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Calls are growing louder for reforms to the political donations system, as billionaires such as Anthony Pratt and Clive Palmer pour money into their parties of choice. By Max Opray.

Push to reform political donations

Anthony Pratt famously wagered $100,000 on Donald Trump to win the 2016 United States presidential election. When it comes to Australian politics, though, the billionaire “cardboard king” prefers to hedge his bets.

In the lead-up to the 2019 election, Pratt donated $1.6 million to the Labor Party, led at the time by his late father’s close acquaintance Bill Shorten, and $1.42 million to the Liberal Party.

New Australian Electoral Commission (AEC) financial disclosures made public this week reveal that in the financial year following that election, Pratt went all-in on the winning party.

Pratt Holdings, the umbrella organisation for Pratt’s various enterprises, including Visy Industries, donated $1.3 million to the Liberals and $250,000 to the Nationals. Labor, whose 2019 election night party the packaging entrepreneur attended, got nothing.

Visy Industries did not respond to The Saturday Paper’s request for comment on the donation.

Pratt’s largesse is but one example of huge gifts to the major parties by organisations under a system that puts no limit at all on the size of donations, and only releases details of political contributions on an annual basis. Yet it serves as an instructive, entirely legal case study of the system.

Greens senator Larissa Waters points to $10 million in bushfire relief funding awarded to Pratt last year to upgrade a paper mill that wasn’t damaged by fires, although surrounding timber plantations were affected.

Waters says another boon for Visy is the waste export ban, which was brought in by the Morrison government in late 2020 as part of a plan to increase Australia’s onshore recycling capability.

“The recycling export ban may have created local jobs, but it’s also increasing Visy’s stranglehold on the market,” Waters told The Saturday Paper

“Given that it was a selective export ban – which excluded, for example, waste steel and aluminium – many may view the government’s legislation as a thinly veiled attempt to specifically advantage their big donors.”

On the horizon are opportunities for Visy to secure funds from the Morrison government’s $190 million Recycling Modernisation Fund and the $100 million Australian Recycling Investment Fund.

Then there is the generous expansion of instant tax deductions in late 2020 to multinationals with more than $5 billion in turnover globally, provided they don’t make that much locally, for which Visy Industries qualifies.

In 2018-19, Pratt Holdings legally paid less than $10 million in Australian tax from revenue of more than $2.75 billion.

According to The Australian Financial Review, Pratt’s net worth now stands at $19.75 billion.

The Saturday Paper is not suggesting any impropriety in his company’s donations.

 

There are growing calls to reform Australia’s campaign finance laws, including from the Centre for Public Integrity (CPI), which last week released a report that found donations above $1 million made up 30 per cent of political contributions from 1999 to 2019 in Australia.

The Sydney-based think tank found that a quarter of all donations were made by just five donors: Clive Palmer’s Mineralogy; the Liberal Party-aligned Cormack Foundation; Labor Holdings and John Curtin House, both Labor holding companies; and the Shop, Distributive and Allied Employees Association.

The CPI has called for a raft of reforms to the reporting system, including capping annual donations from a single person or entity at $2000 per candidate and $5000 per party, along with further transparency measures to tackle hidden donations.

Geoffrey Watson, SC, a CPI director, offered his argument for timely donations disclosure over the phone from the passenger seat of an Uber.

“When I get out of this Uber, within about a minute I’m going to get a receipt,” Watson says. “If Uber can manage it, why can’t the government? If not instantaneous declarations, at least within the week they were made…

“I just don’t think it’s right that wealthy Australians can make such large donations,” Watson says. “They shouldn’t have a louder voice in politics than I do just because they have more wealth.”

But the major block to implementing campaign finance reform in Australia is the firm opposition from the two major parties, which also benefit most from the current system.

Rather than strengthening donation rules, the Coalition and Labor joined forces last year to water down regulations, ensuring that state-based donation laws do not apply to donations to federal political parties.

But the status quo is beginning to appear less favourable to one of the major parties, at least. The AEC data indicates the Coalition received a total of $69 million in donations last financial year, while Labor took in $55 million.

And the one entrepreneur whose generosity exceeded Pratt’s in 2019-20 is central to the opposition’s concerns: Clive Palmer.

Palmer’s Mineralogy donated $5.9 million to his own United Australia Party, and a further $75,000 to the National Party. Those numbers are dwarfed by the $83 million he outlaid in the 2018-19 financial year in the lead-up to a federal election, which was dominated by Palmer’s anti-Labor attack ads.

This week, the mining magnate’s spending spree prompted Senator Don Farrell, Labor’s spokesperson for election law, to restate a call he made last year for the implementation of a cap on political donations.

Farrell also wants the level at which donations must be disclosed to be lowered from $14,000 to $1000.

“What I think is pretty essential, given how much money Clive Palmer is putting into the electoral process, are caps on donations,” Farrell told ABC Radio on Monday. “You cannot have a situation where Clive Palmer is funding both his own political party and the Coalition; it’s just unacceptable.”

Waters welcomes Farrell’s interest in imposing a cap on donations. “The Greens are glad that, after years of opposing our moves to cap donations, Labor has finally decided to change their tune,” she says. “The senate will debate the Greens bill to cap all donations at $1000 a year on February 15, and the Greens will seek to bring it to a vote.”

The Greens bill would also ban donations from companies bidding for government tenders, six months either side of a bid.

A spokesperson for Liberal MP Ben Morton, assistant minister for electoral matters, told The Saturday Paper the Coalition has worked to improve the integrity of the electoral system.

“These reforms include banning foreign political donations, ensuring that political campaigners are subject to similar reporting and disclosure as political parties, and funding a modernisation of the AEC’s transparency register, to make it easier to access information,” the spokesperson said.

Morton is currently considering recommendations by the joint standing committee on electoral matters.

The Human Rights Law Centre criticised the committee’s report on the 2019 election when it was released in December last year, claiming it “made no recommendations to reduce the distorting influence of massive political donations and unlimited election spending, and instead put forward a series of proposals which would suppress voter rights and community participation”, such as requiring voters to show identification at the polls on election day.

 

According to Watson, the need for reform is increasingly urgent. “It’s a cliché but we’re at a crossroads,” he says. “If we don’t fix this now, we might go down the path the Americans have gone. The last US election they spent $14 billion and [most] of that came from the wealthiest 1 per cent. Do we want that?”

Perhaps some Australians do. Pratt lauded the benefit provided to his growing network of recycling plants in the US by the business-friendly reforms of the former Trump administration, praising corporate tax cuts and quick writeoffs for capital expenditure that were emulated in part by the Morrison government in Australia.

Pratt’s trans-Pacific political connections were on full display in September 2019, when Prime Minister Scott Morrison paid a visit to the opening of Pratt’s $US500 million Ohio box-making factory for a photo opportunity with Trump, skipping a global United Nations climate conference in New York to be there.

“Mr President,” Pratt said to Trump about his new factory, “if it weren’t for your presidency, this would not be here today.”

This article was first published in the print edition of The Saturday Paper on Feb 6, 2021 as "State of donations".

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Max Opray is Schwartz Media’s morning editor and a freelance writer.