without fundraisers. Already parties are suffering from not being able to give members enough to do, and this problem would worsen further if donations were banned. Parties would become quasi-state institutions, rather than being parts of civil society.
Political activity would be displaced to organisations that don’t run in elections. Most of these are far more narrowly focused than the current parties, whether on particular issues or on narrower ideological positions than the ‘broad church’ major parties. But these would be the only mechanisms through which new parties could be formed, since if political donations are banned it becomes very difficult to start new parties. For public funding to work, it would need to be based on past performance, which new parties by definition do not have.
Inevitably, the political puritans would decide that non-party political organisations also had too much influence and had to be regulated. We are already seeing this in the case of political expenditure laws. Gradually, independent political activity will be diminished, with only debate within official forums remaining.
Compared to these costs and dangers, the benefits of banning political donations appear trivial. Corruption exists in Australian politics, but it is minor compared to other countries and in the context of other problems we face.