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O’Farrell attempts to muddy waters on donations reform

Lee Rhiannon 31 Jan 2012

Blog by Senator Lee Rhiannon

Considering the NSW Liberal Party has received more than $45 million in political donations since 1999 it is a fair guess that the NSW Premier Barry O’Farrell, as a staffer and now as a politician, would have attended his  share of fundraisers and helped rake in this money.

He has been part of the Liberal machine that equated money with political success for more than two decades. The Liberal Party on many occasions has looked after the corporate interests of its donors.

These days the Premier is keen to distance himself from this unsavoury side of money politics. He attempts to paint himself as a great reformer on political donations.

A close look at the NSW Coalition’s latest political shift on electoral funding reform, the Election Funding, Expenditure and Disclosures Amendment Bill 2011,  reveals built in benefits for the conservative side of politics. While the Bill reduces political donations from entities from the current $5,000 to a complete ban, it allows corporations such as mining giants to continue to spend $1.05 million each as third parties on an election but restricts the capacity of unions and environment and community groups to campaign.

The Bill bans organisations such as unions from paying any affiliation fees to a party no matter how small the fee. It also effectively prevents organisations affiliated to a party  from campaigning in elections because their spending reduces the party’s spending cap. The clearest example of organsiations that will be impacted by this are unions affiliated to the ALP.

It is significant that the Coalition government have responded to community anger about the corrupting influence of political donations and have introduced a Bill with the stated aimof banning donations from corporations and other organisations. However, amendments are needed to ensure we don’t end up with US style Political Action Committees that give power and advantage to wealthy companies and individuals who decide to become third party campaigners.

When the Greens advanced suggestions about how to ensure sectional interests did not benefit from this legislation, O’Farrell went into overdrive to make out that the Greens in NSW were not sticking to our own policy. He did not like us pointing out that the government Bill may not be exactly what it seems and he launched his media spin on our amendment plan.

The Greens submission  to the Upper House inquiry into the proposed bill is consistent with the Greens NSW policy . We are continuing to work to remove the undue influence of corporate and group money on the political process in NSW and across the country, and enhance democracy. Now we are at the stage of finalising the legislation, forensic attention is needed to ensure the new Act does just that.

The track record of O’Farrell and the Liberals reveals that they are late converts to shutting off what has been a rich vein of corporate donations and it is clear they still have a way to go.

Examples of the Liberals erratic behaviour on electoral funding reform go back to 1981 when the Election Funding Act was introduced. The Coalition parties voted against the legislation and declared that they would not accept public funding. They preferred to rely on big donors. This stance was short lived as the Liberals quickly applied for public funding when they were hit with a $2 million debt at the 1981 state election, only to have the NSW Election Funding Authority determine that they were not eligible as the party had not registered in time to qualify for funding.

In 2003 and 2007 O’Farrell and the other Coalition MPs had the opportunity to take the first step to cleaning up political donations when the Greens introduced Bills to ban developer donations. On both occasions in the Upper House the Coalition chose to vote with NSW Labor to retain the status quo which meant developer donations continued to flood to the old parties.

In January, 2008, O’Farrell was feeling the heat from many communities battling over-development. He still could not stomach a ban and came up with a scheme  to limit political donations to candidates at $30,000, and to cap donations  from corporations and other groups to political parties at $250,000.

These weak restrictions gained no traction so he then shifted his emphasis to limiting election expenditure, arguing that if spending caps could be imposed the donation ban was not needed.

The big change in the position of Labor and the Coalition came in the wake of the Wollongong Council developer scandals. In March 2008 former Premier Morris Iemma announced  that all political donations should be banned and then soon afterwards O’Farrell came on board.

 Fast forward to the 2011 state election and O’Farrell knew by now that banning corporate  political donations was an electoral winner. The Coalition has now placed the legislation before the NSW parliament. What we need to ensure is that the relative advantages for the big end of town that O’Farrell’s team have built into this Bill are weeded out.

If the Bill simply banned donations to political parties and candidates from entities, rather than also preventing affiliated organisations from campaigning while retaining corporate third party spending, then the Coalition would have little enthusiasm to honour its promise to bring on such a Bill.



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