Grattan on Friday: Labor's Sam Dastyari suffers Chinese burn

The federal press gallery’s mid-winter ball, held on Wednesday, has become an institution. It raises multi-dollars for charities as well as being an all-round good knees-up for media and politicians. For many companies and lobbyists, however, the occasion has another purpose. Corporates invite politicians to their tables for this great opportunity to put a point of view and extract information. It is an annual appointment in many business calendars.

The influence-peddling industry is huge in our political system, operating at multiple levels, on many fronts, and often involving money. Modern politics is an enormously costly affair. Parties perennially have their hands out. On the other side of the equation, many and varied interests are always wanting politicians to do things for them, whether it’s approving specific projects or transactions (such as a controversial investment by foreigners) or changing a policy stance.

Politicians will tell you decisions aren’t influenced by donations. That’s contestable. Think big unions and Labor. Think conservative Liberals screaming that donors are unhappy about the budget superannuation decisions.

But anyway, donations buy you the right to be a flea in an important ear.

There are some rules around this market of influence. Donations above a set amount have to be declared – although the federal rules are overly liberal. Lobbyists must register. But transparency remains limited and delayed. And there’s more than one way to skin a cat, as highlighted by the ongoing row in the NSW Liberal Party about certain lobbyists' power in preselections.

More reform is urgently needed, including lowering the threshold for declaring donations and providing for the release of information about donations in “real time” rather than, for example, long after an election.

Beyond rules, there is the matter of judgement, which brings us to this week’s extraordinary story of Labor’s man-in-a-hurry Sam Dastyari.

Dastyari, a shadow minister and manager of opposition business in the Senate, who entered parliament in 2013, has made a name for himself through chasing - particularly in Senate committee hearings - bad behaviour by corporates.

But now Dastyari has been winged, his credibility compromised by the controversy around his relationship with Chinese benefactors.

Dastyari had the Top Education Institute, which has strong links to the Chinese government, pay a $1670 bill that he owed the government for overspending his official travel allowance. He disclosed this on his register of interests so the sin is not one of concealment but of judgment. While Dastyari this week admitted he had made a mistake on that, his problem quickly escalated.

On Thursday the Australian Financial Review reported that Dastyari “pledged to respect China’s position on the South China Sea at an election campaign press conference he held with a Chinese political donor who had previously paid his legal bills”. Dastyari was quoted as saying: “The South China Sea is China’s own affair. On this issue, Australia should remain neutral and respect China’s decision” - which was softer than his party’s policy.

The donor in question was Huang Xiangmo, chairman of the property developer Yuhu Group, who has opened his pockets to both sides of politics. Earlier in the week the AFR reported Huang had written in China’s state-run Global Times that: “The Australian Chinese community is inexperienced in using political donations to satisfy political requests.

“We need to learn … how to have a more efficient combination between political requests and political donations.”

Meanwhile the ABC has reported that last year the head of the Australian Security Intelligence Organisation (ASIO) Duncan Lewis warned the major parties about the links between some large donors and the Chinese government.

Common sense would surely suggest to politicians that these donations and gifts are given with a purpose – whether to build goodwill for the future, open doors or keep them open, or exercise influence on specific matters.

With Chinese ambitions for investment in Australia expanding, it is not surprising they are very active in lobbying and donating. It will be interesting to see if more comes out about other politicians on either side. But any politician who is not aware of the play and therefore cautious is naïve at best or cavalier at worst. The same principle applies to other foreign donations but the focus is on the Chinese at the moment.

It’s true that lines are blurred when we consider foreign largesse. Is there, for example, a difference between accepting a sponsored study tour and money to pay a politician’s personal debt?

The debt payment is an obvious no-no. The totally pure might say it would be better always for the government or party to pay for a politician’s work travel. The more pragmatic would believe the study tours are OK: they give politicians the chance to broaden their knowledge and promote goodwill between countries.

Such trips are widely extended by countries to politicians, journalists, business and community leaders and the like. But it is also a question of degree – the difference between a one-off and repeated trips.

Dastyari’s colleagues are both sticking by him – he’s not losing his jobs – and distancing themselves from what he has done. ALP deputy Senate leader Stephen Conroy has called for a ban on foreign companies' donations, saying Australia is “one of a very small number of countries who actually don’t ban this practice”.

It is hard to see how there would be any non-financial downside in such a ban. The initiative would be popular with the electorate. At the very least, it would save politicians like Dastyari from themselves. It should be high on the list of needed reforms of the regulations covering donations.