James Paterson (Victoria, Liberal Party) Share this | Hansard source

I would like to begin by making what I think is an important and what should be an obvious point but one which has been largely missed in the debate so far: donations reform, including banning foreign donations, would not have protected Senator Dastyari from his own poor judgement. That is because Senator Dastyari did not receive a foreign donation. He received a gift. The most regulated political donations system in the world would not have helped Senator Dastyari.

I acknowledge that there are very well-meaning advocates of change, of more regulation of donations, including in my own party, and there certainly are imperfections in the current donations system, which could be improved. It is appropriate that there be a review of the system that we have in place, and the best vehicle for that review is the Joint Standing Committee on Electoral Matters, which is very capably chaired by my colleague Senator Reynolds. But I want to issue a note of caution: donation reform is not something to rush into without careful consideration of the full implications of change.

One idea which has been widely suggested is that we confine donations to people who are on the electoral roll—that is, effectively, ban donations from unions, businesses and not-for-profit organisations. This reform would at least, to its credit, have the benefit of being relatively politically neutral between left of centre and right of centre political parties, unlike the shamelessly self-interested proposal by the Greens to only ban businesses from making donations but to continue to allow unions and NGOs to donate. But I think this idea is misguided for other reasons. It is almost certain to be unconstitutional following the 2014 Unions NSW case. That case found that the Australian people have an implied right to participate in the democratic process by making donations to political parties and other organisations which campaign in and around elections. Crucially, that judgement found that just because some Australians choose to exercise this democratic right collectively through an organisation that does not mean that they should lose that right. That is a very sensible and philosophically sound conclusion. After all, a business, a union or a not-for-profit organisation is just a vehicle for individual citizens to come together to advance their objectives as a group. Any right which an individual possesses alone should also be able to be exercised collectively.

Setting aside constitutional questions, though, it is also my personal view that banning donations from all third parties to political parties is misguided for other reasons. As we have seen elsewhere around the world, particularly in the United States, attempts to prevent organisations like companies from donating directly to political parties just encourages them to seek to influence political outcomes using other means. For example, they may set up third-party organisations of their own and fund them generously to engage in either the issues-based or even the quasi-partisan advocacy that occurs alongside political parties in elections. By their very nature, these third-party organisations will never be subject to the same standards, the same scrutiny or the same regulation that a political party is and can be. For the sake of transparency, we should encourage those that do seek to influence the political system—as is their right in a free and democratic country—to do so through the most formal channels available.

There are those that say we could solve this problem and prevent it from occurring simply by regulating the conduct of third-party organisations or even banning them from campaigning. Again, this is highly, highly likely to be found to be unconstitutional, but I also think it is wrong. In a free country, civil society organisations must have the freedom to advocate their interests and the interests of their members. It cannot be that the only legitimate vehicle through which people can participate in the political process is an established political party.

Many propose that if we were to substantially regulate donations then we could replace any of the lost revenue to political parties with more public funding. That is not an approach that I support. Firstly, I am sure that we can all think of a better use of taxpayers' money than paying for political campaigning. As politicians, I think we sometimes already test the patience of our constituents at election time. Imagine how they would feel if they knew that virtually every ad they saw on television, or virtually every letter or pamphlet they received in their letter box, was funded by their own taxes.

Secondly—and you may be surprised to hear me say this—I think that public funding, which is typically awarded on the basis of the vote received after an election, gives a huge advantage to incumbent political parties. As a major political party we can spend, and if necessary borrow, with certainty during an election campaign knowing full well that we will effectively be reimbursed for that expenditure after the election with public funding because we will have a relatively predictable share of the primary vote, whether we are going to win the election or lose it. New political parties do not have this same certainty. Until they have run at least a few times, they cannot be sure how much of the vote they will get and therefore the amount of public funding they would receive after the election. It will be even more difficult for a new party to compete with existing ones, who are lavishly funded with public support, if we limit their ability to raise private donations.

Thirdly, increasing public donations continues further down the road of fundamentally changing the relationship between the state and political parties. I acknowledge that we have already taken some steps down this road, but it is not one that I am keen to continue down any further. It would give the state more power over parties, especially opposition parties and minor parties. It is not that hard to foresee—as former Prime Minister John Howard pointed out this week—a future government which imposes onerous and potentially partisan conditions on an opposition political party in order for that political party to receive funding. If, at the same time, we curtail their ability to raise those funds privately, they will be at the mercy of the government of the day. In a free and democratic society, we should all be concerned about this prospect. We will all be in opposition at some period during our time here.

Finally, I think there is an important broader point here. If you do not want people to seek to influence political parties and governments with donations, there is a much better way to proceed than by regulating those donations. While ever government is large and intervenes heavily in our economy and our society, there will be people who profit from that and people who lose from that. There will be people who benefit and lose from government decisions, and they will always have the incentive to use whatever means possible, whatever means available, to try to influence those decisions. Instead of further regulating donations, we could choose to tread more lightly on society and the economy. The smaller the government is, the less capacity it has to favour or harm individuals, businesses and civil society, and the less incentive they will have to try to influence us through political donations.

I want to end on a note of bipartisanship and congratulate Senator Conroy for his excellent contribution to the debate earlier on the hypocrisy of the Greens. I also want to congratulate Senator Rhiannon for her honesty. I marvel at the clearness of advertising in their fundraising program called Democracy For Sale. We know what democracy costs in the Greens political party. It is $1.6 million. If you have got $1.6 million—if you are an eminent businessman like Graeme Wood—then you have the capacity to buy them. Graeme Wood said after the election that it was a great return on investment, and Senator Bob Brown, the former leader of the party, said he would be forever grateful. So we know what the price of democracy is in the Greens political party.

I would also like to point out that the Greens often rail against some industries, such as the fossil fuel industry, for making donations to political parties. I am yet to hear them complaining about a new, emerging player in the donations space—that is, the renewable energy industry, which also now makes very generous donations to all sides of politics. It is an industry whose profitability and viability is inextricably linked to the regulations applied to it by government. During the debate about the renewable energy target, we saw that the whole viability of renewable energy companies would be threatened if that favourable regulation and the subsidies they receive did not exist. If there were ever a better example of an industry which uses political donations to curry favour with governments, oppositions and, yes, even minor parties, you could look much further than the renewable energy industry.