Banning political party donations

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.


19 thoughts on “Banning political party donations

  1. Corruption exists in Australian politics

    On both sides? Can anyone point to a current or recent money-scandal involving the right side of politics? At the moment all the political donations scandals seems to involve NSW.


  2. As long as we get transperancy and disclosure on political donations why ban them? I’d prefer people/organisations attempting to buy influence in a transperant manner rather than under the table. The public had no issue with voting for Labor at the last election despite knowing the enormous financial support that unions provided them. Presumabley the public will be fine with this until the bought union influence on the Labor party translates into public policy that exceeds the voting publics desired level of influence.


  3. Sinc – I can’t think of any recent cases of non-Labor corruption, but in the past it flourished under the Nats in Qld and under Askin in NSW. In Australia, corruption is more ‘bad apples’ than rotten institutions, making institutional reform much less necessary or desirable than it might be elsewhere.


  4. Conference delegates are in no sense ‘unelected’, Andrew, they’re elected by the Party members via Electorate Councils. I think you mean union delegates (though I’m sure we disagree on the rightness of union representation at Conference).


  5. “I can’t think of any recent cases of non-Labor corruption”

    This is because bribe-taking occurs almost exclusively at state government level, where the non Labor parties have been in opposition for yonks. (Corruption occurs also at local government level, but the major parties have very little presence there.)

    Federally, we appear to have very little corruption, in the sense of politicians taking bribes. However, AWB was corruption on a grand scale. Less grand, but still corrupt, was the laundering of regional development funds by the previous government to their own seats.


  6. Andrew, Spiros – thank you. That’s my perception too. The problem seems to be at lower levels of government. And it is mostly bad apples, not institutions that is the cause. That suggests to me that new legislation etc. is not required, rather the existing laws that govern this should be enforced.

    The AWB case is a rotten institution problem that can (should) be easily fixed. The Regional Development funds are pork-barrelling, easy to understand, hard to fix.


  7. Liam – Elected, yes, but by the tiny minority of people who are members of the ALP, who have no authority to dictate policy to the people who were elected by the citizens of NSW.


  8. Well this is the issue, isn’t it. My view is that the Pledge signed by every ALP candidate gives Conference *just* that authority.
    This isn’t the point of the post though, and I’m sorry for derailing—I just thought that it needed pointing out that there is a representative process that goes into conference delegation. Not a perfect one or even a good one, but a process nonetheless.


  9. One might argue that that in electing candidates who had signed the “pledge”, voters are agreeing to elected candidates complying with the pledge, i.e. voters are placing their trust in the ALP conference.

    There are of course layers between ALP members and delegates to the NSW conference. 1: the members has to join a local branch. 2: each local branch elects delegates to a state/federal electorate council. 3: the state/federal electorate council elects delegates to the state conference. The electoral system to elect delegates at each step impacts on their composition of the delegation.


  10. Andrew if they ban donations, will we end up with PAC type arrangments like they have in he US where donations were restricted to some degree.


  11. Sacha – Though I am willing to concede something to mandate theory when a party campaigns strongly on an issue, I doubt many voters know anything about the ‘pledge’, and insofar as they do vote Labor despite it rather than because of it.

    But the only thing we can clearly say is that voters agreed to vote in a majority of Labor candidates with knowledge that Iemma would be Premier. Moreover, that is the legal situation as well – the ALP organisational wing’s constitutional role is zero.


  12. Mandate theory also works within Parties, Andrew. The preselectors of the Lakemba branches of the ALP chose Morris Iemma on the explicit understanding that he’d implement ALP policy, and Conference chose Michael Costa as an upper house candidate for the same reason. Those MPs whose preselections depend on Head Office intervention are surely *more* bound to the decisions of the Party machinery.
    If Party policy is so meaningless—regardless of the merits of the issue itself—what is to stop disaffected Laborites from running as alternative independent Labor candidates in elections, as Liberals for Forests do?
    Sacha is accurate about the process BTW: branch members elect delegates to State Electorate Councils, SECs elect delegates to Conference.


  13. Liam – The ALP can de-preselect Iemma if they choose to do so, but they cannot tell a Premier what to do. The internal structures of the ALP, to go back to the original post, show how much we need other influences than the party organisation. One interest group owning a political party while all other interest groups being given limited scope to be involved in party politics would be a very unhealthy state of affairs.


  14. The ALP can de-preselect Iemma if they choose to do so, but they cannot tell a Premier what to do.

    Isn’t that the same thing?
    And on the unions’ ownership of the ALP, that was the basic idea of the organisation as established in the 1890s. Agree or not, at least the pre-WWI unions were honest about insisting on the Parliamentary wing being their wholly owned subsidiary. In this sense I agree wholly with your statement:

    If ‘outsiders’ have less access to politicians, then the party insiders, in Labor’s case the unions, will have even greater relative influence.

    Though naturally I feel quite differently about the matter to you.


  15. Liam – I don’t think they are the same thing. Iemma has the ALP in the same place he has the long-suffering citizens of NSW – he’s not an impressive figure, but what are the alternatives? If they kick him out they are taking a massive electoral risk, reviving old concerns about the unions, and making Labor look divided.


  16. The worst that the Party—for the sake of argument, the union movement’s proxy/puppet—can do to Iemma is expel him, which happened to Premier Holman over conscription in 1916. In any event the Premier’s colleagues are responsible alone for his/her support.
    “Electoral risk” is an understatement: in Holman’s case Labor lost government and was a fractured bitter basket case for years. More likely they’ll simply protect any MP/MLC who wants to cross the floor from the automatic expulsion that normally follows, which is an action that’s hard to interpret as the Party “forcing” anything on a Premier.
    For the record, I tend to think that Geoff Honnor’s crystal ball is the most accurate I’ve heard read. But all this is a distraction from your good post; I’m sorry for the massive derailment.


  17. A question arising from Liam’s comments is whether the ALP is or whether it should be a wholly-owned subsidiary of its affiliated trade unions as it was in the 1890s. If it is, then it is understandable that its affiliated trade unions would want to have final say over its policies.


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