Back from holiday and straight into the NSW and Victorian political donations, Boilermaker Bill has filed two excellent pieces explaining how gaming donations work in NSW and looking at the broader donors list. Some pokies, it seems, are more evil than others.

The Australian went in hard this week on political donations, editorialising on closing the apparent loopholes. But it undermined its case by not realising the real state of play in New South Wales. It argued:
“It is true there is seldom an obvious fit between donation and favouritism, and occasionally an obvious misfit: licensed clubs and pubs are big contributors to Labor in NSW, but that did not stop the Carr Government from bringing in a highly unpopular tax on poker machines.”

There is no misfit. The highly unpopular tax was on CLUB poker machines – the pubs barely whimpered. And a closer look at the pattern of donations shows where the lines have been drawn.

Registered clubs have been on the warpath against NSW Labor since the poker machine tax hikes in 1997, and pubs and Star City Casino were allowed to have poker machines. In 1999 they went so far as to establish the Registered Clubs Party to contest the Legislative Council elections.

During 2002-03, Clubs NSW gave the NSW ALP around $27 000, while kicking in over $200 000 to the Coalition. The donations to Clubs NSW smack of a fighting fund being set up – it took 28 donations from registered clubs, Carlton and United Breweries and pokies manufacturer Aristocrat on 1 July 2002 alone, with the donations in multiples of $2750 (eg $2750, $5500 and $8250).

Meanwhile (with me using an admittedly rough method – largely looking for entities with hotel in the title), the Australian Hotels Association (NSW) and individual pubs gave $395 000 in donations to the NSW ALP.

The AHA made a donation of around $30 000 to the Libs, and an almost perfunctory $10 000 to the Nats. The Nats got $40 000 all up from hotel interests, and the Libs around $75 000.

So the pub interests gave the ALP at least $395 000 vs $115 000 to the Coalition.

So now to the tax hikes. Egan’s last budget’s hit the clubs (not the pubs) hard. The state of play according to the Department of Gaming and Racing’s latest reports are that the 75 214 poker machines in clubs are returning $3.0 billion in profit to the clubs, leaving them with an assessable tax bill of $414 million (13.8% on profit).

The pubs are making $1.4 billion on their 24 255 machines, and were hit with a tax assessment of $343 million (24.5% on profit). Despite the difference in tax rates, pubs were making an average of $59 000 on every machine, while the Clubs were getting $40 000 on average from each machine.

Presently clubs are taxed at between 10.9 and 17% once revenues reach a threshold of $200 000. The first year of the new regime will see rates range from 10 to 20.8 percent in the first year once the $200 000 revenue threshold is reached, while in 2010 the rates will range from 10 to 40 percent. Thirty five percent of clubs will between them hand over an extra $1.4 billion in extra tax to Egan.

Only the pubs getting more $5 million from their pokies will feel a real pinch when marginal rates go from the current 30.91% to 50% in 2010 – marginal rates for profits between $400 000 and $1 million shift only from 26% to 30% over the next seven years, while the marginal rate increases from 31% to 35% for pub pokie profits between $1 and 5 million.

Analysis by Deloittes puts the eventual net effect as an effective gaming revenue decrease of 20% for clubs and 10% for pubs. Deloittes also pointed out that clubs had effectively lost $4 billion in gaming turnover over 1999-2002, while the pubs picked up $4.1 billion in turnover during the same period.

While the pubs and clubs unrealistically thought their machine entitlements were a massive licence to print money, with some pubs expecting up to $200 000 for each licence, the pubs are still doing far better on the actualised sales. While clubs have sold their entitlements for between $15 000 and $30 000 each, pubs are getting up to $100 000 for their individual entitlements. A nice little earner for something they didn’t even have to pay for in 1997 when the government first gave them their pokies entitlements. No wonder the pubs keep kicking serious cash into the NSW ALP’s coffers.

The Australian editorial says political donations are a way of opening doors – in NSW they’re a gigantic thank you for keeping the pub doors open, the pokies whirring, and the profits flowing. That’s why we need donation reform – and soon.

Boilermaker Bill is back in business at [email protected]

Boilermaker Bill’s first missive on political donations

First published Feb 2, 2004

Well, patient readers, Boilermaker Bill McKell is back in town – after a month or two sunning myself in Terrigal and avoiding Darling Harbour like the plague last week.

And just in time to see the Australian Electoral Commission today posting the 2002-03 Annual Returns for political parties and donors. Oh frabjous day!!! These returns warrant and reward many careful hours of reviewing. It’s the year when the returns for the NSW ALP juggernaut (and the the Libs and Nats) include their 2003 election year takings, Mystic Meg’s Progressive Australia Party starts taking donations, and cash seemed to flow like milk and honey into all sorts of accounts.

There’s only been two hours to pull out some tasty little tidbits, so bear with me as I produce daily reports.

Brother Roozendaal was getting some stick a few weeks ago for putting Sussex Street into the red. But the full picture emerges from the AEC returns. The NSW ALP spent $18.6 million in 2002-03, picking up $16.3 million in donations, leaving a $4 million debt – twice the size Paola Totaro mentioned in the SMH on 9 January (however she was just looking at the costs of the election itself). Some bruvvers were muttering that they didn’t need to spend this much seeing the Coalition were easy beats.

Well, the Libs and Nats were turning the lolly over in their accounts big time as well. The Libs spent $14.1 million in 2002-03, with the Nats spending $5.3 million, leaving them with a total debt of $5 million between them after picking up $13.5 (Libs) and $4.7 million (Nats).

So the NSW ALP spent $18.6 million to the State Coalition’s $19.4 million – leaving the major parties with nearly $10 million in debt – and each having to look to contribute to the Federal campaigns within 10 months. Anyone want to have a talk about public funding of elections??

So today, we’ll have a look at where some of the ALP’s money came from:

Cough, cough
Despite Iron Mark’s pledge to turn down the dirty tobacco money, British American Tobacco gave the NSW ALP $16 500, and $12 000 was gratefully received from Phillip Morris.

Clubs v Pubs
Want to know why the Clubs got hit hard on the pokies tax? It wouldn’t have anything to do with their measly $11 000 donation when the AHA could rustle up $65 000, would it?. My calaculator burned out trying to add up the individual pub donations. But to give you an idea, just one pub, Scruffy Murphy’s – an Irish themed pub in the grubby party of Sydney’s CBD, gave $39 000.

What’s this – a huge effin hole in the donations policy?
Despite Federal Labor telling Manildra to stick their donations up their ethanol, the NSW ALP gladly took about $48 000 of their hard earned.

When in Rome

The Toga Group of Companies, which have previously given a total of $35 000 over 4 years, kicked in over $120 000 this year alone. The group runs the Medina Serviced Apartments which seem to have grown like topsy through Sydney – so look at their future plans for the Premier State.

Road to riches
Transurban’s various permutations kicked in over $18 000. Quite a small toll to get into the road business in NSW, hey?

The Big, Tall, Wide end of town
When the Property Council of Australia (NSW) is giving you $50 000 alone, the ALP doesn’t have to worry about their friends in hard hats not reaching into their pockets. (The Property Council gave the Libs $38 000 and the Nats zilch). And good old Harry Triguboff’s Meriton Apartments was good for over $120 000.  Even Patrick Corp saw their way to kick in a timely $4000.

The Man from Hong Kong
NSW ALP coffers got a nice kick along with a $100 000 donation from Shimao Holdings of Hong Kong. Headed by China’s third wealthiest individual with about $800 million (US) to his name, Hui Wing Mau (or Xo Rongmao), this entity has property interests in Honkers, Beijing, Shanghai and Hui’s home town of Fujian. But what isn’t clear is what’s in store for NSW to warrant such a significant kick along to the bruvver’s coffers. He hasn’t featured in the local press for any local projects, with two stories in the Fairfax archives limited to his purchase of his own home. Surely to god, he’s not relying on Sussex Street for property advice??!! Again, here we have a foreign donation that just wouldn’t be allowed in such slush ridden polities as the United States. Just what does Hui think he’s getting for his largesse.

It is as it is
And just to balance the ledger with God and the Libs, Mel Gibson’s film compnay Icon Productions (mistakenly identified in the AEC returns as KON Productions) gave John Brogden’s campaign $US5 000 in March last year; around the time of that photo op in Brogger’s office. Expect to see John, Lucy and the little Brogger at Mad Mel’s The Passion of Christ to return the favour.

And for our Victorian readers, have a look at the donor’s this past year to an exciting little entity called the Progressive Business Association:

IBA Technologies Ltd Level 3, 818 Whitehorse Rd BOX HILL VIC 3128 Donation $30,000.00

Australian Hotels Association PO Box 115 ARMADALE VIC 3143 Other Receipt $15,000.00

Leighton Holdings Ltd PO Box 1002 CROWS NEST NSW 1585 Other Receipt $12,500.00

SMS Consulting Group Ltd Level 18, 60 City Road SOUTHBANK VIC 3006 Other Receipt $12,500.00

Central Equity Limited Level 9, 365 Queen Street MELBOURNE VIC 3000 Other Receipt $11,650.00

Transurban Infrastructure Developments Limited Level 43 525 Collins Street Other Receipt $11,500.00

Bensons Property Group BPG House, 187-189 Peel Street 3051 Other Receipt $11,250.00

Shannon’s Way Level 8, 100 Albert Street ALBERT PARK VIC 3206 Other Receipt $8,350.00

Minter Ellison Level 23, 525 Collins St MELBOURNE VIC 3000 Other Receipt $6,850.00

Holding Redlich 350 William Street MELBOURNE VIC 3000 Other Receipt $6,650.00

University of Melbourne Gratten Street PARKVILLE VIC 3052 Other Receipt $6,500.00

SOCOM Public Response Level 2, 19-21 Argyle Place CARLTON  3053 Other Receipt $4,900.00

Allens Arthur Robinson GPO Box 1176Q MELBOURNE GPO Other Receipt $4,750.00

Pricewaterhouse Coopers 333 Collins Street MELBOURNE VIC 3000 Other Receipt $4,750.00

Victoria Racing Club 400 Epsom Road FLEMINGTON VIC 3031 Other Receipt $4,520.00

Broken Hill Proprietary Company Ltd (BHP) 600 Bourke Street MELBOURNE Other Receipt $3,500.00

Gandel Group Level 23, HWT Tower, 40 City Road SOUTHBANK NSW 2447 Other Receipt $3,500.00

GE Capital Fleet Services Australia 275 Williamstown Road Other Receipt $3,250.00

George Patterson Bates Level 8, 161 Collins Street MELBOURNE VIC 3000 Other Receipt $3,250.00

Network 10 Private Bag 5000 SOUTH YARRA VIC 3141 Other Receipt $3,250.00

Nicholas Applegate Capital Level 50, 101 Collins Street  Other Receipt $3,250.00

Peter McMullin Level 1, 535 Bourke Street MELBOURNE VIC 3000 Other Receipt $3,250.00

Tattersall’s Holdings Pty Ltd 615 St Kilda Rd MELBOURNE VIC 3004 Other Receipt $3,250.00

Transfield Services GPO Box 5344 SYDNEY GPO PRIVATE BOXES NSW 2001 Other Receipt $3,000.00

Uecomm Limited 126 Trenarry Crescent ABBOTSFORD VIC 3067 Other Receipt $2,800.00

ALH Group Pty Ltd 77 Southbank Boulevard SOUTHBANK VIC 3006 Other Receipt $2,500.00

Blue Star Logistics PO Box 119 SOMERTON VIC 3062 Other Receipt $2,500.00

Neville Smith Group 129 York Street SOUTH MELBOURNE VIC 3205 Other Receipt $2,500.00

TABCORP  5 Bowen Cres MELBOURNE VIC 3004 Other Receipt $2,500.00

Victorian Taxi Association PO Box 5111 GARDEN CITY VIC 3207 Other Receipt $2,500.00

Vecci GPO Box 4352QQ MELBOURNE GPO PRIVATE BOXES VIC 3001 Other Receipt $2,250.00

Middletons Moore & Bevins Level 29, 200 Queen Street MELBOURNE VIC 3000 Other Receipt $1,600.00

AAPT GPO Box 181B MELBOURNE GPO PRIVATE BOXES VIC 3001 Other Receipt $1,500.00

Abigroup Contractors Pty Ltd 41/43 Burwood Rd HAWTHORN VIC 3122 Other Receipt $1,500.00

ABN Amro Level 27, 367 Collins Street MELBOURNE VIC 3000 Other Receipt $1,500.00

Australand Holdings Limited Level 1, 17-23 Queensbridge Street S Other Receipt $1,500.00

Australian Super Developments Pty Ltd Level 5, Nauru House, 80 Collins Street  Other Receipt $1,500.00

Bunnings Building Supplies 403 Bourke Street MELBOURNE VIC 3000 Other Receipt $1,500.00

Clayton Utz Level 18, 333 Collins Street MELBOURNE VIC 3000 Other Receipt $1,500.00

Cleanevent 95 Buckhurst Street SOUTH MELBOURNE VIC 3205 Other Receipt $1,500.00

Clifton Consulting Services Level 6, 189 Flinders Lane MELBOURNE VIC 3000 Other Receipt $1,500.00

Commonwealth Bank of Australia Level 7, 48 Martin Pl SYDNEY NSW 2000 Other Receipt $1,500.00

Connex Trains GPO Box 5092BB MELBOURNE GPO PRIVATE BOXES VIC 3001 Other Receipt $1,500.00

Gersh Investment Partners Limited Level 11, 90 Collins Street VIC 3000 Other Receipt $1,500.00

Glaxo Smith Kline GPO Box 5092BB BORONIA VIC 3155 Other Receipt $1,500.00

Global Renewables Level 7, 267 Collins Street MELBOURNE VIC 3000 Other Receipt $1,500.00

Grollo Australia 344 Mansfield Street THORNBURY VIC 3071 Other Receipt $1,500.00

Haystac Public Affairs PO Box 686 BELGRAVE VIC 3160 Other Receipt $1,500.00

JGL Investments Pty Ltd Level 9 South, 161 Collins Street VIC 3000 Other Receipt $1,500.00

jMiFA Super Partners  CARLTON SOUTH VIC 3053 Other Receipt $1,500.00

John Connolly and Partners Pty Ltd GPO Box 5005 SYDNEY NSW 1044 Other Receipt $1,500.00

Kathleen Townsend Level 12, 30 Collins Street MELBOURNE VIC 3000 Other Receipt $1,500.00

MAB Corporation Pty Ltd Level 1, 54 St Kilda Road ST KILDA VIC 3182 Other Receipt $1,500.00

Multiplex Constructions Pty Ltd 32 Lincoln Square CARLTON NORTH VIC 3053 Other Receipt $1,500.00

Real Estate Institute of Victoria 335 Camberwell Road CAMBERWELL VIC 3124 Other Receipt $1,500.00

Sussan Property Group Pty Ltd  Highpoint Shopping Centre VIC 3032 Other Receipt $1,500.00

TCN Channel Nine Pty Ltd 22 Bendigo Street RICHMOND VIC 3121 Other Receipt $1,500.00

The Becton Corporation Level 7, 470 St Kilda Road MELBOURNE VIC 3004 Other Receipt $1,500.00

The Pharmacy Guild of Australia (Victorian Branch) 40 Burwood Road VIC 3122 Other Receipt $1,500.00

United KG 124 Pacific Highway ST LEONARDS NSW 2065 Other Receipt $1,500.00

And where do progressive businesses like BHP Biliton, Tattersalls, GE Credit, TCN Nine make their donations to? Well, only one entity seems sufficiently progressive enough for them this year: the Victorian Branch of the ALP, which got a nice kick along of $189 000 out of the Progressive Business Association’s $600 000 plus coffers. Must be so nice to give to a real Association than to have to hand it over to Max Markson, whom incidentially, I can’t find in the AEC returns!

Till tomorrow, happy reading!

Peter Fray

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