Why political donations are vital for democracy

Donations in cash or kind are the lifeblood of democracy.

Democracy isn't just voting; it is the whole struggle for popular support which is eventually formalised through the ballot box.

The need to raise funds keeps politicians sensitive to the needs of their supporters and community. It also prequalifies a candidate as having a certain level of competence.

If a candidate can't raise funds, then they are probably not worth voting for. It means no one who knows them is prepared to invest money in them. That's a sign you should think twice before investing a vote.

There is a growing call to ban donations to political parties, which has already expressed itself in New South Wales by banning political donations from people involved in the property development, tobacco, liquor or gambling industries.

Criminals can donate, but not citizens in bona fide legal industries which are also huge contributors to state government coffers through taxes, stamp duty and excise.

The calls rest on concern about corruption and influence on the one hand, and the opportunity to cut a political opponent off from resources on the other.

Yet all the evidence shows that corruption is generally channelled directly to the politician, and is outside the normal course of political donations.

Why pay-off a political party where it has to be publically disclosed, and that party then has to put pressure on a third party, the decision maker, to make the corrupt decision?

Wouldn't it be much more effective, and probably cheaper, to just pay-off the responsible official? And isn't that what generally happens?

Then there is the idea that a party policy can be procured by a donation. In fact causation runs in the other direction.

When Graeme Wood gave his record-breaking $1,000,000 donation to the Australian Greens, was it to change policy, or was it because he agreed with them?

As anyone who has donated to a church, surf club, charity or community organisation knows, Australians routinely give sometimes quite large sums altruistically.

Why should donors to political parties be any different?

Some fear the rich are getting influence they shouldn't, but while money can buy you a certain amount of attention, the people who get the most influence are those who donate their time and intellect to the cause.

$10,000 might buy you a seat at dinner next to the prime minister for two hours, but careful social grooming over decades can buy you instant access, even at midnight.

Influence comes from a variety of sources. It can be social or family ties, access to the media, celebrity, perceived importance because of wealth, or geographical proximity, like living next door.

Most influence comes with a cost, it's just that the time poor, and the less influential, meet that cost through dollars and cents.

In any group larger than two that influence will be unevenly shared. That is just a fact of life – it can't be excluded from our democratic practice. And in fact democracy is all about how we regularise the exercise of influence and resolve its conflicts. Influence is what democracy is about.

Proponents of fundraising restrictions most often come from the left. They fear the right has better access to corporate donations.

This may be true, but not necessarily a handicap.

Barack Obama showed corporates didn't matter that much raising $1.1 billion in 2012 mostly from small donors at an average of $65.89 per donation.

There are also many more third party campaigners on the left from trade unions through NGOs to community organisations.

So having corporate support isn't that important.

Not that a ban on donations would be particularly effective or healthy.

There would be nothing to stop rich entities getting into politics in their own right – say a bunch of miners running a campaign against a mining tax.

At the same time, the inability of candidates to raise their own funds would centralise power further and give party organisations even more power over them.

Campaigns would become mediocre, sensitivity to community opinion less and new entrants would be virtually precluded from access to reasonable funding.

We shouldn't allow a few high profile cases of corruption or class envy to stampede us into ceding more power to a few well-placed insiders.

Democracy guarantees us all the right to participate to the best of our ability. If our ability is making money, then it would be anti-democratic to stop us from contributing that.

And it's certainly anti-democratic to take the money from all of us, by force, through the tax system. Let the pollies stand on their own two feet.