Forty Percent Of Political Donations Come From Unknown Donors

In news that won't surprise many, money buys access and results in Australian politics, according to a new Grattan Institute report.

The report -- 'Who’s in the room? Access and influence in Australian politics' -- looks into some of the outside influences on how policy is made in this country. At the heart of the report is what Grattan calls the "money problem", or how donations can lead to influence on politics.

"Political parties received $43 million in declared donations at the 2016 federal election. These donations were remarkably concentrated – just five percent of donors contributed more than 50 percent of donated funds," the report stated.

"And the lion’s share of donations came from donors with the most to gain from government policy decisions."

"Political donations give well-resourced groups more face-time with our politicians... given how often industries in the crosshairs of a policy debate make large donations – and then stop donating after the policy battle is won – it seems that some donors believe, perhaps rightly, that money can influence policy."

(Grattan Institute)

Grattan said political parties in Australia spent a collective $368 million over the two financial years spanning the July 2016 election. While Australia has strong laws around the disclosure of donations, with parties compelled to give accurate receipts which are published regularly by the Australian Electoral Commission, about 40 percent of the money received in politics is undisclosed and unknown -- "money from sources we know nothing about," Grattan said.

"A lot of this is likely to be donations below the disclosure threshold. Some of these will be from ‘mum and dad’ donors who give small amounts to support a political cause. But some is probably ‘donation splitting’ – where donors make multiple payments below the threshold – which the parties don’t need to disclose," the report said.

"Regular donors build relationships with parties and candidates. And most donations come from organisations and individuals who stand to gain a lot if policy shifted in their favour."

(Grattan Institute)

Australia's threshold for donation disclosure is higher than many other countries.

Grattan found the top five percent of donors contributed more than half the amount received by parties, leading to fears of a small minority of powerful and rich groups or individuals having unfair influence over politics.

"36 people or organisations contributed $25 million over the course of the 2016 campaign."

The report found highly-regulated industries like property, mining and gambling were among the highest donors.

"Such a high share of donations from heavily regulated industries suggests that a prime motive for donating is access and influence, or at least a desire to see the more favourably-inclined party win power," Grattan said.

The report drew links between buying access to politicians and ministers, such as through fundraising events or networking functions, and certain businesses or industries achieving favourable outcomes.

"While it is difficult to draw a direct line between donations, access, and policy influence, it is telling that donors themselves think personal interactions are important, and value opportunities to ‘bend the ear’ of politicians."

Grattan also looked into the 'revolving door' between policy making and the lobbying industry, including politicians who quickly take up lobbying or policy roles after leaving parliament.

"Who’s in the room – and who’s in the news – matters for policy outcomes,” said Grattan Institute’s Institutional Reform Program Director Danielle Wood.

“Powerful groups have triumphed over the public interest in some recent debates, from pokies reform to pharmaceutical prices, to toll roads and superannuation governance.”

(Getty Images)

The report noted eight examples of politicians accepting work with business or mining groups within 18 months of their political career ending.

"Australia’s existing rules on lobbying activity are weak and provide little comfort to anyone concerned about undue influence over policy," Grattan said.

Grattan outlined a long list of recommendations to clean up the issue, including tightening rules around donations and financial disclosures, lowering the threshold for which a donation must be declared and published, publishing ministerial diaries so the public can know who is meeting with who, and establishing a federal integrity or anti-corruption body of the type that exists at state level.

Read the full report on Grattan Institute's website.