Unions and political donations reform: the exemption that proves the rule

With glacial speed, Parliament’s Joint Standing Committee on Electoral Matters has finally released a report — although just an interim one — on the 2022 election and proposals for donations and funding reform.

The government says it’s been waiting for the committee to report before it proceeds on its proposals to reduce the political donation disclosure threshold to $1000, require parties to disclose donations in “real-time”, and impose donation and spending caps on parties.

All four proposals are in place in one or more states and territories — with Queensland the leader in regulation, followed by NSW.

Predictably, the government-chaired committee supported all four ideas. Predictably, the Coalition — Stoker-slayer and permanent backbencher James McGrath, previously committee chair and the senior opposition figure on the committee — opposed them.

What is surprising is that the Coalition abandoned its two-decades-long insistence that the current Howard-era indexed disclosure threshold — this year more than $15,000 — is perfect. While still peddling the myth that lower disclosure thresholds automatically lead to union thugs toting baseball bats visiting every small business donor and observing that it’s a nice place and it’d be a shame if anything happened to it, the Coalition’s dissenting report suggests halving the threshold to $8000, a timid but welcome foray into greater transparency.

Coalition members are also suggesting monthly rather than real-time disclosure, another unexpected outbreak of common sense. It might even be workable if coupled with the former NSW Liberal government’s requirement that once an election campaign commences donations must be disclosed in real-time.

There’s plenty of dross elsewhere in the dissenting report. For example, the Coalition absolutely hates that voters can vote before polling day, and wants to further shrink the period in which they can do so, politicians having already conspired to reduce that to two weeks. But there’s some more clear thinking to be found in the dissenting report as well.

The main report rightly grapples with the issue of applying donation and spending caps on third-party entities, which is crucial to ensuring regulation of political parties isn’t evaded US-style by both parties and lobby groups.

But taken as read in that discussion is that trade unions’ financial relationship with the ALP is sacrosanct. The main report recommends “party membership fees, subscriptions, levies and affiliation fees” be excluded from donation caps. Labor and unions also want to ensure unions are not captured by campaign spending caps, but that is left unaddressed in the report’s recommendation that spending caps apply to third parties.

The proposed spending cap comes with problems regarding third-party entities. Would the union movement’s Your Rights At Work campaign against WorkChoices have been considered third-party election spending? And to whom would the cap apply — the ACTU or individual unions?

But the bigger issue — and the one that the Liberal dissenters highlight — is the proposed omission of affiliation fees from donation caps.

A donation cap would substantially reduce corporate donations — bringing an end to the era of six-figure donations from large companies (and the super-rich) — but leave the ALP with a rich source of funding via union affiliation fees, which contribute hundreds of thousands of dollars to the party.

As the Liberals point out, such a cap would be a financial gerrymander in favour of Labor. Excluding affiliation fees also defeats the rationale for any limitation on donations — which is to reduce the capacity of private interests to influence political decision-makers.

Supporters of such an exclusion have argued that union affiliation fees are different from corporate donations in being far more transparent than the latter — everyone knows that unions influence the ALP, because after all the ALP is the parliamentary wing of the union movement, and the role of individual unions within Labor’s power structure and policy development processes is far clearer than any corporate link with Labor or the Liberals.

But putting aside the influence that unions wield out of sight within Labor, that’s a distinction without a difference. The problem with donations isn’t how they enable the wielding of influence but that they enable it at all. Affiliation fees are the ultimate form of donations for access — they provide unions with influence over the party and its MPs at the foundational level. The transparency with which the CFMMEU or the AWU influences Labor on, say, curbing climate action is a minor issue compared with their capacity to do so in the first place as compared with the rest of us.

Political donations enable a two-speed democracy in which special interests — corporations, the super-rich, trade unions — have access to policymakers that the rest of us don’t have. Ordinary voters can’t get the same access as union officials; they’d have to find tens of thousands of like-minded citizens to join with them. The sacred, historical link between unions and the ALP doesn’t change that two-speed impact.

It’s plausible that, aside from cases such as the miners of the CFMMEU and the AWU curbing climate action, or the malignant efforts of the Shoppies to thwart progress on LGBTQIA+ issues, trade unions’ agendas for their members’ interests are more likely to accord with the public interest than corporate agendas for their shareholders’ interests.

But they still travel first class when it comes to influence, when the rest of us are back in economy.

At what level should political donations be capped? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.