Sorry, Matthew, adoption of “real time” donations still doesn’t cut it

by Nichola Cooper | Aug 14, 2017 | Comment & Analysis, Government

AN EMBATTLED Matthew Guy, desperate to rebadge himself as the great donation reformer is urging adoption of “real time” donations. But that doesn’t quite cut it, says Nichola Cooper, who reminds us that Australians are demanding an end to “policy capture”.

Had Guy been seriously concerned about his political future (and he should be after the latest Fairfax Media-ReachTel poll, he’d have taken a leaf out of Annastacia Palaszczuk’s book and advocated serious donations reform. We note no mention, for example, of reducing the disclosure threshold of $13,200 to $1,000 (now a policy of federal and Qld Labor). Increasing the transparency threshold from $1,500 to $13,200 was a ploy by the Howard Government in 2006 to give anonymity to donors. This, in turn, gave rise to “splitting” large donations to different Liberal party branches and associated entities without fear of exposure, especially if the donor was a persona non grata (like an alleged Mafia boss) — as secret phone records of convicted thief and former Liberal fundraiser Barrie Macmillan have revealed.

Palaszczuk leads reform on political donations

The Palaszczuk Labor Government not only introduced “real time” electronic disclosure in March this year but reduced the threshold to $1,000. The new legislation applies to both state and local government. This brings Queensland into line with similar reporting requirements in the UK, New Zealand and Canada — all reported to be perceived as less corrupt than Australia.

Even some states in America, which are hardly bastions of trust and accountability at the moment, host a system of continuous disclosure that awards voters a decent idea of who donated what and when before election day. The New York City Campaign Finance Board requires all registered candidates progressively report donations online, which is then displayed online, almost in real time. The flaw in this system, however, is the First Amendment to the US constitution which means parties and candidates are not obliged to use it for fear of compromising free speech and political association. It must be opt-in.

Under the current federal system, donations over $13,200 are submitted to the AEC online by the 20th of October after the financial year end. This means donations made 18 months ago, if not well recorded, can be incorrectly submitted. (As evidenced by the multiple amendments to submissions on the AEC website). Exceptions are Labor (with a disclosure threshold policy of $1,000 as already mentioned) and the Australian Greens whose federal disclosure threshold is $1,500 and Victorian Branch $1,000.

While this may well be typical political obfuscation on Matthew Guy’s part, his point about real time donations improving transparency is welcome coming from the Liberal Party. But of course “real time” donations are meaningless unless the Liberal Party follows the lead of Labor and the Greens in reducing the threshold to $1,000 or even $1,500. Had Tony Madafferi followed Barrie Macmillan’s advice of splitting a hefty donation into lots of $13,200 between various Liberal branches and associated entities, we’d have remained in the dark.

Lobsters, Grange, secret mobster donations: Vic Libs in cluster cockup

Public funding failed to clean up political donations

In addition to donations, political parties receive public funding if they gain over 4 per cent of first preference votes in the division or the state or territory they contest (the amount awarded is a multiplication of first preference votes over 4 per cent by the annual rate of payment — $2.68 per vote in 2016).  A not-insignificant contribution of millions of dollars of public money to the parties. According to the AEC, the Liberal Party received $23.4m and Labor $22.3m in 2016. Public funding was a measure implemented by the Hawke Government to reduce reliance on donations and clean up politics, however, it’s not paid until after the election.

But, how do you win an election without a marketing budget?

Here’s where the problem with campaign financing and the public discontent begins: it takes deep pockets to win elections. To bridge the timing of public funding, parties and their associated entities sell a lot of memberships, invite-only dinners, access to party fundraisers or private audiences with senators, exciting public cries of corruption and concerns over policy capture by commercial and foreign interests.

“We live in a country where people or organisations with clear links to foreign government can donate millions of dollars,” independent MP Andrew Wilkie told the ABC.

How business lobbyists trump your vote

These are not entirely unjustified concerns when entities such as Labor’s Progressive Business offer members “a platform for your ideas to be heard and the opportunity to contribute to government’s policy agenda”. Progressive Business has since been rarely allowed to forget the incident of the businessman who, after paying $10,000 to attend a function, told the media in November 2009, he was in the premier’s ear all night about his coal industry deal.

In direct opposition to Liberal quietude, Labor members are smug and vocal on the issue of donations. After a 2014 Chinese donations scandal Labor’s ex-chief fundraiser Senator Sam Dastyari called for a total ban on political donations — not just those from foreign sources. Labor Leader Bill Shorten supports this and as already mentioned, it is a principle of the Labor to disclose every donation over $1000, Labor’s policy on disclosure can be seen here.

Foreign donations

A Joint Standing Committee on Electoral Matters (JSCEM), which does a review after each election has recommended foreign citizens and entities be banned from donating to Australian registered political parties, associated entities and third parties. The bill is scheduled to be introduced in the Spring sitting of Parliament. The usual squabbles about the wording have broken out from politicians of all stripes so who knows if we’ll see real change.

According to research by the International Institute for Democracy and Electoral Assistance, two thirds of countries ban foreign donations. Australia does not; and it’s affecting our international profile as well as our local politics. Donations to political parties are uncapped and may come from anywhere; anyone may donate anything, as long as it’s declared to the AEC. For instance, during the years 2013-2015, Chinese-linked businesses donated in excess of $5.5m to both Labor and Liberal parties and the Hong Kong Kingson Investment Company, specifically, donated $860,000 across Liberal and Labor state and federal offices in 2015-16.  This is leading to both a local discontent with political behaviour and a raised profile of corruption. Researchers at the Institute for Governance and Policy Analysis in Canberra report Australians’ trust in politicians are at their lowest level since 1993 and national performance on Transparency International’s Corruption Perceptions Index has been consistently falling each year since 2012.

Will other states and the Feds follow Queensland Labor’s lead?

Accordingly, Queensland is setting the pace for the states and the Commonwealth in political reform. In fact, our legislators have been largely ignoring change to the mechanisms of government: a 2011 Senate committee made many of the same recommendations Labor have been calling for: reducing the disclosure threshold to $1000, terminating the annual indexation, treating all state and federal branches as one entity to prevent splitting of donations and forcing donations over $100,000 to be disclosed within a fortnight. But the Coalition members of the committee were having none of it, claiming such moves would impact individuals ability to donate without fear, intimidation or harassment.

Given Queensland achieved reform without much fuss and got a huge tick from the public, will other states jump on bandwagon? Queensland’s next state election is in 2018. This may be a turning point for the states.

From a progressive government that was the first to ban fracking, implement a Royal Commission on Domestic Abuse and legislation for a conscience vote to introduce Victorian Dying with Dignity laws, it’s interesting that Victoria’s Andrews Government is dragging its feet on political donations reform.

Nichola Cooper

Nichola Cooper is a London-born, Melbourne-based freelance consultant and researcher for MiVote; this means she would sooner tolerate bad food over bad coffee.  Everything is interesting — unless it’s on free-to-air.

Nichola has an MBA and Master of Strategic Foresight.

You can follow Nichola on Twitter @TweetNichola.


Nichola Cooper is a London-born, Melbourne-based freelance consultant and researcher for MiVote; this means she would sooner tolerate bad food over bad coffee. Everything is interesting — unless it’s on free-to-air.
Nichola has an MBA and Master of Strategic Foresight.

Don't pay so you can read it.

Pay so everyone can.

Pin It on Pinterest

Share This