Friday, February 01, 2008

Saturday Forum: Labor - whose party is it?

Prepare to adjust your view of Australian politics. Much of what we’ve been told is no longer true, and the eye-opening list of donations released by the Australian Electoral Commission on Friday explains why.

During 2006/07 businesses provided more funds to the Labor Party than did unions, roughly twice as much.

The Labor Party may or may not be run by “union fanatics” as the Coalition’s election ads repeatedly told us, but it is not bankrolled by them.

It does however have considerable financial resources of its own. It’s biggest donors were its own investment corporations - Labor Holdings Pty Ltd, Labor Resources Pty Ltd, and John Curtin House Limited, between them stumping up $9 million.

The Labor Party comes across as something of a business machine, quite at home in the world of capital.

Its seventh-biggest donor nationwide was the ACT’s own Canberra Labor Club, a commercial venture that turned over $31 million last financial year - mainly generated from poker machines, its TAB commissions and rents...

It earned $24,000 from cigarette vending machines.

The Canberra Labor Club appears not to concern itself with raising money from Labor supporters in the conventional sense. Neither in the last financial year when the threshold for reporting donations was $10,300 nor in the previous two years when the threshold was $1,500 did it report receiving any donations to advance the Labor cause.

The Liberal Party has been less enthusiastic about running business enterprises. Its Cormack Foundation, set up to invest the proceeds of the sale of the Melbourne radio station 3XY, is the chief exception. It handed $2.2 million to the Liberal party during 2006/07, much less than the $4.9 million Labor Resources handed over to the ALP.

The Liberal Party receives donations from individual businesses, but not that many more than does Labor.

The ANZ Bank was among its biggest donorsin 2006/07, handing over $150,000. But it gave the ALP $75,000.

Similarly while the ethanol producer Manildra gave the Liberals $173,900 and the Nationals $59,450, it handed Labor $150,000.

Westfield handed Labor and the Liberals each $150,000 - even-handed treatment practiced also by Meriton, Coles, the Walker Corporation, Tabcorp, Grocon, Mirvac, and Leighton Holdings.

At times the evenhandedness must have hurt. Westpac was run at time by David Morgan, husband of the former Labor Minister and member for Canberra Ros Kelly. It made sure that its combined donations to the Liberals and the Nationals roughly matched its donations to Labor.

Evenhandedness would also seem to have hurt for Employers Mutual, on the face of it an organisation with the interests of employers, not labour at heart. But it donated $61,000 to the Labor in addition to its $80,000 for Liberal, perhaps in the knowledge that its workers compensation business could do with support from state labor governments.

Other firms made only a show of even-handedness. Village Roadshow showered Labor with $203,700 while keeping the Liberals and the Nationals happy with much smaller amounts of $30,000 and $20,000.

The common thread linking most of these big donors is their vulnerability to government decisions. Many are retailers or developers subject to planning decisions. Tabcorp is vulnerable to decisions made about gambling.

Playing both sides of the street may be a way of attempting to ensure that they still get listened to should there be a change of government.

But taken together with Labor’s business acumen and its support from trade unions, this evenhanded approach on the part of business has ensured that the Liberal Party - once thought of as the party of capital - had less of it during 2006/07 than did Labor.

Some of the Liberal donors are rusted on. Gerard Corporation is run by the South Australian manufacturer Robert Gerard who was forced to resign from the Reserve Bank board in 2005 when it was revealed he was in dispute with the Tax Office. His corporation still gives to the Liberal party, andonly to the Liberal Party, but last financial year it gave just $50,200, compared with $150,000 in 2004/05 when Robert Gerard was flying high and on the Reserve Bank board.

Adelaide Brighton Cement is another company that is keen on the Liberal Party only, giving it $150,000 in 2006/07. Ramsay Health Care is similarly keen, if bashful, pumping $125,000 into the Liberal party through a conduit called the Free Enterprise Foundation. Inghams, the chicken company gave to only the National Party, handing it $100,000.

The new rules about what has to be reported introduced at the start of 2005 mean that there is now a lot that is not now reported.

Before 2005 only donations worth less than $1,500 escaped the net. Now it’s donations worth less than $10,300.

Back then more than 1,200 donors owned up. In the financial year just finished it was only 218.

Donating just a bit less than the maximum may be common. The 500 Club, which raises money for the Liberal Party, reported giving it $246,000 but reported none of the individual donations made to it.

And some of the really big donors are hardly household names.

Ferrara Holdings Pty Ltd and Mulpha Australia each gave the Labor Party $200,000. Hong Kong Kinson Investment Limited and Marbal Pty Ltd each gave it $100,000.

Ferrara Holdings is run by Western Australian businessman Allan Blood who was hoping to establish a power plant in the Latrobe Valley. It sent its donation to the Victorian branch of the Labor Party.

Mulpha is the Australian subsidiary of a Mayaysian property developer. Hong Kong Kinson Investment Limited and Marbal Pty Ltd are more obscure.

Other donors are politicians.

Evan Thornley founded the technology company LookSmart. He gave the Labor’s Victorian branch $232,700 at about the time was elected to the state’s upper house and became Parliamentary Secretary to the Premier.

Senator Julian McGauran gave the Liberal Party $20,000 at about the time he defected to it from the National Party.

Taken together the electoral returns paint a picture of a Labor Party that courts and gets very big donations from business, often from businesses that it has the power to hurt or help at the state level.

Labor is also good at running businesses - much more lucratively than the Coalition.

In government in every jurisdiction in the country, Labor is not only the traditional party of the workers, it is now - to a greater extent than its opponents - the party of capital.