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The political donations data is nowhere near the full picture

While we all had good sport looking at the information on political donations released earlier this week, don’t mistake it for actual transparency about who is funding our political parties. It’s a partial picture, at best.

Crikey made its usual lament about how long we have to wait to find out information that could be easily made available every six months, or even on a live basis via immediate online disclosure. And there remains the problem that donations below $11,200 dollars do not have to be disclosed, courtesy of the Coalition’s attack on transparency launched by the Howard government, and continued in concert with Steve Fielding when Labor tried to improve the timeliness of reporting and restore the threshold to its former level.

Crikey also busted several companies failing to meet their disclosure obligations — including a foreign company, Kingold, which hasn’t disclosed its donations to both sides for several years.

Oh, the Faulkner bill would have banned foreign donations, too. Another one to thank the Coalition and Fielding for.

But there are also major problems with the entire disclosure regime and the differences between reporting requirements in different states (assuming they have them). If you want exhaustive and sometimes exhausting description of the differences, Labor released a Green Paper two years ago covering them.

The basic problem is around the differing requirements on donors and political parties.

As I noted the other day, the Commonwealth Electoral Act only requires disclosures by donors if they’ve made a “gift” to parties — i.e. a straight donation. A quick look at the parties’ disclosures shows that those sorts of donations often aren’t the bulk of party fundraising. The NSW Labor return, for example, is more or less a long list of “other receipts”. This makes perfect sense — parties rely on fundraising events, usually around access to senior figures, for contributions rather than straight donations (see, for example, the event list the NSW Nationals rushed out to try to beat what will be NSW bans or caps on donations regardless of who wins in March).

Parties have to disclose these contributions, if they’re above $11,200. Some divisions — federal Labor for the past two years, and now the NSW Liberals — voluntarily adhere to the former limit of $1000. But “donors” don’t, not under federal law. So there’s no way of cross-checking the parties’ returns — not unless the relevant state has a requirement for disclosures of both gifts and other contributions, like NSW. The disclosure records in NSW — released every six months — show all sorts of contributions that are never revealed in the AEC returns.

There are also a variety of non-donation contributions received by parties.  There are taxpayer-funded payments, including but not limited to election funding. AUSAID, for example, can give the Labor and Liberal parties up to $1 million each per year as part of the “Australian Political Parties for Democracy Program”, which is essentially for extended junkets to Liberal and Labor MPs (expect the Greens to have something to say about this in coming months). Labor obtains some contributions from trade unions as donations, and others as non-donation contributions. And some donations and contributions are provided “in-kind” via services and supplies, particularly during election campaigns (for example, providing an office to serve as a campaign HQ).  The accounting and costing of these “in-kind” contributions isn’t made clear, and it’s rare to see a contribution identified as “in-kind” in the parties’ returns. There are also overdrafts, loans and unpaid debts from banks, friendly organisations and individuals and services suppliers.

So sitting down and using the parties’ returns to try to get a clear sense of who is really providing the bulk of funding for the major political parties is virtually impossible.

But you have even less luck if you try to use donors’ returns. Even assuming companies haven’t conveniently forgotten to lodge their returns, they provide a picture that’s even less complete than the parties’. Most companies that make non-donation contributions appear not to report them to the AEC — which is entirely legal. Few companies adopt the approach of Macquarie Bank, which reports everything, not matter in what form, and no matter how large or small.

Most of these problems wouldn’t have been fixed up by John Faulkner’s reform bill. They’ve always been built into the Electoral Act.

Short of adopting a NSW approach, where both sides of politics have committed to serious curbs on donations, a comprehensive regime of disclosure is needed that provides greater clarity about who is giving what, and how, to parties, that applies both to the parties and to donors themselves. The current system gives us an outline of what the parties are getting, but not the full picture.

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  • 1
    AR
    Posted Friday, 4 February 2011 at 10:10 pm | Permalink

    Interesting that there are no comments on something so indicative of our political scene. If that is because Crikey sophisticates think ‘it’s corrupt, duhhh.. ’ then I wonder why we aren’t torching the AEC for not enforcing what few rules it has. Or besieging the Hole in the Hill.

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