Political donations from hotels: bad for our health?

During the 2007 NSW election campaign the AHA feted the Labor Party with a major fundraiser at the Four Seasons Hotel in Sydney. This event was expected to raise hundreds of thousands of dollars for the ALP state election campaign.

While it can be assumed that privately Labor welcomed these donations, publicly they did not want to highlight their links with the hotel industry. Ministers in the Iemma Government and a stream of MPs refused to comment on the function. John Thorpe confirmed that individual MPs were expected to sit one at a table with hoteliers, and that the Premier would give a speech.

The AHA also held a fundraising event for the Liberals. Reports suggest that this function was considerably smaller with less money raised. By the time this event was held it was widely expected that Labor would win the election comfortably.

It will be interesting to see the 2007 election donations from hotel groups. These donations must be declared by all parties to the NSW Electoral Commission no later than 120 days after the election. So we will have to wait at least until September 2007 to see these figures.

While any connection between political donations and law changes that benefit the hotel industry cannot be established a number of public figures have raised concerns. Professor Ian Webster, an Emeritus Professor at the University of New South Wales and an expert in the alcohol and drugs area, recently appeared on SBS Insight which was exploring the impact of 24-hour licensing of hotels on health and social problems. Professor Webster argued that political donations from the liquor industry should be banned.

Professor Webster stated that social agencies dealing with alcohol issues were a “bit like David fighting Goliath. When there’s a powerful industry with lots of money, lots of access involving alcohol, clubs and hotels and gambling, it’s a very powerful influence. … I’m very concerned about the access that money buys to political influence.”

Political donations are not just playing havoc with the hotel industry. Donations distort the entire political process in Australia. While certain other countries such as Canada, New Zealand and Britain have moved to ban or limit political donations, the Howard Government has moved Australia in the opposite direction, especially in transparency of the source of these donations.

The Federal Coalition government changed the threshold for identifying the source of donations effective early December 2005 from $1,500 to over $10,000. Therefore, the amount reported to the Australian Electoral Commission for 2005-06 probably is only a fraction of the money flowing into the parties’ coffers. This is especially true of donations from hotels since each of the 140 hotel owners who have donated in NSW typically gave less than $10,000 a year. Therefore the donations data for 2005-06 is basically meaningless and the reason we haven’t reported it here.

If we want a thriving, democratic society many changes must be made to the electoral funding system in Australia. These include greater transparency in the source of donations, limits or bans on donations from corporations and unions, limits on the amounts individuals can contribute to campaigns and caps on electoral spending. Decisions by governments must be based on the common good, not what aids powerful interest groups.

And maybe limits on political donations will help clean up the hotel industry that is if there is a connection between law changes and the receipt of donations.