In recent years captains of industry and other wealthy individuals have often found details of their political donations splashed over the media and possibly subject to protests by the Greens and community groups.
We will never know, but maybe some of these donors did not like the publicity and became tight with their donations and this is what spurred the Liberals to change the electoral funding law in 2006 so donors could keep their political contributions secret.
It is a fair guess that leading Liberals knew that if donors could remain anonymous when they handed over cheques to the political party of their choice, their generosity might expand under the cloak of secrecy. Because so many donations can now be legally hidden, we will never know to what degree the law change has assisted the major parties in fund raising.
The Howard government raised the threshold for disclosure of contributions to political parties in December 2005 from $1,500 to "over $10,000". Since the new threshold is linked to the Consumer Price Index it rises each July. Currently the threshold is $10,500 and will increase every year until a new federal government committed to transparency lowers it to a more reasonable limit.
Various Liberal Party representatives argued at the time that the higher disclosure threshold would protect the privacy of the individual, which in turn would encourage people to make small donations to the party of their choice.
They saw no transparency problems with the higher threshold, saying that only a small amount of money flowing to the coffers of the parties would no longer be identified. Senator Abetz actually stated that 88 per cent of the dollar amount donated would still be available for public scrutiny. Similarly the federal director of the Liberal Party, Brian Loughnane, stated in a parliamentary inquiry to the 2004 federal election that almost 90 per cent of donations received in 2003-04 would be disclosed if the threshold was raised to $10,000.
In order to explore the effects of this change to our electoral laws, the Democracy4sale Research Project looked at the contributions to the NSW division of the Liberal Party for the financial year 2004-05. This was the last year that donations of $1,500 and above had to be identified.
We, the Greens, chose the NSW division since it is in John Howard’s home state and it typically raises a larger amount of money than any other state Liberal division. Most years the NSW division also outstrips the Liberal’s national office in contributions flowing into its coffers.
We omitted all money received from electoral funding by the state and federal governments, tax refunds, interest on bank accounts, insurance claims and transfers on money from other divisions of the Liberal Party. This way we were able to look solely at money donated by companies, individuals and organisations, as well at money from fundraising events.
There were 714 contributions to the party in 2004-05. Using the current disclosure threshold of $10,500, only 136 would have been identified with 578 hidden from public scrutiny. This means that almost 81 per cent of contributors to the NSW Liberals would have never been known. This included most donations from hotels, clubs, small property companies, law firms, health care companies and even some major lobby groups.
The claims made by Senator Abetz and Brian Loughnane that close to 90 per cent of the dollar amount of contributions would be identified are clearly wrong. Almost $5.5 million was given to the Liberal Party in NSW in 2004-05. Only 58 per cent of this money would have been identified - less than $3.2 million. Therefore, approximately $2.3 million would have escaped scrutiny by the press and the public.
The move to change the disclosure threshold was opposed by Labor, the Greens and the Australian Democrats. As expected, the Liberal Party's coalition partner supported the change. Therefore, we looked at the pattern of donations in 2004-05 for the NSW division of the National Party to see if it benefited them as well.
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