Reform

Surcharge to Support the Political Process

By Bruce Barbour - Updated September 2024

One of the big issues for all democracies, including Australia, is the corrupting effect of political donations from corporations and other organisations.

When companies make political donations they are not doing it out of generosity, to support democracy in Australia. They want a return. A decision to go their way. A regulation or law rescinded or not implemented. It may not be anything specific.  A party which receives significant donations from an organisation over the years will begin to factor that into their decision making when considering new policy. The party will not want to upset their corporate donor, to risk losing that donation which may impact on their operational ability. Often corporations can get massive returns on their "donation" - a 10, 20 or 30 or more thousand dollar donation can result in the overturn of a decision or a policy that would benefit Australia, but not the corporate donor, not being adopted. A favourable decision could impact on the company's bottom line by millions of dollars. But it could have a much more detrimental impact on Australia as a whole. While the company and the political party wins, Australia as a whole looses.

A person, including politicians, cannot serve two masters. They either serve their constituents or they serve their corporate donors. When most of the money necessary for their political survival is coming from corporate donors then who they are more likely to be serving? It is, at the very least, a risk that can be eliminated.

If a politician or their party receives a donation from a lobbyist or a company why is it not then incumbent upon that politician when matters relating to that company or the issue a lobbyist is supporting are being decided by the politician that they declare a conflict of interest. Because there is no doubt that it is a conflict of interest. The trouble is the whole party would have to declare a conflict of interest and therefore no decision could be made on the matter. This is one of the many problems with large political donations from companies and lobbyists.

At the moment (November 2021) we have the ICAC in NSW and the IBAC in Victoria investigating various issues relating to the actions of politicians. From what I can see the alleged actions from the politicians being investigated are minuscule when compared to the much more significant issues related to lobbyists and companies getting favourable decisions due to their financial contributions to the political parties. Orders of magnitude greater and yet this is not being investigated by an ICAC/IBAC or any other body. It beggars understanding.

Political donations from companies and organisations are a corrosive force in our democracy. They must be either banned or limited to such an extent they are not large enough to change a political decision.

Another favourable aspect of this change would be that it would free politicians and their party from having to fund raise from large corporate donors. No more endless wining and dining and meetings with actual and potential donors. The politician will be able to do what they are paid to do - to consider policy beneficial to the country and address their constituent's concerns.

When you think about it, why is it legal for a politician to go out to raise funding for his own and his parties benefit when he or she is being paid for by the taxpayers to do the job of representing the taxpayer. We've had recent (2021) instances of where it has been alleged that taxpayer funded staff in a politician's office have been doing work for the benefit of the political party rather than the taxpayers - and that is classed as possible corruption. Yet apparently it is OK for the taxpayer funded politician to do the same.

However the political process is expensive. Running a political party and political campaigns for elections is expensive - more expensive than what can be garnered from membership fees. They need money. If it is not from the donors then it has to be from the taxpayers. It will be expensive but the cost of not doing it is more costly.

I propose a tax surcharge on companies to pay for the running of political parties. It may also apply to individual taxpayers - to be decided. I don't know what size the surcharge would be, but probably a fraction of a percent. For some companies this would result in a significant saving as they would be banned from direct and indirect political donation.

How the money would be distributed would have to be determined but would be based on the number of votes the party - or political candidate - receives, and whether they were elected. Parties /candidates that are elected would receive a higher amount with payments spread over the years between elections. An unelected candidate might receive a smaller one off amount, once their vote hits a certain threshold. Also the total amount spent by political parties might be cut from the current amounts to a lesser sum. This may mean less political advertising, which may be a good thing, and probably fewer support staff due to no longer having to wrangle donors and lobbyists.

Donations from private citizens to political parties would be allowed with the annual amount strictly limited.

The Role of Companies and Lobbyists

Companies should be banned from being able to lobby on issues and government policy. A company itself can argue the merits of a particular project that they want to initiate. However not on government policy.

And as stated earlier companies and their lobbyists cannot provide donations to the politician or their party.

For example it is not appropriate that a company can lobby or argue about climate policy. It is strictly for the people to decide how the country tackles climate change. Companies just have to accept the decision of the government because that decision is informed by the will of the people. If the government is mistaken in its interpretation of the will of the people the people have the right to let them know - immediately by contacting their politician and later at the ballot box.

I would ban companies and their lobbyists (and everyone else) from wining and dining or to offer any other gift to politicians or candidates. It would be difficult to ban them meeting with politicians - everyone has the right to meet with a politician but seeing as they can only argue for a particular project they want to implement and not on general policy there should be less need for them to meet with politicians.

If a company (or their lobbyist) or a constituent do meet a politician there has to be transparency in their meeting. To that end I would make it a requirement that the politician's diary be published on line after the event - published in the following week. (It couldn't be published before the event as there could be security issues.) If the meeting was with a constituent the published diary would not necessarily publish the name of the constituent if the constituent didn't want it published. For other people, including lobbyists, the name would be disclosed, as well as the company they represent if relevant and a brief overview of what was to be discussed. All correspondence would be subject to freedom of information access - except from constituents except if agreed or determined as being necessary for good governance - some, such as that from a lobbyist, may be required to be published on the politician's website.

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The documentary "Big Deal" provided a good analysis of the political donation issues in Australia. It use to be available on ABC Iview but no longer. It may be able to be found elsewhere on the internet.

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