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Western Australia

Feb 21, 2012

The rise and rise of mining company donations

Big mining money has shifted behind the Coalition and poses a serious threat to Labor if maintained.


Labor’s mining tax and the resources boom may have permanently and significantly changed the balance of political donations, with millions of dollars flowing from mining companies to the Coalition, Australian Electoral Commission data shows.

Mining companies began increasing their stake in the political process before the financial crisis, favouring the Coalition but also contributing to Labor. However, the mining tax saw an extraordinary increase in donations to the Coalition that has opened up a huge funding resource for the Liberals.

Mining company donations to state and federal Labor parties and the Coalition since 2004 show the extent to which Coalition benefited from the surge in mining company largesse after the Rudd government infuriated them with its RSPT proposal in May 2010.

But the largesse is predominantly from Western Australia. In Queensland, the ongoing support of Clive Palmer has been the primary mining contribution to the conservative cause, including a monster donation of $500,000 to the LNP by his Queensland Nickel. Other than Palmer, the federal Liberal Party took $100,000 from controversial miner New Hope — the target yesterday of a protest led by Alan Jones and Bob Katter — maintaining the Queensland representation in 2010-11.

Last year the Queensland government capped donations at $5000 to parties and $2000 to candidates, but the cap only applies to donations relating to campaign purposes; general purpose donations to parties are not capped).

Santos and Beach Petroleum each gave big donations to the SA Liberals in 2010-11 as well.

However in WA, mining company donations to the WA Liberal Party went from less than $100,000 in total in the mid-2000s to over $1.2 million in 2010 and 2011, forming around one dollar in five of the party’s revenue.

Previously, mining companies had tended to follow the pattern of many industries and give to both sides of politics. Indeed, the Gallop government attracted more mining industry donations in 2004 and 2006 than the WA Liberals. But WA Labor didn’t get a cent from miners in 2009-10 or 2010-11, presumably reflecting the party’s dispatch into opposition as well as the mining tax.

Federally, Labor’s take from miners slumped to a bare $50,000 worth of small donations and fund-raising dinner contributions, from $200,000 before the 2007 election.

The sheer scale of mining company generosity illustrates why Tony Abbott remains committed to repealing the carbon pricing package and the mining tax despite the difficulties he will face in securing Senate support. That should continue to lock in big mining company donations this year and next and establish the mining industry as a go-to source for big donations that Labor cannot access for years to come.

The donations are widespread across the WA industry, with 25 companies giving the party on average $95,000. The list doesn’t include Rio Tinto and BHP Billiton, who no longer donate or only provide small donations; given they can pick and choose prime ministers and dictate how much tax they pay, donations would appear to be of limited value for the big foreign miners.

The long-term problem for Labor is that the habit of giving to the Liberals becomes permanent for mining companies. That will erase the advantages that have accrued to Labor in recent decades, whereby business has significantly lifted its donations to Labor while unions have continued to pump funds into the party.

CORRECTION: An original version of this story stated Queensland Nickel was a company independent of Clive Palmer. The company is in fact owned by Palmer.



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33 thoughts on “The rise and rise of mining company donations

  1. guytaur

    Time for the afeds to follow NSW’s example. Either that or to void controversy over cutting out a group like unions go for ban all political donations and all be publicly funded.
    The losers would be taxpayers and advertising agencies.

  2. James K

    A number of European democracies ban large political donations. An individual or a company can only give up to a certain relatively small figure, in a calendar year. We should do the same.

    because as the old saying goes: he who pays the piper, calls the tune….

  3. tido wales

    “The list doesn’t include Rio Tinto and BHP Billiton, who no longer donate or only provide small donations; given they can pick and choose prime ministers and dictate how much tax they pay, donations would appear to be of limited value for the big foreign miners.”


  4. tido wales

    so, why is there a senate inquiry into the green’s relationship with graeme wood, and no such scrutiny for libs relationships with miners?

  5. James K

    Because the greens are a minority in the senate? Easy to pick on?

  6. liliwyt

    @ Tido – “why … no such scrutiny for libs relationships with miners?” Indeed.

    Maybe we should get politicians to start wearing endorsements on their clothes – like racing car drivers, or footballers. That would help the transparency issue. There would be no way we could get the political animals to stop sucking at the teat of their political donors.

  7. Meski

    And all this money being given to the Coalition comes with no ties whatsoever, and in other news, scientists have found the moon is made of cheese.

  8. Microseris

    We have a democracy in name only. Miners buy favour with the politicians and guide public opinion via their influence in the media. By definition legalised systemic corruption.

  9. Suzanne Blake

    I suppose it partly evens up the Union donations to ALP

  10. Flower

    Some joke that. Here we have an international mining behemoth (running the country) whose bloodied hands are so filthy that even the blowflies know not to touch them.

    “Australia is a lucky country, run by second-rate people,” greed merchants and ecocidal freaks.

  11. Meski

    @SB: So two wrongs *do* make a right?

  12. Matt Hardin

    Except Suzanne the ALP is nominally the unions’ party. Unions are affiliated to the party and send delegate to decide the policies of the party. You can debate the fairness of this, you can debate the role of the rank and file but the fact remains that the party was set up by and for the unions. The other difference of course is that union membership is voluntary and unions are nominally democratic bodies so individuals can have a say in where their money goes.

    The money paid by corporations comes out of their profits and also the pay and conditions of their workers. Given that most investors ion these companies invest through institutions and that workers are not given any part of the decision making individuals are not given any say at all.

  13. Barbara Boyle

    No time like the present for the PM to abolish ALL donations to political parties,large and small. A clean sweep across the board;the electorate would love it, we would be spared the mindnumbingly infotisementys that saturate and pollute the media. Ple-e-e-e-ese, Madame Prime Minister, uncoil your backbone and DO IT NOW. That cant be too hard?
    Big Mining, Big LabourUnions,and all the others who like to participate in this particular form of ‘democracy’
    It would take care of any worrying concerns about those all powerful Greens who might well be imagining they were being picked on.
    So, please, why not a level playing field for this one,PM?

  14. Mike Flanagan

    It also should be understood that the millions expended by the Mining and other rent seekers in individual advertising campaigns to thwart government policy is not included in the above figures.
    The corporatisation of democracy visits our Australian shores and is probably the only export industry left for the Europeans and yanks.
    If we allow it to continue, the principle of ‘one man, one vote’ will become meaningless.

  15. SimsonMc

    @ Barbara – As much as I agree with banning all political donations in the bid to stop us from becoming America, I suspect that as Tido and others have pointed out, it will have little effect on our political process. The big miners learnt that they don’t need to buy favour with donations, they just need to fund a good ad campaign. They got far more bang for their buck out of the anti mining tax ads than they did with giving donations. Now that they have paved the way, everyone one else knows the way to the pot of gold at the end of the rainbow. As pointed out yesterday, if the Govt think that the miners and clubs were bad, wait until they get the mafia mums in the private school carpark off side.

  16. Liz45

    Cut it out altogether! Publicly funded elections would solve the problems.

    We’re getting too much like the US for my liking! Publicly funded Election Campaigns were supposed to stop all this. All it meant is that the cookie jar is full to start with, and anything else is icing on the cake! Don’t like it at all!

    It will be interesting to see the result of the High Court action re Unions in NSW over recent Legislation.

  17. Mike Flanagan

    Many European Governments have enacted legislation to control corporate influence on their political processes. It has proved to be a failure as we witness in the Banking Corporates taking over governments and treasury benches in Greece, Italy, Portugal and Spain.
    A group of bank financed Rating Agencies are now determining the social and economic policies of France and Britain.
    Here we have mining, rent seekers and media moguls, ably supported by the taxpayer funded ABC, determining our policy regardless of the resources of the nominated political parties, entities and the majority of the voting public.

  18. Stevo the Working Twistie

    Democracy: the finest form of government money can buy.

  19. michael crook

    Perhaps if we nationalised the mines as Venezuela did, it would no longer be a problem. We could certainly fund Gonski!

  20. Liz45

    @MIKE FLANAGAN – I even get the s***s when the ABC tells us what’s going on at the Stock Exchange. If people want to know, let them find out. I’m not interested and don’t think the ABC should be covering this. But then, I’m in a minority??

    Hi MICHAEL CROOK – Now that IS a good idea! We could take another leaf out of their book and re-write the Constitution. They did a damned fine job. There were regional meetings via community radio/TV etc, then larger ones, then the people voted on the Draft, and then on the Final Document! Amazing! Why can’t we do that? The fuddy duddies (probably misogynists – certainly racists) may have written for those times, but many years have passed by since then. We should just have a Referendum to start again!

    Leave it to the Libs in NSW and soon Qld, and there’ll be nothing left! They’ll sell what little is remaining! Depressing! If or when the Coalition is in Govt in Qld, the people will be governed by Clive Palmer and Gina billions! Can’t say they weren’t warned though! Just like what’s happening in NSW.

    Incidentally, why isn’t the Media screaming at O’Farrells’s big LIE. He insisted that a Coalition Govt would NOT change NSW policy re Uranium. (they’ll insist that they’ve only given the go ahead for ‘investigations’? Yeah Right! I have fairies at the bottom of my garden too?

  21. TheTruthHurts

    This Dillard/Rudd/Crean Labor Government is a Sovereign Risk for Australia

  22. TheTruthHurts

    [“Perhaps if we nationalised the mines as Venezuela did, it would no longer be a problem. We could certainly fund Gonski!”]

    Labor can’t run a $10 chook raffle how will they run a multibillion dollar mining company?

  23. Mike Flanagan

    And that is evidenced by our dollar being over 1.07 to the US$ and us having one of the few AAA ratings for Sovereign Debt.
    Let use some facts in the discourse not immature, puerile assertions.

  24. outside left

    Geee whiz,the truth that hurts is back ;and as abonus has lobbed in another lucid,balanced,honest and incisive missive.

  25. Wallace Scott

    Mike, Peter Ormonde said the THETRUTHHURTS is Geewizz. You’ll be wasting time arguing with him. Read carefully what he said over at “Gillard: from lifeline to the tumbrel in a week”

    “Yes thats true but the reason why is because our interest rates are much higher than other countries so we are a “safe bet” for dumping a few lazy Billion into the banks.

    Australia needs to start cutting interest rates before we start cutting jobs. Lower interest rates will reduce the value of the Aussie dollar, increase export revenues(read: Budget Surplus) and protect Australian jobs.
    A lower Australian dollar means miners profits increase, meaning they pay more tax, meaning budget surplus.
    Well minerals are sold in U.S $.

    If we sell minerals at $1.08 Aus to $1US then we make much less money than selling minerals at $0.90Aus to $1US
    Can you imagine the RBA and government just sitting back and letting the dollar get to say $1.20Aus to $1US? That will be devastating to our local industries”

    Look at how absurb his argument was, he hasn’t got a clue about trading. He does not know that the high dollar hurts our exports because it makes it too expensive for other countri,es to buy our goods, he thinks the high dollar reduces the profit hence the ludicrous example that contradicts his own statement.

    His premise is the lower the dollar the more profit miners will make yet he does not know that in his example: $1.08 Aus to $1US is lower than $0.90Aus to $1US not higher as he thinks it is, and $1.20Aus to $1US is actually 83.33 US cents for 1 Aus dollar , a fall not not a rise in the dollar so if the RBA let the dollar gets lower to 83 US cents it would be devastating for our local industri,es. We have had the dollar at 83 cents many times, below and above that as well it is not a devastating number but actually would be good for our exporters at the moment. Apart from commoditi,es which are influenced by market price, export compani,es set prices and profits in relation to production cost relative to the Australian dollars, regardless whether you choose to have your contract in AUD or USD the profit will be the same but the exporter should take into account exchange conversion fee back to AUD if they choose USD contract.

    I got my mortgage in mid 2008 at 9.25% rate and now I’m paying at 6.8% I should know about rate and he tri,ed to talk over all of us, from the page on the link he gave us it also showed advertisement for low rate such as 6.35% from myrate.com.au or refinance at UBank for about 6.15% but he ignored it and kept saying interest is higher now. He does not know how to read graph to assess the situation from the data. Labor won government at the end of November, they inherited an ACCELERATING HIGH RATE RISING TREND (highlight not shouting), from memory it reached 9% in Dec. 2007 just a few days after the election and reached around 9.25% in 2008. Joe Hockey the other day claimed credit for low unemployment in 2008 yet he did not claim responsibility for the high interest rate in 2008, these Libs select everything good and credit it to themselves.

    I don’t know how you, Jimmy and Peter have the patience to talk to him. He just ignores the facts and deni,es it when he is wrong like he suffers some kind of delusion or mental illness.

  26. drsmithy

    And that is evidenced by our dollar being over 1.07 […]

    The high dollar is destroying the Australian economy, it’s in no way a good thing.

    Plus, it’s only high because our Government is the only one in the world idealogical (/dumb) enough not to be actively devaluing their currency. It’s got nothing to do with fundamentals. The bulk of our economy currently boils down to letting foreigners dig up our dirt and sell it to other foreigners, and borrowing money from foreigners to swap – not even build new ! – houses with each other. We don’t make anything. We don’t have any unique services to offer. We don’t even qualify as an attractive tourist destination anymore since the cost has skyrocketed in the last few years.

    […] us having one of the few AAA ratings for Sovereign Debt.

    The elephant in the room isn’t sovereign debt, it’s private debt (which is but a banking system bailout away from sovereign debt).

  27. Peter Ormonde

    Kevin Rudd – his legacy will live on.

    His absurd one-man-band campaign on the MRRT did irreparable damage to Labor and really annoyed a lot of very powerful vested interests. They will make a determined effort to ensure Labor is demolished over the next decade.

    Didn’t have to be this way … could have been done strategically and bringing something approaching a public consensus – like Medicare. But no – Kevin wanted to do it all by himself. What Bernard would call the “Rudd agenda”.

    Bureaucrats make very poor politicians where you must work with others and compromise. They make excellent foreign ministers where the scripts are written in stone.

    Might make the political donations issue somewhat more urgent and speed up the democratisation of the ALP. Painful though.

  28. Mike Flanagan

    Wally S;
    Thanks for your input. I have a tendency to try to say to the likes of Truthout as I see their arguments and then ignore them. I refuse from then on, to give them the opportunity for air time.

    The honest assessment of private debt would identify that it occured under Costello’s watch and not Swans.
    The current RBA interest rate settings are both lower than any time during the Howard/ Costello period and give monetary policy the flexibility to be adjusted either way to aid in the macro economis drivers. As most economists will agree that the Government fiscal policy alone is not capable to have the necessary impacts to readily affect macro economics in todays economy. We do need to have the added capacity to use monetary policy settings as delivered by the RBA.
    The evidence of the acumen and skills of the current governments skills stand in stark contrast to what we have experienced, and to some extent still endure, under Howard and Costello, the people that Abbott, Hockey and Robb wish to emulate.

  29. Glenn Brandham

    Question for the fiberal/rats – who’s your daddy?

  30. drsmithy

    The honest assessment of private debt would identify that it occured under Costello’s watch and not Swans.

    Absolutely. Costello’s continuation of the negative gearing rort, the changes to CGT and the first home buyer’s bribe drove Australia into a credit-fuelled real estate bubble that still hasn’t popped (and consequently has locked damn near a generation of young Australians into debt slavery).

    However, the current Government has done nothing but encourage the problem with continuations of the same policies. They are equally guilty.

  31. Mike Flanagan

    Peter O;
    You are right to observe that ‘bewrocrats’ make very poor politicians. But I find it dsheartening to observe the current press orgy of self deluded king making.
    Rudd was a failure as PM but his manic managerialist style seems to be having a good affect on Foreign Affairs bureaucrats. Under Downer’s indolent watch they also seemed to get sleeping sickness. Rudd seems to be putting some stiffeners into their stick and he does display some coherence that was sadly lacking under Downer.
    The unfortunate affect of the press commentators focus on developing controversies and deluded king making, is to undermine the value Rudd does bring to ministry in Foriegn Affairs.
    Perhaps if he stopped being a Beattie clone, as a media show pony, then his career in this area would have greater longevity and hence more impact.

  32. Mike Flanagan

    I do agree that there are some anomalies in our established economic policies and you rightfully identify a couple.
    Having witnessed the affect on todays government trying to introduce some fairness into the tax regime to the mining industry, could you imagine any Australian Government commiting political suicide by bringing some rationality to our tax treatment of either Negative Gearing or Capital Gains Tax.
    But this government should be given credit for its efforts so far, in many areas that were studiously ignored and avoided under Howard and Costello. And we should remember that these are the people that Abbott, Hockey and Robb wish to replicate.

  33. Wallace Scott

    Dr Smithy

    “The high dollar is destroying the Australian economy, it’s in no way a good thing.”

    True. I think small exporters don’t have the money hedge currency. May be they could form a co-op, have a pool of fund in USD for their incomes when they sell in USD then wait till the AUD drop and convert to AUD and make a windfall.

    They could have a forex expert to tell them when and how far the AUD will drop so they can give discount or low price to their USD customers at certain times and increase sales.

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