Political donations: The shadowy backdoor of democracy

In the wake of the Australian Electoral Commission’s recent annual release of political contributions data for 2022–23, The Australia Institute is sounding the alarm for immediate and transparent disclosures of political donations. The organisation highlighted the flaws in the existing system, emphasising that some contributions take over 18 months to be disclosed, if they are disclosed at all.

The current high threshold for donation disclosure, combined with the annual release of information in a bulk data dump, poses significant challenges for voters and community organisations to hold politicians and political parties accountable for the financial support they receive.

During the last federal election year, the Labor Party amassed $84.4 million in donations, with the largest contribution coming from billionaire Anthony Pratt. Simultaneously, the Liberal Party received a $112.7 million in donations. The big four consulting firms, including the controversial PWC, collectively contributed 1 million to the major parties. From the healthcare sector, notable donations came from the Pharmacy Guild of Australia ($355,780)*, followed by Medicines Australia ($255,096)*.

A major concern highlighted by The Australia Institute is the gaps in Australian political contribution laws. Currently, only donations exceeding $15,000 are mandated to be disclosed, and there is a possibility of contributions being split to stay below the threshold. The Grattan Institute’s research recommends reducing the disclosure threshold to $5,000 to address the issue of undue political influence.

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Furthermore, the disclosure process occurs once a year, covering the previous financial year, leading to delays of over 18 months before certain political contributions are made public. The inclusion of a vague “other receipts” category, encompassing corporate membership fees, affiliation fees, levies on MPs and staffers, dividends, rent, and other payments, adds to the lack of transparency.

For example, Labor received $310,330 from the Pharmacy Guild in the 2021-22 financial year, disclosing only $202,930 in donations . This total included a $110,000 platinum membership to the Federal Labor Business Forum, an upgrade from the silver membership of $27,500 the prior year. The forum provides companies access to exclusive networking events with parliamentarians.

Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program, expressed concern over the current state of political donations data, stating, “The political donations data highlights the lack of transparency and integrity in Australian politics. We are learning today whether businesses made political donations 18 months ago. These lags and other loopholes make it difficult to see how politicians and political parties are being funded – and by whom.”

Browne issued a stark wake-up call, emphasising that 2024 is the last opportunity for meaningful democratic reform before the 2025 election. He acknowledged positive reforms during the first term of the Albanese Government, including the establishment of a National Anti-Corruption Commission and a code of conduct for parliamentarians. However, he urged the government not to squander the opportunity to continue this work.

Highlighting the need for strong democratic institutions in Australia, Browne stated, “Political upheaval in other democracies and the misleading and vitriolic claims that swamped the Voice referendum demonstrate that Australia needs strong, democratic institutions. Australians should go to the next election with strict political donation disclosure laws, truth in political advertising laws in force, and information about who’s meeting ministers made public as a matter of course.”

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*These figures do not include donations from individual organisations who are members of these peak bodies.