The Higginson Leaks: Who’s Really Funding Our Political Parties?

New leaked documents from the office of Phillip Higginson, the Federal Treasurer, seem to indicate that the Liberal Party of Australia may have been receiving donations of a “million pounds Sterling” and up to “several tens of millions of US dollars” from “within the USA”, with the Treasurer stating that he “can now quite confidently ask individuals and their advisors for a donation”.

A few questions immediately spring to mind. If there are donations from overseas, are they being disclosed transparently? If so, is it healthy for our democracy to be influenced by foreign money? Does this phenomena cover both sides of the political spectrum?

It seems fairly obvious from Higginson’s letters that this information was not intended to come to the awareness of the public. In closing the first of his letters, sent on February 22nd of this year, he asks his colleagues to keep the contents of the letters within the party.

“I do hope the recipients will respect my privacy and treat [this] letter with the utmost confidentiality, and debate it only internally. It will serve little purpose to hang out our dirty linen.

What exactly is the “dirty linen” being referred to? From the Treasurer’s comments about asking for party donations from foreign interests, it seems likely that the statement is indicative of this international involvement in the funding of the Liberal Party. Whether he is referring to this case only as “dirty linen”, or whether that comment is indicative of a broader corruption within the party’s funding remains to be seen.

We know that donations to the Liberal Party were more than four times the amount given to the Labor Party in 2012-13, and with more interested parties one can surmise that the potential for ideological interference in government from donors would likely be concurrently higher.

This seems to be reflected in the sources of Liberal Party funding from our own backyard. Donors to the party in the period of 2011-12 include British American Tobacco, with a donation of $12,000, Roslyn Packer, widow of Kerry Packer, whose company owned a controlling interest in Channel Nine, who donated a huge sum of $580,000, shareholders in The Age, DSAH Holdings, who donated $55,000, and Mineralogy Pty Ltd, a mining company owned by the then Liberal Party supporter Clive Palmer, who donated a total of $203,700.

These, along with a long list of additional donors, seem to indicate a strong vested interest from conservative media outlets and big business. It is then little wonder that the governments policies reflect a sympathy for right-wing conservative values and the interests of oligarchs.

In May, 2006, the Howard Government increased the disclosure threshold for political donations from $1,500 to $10,000. Upon announcing the laws, the administration at the time stated that they would result in a “fairer” and “more competitive” electoral system, however, failed to discuss how the changes achieved these goals.

Critics of the change claimed the new laws would increase the chances of corruption, by making political donations harder to track, and by making conflicts of interest harder to detect.

As evidence for this, Senator Kerry Nettle pointed to a $92,400 donation from defence company Tenix, which used former defence minister Peter Reith as a consultant, and Tenix being awarded a $920 million government contract. Tenix’s funding on both sides of the political spectrum goes back at least as far as 1998, as shown in this inquiry into political funding from the House Committee.

The change allowed corporations to secretly donate up to $90,000 spread across the national and the eight state/territory branches of political parties without public disclosure of that funding.

Since 2006, the threshold has increased two or three hundred dollars per annum (adjusted for inflation) so that by 2014 the threshold was $12,400, and up to $111,600 can be received by political parties from each donor (spread across the national and state/territory branches) without a need for disclosure.

Despite the Australian Electoral Commission annually publishing a list of political donors, it is often difficult to ascertain who made the donation, as it is not uncommon for political parties to use “associated entities” as front organisations to hide the source of the donations.

Front organisations such as the Cormack Foundation and John Curtin House Limited provide individuals and corporations with a means of passing funds to the major parties anonymously. Under the current electoral act, these organisations are not required to disclose where the donations came from. Associated entities have become huge political donors in Australia, in 2003-2004 donating $72.6 million to political parties.

It seems that if foreign money is being paid to local political parties, that the economic and political goals of foreign states may be being unfairly represented in Australian politics. If that is the case, we may see decisions being made based not on what is best for Australians, but rather what is best for Washington or London.

As for local donations, it would appear that donors money has been helping businesses to secure lucrative government contracts at the very least. Corporations are not required to adhere to the same standards of transparency as government under the law, and as such the ability of Australians to hold any employees who may be involved in corrupt activity with the government accountable for their actions doesn’t seem to be clearly defined. Citizens may find it exceedingly difficult under current legislation to trace the ideologies and world views of those financing their chosen party, or for that matter, to know who these individuals are.

So how much of the funding for our major political parties can be traced to international donors? There seems to be no avenue for civilian inquiry into the matter, a situation that should raise red flags in even the most die-hard supporters of both parties.

Democratic governance, in order to function as a truly democratic process, requires an informed citizenry. If our citizenry is not able to freely access information about potential conflicts of interest in their elected parties, to understand in objective terms the amount and source of funding given, then we cannot claim to be a democracy in any real sense of the word.


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