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Federal

Feb 3, 2012

More evidence of why donation disclosure laws are hopeless

For several years now Crikey has engaged in the ritual denunciation of our Commonwealth electoral donation laws. It's worth repeating.

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For several years now Crikey has engaged in the ritual denunciation of our Commonwealth electoral donation laws every February when the Australian Electoral Commission does its annual release of donations data.

It’s worth repeating: at the Commonwealth level, the laws about electoral donations are a complete disgrace. That we are only finding out 17 months after the 2010 election who donated to the major parties is a blight on our democracy — one the mainstream media, normally quick off the mark to denounce any lack of political transparency, seems to ignore.

That blight is there because the Coalition and Steve Fielding blocked reforms proposed by John Faulkner during the Rudd government that would have significantly accelerated the reporting cycle for donations, as well as reducing the reporting threshold back to $1000, rather than the current $11,500 threshold created by the Howard government.

To its credit, Labor reports according to the $1000 threshold. The Coalition — complying with the law — does not.

One of the key elements of the current law that does work, however, is that donors and parties are required to submit returns on donations. Parties are also required to report other forms of funding as well, including tax refunds and payments from government.

Having donor and party required to report donations enables some cross-checking, so we’re not reliant on political parties only for information on who is giving them money. The result, invariably, is that several donors are found out as having not submitted returns by the deadline of  November 17 after the end of the relevant financial year, potentially exposing themselves to fines by the AEC.

Austereo appears to be one such. It hasn’t donated since the 2007 election, but gave $197,788 as a “gift in kind” to the Liberals — presumably radio airtime — and a $150,000 donation to Labor, without submitting a declaration (the company was unable to respond by deadline; its reponse will be posted once it’s received). Chinese tycoon Chau Chak Wing, a prolific donor and philanthropist in Australia, yet again failed to submit a return for his $50,000 donation to the Liberals.

A $100,000 donation to the Liberals by fund manager Pacific Road Capital Management was also not reported; CEO Paul Espie told Crikey he’d made the donation personally and had asked his accountant to find out why it hadn’t been reported. Terry Jackson, a WA property developer who is a massive donor to the WA Liberals, had only recently lodged his return for a $500,000 donation the party, citing ill health. Then there’s several individual donors who failed to lodge returns for their donations over $11,500.

But other discrepancies point to the need for an overhaul of the reporting system. Queensland coal miner New Hope Corporation’s $100,000 donation to the Liberals was reported separately by its ultimate owner, Washington H. Soul Pattinson. Macquarie Telecom appears not to have filed a return for its $120,000 donation to the ALP –- but in fact it did, for 2009-10, because it donated to Labor on June 29, 2010, and Labor appears to booked that in the 2010-11 financial year. The same applies to Straits Resources, which gave $100,000 to the Liberals.

The lack of clarity around what a donation is and what a payment is, when both serve the same purpose of fund-raising, also adds to the confusion, because donors are not required to report the latter. If a company purchases a seat at a party fund-raiser and gets access to a minister, that isn’t counted as a donation for the purposes of Commonwealth laws, and therefore donors don’t have to report it, although some companies, such as Macquarie Bank, scrupulously report everything. GE Real Estate Investment, a Sydney company, gave over $93,000 to the Liberals but didn’t have to report it because it wasn’t a donation. Raytheon gave the Liberals $30,000 in “other” funding.

Add to that the layer of state disclosure requirements, which vary enormously (NSW requires reporting of non-donation contributions, for example), and you begin to see why companies, particularly large ones that operate nationally, can get confused about what they’re supposed to report, to whom and when.

It’s rare that donors actually want to hide their donations — “I don’t need to hide my light under a bushel,” said one big Liberal donor. There’s no reason why companies and parties couldn’t report donations instantly, or within a matter of days, rending moot the whole process of looking back 17 months and checking different financial years, thereby significantly improving real-time accountability.

That’s exactly what the Joint Standing Committee on Electoral Matters recently recommended for donations over $100,000, with a 14-day reporting requirement, as well as a six-monthly reporting timeframe for other donations.

Predictably, however, the Liberals indicated in their dissenting report that they opposed lowering the reporting threshold to $1000, and amazingly also opposed a recommendation that Commonwealth laws be amended to require donors to report non-donation funding such as attendance at party fund-raisers.

With the Greens holding the balance of power in the Senate, however, it’s time for the government to move fast on disclosure reform.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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