Take The Politics Out Of Commerce, Not Vice Versa

Last week the Australian Electoral Commission published its latest donation figures for political parties. Donations are down from last year.

Nevertheless, these figures were accompanied by the standard appeals to “clean up” the political process and get corporate influence out of politics.

But it was also the week that the federal government introduced its emissions trading scheme into Parliament for the third time. In the government’s words, if passed, the emissions trading scheme “will change the things we produce, the way we produce them, and the things we buy”. When the government has this sort of ambition, is it really any surprise businesses are trying to influence the political process?

The problem with political donations isn’t that corporations are unduly trying to manipulate laws and regulations to their benefit. It’s that politicians are trying to shape an Australia where businesses have to involve themselves in the political system or they just might go broke.

The government plans to give out billions of dollars worth of free emissions permits as part of its emissions trading scheme. And the Coalition’s policy includes an “emissions reduction fund” of about $1.2 billion per year for some companies that reduce their emissions.

So if you had an aluminium smelter, and you didn’t take any politicians out to dinner in 2009, you’ve neglected your business responsibilities. Your competitors will be wining and dining any backbencher they can grasp.

But some of the biggest donors this year weren’t energy firms. The banks handed over a few lazy hundred thousand dollars to the major parties. Even while smarting from the financial crisis, the banks were self-aware enough to recognise the government’s guaranteeing of their bank deposits at taxpayer expense was a great deal for their shareholders.

And they’ll want a say in what comes next: like the Senate inquiry announced last week into small business access to finance. And whatever the government does with executive pay reform. And the results of Treasury secretary Ken Henry’s tax review. My point isn’t that we should feel sorry for the banks; they’re as protected by the government as they are regulated by the government.

But when Kevin Rudd says Westpac should have a “long hard look at itself”, or when Tony Abbott hints that if he makes it to the Lodge he’ll impose more banking regulation in response to the interest rate rise, what do we expect these firms to do? Just sit back and cop whatever regulation the government deems? Or, worse, whatever regulation their competitors convince the government to impose?

If firms aren’t donating, they’re lobbying. The government’s register records nearly 300 lobbying firms. More than 1800 Australian organisations paid these lobbyists to saunter around the corridors of Parliament. Even The Big Issue apparently feels the need for professional representation in Canberra – the magazine is listed as a client of two of Australia’s biggest lobbyists, Hawker Britton and Enhance Corporate.

It’s strange that we seem to blame the companies who donate money to political parties for the corruption of our democracy, rather than the politicians who take that money and change the law to suit. A US study last year found that for every dollar US companies spent lobbying Congress, they received $220 in tax benefits. What firm wouldn’t want that sort of return on investment?

The solution isn’t to regulate political donations, or crack down on lobbyists. We could try. But the stakes are far too high for any limit on corporate influence to be effective. A company that feels its entire raison d’etre could be eliminated with the stroke of a legislative pen will find a way to influence politicians, whether we like it or not.

We’ve gotten into this situation because of a bipartisan belief that there are no limits to what government should do – there are almost no areas of the economy the government shouldn’t oversee, regulate or direct.

So do we want commerce out of politics? We’ll have to get politics out of commerce first.