Election 22 / 27 April 2022

Political funding and donations

One of the themes of this election is integrity and transparency, and one area that critics have said for ages needs more sunlight is the funding that our political parties and independent candidates receive. So let’s get across the sorts of funding in Aussie politics, how it works, and the problems that have been identified. 

So what’s this about pacifically?
It’s ‘specifically’… And we’re talking about political funding at the federal level. Our states and territories have their own rules.

Got you – let’s start at the top. 
Political funding in Australia covers 3 main areas: donations, public funding and the income political parties generate off their own bats. The most controversial of those 3 things is donations. But across it all, the main game for the parties and candidates is to have enough money to win the election.

I thought it was to make the world a better place?
Sure. But like most companies are there to make a profit, politicians are there to win elections. And to win government, you have to fight expensive election campaigns.

How much is it to run an election? 
The political parties don’t declare how much their spend on elections, but you can look at what they declare to the Electoral Commission to make some assumptions. And based on that sleuthing, looking back on the 2019 election campaign, Clive Palmer’s United Australia Party was the biggest spender. The billionaire’s Mineralogy company donated $83.6 million to its campaign – and did not win a single seat.

Geez, you’d be annoyed about that…
Well, after that election, Palmer said that was fine because what his campaign did achieve was keeping Bill Shorten and Labor out of office. He believed the Coalition was better for the country at that point in time. 

What about the others?
Labor’s filing to the AEC revealed a $50 million war chest, and the Liberals had $48 million. Meanwhile, the Nationals declared less than $400,000 in income in 2019-20, which was a worrying low according to Nats leader Barnaby Joyce.

What did he say?
That “you’re not going to be able to run a political party on lamington drives”. 

So why is there public funding for election campaigns?
The idea is that providing public funding to the parties for elections reduces the influence of private citizens. The major parties get about a third of their funding that way, and for the 2019 election, that amounted to almost $70 million that was paid out by the Australian Electoral Commission. 

And you mentioned another way political parties fund themselves is to generate their own income? How do they do that because Joyce has ruled out lamington drives…
Gotta love a lamington… The major parties have been around for a while and they have some wealthy people in their orbit. In the past, they have helped the parties get set up with investments and property – and they are assets some still hold today and get income from dividends or rents, or asset sales. And there are trusts and fundraising vehicles that are attached to these parties that also contribute to their funding.

That sounds complicated…
These are multi-million dollar and complex ventures. 

And what about donations?
The majority of the spending on elections is raised from donations from private individuals or companies, and from fundraising events and entities associated with the major parties.

How does it work?
It can just be literally transferring money – to the party or to a specific candidate, or it’s a donation made via attending an event. That happens a lot, particularly in the year leading up to an election. If you’re the leader of a party or a senior member, your diary is chockablock with fundraising drinks and dinners.

What’s that going to set me back? 
Attending those drinks and dinners can cost invitees upwards of $10,000 if there are just a few people sitting around the table. If they are bigger events it might be in the hundreds of dollars. They ain’t cheap…

So what do I get out of it?
Access to those in power, or to the team that has a chance of being in power. And the criticism is that how those donations are reported needs to be clearer, and there needs to be greater transparency around what people are asking for in return.

What about the big political conferences? 
They are big affairs and business observers attend with the parties putting on special programs for them to mix with delegates, and meet senior members – it’s part of the dance they do to exchange networking for financial support.

So how is all of that reported?
They are not classed as donations but as“other receipts” by the Australian Electoral Commission. 

But do donations have to be reported?
So, a significant chunk of the total funding received by major parties and candidates, including independents, remains a mystery. And that’s because the donations fall below the threshold of $14,500, above which a donor’s name must be disclosed. Multiple donations can be made by one person or company beneath that threshold.

That seems a bit misleading… 
That’s a big criticism of the system, another is the timing of how donations are reported.

What do you mean?
Real-time transparency on donations and fundraising at the federal level is something critics would like to see. Just as an indication of how slow it is, what’s happening during this election will not be revealed by the AEC until early next year. 

Right. What else are the experts saying about this campaign?
That Palmer is set to spend upwards of $100 million. That’s prompted calls for a cap on what one individual or company can spend on a campaign. 

That’s a lot of money… What about the individual campaigns?
In some of the big fights, a candidate will spend $2 million to get elected. All up, that could see the election cost $500 million.

I’m still stuck on paying $10,000 for a dinner, it would have to be delicious…

Get the Squiz Today newsletter

It's a quick read and doesn't take itself too seriously. Get on it.