Communist Party of Australia

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Issue #1584      March 6, 2013

What does it cost to buy a gov’t?

Recent patterns of donations to political parties reveal a system of rewards for compliant parties and punishment for those who fail to deliver. And the major parties appear more responsive to the corporate dollar than the wishes and needs of voters. The use of political donations reads more like corruption than democracy.

Long gone are the days when the Labor Party relied on cake stalls and trade union donations and the Liberal Party was the main beneficiary of corporate sector largesse. With the right wing in tight control and a leadership determined to prove its conservative economic credentials, the corporate sector has increasingly recognised the benefits of lining Labor’s coffers.

It is not unusual now for corporations to give large amounts to Liberal and Labor, shoring up their interests with whoever gets into office. Although some are more selective, boosting the coffers of an incumbent or about to be elected party.

In 2010-11, an election year, federal Labor disclosed $10.8 million in donations and the Liberals who looked like winning, $9.3 million. These included individual, trade union as well as corporate donations over a threshold of $11,500. Spending during the year was far higher – Labor $36 million and the Liberals $35 million. State branches of parties made significant contributions, as did individuals, fund raising events, etc.

Federal donations dropped off in 2011-12, a non-election year, to $7.5 million reported to the Australian Electoral Commission (AEC) by Labor and $4.7 million by the Coalition. Major donors came from resources and energy, property development, gambling, pharmaceutical and medical industries and, in the case of Labor, from trade unions. The corporate donations in some sectors leant heavily in favour of Labor, reflecting the fact it was in government.

The recent multi-million dollar media campaigns by the mining sector and gambling industries were very public and no doubt influenced many people. But behind the scenes they exerted another form of pressure – the threat of and actual withdrawal of financial support.

Mining dollars

Donations by the mining sector are quite revealing. The big boys like BHP Billiton and Rio Tinto see no need to donate. They contributed heavily to the $22.2 million campaign against the Rudd government’s proposed resources super profits tax (RSPT). They then got what they wanted by changing a Prime Minister and Opposition leader and then sitting around the table to draft Gillard’s mineral resources rent tax, which has so far cost them nothing.

But the next layer of mining corporations feels the need to donate. Their donations to the Liberal and National Parties rocketed in 2009-10 to a record $2.4 million following the Rudd government’s announcement of RSPT. At the same time Labor was punished with the bottom falling out of donations from the mining sector.

No wonder Abbott hammers the point he will abolish the minerals resource rent tax and carbon tax.

Billionaire Clive Palmer alone, donated over $1 million that year through his companies to the conservative parties. The Nationals relied on his largesse for 20 percent of their funding. Other resource company donations to the Coalition parties included New Hope $100,000, Straits Resources $100,000, Straits Resources $500,000, Western Areas $400,000, Savannah Nickel $125,000 and Lanfranchi Nickel $125,000.

In Western Australia, mining company donations to the state branch went from around half a million in 2008-09 to almost $2 million in 2009-10. Labor went without at the state level, where it was not in government.


In 2010-11 when the big battle was on over gambling reforms, Clubs NSW and the Australian Hotels Association donated over $1 million to the major parties with close to 90 percent going to the pro-pokies Coalition. Labor also receives a considerable amount of its funding from its interests in poker machines, including income from Canberra Labor Club of $660,000 in 2009-10 and $300,000 in 2010-11.

The Australian Hotels Association gave federal Labor a rather derogatory $5,000 when it was attempting to honour its agreement with Independent Andrew Wilkie for gamblers to pre-commit how much they would spend. The Liberals received $350,000 for their stand against pokie reform.

As Andrew Wilkie pointed out, it was little wonder that the government broke its promise. “No one hands over that sort of money without expecting something in return.”

Ethanol stench

Perhaps one of the biggest stenches comes from biofuels which are burning on the roads of NSW. The private company Manildra, a flour miller and ethanol producer, has achieved a capitalist’s wildest dreams – almost mandatory use of its product by consumers, a virtual monopoly, no price restrictions and a government subsidy.

In 2002, the Howard government introduced a 38.143 cents per litre excise on ethanol fuel and gave local producers a short-term production grant of the same amount for biofuels produced for transport use in Australia. This was to keep out overseas competitors. Labor has extended that subsidy until June 30, 2021!

This assistance has already cost the public purse hundreds of millions of dollars. The ethanol is produced from wheat or wheat by-products.

The NSW Labor government legislated for a mandatory six percent of total volume of petrol sold in that state to be the biofuel ethanol. The usage was being phased in.

In 2011, the O’Farrell Liberal attempted to enforce 10 percent ethanol on all unleaded petrol users but was forced to back off after massive opposition from angry motorists. Not only is the fuel less efficient, it is incompatible with hundreds of thousands of vehicles.

Claims about its environmental superiority to petrol do not stand up. There are also serious health concerns as the highly toxic pollutant ozone is emitted when low concentration ethanol in petrol is burnt. (See Global Mail, “Priming Australia’s Ethanol Pump”, 13-02-2012)

Manildra has a virtual ethanol monopoly in NSW. The company donated more than $600,000 to the Liberal and Labor Parties at the federal level in 2010-11 and around $280,000 in 2011-12.

Over the years since Howard introduced the subsidy, Manildra has lined the coffers of the major parties by more than $3 million, mostly in NSW.

Reform required

The Greens have been consistently overlooked by the major political donors – gambling, resources, pharmaceutical and medical and banking. Of course this should not come as a surprise with the principled stand they have taken. (For more details on corporate donations visit democracy4sale.org) Needless to say, the Communist Party of Australia does not receive a cent from the corporate sector. It also misses out on the millions of dollars from the public purse which is based on the number of votes received.

The Greens have pointed to the undemocratic nature of the present system and are calling for major reform. Their demands include:

  • Bans on corporate and union donations
  • Strict limits on private donations
  • Much greater transparency and timely disclosure.

These are all worthwhile reforms, some of which are being introduced by state governments. But for the electoral system to have some semblance of being democratic, all candidates should be standing on an equal footing.

It is not just a question of monetary donations, but the many other means of support for parties or individual politicians such as the corporate media. Murdoch wields huge influence through his publications, attacking and pressuring governments, influencing public opinion, calling on people to vote one way or another.

There are all the other means of buying politicians such as lucrative directorships when they leave parliament.

Tackling the huge inequities between the resources available to parties that serve corporate interests and smaller parties such as the Greens and CPA will not be possible without more substantial reform of the media and electoral rules.   

Next article – Penalise Sensis for betraying Australian workers

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