Ever since the NSW Corps and the conflict with Governor Bligh called the Rum Rebellion, two hundred years ago, the most disgraceful aspect of political life in NSW has been the corruption and influence buying on behalf of corporations that are looking for Government favours (e.g. the right to sell rum) and from individuals who decide to buy positions in Parliament and preference in gaining the ear of decision makers for their own benefit.

One common approach has been through making donations to cover some of the costs of the politicians’ next election. They go towards the funding of the parties' election advertising campaigns. Donations from trade unions also play a big role, and to a lesser extent donations from individuals.

The Australian Electoral Commission records donations to political parties, and publishes a yearly list of major identifiable political donors. Donors can sometimes hide their identities behind associated entities.

Corporate political donations has increased dramatically and all major parties employ staff to gather these donations. Between the years 1995-1998, corporations donated $29 million to Australian political parties. The largest corporate donor during this period was Westpac Bank. By the year 2002-2003, the amount of corporate funding to Australian political parties had risen to $69.4 million. In 2004-2005, the Labor Party raised $64.8 million from the corporate sector, while the Liberal Party raised over $66 million. Most of the large corporate donors conduct business in an area greatly affected by government policy, or are likely to benefit from government contracts.

In 1984, the Hawke government introduced public funding for political parties, with the intention that it would reduce the parties' reliance on corporate donations. The scheme failed its stated goal, as political donations from corporations have risen since that time.

During the 2004 election, the government paid $41.9 million in public funding to political parties. The Liberal Party received $17.95 million in public funds, while the Labor Party received $16.7 million.

The Australian Labor Party is the main beneficiary of trade union donations in Australia. During the years 2004-2005, trade unions donated $49.68 million to the Labor Party's head office. Critics have accused the unions of buying seats at ALP state conferences. In 2001-2002, money from trade unions amounted to 11.85% of the Labor Party's income.

Recently, the shooting of NSW businessman, Michael McGurk, in cold blood has intensified allegations of endemic government corruption in New South Wales. Mr McGurk was shot dead at his Cremorne home in a targeted killing. Before his death he told reporters about a recording he claimed to have made containing revelations that implicated New South Wales and Federal Labor politicians in corruption. The tape is purported to contain conversations about Members of Parliament receiving payments from businessmen in return for favours. An ICAC investigation found no evidence of actually corruption of politicians.

McGurk apparently owed Ron Medich a large amount of money. Three contract killers have been charged with murder as has Medich. Medich has recently donated $260,000 in the hope that the Labor Government would rezone areas of Badgery's Creek for housing development. If rezoned Medich could make hundreds of millions of dollars profit. The Government in spite of the ALP donation has not rezoned the land.

Accusations of political corruption have long been part of political debate in New South Wales and other states. ICAC has been busy hearing charges against individual Parliamentarians and a number of Councils. The worst of these was the Wollongong City Council. The incarceration of a former Beattie minister for corruptly receiving $360,000 in secret payments from Queensland businessmen reveal a recent example of blatant corrupt behaviour.

Although the federal government in Australia raises most of the revenue, the state governments spend it. Education, police, health, roads, transport, housing and justice fall largely under state jurisdiction, presenting potentially large opportunities and rewards for corrupt activity.

Both the major political parties in Australia, Labor and Liberal (in a coalition with the National Party), have been accused of succumbing to these opportunities when in power at the state level.

In recent decades, corruption accusations surrounded New South Wales governments under Liberal Premiers Robin Askin and Eric Willis (1965-1976), and under their Labor successors, Premiers Neville Wran and Barrie Unsworth (1976-1988). In the 1988 election, the Liberal leader Nick Greiner promised to establish an Independent Commission Against Corruption (ICAC) to investigate activities and recommend prosecution against individuals where necessary.

However, in 1992 Premier Greiner and one of his ministers were forced to resign from Parliament following an ICAC investigation into their involvement in appointing a former colleague to a senior bureaucratic position. The courts later cleared both the Premier and his minister.

Professor Mark Findlay (Director of The Institute of Criminology, The University of Sydney) has stated described the success and failures of ICAC. He stated that ICAC has slowly reversed an intensely corrupt local government planning structure. It radically improved public tendering. It challenged the improper use of public information. These are long-lasting betterments of public administration. But when faced with corruption within the police and prisons, it prevaricated and failed.

One problem with a review agency like ICAC is that the executive government controls its resources and appointments to this independent body.

In a paper entitled “Perils of Government Dominance”, Professor Scott Prasser argues that parliaments cannot rely on watchdogs alone to guard against bad government. In recent decades, we have seen the dominance of the executive government over the legislature, the judiciary, and the public service. This is a threat to democracy and goes against the doctrine of the separation of powers.

Prasser describes the emergence of “elective dictatorship”. He stated: “The increasing focus of government leaders and the almost endless election campaigns are now a feature of modern democracy. Consequently, the executive becomes more anxious to control both the political agenda and the institutions of government to minimise mistakes and maximise political outcomes. This desire for control is reflected in the expansion of the prime minister and premiers’ departments that now dominate government operations. Today, leaders want not only to have their finger on the pulse, but also to control the flow of all government business.”

Sadly, that has long been a common feature in New South Wales politics. Perhaps Professor Findlay has rightly encapsulated the mood of the people when he wrote: “Irrespective of the outcome, the community is convinced that corruption remains a feature of public life in New South Wales. After a quarter century of corruption prevention, ICAC has been incapable of stemming high-level political corruption. Neither has it succeeded in overcoming public suspicion that it is business as usual in Macquarie Street.”

This week, the NSW opposition has staked a claim to the moral high ground in the ongoing state stoush over campaign finance reform, with a proposal to restrict donations to individuals on the electoral roll.

The feud over electoral reform continued in the NSW parliament on Tuesday with the Greens announcing an amendment to ban tobacco company donations, still accepted by the opposition but not the Labor government.

Under pressure to support the ban, NSW Opposition Leader Barry O'Farrell announced his own amendment restricting donations to individual voters, and challenged Labor and the Greens to back the idea.

"The only people who get a vote in our electoral system are individuals - not unions, not corporations, not interest groups," he told reporters in Sydney.

"The way to put an end once and for all to the decisions-for-donations culture that has grown up is to only permit individuals, individuals on the electoral role, individual Australian citizens, to donate to the candidate or party of their choice."

The government's reforms would introduce annual donation caps of $5000 to parties and $2000 to individual candidates or MPs.

The government's campaign finance reforms have been assured passage through parliament with the support of the Greens. Apart from the donation caps, there will be tough restrictions on party and candidate campaign expenditure, while third parties would each be able to spend $1.05 million ahead of an election.

The inclusion of unions within the third party caps has been a major sticking point for the opposition: a "rort" designed to benefit the Labor government only. I spoke and voted against these changes that are designed to benefit the Labor and Greens Parties. Minor Parties, such as the CDP and Family First, depend upon individual donors.

There is still the issue of individuals buying their position by either personal donations or by enabling donations from their union or corporation. Many very generous donors have sought preselection as a Party’s favourite candidate to allow them to enter Parliament. The most recent example has been this week where the Liberal Party was selecting its candidate for the safe Liberal seat of Castle Hill.

Ashley Pittard has political ambitions. A great deal has been said about how he has used his wealth. NSW Election Funding Authority records show that Mr Pittard has donated more than $360,000 to the Liberal Party since 2007. The largesse has prompted plenty of discussion about his bid for the seat. Mr Pittard has also a history of donations to the Federal Electoral Council covering the seat of Mitchell, held by the party powerbroker Mr Hawke. Donation records show that Mr Pittard contributed $150,000 to the Mitchell FEC between July 23 and October 25, 2007. Mr Hawke was elected to Mitchell that year at the November election. In April last year, Mr Pittard contributed $75,000 to the Mitchell FEC. In July, before the federal election, he gave another $45,000. This is incredible giving.

Perhaps it is a sign of political maturity, but the Liberal Party selectors eventually gave the pre-selection to a competitor to Mr Pittard. But buying a seat n Parliament (Premier Henry Parkes sold positions on a regular basis using the money involved to pay off his debts!) or buying favourable treatment for land development that will result in huge profits for the Corporations, is on both accounts unacceptable.

Public funding for elections is desirable in the light of present practices that have led to corruption. We may not want to pay for elections, but it is the best way of ending the corruption of political donations.