LABOR is willing to sever its financial ties with the union movement as part of its push for substantial reform of campaign finances, including the abolition of corporate donations.
The Sydney Morning Herald has learnt there is support at the highest levels of the ALP to end the practice of unions paying fees to affiliate with the party. The fees are a lucrative source of income, worth $1.3 million a year to NSW Labor alone.
While the fees do not meet the strict definition of political donations, senior party officials believe they should be traded away in order to secure Liberal Party support to ban all corporate donations, as well as those from other third parties and associated entities.
''How could we argue to ban people from donating to the Liberals while say, unions, could still contribute to the Labor Party,'' said a senior source, intimate with the talks. ''This is a once-in-a-lifetime opportunity to get donation reform.''
The goal of the reform process is to abolish donations to minimise the potential for corruption or influence peddling.
Instead, parties would be allocated public funds to run their campaigns. The process was begun by the former special minister of state John Faulkner and is being continued by his successor, Joe Ludwig.
The Liberal Party is amenable to the proposals and talks with Labor are well advanced. Legislation could be introduced next year.
It is understood Senator Ludwig's Opposition counterpart, Michael Ronaldson, supports abolishing all forms of donation, although it is likely some capacity to donate would remain.
The parties are discussing whether to allow donations only from individuals, which would be capped at $1500 or $2000.
Unions would still be able to affiliate with the ALP, but would pay a single capped fee per union, rather than the tens of thousands of dollars an affiliation costs now.
But views are mixed within the union movement, some fearing the abolition of affiliation fees will be the start of reducing union influence in the ALP.
One source said the ACTU and Victorian unions were the most hostile and that internal talks were robust. But he said unions would still be able to affiliate, and their 50 per cent representation inside state Labor conferences would be maintained.
Unions affiliate at a state level, and the funds are not collected by the federal Labor Party. But it is expected that the donation reforms adopted federally would be replicated by the states.
The talks are being motivated by corruption allegations in Queensland and NSW. The Queensland Premier, Anna Bligh, has banned her ministers from attending corporate fund-raisers and the NSW Opposition Leader, Barry O'Farrell, has called for a ban on corporate donations.
''Everyone accepts this is going to happen,'' the Labor official said. It was only a matter of time before there would be a crisis at federal or state level.
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