Is the political system for sale?by Bob BrowningNews Weekly
, June 2, 2001
Michael Yabsley, the NSW Liberal Party's fund-raiser, recently acknowledged collecting $3.5 million over the last 16 months from major companies. He did so through one of the Party's new fund-raising mechanisms, the so-called Millennium Forum (Australian Financial Review, April 6, 2001).
Yabsley's admission emerged during recent controversy over the extent and purpose of political donations by big property developers. His $3.5 million effort included money from developers and builders, some of them multinational. Lend Lease, Multiplex, Mirvac, Meriton and Stockland were named among the Liberal Party donors.
There were calls, including from no less than Paul Keating, for curbs on developer political funding. The AFR claimed that most property developers were "coy about disclosing their donations". Yabsley counter-claimed:
"Disclosure laws in Australia are among the toughest in the world and that should cover any category of donors - property developers or otherwise."
The Australian Electoral Commission is among those that might not agree. In its submission late last year to the Joint Standing Committee on Electoral Matters, the Commission again raised recommendations some of which dated back to its 1998 Funding and Disclosure (FAD) reports. It stated:
"AEC recommendations to improve the FAD scheme under the Electoral Acts are made from a politically neutral perspective, and in the public interest, but do not always find support within the major political parties in the Parliament."
The AEC concluded its submission with the somewhat ominous statement:
"The legislation's history to date can be characterised as one of only partial success. Provisions have been, and remain, such that full disclosure can be legally avoided. In short, the legislation has failed to meet its objective of full disclosure to the Australian public of the material financial transactions of political parties, candidates and others."
The AEC's concern is general. It is not confined to developer corporations and the building industry. Following the 1998 election, the AEC reported that:
"The AEC's experience is that, since the inception of a national disclosure scheme more than 15 years ago, there has been an unwillingness by some to comply with disclosure; others have sought to circumvent its intent by applying the narrowest possible interpretation of the legislation.
"Wherever possible the AEC has sought to respond administratively to challenges in these areas, but there is a limit on how much can be achieved in this manner alone.
"To adequately respond to these challenges and to prevent potential exploitation of loopholes in the legislation, there is a continuing need for greater legislative rigour."
The AEC argues that the competence of the current disclosure legislation needs to be assessed against its declared intention:
"The disclosure provisions contained in Part XX of the Electoral Act have the objective of informing the public of the financial dealings of political parties, candidates and others involved in federal elections; in other words, to prevent political corruption by making the financing of political parties and candidates as transparent as possible."
Its latest submission repeated the obvious warning made in the second reading speech introducing the disclosure legislation in 1983:
"It is simply na•ve to believe that no big donor is ever likely to want his cut sometime. Australians deserve to know who is giving money to political parties and how much."
The AEC is at pains to emphasise the "crucial importance" of making available to public scrutiny not just the money donations but the "material benefits" provided to political parties. "If this outcome cannot be fully assured", it declared, "then the public interest cannot be served, and disclosure under the Electoral Act becomes discretionary."
Not long after the public spotlight fell on the developers, it swung to the insurance industry. The collapse of insurance giant HIH thrust the issue of corporate political money again before public attention. HIH had donated $592,700 to political parties from 1994 to 2000. The lion's share - $457,700 - went to the Liberal Party. HIH merged in 1998 with the FAI insurance group - another major political donor.
The big insurance companies in general, not just the HIH and FAI, combine political donations with intensive lobbying. Over recent years, their major concern has been with changes to workers compensation, third-party insurance and financial regulations.
After HIH's collapse, the media questioned CEO Ray Williams as to whether the company's very generous money contributions had anything to do with changes to financial regulations. Williams denied any untoward or ulterior motive. He insisted he made the donations because he thought the Liberal Party would "best look after Australia's interests, and insurance" (The Age, May 15, 2001).
The AEC's latest published batch of disclosed corporate donations to political parties includes 30 of more than $50,000. Of these, 21 went to the Liberal Party, 8 to the ALP, and 1 to the Greens. The Liberals got $2,025,222, the ALP $1,279,276 and the Greens $100,000.
But there are ways other than cash donations by which corporations can assist and influence political parties. The AEC requires the disclosure of all "material benefits". Currently, the law intends that both donors and political parties declare "gifts-in-kind appropriately valued". Gifts-in-kind comprise "any asset, service or discount received other than in the course of business".
Neither donors nor parties however are required to declare "the value of volunteer labour of party members". This exclusion is fair enough - if and when it applies to genuine party members, working gratis to help the party of their choice. But what if corporations use the provision to put various sorts of company hot-shots at the disposal of party secretariats and leaders during electoral campaigning?
Corporate staff specialising in public and media relations, for example, may have or take out party membership and be granted paid leave, or otherwise rewarded to enable them to bolster party organisation.
There are many other ways of dodging the letter and spirit of the disclosure laws. Whether or not influenced by it, the Federal Government's purge of the Pharmaceutical Benefits Advisory Committee in the multinational industry's favour certainly followed the promotion of the Howard Government and its Health Minister Michael Wooldridge through costly advertisements worldwide in The Economist.
Nick Greiner, former NSW Liberal Premier, joined the board of QBE Insurance after he left politics. Noting this fact, The Age (May 15, 2001) reported former GIO CEO Bill Jocelyn's descriptions of the extent to which the insurance industry lobbied the Greiner Government over workers compensation and third-party insurance.
Corporation-funded think tanks frequently claim a moral equivalence between corporate and trade union donations. The two cancel each other out, they say. Moreover, corporations give some money to the ALP. Unions are not noted for their donations to the Liberal Party.
The power of the corporations these days, however, clearly exceeds that of the trade unions. The union movement is mostly in decline, numerically and financially.
Corporations are rocketing to global ascendancy through neo-liberal-style globalisation. Several of the mega-corporations operating in or on Australia now have resources that dwarf the GDP of whole nations. Australian trade unions hardly make that league.
Moreover, the trade unions are Australian. They may serve special interests, as the think-tanks claim, but at least those interests are mostly those of ordinary working Australians.
Many of the corporations increasing their grip over Australian public policy cannot claim the same.