• Norm Kelly

Photo: Brian Pamphilon/ iStockphoto.com

05 August 2009Strong arguments exist for banning overseas donations to political parties, argues Norm Kelly

THERE ARE long-established laws in place to prevent foreign investments that are against the Australia national interest. Why then should we continue to allow foreign individuals and organisations to have an unrestricted ability to influence one of the country's most important institutions – our democratic elections – through unlimited donations to political campaigns? The Rudd Labor government has attempted to prohibit foreign donations to political parties, but has previously been blocked by the Coalition in the Senate. It will again attempt to place a ban on foreign donations in the next session of Parliament.

Writing in the Canberra Times, Andrew Norton has suggested that the current unfettered access for foreigners to influence our political parties and elections should be allowed to continue. I would argue that there are sufficient ways for foreigners to participate in Australian political debate without the need for making donations.

The reality is that major individual and corporate donors expect something in return for their money. Primarily they are purchasing access and influence. For example, donors may wish to persuade ministers and MPs about legislation relevant to their interests, gaining access not available to non-donors. It is not surprising then that the Britain-based gambling operation Betfair made donations to the Labor and Liberal parties at a time when it was trying to have legislation changed to allow it to operate in Australia. Worse, donations may be used for undue influence or corrupt behaviour, for example to facilitate the issuing of visas. In 2003, Labor Senator Nick Bolkus was caught in his attempt to disguise a foreign donation intended to facilitate an immigration visa.

These are concerns irrespective of whether the donor is Australian or foreign. But at least Australian donations can more readily be traced to the original source, as occurred in the Bolkus ''cash-for-visas'' scandal.

Although not of itself corrupt, foreign donations provide foreign interests with undue influence, which increases the chances of corruption. This is compounded by the secrecy of all large donations, whether domestic or foreign, with amounts under $11,200 not subject to public disclosure (an initiative of the Howard government). It is uncommon for a governing political party to introduce electoral law reform that will disadvantage itself, and one of Labor's motives to ban foreign donations may have been the $1 million donation the Liberal Party received from British Lord Michael Ashcroft in the lead-up to the 2004 election.

In the case of foreign donations, however, there is no clear partisan advantage for one particular side of politics in changing the rules. Labor, the Liberals and the Greens all receive significant donations from foreign sources. For example, in 2006-07, the Labor Party received at least $200,000 from foreign donations.

The current proposal from the Rudd Government provides for foreign citizens living in Australia to continue to be able to make donations. This appears fair. Such residents are subject to Australian laws and are economic and cultural contributors to Australian society it is reasonable that they be allowed to contribute monetarily to political activity, even if unable to vote (whether permanent residents should be entitled to vote is a separate issue).

Conversely, a blanket prohibition on donations from Australian citizens living overseas (using overseas funds), which is also included in the Government's legislation, is unfair (on this point I'm in agreement with Norton). In a nice twist, current MP Melissa Parke, who was pre-selected for the seat of Fremantle in 2007 while living in New York, would not have been able to contribute to her own campaign under the proposed prohibition (at least not by using her US funds).

If citizens are qualified to stand for election, or to vote (which under Australia's electoral laws would mean they intend returning to Australia to live), they should be entitled to participate financially in an election campaign by donating to a political party or candidate. A similar provision occurs in Ireland, where there is a ban on foreign donations, but with the exception of Irish citizens living overseas. This would be a sensible change to the  government's current Bill. Many countries currently ban foreign donations, generally on the rationale of limiting undue foreign influence.

In addition to Ireland, countries currently with bans include the United States, Canada, Mexico, Britain, and France. New Zealand limits foreign donations to $NZ1000. Newer democracies, such as Papua New Guinea, Afghanistan and Russia, also have acknowledged the need to restrict outside influences by banning foreign money.

A ban on foreign donations does not mean a closed mind on international issues or interests. It is not about protectionism, as Norton argues. It is about ensuring that Australia's robust democracy, that rightly allows foreign students to protest in our streets, is not undermined by the weight of money from vested foreign interests. International environmental groups and companies such as Betfair would still be able to lobby for legislative change, but more likely will have to do it in a more transparent manner. •

Norm Kelly is a member of the Democratic Audit of Australia. This article first appeared in the Canberra Times.