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Speech: High Court Case on Donations

Speeches in Parliament
Lee Rhiannon 10 Nov 2015

Senator RHIANNON (New South Wales) (21:49):

High Court decisions are usually met with great fanfare and commentary from the major political parties. However, government and opposition MPs were very quiet when the court ruled recently that both Labor and the coalition were caught up in systemic corruption. This case stands to be a game-changer in the long campaign to clean up federal electoral funding laws. I do encourage all senators to acquaint themselves with this case. Former Newcastle lord mayor and developer, Jeff McCloy, brought a case to the High Court in a bid to overturn New South Wales law banning developers from making political donations. He argued that the ban was at odds with the implied freedom of communication under the Constitution. However, the court agreed with the state government that communication between legislators and voters was not impeded by these donation bans. It was a win for sensible restrictions which seek to enhance the democratic process by reducing temptations for politicians to act corruptly. The ruling has far-reaching consequences for the regulation of political activity because it expanded the definition of 'corruption'. This is the great significance of this case-its analysis of corruption itself. Prior to this case, corruption was largely seen as quid pro quo. As my colleague New South Wales Greens MP David Shoebridge put it:

In the 1970s, when Bob Askin was NSW Liberal Premier, corruption was a pretty simple affair.
Those who wanted a favour from the planning authorities or the police delivered a bundle of cash and the politicians delivered.
In the 1980s the story continued, with Labor's Corrective Services Minister Rex 'Buckets' Jackson eventually going to jail because he was caught releasing those prisoners who paid him for the pleasure.
This kind of corruption is where money changed hands for a specific outcome. There has always been another kind of corruption where money did not buy a specific outcome; instead, a payment or payments bought a more subtle pattern of outcomes because the recipient became dependent on the continued financial support of the donor. It is common sense that this is corruption, but, until now, it has not been recognised in the courts. The saying 'Don't bite the hand that feeds you' rings true for most people, and helps explain the state of politics in this country. The major parties have grown fat at the hands of corporate donors, and they have certainly been reluctant to bite them. The High Court has called this kind of corruption 'clientelism'. It is where, according to the High Court:

... office holders will decide issues not on the merits or desires of constituents, but according to the wishes of those that have made large financial contributions valued by the office holder ...

The High Court states that consistent patterns of donations:

... compromise the expectation, fundamental to representative democracy, that public power will be exercised in the public interest.

In identifying the clientelism form of corruption, the High Court has detailed what the Greens Democracy for Sale project for long has called the corrupting influence of donations, known as parent/client corruption.

The High Court recognised that this kind of corruption has validated the New South Wales law that bans certain classes of donors. It has shown that these bans are crucial to maintaining the integrity of the political system. The High Court has opened the way for expanding those bans, both within states and at the federal level.

I would argue that we have a responsibility to respond to the High Court findings. A solid starting point for the long-overdue reforms at the federal level would be the Greens donation reform bill-the Commonwealth Electoral Amendment (Donations Reform) Bill-which is currently before the Senate. The Greens bill contains amendments to the Commonwealth Electoral Act 1918 that would prohibit political donations from specific industries. The purpose of the amendments is to strengthen the integrity and accountability framework underpinning Australia's electoral system. Specifically, amendments are proposed to ban donations from property developers, tobacco industry business entities, liquor business entities, gambling industry business entities, mineral resources or mining industry business entities and industry representative organisations whose majority members are those that I have just listed.

It is time, I would argue, that all MPs supported laws that would prohibit for-profit corporations from donating to political parties. When patronage, profits and politics come together we have a corrupted democracy. There are too many examples in Australia. MPs might hide behind the law and argue that they have done nothing illegal when they accept donations, but that does not mean that it is right or fair. MPs should represent their constituents and work for the public good.

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