AT LAST some agreement among the three major parties. All agree that it is not acceptable for a frontbencher to take money from a corporation with strong ties to the Chinese Government. And that it is a resigning offence.

But something does not quite add up in the case of Senator Sam Dastyari having some expenses paid by the corporation. Why isn’t it equally unacceptable for any Australian MP to take any foreign money.

The Dastyari case should lead to a legislated ban on political donations from foreigners, and while we are at it general reform of donations law. The Coalition cannot have it both ways. It cannot call for, and eventually get, Dastyari’s resignation without acknowledging that foreign donations are wrong and do something about them.

Our democracy would be much healthier if we restricted donations to candidates and parties to only those on the electoral roll with a cap on both to, say, $500 or $1000 a year and real time internet reporting of donations over, say, $200.

One significant hurdle would be drafting the legislation to withstand a challenge in the High Court.

Much commentary has recalled that in 2013 the High Court struck down NSW legislation essentially directed at curbing union donations to the Labor Party. It restricted donations to only those on the NSW electoral roll. It also capped donations from people and capped the total amount a candidate or political party could spend in an election campaign on political communication. Further, it in effect said that union expenditure on political communication would be added to the ALP total spending in calculating the cap.

It was expressed generally as any spending on political communication by a third party that has the right to send delegates to a political party’s conference, but only the Labor Party and unions were caught.

The High Court held that the legislation offended the constitutional implied freedom of political communication.

Some have wrongly concluded that the case puts an end to effective political-funding reform. But a closer look at the 2013 case and considering a later High Court case, in 2015, and the cause of tighter political funding laws looks more rosy.

The hurdle to get over is that the High Court held in the 1990s that the Australian Constitution lays out a system of representative democracy which can only function if there is a free flow of political communication. The latter is implied in the former. Therefore, the High Court has held, any law that is contrary to that freedom is invalid. Among other things, the court has granted a constitutional defence for political communication in defamation cases. It has struck down legislated offences for criticising the courts and struck down bans on political broadcasts.

The 2013 case struck down the ban on donations by anyone other than a person on the NSW electoral roll and the incorporation of union money into the ALP spending cap. But it did so on fairly narrow grounds.

It held that in discriminating against affiliated industrial organisations, the law was not “reasonably appropriate and adapted to a legitimate end” and so was a burden on political communication. That legitimate end purported to be to attack corruption and undue influence, but in fact the law distorted free political communication. The court saw through the legislation’s anti-Labor bias.

The court also held that the exclusion of non-electors did not advance the purpose of thwarting corruption and undue influence.

Also, restricting the sources of funds imposed a burden on free political communication despite public funding because there was a gap between public funding and what a party might want to spend.

That looks a bit grim. But in 2015 the High Court upheld a ban on donations by developers and the gambling, tobacco and alcohol industry. It citied the need to combat corruption in the case of developers.

"These are provisions which support and enhance equality of access to government, and the system of representative government which the freedom protects," five judges said in a joint judgment.

In a separate judgment, Justice Stephen Gageler said the provisions met the "compelling statutory object . . . of preventing corruption and undue influence in the government of the state."

It seems as if the recent increasing menace of corruption and undue influence caused the judges to modify their approach. Moreover, the court held that donations in themselves were not political communication. So unlike in the US with its freedom of speech provision, donations from corporations are not guaranteed.

So how should Australian legislatures meet the constitutional hazards?

It seems that banning all donations from corporations might be unconstitutional, but a severe cap on what they can give would pass muster. The 2015 decision upheld NSW caps on donations to individual parties and candidates. But to be effective there would have to be uniform legislation and an overall cap, otherwise corporations or people could give the capped amount to every federal and state candidate and every federal and state iteration of a political party and thereby get around the ban.

A ban on donations by foreign corporations (with criminal sanctions for the receiver) would probably pass muster. Foreign corporations have no legitimate concerns in the Australian system of government. Their concerns can only be for their own interests.

So that would be a start.

But the really tricky question is how to restrict third-party “independent” organisations spending their money supporting the policies of a political party without giving it directly to it.

Perhaps this could be done by limiting the amount of money an organisation (including any related organisation) that could be spent on political communication in a year. That would be new ground for the High Court. But if the legitimate end is to prevent undue influence, it might pass constitutional muster.

Let’s face it. Big corporations give money to political parties and spend money on political communication to influence policy in their favour. The more they can give or spend, the more warped the political process becomes in favour of the wealthy and the elites.

Surely, such a cap would “support and enhance equality of access to government, and the system of representative government which the freedom protects”, as the court has held.

www.crispinhull.com.au