The influence of donations on politics
Regulators in Australia have been active in trying to strengthen democratic processes. In 2019 the Joint Standing Committee on Electoral Matters (JSCEM) banned foreign donations due to their impact to ‘influence domestic policy’. Therefore if it is stated that foreign donations influence policy it must also be recognized that all donations influence policy decisions.
Disillusionment with current political processes
A study by The Museum of Australian Democracy and the Institute for Governance and Policy Analysis at the University of Canberra showed that satisfaction and trust in Australia’s democracy plummeted from “72% to 41% between 2013 and 2018”. Australia is not alone in this push back against the political class. The world is seeing a backlash against globalization and the political class which many people see as not sharing the benefits or previously overestimating the positive effects of trickle down economics. Closing these deepening divides which are fragmenting economies and societies are a top priority for the G20, other multilateral groups and politicians as if affect national geopolitical risk and social stability.
A way to counter disillusionment with modern politics is to ensure and then reiterate to citizens that policies are made with the best outcomes of the nation in mind and that government procurement tenders are won through merit and not linkages with donations.
The reliance on private capital for political activities
In Australia the Australian Electoral Commission (AEC) pays “$2.63 for each vote cast for the House of Representatives and the Senate”. This is not enough to fund election campaigns therefore politicians are forced to fundraise for private contributions. If taxpayers were the majority funders it would stop the need for cabinet members to fundraise and appease minority groups thus leaving time for them to govern.
Australia has existing federal disclosure laws and regulations but, despite this, major parties “reveal 10-20%” of their income as donations. Researchers are tracking the amounts spent on campaigns to track the amount missing called ‘dark money’. Strengthening disclosure rules and administering donor caps has not solved the problem, just prompted donation splitting, naming donations as ‘other receipts’, corporate donations being sent through individuals and the rise of fundraiser third parties.
Global experiences
The amount spent by companies on campaign donations is sickening. The Center for Responsive Politics has estimated that “$6 billion will be spent in the U.S. elections by campaigns, political parties and corporations…roughly $2 billion was spent by parties and candidates in the 2010 presidential election”. This exorbitant spending on political campaigning reduces the levels of trust between the political class and citizens. In the 2012 U.S. election, “Barack Obama and Mitt Romney both spent more than $400 million each on TV ads”. This huge amount means only the rich can succeed in politics.
Where is public funding happening
Across the world, countries use public funding of election campaigns to assist equity and the fair spread of information. In Germany “campaigns get government funding, parties are allocated TV advertising time..each party creates just one 90-second ad for the entire election, and the number of times it airs on TV is proportional to the number of votes the party garnered in the last election”.
A possible solution
What would happen in Australia if there was a public funding model so that political parties were not reliant on donors who are perceived as paying for access and expect something in return which decreases public trust in the integrity of political processes. A move like this could help increase levels of social stability and trust in politics.
Global ramifications
If copied on a global stage, reforming donation policy to be majority public based would reduce the cycle of ‘cash for access’ to politicians. It would allow politicians to not feel compelled to enact policies or award contracts to donors. It would ensure that governments implement best-practice policy regulation, resulting in countries moving forward in inclusive economic growth and development. Finally it would enable the re-building of trust with constituents.