In Summary

  • Analysis for Inside Story, by James Murphy, PhD Politics student, Swinburne University of Technology

The release of the Australian Electoral Commission’s latest political donations data provoked the usual rush to unearth hidden scandals. Clive Palmer’s $5 million donation to his own party – which incidentally tipped his nickel mining company into administration – was the hot favourite, and that story certainly does tell us something about Australian politics at the moment. The super-rich do have grossly disproportionate influence over our governments, whether it’s publicly, like Palmer, or behind the scenes, via quiet (and often invisible) donations. Individual tycoons and magnates can and do tip the balance when they get involved in politics.

But this is just the colour and movement in the AEC’s data, the melodrama that plays out in the foreground. In the background lurks a deeper story, one that tells us a whole lot more about how our political system functions. That’s the story told by the predictable donations, the routine donations, the donations so familiar we hardly notice them any more.

The data released covered the three elections – in Victoria, Queensland and New South Wales – during the 2014–15 financial year. Victoria’s data is juiciest because of that state’s open-slather donations regime; indeed, the state’s ombudsman, Deborah Glass, describes Victoria as among “the least regulated jurisdictions in the Western world in terms of political finance law.” Apart from gaming licensees, anyone can make a donation of any size, and only those donating more than $13,000 must disclose the fact. Victoria is essentially the wild west of campaign finance.

So it’s no surprise that the list of donors in the lead-up to the 2014 Victorian election is a who’s who of firms and industries that are regulated by or have business before the government. Most prominent of all were property developers, perhaps the people with the most to gain from favourable state government decisions.

Take Bill McNee’s VicLand development firm. VicLand made a massive windfall profit when Matthew Guy, then planning minister and now opposition leader, rezoned 250 hectares of warehouses and industrial plant at Fishermans Bend for large-scale redevelopment. VicLand donated over $100,000 to the Liberal Party during its term in government and contributed $52,000 to the party’s unsuccessful 2014 election campaign.

Michael Yates, a developer who donated $20,000 to the Liberal campaign effort, made $30 million on a South Yarra apartment tower deal that went ahead only after Guy approved it over the objections of the local council. Yates made a $25,000 donation during the approval period too. When he was asked if he was aware of Yates’s generosity, Guy said, “I see Michael Yates at many functions, he is a well-known developer.”

Nigel Satterley AM, who donated $20,000, made major profits thanks to decisions to unlock land for development on Melbourne’s urban fringe. Watsons, the Mornington Peninsula developers who happened to benefit from decisions to allow the development of Melbourne’s green wedges, donated $80,000. Parklea – $30,000 – was lucky enough to own swathes of land near Torquay released for development by Matthew Guy in 2014. All were perfectly legal donations, but all are worrying for their potential to create conflicts of interest and compromise decision-makers.

While Labor got its share of developer dollars, most flowed to the Liberals. We can probably put that down to the fact that the Liberals were in power rather than to any ideological affinities. The donations are not coincidences or sincere expressions of political values; they’re made with an eye to the decision-makers who, by the stroke of their pens, can make or break fortunes.

Then again, even that paints too simple a picture of things. It would be a mistake to view these donations as direct transactions, as corruption in the narrow sense of the word. Indeed, it’s important to stress that nothing even slightly illegal is happening here. These donations are more about networking, about sending signals. A $20,000 donation is about proving your congeniality, your willingness to cooperate, to the party in power. It keeps you in the Rolodex, gets your calls returned. It’s part of a bigger system of give and take, of patronage and courtship – one step in the complicated dance of governments and vested interests.

And – crucially – it takes two to tango. Governments are just as interested in big developments going ahead as the developers are. It’s a chance to don the high-vis jacket, to announce new jobs, to demonstrate progress, to get cranes on the skyline. This is the yardstick by which governments are now measured. So we are not dealing with one-way, one-off transactions. This is a tight-knit, long-term relationship. In a sense, political parties govern in coalition with developers, or with other business interests. Generating the capacity to govern – to have some influence over the economy and the physical shape of our communities – requires these coalitions.

All this is to say that these very routine donations, from developers and from other interests, should be looked at more as the sharing of resources within a governing coalition, rather than as specific cases of corruption. All the donations mentioned here fall well within the guidelines and are perfectly legal – indeed, the fact that this behaviour is within the bounds of the existing regulatory framework is what should concern us most. It may not be corruption in the brown-paper-bag sense of the word, but it is a “corruption” of what we might expect from democratic government, government for the people and for the public interest rather than in the narrow interests of developers or political partisans.

Changes are obviously needed. A NSW-style scheme that bans developer donations, puts tight limits on how much can be donated, and lowers the disclosure limit to $1000 would be a solid start. Queensland and Western Australia have made some progress in this direction. Victoria, South Australia, Tasmania and, of course, the Commonwealth are the laggards – and others, like the Australian Capital Territory, are even going backwards. A serious reform push, in multiple states, would be necessary for any changes to be workable and lasting.

But reformers beware. When we target the developer–politics nexus, we target a seriously tangled relationship. It can be hard to tell where private interests end and government begins. If the NSW Independent Commission Against Corruption has taught us anything, it’s that untangling the pair can get very messy indeed.

Written by James Murphy, PhD Politics student, Swinburne University of Technology. This article was originally published for Inside Story.