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Good evening, I'm Matt Wordsworth. Tonight - the growing push to reform Australia's political donations system. As former Prime Minister Tony Abbott outlines his plan, we ask whether there's the will to change.Look, it's very hard when the politicians are both game keeper and poacher. Conflicts emerge pretty quickly and you will in the end probably end up with something like an independent tribunal to judge this.Disclosure, transparency, reality accountability, stop the splitting of donations, it can be fixed very quickly.Our late debate coming up shortly. First when Labor Senator Sam Dastyari resigned from the frontbench this week after the backlash over his decision to allow a Chinese businessman to pay his debt, some insiders predicted that would be the end of the matter. But the push for significant reform of the way political parties are funded continues to gather momentum. One former NSW Labor minister has told Lateline Senator Dastyari is a living example of the system of entitlement that pervades the political class. As Lateline's political correspondent David Lipson reports, he's one of the growing number calling for root and branch changes to the donation and campaign funding system.It has the stench of corruption.On reflection, I should have paid that amount myself. I take full responsibility and have donated that amount to charity.He took cash for himself.Sam Dastyari's acceptance of a personal payment from a company linked to the Chinese Communist Party and his apparent deviation on national security policy was too much.Today, I spoke to my leader Bill Shorten and offered my resignation from the frontbench.Next week, the Senator will sit on the backbench leaving a much bigger debate about political donations in his wake.Senator Brandis with the same person, of the Prime Minister with the same person, or a list of political donations to the Liberal Party.The problem didn't start with Senator Dastyari and it doesn't end with his resignation. We've got to do something to get rid of the influence of big money politics. Labor took a suite of reforms to the last election, including a ban on foreign donations, which Bill Shorten is now running hard on.Mr Turnbull needs to make it clear whether or not he supports Labor's ban on foreign donations.We will look at it with an open mind. Australia is one of a few countries worldwide - seen here in red - that allow foreign donations to political parties. Among them, Italy, Iraq and Sierra Leone. Of comparable English-speaking countries only New Zealand allows foreign donations and they're capped at $1500.Mr Turnbull is saying that he is prepared to entertain donations reform and in particular a ban on foreign donations. Labor is saying let's do this.Of course, it's not that simple. Even a definition of foreign donations is hard to grasp. Would a donation from Toyota for example be considered foreign? And what about sponsored study trips overseas? And then, there's so-called foreign agents in Australia.A foreign agent could be an Australian citizen, but it could be someone who is acting extensively for another country.The question quickly becomes, where to draw the line?You also have to do something about third party campaigning otherwise the unions will simply give all their money to get up and use them to campaign against the Liberal Party.Ideally, donations to political parties should be limited to people who are on the electoral roll, voters and so you would exclude not simply foreigners, but you would exclude corporations and you'd exclude trade unions.Restricting donations to individual voters would have a profound impact on party finances and so it doesn't hold proud appeal. Would you be willing to ban union donations?Not at all.Any sweeping reforms to donations would likely require a major boost to the amount the taxpayer contributes to election campaigns. Currently, any party that gets more than 4% of the primary vote receives $2.63 from the taxpayer for every vote. To r the majority parties and others like One Nation, it's become a major cash cow worth many tens of millions of dollars. Former NSW Labor minister was the major force behind the introduction of public funding in the early '80s.I can't think of anything I've done that was ham-fisted and ultimately stupid. I didn't imagine it would become the monster it's become. It's led to the destruction of democracy in the major parties and given a culture of leaderships.
entitlements to the machine leaderships.Safeguards ensuring taxpayer dollars were only used for candidates
the reimbursement of individual have
candidates direct election expenses have been eroded by subsequent governments.Every principle of 19le 0-81 have been debauched. No money goes to the consistencies. It's scooped by head offices.Money for jam, as he puts it, at the heart of all that's wrong with today's politics and the people it attracts. What Senator Dastyari has done is very much in character. He is a living example of the culture of entitlement that pervades the NSW branch of Australian Labor. I suggest to you the other branches of Australian Labor and increasingly the Liberal Party across Australia. On the other side of the political fence, former Liberal Party honorary Treasurer Michael Yabsley agrees. They have been able to rely on a river of gold in terms of fundraising that has a number of tributaries and my argument is that all of those tributaries have in one way or another corrupted the way political fundraising is carried out.He believes the answer could lie in a system of high-volume, low-value donations pointing to the recent nonestablishment fun raising juggernaut in the US, berz.-- Bernie Sanders. In other words, where a lot of people give a small amount of money. I think that has the potential to not only allow political parties to get on with the job. It would basically redemocratise political parties as we know them.As for foreign donations?The idea that that is meaningful reform is nonsense. Banning foreign donations changes nothing.Sam Dastyari always prided himself on going after the big moral issues. He may have inadvertently uncovered his biggest yet, but for now solution and consensus are words foreign to this debate. Changing the system would require the support of politicians from minor and major parties. There's a lot of money at stake, so could there be the political will to make sweeping reform of donations a reality? John Hewson is a former Federal leader of the Liberal Party, now Professor and Chair at the Australian National University's Tax and Transfer Policy Institute. Dave Oliver is the secretary of the ACTU and John Warhurst is Emeritus Professor of Political Science at anew. They joined me earlier. Gentlemen, thanks for joining us today. Can I just put this out to all of you. First things first, does anyone here believe that donations don't buy influence?No.No.So we're all sorted that donations do affect the way politicians behave? They don't necessarily work, but there's an expectation that they will buy influence, yeah.There's probably a small percentage of donations where influence is not sought, but the vast bulk are after access or influence or however you want to describe it.Dave, you're a bit quiet because I guess you're the only one in the room who has donation skin in the game here? There's a disconnect between donations and campaigning and the union movement is very cognisant that when we're looking at supporting particular political parties, the trend now is to be that money's invested in campaigning around the particular issues. You only have to look at the last Federal election, you would have seen the union movement was quite vocal on a number of key issues that affect workers and their families. Particularly around penalty rates and Medicare and they were the issues that we were out there campaigning on, on the ground and in the airwaves.It's like a pub test, isn't it Dave? If I buy you a beer in the pub, I'm expecting you to buy me one back, aren't I?Depends on how big the beer is that you're buying, I guess.If I buy you a schooner, you're going to buy me am idi back, are you?The idea that unions donate to political parties that are more aligned with their points of view and their values and we do it on the basis around campaigning around particular issues and it comes as no surprise that there is a linkage between the trade union movement and the union Labor Party, for example. It comes as no surprise that unions who are affiliated to the Labor Party, unions make donations, unions make donations to the Greens. Unions donate to Independents and it's about lining up support for the issues and the values that we're out campaigning on.John Hewson, you think something should be done about it. What changes are you thinking are best?I've been advocating for quite some time that either we clean up election funding, campaign funding, lobbying and so on, or we go back pretty much to a system of full public funding. I'd like to see a cap on individual donations and where possible - and that's subject to some debate as to how possible, whether we need a constitutional referendum to do it or not - but I'd like to see a ban on union donations, corporate donations, all these sort of associations and third party organisations and so on. Just a cap of about $1,000 on individual donations for Australian residents. Dave Oliver, that would obviously be a problem for you, wouldn't it?Not a problem only for me, but for the 1.8 million members who through the election campaign and through their unions have an opportunity to campaign in the political space around issues that matter most to them. I'm pretty much, there's a lot of similarity from what John Hewson suggested that we can support. We're truly of the view that it needs to be more transparent. We support the idea of lowering the reporting thresholds down to $1,000. Mind you, it is interesting to note that one of the recommendations that came out of the Dyson Heydon Royal Commission was that point that for union donations, for union elections we had to declare $1,000 or more. So it'll be interesting to see what the current Federal Government does with respect to that donation, if it's good enough for union elections it should be good enough in the Federal sphere.John Warhurst I might bring you in here now, is there any way around the High Court decision which struck down the NSW Government's legislation which attempted to ban donations from both unions and corporations?Look, I don't think so. I'm not a constitutional lawyer, but I think we've got to take it as bimpb that whatever reforms we -- given that whatever reforms we institute may be repealed through the court system. We have to be aware of existing decisions which cast doubt on the ability to create an individual-only donation system and ruling out donations from any form of association or corporations. I'd like to say just to come in on the conversation so far that I think we ought to try and make the existing system work and that things like transparency, timeliness, the ability to deal with intermediaries, the ability to deal with money laundered through the system, the ability to deal with money that comes into one branch of a political party and is then transferred to another - there are so many holes in the existing system, as there are holes in the system of lobbying regulation, as well that I'd be hesitant to just move into a wholesale transformation of the existing system which would have implications... Well, it would depend on us being able to make the existing system work. A more modest existing system, let's see if we can make that work and then move onto a more root and branch approach to reform.Just on the other issue of the week which is foreign donation. John Hewson, would you support a ban -I would ban foreign donations, yeah.It's pretty common, like the US and the UK both ban -You make the point about expecting to buy influence with a donation. That's much more a foreign expectation than it is a domestic expectation probably, so I would definitely ban it.There is an argument, isn't there, if you're accepting that a foreign donation influences a politician, or has the potential to influence a politician then surely a local donation has the same potential?It may not have the same potential in the sense that a lot of these offshore groups of countries and so on, that's the way, in fact, their political system works. They're used to buying influence. It's probably an acquired taste in this country by comparison, but it's still the point. The point's still largely correct, yes.Dave Oliver, is it naive to think even if you banned any of these donations, foreign, local or otherwise there's always going to be money in politics?It's safe to say there will always be money in politics, but what is required now is there's got to be a bit of equity in it. For example, we've got a Prime Minister at the moment that suggests that no unions or corporations should make political donations, it should be those individuals on the electoral roll. Last time I looked the Prime Minister was on the electoral roll and we understand there was his own donation of somewhere between $1 and $2 million, which we won't know about for another 12-18 months' time. The last time we looked there's plenty of wealthy banking executives on the roll and they might have an interest, particularly those opposed to a royal commission. Last time we looked plenty of mining executives on the banking roll. The other thing I want to pick up on is what John mentioned. He spoke about caps on donations. Well, one thing that we have looked at for a little while, is the possibility of caps on expenditure, as well. What we've seen happen here, and you only have to look in the US what can be akin to the arms race where these huge amount of money's being built up. You only have to look at what happened with the mining industry, the $26 million advertising campaign they did on one issue, about the mining tax. So there's got to be equity built into the system. As long as you can provide a system that individual workers or individuals have got the capacity to campaign in this space.John Warhurst, this is exactly the point that I was trying to make before. You look at the United States with these pacts and superpacts where just as long as they keep themselves independent from the candidate, they pretend they're on their own, they can pretty much spend what they want. If we go down banning or limiting donations, we could just open up this whole third parti-athon?I think you're right and it goes to my point about trying to make the existing system work, or to prove we can make the existing system work, because money will be laundered. Money will be moved into various third parties, even if we ban foreign donations and I would add that I think the whole debate has been coloured by the fact it is China being talked about at the moment. If we were talking about a British or an American foreign entity I don't think there'd be quite the angst that there is because China is involved. So I think money will be moved around and the point about those people who do make large donations to buy influence, they're not going to be bothered by regulation so much. At the very least they're going to try to find a way around the regulations and I think the domestic experience shows that they will in many cases, do that.What about foreign trips? Foreign governments pay for our politicians to travel overseas, John Hewson, should they banned too?It's hard to have a general rule, but in principle that's an area that needs to be looked at, as well. As far as the existing system goes if I can pick up the point what John was saying, the major parties have known for a long time how to fix it. They've taken the view they can exploit the system better than the other side and they don't fix it. Caps are important, immediate on-line
publication of those donations disclosure.
on-line is important.Reality disclosure.It should be, it makes a big difference that people know what's being done and so the cap will deal with the Turnbull personal donation point. I think we've played with the present system for too long and it's true that if you set a rule there's always a group of people that are going to find a way around it, but you can set a standard and enforce a standard and put some pretty significant penalties on breaches and you may change the nature of the culture quite dramatically.Dave Oliver, this is exactly what you're talking about? Sunlight is the best disenfektant, spotlight on reality donations? John, you'd know of all people that back in 2013, the major political parties were very close on getting a deal, which encapsulated a lot of what we've been talking about tonight and at the last-minute, one minute to midnight Tony Abbott then reneged on the deal and that's why we're still apart. It can be fixed very quickly. Malcolm Turnbull when he gets back from overseas can sit down with the other major political party, the Labor Party and revisit that agreement, which covers a lot of those issues about disclosure, transparency, reality accountability, stop the splitting of donations. It can be fixed very quickly.John Hewson, what do you make of Tony Abbott coming out and making those comments, advocating a ban on union donations?Tony is having a lot of road to Damascus conversions these days.Is it just the freedom of not being the leader anymore?He's not playing any games, not trying to undermine the leadership, just Tony being genuine and a concerned citizen.Matt, could I add that John Hewson's point about this being a cultural problem hits the nail on the head and shows how deeply embedded current attitudes towards the role of money in politics are and I'd go along with just about everything John Hewson said, but add that the cultural change will take some time and you will get significant groups of people who will try and work their way around the system and some of them will undoubtedly be successful. The most dangerous aspect of this debate at the moment and I think Matt you referred to it as the third partyism, the beauty of this country is that people have got the right to get out there and campaign on different issues. A big debate next year around marriage equality. We've got environmental groups, we've got unions and the workers. So get out there and campaign on fundamental issues, and you need to be mindful that anything you're doing in this space about political donations doesn't impinge on that and that was the problem in NSW with the High Court, and to stand up to say well, third parties should be barred from political donations or in essence being able to campaign around key issues offends the very democracy of this nation.The other point that Dave made before about capping expenditure. We need to look at why all this money's raised in an election campaign. The bulk of it goes on television advertising, which I'm sure most of us find uninteresting, unconvincing if not totally not sensible. You could take a UK approach and actually ban that and just give the parties a couple of slots on the ABC during the campaign and get rid of all that and that cuts a hell of a lot of money out of the election campaign.Being the ABC we don't have to worry about advertising.There's social media John, get with the times!What I want to ask John Warhurst, perhaps this is best directed to you, we're talking about politicians signing up to deals before that they've since gone back on and relying on them making a decision in the future and Malcolm Turnbull certainly wants to send this off to a parliamentary committee before anything has changed. Should this even be in the hands of politicians when they've got a vested interest in making more money for their campaigns?I think you've got to start with the politicians or at least you've got to involve the politicians at some stage. Any system... I'm not sure we can come up with a system that eliminates those people who are actually making the system work.For instance we've got a remuneration tribunal that makes decisions on their pay, should we have an independent tribunal that makes decisions on electoral donations?We might end up with an independent tribunal of some type, but in the meantime I would start with the parliamentary process and see if we can get some agreement between the major political parties, because that's really where real change starts and it might involve a Senate inquiry or a parliamentary inquiry of some sort and let's see if we need another institution down the track.Dave Oliver, what chance do you give it that we'll see some significant reform in this area? Well, that's probably a question better asked of the Prime Minister when he gets back into the country and as we know from the other side of politics, Labor they're very close to supporting significant reform. It's very close to the deal that would have been accepted, had it not been for Tony Abbott in 2013 and the ball's squarely in Malcolm Turnbull's court. If he's serious about this, he could quickly go back and revisit that agreement.John Hewson?Look, it's very hard when the politicians are both game keeper and poacher. The conflicts emerge pretty quickly and you will in the end probably end up with something like an independent tribunal to judge this and to control, to police it. But I think we are going to see reform this time. Both sides have actually got themselves into a position where the electorate expects something. I take messages out of the last election. When you have an all-time low vote for the two major parties and maximum vote for Independents and third parties, the message is clean up your act, get back and focus on government and stop playing short-term political game-scoring points on each other, being opportunistic and so on. That's the message that I think is there. They're dumb if they don't listen to that message and I suspect therefore they will actually move in the direction of reform. How far it goes and how fast is another thing a parliamentary inquiry could just delay it unnecessarily.Let's not assume too much. We'll see what happens, John Hewson, John Warhurst and Dave Oliver, thank you so much for your time.A pleasure.Thank you.Political donations were the subject of this week's Lateline viewer poll. We asked you whether foreign interests should be allowed to donate to Australian parties. Here's Jason Om with the results. Well, everyone was fired up by this week's poll on foreign donations, with many of you angry about the current system. An overwhelming majority agreed that foreign interests should not be allowed to make political donations. On both Facebook and Twitter a resounding 95% voted no. And while the furore over Sam Dastyari concerned China, your anger was broadly directed at the system as a whole rather than any one foreign entity. The level of frustration among your comments would suggest it's time for much wider reform.

There's a feeling donations created undue influence over Australia's political system.

There was some support for donations, but under stricter controls. Another idea from Malcolm Lewis:

The pressure is now on the Prime Minister to take the public's concerns seriously and the test will be how far are politicians prepared to go to change the system which funds them? And that's all for Lateline. You can find all tonight's stories and interviews on our website. Have a great weekend. Goodnight.

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