Tuesday, October 09, 2007

Tuesday Column: Ban large political donations. Starting here, starting now.

After I wrote last week that ACT housed more poker machines per person than any other state in Australia I got an anonymous semi-serious email suggesting we needed more. “They should be in shopping centres, in railway stations, tram and bus stops, in government offices, public buildings and banks,” my correspondent wrote.

”I see tax taken on poker machines as tax I don't have to pay. This is a good thing, and I see no reason to stop it.”

Except that the ACT for some reason takes comparatively little tax from poker machines – less than the Australian standard. ACT citizens get the worst of both worlds: the misery associated with the highest concentration of poker machines in the country (we have more gambling-related bankruptcies per head than anywhere else) without Australian-standard tax revenue.

The whole thing makes no sense unless you are a cynic who thinks that the ACT Labor Party is reluctant to really move against poker machines or properly tax them because it knows it is bankrolled by the clubs that house them...

It certainly is bankrolled by one of those clubs. The Canberra Labor Club hosts more than 400 poker machines at its venues in Civic, Belconnen, Charnwood and Weston Creek. Its donations to the ACT Labor Party - reported on the Electoral Commission’s website - dwarf those of every other contributor.

It’s an uncomfortable thought – that a government generally well regarded in the ACT is unable to govern properly on this one issue because it knows that if it did its parliamentarians might lose the money they need to get reelected.

The anti-pokies campaigner Tim Costello says our Chief Minister is “brought to you by the gaming industry, he's an extension of the gaming industry” – a claim that can hardly make us or Jon Stanhope feel proud.

Stanhope has hit back by alleging that the Liberals are in "bad odour" themselves because they are funded by real estate agents and developers.

He is correct about where the ACT Liberal Party gets its money from. Its donors include the Village Building Company, LEDA Holdings, Consolidated Builders, Madison Constructions, the Hindmarsh Group and the Amalgamated Property Group as well as property financiers including Westpac and the National Australia Bank. It has also been supported by British American Tobacco.

So why not break the cycle?

What I am proposing is an Australian first where the ACT would be proud to show the rest of Australia the way.

Unencumbered by an upper house or an by Opposition with any moral authority on campaign funding, the Stanhope government is in an excellent position to push it through.

All political donations larger than a certain amount – say, $2,000 – would be banned.

In immediate financial terms the change would hurt the Labor Party the most. At the moment it gets a bigger haul of donations than the Liberal Party, largely because of the pokies-tainted funding from the Labor Club.

But in the long run Labor might be the biggest beneficiary.

As happens already, it and the other parties in the Assembly would continue to receive funding from the Electoral Commission based on their vote in the last election. The formula could even be made more generous. It would be a small price to pay for an improved democracy.

Minor parties and independents not yet in the Assembly would find it harder than at present to compete, but that’s unlikely to worry the ALP.

And the Liberal Party, at present under-funded compared to Labor, would be prevented from ever whipping up mass business support and outspending it.

With Canberra essentially a Labor-leaning town, and with upsets less likely, the ACT Labor Party would have bought itself long-term electoral dominance.

ACT elections would be duller - there would be fewer ads. But turning down the heat at election time is unlikely to hurt the dominant party. It might even lead to better campaigns.

It would certainly lead to a Labor government, or a Liberal government when elected, that was free to act in the best interests of the electors without the suspicion that it was also repaying financial favours.

Trade unions would be freed from the need to contribute the ALP. They could use the money for the benefit of their members. Any members that wanted to donate to the Party would be free to do so individually, up to a limit of $2,000.

Developers including Village, Hindmarsh and LEDA might no longer feel the need to engage in the bizarre practice of donating to both the ACT Liberals and the ACT Labor Party using a logic that I am not keen to explore further.

I can imagine objections to the idea. One would be that any organisation that wants to make a big donation to one of the parties could still do so by breaking it up into $2,000 blocks and donating each in a different name. In reality I don’t think that is likely, and organisations such as the Canberra Labor Club which donates hundreds of thousands of dollars would find it all but impossible.

Also many donations already fit within the $2,000 cap. Many more would not have to be reduced by much in order to fit.

It would be impossible, and not desirable, to outlaw political donations altogether. They are part of politics. The High Court has found that Australians have the right to donate as part of the exercise of free speech. It has held that a government can limit, but not abolish that right.

Another objection would be that some candidates are rich enough to spend their own money, or keen enough to mortgage their houses to fund their campaigns and will get an unfair financial advantage. I call this the “Ross Perot” objection, named after the American billionaire who poured millions of his own dollars into a bid to become US President in 1992 - easily outspending competitors including Bill Clinton who faced donation limits.

But if candidates are prepared to spend their own money getting elected I don’t really see an opportunity for corruption of the political process. That happens when they are spending donated money and owe favours.

Would the idea appeal to our Chief Minister? I think it might. Being factionally unaligned he owes nothing to mandarins who run either the Labor Club or the Tradesman’s Club. He probably has no particular love for poker machines.

If it became law, Jon Stanhope would doubtless continue to allow poker machines to operate, but he would become free to pass laws that wound back their numbers and restricted their operation in a way it is currently believed he cannot.

And he would put the ACT on the map. We would strengthen Australia’s democracy by example, and we would probably reward him for it.