a $1 billion stash of secretive political donations


The darkness can be quantified, sometimes, for Australians who wonder just how much is hidden from them. The answer turns out to be about $1 billion. That is the value of party income not fully disclosed over the past two decades.

How did this money influence our politicians? It is impossible to say with any certainty because so little is known apart from the number itself. This is a blight on national affairs because the rules set by the politicians are designed to keep so much hidden.

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The $1 billion estimate is the work of the Centre for Public Integrity and one of the best academics who studies the donations, Joo-Cheong Tham of the University of Melbourne. It is calculated by looking at money that flows into the parties but is not named by source.

“Vast amounts of money potentially influencing last year’s federal election will not be disclosed to the public,” say the centre’s Tham and Hannah Aulby in a paper on this week’s donations data. “The source of over $100 million received by the major parties alone in 2018-19 will be hidden from public view.”

The reasons are simple: donations worth less than $14,000 are not disclosed; the true identity of donors can be easily hidden in corporate structures; and the files are littered with “other receipts” that can work like donations but are not listed as such.

This can be disclosed under the law by parties and donors on paper files in illegible handwriting so the Australian Electoral Commission can release faded and sometimes unreadable scanned images on the first working day of February each year.

Worse, the system is going backwards. The $14,000 threshold is higher than in the past, thanks to changes by the Howard government. The way parties spend their money is barely visible, even when some of that money comes from taxpayers through the AEC.

“The Commonwealth Electoral Act was amended in 1995 to require only total expenditure to be reported,” Tham and Aulby note. “It was amended again in 1998 to not require any electoral expenditure to be disclosed at all.”

This is a wonderful world for vested interests – a smorgasbord in a luxury restaurant for the wealthy and well-connected, not to mention Chinese spies and snakes on the make.

The secrecy suits most parties but the Greens and Labor want more transparency. The Labor policy, restated last November, is to reduce the disclosure threshold to $1000 and require payments to be disclosed within seven days.

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The ludicrous nature of the system is revealed when donations are revealed and then denied, a glitch that  appears to happen every year.

This is Third World transparency in a First World democracy. And it does not stop at the annual donations release. Australians who enjoy a sense of superiority when reading stories of Indonesian politicians handing out cash on election day now see their own ministers giving taxpayer money to sporting clubs in marginal electorates.

Readers say the Mosman Rowers has done wonders with its $500,000 – and who can blame the clubs for competing for what they can get? – but even this may not compensate for the descent into trading cash for votes.

The government’s response is to defend the sports funding scheme, promise money to the clubs that missed out and accuse Labor of being just as bad when it was in power. Neither of the major parties will stop the problem at its source by taking these grants away from ministers and leaving them with independent agencies.

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Morrison now relies on a human shield in his former chief of staff, Phil Gaetjens, who has written a defence of the scheme in his capacity as secretary of the Department of Prime Minister and Cabinet. While the report is not being released, ministers quote it to shrug off the findings of the Auditor-General.

This is corrosive to good government. Who would trust a mandarin’s secret report over the 76 pages of the auditor’s public assessment? Nobody should welcome a political manoeuvre that sidelines one of the best checks on how governments allocate public funds.

The solutions are not hard to find. One is to trust the Auditor-General. Another is to rely on officials, more than ministers, to allocate cash.

The most important solution is to move to the real-time disclosure of donations with a lower threshold for reporting from parties and donors. Given the impact of Palmer’s $90 million at the last election, it is only a matter of time before Australia debates a donations cap to limit the power of one person (regardless of political leaning) to shift an election.

The most likely scenario is that Australian politics will drift further toward the money politics that is so corrupting in other countries. The solutions are obvious but too difficult.

While voters know that sunlight works best for the public, the politicians know that secrecy works best for them.

David Crowe is The Age and The Sydney Morning Herald’s chief political correspondent.

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