Updated July 30, 2018 13:17:47
Photo: Every donation over $1,000 will have to be disclosed under the new laws. (AAP: Tracey Nearmy)
The Victorian Parliament has just passed new rules on political donations, which have been dubbed the strictest in the country by the State Government.
The overhaul made it through the Upper House on Tuesday night before receiving the final tick of approval from the Lower House.
Here’s why the changes matter.
What exactly has changed?
Donations in Victoria will be restricted and capped under the new reforms there will be no more foreign donations and domestic ones will be limited to a maximum of $4,000 every four years.
Every donation over $1,000 will have to be disclosed to the public.
Under the current rules, only donations over $13,500 are disclosed on the Australian Electoral Commission (AEC) website, and anything less can be completely anonymous.
The only existing restrictions on political donations are that gambling licence holders and casinos cannot donate more than $50,000 a year.
Donations are only disclosed in annual returns after an election. But the new rules will require political parties to tell the electoral commission what they’ve taken within a month of receiving it.
The Government said the changes are about increasing transparency and preventing influence on political decision-making.
But the Opposition is against the changes because they will increase the cost to the taxpayer.
Photo: One of the biggest donors to the Matthew Guy-led Liberals is the Cormack Foundation. (AAP: Julian Smith) How much money goes into politics now?
Quite a lot. An analysis of political donations disclosures over the past four years shows the Victorian branch of the ALP took in more than $11 million in donations and other receipts.
That’s according to annual disclosures made to the AEC from the 2013-14 financial year to 2016-17.
The Victorian division of the Liberal Party received nearly $30 million.
Those figures exclude what both parties received from the electoral commission and payments from the tax office.
But it’s still difficult to know exactly how much of that is donations, because the party gets to decide what is a donation and what is an ‘other receipt’.
The term ‘other receipts’ is broad and includes payments such as income and dividends.
But it could also include payments which blur the line on donations, like the costs charged to attend fundraising dinners.
And since donations under the threshold do not have to be disclosed, the actual figures would be likely be even higher.
Donations, other receipts made to Labor: 2013 – 2017LaborAmountFederal Secretariat$297,510Donations$4,853,486Other receipts$5,890,903Total$11,041,899Source: Australian Electoral Commission Donations, other receipts made to Liberals: 2013-2017LiberalsAmountFederal Secretariat$5,119,444Donations$17,152,118Other$6,974,114Total$29,245,676Source: Australian Electoral CommissionWho are the big donors?
The biggest donor to the Liberals is the Cormack Foundation, which has donated more than $10 million to the party since the 2013-14 financial year.
The Cormack Foundation was set up by senior Liberals in the late 1980s after the sale of conservative radio station 3XY.
The party’s relationship with the foundation has deteriorated recently to the point of court action, after the foundation donated money to other conservative political parties.
Vapold is another associated entity which is operated for the benefit of the Liberal Party, which paid about $3 million to the party.
The new donations laws would shake all of this up, since parties can only nominate one associated entity and any donation to them would be treated like one to the party.
External Link:The biggest donors to the Liberals
Labor has its own associated entities. Labor Services and Holdings Trust paid more than $2.1 million to the Victorian branch, while Progressive Business contributed about $1.4 million to party coffers.
External Link:The biggest donors to Labor
But the party collects big money from unions, and not all of it is counted as donations.
In a four-year period unions donated close to $1.4 million to the Victorian Labor Party, but they paid another $4.5 million in other receipts.
While they are not declared as such, many of these payments are union affiliation fees, which are not affected by the proposed donations overhaul.
However, the Government said that money cannot be used for campaigning.
External Link:Union payments to Labor But if donations are capped, who pays for elections?
That would be you the taxpayer.
The cost of the changes is estimated at about $45 million for every political term.
Victorians already pay a percentage of elections, calculated based on the number of votes received by each candidate.
In 2014, that was about $1.65 for every first preference vote received by a party.
The new legislation would award parties $6 for every Lower House vote and $3 for every Upper House vote.
Calculating those rates reveals a huge difference in funding from the Victorian Electoral Commission.
Calculating party funding under new system Party2014 payout from VECFunding calculated at new ratesLabor$3,900,000$11,100,000Liberals$3,700,000$9,500,000Nationals$589,000$2,700,000Greens$1,200,000$3,400,000Source: Australian Electoral CommissionBut that’s not all
The Government also said it would pay $40,000 to each MP to deal with the administrative costs of adhering to the new rules.
But when the Opposition withdrew its support, the Government needed the backing of minor parties for a bill which many said would disadvantage them.
In a last-minute sweetener, the Government put forward changes that gives $200,000 to independent MPs or the first MP in a party.
The second elected MP gets $70,000 and the third to 45th MPs each receive $35,000.
That money can be spent on office space, staff and equipment but not political campaigning.
How much will each party get with administrative costs?PartyNumber of membersAmount of moneyLabor59$1,775,000Liberals44$1,740,000The Nationals7$445,000The Greens8$480,000Shooters, Fishers and Farmers Party2$270,000Crossbenchers
*only one member, each receiving $250,000*6$1,200,000Total $5,910,000
The costs to the taxpayer are running up, but crossbench MP Fiona Patten only agreed to support the bill if the Government looked at introducing a cap on election spending.
But with the November election looming, many of the changes will not be in place for this campaign.
Topics:elections,government-and-politics,states-and-territories,state-parliament,parliament,liberals,alp,political-parties,melbourne-3000,vic
First posted July 28, 2018 08:24:56
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