6 Reasons why Social Funding can effectively end political corruption

Shit is about to get real...ugly
Shit is about to get real…ugly for the political class.

While ICAC has temporarily suspended its inquiry into the soliciting and concealment of political payments, we have a chance to reflect on the systemic implications of what we we’ve found out. The roll call of resignations, suspensions and those broadly implicated in the last few weeks runs deep – former NSW resources Minister Chris Hartcher, former Federal Assistant Treasurer Arthur Sinodinos, Federal Treasurer Joe Hockey, former NSW Police Minister Mike Gallacher, Central Coast MPs Darren Webber and Chris Spence, and former NSW Premier Barry O’Farrell. It feels like a George RR Martin novel where the body count is extensive, the web of intrigue intricate and there are thousands of pages of plot still to come where the axe will continue to swing. O’Farrell’s unexpected beheading certainly signals the unfolding of chaos for the political class in the capital and the rest of the seven kingdoms.

This runs deeper than a few errant pollies and political operators. Rather, the corrupt behaviour of individuals reveals the ongoing corruption of the system. The structural driver of this corruption is that politicians, in both major parties, depend on the support of a small class of rich donors looking to expand their wealth. It means that parliamentarians are more representative for some than the rest of us, and it cuts the political class off from the rest of the population.

Most of the resultant suggestions concerning the reform of political donations have centred on either banning any entity other than individuals from making donations or replacing all private donations with State funding. Neither suggestion would substantially change the behaviour of the political class. This is because neither suggestion alters the structural driver of corrupt behaviour. Banning all corporate, union and membership-based organisation donations has a certain liberal appeal. All it would do, however, is provide for an empty formal equality where the single parent office cleaner is just as free to donate $10,000 to a political camapign as the private hospital entrepeneur. Marc Newman has written further on the futility of restricting political donations to individual persons. Restricting political campaigning to state funding, on the other hand, is just as problematic. What it does is leave the State inherently unchanged but entreches power within the existing political class. If I was a parliamentarian this would be my preferred option because it removes the effective ability of candidates outside a narrow range of power cliques within existing parties from challenging me before I decide to retire to a life of corporate boards and making money off of my relationships.

What we need is a system of political funding that effectively ends corruption by putting power directly in the hands of the people. We need the social funding of elections. The idea is that each year every Australian voter has the ability to donate a set figure, for example $20, to a registered political party or candidate. Political funding is thus equally in the hands of each member of our society, and it is your decision about who to donate to or whether to donate at all. To make this system constituional, anyone would still be free to make political donations (although any donation should be immediately reportable and available for the public to check) but if a candidate or a political party decides to accept a private donation they are no longer eligible to receive social funding for a significant period of time. Further, the decision to rely on private funding or social funding would itself become an issue in any political campaign. Erik Olin Wright outlined this system which he calls a “Democracy Card”  in his book Envisioning Real Utiopias including some of the safe guards and accountability mechanisms that would be required for such a system to work.

There are 6 reasons why I think social funding can effectively end systemic political corruption:

  1. It rebalances power away from a small network of mining and property magnates towards the rest of the population.
  2. In a very tangible way it means that every voter counts and not just a few thousand people in key marginal seats. Voters in safe seats will matter to political parties because they will be necessary to the ongoing ability to fund effective political campaigns – ignore your voting base and your funding runs dry.
  3. It builds civil society and associational democracy – the endorsements of organisational leaders will matter for building up a funding base. However, they will be more effective for active organisations with an engaged membership and the structures to incorporate an ongoing discussion amongst the membership. Endorsements from an organisation with a large paper membership where the leadership is cut off from the membership base would be next to useless.
  4. Social funding would drive conversations with real people – political parties and candidates would have to spend more time having proper conversations with real people, listening to their issues and meaningfully responding to them in order to be able to function.
  5. It provides a pathway to mass participation and mass membership in political parties again – building the infrastructure necessary to get donations also involves building the infrastructure necessary to ask people to join. In addition, once you’ve made the decision to donate, why not help out to ensure your favoured candidate gets up? Why not join to attempt to make the party even better?
  6. Social funding builds in the prospect for democratic renewal – it provides a funding mechanism whereby groups such as Voices for Indi can organise a credible campaign within their own communities. A few dissatisfied community members can gather around a kitchen table to register a political candidate and with their networks get together the seed funding to start a campaign. This works as social funding does not lock in funding based on past political preferences but based on our active and current preferences.

Social funding won’t solve all our problems but it should expand the horizons of public discourse so we can at least start talking about how to solve our real problems.



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