16th Nov 2016
Australia’s ineffective political donation laws have allowed 85 per cent of all private money going to major parties avoid scrutiny while more than half remains entirely undisclosed, a new report has found.
Research by University of New South Wales lecturer and former Howard government adviser Belinda Edwards finds that disclosure of donations to political parties in Australia has become effectively optional, with sums of as much as $20 million easily hidden using so-called donation splitting and other methods.
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Released by left-wing activist group GetUp!, the report finds that after the 2013 election, the Coalition and Labor declared less than 25 per cent of their privately raised income as donations to the Australian Electoral Commission.
About half of the cash came from a range of party fundraising bodies, leaving between 12 and 15 per cent clearly linked to specific political donors.
Liberal Party-linked groups, including the Free Enterprise Foundation, the controversial Parkeelia organisation, the Platinum Forum and the Kooyong Club accounted for $6.01 million of $10.3m in declared donations in 2014-2015.
Key Labor-linked groups included Labor Holdings, the Progressive Business Associations, the 1973 Foundation, John Curtin House and the Chifley Research Centre made up $4.2m of $7.3m in declared donations in 2014-15.
Donations from trade unions to Labor accounted for a further $1.2m of the total.
The report finds that of the payments received by the Liberal Party at the 2013 election just 25 per cent – $19.3 million – was declared as donations.
In the past 10 years, the share of Liberal Party income declared as donations has dropped from 30 per cent in the 2007-08 election to a quarter in 2013-14.
Labor’s income is less clear because its total fell in the same period, but the party also recorded 25 per cent of income from donations in 2013-14, down from 30 per cent in 2007-08.
The report finds the majority of funds going to the major parties are undisclosed.
For the Liberal Party, the total is 63 per cent, or $48 million, compared with Labor’s 50 per cent, or $23 million.
Of contributions to the Nationals, 79 per cent, or $4 million, were undisclosed while the Greens recorded 85 per cent or $8.9 million in undisclosed income.
Dr Edwards said the Australian Electoral Commission database is difficult for researchers and journalists to use effectively while “significant transparency problems” exist in disclosure mechanisms themselves.
“Australia’s financial disclosure system is sufficiently poor that the most useful way to make sense of the political donations landscape is to map what we do not know,” Dr Edwards said.
“It is to map out how much ‘dark money’ is in the system which is not being adequately disclosed.
“The volume of ‘dark money’ in the system undermines the confidence that the public can have in being able to interpret the payments that are disclosed, and undermines the integrity of Australia’s financial disclosure regime.”
GetUp! campaigns director Natalie O’Brien said the report showed donation disclosure was causing the public to lose trust in politics.
“Australian law requires all payments to politicians over $13,200 to be publicly declared – an important transparency measure to stop corruption,” she said.
“But right now there are gaping legal loopholes that see tens of millions of dollars funnelled into the pockets of our politicians with no oversight, no accountability.
“Using these loopholes, it’s possible to funnel $20 million a year to political parties with zero scrutiny. The current disclosure system is completely broken.”
GetUp! has called on federal parliament to require real time, online disclosure for donations of $500 or more and for a $1000 financial year cap on donations from individuals or corporations.
Current rules require donations of more than $13,200 to be disclosed, but some donors split contributions into smaller amounts on different days or to different party branches to avoid having to identify themselves.
The federal government has asked a parliamentary committee to consider a ban on foreign donations, a move supported in principle by Prime Minister Malcolm Turnbull and the opposition. Labor has called for the disclosure threshold to be lowered to a fixed $1000 and for a ban on donation splitting.