Australia’s richest-ever member of Parliament could introduce a novel influence-buying dynamic into federal politics, new research suggests.
Clive Frederick Palmer, member for Fairfax, has been confirmed as a billionaire. The leader of the Palmer United Party has made his outsized wealth a political issue.
“I’m not offering myself for service to the nation to increase my income… I’m incorruptible – you can offer me a billion dollars and it won’t change my views on something and it won’t mean much to me either.”
The argument is plausible. The theory of the declining marginal utility of money suggests Mr Palmer would be less tempted by a million bucks than other MPs.
But a new paper from the United States National Bureau of Economic Research hints that is not the end of the story.
Berkeley economics professor, Stefano DellaVigna and colleagues, have found “[w]hen a politician controls a business, firms attempting to curry favors shift their
spending towards the politician’s business.”
Professor DellaVigna’s paper, Market-based Lobbying: Evidence from Advertising Spending in Italy, uses the reign of Silvio Berlusconi to show that companies increased their advertising spending with his media companies.
“We document a significant pro-Mediaset bias in the allocation of advertising spending during Berlusconi’s political tenure. This pattern is especially pronounced for companies
operating in more regulated sectors, as predicted,” DellaVigna et al write.
Mr Palmer may not be Prime Minister, as Berlusconi was, but after July 1, his party will control the balance of power in the Senate.
Will Australian companies start doing business with Mineralogy, Palmer’s main concern? Bluescope Steel, perhaps. But it is doubtful many regulated companies can use a lot of iron ore or nickel.
Palmer’s interests run deeper and broader than that, according to the register of Member’s Interests. [.ashx link]
He owns over 80 private companies in Australia, and nine private overseas companies. That’s without considering his directorships and companies owned through trusts or other entities in which Mineralogy has shares.
The one that jumps out in this context is Coolum Resort.*
The former Hyatt resort – which Palmer bought in 2011 for an estimated $80 million – has already got a load of free publicity.
If you are the sort of person that gets invited to conferences and summits, don’t be surprised if you end up among the Tyrannosarus Rexes at some point in 2014. (The resort features 160 fibreglass dinosaurs)
*I do not suggest booking a conference at Coolum necessarily constitutes corruption or influence-seeking, neither do I suggest Mr Palmer’s votes or views would be influenced by who books at his resort.