Funding laws set to change as $70m mystery revealed | The Age

Royce Millar and Craig Butt

February 4, 2012

THE Gillard government is edging towards modest reform of Australia’s lax political funding laws amid revelations that at least $70 million – one-third of total political income across Australia – is publicly unaccounted for.

Saturday Age examination of this week’s disclosures by all parties to the Australian Electoral Commission reveals a lack of transparency as parties, especially some state branches, take advantage of Howard-era laws requiring them to only declare donations over $11,500.

The disclosures show total receipts for all income, including donations, for parties and their branches across the political spectrum in 2010-2011, of almost $231 million.

But of that total, just $158 million is itemised, leaving a $72 million question mark over the origins of a large slab of money in the Australian political system.

Now, after four years of squabbling both internally and with political foes, Labor looks set to slash the disclosure threshold to $1000.

The reform package is also likely to include:

■ Removal of the loophole that allows donors to hide their contributions by splitting them across state branches.

■ A tightening of the definition of a donation.

■ A requirement that political parties and donors notify the commission within 14 days of any donation over $100,000.

It will stop short of bans on corporate/union donations or caps on campaign spending.

The negative impact of the threshold on transparency can be seen in the number of donors declaring their contributions before and after the Howard government’s 2006 amendments, which raised the Hawke-era disclosure trigger from $1500 to $10,000 (a figure that has since risen to $11,500).

In 2004-2005, there were 1442 donor returns. In 2010-2011, the figure had slumped to 329.

After reviewing this week’s commission figures, University of Melbourne political finance specialist Joo-Cheong Tham called for urgent reform.

”The level of non-disclosure demonstrates how there needs to be much more robust regulation to ensure transparency,” said Dr Tham.

Separate to the $72 million that is unaccounted for, the itemising of donations often fails to identify the source of the contributions, with much funding funnelled into parties through fund-raising groups such as the Liberals’ 500 Club and Labor’s Progressive Business.

As The Age reported this week, the governing Victorian Liberals identify the original corporate, individual or industry source of a mere $485,000 of its total receipts of $18.5 million – about 3%.

Disclosure policies vary across parties and their branches. The federal branches of both parties provide more than required under law, including the source of donations down to $1000. The Queensland ALP does the same.

Some states, including New South Wales and Queensland, also have their own electoral funding rules requiring more detailed disclosure to state authorities. (Paradoxically, both states have much tougher campaign funding rules than others as a result of high-profile corruption scandals.) Victoria, Tasmania and South Australia have no such laws, leaving voters in those states in the dark about much political funding.

The mishmash of federal and state rules and regulations has led many players from assorted political positions to the view that an improved, federal system of accountability is required.

In 2008, former special minister of state John Faulkner appeared to be heading for a tougher, Canadian-style regime when he promised that new laws would be introduced within the Rudd government’s first term. Senator Faulkner’s bid for change was thwarted by forces within both the Coalition and Labor….

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