The hidden millions in political donations

While the raw data from the Australian Electoral Commission released yesterday provides some insight into the latest batch of big donors to Australian political parties there is also a hidden story tucked away in these disclosures. Comparing the AEC data for NSW with the disclosures to the NSW Election Funding Authority reveals some interesting trends in political donating and underlines the need for far reaching political funding reform.

Many corporations have taken advantage of the changes to the electoral funding laws made under the Howard government in 2006, which lifted the threshold for disclosure for political donations from $1500 to $10,000. With increases in the CPI the threshold for the current round of disclosures is now $11,200.

At the time Liberal Senator Nick Minchin argued that the higher threshold was all about protecting the privacy of donors.

This line of reasoning did not stop the accusations that the influence of money politics would flourish under this heavy veil of secrecy afforded by the higher threshold.

A comparison of the donation data revealed by the AEC with that disclosed to the NSW EFA provides an insight into what the Coalition elders wanted to keep secret.

The former Howard government's rule change certainly worked as the Greens and Labor predicted. Many political donations remain hidden unless you reside in NSW. Donors to the Coalition parties are more likely to give amounts below the federal donation threshold, which provides the “privacy” provision pushed through when the Howard government controlled both houses of the federal parliament.

The total amount of political donations received by the NSW Nationals for 2009-10 as disclosed to the AEC comes in at $532,000. For the same period the NSW EFA was informed that the NSW Nationals received $709,000 in donations. The accuracy of these disclosures is thrown into further doubt when contributions from the National Free Enterprise Foundation are taken into account. This body, a generous fundraising arm of the Nationals, donated $60,500 according to the NSW EFA, while the AEC reveals that $341,000 was received from the same donor over the same period.

An analysis of donations to the Liberals shows even a greater gap in donations reported to the AEC and those reported to the NSW EFA.

Yesterday's AEC data for 2009-10 shows the NSW Liberals received $962,000. Meanwhile the NSW EFA data for this period reveals the total Liberal donations come in at $3.77 million. Clearly many donors to the NSW Liberals have chosen to give amounts under the $11,200 AEC threshold.

For Labor the difference is not nearly as great. The AEC reveals Labor received $3.7 million in donations, while the NSW EFA data puts their donations at $4.4 million.

We are also able to make a direct comparison of the data for 2008-09. While the NSW Liberals reported donations totally $1.50 million to the AEC, the NSW EFA with its tighter disclosure rules reveals a figure of $3.54 million.

For NSW Labor for the same period the AEC recorded $2.73 million in donations compared to $5.2 million under the NSW EFA rules.

While these discrepancies highlight the need for tighter and consistent disclosure rules, reform needs to go much further.

We need national uniform electoral funding laws that require a ban on all donations from corporations and other organisations, strict limits on donations from individuals and caps on election expenditure.

It is not just about knowing who is donating and possibly trying to gain influence, it is about a creating a fair electoral system.