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Why political donations are vital for democracy

By Graham Young - posted Thursday, 18 September 2014


Donations in cash or kind are the lifeblood of democracy.

Democracy isn't just voting; it is the whole struggle for popular support which is eventually formalised through the ballot box.

The need to raise funds keeps politicians sensitive to the needs of their supporters and community. It also prequalifies a candidate as having a certain level of competence.

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If a candidate can't raise funds, then they are probably not worth voting for. It means no one who knows them is prepared to invest money in them. That's a sign you should think twice before investing a vote.

There is a growing call to ban donations to political parties, which has already expressed itself in New South Wales by banning political donations from people involved in the property development, tobacco, liquor or gambling industries.

Criminals can donate, but not citizens in bona fide legal industries which are also huge contributors to state government coffers through taxes, stamp duty and excise.

The calls rest on concern about corruption and influence on the one hand, and the opportunity to cut a political opponent off from resources on the other.

Yet all the evidence shows that corruption is generally channelled directly to the politician, and is outside the normal course of political donations.

Why pay-off a political party where it has to be publically disclosed, and that party then has to put pressure on a third party, the decision maker, to make the corrupt decision?

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Wouldn't it be much more effective, and probably cheaper, to just pay-off the responsible official? And isn't that what generally happens?

Then there is the idea that a party policy can be procured by a donation. In fact causation runs in the other direction.

When Graeme Wood gave his record-breaking $1,000,000 donation to the Australian Greens, was it to change policy, or was it because he agreed with them?

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An edited version of this article was published in the Australian Financial Review.



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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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