Introduction by Croakey: If Australia is to achieve healthier policy outcomes, then reforms are urgently needed to block the influence of cashed-up donors on the political process.
That’s the clear message from Jennifer Doggett’s analysis of the latest data from the Australian Electoral Commission (AEC)’s “Transparency Register”, whose release has prompted renewed calls to reduce the influence of powerful vested interests over the Federal Government.
The AEC data reveals that political donations are dominated by a small number of individuals and groups, including many involved in sectors damaging to health, such as gambling, fossil fuels and tobacco.
Jennifer Doggett writes:
Companies involved in fossil fuels and gambling made substantial donations to the Liberal/National parties and Labor, according to the annual report on political donations released last week by the Australian Electoral Commission.
The data, covering political donations for FY2020-21, also shows that the National Party continues to accept donations from the tobacco industry.
This is despite Australia being a party to the World Health Organization Framework Convention on Tobacco Control, whose implementation guidelines state: “Parties should have effective measures to prohibit contributions from the tobacco industry or any entity working to further its interests to political parties, candidates or campaigns, or to require full disclosure of such contributions”.
Michael West Media provided an analysis of the AEC data, building on the extensive work they have previously undertaken in this area.
This analysis found that the biggest individual political donor last year was Anthony Pratt’s Pratt Holdings, which donated a total $1.28 million, almost all to the Liberal Party. Major donors also came from companies in the consultancy, gambling, banking and property development sectors.
A useful overview of the AEC data and responses to the report is provided by public sector advocate Ian McAuley on his personal blog, where he also highlights the need for more analysis in this area.
He notes that the Centre for Public Integrity released its comprehensive analysis of donations over the period 1988-99 to 2019-20, revealing a big gap between what donors reported and what the parties reported.
Health sector donors
In the health sector, the largest donor recorded by the AEC was the Pharmacy Guild. Other donors include pharmaceutical companies, health insurance funds and pathology providers.
This data demonstrates how political donations are dominated by a narrow group of health companies. Absent from this list are any public health, community and consumer groups – which do not have the deep pockets of corporate health interests.
It’s difficult to draw a straight line between any single action by an organisation or interest group and a government policy or funding decision. However, there is no doubt that political donations, campaigns and lobbying work in complex ways to influence the political environment in which these decisions are made.
Clearly, public and community health advocates are operating in an unequal playing field when competing for influence in the political arena.
This has been recognised by a number of health advocates and stakeholders, including the Public Health Association of Australia (PHAA), which has repeatedly raised concerns about the adverse public health impact of political donations.
In a 2017 submission to a Senate Inquiry into the Political Influence of Donations, PHAA described how interest groups from the alcohol, gambling and hospitality sector donated substantial sums of money to political parties in a bid to influence policy decisions favouring alcohol sales and availability.
“Few if any public health groups, community sector organisations and others in civil society who work in addressing the harms associated with excessive alcohol consumption have the same financial base from which to draw, in order to seek a similar level of influence,” the PHAA wrote.
Another recent report from the Human Rights Law Commission (HRLC) describes the tactics used by the tobacco industry to combat efforts by government to reduce the harms caused by tobacco use.
These include using ex-politicians and staffers to run campaigns targeting backbenchers to pressure government to back down from proposed changes to reduce the harms of tobacco use, such as bans on personal imports of nicotine products.
The HRLC report states that two of the largest global tobacco companies worldwide – Philip Morris and British American Tobacco – have been major political donors in Australia. While the Liberal, Labor and Greens parties no longer accept donations from tobacco companies, the Coalition benefits from the donations provided to the National Party (the AEC Transparency Report shows that in 2020 this amounted to $55,000).
The report describes an attempt by the tobacco lobby to get Health Minister Greg Hunt to reverse his decision to ban personal imports of nicotine from overseas, as well as its ongoing efforts to prevent restrictions on the promotion of new products, like e-cigarettes.
Former NSW Labor Minister Verity Firth is quoted in the report describing how the tobacco lobby works:
The tobacco industry were actively lobbying against legislation that they saw as counter to their interests…
They were really active in lobbying not just me as the minister, but taking backbenchers out to lunch, visiting people in their electorate offices, basically trying to stir a backbench revolt against public health legislation.
I was definitely getting lobbied by my colleagues as a result of it.”
The HRLC report points out that these types of activities are not in accordance with the World Health Organization’s Framework Convention on Tobacco Control (Convention on Tobacco Control), to which Australia is a party.
This convention requires public officials to protect public health policies from the commercial interests of the tobacco industry but, as the above examples make clear, this treaty and associated guidelines are often ignored.
Other advocates have raised concerns about the influence being exerted over government by the fossil fuel lobby.
For example, the Australian Conservation Foundation (ACF) recently described how hefty donations and membership fees to exclusive party forums have given fossil fuel companies access to elected representatives, which, they argue, translates over time to political influence.
“Many smaller contributions are for fundraising dinners or similar events where coal and gas executives can literally buy a seat next to a minister,” Australian Conservation Foundation’s Democracy Campaigner Jolene Elberth said.
“The problem feeds itself: as political parties rely on big donations to run their election campaigns, they have an interest in not putting their donors offside, even when doing so is in the public interest. It’s a repeating cycle and it leads to bad policy outcomes – like the so-called gas-led recovery – where private financial interests are put before the public interest.”
A report from Renew Economy discusses donations made by fossil fuel companies, finding that in FY20/21 at least $1.15 million in political donations were made by fossil fuel companies with the Coalition as the largest beneficiary.
The report found that donations from the fossil fuel sector totalled at least $1.15 million in FY20/21 with the Coalition receiving almost $675,000 and Labor at least $473,854.
The report also suggests a possible link between a $25,000 donation to Labor and the ALP’s failure to back a Greens sponsored motion in the Senate, that would have cancelled out the Government’s $21 million in grant funding to the controversial Beetaloo gas exploration (grants which were later found by the Federal Court to be unreasonable and therefore invalid).
The Guardian has also reported on political donations made by gas companies to Labor and the Coalition, and pointed out that “Australia has more than 100 fossil fuel developments in the pipeline that could result in nearly 1.7bn tonnes of greenhouse gases a year – equivalent to about five percent of global industrial emissions – if all were to go ahead.”
More transparency needed
While the AEC report provides some degree of transparency, many commentators – including The Centre for Public Integrity, Australian Conservation Foundation, The Grattan Institute and Michael West Media – have identified significant limitations in the data and called for stricter reporting requirements.
The Grattan Institute has written that despite Australia’s political parties collectively reporting A$177 million in income, only a tiny fraction of this is identifiable. It argues that this means that the public is left with a woefully inadequate picture of what is actually going on with political funding in Australia.
For example, Grattan reported that in 2020-21, 62 percent of the Coalition’s income was from undisclosed sources. It stated that although the other 38 percent of donations are classified as disclosed sources, this means that we have no way of tracing who’s funding major Coalition donors such as the National Policy Forum and the Cormack Foundation.
The Australian Conservation Foundation has expressed particular concern about the fact that political parties have not declared donations from fossil fuel companies and associated lobby groups. ACF Democracy Campaigner Jolene Elberth said:
This [AEC] data shows just how dark and opaque the financing of our politics is, with 38 percent of the money that funds Australia’s major parties having no identifiable source.
More and more we are seeing corporates report their donations while the parties don’t disclose where the money has come from.
For example, the Liberal Party didn’t declare any of the money it received from Chevron or from oil and gas lobby group APPEA and the WA Liberals didn’t declare any Woodside donations.”
The Centre for Public Integrity (CPI) released a comprehensive analysis of the AEC data which revealed a big gap between what donors reported and what the parties reported.
The report argued current federal disclosure regulations allow the majority of political donations to be hidden and identified the following flaws in the current regulatory and reporting system:
- Donations below a certain amount (currently $14,500) do not have to be disclosed so that organisations can make repeated donations under this threshold without disclosure.
- There is no disclosure at all of payments for events such as fundraiser luncheons.
- Donations are only disclosed annually and there are delays
- There is no limit to how much parties can spend on campaigns.
- Lobbyists working in house directly for a company or association need not adhere to the Lobbyist Register or Lobbying Code of Conduct.
- There is no Commonwealth Parliamentary Code of Conduct
- There is no National Integrity Commission.
- The ACE lacks the investigative powers and resource to enforce compliance with disclosure requirements
- Breaches of the Ministerial and Lobbying Codes of Conduct have no real consequence.
Consequences for democracy
The impact of Australia’s weak integrity laws on our democratic processes have been raised by a number of public sector advocates and health groups.
The HRLC report describes how industry sectors such as fossil fuels, gambling and tobacco are distorting our democratic processes to put their profits ahead of our wellbeing and undermining the fair and effective functioning of our democracy.
It argues that Australia lags well behind almost all other advanced democracies when it comes to regulating corporate influence over our politicians stating: “What is considered illegal and corrupt influence overseas is business as usual in Canberra.”
The CPI has argued that the Federal Government has the “weakest political finance laws in the country” and that enormous gaps in Australia’s regulatory framework “make it easy for wealthy companies and industries to use money to influence decision makers”.
Its briefing paper on this issue states:
Public trust in our democracy is low.
A perceived lack of integrity in Australia’s political and bureaucratic processes, weak laws regulating the flow of money and undue influence in government, and gaps in the jurisdiction of accountability institutions have led to public concern that government, politicians and public servants do not always act in the public interest.
Reform is needed to help strengthen confidence and trust in liberal democracy and the rule of law.”
Former PHAA CEO Adjunct Professor Michael Moore, a past president also of the World Federation of Public Health Associations (WFPHA), has spoken out on this issue arguing that “political donation regimes at the federal level simply undermine democratic processes and public health”.
Dr Peter Tait, a GP and public health, human rights and environment advocate, has also written extensively about the public health benefits of strengthening democracy and how this is undermined by our current system of political donations.
Reform efforts stymied
Previous attempts to restrict the capacity of interest groups to influence government have been stymied by the combined efforts of the Coalition and Labor parties.
For example, last year Greens Senator Larissa Waters introduced a private members bill aiming to ban “dirty” political donations.
The Bill sought to introduce a $3,000 cap on donations to political parties and candidates per parliamentary term and to ban political donations from developers, banks, mining companies and the tobacco, liquor, gambling, defence and pharmaceutical industries.
However, this Bill was opposed by both major parties, after a Senate Committee last week recommended against support for the Commonwealth Electoral Amendment (Banning Dirty Donations) Bill 2020.
The PHAA responded:
Yet again, Federal Parliament refuses to act to curb the lobbying and political donations influence of harmful industries on public policy.”
The Grattan Institute has also criticised both major parties for failing to act on political donation transparency, stating that “the federal Coalition has a terrible track record on transparency. Meanwhile, Labor may have proposed lowering the donations disclosure threshold, but it has failed to put any pressure on the Government to close loopholes and make the data more timely.”
The difficulties experienced federally in progressing reforms in this area have been echoed at the state level, including in Tasmania.
However, despite past failures, the current political environment provides some hope for reform.
The COVID-19 pandemic has highlighted the importance of public trust in government and the need to address growing inequalities and the marginalisation of already disadvantaged groups.
Recent media reports reveal community concern about related accountability issues, including pork barrelling, and the investment of public funds in industries such as weapons manufacturers.
As previously reported at Croakey, the #OurDemocracy campaign is advocating publicly for reforms to our political donation system and has produced a film with interviews with current and former politicians, journalists and lobbyists.
Given these concerns, it is likely that independents and minor parties will focus on integrity and accountability issues in the upcoming federal election, which could force pre-election commitments from the major parties.
The (not unlikely) scenario of a parliament where the balance of power is held by minor parties and crossbenchers could result in demands for greater transparency from the next and future governments.
If this occurs, these parliamentarians will be able to draw on a range of reform proposals from advocacy groups working in this area.
For example, the CPI has developed a plan to reduce vested interest groups’ influence over government. This includes improving the reporting of political donations, introducing campaign spending caps and increased powers for the AEC to enforce regulations.
The #OurDemocracy campaign has called for an end to “cash for access” and proposed changes to make lobbying transparent, stop ministers moving into industry jobs, ban corrupting political donations and increased reporting of political donations
The ACF has also called for caps on donations, a lower threshold for revealing donations and more regular disclosures, pointing out that the Federal Government lags behind most state/territory governments in this area.
The PHAA has argued that ideally all political donations should be banned but also suggested the following measures if donations are to be maintained:
- There should be a single national online register of all donations, regardless of the amount, updated daily for real-time disclosures
- The register should include donations in other forms including gifts, attendance at fundraising events, fees for membership of and attendance at networking and other similar forums, sponsorships and hosting events
- The register should include disclosure of all meetings between donors and political parties and their respective representatives
- Tax deductions for political donations should be banned
- Political donations from companies whose goods cause demonstrable public health damage, such as tobacco, alcohol and gambling, should be banned.
See Croakey’s archive of articles on the commercial determinants of health.