Political donations: buying influence and outcomes.

The furore in New South Wales over developers and resource companies seeking to buy influence through political donations has died down a bit as focus has turned to the federal Budget. Whilst no one is linking Budget decisions to specific donations, it is pretty obvious the Coalition has brought down a Budget which favours many of their major financial backers, whilst a very large number of less well off people will be paying a significant financial price as a result of Budget decisions (although the Senate still has some key decisions to make before we all know for sure what the fate of some Budget proposals are.)

Back in Queensland, the state government is still planning to scrap the existing cap on political donations and limits on electoral expenditure, and significantly increasing the size of anonymous donations which will be allowable. This legislation is likely to be passed next week, at precisely the time we are all becoming more aware – thanks to the Independent Commission Against Corruption hearings in Sydney – how prevalent influence buying is in political circles. I doubt many Queenslanders believe that somehow we don’t have the same sorts of temptations and influence buying happening as what is occurring down south.

I had a piece published last week in the Courier-Mail on this topic, which you can read at this link:

(or if you don’t go to their site, the text of the article is below.


THE ongoing revelations in NSW out of the Independent Commission Against Corruption (ICAC) over the past 12 months or more show just how widespread attempts are to buy or improperly influence state government decisions.

Just as the ICAC hearings have shown tainted decisions, undisclosed donations and buying influence are not confined to just one political party, it would be foolish to think this misconduct only occurs in NSW.

The ever-widening range of misconduct exposed by the ICAC highlights the danger in the Newman Government’s action to weaken our state’s Crime and Misconduct Commission (CMC), to be renamed the Crime and Corruption Commission, which performs a similar role to ICAC.

Among other things, the Queensland Government has now raised the threshold for what matters are captured within the definition of official misconduct, and weakened the CMC’s capacity to work on the prevention of corruption.

The ICAC hearings show that Attorney-General Jarrod Bleijie and Premier Campbell Newman are going in the wrong direction with the CMC changes. Picture: Russell Brown

But there are other more immediate changes the Newman Government is proposing that are even more dangerous in the context of what is emerging from ICAC.

As more evidence is emerging in ICAC of allegedly illegal donations being funnelled through front companies from property developers and others who are banned from making political donations in NSW, the Liberal National Party Government in Queensland has the Electoral “Reform” Amendment Bill before parliament, which will remove existing caps on political donations and substantially increase the threshold to $12,400 before a donation has to be publicly disclosed.

It is ironic that at the very time the LNP is complaining about Clive Palmer allegedly trying to buy influence by persuading MPs to defect to his party, the LNP is widening the ability of any other well-funded person or entity to be able to buy some influence of their own.

As the ICAC hearings have shown, donations far lower than $12,400 have had the capacity to buy influence.

The Age economics editor Peter Martin recently pointed out that research from professors Ulrike Malmendier and Klaus Schmidt from US National Bureau of Economic Research, in a paper called You Owe Me, found that smaller gifts can actually have a bigger impact in getting return favours, compared to larger gifts.

This effect is not based on the ideology of the recipient. Rather, it is based on human psychology.

A decision-maker often wants to favour the gift giver, even when they know the gift is given specifically to try to influence them.
Rather than increase the ability of political parties to be able to legally hide sizeable donations, Queensland should be following NSW in banning donations altogether from sources such as property developers and more tightly controlling the ability of big business and unions to funnel money to political parties.

Similarly, rather than increasing the influence of big money by removing the caps on what parties can spend at election time, Queensland should be levelling the playing field by reducing what can be spent. As the ICAC hearings have shown, putting in place bans and tight disclosure requirements on various types of donations to political parties won’t stop people from trying to rort the system.

But it is far better trying to constrain corrupting conduct, and put those who try to avoid the rules at risk of conviction if they are caught, instead of just opening up the floodgates.

The ICAC hearings show that the Newman Government is going in precisely the wrong direction with their moves to weaken our CMC and restore the power of big money to influence political parties.

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