Political donations 'an unregulated arms race,' Senate committee told

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Liberal MP Kevin Andrews addresses the media after a meeting with representatives of volunteer firefighters at Parliament House in Canberra on Monday 10 October 2016. fedpol Photo: Alex Ellinghausen

Liberal MP Kevin Andrews addresses the media after a meeting with representatives of volunteer firefighters at Parliament House in Canberra on Monday 10 October 2016. fedpol Photo: Alex Ellinghausen

Australia's system of political finance law is broken, open to exploitation and soft-corruption, a Senate inquiry has heard.

"You can get a politician for $2000 a year, a party for $100,000 a year and policy for $200,000 a year," Monash University academic Charles Livingstone said in Melbourne on Thursday.

The inquiry into the political influence of donations was called in the wake of widespread concerns over the effects of big business donations on mining, alcohol and gambling policies and a series of scandals linked to wealthy Chinese donors.

Witnesses, including some of Australia's biggest benefactors, have called for wholesale national reform of the system, with the committee hearing arguments for donations to be capped as low as $1000, real time disclosures, a ban on foreign donations and campaign expense limits.

In September, the Victorian government announced it would cap political donations at $4000 over four years and provide immediate online disclosure. Experts have called for the changes to go further and to be implemented nationwide.

"It is widely accepted among experts and others that Australia's system of political finance law is broken, and open to exploitation and undue influence," said UNSW's dean of law George Williams.

"This can give rise to a form of 'soft corruption' in which money may be given in return for access and the potential to bring about undue influence on decision making and policy development.

"Such a system is clearly not in the interests of the Australian community," he said in his submission.

Dr Livingstone gave evidence that $80,000 in donations from Clubs NSW and the Australian Hotels Association to the Coalition prior to the 2013 federal election directly affected the unwinding of gaming regulations instituted by the Gillard government.

He alleged then social services minister Kevin Andrews, a Victorian MP, was recorded at a Clubs NSW function launching the policy that included scrapping mandatory pre-commitment and ATM limits.

"He announced something they would have been extremely happy with or maybe even wrote," he told the committee.

Dr Livingstone said the first piece of legislation Mr Andrews put through was am omnibus bill that got rid of the remnants of the former government's efforts at reform.

"It suggests the policy is for sale and it smells really bad," he said.

Mr Andrews' office has always maintained any suggestion his decisions were influenced by donations was "wrong and offensive".

The committee also heard from Melbourne law school associate professor Joo Cheong Tham who said he considered pre-budget briefings of donors a form of corruption and there needed to be restrictions on MPs taking up lucrative private roles in their former portfolios.

Former government ministers Bruce Billson, Andrew Robb and Martin Ferguson have all landed plum post-politics jobs in areas they had formal control over.

"There seems to be a well-trodden pathway of senior cabinet ministers taking jobs in industries that they had responsibility for," said Dr Tham.

He said the need for fundamental donations and political influence reform has been apparent for at least a decade.

"It has led to an unregulated arms race in elections," he said.

The committee heard the mining industry contributed $16.6 million to major political parties since 2007, while big tobacco companies have donated tens of thousands of dollars to the Nationals and Liberal Democrats despite a ban on tobacco donations from both the Labor and Liberal parties.

RMIT school of business and law lecturer Yee-Fui Ng said the donations disclosure regime was inadequate and riddled with loopholes.

"But it is not just actual corruption that is the issue; even the perception of corruption can damage trust in the political system," she said.

Former Independent Commission Against Corruption assistant commissioner Anthony Whealy said there was "an urgent imperative to make changes," and that business has already been turned off by the perception of corruption.

"We know something is wrong with the system, they have decided that it is too dangerous," said Mr Whealy, who gave evidence as a spokesman for Transparency International.

The Property Council of Australia told the committee it regularly received requests for donations from across the political spectrum but decided in October last year to withdraw from all political donations at all levels of government.

"The key reason behind this decision is that political donations have no impact on the success of our advocacy work, which is sustained on the merits of our research and policy activities," chief executive Ken Morrison said.

"We believe that political donations regimes must be extremely transparent with appropriate and timely public reporting, and there must be appropriate penalties for any person who seeks to use donations to distort government decision making."

One of the country's most prolific donors has taken a similar position.

Woodside Energy's senior vice-president Michael Abbott said the company had put an end to all campaign donations after donating more than $1.4 million to the major parties over the past decade.

"We formed the view that those contributions would be sufficient and we didn't wish to be making any more," he said.

Committee member Senator Jacqui Lambie accused Woodside of basing the decision on "no longer getting value for money".

Mr Abbott said the company would continue to contribute up to $100,000 a year through hosting business forums and agreed there was a need for greater transparency across the spectrum.

The inquiry continues in Canberra on Monday.

This story Political donations 'an unregulated arms race,' Senate committee told first appeared on The Sydney Morning Herald.