More than a third of the cash flowing to the Liberal and Labor parties is coming from shadowy entities that can hide the true source of the funds, according to a new analysis that shows the main parties collected $1.2 billion over the past two decades.
The property industry led the list of business sectors donating to both parties, giving $37.4 million to Labor and $53.1 million to the Coalition, but the study by the Centre for Public Integrity, an independent organisation, concludes that too many other donations are being hidden.
With both sides relying on "associated entities" such as investment companies and foundations, the work finds that 42 per cent of Coalition donations and 33 per cent of Labor donations have come from entities that do not always reveal the source of their cash.
University of Melbourne professor Joo-Cheong Tham, a director of the CPI, said the figures highlighted the need for greater disclosure, including real-time reports of all donations so voters knew the sources of campaign finance before the election due by May.
"Donation caps are needed to rein in the influence of millionaire donors and we need real-time disclosure of donations over $1000 so that the public knows who is funding our political parties before they vote," said Professor Tham, an expert on political finance at the Melbourne Law School.
The latest donations are due to be revealed on Tuesday when the Australian Electoral Commission publishes hundreds of scanned images of forms lodged for the last financial year, but the funding for the coming election will not be disclosed until February 2023.
The chair of the CPI, former NSW Supreme Court judge Anthony Whealy, QC, said the large amounts of money paid to the parties by their associated entities were a cause for concern because of the inadequate disclosure rules.
"Funding of our political parties is dominated by large and opaque donations," he said.
"The major parties rely on their associated entities and unions for the lion's share of their fundraising, but information about the source of this money is hard to trace."
The CPI analysis is based on published reports from the Australian Electoral Commission since 1999 and finds Labor has received $564.3 million in that time, while the Coalition has received $499.2 million and the Greens $20 million. These figures are based on disclosures from each party.
Labor received $179.6 million from associated entities not including unions, while the Coalition received $194.9 million from associated entities.
The biggest funding sources for Labor included ALP Holdings, which gave $58.9 million, followed by John Curtin House ($49 million) and the Shop, Distributive and Allied Employees' Association of Queensland ($32.7 million).
Labor also received $24.3 million from the Construction Forestry Maritime Mining and Energy Union in the ACT, which receives regular funding from the Tradies Club.
The most important associated entities for the Coalition were the Cormack Foundation, an investment company that gave $62.3 million over the 22 years, followed by Vapold ($15.3 million) and the Free Enterprise Foundation ($13.5 million.)
The CPI paper, which will be released on Monday and includes tables for each of the main parties, concludes that last year's disclosure from the Cormack Foundation had more detail than other associated entities because it revealed $3.9 million from investments in companies such as ANZ, BHP, NAB and Rio Tinto.
The importance of the Cormack Foundation was highlighted in a long-running legal dispute which led to a settlement that gave the Liberal Party a 25 per cent stake in the foundation and two out of eight board positions.
In a sign of the campaign power of mining magnate Clive Palmer at the coming election, his United Australia Party and its predecessors gained $132.2 million, most of it from his companies Mineralogy and Queensland Nickel, which collapsed in 2016 amid a dispute over unpaid wages.
Those donations added to others from resources and mining to all the major parties, making the sector one of the biggest influences in campaign finance.
Resource companies donated $21.3 million to the Coalition, according to the party's reports, and $4.8 million to Labor, according to reports from the donors to the AEC.
The Liberals and Nationals took the lead in political donations in the disclosures from the AEC one year ago, collecting $69 million in the 2019-20 financial year compared to $55 million for Labor.
Over the long term, however, a steady stream of payments from unions has helped lift Labor ahead of the Coalition. Labor disputes the idea that unions should be compared with the entities that help fund the Liberals, arguing they are membership organisations.
The CPI analysis finds trade unions gave $160.2 million to Labor over the 22 years in payments separate from the $179.6 million from associated entities.
The reporting of donations is often disputed because it is based on paper forms submitted to the AEC by party divisions in each state and territory as well as donors and other entities, with regular omissions that have to be corrected later. The forms are scanned into the commission's system and observers must add the figures manually to be sure of the long-term trends.
The donations to the Greens over the 22 years included $2.9 million from Graeme Wood, the founder of travel site Wotif, and $1.4 million from Duncan Turpie, a professional gambler.
Written by David Crowe and published in the Sydney Morning Herald on January 31 2022
