The public perception, in Australia as in most of the world, is that politicians are a mercenary and unscrupulous lot, out to feather their own nests at the expense of the taxpayers. The description certainly fits some of them, but in most cases it’s unfair; politicians on average are no better and no worse than the rest of us.

There’s no doubt they display a strong inclination to divert public money to themselves and to the political parties that support them. But I think most of them act in complete sincerity. They behave in very much the same way as other members of that small minority who have the power to set their own salaries – indeed, compared to senior corporate executives and directors of public companies, politicians could be said to be reasonably restrained.

That’s the backdrop to the controversy in Australia this week over a government proposal to provide recurring funding for major political parties, not just grants to cover election campaigns. The legislation is now dead in the water after the opposition took its cue from public outrage and went back on an earlier agreement to support it.

Yet I’m sure many MPs on both sides still don’t really understand what all the fuss was about. They would say (correctly) that the sums of money involved are small in the context of the federal budget, and to them it’s self-evident that political parties are worthy recipients of extra cash. One of the strongest features of human nature is our capacity to sincerely believe whatever happens to be in our own self-interest.

For an even better illustration of the same mentality, have a read of the speech made in the Victorian parliament on Wednesday night by Geoff Shaw, the independent (renegade Liberal) MP for Frankston. (It’s at pages 88-89 of Hansard, and reported in this morning’s Age.) He’s speaking in support of legislation to increase MPs’ salaries, but the thrust of his argument is that the increase does not go nearly far enough.

Shaw is a thoroughly unappealing figure, a right-wing fundamentalist under investigation for misuse of his parliamentary car. But the points he makes in support of more money are not silly, they’re just incredibly one-sided: he sees only the disadvantages of the parliamentary lifestyle, not its non-monetary benefits.

It’s not just the politicians themselves, either. The same habit of rationalisation infects those close to the political process, especially in the media, who happily repeat the justifications offered for public funding – such as the idea that it would reduce the parties’ unhealthy dependence on rich donors. A perfectly logical idea in theory, but there’s no evidence at all that it actually works that way: parties just line up for as much money as they can get, whatever the source.

So too the hapless Michelle Grattan, who yesterday seemed to have convinced herself that Abbott’s about-turn on party funding would be a negative for him, not for the government that came up with the idea.

Public funding of political parties and campaigns has now established itself across the developed world. So, of course, have non-means-tested payments to MPs. The amounts spent keep increasing, but we don’t seem to get better politicians or better politics as a result; we just hollow out political parties as they rely more on the taxpayer and less on grassroots members.

MPs and their cheerleaders keep telling us that we need to pay more money to attract good people into politics, but again the assertion lacks any actual evidence. It seems to me that encouraging the perception of politics as a money-making business is much more likely to have harmful effects. Far from reducing the incidence of bribery and misappropriation, sending out a clarion call for mercenary politicians will probably increase it.

If the incentive structure is wrong to start with, increasing the amounts of money involved isn’t going to help.

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