More than $68 million in unexplained money flooded into political parties in the past financial year, making up almost 40 per cent of all donations, with integrity advocates warning the secrecy around who donates to Australia’s political powerbrokers must end.
An analysis from the Centre for Public Integrity published on Friday found the hidden money, which parties are not legally required to reveal the source of, is more than all other declared donations and other receipts combined for the 2020-21 financial year.
The amount of money spent in the coming election, which must be held by late May, is anticipated to again hit record levels. The major parties collected more money in 2020-21 than the previous year, and donations and fundraising are usually ramped up closer to an election.
The Coalition faces pressure over integrity issues from Labor and a raft of centre-right independent candidates after Prime Minister Scott Morrison promised in 2018 to establish a Commonwealth Integrity Commission to investigate corruption.
Three years later, the bill to introduce an anti-corruption watchdog is yet to go to Parliament. Mr Morrison says he wants Labor’s bipartisan support for the model, but the opposition says it is not up to standard.
Geoffrey Watson SC, a director of the CPI and a former counsel assisting the NSW Independent Commission Against Corruption, says there is a “transparency void” in election funding when voters deserve to know who is backing political parties.
“This secrecy needs to stop,” he said.
He sees three “fundamental flaws” in the system: too much money being thrown around, it allows “rich people and big business to influence politicians”, and voters don’t know where the money is coming from.
In documents published by the Australian Electoral Commission on Tuesday, political parties disclosed a combined $176.7 million of income for 2020-21.
Of this, $15.5 million was in declared donations, $30.6 million “other receipts” – a category that can include tax refunds but also covers things such as money paid to a party for tickets to fundraising events – and $55.4 million in public funding. A further $7 million came through subscriptions, loans, capital transfers and party branches shifting money between themselves.
The source of the rest of the money, some $68.3 million, is unexplained.
Over two decades since 1998-99, the origin of nearly $1.4 billion out of $4.5 billion in political party income has been hidden.
Almost 36 per cent of the Coalition’s reported income of more than $2 billion since that year is unexplained, while for Labor, 24.5 per cent of the almost $1.8 billion came from unknown sources.
However, the latest figures published by the electoral commission cover only the year to the end of June 2021. If a donation was made to a party on July 1, or any time since, it won’t be disclosed until February next year — more than eight months after the election.
Donations made directly to specific individual candidates (not those backed by party structures) during the election period will be disclosed in election returns, published almost six months after polling day.
Ahead of the coming election, mining magnate Clive Palmer has said he intends to top the $80 million he spent in 2019 promoting his United Australia Party, for which he is running on the Queensland Senate ticket. The party’s yellow and black advertisements and billboards are already ubiquitous.
“We’re getting to the point where individuals are now boasting – not threatening, but boasting – that they can influence political outcomes through sheer spending,” Mr Watson said.
“It’s time for Australians to recognise that this is a really damaging part of our system.”
“If I can get out of an Uber and be told within a minute or so, be given a receipt, I just do not understand why it’s now taking nine months or more for us to discover who’s donating to political parties.”
At the federal level, political parties are only required to disclose identities of donors who give more than $14,500 in one go. This is significantly higher than the disclosure threshold in the states, which is set at about $1000 in NSW, Victoria, Queensland and the ACT. The next highest threshold is in South Australia, where donations over $5600 have to be declared, then Western Australia at $2500.
Laws in NSW, Victoria and Queensland cap how much people can donate to a political party or candidate. In Victoria, Queensland, SA and the ACT, there are also limits on how much can be spent during election campaigns.
Labor’s policy is to reduce the federal disclosure threshold to $1000.
The new Centre of Public Integrity analysis doesn’t include money given to associated entities. These opaque fundraising organisations, which are either controlled by political parties or funnel money to a specific candidate or party, have given more than $1.2 billion to the Liberals and Labor over the past two decades.
This article was written by Katina Curtis and was originally published in the SMH on the 4th of February 2022