Election campaigns are expensive exercises. Advertising, including on social media, letter-boxing, even corflutes (the candidate posters named for the plastic material they’re printed on) all cost big bucks. Candidates travel all over their electorates for several weeks while the major party leaders jet around the country during a campaign.
This means that, well before election time, political parties and candidates are incentivised to raise as much money as possible from private sources, including deep-pocketed lobby groups and wealthy benefactors, as well as unions and grassroots supporters.
A federal donations disclosure scheme, administered by the Australian Electoral Commission, exists so voters can see who is financing the campaigns of political parties and independent MPs and senators. But major loopholes have led to repeated calls from experts for campaign finance reform to improve transparency and reduce the influence of private interests.
So, how do donations to political parties work?
The major parties are multimillion-dollar machines.
The Liberal and National parties attracted almost $83 million in funding in the 2020-21 financial year, according to their disclosures to the commission. Labor collected more than $67 million while the Greens declared almost $16 million.
However, only a fraction of this money is declared as donations. Other sources of funding can be declared as “other receipts”, which can include loans received, proceeds on sales of assets, returns on investment, public funding, discretionary benefits and membership fees.
In total, political parties collectively declared about $177 million in funding last financial year – but just $15 million was declared as donations.
The source of millions of dollars in political funding is unknown.
Donations and “other receipts” need to be declared to the electoral commission only if an amount exceeds the “disclosure threshold”, currently set at $14,500, although it increases each year. This is a much higher threshold than exists at a state level. For example, Queensland and NSW require donations over $1000 to be disclosed, and in Victoria the threshold is $1050.
The Centre for Public Integrity, an independent think tank that analyses AEC disclosure data, estimated that in the 2020-21 financial year about $68 million – about one-third of the $177 million that flowed into political party coffers – was “hidden” money. A large component of it is believed to be donations received below the disclosure threshold. “We don’t know who is giving this money. We only know that it is below the disclosure threshold,” says Professor Joo-Cheong Tham, a director at the centre.
A quarter of political donations comes from ‘big money’.
Any Australian individual or company can donate to a political candidate or party. There are no bans on donations from certain industries – such as gambling, tobacco, property developers – at a federal level as there are in some states. But foreign donations over $100 are prohibited.
In reality, so-called “big money” dominates the financing of political parties.
Nearly a quarter of all donations came from just 10 donors in the 2020-21 financial year, according to the Centre for Public Integrity’s analysis. The biggest donor was packaging billionaire Anthony Pratt through his company Pratt Holdings, which donated $1.288 million to the Liberals and $10,000 to Labor.
Former fund manager Simon Fenwick and his wife, Elizabeth, donated $650,000 and $350,000 respectively through their investment vehicles to conservative campaigner Advance Australia, seen as a rival to left-wing outfit GetUp!
Powerful lobby groups and big accountancy firms also gave big. The Pharmacy Guild ($206,500 to the Coalition, $88,500 to Labor), property developer Harry Triguboff’s Meriton Apartments ($285,000 to the Liberals), and Melbourne man William Nitschke who gave $300,000 to former One Nation senator Rod Culleton’s Great Australian Party.
There’s no limit on donations. Clive Palmer is massively outspending the major parties.
Clive Palmer famously donated more than $83 million to his United Australia Party through his mining company Mineralogy ahead of the 2019 election, although he failed to get a single candidate elected.
This time, Palmer is on track for a similar-sized spending spree, having splashed more than $31 million on advertising by late February – more than 100 times more than the major parties. He has vowed to spend another $40 million during the six-week election campaign.
The absence of a donations cap poses a major equality issue for election campaigning, says University of Queensland Professor Graeme Orr, an expert in campaign finance law. Most states have moved to address this by implementing either donation caps or expenditure limits on their state and local elections.
“The big thing about the Commonwealth system is it is a free-for-all. Political equality would say we have to have some caps on donations and expenditure to control the arms race,” says Orr.
We won’t be able to assess the influence of big money on this election until next year.
The donations that political parties and candidates are receiving right now – or have received since July last year – to finance their campaigns won’t be revealed until the commission publishes its annual disclosure data in February.
This lag of up to 19 months has fuelled calls for “real-time” donations reform.
Labor, should it win government, will pursue reforms to lower the disclosure threshold from the current $14,500 to a fixed $1000 as well as to require real-time disclosure of political donations.
The Coalition has made some changes to electoral law while in government, including banning foreign donations and forcing entities to register as “significant third parties” and open their books to the commission if they spend more than $250,000 on electoral expenditure a year – a move targeted at independent and climate advocacy groups such as the Voices For campaigns.
The Australian Greens’ policy is there should be a ban on all political donations from the mining, development, tobacco, alcohol, gambling, banking, defence and pharmaceutical industries. They also want donations capped at $1000 per year, real-time disclosures, and limits on electoral spending by political parties.
A number of independent MPs and candidates are campaigning on a platform of political donations reform at this election. Tasmania independent MP Andrew Wilkie, for example, has proposed a private member’s bill to require real-time disclosure, a $1000 donation disclosure threshold, cap donations to $50,000 during an election cycle and ban donations from fossil fuel entities, gambling companies, liquor companies, and the tobacco industry.
Written by Lisa Visentin. Originally published in the Sydney Morning Herald on April 19 2022.