Unions and business should not be allowed to fund political parties, senior Liberal party minister says

This article is more than 6 years old

This article is more than 6 years old

As more senior Liberals prepare to face a corruption inquiry in Sydney, the federal education minister, Christopher Pyne, has called for a ban on all political donations “other than from individual Australians”.



“I don’t believe that the trade union movement or corporate Australia should be able to donate to political parties,” Pyne told ABC’s Insiders program on Sunday morning.



“I think only individuals should be able to donate to political parties, so that they make the decision that, with their after-tax income, they feel strongly enough that they want to support a political party, whether it’s Labor, or the Greens, or the Liberal party,” he said.



His comments come as the NSW premier, Mike Baird, tries to stem the damage from the Independent Commission Against Corruption hearing, following Friday’s resignation of the NSW police and justice minister, Mike Gallacher.



Baird has promised “decisive action” but he stopped short of giving details of any precise measures. “I said we will be making announcements in due course. I’ve said I’m concerned about donations, I’m concerned about lobbyists, there’s actions that need to be taken in that space, but I will not do policy on the run,” he said on Friday.



However, Ian Robertson, the solicitor who led the successful high court challenge against the premier Barry O’Farrell’s electoral-funding reforms, said any attempt to ban corporations or unions from making political donations to political parties could be “in breach of the Australian constitution”.



O’Farrell’s reforms, passed in March 2012, limited donations to individuals on the NSW electoral roll. However, in December last year the high court unanimously found that the law was an “impermissible burden” on the Australian constitution’s implied freedom of political communication.



“It’s extremely strong; it cannot be ignored,” Robertson said of the decision. “Anybody who wants to ban [specific entities] is going to have to have a very good reason.”



Property developers, alcohol companies and gambling interests, including pubs and clubs, are still banned from donating to NSW political parties, but Robertson said if they challenged this restriction “they might well be successful”.



On Friday, counsel assisting the inquiry, Geoffrey Watson, SC, accused Gallacher of “hatching a corrupt scheme” to funnel donations from property developers to the Liberal party through a sham business, Eightbyfive.



Gallacher resigned from the ministry on Friday, saying he could not “remain in this office whilst such a serious allegation has been made against me”.



More senior Liberals are slated to appear before the inquiry this week, including the acting state director of the NSW Liberal party, Simon McInnes.



Along with the chairman of the party’s fundraising arm, Paul Nicolaou, McInnes was accused this week of using an associated entity, the Free Enterprise Foundation, to secretly channel money from prohibited donors to the NSW Liberal party.



“The actions of these persons were a serious breach of the law and a serious breach of trust with the voters of New South Wales in the lead-up to the March 2011 election,” Watson said. “The Free Enterprise Foundation donated just on $700,000 to the New South Wales Liberal party. Not all of that came from prohibited donors, but a substantial part of it did.”



Both men are scheduled to give evidence on Thursday. They will be followed on Friday by the federal Liberal senator Arthur Sinodinos, who is making his second appearance before Icac.



The former assistant treasurer, who stood aside from his position pending the outcome of the corruption investigation, was treasurer of the NSW Liberal party and a board member of Australian Water Holdings, which records show paid Eightbyfive $183,000 between April 2009 and May 2011 for “products and services as stipulated in service level agreement”.



• On 5 May 2014 this article was amended to describe Ian Robertson as a solicitor. A previous version said he was a barrister.