Reflecting the current orthodoxy on campaign finance policy, the Age yesterday editorialised in favour of the threshold for political donations disclosure being lowered from $11,500 to $1,000.

Despite the popularity of the $1,000 figure, I have never seen any real argument as to why that number is the right one. The Age said this:

For as long as this situation has been allowed to continue, and various donors are – for whatever reasons – free to conceal themselves from public scrutiny, democracy is under threat. Voters must be confident that political donations are not synonymous with covertly buying influence.

But could $11,500 plausibly buy influence? In 2010-11, a donation of that much was 0.000012% of the ALP’s income. I won’t strain your eyes any further by making you count how many decimal places would be needed to calculate a $5,000 or $2,000 donation as a percentage of the ALP’s total income. And the numbers would be even lower for the Liberals, who raised more money than Labor in 2010-11. The parties have incomes that are large enough, and diversified enough, for a single donor at this level not to be important.Read More »