Australia is an international rarity for allowing foreign companies and individuals to make political donations. According to a study by the International Institute for Democracy and Electoral Assistance, 114 of 180 surveyed countries do not allow foreign interests to make political donations. According to court documents,, Lu was part of a much larger operation that saw $17 million deposited into CBA accounts. Credit:Rob Homer Banning foreign donations has strong support across the political spectrum - from Labor to the Greens to Coalition MPs such as Cory Bernardi. "It's wrong for substantial amounts of money from foreign entities in non-democratic governments to flow into [the] Australian body-politic," Senator Bernardi said this week. It is also popular with Nationals MPs opposed to foreign ownership of agricultural land. According to government minister Christopher Pyne, the "vast majority" of overseas donations flow to Labor - meaning the Coalition has little to lose by turning off the tap. But banning foreign donations would not be a panacea. Many companies have complicated ownership structures, so could potentially find loopholes in the law by donating through local affiliates.

And Australians with close overseas connections or who are dual citizens could continue donating. Minshen Zhu, the businessman who paid Senator Dastyari's debt, is a Chinese-Australian with reportedly has strong connections with the Chinese government. 2) Ban corporate donations This is the favoured policy of the Greens. Under their approach, for-profit companies would be banned from making donations while individuals and non-profit entities could keep donating. The problem: banning donations from corporations but not unions would never fly with the Liberals. Doing so would fly against the party's free market instincts and hand its political opponents a massive fund-raising advantage. If you want your reform model to have a shot at bipartisan support, this isn't it. 3) Limit donations to individuals on the electoral roll

This proposal is the most radical on offer as it would wipe out donations from both businesses and unions. Only individuals would be allowed to donate. The major parties would lose up to 90 per cent of their donations revenue under this scenario, with increased public funding used to fill the hole. The idea has particularly strong support from the conservative side of politics - from Malcolm Turnbull to Pyne to former Liberal Party treasurer Michael Yabsley. There's no doubt this move would go a long way to restoring faith in the integrity of the system, but there are some big problems. Firstly, the realpolitik: Labor is unlikely to support cutting ties so dramatically with the industrial wing of the party. More importantly, it could well be found unconstitutional. When the NSW O'Farrell government tried to limit donations to individuals in 2013 the High Court shot it down on the basis it infringed the Constitution's implied right to political communication.

4) Cap donations To overcome these constitutional risks, legal experts have suggested capping donations instead of banning them. Corporations and individuals can currently donate as much as they want to political parties. A 2014 report led by respected executive Kerry Schott found: "Caps are a measured and appropriate way of targeting large donations which clearly pose the greatest risk in terms of corruption and undue influence." Proposals for capped donation amounts differ. The NSW government, for example, has backed a $5,800 limit for donations to political parties. Former prime minister John Howard argued against such restrictions on Wednesday. Limiting donations, he argued, amounts to "an attack on freedom of political activity and expression". He also warned that cutting off donations could create an even more "monstrous" scenario than we have now: the growth of US-style Super PAC organisations. These groups raise millions of dollars for political campaign but operate with little regulation and transparency. 5) Improve disclosure requirements

There is a significant lag in Australia's political donation reporting requirements. The federal election was held in July but we won't discover until next February who was donating what to whom. How much did the big banks give to the Coalition, which was fighting calls for a royal commission? How much did the construction unions give Labor, which opposed the restoration of an industry watchdog. You'll have to wait to find out. That's why there is widespread support for real time donations disclosure or, at the very least, much more frequent updates of the register. Then there are the disclosure thresholds. In 2006 John Howard lifted the disclosure threshold from $1000 to $10,000 plus indexation (the threshold is now $13,500). Labor supports disclosure at $1000 and already does so voluntarily. Many of the above ideas may sound like common sense. But don't underestimate how hard it is to get anything done. In the Rudd era, John Faulkner got a package of reforms - including a ban on foreign donations and reducing the disclosure threshold to $1000 - through cabinet and the House of Representatives. But, without Coalition support, it never made it to the Senate. In the Gillard era, Tony Abbott agreed to then backed out of a deal to impose a $5000 disclosure threshold. It will take sustained public pressure - and a rare burst of political co-operation - to ensure dreams of reform don't crash into the rocks once again.

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