By David Crowe, originally published by SMH on 1 February 2021.
Federal political parties have received $1.1 billion from hidden donors in a trend towards greater secrecy over two decades, says a new report that warns of dangerous failures in the system meant to expose vested interests.
A handful of dominant players have increased their sway over federal politics by making one-quarter of all donations over the period, led by mining magnate Clive Palmer as well as Liberal and union funds.
In a damning assessment of the disclosure regime, the not-for-profit Centre for Public Integrity says voters are being denied crucial facts about who has paid for influence with about $3 billion in party income over two decades.
The findings come as the Australian Electoral Commission prepares to release annual disclosures on Monday for the past financial year, naming some of the donors but leaving many hidden under the laws agreed by the major parties.
“The federal disclosure scheme is misnamed – it is a non-disclosure scheme with more than a third of political funding shrouded in secrecy,” said University of Melbourne Professor Joo-Cheong Tham, an author of the report.
“That the most significant level of government has the weakest political finance laws is a grave weakness of Australian democracy.”
In a tally of payments from 1999 to 2019, the Centre for Public Integrity estimates the parties received $3.1 billion, including declared donations of $482.9 million and other receipts of $497 million.
Another $48.2 million came from subscriptions and $956.1 million came from sources explained in papers lodged with the AEC, requiring Professor Tham and his colleagues to sift through thousands of documents.
But $1.1 billion was not explained, which meant more than one third of the total income was “hidden money” without enough detail for voters.
The Centre for Public Integrity board includes former Federal Court judge and Queensland corruption commissioner Tony Fitzgerald, former Victorian Court of Appeal judge Stephen Charles, former NSW Supreme Court judge Anthony Whealy and NSW barrister and corruption inquiry counsel Geoffrey Watson, as well as Professor Tham.
The Liberal, Nationals and Labor parties have backed limited changes to the regime, such as a ban on foreign donations in 2018, but have opposed bigger reforms such as a cap on the amounts paid by individuals, companies or unions.
A key reason for the secrecy is that only donations over the threshold of $14,300 need to be disclosed, allowing donors to make multiple donations below that amount without being identified.
Another factor is the use of foundations, trusts and funds that make regular payments to a party but might not disclose the original source of the money.
The new conclusions are in line with separate research by University of NSW senior lecturer Lindy Edwards, who found three years ago that the major parties disclosed less than 20 per cent of donations transparently.
Centre for Public Integrity executive director Han Aulby said Australia needed mandatory disclosure of all payments of more than $1000 as well as real-time disclosure.
Professor Tham said donations should be capped to limit the power of any individual or company over a party or an election result.
“The absence of caps on political donations has permitted a handful of donors to dominate the funding of political parties,” he said.
“Caps on election campaign spending are necessary for a level playing field in elections.”
The new report highlights the trend towards a few big donors overshadowing all others.
“Unlimited donations mean that individual donors can have more influence. Donations over $1 million made up 30 per cent of donations since 1999 but only 0.6 per cent of donors,” it said.
“One quarter of all donations since 1999 have been made by five donors.
“The 2019 election saw the two largest individual donations in history, with Clive Palmer donating $83.5 million to the United Australia Party and Sugolena donating $4.1 million to the Liberal Party.”
Sugolena is a private company set up by Isaac and Susan Wakil, who came to Sydney after World War II and assembled a property portfolio. Asked about the donation, a company spokeswoman said: “Mr Wakil had a strong conviction that Mr Morrison was the best person to lead Australia. There were no conditions attached.”
The five largest donors over two decades were Mr Palmer’s private company, Mineralogy, which donated $101.2 million, followed by the Cormack Foundation, an investment fund aligned with the Liberal Party, with $61.4 million.
Next came Labor donors ALP Holdings ($56.8 million), John Curtin House ($47.6 million), and the Shop, Distributive and Allied Employees’ Association ($31.2 million).
Unions contributed $142.8 million to political parties over two decades, including $91.8 million in affiliation fees, another $48.9 million in donations and $5.1 million in other payments.
Almost all of this went to Labor, although unions including the CFMMEU and the National Tertiary Education Union have given money to the Greens.
While the Centre for Public Integrity did not equate affiliation fees with donations, its work suggested union funding was about twice that of the property sector, which spent $68.9 million over two decades.
“Big money dominates both major parties. The resources and property industries donate more to the Coalition, but unions donate almost exclusively to the ALP,” barrister Geoffrey Watson said.
Labor has supported a cut in the disclosure threshold to $1000 and the disclosure of donations within seven days.
Greens senator Larissa Waters will move on Monday to halt federal grants and tenders to political donors through a private member’s bill that is unlikely to gain major party support.
The Greens want to cap donations at $1000 each year, lower the disclosure threshold and stop donations from mining, banking and other industries.
Liberal Party federal director Andrew Hirst and Nationals federal director Jonathan Hawkes last year opposed the $1000 threshold on the grounds that parties should be able to appeal to private donors without relying on taxpayer money.
The Shooters, Fishers and Farmers Party argued last year that donors did not want their names “on the front page of the newspaper” for payments of as low as $1000.