Five things political donations tell us about how money influences Australian politics

This week, the Australian Electoral Commission released details of donations collected by politicians who contested the 2019 federal election.

the publication of data included the headline $1.1 million donated to independent Zali Steggall.

But these data concern only a small number of candidates, mainly independents.

The numbers will pale in comparison to political party numbers expected in the second round of donation disclosures due out in February, particularly Clive Palmer’s alleged $60 million contribution.

Nonetheless, the money paid to independents in the 2019 election tells us five things about the role of money in Australian politics and the ability of independents to be a force for change.

A successful independent campaign is expensive

Breaking into Australia’s political duopoly, the Labor Party and the Coalition, is not easy.

Brand recognition is a major hurdle for candidates outside of major parties.

The new data shows independent candidates in the 2019 election raised more than twice as many donations as independents in the previous two elections, and three times as many per candidate as in 2016.

The two independents who won a seat for the first time, Zali Steggall and Helen Haines, both raised substantial sums, with Ms Steggall’s total donations being the highest for an independent in history.

This suggests that the ability to attract donations has become increasingly important to the electoral success of independents.

The self-employed are less able to tap into corporate and union money

Independents must look beyond the deep pockets of Australian businesses and unions to fund their campaigns.

Businesses and unions almost exclusively support the big parties; they gave around 70% of reported donations to the Labour, Liberal and National parties in the 2016 election.

Unions are Labour’s main regular donors, and many companies contribute regularly to both sides, including the Australian Hotels Association, ANZ, Westfield and Village Roadshow.

The “value proposition” of independent candidates is much less clear.

It is therefore perhaps not so surprising that individuals, including family members, figure more prominently than companies or unions as donors to the self-employed.

Top four independent campaigns (ranked by total donations)

It helps to be independent in an affluent (and upset) electorate

With big union and corporate money effectively on the table, if you want to do some serious fundraising as an independent, it pays to be among the well-heeled.

Warringah, Kooyong and Wentworth, three of the nation’s wealthiest electorates, were also three of only four electorates where independent candidates raised more than $200,000 in donations.

The fourth was Indi, where Ms Haines raised more than $420,000 despite being from a constituency with incomes below the national average.

This is a rare example of a people power campaign, with over 1,000 donors contributing an average of just $420.

Big fundraising campaigns require more than wealthy voters.

Warringah was frustrated with its local member (Tony Abbott), Wentworth was unhappy that its former local member (Malcolm Turnbull) had been ousted as Prime Minister, and Indi resented being seen as a previously safe Tory seat.

There’s money to promise climate action

Many independents showed up on a stronger climate action platform.

Climate200, a fundraising vehicle set up by renewable energy advocate Simon Holmes a Court, raised nearly $500,000 ahead of the election from philanthropists including Mike Cannon-Brookes.

Climate200 was a big supporter of independents who advocated for climate action, including Oliver Yates (Kooyong, $145,000) and Kerryn Phelps (Wentworth, $47,500).

Holmes a Court wants to double down on its fundraising efforts for the upcoming election to balance the vested interests opposed to climate action that remain among the biggest donors to political parties, particularly the Coalition.

In the two years following the 2016 election, parties reported more than $3.8 million in donations from mining companies, more than 20% of their reported corporate donations. This was on top of more than $8 million in direct campaigning by the Minerals Council of Australia around the 2016 election, including the ‘Coal is an amazing thing’ publicity blitz.

Freelancers are held to higher standards

Perhaps the most surprising thing to emerge from the latest donations data is that independents are held to higher standards of transparency than political parties.

Independent donation disclosures are three months ahead of political party disclosures, provide more complete information, and are provided in a more usable format than political party disclosures.

Like political parties, independents are required to identify individual donations above the $13,800 disclosure threshold, but unlike political parties, they must also report their total donations from all sources (above and below the threshold). ).

They are also required to consolidate multiple donations from a single source, preventing the practice of “donation splitting” when donors make multiple payments below the threshold, which the parties do not need to disclose.

We can see that 30-40% of donations to the Steggall, Haines, and Phelps campaigns came from large donors (those who contributed more than $13,800), and we can be sure the rest came from small donors.

In contrast, about 60% of the private funds given to major parties in the 2016 elections came from unknown sources, and there is no way of knowing how much of those funds came from small donors and how much was “sharing”. donations”.

The ultimate lesson

Money matters in politics. Two of the three independents elected in the 2019 federal election, Ms. Steggall and Ms. Haines, were the biggest fundraisers by number of donations and value.

Unable to draw heavily on corporate and union funding, independents rely on a combination of well-off supporters, a motivated electorate and agenda-based outside groups.

But all of this is of course just the tip of the iceberg. The big dollars will hit the books in February.

Danielle Wood is Director of the Fiscal Policy and Institutional Reform Program at the Grattan Institute and Kate Griffiths is a Senior Fellow at the Grattan Institute.