Lobbyist flags end to corporate donations

An inquiry into political donations has heard of a growing backlash against corporate support for political parties.

A veteran business lobbyist says it's likely Australia will move to fully publicly-funded election campaigns as pressure builds over corporate influence on parties.

Ian Smith set up Bespoke Approach in 2008 with the backing of ex-Liberal minister Alexander Downer and former Labor minister Nick Bolkus.

Mr Smith, a former Liberal adviser, said donations to parties had an "influence", in terms of promoting issues of interest to them.

"(But) in my experience I have not seen them have an impact on the behaviour of federal politicians," he told a parliamentary inquiry into donations in Canberra on Monday.

"A donation's influence is not designed to undermine our political and democratic processes."

The "overwhelming reason" for donations was because of the "inadequate levels of public funding" to parties.

While the public funding per vote which went to political parties covered about $22 million in costs, it was not enough to cover the estimated $40 million cost of a modern-day political campaign.

With voters becoming more negative about donations, Mr Smith said: "We are on a path to full public funding."

Greens leader Richard Di Natale said it was "cloud cuckoo land" thinking that corporations donated money mainly because there was not enough public funding.

The committee had heard evidence of spikes in donations to political parties when policies of direct relevance to companies were being discussed by government, such as alcohol, gaming and tobacco regulation.

Mr Smith said donors would be "wanting to influence a policy outcome" but only those consistent with a company or an entity's objectives.

He supported the idea of real-time disclosure and lower thresholds for disclosure of individual donations.

GetUp national director Paul Oosting said the political donations system was "broken".

The activist group commissioned research which found 20 major business lobbies earned $1.94 billion over the past three years.

"The purpose of that spending is to encourage politicians to put private interests ahead of the public interest," he said.

"The worst part about it is, it works."

Mr Oosting said there was a crisis of confidence in politics and the influence of corporations and corporate money is a cause.

The organisation has proposed a five-point plan to restore integrity:

* A cap of $1000 for any individual or corporation to donate in a financial year and spending caps on campaigns

* All donations above $500 to be disclosed in real-time.

* A national anti-corruption watchdog.

* A ban on overseas entities and non-citizens from donating.

* A three-year gap between MPs leaving parliament and becoming lobbyists.