The business of buying parties

February 2, 2021
Photo: Modified from original by Stilgherrian/Flickr CC BY-SA 2.0
The lack of regulation of federal election donations makes it easy for big capital to influence politicians. Photo: Modified from original by Stilgherrian/Flickr CC-BY-SA 2.0

Australia’s corrupt system of political patronage is well and truly exposed whenever the Australian Electoral Commission (AEC) reports on electoral donations.

This year’s reports are not very different to previous years: the AEC report on 2019–20 donations published on February 1 showed big fossil fuel capital donating to both major parties, either directly or indirectly.

Major funding also ended up helping the Liberals via a detour through Clive Palmer’s United Australia Party (UAP) and Bob Katter’s Australia Party.

Palmer’s Mineralogy donated $5.9 million to his own party, according to the AEC, and the ABC reported he also donated $75,000 to the National Party.

Palmer used the 2019 federal election to scaremonger about climate policies that could potentially impact his mining interests. He spent $60 million on political advertising for the UAP, which failed to win a seat. Afterwards, he smirked that he had only ever been interested in securing the re-election of the Coalition government.

It’s all legal under the current federal system of political patronage.

Regardless of what the major parties say today, they have resisted changes to the Commonwealth Electoral Act 1918. Most recently, they voted against a proposal to adopt state laws banning donations from property developers, instead supporting a system whereby some donations do not have to be declared.

The most recent set of “reforms” adopted allows property developers to continue to donate to federal political parties if the donations are for a “federal purpose” and if the party keeps the money in an account separate from its state funds. Some state laws have outlawed property developer donations.

Former finance minister Mathias Cormann, now gunning for the top job in the Organisation for Economic Co-operation and Development (OECD), said last year that only “technical” changes are needed to “facilitate the proper functioning of our democracy”.

It is becoming clear that the “proper functioning” of their democracy relies on “dark money”, the source of which is not made public. It also shows that the experience of limiting and banning electoral donations can always be circumvented by those with good lawyers.

The Australian electoral system awards incumbents $2.75 per first preference vote. Candidates are only eligible for public funding if they are elected or receive at least 4% of first preference votes. The Electoral Act 1918 entrenches the status quo, and benefits the big or billionaire parties.

This means that in addition to donations — declared or otherwise — parliamentary parties receive millions of dollars in public monies via the AEC. According to the ABC, Labor received a total of $55 million in donations and public money; the Liberals $57 million; the Greens $19 million; and the Nationals $12 million. One Nation reported almost $6 million.

According to The Centre for Public Integrity (CPI), the lack of regulation in the federal system makes it “easy for wealthy companies and industries to use money to influence decision makers”.

Corruption is another way to describe this process.

Its January briefing paper identified several gaps in the regulation of money in politics including:

• a high disclosure threshold and no aggregation, which enables multiple donations to not be disclosed;

• the delay in disclosure means donations made before the federal election in May 2019 were not revealed until February 2020;

• loose disclosure rules allow the source of more than $1 billion in contributions since 1999 to be hidden;

• no caps on donations means that big money dominates — one quarter of all  donations since 1999 have been made by just five donors; and

• the lack of spending caps allows wealthy individuals or companies to spend millions on pre-election advertising blitzes.

It said the states and territories have strong disclosure systems, which the federal system should adopt.

It wants a National Integrity Commission to be set up to investigate serious breaches of “hidden money”, which it estimates to be more than $1070 million over 1999–2019. By contrast, over the same period, $956 million is “explained money”.

“There is no limit on what political parties, associated entities and third parties can spend in federal elections,” the CPI said. “There is also no limit to what donors can give to political parties, associated entities or third parties.”

It found that one quarter of all donations since 1999 have been made by five donors: Minerology (owned by Clive Palmer); Cormack Foundation (a Liberal Party registered entity); ALP Holdings; John Curtin House and the SDA Union.

The CPI concluded that such a system “enables individuals and corporations with greater wealth to have an undue influence on elections”. It wants caps on election expenditure and donations, new real time disclosure laws and a new enforcement body.

Independent MP Andrew Wilkie described dark money as “a cancer on democracy” and wants more transparency, as do the Tasmanian Greens, which wants parties to “voluntarily” release details of their donors who contribute more than $1500.

It’s hard to imagine that happening without new regulations. However, ending the corrupt system of political patronage is going to take a lot more than just that.


Comparison of state, Territory and federal donations and disclosure laws. Photo: Centre for Public Integrity

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