How to make Australian politics cleaner - Grattan Institute

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Political donations can introduce a conflict between the financial interests of political parties, and their assessment of the national interest in policy making.

Australians should be able to see who funds election campaigns and who political parties rely on most for funding support. But federal donations disclosure laws fall far short of this ideal. In theory, large donations need to be disclosed. But in practice, the laws have several major loopholes that allow major donors to hide if they wish and leave the Australian public in the dark.

In this submission to a Senate inquiry, Grattan’s Danielle Wood and Kate Griffiths call on Federal Parliament to improve the transparency of political donations by:

  • Lowering the donations disclosure threshold to $5,000 per year. This would protect the privacy of small donors, and keep administration costs manageable, while ensuring that all donations big enough to matter are on the public record.
  • Preventing ‘donations splitting’, by requiring political parties to aggregate multiple donations from the same donor. This would mean major donors could not hide by splitting a large donation into smaller contributions below the threshold.
  • Making funding disclosures more meaningful by classifying contributions made via fundraising events as donations. These contributions are currently classified as ‘other receipts’, which makes them impossible to distinguish from other income sources such as loans and investment income.
  • Publishing donations information more quickly, ideally within a week during election campaigns. The current lag of 8-to-19 months means the information is stale by the time it is released.

A stronger system of political donations disclosure should be supported by broader reforms – including a cap on expenditure during election campaigns to reduce the influence of money in politics.

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