[Theme music starts]

RUBY:

From Schwartz Media, I’m Ruby Jones - this is 7am.

Every year millions of dollars flows into the bank accounts of Australia's political parties - from individuals, businesses and unions.

But loopholes and weak federal election laws mean that the source of more than half of the money political parties receive remains a mystery.

Today, contributor to The Saturday Paper Hannah Ryan on how political parties are hiding the real source of their donations – and what that means for the way our democracy works.

It’s Wednesday, February 9.

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RUBY:

Hannah last week, a lot of information was released by the Australian Electoral Commission about political donations. So can you tell me what we found out and and why all this information came out at once?

HANNAH:

Yeah. So basically every February, the Electoral Commission just publishes a huge set of disclosures from political parties, companies that are closely associated with them, unions, donors and campaigners. And it all gets uploaded to the internet once a year all at once.

Archival tape -- Charlie Pickering:

“February every year there’s a special day where we find out who really loves who although it’s not valentine's day…”

HANNAH:

So it's a really big event in Australian politics and for journalists

Archival tape -- Charlie Pickering:

“It’s that magical day in February where we find out who’s been donating money to our politicians.”

HANNAH:

when you have journalists, campaigners and people who work in politics poring through all of that information to find out finally, who's donated what, who's given to who and when they've made those donations.

Archival tape -- ABC:

“But first - following the money in federal politics. The Australian Electoral Commission has released the latest figures on corporate donations to Australian political parties.”

HANNAH:

It's important to note that the information that was released actually only pertains to the last financial year ending midway through 2021. So it really isn't, it's completely up to date. And it also means that even though we're only a few months away from a federal election, we won't be finding out who donated for this campaign until next February.

But still, it's a really interesting bunch of information that can show us what kinds of industries and organisations are getting involved in the political system.

RUBY:

Hmm. OK, so let's talk about that, what did we actually learn then about who the major donors are and who's getting involved?

HANNAH:

Yeah. So this year, the biggest donation came from Pratt Holdings Proprietary Limited, who gave nearly $1.3 million to the Liberal Party. They also gave $10,000 to Labour. And that is a company which is owned and controlled by billionaire Anthony Pratt.

RUBY:

Mm-Hmm. Hmm. So who is Anthony Pratt and where does his wealth come from?

Archival tape -- News:

“Our special guest now, Australia’s richest person. His name is Anthony Pratt he’s the executive chair of Pratt INdustries and he joins us now…”

HANNAH:

Anthony Pratt is the executive chairman of Visy, which is a packaging and recycling company that operates throughout the world,

Archival tape -- News:

“So welcome to the program good to see you”

Archival tape -- Anthony Pratt:

“Thankyou Stuart!
Now, you’re putting a lot of money into America…”

HANNAH:

and he's actually one of the richest people in Australia.

Archival tape -- News:

“President Trump is speaking at Anthony Pratt’s paper plant in Ohio…”

Archival tape -- Donald Trump:

“Anthony is one of the most successful men in the world, perhaps Australia’s most successful man as they say right?”

HANNAH:

And that donation that really big donation to the Liberals has raised eyebrows because Visy was controversially given a $10 million grant from the federal government's bushfire recovery fund in the same financial year that he gave that massive donation to the Liberal Party.

RUBY:

Hmm. That is interesting.

HANNAH:

Yeah… and it was also interesting that this year he gave mainly to the Liberal Party, when previously both major parties could expect kind of roughly equal donations from him.

Then going through and looking at it further, the largest donation from an individual was William Nitschke. He made four donations worth $300,000 to Rod Carlton's Great Australian Party. They're running Pete Evans, the conspiracy theorist, as a Senate candidate at the next election.

So resources companies were also on the list of donors. There was more than $2 million that went to the Liberals, the Nats and Labour from gas, oil and coal interests. Just to give you an example, we had Woodside Energy, which by itself gave out over $230,000 to the major parties.

So we had big donors like Pratt Holdings dominating the returns and a think tank called the Centre for Public Integrity did some analysis, and they found that ten donors alone were responsible for almost a quarter of all donations, which obviously raises really uncomfortable questions about what kind of influence that money can buy in Australian politics.

Then there are all sorts of loopholes that mean that heaps of this stuff isn't even declared.

RUBY:

Ok so we do know who the biggest donors are, who know who they’re donating too and we also know what kind of industries are donating - but all of that is based on information declared to the Australian Electoral Commission. But Hannah, what don’t we know?

HANNAH:

This year political parties took in a huge $68 million from mystery sources that they didn't declare at all.

Archival tape -- 730 clip:

“Political parties declared nearly $176 million in income, but loopholes in the law mean some $68 million, nearly 40 percent is so-called dark money.”

Archival tape -- 730 clip:

“So where does that money come from? We don't know, and that's why we call it dark money.”

HANNAH:

And for this reason and a few other loopholes, the source of two-thirds of the money going to political parties is actually a mystery.

RUBY:

We'll be back after this.

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RUBY:

Hannah we've been talking about political donations, where they're coming from, who's giving money to political parties, and while we know the names of some of the big individual donors and some of the companies, the source of two-thirds of the total amount of donations is a mystery. So can you tell me how that is possible and what are these loopholes that enable that?

HANNAH:

So I spoke to Kate Griffiths, who's a researcher at the Grattan Institute, about this.

Archival tape -- Kate Griffiths:

“My full title is deputy programme director of budgets and government, but I'm very happy with researcher.”

HANNAH:

And she told me that there are these loopholes and essentially that Australia's federal election laws are the weakest in the country, that every state and territory has stronger donations disclosure rules than the federal electoral system.

Archival tape -- Kate Griffiths:

“What we can't see at the federal level is who are the major donors? And we can't see who's getting meetings with the prime minister or with ministers and the combination of not being able to see who's backing the political parties or who's getting that kind of opportunity to wield influence is really dangerous because it means that voters, when they go to the polls, don't know who's backing the political parties and don't know who is going to have who's likely going to have significant access to the next government.”

HANNAH:

So, for example, at the federal level, you've got parties that they're forced to declare their total income to the Australian Electoral Commission, but they only have to name donors who gave more than…

Archival tape -- Kate Griffiths:

“fourteen thousand five hundred. But it's not just that the threshold itself is too high, it's also that you can make multiple donations below that threshold. So same donor can make multiple donations below the threshold, and the parties don't have to aggregate those donations.”

RUBY:

OK, so anyone who donates less than that amount less than fourteen thousand five hundred dollars, they can keep their identity secret - even if they actually donate more than because they make multiple small donations?

HANNAH:

Yeah, that's right. So if you hand over $10,000, there's no legal obligation to disclose that. But some parties, including federal Labor and the Greens, have chosen to give more detail, and some donors themselves also choose to give more detail.

Archival tape -- Kate Griffiths:

“One donor, for example, in last year's data, made 82 donations, of which six were above the threshold and the donations below the threshold collectively account for half of the total money that they contributed to political parties. But we only know about those donations because that donor has come forward and put it on the record. It's not something that that the parties are required to disclose.”

HANNAH:

But generally, anything below that threshold is dark money.

Archival tape -- Kate Griffiths:

“So I would say two thirds of the money in the system we really don't know enough about. To be sure who’s donating and to be sure who’s backing our political parties.”

HANNAH:

So I'll give you an example. The Coalition had $63 million in private income in the past financial year, but the source of 62 per cent of that is completely unknown. And then for Labor, they had $47 million in income and 43 per cent of that money was undisclosed.

But there are also other ways that political parties can disguise where they're getting their money from that are a little more messy in some ways, a little murkier. And that's when things get really interesting and pretty complicated.

RUBY:

OK, so tell me more.

HANNAH:

So when you go into the AEC website and you look at these disclosures and you press donors, it's the names like Pratt and Nitschke that come up. If you're sorting it by donation size and you just want to see who's the biggest donor?

But then there is another way that money flows and that's coming through what's called an associated entity. So associated entities are companies or other bodies that are controlled by or operate for the benefit of a political party. So they're closely associated groups to political parties. And over a third of political parties income actually comes from these associated entities, which makes them the largest category of donor.

But the money that they're giving to the parties is coming from other sources. Sometimes donations, sometimes other ways of getting income, and that can obscure the real source of the money. And I think to understand how associated entities work, it's good to talk through an example.

RUBY:

OK, let's do that. Can you run me through one?

HANNAH:

Yeah so I'm going to tell you about the National Policy Forum.
That is the name of a group that was the Coalition's second top donor last financial year. We found out when those disclosures were published last week and it donated hundreds of thousands of dollars to the National Party.

If you look at its return to the AEC, you can see that it got $55,000 each from Adani, which is a mining conglomerate and Philip Morris, a tobacco company. That money is not described as a donation, but we can tell from cross-checking various things that it's money for a membership to the National Policy Forum.

RUBY:

Right? OK. And so what does membership to the National Policy Forum mean?

HANNAH:

OK, so according to the National Policy Forum's website, the $55,000 membership, the foundation membership, gets you a seat at the table at a number of different National Party events. So to get you to their national conference, a table at the federal budget dinner and a table at lunch events hosted by the party's leader. So basically, it gets you access.

RUBY:

Right ok, so just so I'm clear, Hannah, it sounds like what's happening is these companies, they're buying a membership to a foundation and that membership gives them access to events, influential events where politicians are likely to be. And on top of that, this foundation, it also uses the money that it's getting from these companies to make donations to political parties and I suppose, particularly in this case, to the coalition.

HANNAH:

Yes, that's exactly right. So that's just one example of how companies might get the ear of the powerful using money, but there's probably plenty more that we don't know about because of the many loopholes in the electoral law.

And it's also a way to give money that avoids being labelled as a political donor in the headlines. It's not legally considered a donation because that has a really narrow definition. It means you don't get anything in return. It has to be a gift, and these companies are actually getting the seats at the table, so they're getting the membership at the forum.

Also, it's a step removed from the party because they give through a different company. So if someone just logs on to the AEC website and sorts by donor or looks at the political parties disclosure on its own, they won't find that money from Adani or from Philip Morris.

RUBY:

Hmm. Yeah, I suppose that is a really interesting and very important part of all of this, that this is happening somewhat secretly.

HANNAH:

Yeah, exactly. I think that's a big part of why it's bad for democracy.
So there's a bunch of research that suggests that money can buy you influence in terms of policy and politics, especially if it's being handed over in big sums and, you know, short of tightening all of this up completely the only way to keep companies and political parties and these associated entities, the intermediary groups accountable for the flow of money is to actually trace the flow of money. And that just becomes all the harder when you have all of these different loopholes and steps that they can go through to kind of conceal the flow of money.

And the other thing to remember that's kind of crazy is that none of this information is actually available in real time, so it's almost like opening up a history book. It won't be until next February that we know who's donating now just as we go into a federal election.

RUBY:

Hmm. OK, well, I suppose we'll have to talk to you then next February. Hannah to find out who was donating now?

HANNAH:

Absolutely.

RUBY:

Thank you so much for your time.

HANNAH:

Thank you.

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RUBY:

Also in the news today…
Prime Minister Scott Morrison apologised to former federal government staffer Brittany Higgins in parliament yesterday.

Archival tape -- Scott Morrison:

“And I particularly want to acknowledge Miss Brittany Higgins whose experience and more importantly courage is the reason we are all here today and I want to thank her for that.”

RUBY:

Last year Higgins alleged she was raped by a male colleague in Australia's Parliament House.

Archival tape -- Scott Morrison:

“I am sorry. We are sorry. I’m sorry to Ms Higgins for the terrible things that took place here”

RUBY:

The apology was part of a formal acknowledgement of the bullying, sexual harassment and sexual assault that has occurred in Parliament. It was a recommendation from Sex Discrimination Commissioner Kate Jenkins’ review of the culture of working in politics in Canberra.

Archival tape -- Scott Morrison:

“But I am sorry for far more than that, for all those who came before Miss Higgins and endured the same but she had the courage to stand so here we are.”

RUBY:

And in new amendments proposed to the governments’ religious discrimination bill, Scott Morrison has recommitted to prevening children being expelled “because of their sexuality”.

However, the most recent changes will allow religious schools to expel students on the basis of their gender identity – meaning trans students will not be protected from expulsion.

It remains unclear if the bill will pass the parliament.

I’m Ruby Jones, this is 7am, see ya tomorrow.