Ruth Williams and Ben Butler
February 4, 2012
Peter Bond, CEO of Linc Energy. Photo: Dallas Kilponen
LINC Energy chief executive Peter Bond doesn’t mind explaining what motivated his company’s $80,000 in donations to the Liberal Party last financial year.
”I’m personally not happy with that three years of leadership [under Labor] and the fact we had to go through the resources tax – the way that was brought in and the lack of consultation,” he says.
But as Bond points out, Linc also gave money to Labor – $23,700 to its federal and Queensland branches, the company’s donor disclosure form lodged with the Australian Electoral Commission shows. Its total spend on donations was more than $100,000.
While Bond said it was ”a good question” whether such donations were a worthwhile use of shareholder funds, he added: ”I think you need to express your opinion at both federal and state level. We are affected more and more by politics. You don’t buy favours but it certainly gives you an ability to express an opinion and get in front of people to express shareholders’ interests.”
Linc Energy was just one of a long list of mining and energy companies that ploughed funds into the Liberal Party’s coffers last financial year, as the battles over the mining and carbon taxes raged.
While the reason for those donations seems obvious, other companies, such as National Australia Bank and the ASX, insist their motivation is pure – a simple case of promoting the cause of democracy.
”Our reasoning is to make a contribution to the democratic process,” said ASX spokesman Matthew Gibbs. ”It is as simple as that.”
Whatever the reason, dozens of Australian listed companies continue to give big sums of money to Australian political parties, on top of the millions spent by mining and tobacco companies on direct campaigns.
Donation disclosures for 2010-11, released by the Australian Electoral Commission this week, reveal that at least 10 listed companies donated six-figure sums to the Labor Party, the Liberals or both. Many more gave several tens of thousands of dollars.
And then there were the hundreds of ”other payments” made by companies to the political parties – relatively small sums for dinners, conferences and other party fund-raisers that give companies access to ministers or high-ranking opposition MPs.
Such payments can add up to several tens or even hundreds of thousands of dollars over the course of a year.
For listed companies, political donations are ”increasingly frowned upon” in corporate governance circles, according to Melbourne University corporate law expert Ian Ramsay.
”They are of concern for two critical reasons – a concern that commercial interests could be advanced by donating funds to political parties, and that’s a hard argument to refute,” Professor Ramsay said.
”Companies say, ‘We are doing it to promote democracy’ – well, what does that mean? I have read that phrase in a lot of annual reports and it’s never identified how that donation promotes democracy.
”The second thing is, [these are] public companies, it’s a decision made by directors or possibly senior executives, but it is not their funds. It is the shareholders’ funds that are being handed over to one or more political parties.”
Peter Swan, from the school of banking and finance at the University of NSW, said it would be better – from a corporate governance perspective – if companies that wanted to support a party set up a facility allowing shareholders to donate directly.
”It’s a lot better if funds come from shareholders direct in one form or another, rather than burdening all shareholders … if the company sets up some facility for them to decide themselves, I don’t think there’s a problem.”
Last financial year, companies that favoured the Liberal Party included mining companies New Hope Corporation and Straits Resources and investment conglomerate Washington H Soul Pattinson.
NAB was among those that gave big sums to both, along with long-time donors Village Roadshow and Westfield. ”As a large organisation in Australia we believe in supporting the democratic process, which is why we provide financial donations to both major political parties,” a NAB spokeswoman said.
Just two listed companies appeared to donate significant sums only to Labor – ASX and Macquarie Telecom – but both said the records were misleading.
ASX said its equal $50,000 donations to Labor and Liberal in 2010 arrived on either side of the deadline – in 2009-10 it appeared that ASX had exclusively favoured the Liberal Party.
Data hoster and telco Macquarie Telecom, a vocal backer of the government’s national broadband network, said it was also a bipartisan giver despite its $120,000 donation to Labor in 2010-11 dwarfing its contributions to the Queensland LNP and WA Greens.
”If you were to take … a 10-year view of our contributions, I think you would find it would be very close to even,” said spokesman Matt Healy, who said the company gave to parties even when their policies were not ”necessarily aligned with our commercial interests”.
Healy said political parties needed money to exist – ”and whether it comes from individuals or corporations, that funding needs to be there for them to spend time developing policies and making good decisions in the interests of the nation. Individuals have a role in that and corporations have a role in that.”
Read more: http://www.theage.com.au/business/coming-to-the-party-not-cheap-for-free-enterprise-20120203-1qxrx.html#ixzz1mAbvj2Ps