Right: Labor Senator Sam Dastyari resigned after admitting that he had asked a Chinese political donor to pay for some travel costs and legal fees.
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Arguments in favour of banning foreign, corporate and union donations to political parties
1. Foreign contributors may influence political decisions in ways that are not in Australia's strategic or economic interests
Professor George Williams, Dean of Law at the University of New South Wales, and a member of Civil Liberties Australia, argued in a comment published on September 5, 2016, 'Money can drive outcomes that suit the foreign interest, and not the Australian community. This may be because national security is compromised, or policy decisions distorted.'
The rapid increase in the number of Chinese corporations and individuals, for example, making donations to Australian political parties has led to concerns that these groups and individuals may be buying influence with Australian governments.
A report published in The Inverell Times on May 23, 2016, noted, 'A Chinese government-backed propaganda unit and a swag of companies that stand to gain from the China Australia Free Trade Agreement have made more than half a million dollars of political donations in Victoria, raising concerns about the influence of foreign donors.' The article goes on to suggest that these companies may be seeking to buy influence.
In August, 2016, the ABC reported that businesses with Chinese connections gave Australia's major political parties more than $5.5 million from 2013 to 2015, making them easily the largest source of foreign-linked donations.
On September 14, 2016, the United States Ambassador to Australia, John Berry, relayed his country's concern that the extent of Chinese political donations was leaving Australia open to undue foreign influence.
Ambassador Berry indicated that the United States objects to Beijing being able to fund political candidates in an Australian election campaign to advance Chinese interests.
Berry stated, 'That, to us, is of concern. We cannot conceive of a case where a foreign donation from any government, friend or foe, would be considered legitimate in terms of that democracy.''
Critics note that it has become plain that some foreign donators clearly expect to be able to exert political influence as a result of their donations. Huang Xiangmo, chairman of the Yuhu Group of developers, voiced a complaint which was published in Mandarin in China's state-run newspaper. Huang Xiangmo complained, '(They're) not delivering ... We need to learn how to have a more efficient combination between political requests and political donations.'
Those opposed to foreign political donations are concerned that these donations may result in politicians being pressured to act in ways that are not in Australia's national or economic interests.
2. Corporate donations may influence political decisions in ways that are not be in the interests of all Australians
There is concern that political donations from large corporations can give those groups influence over the policies political parties form and the decisions governments take. This is seen as undermining one of the basic principles of democracy - one vote, one value.
Critics claim that although the wealthy can only cast one vote in the same way as any other citizens, the corporations of which they are a part, are able, through their political donations to effect what governments do in a way the ordinary citizen cannot.
In 2008, the House of Lords argued that it was necessary to maintain a level playing field and prevent 'well-endowed interests' from using 'the power of the purse to give enhanced prominence to their views'.
In an opinion piece published in The Conversation on June 2, 2016, Marian Sawer, Emeritus Professor, School of Politics and International Relations, Australian National University, stated, 'Parties without wealthy backers should not have their message drowned out by those that do. And corporate donors should not be able to buy political access far in excess of what other citizens enjoy.'
The same point was made by former West Australian premier, Carmen Lawrence, in an opinion piece published in September 2007 in The Australian Review of Public Affairs. Lawrence stated, 'Well-funded lobbying and campaign donations...strip average voters of equality at the ballot box. Those who can afford the big donations (often made without the agreement of shareholders or members), the flights to Canberra, the permanent lobbyists, and the hospitality may well drown out other less well-funded voices.'
The principle of electoral equality, maintaining that no group or individual should exert greater influence of the political process simply by virtue of wealth, was reinforced in a High Court decision brought down in 2015.
In the McCloy decision, the High Court decided, in response to a case brought by a property developer, that 'guaranteeing the ability of a few to make large political donations in order to secure access to those in power' was antithetical to the underlying constitutional principle of political equality. Political freedom needed to be balanced by 'equality of opportunity to participate in the exercise of political sovereignty'.
It has also been noted that corporate donations to political parties buy influence and secure government preferment in a way that is likely to be unfair and inappropriate. For example, managing Director Luca Belgiorno-Nettis told Four Corners in May 2016 that Transfield's large political donations had undoubtedly given it the ability to negotiate with its "political masters" for favourable contracts, such as that for the Sydney Harbour Tunnel.'
3. Union donations may influence political decisions in ways that are not be in the interests of all Australians
Opponents of unions making political donations argue that they too are seeking to buy influence in the manner corporations and foreign contributors are accused of doing.
In an opinion piece published in The Australian on September 6, 2016, Judith Sloan stated, 'The brutal reality is union donations to Labor purchase favours in a similar way to other donations, although union gifts are generally more effective at getting the job done. And because of the scale of the donations and the lopsided nature of them - most companies will generally give money to both sides of politics, although not always in equal measure - the pay-offs are substantial even when Labor is not in office.'
Sloan argues that unions should not be seen as representative bodies in their own right as only a small minority of the electorate are union members. Rather she argues, they are seeking to buy influence for a narrow sectional interest. Sloan contends, 'No one should kid themselves that the political actions demanded by the union movement as part of the quid pro quo are undertaken in the national interest. The aim is to foster narrow sectional interests; don't forget trade union members make up only 11 per cent of the workforce.'
Sloan further argues that trade unions will seek to exert this influence even when the Labor Party is not in government. She writes, 'Even if Labor is not in power, it will use its numbers in the Senate to block the removal of union privileges and to prevent the introduction of any policy initiative of which the unions disapprove.'
A Four Corners program televised in May, 2016, Four Corners exposed the bankrolling of the Australian Labor Party by the CFMEU and other powerful trade unions. Also bankrolling the Labor Party were the poker machine profits taken from its Canberra Club.
The program exposed substantial donations to the Greens from the CFMEU and the Electrical Trades Union which, some observers alleged, have been rewarded by the Greens' blocking of the Turnbull government's Australian Building and Construction Commission legislation.
4. Corporate and union donations favour the large, established parties
It has also been argued that corporate and union donations favour the large, established parties. It has been suggested that groups that intend to buy influence via donations are only likely to do so if the party to which they are contributing has a significant chance of achieving government.
Whatever their motivations, donation analysis demonstrates that corporations donate primarily to the Liberal Party and then to the Labor Party and that trade unions donate primarily to the Labor Party. Minor parties typically gain most of their private campaign funds through the donations of individual voters.
Critics argue that this pattern discriminates against the minor parties that are handicapped in delivering their positions in election campaigns through a relative lack of campaign funds.
In an opinion piece published in the Australian Review of Public Affairs in September 2007, former West Australian premier, Carmen Lawrence, stated, 'Easier access to unlimited private funds and uncapped expenditure entrench the interests of the major parties, deny electoral choice and reduce the competition of ideas; new parties and individuals simply cannot raise the money to run sufficiently visible campaigns to attract voters.'
In an opinion piece published in The Guardian on September 11, 2016, Warwick Smith argued that corporate interests use donations to the major parties to have them ignore issues the corporations want left off the political agenda. Minor parties, meanwhile, are starved of funds.
Smith wrote, 'Large donations to both the Liberal and Labor parties further marginalise minor parties who may seek to break the silence on policy issues that the corporates or elites have purchased. In Australia, the Greens are strong advocates of poker machine reform so donations that advantage the major parties over the Greens are still worth making for corporates who want this issue out of the spotlight.'
5. Foreign, corporate and union donations reduce the electorate's trust in Australia's political system
It has been claimed that the dominant role of corporate and trade union donations in party campaign funding, coupled with concern about foreign influence, is undermining faith in the Australian political system. It has been suggested that many voters believe that politicians are not motivated by the ideal of community service. Instead, it is believed, politicians are greedy and self-serving.
Part of this picture is the popular view that politicians want power for selfish reasons and will do the bidding of their campaign contributors in order to retain power.
In a comment published in the Australian Review of Public Affairs, former Western Australian premier, Carmen Lawrence stated, 'Australian Election Studies (2001) data show that almost half voters already believe that it is the preferences of big interests that determine policy, not the preferences of voters.'
Lawrence went on to explain further the manner in which this distrust of the operation of Australia's political system is created. Lawrence noted, 'Substantial campaign donations to the major parties by corporations and large organisations such as unions and business foundations foster the perception (and perhaps the reality) that it is possible to buy privileged access to MPs and ministers and that this influence is in proportion to the amount of money donated.'
In an opinion piece published in The Conversation on June 2, 2016, Emeritus professor Marian Sawer, from the Australian National University, stated, 'Both political donations and the negative advertising these buy increase distrust in politicians and political parties.'
Greens Senator Lee Rhiannon has similarly stated, 'People are becoming increasingly cynical about the influence rich people and corporations are having on our political process.'
The 2017 Trust Barometer by Edelman, a group which conducts international attitude surveys, has documented an 'implosion of trust' where one in two countries (including Australia) believe the entire system is failing and harbour deep fears of immigration, globalisation and changing values.
The Edelman survey found that despite the narrow re-election of Malcolm Turnbull's Coalition government, Australians' trust in government plunged eight points last year to 37 (out of 100) - one of the sharpest falls of any country measured.