Reform political donation laws

Rules governing donations to political candidates in Victoria are inadequate and should be reformed to protect both public confidence in the electoral system and the reputation of people standing for election.

Such changes would be considered under the recommendation tabled by the Victorian Ombudsman in Parliament today in the report, Investigation of a protected disclosure complaint regarding allegations of improper conduct by councillors associated with political donations.

The investigation followed a protected disclosure complaint regarding the activities of councillors at Casey City Council who were candidates in the last state election.

Key allegations included that the councillors accepted donations from property developers in return for favourable council planning decisions.

While the allegations were not substantiated, the investigation raised several issues of public interest around the capacity or the perception that influence can be bought.

This issue continues to generate debate amongst politicians, commentators and academics, with most states imposing more onerous disclosure and reporting requirements than Victoria.

The Victorian Parliament’s Electoral Matters Committee acknowledged the state’s position when it said in 2009 that ‘Victoria, along with the Commonwealth, is amongst the least regulated jurisdictions in the western world in terms of political finance law’. No reforms have been made in the interim.

"There can be little doubt that the lack of transparency in political donations and the lack of limitations on who can make those donations in Victoria creates an environment in which allegations of improper conduct can flourish," Ms Glass said.

"Whether they are substantiated or not, whether such allegations are legitimately made or are made for political mischief-making as is often claimed, is not the point.

"Ultimately, they create a perception that politicians can be bought, which reduces public trust in government."

The Electoral Act 2002 simply requires parties to lodge an annual return with the Victorian Electoral Commission. The only limit on political donations is for organisations holding gambling and casino licenses, which may not donate more than $50,000 a year.

Disclosure of donations over $13,000 must be made under Commonwealth legislation, although is not required until many months after an election, making it very difficult to prove whether any donation was made for an improper purpose.

New South Wales has legislated against property developers making political donations, the constitutional validity of which was recently upheld in a High Court decision.

"The High Court referred to the well evidenced corruption risk in that state between developers and politicians when ruling on the New South Wales case," Ms Glass said.

"The risk in Victoria is no different.

"It must therefore be time for Victoria to put this issue back on the table with a view to reform before the next election.

"We should not wait for a scandal for this to happen."

As this is a protected disclosure investigation, Ms Glass is not available for interview.

Read the report: Investigation of a protected disclosure complaint regarding allegations of improper conduct by councillors associated with political donations

Media contact: Mob 0409 936 235 | vomedia@ombudsman.vic.gov.au