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Politically expedient solution of banning donation misses the most rational option – caps

Prime Minister Malcolm Turnbull says a parliamentary committee should consider donations reform. Photo: Sanghee LiuThe rush to find a politically expedient solution to the current donations furore could potentially kill off any meaningful reform before it even begins, constitutional experts have warned.
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With Sam Dastyari’s fall from the Opposition frontbench came a spotlight on the broader donations system and from there, the political consensus has divided, with Coalition figures expressing support for restricting donations to those on the electoral roll – ruling out entities such as trade unions and big businesses – while Labor is pushing for an end to foreign donations.

But constitutional law experts argue that both options, while potentially constitutionally loaded, miss the most “rational approach” – capping donations and political party expenditure to remove any concerns about the funding source.

The High Court struck down a NSW attempt to limit donations to people on the electoral roll in 2013, raising immediate concerns that the solution Prime Minister Malcolm Turnbull has been touting is potentially invalid.

But not impossible – Professor of Law and Politics at the University of Queensland Graeme Orr said the 2013 decision needed to be considered in its context, which included NSW’s donation cap.

“The High Court reasoned that if you are going to limit all donations to $5000 – what is the pressing need to ban permanent residents, trade unions, small companies, even I guess Australian citizens overseas who may have fallen off the roll,” he said.

But he said any restrictions would be examined by the High Court from the point of the principle of the law.

“And the principle has to balance three things – liberty to participate in politics, equality- it would have to be fair – and concerns about integrity,” he said.

Which, Professor Orr said, would raise concerns with restricting donations to the electoral roll, as, from a fairness point, organisations like not-for-profit groups and unions would be banned, but wealthy individuals who can donate as much as an entity, would be free to give as much as they liked – hampering, in the current political climate, one side of politics.

Canada has done it, with their model banning anyone but citizens and permanent residents from donating. But while banning foreign donations brings its own issues. The Sydney-based, Chinese institute at the heart of the Senator Dastyari affair had an Australian ABN, potentially ruling it out as “foreign”. And while it has been argued that two-thirds of the world’s nations have banned foreign donations, Professor Orr said that was a “false factoid”, because it included nations like France, which only banned donations from foreign nations and political parties.

But any solution would need to be independently and thoroughly examined, Professor Orr said, to ensure proper reform, a point the Dean of the University of NSW’s Law Facility, Professor George Williams, echoed.

“The [previous] attempts [at reform] have failed not because of the legal constraints, but because of a lack of political will,” Professor Williams said.

“This can be done, the legal impediments can be overcome, a good rival model can be produced that is safe and consistent with the constitution, which also achieves the community desire to free our politics of the undue influence of these donations and getting there now is a question of politics and leadership.

“And I think that is the main point really – that we just need to work through this in an appropriate, deliberate way.

“I think some sort of independent process to assess it is the right thing to do and we’ll see if our political leaders have the courage of their convictions to fix what is a very significant problem for our democracy.”

Which, he said, meant examining a “good and straightforward solution . . . [and] cap all donations from whatever source to a low enough level to mitigate against any one donor having an undue influence”.

“The approach the Prime Minister and others have suggested has very significant policy and popular appeal, but I think it is fraught with danger, given recent High Court decisions,” Professor Williams said.

“And a more prudent course would be to adopt a different approach, capping all donations to a low level because that is both likely to achieve the desired outcome, while also surviving muster in the High Court.

“What you also need to do is cap expenditure by parties as NSW has done. That’s important because it takes the heat out of the system by removing the need to raise large sums of money.”

Differences in jurisdictionsQueensland – $1000 declaration threshold, disclosed twice a year.  Committed to introducing real-time donations by February.NSW – $1000 declaration threshold, disclosed once a year.  Caps on donations per candidate and party expenditure.  Donations from developers, gambling, liquor and tobacco companies banned.Victoria –  No state disclosure. Donations over $13,000 are made under federal legislation.  Gambling and associated entity donations restricted to $50,000.SA – $5000 declaration threshold, disclosed once a year.WA – $2300 declaration threshold, disclosed once a year.Tas – No state disclosure.  Donations over $13,000 are made under federal legislation.Federal – $13,000 indexed declaration threshold, disclosed once a year.

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