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Democracy for sale

By Joo-Cheong Tham - posted Friday, 16 March 2007

Markets, it seems, are everywhere. There is even a market for political power. On the supply side are politicians anxious to sell influence not least to fill the coffers of their parties.

The New South Wales Liberal Party, for example, runs an outfit by the name of Millenium Forum that offers businesses access to the Prime Minister in exchange for “sponsorship” fees in excess of $10 000.

On the demand side are companies eager to advance their commercial interests. Property developers with millions at stake in planning decisions give generously to the major parties. No laggard, Australand, a client of Brian Burke and Julian Grill, gave $25,000 each to the NSW ALP and the federal Liberal Party in the last financial year.


Like any mature market, there are middle-men. Increasingly, the intermediaries who facilitate the exchange of money for political influence are lobbyists drawn from the ranks of former ministers.

Soon after leaving ministry in 2001, former Health Minister Michael Wooldridge joined the board of a lobby group funded by pharmaceutical companies. Last year, former NSW Premier Bob Carr landed a job with Macquarie Bank barely two months after retiring. And there is, of course, Brian Burke, a former WA Premier, and Julian Grill, a former WA minister.

The focus on Burke and Grill may, however, mask how their unsavoury activities are merely a symptom of a deeper malaise. The practice of trading influence for money is entrenched among the major parties. It is not surprising then that the government’s attack on Kevin Rudd should backfire with several of its members caught in the web of influence spun by Burke and Grill.

Indeed, we can expect this roll-call, which already includes Ian Campbell, David Johnston, Geoff Prosser and Ross Lightfoot, to grow longer in the days to come.

At the heart of this malaise is the belief that political power is a commodity to be bought and sold like any other. It is this idea that corrupts Australia’s democracy. A key democratic ideal is that the exercise of political power be subject to the equal influence of citizens whether rich or poor.

This principle ensures that political power is exercised in the public interest. On the other hand, when businesses are allowed to speak louder into the ears of parliamentarians because of their financial contributions or the lobbyists they have hired, the public interest is sidelined in favour of sectional interests. It follows that those who sell political access and influence necessarily engage in corrupt activity.


To be sure, there are shades of corruption. At one extreme, there is corruption as graft where the purchase of political influence leads to illegal activity. It is such conduct that is being investigated by the WA Crime and Corruption Commission when it scrutinises the representations that Burke and Grill made on behalf of Urban Pacific, a subsidiary of Macquarie Bank.

On the spectrum of corruption are also instances where businesses secure a hearing with ministers by virtue of the money they have given. Such corruption as undue influence occurs when Peter Costello grants audiences to business executives because they have paid $10,000 per person to attend a Liberal Party fund-raiser. If so, the spotlight should be thrown upon dealings between the Liberal Party and Macquarie Bank which gave $40,000 to the NSW Liberal Party in the last financial year.

It is clear then that the dangerous mix of money and politics have given rise to systemic problems that go beyond the activities of Burke and Grill. A debased political morality is to blame but so is lax regulation of political funding.

Transparency of such funding has considerably worsened after amendments made last year that allow many political donations to be shrouded in secrecy. The warning issued by the Royal Commission on WA Inc that “(t)he Parliamentary system will malfunction if it allows for significant, but undisclosed, political donations” seems to have been blissfully forgotten.

Fortunately, there are parliamentarians who recognise the urgent need to deal with these problems. Democrats Senator Andrew Murray has introduced the Electoral (Greater Fairness of Electoral Processes) Amendment Bill 2007 (Cth) which will inject much-needed transparency into funding of political parties.

Not only does the Bill lower disclosure thresholds to more reasonable levels, it will also address a long-standing loophole that allowed donors and parties to split donations so as to evade these thresholds. The Bill also launches a frontal attack on the sale of political influence by banning “strings attached” donations and donations exceeding $10,000 from companies with government contracts. As a way of minimising the danger of graft, it also proposes annual donation cap of $100,000. These changes will go some way to restoring the integrity of Australia’s democratic system and should be supported.

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About the Author

Joo-Cheong Tham is a senior law lecturer at Melbourne University. With Sally Young, senior lecturer in media and communications at the University of Melbourne, he is the co-author of a report on Australian political finance for the Democratic Audit of Australia. His forthcoming book on political funding in Australia will be published by UNSW Press.

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