FactCheck Q A: Is Australia one of the few countries worldwide to accept foreign political donations?

The Conversation is fact-checking claims made on Q&A, broadcast Mondays on the ABC at 9:35pm. Thank you to everyone who sent us quotes for checking via Twitter using hashtags #FactCheck and #QandA, on Facebook or by email.

TONY JONES: Sorry, to be fair, you still haven’t answered the question as to whether you think your party should not take foreign donations.

BRIDGET MCKENZIE: Yeah, I probably don’t. We’re one of the few countries in the world that does. – National Party Senator for Victoria Bridget McKenzie responds to journalist Tony Jones on the ABC’s Q&A program, September 12, 2016.

Nationals Senator Bridget McKenzie told Q&A that Australia was one of the few countries in the world that accepted foreign donations.

Is that true?

Checking the source

When asked for a source to support her assertion, a spokesperson for Bridget McKenzie referred The Conversation to data collected by the International Institute for Democracy and Electoral Assistance, which shows that of the 180 countries it listed, 114 ban foreign political donations.

The International Institute for Democracy and Electoral Assistance (International IDEA) is a Stockholm based intergovernmental body, of which Australia was a founding member. It maintains a political finance database covering political finance laws and regulations in 180 countries.

Is Australia one of the few countries in the world that allows foreign donations?

It is true Australia allows foreign donations but it’s a slight exaggeration to say it is among the few countries in the world to do this.

The chart below, created by the International IDEA database, shows that of the 180 countries they researched, 114 countries ban donations from foreign interests to political parties. 55 do not and data is lacking for 11.

Australia belongs to the one third that do not ban foreign donations.

Oceania, the region that includes Australia, has the lowest proportion of countries that ban foreign donations. Only two countries out of 12 in Oceania (Papua New Guinea and Fiji) ban such donations. New Zealand allows foreign donations but limits them to NZ$1,500.

In contrast, 33 of 37 countries in Asia and 31 of 44 countries in Europe ban foreign political donations.

Democracies most similar to Australia, such as the UK, US and Canada, all ban foreign donations.

Other common restrictions on political donations

The International IDEA data also show that of the 180 countries on which data is collected:

• 87 countries ban donations to political parties from corporations with government contracts or partial government ownership. (Australia does not).
• 46 countries ban corporate donations to political parties. (Australia does not).
• 45 countries ban trade union donations to political parties. (Australia does not).
• 69 countries cap donations to political parties in relation to an election, regardless of the source. (Australia does not).
• 54 countries place limits on the amount a political party can spend – including Canada, New Zealand and the UK, which also limit election campaign spending by non-party organisations. In Australia, NSW and the ACT have such spending limits‬, while in South Australia expenditure caps apply to all parties that opt into public funding.
• 120 countries, including Australia, provide direct public funding for political parties. This can include annual administrative funding, as in European countries, as well as campaign funding.
• 65 countries, including Australia, provide tax benefits for political parties, candidates or donors.

The High Court has recently decided two important cases about regulation of political donations in Australia. In Unions NSW the Court struck down legislation imposing a blanket ban on political donations from corporations or unions or others not on the electoral roll. In McCloy, the Court upheld caps on political donations and a ban on donations from property developers.

Verdict

Bridget McKenzie was slightly exaggerating to say that Australia is one of the few countries in the world to accept foreign political donations.

Of the countries for which we have evidence, Australia belongs to the one third that do not ban such donations. – Marian Sawer

Review

This is a sound FactCheck. I have reviewed it and the author presents a fair and accurate view of the data from International IDEA.

There may be constitutional issues in banning foreign political donations in Australia. The High Court has struck down a scheme in NSW that banned donations from corporations, unions and non-citizens. On the other hand, the High Court upheld a NSW scheme that imposed yearly caps on political donations and banned donations from property developers, due to the history of corruption in NSW.

So any ban on political donations has to be carefully circumscribed to be compatible with our constitutional freedom of political communication. – Yee-Fui Ng

Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.