The ways of the world: implications of political donations for the integrity of planning systems

10 Nov 2015

Introduction: Money for nothing?

For some years the heavy reliance of both major Australian political parties on developer donations has been known 1. One developer (Jeff McCloy) memorably told the NSW Independent Commission against Corruption (ICAC, 2014b. p.5328T) he felt like a “walking ATM”. This sentiment was echoed by lobbyist Frank Dunlop, who told the Mahon Tribunal in Ireland that his phone would “walk off the desk” with calls from candidates seeking money as soon as a general election was called (Mahon, 2012 p.757).

Both givers and recipients have insisted that nothing is expected and nothing is given in return for these donations, and it has been impossible to disprove this ‘money for nothing’ proposition. Instead it has been suggested that donations are simply a way of ‘participating in the political process’. This suggestion reflects US Supreme Court jurisprudence, which has elevated donations to the status of ‘speech’ and forbidden US legislatures to act to prevent anything short of ‘quid pro quo’ corruption.

The Australian High Court followed the US Supreme Court part of the way along this path, characterising donations as a form of ‘political communication’. An attempt to confine donations to voters (as is the case in Canada) was successfully challenged in the High Court by Unions NSW, on the basis that this was an unreasonable imposition on an “implied freedom of political communication” 2.

A recent challenge by Mr McCloy to the constitutional validity of the preexisting NSW ban on donations from property developers, and caps on the amount of donations, was however unsuccessful in both respects 3. The High Court rejected the US Supreme Court’s reasoning that governments may only limit political communication to prevent quid quo pro corruption. It confirmed that the prevention of both corruption and undue influence are valid reasons for legislatures to restrict political donations, and that in the final analysis, the Australian constitution must be interpreted to serve the interests of democracy.

This should come as a great relief to Australian citizens. Anti-corruption agencies with strong investigative powers (including the power to undertake covert operations) have uncovered what many suspected was the truth, both here and in Ireland. There is now firm empirical evidence of cases in which donations from the property development sector have in fact had ‘strings attached’. Something was expected of public officials in return, whether explicitly stated or not, and that something was some form of rezoning or development approval, or an action that cleared the way for these approvals.

Whether or not this behaviour constitutes corruption is a question of significance in terms of the possibility of sanctions against individuals. The issue for the integrity of the planning system is not however confined to corruption. It is the broader question of donor influence that has been brought into sharp focus by the work of anti- corruption agencies in Australia and elsewhere. Influence is the subject of this research paper, rather than corruption.

Some forms of influence are indeed corrupt by any standard. Other forms of influence are better characterised as ‘undue influence’; they may fall short of corruption but their potential impact on planning systems are, nonetheless, significant.

Research question

The central concern addressed in this paper is whether, and if so, how, political donations pose a risk to the integrity of the planning system. It concerns both the corruption of decision-makers and undue influence over them. Both corruption and undue influence have the potential to distort planning processes and outcomes.



1 See for example New South Wales Parliament Legislative Council, Select Committee on Electoral and Political Party Funding June 2008, Report no.1, Electoral and Political Party Funding in New South Wales p.6

2 Unions New South Wales and Others v New South Wales [2013] HCA 58

3 High Court of Australia, McCloy v State of New South Wales [2015] HCA 34, 7 October 2015.

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