It is becoming increasingly difficult to deny that big money plays a corrupting role in Australian politics.

Whether it’s Clive Palmer buying his way into parliament, the recent, varied ICAC revelations of dodgy fundraising in the NSW Liberal party, or the refusal or inability of successive governments to effectively tackle powerful corporate interests in industries like gambling, mining, media, and junk food, there is a feeling among many Australians that democracy is up for sale.

Though it may be clear in most cases whether a particular transaction was against the law, if we take ‘corruption’ to mean something more than merely that which is illegal, it becomes harder to identify where exactly lobbying ends and corruption begins. If corruption is instead defined as using gifts to influence the outcome of public policy decisions in aid of private gain and away from the public interest, then the activities of many corporate lobbyists appear to fit the bill.

One particularly egregious example is the amount of gambling advertising in Australia, the country with the highest gambling losses per adult in the world, at over $1000 a year. The lack of meaningful restrictions on where and when gambling can be advertised is shocking – at least until you realise that the gambling lobby donates hundreds of thousands of dollars to the major parties every year.

Soliciting payment for access to politicians represents another way in which money distorts the political process. Though it may be legal, allowing the well-heeled to pay thousands of dollars for access to the Treasurer does not give the impression of decision-making in the public interest. The major difference between this and illegal corruption is that, in this case, businesses are paying for the opportunity to try to influence the Treasurer, and not for a particular outcome. And although the money is paid to the party and not into Mr Hockey’s bank account, he still benefits indirectly by leveraging a public office.

But why would one pay for such a privilege if there did not exist the expectation that one might influence public policy, and make money by doing so? Joe Hockey seems like a reasonably charismatic fellow, but I’m not sure many people would pay solely for the pleasure of his company at dinner. No matter how transparent the process, there is still the expectation that you’ll get something in return for your contribution.

Then there is the obvious point that, whether paying for access is in itself legitimate or not, only a few can afford such a privilege. This almost inevitably leads to a skewering of policy in favour of those who have the minister’s ear – at the expense of those whose voices go unheard.

But as Prime Minister Abbott pointed out when asked how appropriate it was for the Treasurer to accept donations in exchange for meetings, ‘all political parties have to raise money.’

Abbott is right, parties need money, and a lot of it. The problem is not just one of self-control: clearly there needs to be systemic reform of the way parties are financed. Indeed, much of the corruption uncovered by ICAC is already illegal.

Christopher Pyne’s suggestion to only allow individuals to donate would not solve the problem – at least not on its own – and would leave rich individuals like Clive Palmer free to unduly influence debate, and would hit Labor harder than the Coalition.

The notion of capping donations or spending has been gaining ground among the commentariat recently. This idea is appealing in some ways – it allows citizens to give money to groups they believe in, but limits the ability of a small number to call the shots – but if poorly designed can hobble opposition parties. It can also mean the money donated to parties is instead put into technically unaffiliated campaign groups that nonetheless results in a similar situation, as has occurred in the United States with PACs (political action committees).

But for the good of Australia, it’s worth figuring out how to cap either donations or spending (or both) without undermining our democracy. The alternative is a party system reminiscent of that in the United States, where the deep pockets of vested interests very often trump any real public debate, making important reforms nigh on impossible.

Restricting the impact of private money in politics would help make Australian democracy healthier. Democratic politics is, after all, supposed to be about acting in the public interest.

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