Political donations in Australia
Encyclopedia
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 corporations, which go towards the funding of the parties' election advertising campaigns. Donations from trade union
s 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.
. By the year 2002-2003, the amount of corporate funding to Australian political parties had risen to $69.4 million. 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.
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.
government introduced public funding for political parties, with the intention that it would reduce the parties' proportional reliance on corporate donations, vs public funding.
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.
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.
In 2001-2002, money from trade unions amounted to 11.85% of the Labor Party's income.
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 allowed corporations to secretly donate up to $90,000 spread across the national and eight state/territory branches of political parties without public disclosure of that funding.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%.
Since 2006, the threshold has increased two or three hundred dollars each year (adjusted for inflation) so that in 2011 the threshold is $11,900. That means a total of up to $107,100 from each donor can be received by political parties (spread across the national and state/territory brances) without a need for disclosure.
days to be appointed by proclamation" which probably means some time in 2012. That will reduce the total undeclared donations by each donor to each political party to $96,200 (ie $11,900 from federal party donations plus seven rather than all eight state/territory parites, plus $1000 from NSW).
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. Associated entities have become huge political donors in Australia, in 2003-2004 donating $72.6 million to political parties.
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:
Political researchers Sally Young and Joo-Cheong Tham from the Australian National University
concluded:
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. 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."
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.
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.
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. The ICAC also recommended that local government councillor
s 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.
Critics have said the inquiry will be a toothless tiger, due to it being stacked with government-friendly members.
On 14 September 2011, a radical bill tabled by Barry O'Farrell
was passed banning any donations from corporations, unions or other organisations; only individuals will be permitted to donate up to a cap of one thousand dollars.
during the year 2001-2002, the Victorian Labor Party
received $7.2 million in political donations, with trade union
s, 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.
Former Victorian premier
, John Cain
, presented a speech on political donors:
Former Victorian auditor-general Ches Baragwanath said it is naive to believe that political donors don't expect favours in return for their money.
International:
Politician
A politician, political leader, or political figure is an individual who is involved in influencing public policy and decision making...
, a political party
Political party
A political party is a political organization that typically seeks to influence government policy, usually by nominating their own candidates and trying to seat them in political office. Parties participate in electoral campaigns, educational outreach or protest actions...
, or an election campaign
Political campaign
A political campaign is an organized effort which seeks to influence the decision making process within a specific group. In democracies, political campaigns often refer to electoral campaigns, wherein representatives are chosen or referendums are decided...
.
In Australia, the majority of political donations come in the form of financial gifts from corporations, which go towards the funding of the parties' election advertising campaigns. Donations from trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
s 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
Australian Electoral Commission
The Australian Electoral Commission, or the AEC, is the federal government agency in charge of organising and supervising federal elections and referendums. State and local government elections are overseen by the Electoral Commission in each state and territory.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.
Corporate political donations
Between the years 1995-1998, corporations donated $29 million to Australian political parties. The largest corporate donor during this period was WestpacWestpac
Westpac , is a multinational financial services, one of the Australian "big four" banks and the second-largest bank in New Zealand....
. By the year 2002-2003, the amount of corporate funding to Australian political parties had risen to $69.4 million. 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 MPsMember of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
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
Australian Electoral Commission
The Australian Electoral Commission, or the AEC, is the federal government agency in charge of organising and supervising federal elections and referendums. State and local government elections are overseen by the Electoral Commission in each state and territory.The Australian Electoral Commission...
, 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 HawkeBob Hawke
Robert James Lee "Bob" Hawke AC GCL was the 23rd Prime Minister of Australia from March 1983 to December 1991 and therefore longest serving Australian Labor Party Prime Minister....
government introduced public funding for political parties, with the intention that it would reduce the parties' proportional reliance on corporate donations, vs public funding.
During the 2004 election, the government paid $41.9 million in public funding to political parties. The Liberal Party
Liberal Party of Australia
The Liberal Party of Australia is an Australian political party.Founded a year after the 1943 federal election to replace the United Australia Party, the centre-right Liberal Party typically competes with the centre-left Australian Labor Party for political office...
received $17.95 million in public funds, while the Labor Party
Australian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
received $16.7 million.
Trade union political donations
The Australian Labor PartyAustralian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
is the main beneficiary of trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
donations in Australia. During the years 2004-2005, trade unions donated $49.68 million to the Labor Party
Australian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
's head office. Critics have accused the unions of buying seats at ALP state conferences.
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 governmentGovernment of Australia
The Commonwealth of Australia is a federal constitutional monarchy under a parliamentary democracy. The Commonwealth of Australia was formed in 1901 as a result of an agreement among six self-governing British colonies, which became the six states...
increased the disclosure threshold for political donations from $1500 to $10,000. In announcing the laws, the government
Government of Australia
The Commonwealth of Australia is a federal constitutional monarchy under a parliamentary democracy. The Commonwealth of Australia was formed in 1901 as a result of an agreement among six self-governing British colonies, which became the six states...
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
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
, by making political donations harder to track, and by making conflicts of interest
Conflict of interest
A conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other....
harder to detect. The change in disclosure allowed corporations to secretly donate up to $90,000 spread across the national and eight state/territory branches of political parties without public disclosure of that funding.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%.
Since 2006, the threshold has increased two or three hundred dollars each year (adjusted for inflation) so that in 2011 the threshold is $11,900. That means a total of up to $107,100 from each donor can be received by political parties (spread across the national and state/territory brances) without a need for disclosure.
2011 law change
An ammendment to the Election Funding, Expenditure and Disclosures Act in the state of New South Wales will ban non-private donations all together. It "commences on a day ordays to be appointed by proclamation" which probably means some time in 2012. That will reduce the total undeclared donations by each donor to each political party to $96,200 (ie $11,900 from federal party donations plus seven rather than all eight state/territory parites, plus $1000 from NSW).
Associated entities
Despite the Australian Electoral CommissionAustralian Electoral Commission
The Australian Electoral Commission, or the AEC, is the federal government agency in charge of organising and supervising federal elections and referendums. State and local government elections are overseen by the Electoral Commission in each state and territory.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
Cormack Foundation
Cormack Foundation Pty. Ltd. is an Australian investment company established for the purpose of raising funds for the Liberal Party of Australia...
and John Curtin House Limited
John Curtin House Limited
John Curtin House Limited is a Canberra based holding company owned by the Australian Labor Party, named after the World War II-era Prime Minister and ALP member for Fremantle 1928-1945, John Curtin....
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. 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 AssociationAustralian Shareholders Association
The Australian Shareholders Association is a not-for-profit organisation established in 1960 to protect and advance the interests of investors...
has called for political donating to end, arguing that the donations are a gift and a form of bribery.
Former Qantas
Qantas
Qantas Airways Limited is the flag carrier of Australia. The name was originally "QANTAS", an initialism for "Queensland and Northern Territory Aerial Services". Nicknamed "The Flying Kangaroo", the airline is based in Sydney, with its main hub at Sydney Airport...
chief, John Menadue
John Menadue
John Laurence Menadue AO is a former Australian public servant and diplomat.Menadue was born in South Australia and graduated from the University of Adelaide in 1956 as a Bachelor of Economics. He is married with four children and ten grand children.From 1960 to 1967 Menadue was Private Secretary...
, 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
Australian National University
The Australian National University is a teaching and research university located in the Australian capital, Canberra.As of 2009, the ANU employs 3,945 administrative staff who teach approximately 10,000 undergraduates, and 7,500 postgraduate students...
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. 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
New South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
Opposition Leader Barry O'Farrell
Barry O'Farrell
Barry Robert O'Farrell MP, is an Australian politician and is the 43rd Premier of New South Wales, Minister for Western Sydney, Leader of the New South Wales Liberal Party and a Member of the New South Wales Legislative Assembly representing Ku-ring-gai for the Liberal Party since 1999.Born in...
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
Morris Iemma
Morris Iemma , is a former Australian politician and 40th Premier of New South Wales, succeeding Bob Carr after he resigned on 3 August 2005. Iemma led the Australian Labor Party to victory in the 2007 election before resigning as Premier on 5 September 2008, and as a Member of Parliament on 19...
, 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."
Under a proposal launched by Shadow Federal Treasurer Malcolm Turnbull
Malcolm Turnbull
Malcolm Bligh Turnbull is an Australian politician. He has been a member of the Australian House of Representatives since 2004, and was Leader of the Opposition and parliamentary leader of the Liberal Party from 16 September 2008 to 1 December 2009.Turnbull has represented the Division...
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.
New South Wales
The New South WalesNew South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
government is the seventh biggest advertiser
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
in Australia, ahead of McDonald's
McDonald's
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948...
and Coca-Cola
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
.
On 30 October 2006, former Prime Minister Paul Keating
Paul Keating
Paul John Keating was the 24th Prime Minister of Australia, serving from 1991 to 1996. Keating was elected as the federal Labor member for Blaxland in 1969 and came to prominence as the reformist treasurer of the Hawke Labor government, which came to power at the 1983 election...
called for an end to political donations from property developers. He said that in NSW
New South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
, property developers were sending a "wall of money" towards the planning minister.
In September, 2007, the Independent Commission Against Corruption cited political donations as a risk for corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
. The ICAC recommended that the state premier
Premier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
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. The ICAC also recommended that local government councillor
Councillor
A councillor or councilor is a member of a local government council, such as a city council.Often in the United States, the title is councilman or councilwoman.-United Kingdom:...
s step aside from any development applications involving political donors.
On 27 June 2007, the New South Wales Legislative Council
New South Wales Legislative Council
The New South Wales Legislative Council, or upper house, is one of the two chambers of the parliament of New South Wales in Australia. The other is the Legislative Assembly. Both sit at Parliament House in the state capital, Sydney. The Assembly is referred to as the lower house and the Council as...
established a committee to investigate electoral and political party funding.
Critics have said the inquiry will be a toothless tiger, due to it being stacked with government-friendly members.
On 14 September 2011, a radical bill tabled by Barry O'Farrell
Barry O'Farrell
Barry Robert O'Farrell MP, is an Australian politician and is the 43rd Premier of New South Wales, Minister for Western Sydney, Leader of the New South Wales Liberal Party and a Member of the New South Wales Legislative Assembly representing Ku-ring-gai for the Liberal Party since 1999.Born in...
was passed banning any donations from corporations, unions or other organisations; only individuals will be permitted to donate up to a cap of one thousand dollars.
Victoria
In VictoriaVictoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
during the year 2001-2002, the Victorian Labor Party
Australian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
received $7.2 million in political donations, with trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
s, gaming
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
companies and property developers on the list of donors. In the same year, the Victorian Liberals
Liberal Party of Australia
The Liberal Party of Australia is an Australian political party.Founded a year after the 1943 federal election to replace the United Australia Party, the centre-right Liberal Party typically competes with the centre-left Australian Labor Party for political office...
received $11.3 million in political funding, including $3.8 million in public funding.
Former Victorian premier
Premier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
, John Cain
John Cain II
John Cain , Australian Labor Party politician, was the 41st Premier of Victoria, holding office from 1982 to 1990.-Biography:...
, 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."
Former Victorian auditor-general Ches Baragwanath said it is naive to believe that political donors don't expect favours in return for their money.
See also
- Campaign financeCampaign financeCampaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...
- Political financePolitical financePolitical finance covers all funds that are raised and spent for political purposes. Necessarily such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover all modern democracies...
International:
- Campaign finance in the United StatesCampaign finance in the United StatesCampaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels.At the federal level, the primary source of campaign funds is individuals; political action committees are a distant second. Contributions from both are limited, and direct...
- Federal political financing in CanadaFederal political financing in CanadaThe fair and transparent financing of political parties, candidates, and election campaigns is a key determinant in the health and proper functioning of a democracy...
- Political funding in JapanPolitical funding in JapanIn Japan, the problem of political funding was intensely debated during the late 1980s and early 1990s, partly as a result of revelations following the Recruit scandal of 1988-89...
- Political funding in the United KingdomPolitical funding in the United KingdomPolitical funding in the United Kingdom has been a source of controversy for many years. There are three main ways a political party is funded. The first is through membership subs; the second is through donations; the third is through state funding.-History:...
- Party finance in GermanyParty finance in GermanyParty finance in Germany became an issue of political discourse, when in 1949 the concept of transparency was discussed in the constitional convention in connection with a new article to be entered into the constitution...