Political donations in Australia

The term "political donations" refers to gifts to a politician, a political party, or an election campaign.

In Australia, the majority of political donations come in the form of financial gifts from corporationscite paper |last=Young |first=Sally |title=Political finance in Australia : a skewed and secret system |publisher=Australian National University |date=2006 |url=http://arts.anu.edu.au/democraticaudit/papers/focussed_audits/20061121_youngthamfin.pdf |accessdate=2007-09-29 ] , which go towards the funding of the parties' election advertising campaigns. Donations from trade unions also play a big role, and to a lesser extent donations from individuals. Donations occasionally take the form of non-cash donations, referred to as "gifts-in-kind".

The Australian Electoral Commission regulates donations to political parties, and publishes a yearly list of political donors. Donors can sometimes hide their identities behind "associated entities".cite web | url=http://www.theage.com.au/news/in-depth/are-our-politicians-for-sale/2006/05/23/1148150251862.html | title=Are our politicians for sale? | publisher="The Age" | date=2006-05-23 | accessdate=2007-09-21]

Corporate political donations

Between the years 1995-1998, corporations donated $29 million to Australian political parties. The largest corporate donor during this period was Westpac.cite web | url=http://www.abc.net.au/rn/talks/natint/stories/s143363.htm | title=The National Interest: Political Donations | publisher="ABC Radio" | date=2004-06-25 | accessdate=2007-09-25] By the year 2002-2003, the amount of corporate funding to Australian political parties had risen to $69.4 million.cite web | url=http://www.theage.com.au/articles/2004/02/07/1075854110070.html | title=Can power be bought? | publisher="The Age" | date=2004-02-08 | accessdate=2007-09-26] In 2004-2005, the Labor Party raised $64.8 million from the corporate sector, while the Liberal Party raised over $66 million. Most of the large corporate donors conduct business in an area greatly affected by government policy, or are likely to benefit from government contracts.

Corporate fundraising

In Australia, there is a growing trend for MPs to become directly involved in the corporate fundraising efforts of their parties. Ministers and staff are encouraged to engage with donors and business supporters, with the aim of raising cash for their political parties. It is known for business leaders to pay $1400 to get near a federal minister.

When political parties lodge their return to the AEC, they are not forced to divulge the identities of corporations attending party fundraising events. This allows companies to deny they are political donors.

Public funding to reduce corporate donations

In 1984, the Hawke government introduced public funding for political parties, with the intention that it would reduce the parties' reliance on corporate donations. The scheme failed its stated goal, as political donations from corporations have risen since that time.

During the 2004 election, the government paid $41.9 million in public funding to political parties. The Liberal Party received $17.95 million in public funds, while the Labor Party received $16.7 million.

Trade union political donations

The Australian Labor Party is the main beneficiary of trade union donations in Australia. During the years 2004-2005, trade unions donated $49.68 million to the Labor Party's head office. Critics have accused the unions of buying seats at ALP state conferences.cite web |first=Janet |last=Albrechtsen |authorlink=Janet Albrechtsen | url=http://www.theaustralian.news.com.au/story/0,20867,20718822-32522,00.html | title=Of course donors expect something in return | publisher="The Australian" | date=2006-11-08 | accessdate=2007-09-26] In 2001-2002, money from trade unions amounted to 11.85% of the Labor Party's income.

2006 law change

In May, 2006, the Australian government increased the disclosure threshold for political donations from $1500 to $10,000. In announcing the laws, the government said it will result in a "fairer" and "more competitive" electoral system, however, failed to discuss how the changes achieved these goals.

Critics allege the new law will increase the chances of corruption, by making political donations harder to track, and by making conflicts of interest harder to detect. The change in disclosure allows corporations to secretly donate up to $90,000 spread across national and state branches of political parties without public disclosure of that funding.cite web | url=http://www.smh.com.au/news/opinion/how-red-tape-strangles-the-ballot-boxes/2007/08/31/1188067365988.html | title=How red tape strangles the ballot boxes | publisher="The Sydney Morning Herald" | date=2007-09-01 | accessdate=2007-09-26] Donations up to $1500 were also made tax deductible.

The Commonwealth Parliamentary Library estimated this disclosure change will increase the number of secret political donations from 25% up to 36%.cite web | url=http://www.theage.com.au/news/opinion/our-democracy-encourages-corruption/2007/02/01/1169919469189.html | title=Our democracy encourages corruption and undue influence | publisher="The Age" | date=2007-02-02 | accessdate=2007-09-26]

Associated entities

Despite the Australian Electoral Commission publishing a yearly list of political donors, it is often difficult to ascertain who made the donation, as political parties sometimes use "associated entities" as front organisations to hide the source of the donations..

Front organisations such as the Cormack Foundation and John Curtin House Limited provide individuals and corporations with a means of passing funds to the major parties anonymously. Under the current "electoral act", these organizations are not required to disclose where the donations came from.cite web | url=http://www.abc.net.au/pm/content/2004/s1036576.htm | title=Mysteries remain in political donations | publisher="ABC Radio" | date=2004-02-02 | accessdate=2007-09-25] Associated entities have become huge political donors in Australia, in 2003-2004 donating $72.6 million to political parties.

Criticism of political donations

The "Australian Shareholders Association" has called for political donating to end, arguing that the donations are a gift and a form of bribery.

Former Qantas chief, John Menadue, said::"Corporate donations are a major threat to our political and democratic system, whether it be state governments fawning before property developers, the Prime Minister providing ethanol subsidies to a party donor, or the immigration minister using his visa clientele to tap into ethnic money."

Political researchers Sally Young and Joo-Cheong Tham from the Australian National University concluded::"There is inadequate transparency of funding. Moreover, there is a grave risk of corruption as undue influence due to corporate contributions and the sale of political access."

Some critics say Australia should follow the example of the United Kingdom, where corporate donors must disclose their political donations in the company's annual report to shareholders.

Other critics have called for limits to cap the amount that corporations and unions can donate to political parties, similar to the $5000 personal donation limit in Canada, with a virtual ban on union and corporate donations.cite web | url=http://www.news.com.au/dailytelegraph/story/0,22049,22487384-5001031,00.html | title=Counting the cost of political advertising | publisher="The Daily Telegraph" | date=2007-09-26 | accessdate=2007-09-29] Some point to the success New Zealand has had, limiting the amount of money that political parties can spend on their election campaigns.

In January, 2008, New South Wales Opposition Leader Barry O'Farrell demanded political donations be limited to $30,000 per candidate, and a cap of $250,000 on what a corporation or union can donate to a political party. Describing the NSW government of Morris Iemma, O'Farrell said: "This is a Government where many people are of the view donations buy influence and decisions. That's why we need to take action to clean up the system."cite news |first=Andrew |last=Clennell |title=Anger over Iemma's lopsided election campaign war chest |url=http://www.smh.com.au/news/national/anger-over-iemmas-lopsided-war-chest/2008/01/27/1201368945679.html |publisher="The Sydney Morning Herald" |date=2008-01-28 |accessdate=2008-01-28 ]

Under a proposal launched by Shadow Federal Treasurer Malcolm Turnbull in January 2008, only individuals who are Australian citizens or on the Electoral Roll would be eligible to donate to political parties, and must declare the money came from their own funds. Turnbull said that the democratic system was not working properly when there is such a disparity between the amount of political donations a government can raise compared to the opposition.cite news |first=Andrew |last=Clennell |title=Turnbull backs call for cap on donations |url=http://www.smh.com.au/news/national/turnbull-backs-call-for-cap-on-donations/2008/01/28/1201369038314.html |publisher="The Sydney Morning Herald" |date=2008-01-29 |accessdate=2008-01-29 ]

tate political donations

New South Wales

The New South Wales government is the seventh biggest advertiser in Australia, ahead of McDonald's and Coca-Cola.

On 30 October 2006, former Prime Minister Paul Keating called for an end to political donations from property developers. He said that in NSW, property developers were sending a "wall of money" towards the planning minister.cite web | url=http://www.smh.com.au/news/national/developers-money-keeps-all-sides-of-politics-afloat/2006/10/31/1162278141454.html | title=Property developers' money still keeping all sides of politics afloat | publisher="The Sydney Morning Herald" | date=2006-11-01 | accessdate=2007-09-26]

In September, 2007, the Independent Commission Against Corruption cited political donations as a risk for corruption. The ICAC recommended that the state premier make changes to the "Election Funding Act" to force property developers to publicly disclose any donations made to the minister for planning, or the minister's political party.cite web | url=http://www.icac.nsw.gov.au/index.cfm?objectID=CDF1B848-CBBE-7358-3301A480AE7D102B | title=ICAC recommends applicants declare political donations to minimise DA process corruption risk | publisher="ICAC" | date=2007-09-04 | accessdate=2007-09-25] The ICAC also recommended that local government councillors step aside from any development applications involving political donors.

On 27 June 2007, the New South Wales Legislative Council established a committee to investigate electoral and political party funding.cite web | url=http://www.parliament.nsw.gov.au/partyfunding | title=Legislative Council Select Committee on Electoral and Political Party Funding | publisher=Parliament of NSW | date=2007-06-27 | accessdate=2007-09-25] cite web | url=http://www.smh.com.au/news/national/coalition-wins-vote-for-donations-inquiry/2007/06/27/1182623992519.html | title=Coalition wins vote for donations inquiry | publisher="The Sydney Morning Herald" | date=2007-06-28 | accessdate=2007-09-25] Critics have said the inquiry will be a toothless tiger, due to it being stacked with government-friendly members.cite web | url=http://www.smh.com.au/news/national/donations-inquiry-stymied-by-iemma-government/2007/09/27/1190486405623.html | title=Donations inquiry stymied by Iemma Government | publisher="The Sydney Morning Herald" | date=2007-09-27 | accessdate=2007-09-29]

Victoria

In Victoria during the year 2001-2002, the Victorian Labor Party received $7.2 million in political donations, with trade unions, gaming companies and property developers on the list of donors. In the same year, the Victorian Liberals received $11.3 million in political funding, including $3.8 million in public funding.cite web | url=http://www.theage.com.au/articles/2003/02/03/1044122322310.html | title=Fuel firm doubled gift to Coalition | publisher="The Age" | date=2003-02-04 | accessdate=2007-09-26]

Former Victorian premier, John Cain, presented a speech on political donors::"All of them want access and, some would say, favours. We seem to have accepted this situation provided that the donation, the giver and receiver are known; that is, that disclosure is the key."

:"But the driver is hunger for money by the parties. Despite public funding in the Commonwealth and some states, this hunger explains the drive only in part. Donors want the parties (and so, governments) to be beholden to them and to be preferred over their business competitors. It is a neat, cosy arrangement. It grows more blatant."

:"The parties in Australia now openly call for donations that provide access at rates of $10,000 to the Prime Minister or premier. It costs less to get to see a minister."

:"Parties are like football clubs - no matter how much money they get, they will spend it and then want more."cite web |first=John |last=Cain |authorlink=John Cain II | url=http://www.theage.com.au/news/opinion/the-politics-of-greed/2006/10/17/1160850927192.html | title=The politics of greed | publisher="The Age" | date=2006-10-18 | accessdate=2007-09-26]

Former Victorian auditor-general Ches Baragwanath said it is naive to believe that political donors don't expect favours in return for their money.

ee also

* Campaign finance

References