The Power Index: election deciders, the moneybags at #7
"It's a battle of ideas, not money," says Clive Palmer of the election. But the two aren't mutually exclusive. So who's holding the bag for their respective leaders -- and who's providing the cash? The Power Index investigates.
“It’s a battle of ideas, not money.” — Clive Palmer to Crikey on election donations, May 2013
If you want to do well at a federal election, you’ll need a warchest filled by friends in high (and sometimes low) places. As this interminable and apparently predetermined campaign grinds on, the state of the parties’ fundraising may come as no surprise. The Coalition’s funds are “flowing nicely”, Labor is looking shaky, and the Greens are “pretty bad”.
The major parties will hope to raise more than $35 million each for the September election, including public funding, which flows to the parties in election years only (Labor is considering a proposal to provide public funding — based on a certain amount per vote — every year, to cover administrative costs).
Does money help decide election results?
When asked if cash made a difference, Liberal operative Grahame Morris replied: “Bloody oath.” He says it’s mainly for paid communications, heavily skewed towards TV, and bankrolls the party secretariat, which ramps up for elections. The campaign HQ has to be funded, staff paid and meals and travel provided for campaigners.
Another Liberal figure, who sat on a key party committee, says a very high proportion of the warchest goes on the “national media buy”, with the rest on organisers, media people, strategists and pollsters (who often work for cheap in hope of a cushy job later). Money tends to flow to marginal seats.
Sam Dastyari, general secretary of the ALP’s New South Wales branch, says money matters but there is a law of diminishing returns. A party has to have a strong message and communicate it effectively, or money won’t help. He says TV ads are becoming less important; a large volunteer base may be worth more. “Money isn’t as important as it once was in political campaigns,” Dastyari told Crikey.
Which, if true, is just as well for Dastyari. Labor’s fundraising prowess has declined with its fortunes. The party easily out-gunned the Coalition in 2007, raising more than $60 million (including public funding, now at $2.31 per vote). By the 2010 election the parties had evened out, with Labor raising $37 million to the Coalition’s $30 million, while in 2011-12 the Liberals raised more. With the ALP way behind in the polls, Labor is now a tough product to sell. Meanwhile, the Greens are no longer basking in the glow of mega-donor and Wotif founder Graeme Wood’s largess — he gave them the largest ever donation ($1.6 million) in 2010.
With the election more than three months away, many donors are yet to stump up. Some will only do so during the official election campaign, when bagmen (and women) hit the phones and whisper sweet nothings at party dinners. Fundraising events have started, and prices are starting to mount — anecdotally, Liberal events are outselling Labor’s.
We won’t formally know who’s donated what between July and September until 18 months after election day; donations over $12,100 must be disclosed via the Australian Electoral Commission (there are proposals to cut this threshold to $1000 or $5000), but there’s a long lag. Donations are highly secretive. Even some frontbenchers are in the dark as a small inner clique runs the finances for both major parties. A Liberal MP told Crikey: “I’ve noticed a real culture of secrecy around these things in recent years … you could probably torture [federal director] Brian Loughnane and he wouldn’t reveal it.” A Labor figure said: “They keep that stuff very very tight.”
Donors game the rules to avoid their names going public. The Liberal MP says people make smaller donations, break them up and funnel them through third parties.
“They simply walk the street, they talk to their friends … they go to their mates on the company board and say they want the money.”
So, to the parties …
Labor is rumoured to be struggling. Unions dominate, with the Communications, Electrical and Plumbing Union, the Shop, Distributive and Allied Employees Association and the Construction Forestry Mining Energy Union spending up big in 2010. But some unions funded the Greens in 2010, the CFMEU and the Electrical Trades Union (ETU) donated to Katter’s Australian Party (KAP) in 2011-12, and the ETU says it will fund the KAP and the Greens. The CFMEU has threatened not to fund Labor.
Chinese investors like Labor, although donations from property investors are drying up. Visa stumped up $151,000 to the ALP last year; will this be repeated? Climate Change Minister (and possible future leader) Greg Combet has claimed privately he’s the ALP’s second biggest fundraiser after the PM. Bringing home the bacon brings cabinet cachet.
Dastyari says ALP fundraising is changing, away from a small number of large donations towards more people giving smaller amounts. “We’re in a race to change how we fundraise,” he said. He pointed out that unions fund their own campaigns.
As for the Liberals, a Coalition MP told Crikey: “I’m hearing signals that the money is flowing nicely … I get the impression that we’re not going to be short of money at this campaign.” Coalition funding comes from high-wealth individuals and companies that feel they’ll do worse under Labor (think miners, big pharma, private hospitals). At the 2010 election, Clive Palmer tipped in $300,000 (now he’ll give them “not a cent”), controversial Tory Michael Ashcroft $270,000, and the Pratt clan $150,000 (the Pratts have been less forthcoming since Richard Pratt died).
In 2011-12, private hospital baron Paul Ramsay gave just over half a million to the Liberals, the Australian Hotels Association kicked in half as much, and ad-man Harold Mitchell got out the credit card. Gina Rinehart has made small donations via Hancock Coal. Don’t forget the party’s associated fundraising entities like the Cormack Foundation (a Liberal investment company), the Free Enterprise Foundation, and the Millenium Forum (a NSW-based John Howard baby).
Key fundraisers are party president Alan Stockdale and treasurer Philip Higginson (plus Loughnane). One insider says the treasurer is chosen to raise money (think Ron Walker and Malcolm Turnbull): “They simply walk the street, they talk to their friends — it’s very much a personal endeavour. They go to their mates on the company board and say they want the money.”
Liberal pollies Tony Abbott, Julie Bishop and Joe Hockey have been flying around attending fundraisers that can fetch $10,000 a head. Fly to Perth, roll out the white tablecloths and let the older white men come.
A Greens insider says fundraising this year is “pretty bad”, with “no significant contributions” (Graeme Wood confirmed to Crikey he was not considering donating, after funding a prime-time ad campaign in 2010 that helped the party to the balance of power). The party relies on public electoral funding (part of the reason it runs candidates across unwinnable lower house seats is for cash), plus smaller donations, often from retirees. A common Greens beef is that the party is too decentralised, making national strategy and focus difficult. “I don’t think anybody’s in control [of fundraising],” the insider said. Unions like the ETU have flagged they’ll donate.
The Queensland renegades may not win seats, but they’re cashed-up. The KAP has donations from James Packer, the ETU, Santi Burridge’s wealth management firm, etc.
As for Clive Palmer’s party, he told Crikey donations were coming from “all over Australia”, but “elections are not fought on donations. It’s a battle of ideas, not money.” Palmer, who donated $176,000 to the Queensland LNP in 2011-12 and $300,000 to the Liberals the year before, says “I haven’t decided yet” whether he will fund the PUP. He chastised us for being too obsessed with money and suggested Crikey “should lift its sights”.
Unlike the money men and women of Australian politics.