Press Clippings

The nation's largest shareholder lobby group is pushing for an end to party political donations by publicly listed companies, arguing that the gifts are a form of bribery that can corrupt the democratic process.

Australian Shareholders Association chairman John Curry said yesterday the organisation planned to contact publicly listed companies and explain the new policy position, which comes amid increasing speculation about the timing of the next federal election.

Mr Curry said corporate donations could taint the democratic process because they created the belief that vested interests were seeking special favours.

"Whether the expectation is real or simply perceived, it is not in the interest of democracy, and companies that make political donations must fully consult with their shareholders," he said.

"It's almost a form of bribery. No company's going to give something unless they expect to get some benefit from it, and so we're against that in principle." Mr Curry said the ASA board decided to take the stance after six months of debate and discussion about the millions of dollars poured into party coffers.

But within the ASA, he said, there was a "strongly expressed" minority view that companies should be allowed to make the donations to counterbalance donations made by trade unions and other organisations with a vested interest in public policy.

A spokesman for the Business Council of Australia, which represents some of the nation's largest companies, said a ban on corporate donations to political parties would give private companies an advantage over public companies.

He said it was ironic that the debate about political donations resulted from the fact that the process was transparent, with details about donations received by parties made public through Parliament.

Details of political donations are provided to the Australian Electoral Commission and its state-based equivalents. Some companies also list details of the donations in their annual reports.

Mr Curry said the ASA believed companies should be allowed to lobby political parties but ultimately it should be the shareholders, rather than the boards, who decided whether a gift should be made. "Some companies already list what they give to political parties and that's to be commended," he said. "We would say that none should be given but we're smart enough to realise that some people won't listen to what we say, in which case they should list out the amounts they're going to give."

Turnbull's extraordinary bill to win Wentworth AS election campaigns go, it had gold-plated fixtures, plush leather and a polished mahogany dashboard.

It was the campaign Liberal Malcolm Turnbull drove to win the safe Liberal seat of Wentworth in eastern Sydney in October.

His victory over the relatively impoverished Independent Peter King cost $609,202.19, according to spending declarations released yesterday.

And it was all his own money.

The multi-millionaire businessman-turned-MP might have set a record for cash saturation of an electorate.

"I've heard of $500,000 on a seat, but nothing like this," a campaign veteran said yesterday.

The spending was roughly twice the maximum a party might usually spend on a close contest in an important marginal electorate and about three times the regular outlay for an endangered safe seat.

It amounts to $19.80-a-primary vote, and about five years' salary for a backbench MP.

The total, released by the Australian Electoral Commission yesterday, has astonished political professionals.

"It's pretty hard to spend that much money. It is really hard," said one envious Labor campaign manager. Peter King, the former Wentworth MP who lost the Liberal's endorsement to Mr Turnbull, spent $138,355.67 -- or $10.45 for each primary vote he received.

Mr King spent about $19,000 on publishing advertisments, compared with Mr Turnbull's $53,680; $11,200 on campaign material requiring authorisation, against $218,395 for Mr Turnbull and $108,170 on direct mailing. Mr Turnbull spent $267,500.

In fact, Mr Turnbull's direct mailing bill was so big, he could have mailed every voter in Wentworth seven times.

The figures show $10,240 went on broadcasting advertisments and about $60,000 on polling and research, neither of which Mr King spent money on.

According to his declaration, Mr Turnbull received no donations directly.

It is likely any money for his campaign went through the Liberal Party.

Mr King was backed with cash by 88 individuals and organisations, providing him with $119,184 to fight Mr Turnbull.

The donor list shows how Darling Point was torn between the two candidates and party loyalties.

Those who donated to Mr King's campaign included former National Party MP for Gwydir, Ralph Hunt, who provided a total of $5500; a Doug Sutherland ($1000), Lady (W) Stephen ($250) and Sir William Tyree ($999).

Julie Lowy gave the largest donation -- two pledges totalling $27,935, the smallest of which was $5000.

The Electoral Commission needs more muscle to enforce disclosure of where political parties get their money from. So far that is wishful thinking.

For years the Victorian branch of the National Party has quietly recorded in its annual report to the Australian Electoral Commission that it has received money from two companies, Pilliwinks Pty Ltd and Doogary Pty Ltd.

The two generous companies share the same three directors former National Party minister in the Fraser government Peter Nixon , former Victorian Country Party leader Peter Ross-Edwards and former National Party MP and federal opposition frontbencher Peter Fisher .

The current company secretary of both is the National Party's Victorian director, Meredith Dickie.

And on company returns both say their principal place of business is c/o the National Party, at its Melbourne address.

But the National Party insists it does not control the companies and that they do not operate "wholly or mainly" to benefit the party. That means they are not classified as "associated entities" under the Electoral Act.

And here's the crunch that means they do not have to tell the Australian Electoral Commission where they get their money from.

The amounts received by the National Party from the companies vary. Its most recent return to the AEC for 2002-03 shows $95,955 flowing into party coffers from Pilliwinks and $661,455 from Doogary, and together those amounts account for about 40 per cent of the state division's income.

Victorian National Party president John Tanner says one of the companies owns a rental property and the other is an "investment situation".

But, he insists, the assets belong to the directors and it is entirely up to them whether the income is directed to the party, although he adds that he is "not aware of anyone else who benefits from it".

"What I can assure you is that they are not set up to channel donations to the party," he said.

He declined to say specifically what assets the companies owned, but Victorian land title records show Pilliwinks owns a building in an industrial area in the outer Melbourne suburb of Clayton and a spokesman for All Crash Parts confirmed his smash repair company leased the site from Pilliwinks.

Not that it's unusual for political parties to set up investment companies, or for those companies to own rental properties or share portfolios.

The Victorian Liberal Party, for example, set up the Cormack Foundation as a trust fund to invest the $14 million it received from the 1986 sale of Melbourne radio station 3XY to the Paul Dainty Corporation. In 2002-03 the Cormack Foundation provided $1.8 million to the Victorian Liberal Party as well as generous donations to various conservative think tanks. The infamous rent from the Australian National Audit Office ($5,351,681 last year) is paid to a company associated with the ALP John Curtin House and Queensland Labor runs another investment company called Labor Holdings.

The crucial difference is that those foundations are now all classified as "associated entities" and must provide detailed returns showing exactly where they derived their income.

The director of the Electoral Commission's funding and disclosure section, Kathy Mitchell , has told a Senate committee the commission is currently "looking into" the status of Pilliwinks, Doogary and several bodies which provide funds and loans to the NSW National Party.

But for at least four years the commission has been pleading with politicians to tighten the definition of "associated entity" one of a raft of recommendations to close loopholes that make Australia 's political funding and disclosure laws look like Swiss cheese.

In fact, the commission says it is time for a complete overhaul of the laws introduced in 1983 to bring the relationship between political parties and their benefactors into the harsh spotlight of public scrutiny to allow the public to look for the connections between those who pay the piper and the tune.

"Loopholes persist that allow financial arrangements to be contrived for the purpose of avoiding disclosure. In the view of the commission, if the disclosure provisions in the Electoral Act are to deliver transparency . . . then a comprehensive review of the legislation . . . is required," it said in a submission to a parliamentary inquiry which never reported and lapsed at the time of the last election.

Nailing down the status of companies like Pilliwinks and Doogary is just one problem with which the commission's five-person funding and disclosure branch is struggling.

It is also recommending amendments as a result of the fracas at the end of the 1990s over the Greenfields Foundation, a charitable foundation which took over the federal Liberal Party's $4.75 million bank debt in 1996 interest free, asking for repayments of only $100,000 a year. Subsequently, the party's then treasurer, Ron Walker , said he had personally covered the debt. The ALP has always maintained the true source of the Greenfields funds remains a mystery. The commission accepted Walker 's word, but says the "Greenfields model" is more evidence of the need to tighten the act.

Then there is the whole shady world of political fundraising.

In this election year the postboxes of businesses around Australia are bulging with invitations to political fundraisers dinners or sporting events were an inflated ticket price ensures contact with a minister or two. On the night of the May budget alone there are so many fundraising dinners and drinks events being held around Parliament House in Canberra that Treasurer Peter Costello will have to move very quickly to put in his promised appearance at most of them.

But is the money the attendees stump up (up to $500 a head, and many businesses send more than one person) a declarable political donation? Not always.

Last year the commission wrote to the parties clarifying that there is a legal requirement for the individual attendees to be identified if they pay more than $1500 for a single event, instead of just declaring the proceeds of an event as a lump sum.

As for the other side of the commission ledger, the returns by the donors themselves which should theoretically crossmatch with the declarations by the political recipients attendees must only declare their spending if it exceeds $1500 and if their primary purpose in attending the event is to benefit a political party. If they go along for the food, or to schmooze a minister, then legally they are in the clear. And if the tickets were bought for the attendees, by a lobbying firm for example, then we may never know who did the eating and the schmoozing, even if returns are lodged.

Again, the commission can see the problem, and for four years has been asking for legislative change.

In 2000 it recommended that political parties be required to disclose all such fundraising, and that the fundraisers themselves also be required to submit full returns. It also says it cannot police the current law on donor returns because it requires the commission to get inside the mind of the donor and figure out why they went to a particular function.

"For as long as payments made at fundraising events remain a grey area, the opportunity to legally avoid disclosure will remain," it said in a submission in 2000. "The only practical means of preventing fundraising functions from being used to avoid full disclosure is for the Electoral Act to deem all payments at fundraisers to be donations." The commission is still waiting.

In a related development, the new Labor leader, Mark Latham, on Friday vowed to flush out the often secretive world of political influence peddling in another way, promising that Labor will consider forcing lobbyists to publicly reveal all their clients and all the public officeholders they have lobbied.

The commission also wants more teeth for example the ultimate sanction of deregistering a party which lodges an incomplete return for two or more years running. And it wants the law to deal with problems of tracing donations or loans sourced from overseas and donations made by one party to another.

The size of the problem with the funding and disclosure required by the Electoral Act is demonstrated by the fact that in 2002-3 the major political parties declared that they received a total of $87.2 million, but when you add up the declared donations it comes to about $18.5 million. Some of that difference is made up from returns on investments and the like, but certainly not all of it.

But after years of delay there is some hope for reform. Earlier this month the Senate quietly reopened the inquiry into the commission's funding and disclosure provisions.

Hearings start in mid-May and the committee is due to report by June. Probably not in time to make a difference to the public disclosure of the funding-raising frenzy in the lead-up to this year's federal election. But still a chance to make a difference.

Political parties are increasingly getting their cash from fund-raising groups set up partly to protect the identities of private donors. Individuals, businesses and interest groups have long been required to publicly disclose political donations of more than $5000. But as figures released yesterday by the Australian Electoral Commission reveal, some of the biggest contributors remain concealed behind secretive fund-raising "associated entities".

Last financial year, the biggest donation to the Coalition came from the Cormack Foundation, a long-term supporter of the Liberal Party set up with the proceeds of the sales of Melbourne radio station 3XY to promote private enterprise. The little-known private foundation pumped $1.8 million into Liberal Party coffers in 2002-03. Its return lodged with the commission showed the money was paid in by stockbrokers JB Were and was listed as coming from investments. The thousands of donations made to the Coalition in 2002-03 totalled $43.2 million. That was well below the previous financial year, when $71.5 million was funnelled into Liberal and National accounts.

Labor, federal and state, received around $35.5 million during the 12 months to June 30, 2003. The biggest single contribution to the ALP was more than $1.3 million from John Curtin House Ltd - a party fund-raising organisation that controversially leases offices to the National Audit Office at a massive profit. Special Minister of State Eric Abetz said the donation from John Curtin House had come at taxpayers' expense because of the exorbitant rent had been charging the audit office, calling it "an outrageous rort". "John Curtin House Ltd is the Labor-controlled holding company that owns the notorious Centenary House, a property in Canberra which is now charging $873 per square metre . . . through an unbreakable 15-year lease with a government agency," Senator Abetz said. The Federal Government also used the figures to attack Labor for receiving substantial donations from unions. Workplace Relations Minister Kevin Andrews said unions donated $4.9 million to Labor in 2002-03, and since 1995-96 had donated almost $40 million. "The ALP is a wholly owned subsidiary of Australia's big union bosses," Mr Andrews said. The Coalition received some substantial donations from corporate Australia.

The commission's register, which documents more than $100 million in donations, revealed that ethanol giant Manildra dramatically increased its cash support for the Coalition in 2002-03 following the Government's controversial decision to reject ethanol caps for petrol. The company, whose chief executive Dick Honan is an associate of Prime Minister John Howard, gave $216,780 to the Nationals and $141,978 to the Liberals - up $180,000 on what it gave to the Coalition the year before. It was the second biggest donor to the Liberal Party last financial year.

Other big Coalition donors included poultry company Inghams, contributing $257,000, and Westfield's Croissy, which contributed $200,000, compared with $75,000 to Labor. Gerard Industries - controlled by flamboyant South Australian manufacturer Robert Gerard - donated more than $111,000 to the Coalition. According to the register, $100,000 of the contribution was made in January 2003, just months before Mr Gerard was given a position on the powerful Reserve Bank board.

Greens senator Kerry Nettle said Labor and the Coalition were now receiving around 80 per cent of their funding from private sources, compared to 35 per cent when public funding was introduced in 1984. "The major parties are receiving more and more money from private interests," Senator Nettle said.

Independent MP Peter Andren said there should be a cap on campaign budgets and more transparency about donors. "There is no way in the world the average person can trace through who indeed certain foundations are, where their funding is coming from and for what purposes well over a million dollars can be paid out to various parties by one particular foundation," Mr Andren told the ABC.

POLITICAL FUNDRAISERS

THE CORMACK FOUNDATION - Multimillion-dollar Liberal Party trust fund. - Established with the proceeds of the sale of Melbourne radio station 3XY (about $14 million in 1986), with intentions to support individuals and organisations that promote the private sector. - Funds are distributed to the Liberal Party and "other organisations which have a philosophy aligned to free enterprise" (chairman John Calvert-Jones, in 1997).

JOHN CURTIN HOUSE - Labor's funding arm. - Company leases Canberra prem-ises to the Australian National Audit Office under a 15-year, $35 million deal struck in 1992 by the Keating government. - Owned by the ALP. - Subject to same rules of disclosure as the party.

LABOR

John Curtin House	$1,359,018
Canberra Labor Club	$366,064
Transport Workers Union	$183,927
Health Services Union	$160,934
Village Roadshow	$107,945
Coles Myer	$107,000
Martson	$106,000
Shimao Holdings Company	$100,000
Westpac	$90,710
Croissy	$75,000
Hotels and Hospitality	$70,000
Queensland Nurses Union	$62,000
Property Council	$56,059
ANZ Banking Group	$50,000
Manildra Flour Mills	$50,000

COALITION

Cormack Foundation	$1,800,000
Manildra Flour Mills	$358,758
Inghams Enterprises	$257,000
Croissy	$200,000
Food Investments	$180,000
Meriton Apartments	$165,000
Deloitte Touche Tohmatsu	$162,570
Jefferson Investments	$157,000
Coles Myer	$133,000
Grollo Australia	$126,000
Westpac	$118,495
Gerard Industries	$111,795
ANZ Banking Group	$75,000
JP Morgan Holding	$68,200

The great annual political donations list was released by the Australian Electoral Commission on Tuesday morning and, as usual, there are about 50 interesting stories.

Our intrepid political correspondent Christian Kerr has already driven down to the address of Family First's biggest donor in South Australia, the mysterious Hardel Pty Ltd at 255 Port Rd, Hindmarsh, and discovered the generous benefactor to the tune of $23,000 resides in a modern business centre with several tenants.

Could it be Johnson & Johnson? We doubt it. Could it be a Job Network provider? Unlikely.

How about a client of an accounting firm called Brentnalls SA. Getting warmer. Could this be connected to Family First founder Peter Harris. Certainly looks that way.

You can check out all the figures for yourself here: http://fadar.aec.gov.au/

Below is a list of the biggest donors and we'd love your feedback on who some of these donors are and why they have given for our coverage and analysis over the next few days:

Liberal Party (National)

• The Free Enterprise Foundation - $265,000
• Kingold Group Companies Ltd - $200,000
• Pratt Holdings Pty Ltd - $200,000
• ANZ Bank - $150,000 (part of the lucrative government licensed banking cartel and run by Peter Costello's close friend John McFarlane)
• Meriton Apartments Pty Ltd - $100,000 (Billionaire Harry Trigaboff likes if both ways)
• Ramsay Health Care - $100,000 (The PM's golf buddy Paul Ramsay has made a fortune out of private hospitals and his television licences)
• Westpac Banking Corporation - $85,000
• Coles Myer Ltd - $75,000 (Why wouldn't the hugely profitable retailing duopoly be happy after being allowed to category kill in petrol)
• British American Tobacco - $51,500 (used to be chaired by NSW Liberal Premier Nick Greiner)
• Australian Catseye Group Pty Ltd - $50,000
• Leighton Holding Limited - $50,000 (out biggest building company needs the Feds to beat up on building unions and loves all those government contracts)
• Monetti Pty Ltd - $50,000
• Paspaley Pearl Sales Pty Ltd - $50,000 (needs access to those pearls off Broome for the Japanese from fisheries authorities)
• Resmed - $50,000 (sleep disorder outfit. Were there any government grants behind its development?)
• Turnbull & Partners - $39,120 (Malcolm putting his money where his mouth was as Liberal Party federal Treasurer)
• Elizabeth Joy Murdoch - $25,000 (Rupert's daughter who still lives in the UK after years at BSkyB)

Liberals (NSW)

• 500 Club of NSW Inc - $55,000
• Servcorp Pty Ltd Ð $49,500 (charge like wounded bulls to use their office space)
• IQMS Pty Ltd - $47,800
• Tenix Corporate Pty Ltd - $29,500 (the Defence contractor which signed up Peter Reith straight after he left Parliament)
• Richard Hains - $25,000
• Sereniy Cove Industrial Estate Pty Ltd - $25,000
• Everything Travel - $20,000
• Marhop Pty Ltd - $20,000
• Nashar Pty Ltd - $20,000
• Sovori Pty Ltd - $20,000

Liberals (Victoria)

• Cormack Foundation - $800,000 (the investment fund from the proceeds of the sale of 3XY)
• Estate Peter Forbes MacLaren - $250,000 (good if you can get it)
• The 500 Club (VIC) - $225,000 (the fundraising arm set up by John Ellliott is still delivering in spades)
• Vapold Pty Ltd - $96,000
• Murray 250 Club - $40,000
• Menzies 200 Club - $30,000
• The Becton Corporation - $20,000 (aggressive developers who like to play it both ways have profited enormously from incompetent government dealings over the years)
• Westfield Capital Management - $20,000 (Frank Lowy spreading it around as usual)

Liberals (Queensland)

• Forward Brisbane Leadership - $465,000
• Libco Pty Ltd - $60,000
• Silvada Pty Ltd - $40,000
• JJ Richards and Sons Pty Ltd - $25,000
• Multiplex Constructions (Qld) Pty Ltd - $25,000 (John Roberts is keen for plenty of work from Liberal Lord Mayor Campbell Newman)
• Aldoga Aluminium Smelter Pty Ltd - $15,000
• Brescia Investments Trust - $15,000
• Tabcorp Holdings Ltd - $15,000 (with 3 casinos in Queensland, it pays to keep both sides happy)
• Thiess Contractors Pty Ltd - $15,000 (part of Leighton and lots of big Queensland contracts)
• Windsory Group Pty Ltd - $15,000

Liberals (SA)

• Gerard Industries $100,000 (Rob Gerard has long been the biggest Lib backer in SA and clearly deserves his spot on the RBA board)
• Adtrans Group - $15,000
• ETSA Utilities Pty Ltd - $15,000
• Lanes - $11,050
• Ausbulk Ltd - $10,000
• T & R Pastoral Pty Ltd - $10,000

Liberals (WA)

• Canning Federal Campaign - $49,225
• The Willows Aged Care Facility - $20,000
• Wyllie Group Ltd - $20,000 (the very wealthy former Burswood shareholder Bill Wyllie)
• Resolution Holdings - $17,500
• Canning Vale Earthmoving Pty Ltd - $10,000
• Multiplex Constructions Pty Ltd - $10,000
• Wesfarmers Ltd - $10,000

ALP (National)

• John Curtin House Ltd - $1,200,000 (dodgy Centenary House rent rort delivers again for Labor. What a scandal!)
• Croissy Pty Ltd - $300,000 (Wow, Frank Lowy is really looking after the Bruvvers. Orange Grove impact anyone?)
• ANZ Banking Group - $125,000 (the banking cartel was taking out insurance in case Latham was PM)
• Pratt Holdings Pty Ltd - $100,000 (Dick Pratt always plays it both ways)
• Coles Myer Ltd - $67,500 (retail duopoly is more government-dependent than people realise)
• Inghams Enterprises Pty Ltd - $50,000 (Ingham Chicken brothers have traditionally given heavily to both sides)
• Leighton Holdings Ltd - $50,000
• Westpac Banking Corporation - $50,000
• Allianz Australia Limited - $45,000
• Coca-Cola Amatil Limited - $40,000
• KBR (Kellogg Brown & Root) Pty Ltd - $40,000 (dear oh dear, the Bruvvers have accepted a big whack from Dick Cheney's Halliburton, which had the big contract for the Darwin to Alice railway project)

ALP (NSW)

• Walker Corporation Pty Ltd - $140,000 (colourful deverloper Lang Walker always delivers big)
• North Lakes Pty Ltd - $110,000
• Austerand Pty Ltd (Better Australia Foundation) - $100,000
• Toga Group of Companies - $55,000
• Inghams Enterprises Pty Ltd - $50,000
• Grocon Pty Ltd - $40,000
• The Village Building Co Limited - $38,000
• TAB Limited - $35,000 (Makes all those negotiations with the Government over the Tabcorp takeover look interesting)
• Pratt Holdings Pty Ltd - $33,333
• Austcorp Group Limited - $33,000
• Babcock & Brown Pty Ltd - $33,000
• Jupiter Limited - $33,000 (is that Tabcorp's Queensland casino?)
• Markson Sparks Pty Ltd - $31,175 (Cherie Blair's great promoter)
• KPMG Australia $30,000
• Marfield Holdings Pty Ltd - $30,000
• National Pharmacies - $30,000 (very happy when Carr and Howard agreed to block the Woolies move into pharmacies)

ALP (Victoria)

• Progressive Business Association Inc. - $445,000
• Pratt Holdings Pty Ltd - $33,333
• Connex Melbourne - $30,000 (recipient of huge increased subsidies from the taxpayer to run trains and trams)
• John Holland Group Pty Ltd - $30,000 (Part of Leighton, must regret this given the disaster of Spencer St)
• Tattersall's Holdings Pty Ltd - $30,000 (so much for the Bracks government promise not to take cash from gaming outfits they licence)
• ABN Amro - $25,000 (loves that lucrative County Court financing deal)
• Australand - $25,000 (won the big Commonwealth Games Village contract, which is now being redesigned)
• Grollo Australia Pty Ltd - $25,000 (Bruno and his boys were fighting with the unions and seeking big deals such as the MCG)
• H Mitchell - $25,000 (now wonder the advertising heavy gets appointed to all these arts boards)
• Village Roadshow Treasury Pty Ltd - $25,000

ALP (Queensland)

• Labor Resources Pty Ltd - $4,935,000
• The Brisbane's Future Committee - $153,735
• Collingwood Park Developments - $75,000
• Hatia Property Developments - $70,000
• Multiplex Developments (QLD) Pty Ltd - $70,000 (John Roberts knows the importance of planning approvals and big government projects)
• Yu Feng Pty Ltd - $69,300
• Crosby Road Developments - $56,100
• Alan Brendon Corporation Pty Ltd - $55,000
• Meriton Apartments Pty Ltd - $50,000
• Warner Village Theme Parks - $50,000 (controls the major Gold Coast theme parks which need regulatory and tourism support)
• Australand Holdings - $45,000 (controlled by Singapore Government and a big developers in Queensland)

ALP (WA)

• Central Pacific Minerals - $30,000
• Skywest - $22,000
• Burswood International Resort Casino - $15,000 (then independent, now with the Packers)
• Devereaux Holdings - $10,000
• Graham Laitt - $10,000
• Great Southern Plantations Ltd - $10,000
• Thiess Pty Ltd - $10,000
• Transcontinental Investments Pty Ltd - $10,000
• Wesfarmers Limited - $10,000

ALP (SA)

• ETSA Utilities Pty Ltd - $15,000
• Ausbulk Ltd - $10,000
• Cadillac Printing - $9,180
• KBR (Kellogg Brown & Root) Pty Ltd - $5,000
• Lion Nathan Australia Pty Ltd - $5,000

Latham's gift: $10 million for the bruvvas

Hugo Kelly counts the cash:

Judging by this week's electoral funding disclosures, Labor has shot its golden goose. Posthumously, Mark Latham has been revealed as the best thing to happen to Labor Party's bank balance in years. More than $10 million extra flowed into the ALP's coffers last financial year than in the 2002-3 year - most of which, Latham was at the helm.

While Mark was a money magnet, it's going to be all uphill for Beazley's Labor. No wonder Kim had brekky with Peter Beattie on Monday: the party's largest single donation was to its Queensland branch via its investment arm, Labor Resources - $4.9 million.

Labor's taxpayer-funded cash-cow, John Curtin House, gave $1.2 million to the ALP. While the Cormack Foundation, an investment company set up from the proceeds of Melbourne radio station 3XY, made the biggest donation to the Liberal Party: $800,000 to its Victorian branch.

But it was the big black holes in the financial disclosure returns that underline the need for much stronger federal and state political donations laws.

Transparent democracy demands tighter accountability on who is funding politicians and their parties - who is behind clubs, trusts and foundations, and whether donations are made by foreigners or come with strings attached.

Andrew Murray, the Democrats Electoral Matters spokesman, has been hammering away at this issue. In return, the big parties have joined together to vote down Democrat amendments that sought to prohibit donations with strings attached.

In Democrat-land, however, the signs are not good. Fresh from their large slice of the federal funding pie at the November elections, the Greens stormed ahead of the Democrats in total donations, taking in $3 million, while the Democrats shriveled to $600,000.

Australians are extremely distrustful of political parties. A 2003 survey demonstrated that nearly half of Australians did not have much confidence in the Federal Parliament. More than half the respondents thought that Federal Parliament was run entirely or mostly for the benefit of big interests.

These attitudes should not be dismissed as mere cynicism. Indeed, they are vindicated by how the main parties are funded. Corporate donations swamp individual donations to the conservative parties and corporate and union donations combined fuel the Labor Party machine. Only the Greens do not rely heavily on corporate money.

Fuelling such dependence on corporate donations is a corrosive attitude that treats such donations as unproblematic even when they involve the purchase of political access and influence. For instance, the recent Liberal Party federal conference was proudly sponsored by Goldman Sachs and JB Were. Not to be outdone in the bid for corporate money, the website of the Victorian ALP's business fund-raising body, Progressive Business, openly proclaims that "joining this influential group allows you to participate in the decision-making process".

The normalisation of corporate donations also explains the dramatic financial inequalities between the parties. For example, when the parties' budgets for the financial year 20002-03 are divided by the number of the first preference votes they received in the last federal election, there is a sharp cleavage with the ALP, the Liberal Party and the National Party, on one side, and the Democrats and the Greens, on the other. The ALP and the Liberal Party received more than five times as much funding per vote as the Democrats and Greens. They do so primarily because they have access to power to sell. This divide means that the ALP, the Liberals and the Nationals, armed with much larger war chests, can easily outspend the other parties.

The situation has been made much worse by excessive parliamentary entitlements. Liberal Party heavyweight Michael Kroger was quoted as saying these entitlements are worth more than $1.3 million an MP over three years. This is $1.3 million that is not available to political newcomers or even to parties with significant electoral support but no parliamentary representation. No wonder incumbents monopolise the system: there is very little turnover of parliamentary members, except in cases of retirement or a major party tiring of a factional hack.

In this hierarchy of entrenchment, the greatest rort of all is government advertising: the Federal Government unashamedly spends up to $150 million of taxpayer money in election years on campaigns targeted to buy votes or mollify opposition. It is doing much the same in its partisan battle with the union movement over industrial law.

Corporate largesse and exorbitant parliamentary entitlements thus not only create a serious risk of MPs being beholden to corporate donors, but also an uneven playing field on which the major parties enjoy a tremendous competitive advantage. Far from being open and free, there is now an ossification of the Australian political system favouring the major parties and their financiers.

This unacceptable situation is partly due to a ramshackle regulatory framework. Political spending, the engine that drives parties to seek more funding, is largely unregulated. There are no limits on spending and parties are not even required to reveal how much they have spent on electioneering. Political donations receive slightly more robust treatment through a disclosure scheme. This scheme, however, is riddled with loopholes and does not provide timely disclosure. Worse, there is evidence that the parties treat the scheme with some contempt. The Australian Electoral Commission, for one, has noted that parties are not according sufficient priority to their disclosure obligations.

The Joint Standing Committee on Electoral Matters is now inquiring into the conduct of the 2004 federal election and included in its remit are the rules regulating party funding. This inquiry presents an important opportunity to renovate these primitive rules and insist that parties be funded in a democratic fashion.

Several principles should govern the funding of political parties. First is transparency: voters should know who is financing the parties. Second, parties should not be funded in a manner that involves corruption or undue influence. And, most importantly, funding must not distort electoral politics by giving an unfair advantage to any one party. Absent a level playing field, Australia's political system is democratic in name only.

These principles dictate that the disclosure scheme be considerably beefed up. Parties should have to disclose how much they spend on electioneering. Disclosure should occur more frequently than the present annual cycle. Parties' returns should be accompanied by an auditor's report verifying their accuracy. But besides enhancing the disclosure scheme, appropriate limits should be imposed on political spending and large donations. Finally, major government advertising campaigns on sensitive policy matters should be subject to independent scrutiny and annual limits.

Such changes will reinvigorate Australia's parliamentary democracy and, hopefully, restore the public's trust in our political institutions.

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Dr Graeme Orr is a senior law lecturer at Griffith University and Joo-Cheong Tham is a law lecturer at Melbourne University

Being elected to parliament requires more than just a bit of door-knocking and kissing the odd unsuspecting baby. It takes money, lots of it. But many MPs are finding the going tough and are having to find new ways to make donors cough up.

Liberal Party politicians are finding their job just gets harder and harder. Apart from representing constituents, helping to formulate policy and sitting in parliament, there is now another task that, for very good reason, used to be confined to the backroom apparatchiks.

The federal Liberal Party finances are in such a parlous state that all its parliamentarians now have to be bagmen. Money is what the party needs and those who can't raise it should watch out. In a move that brings politicians dangerously close to donors, federal Liberal MPs have been given fundraising targets for the next election that will require rather more work than running a chook raffle.

The average senator must raise more than $100,000, back-benchers in blue ribbon seats have been asked for $110,000 and senior figures like Health Minister Tony Abbott will need to hand over up to $150,000. The money will be tipped into federal coffers and only then can MPs set about raising cash for their own campaigns.

The NSW Liberals' finance committee has set the targets and failure could mean the end of a political career. Those who don't meet targets will be "named and shamed", according to a NSW Liberal who spoke on condition of anonymity. A politician's failure as a fundraiser would be an issue for discussion at the next preselection, and could even determine a position in the ministry, he said.

The Victorians have rejected the fundraising target system but MPs in safe seats are raising funds for candidates in marginal seats. Heavy hitters like Treasurer Peter Costello obviously raise a lot of money, a political source in Victoria said.

So just what does a donor get in return for thousands of dollars?

"I guarantee people access but not outcomes," says a senior Liberal senator.

This approach to political fundraising is alarming many observers.

"It's democracy for sale," says Monash University governance academic and former Victorian Labor state MP Ken Coghill.

The Liberals' motivation is simple: federal party coffers are under threat in the lead-up to the next election. The main sources of funding the state branches are finding it difficult to raise cash after long periods in opposition.

The NSW Liberals, probably the richest of the state parties, have not won an election since 1995 and the state branch was forced to sell its Sydney headquarters four years ago to dig their way out of a $3.6 million debt incurred in the failed 1999 election campaign.

Federally, the pressure is on to meet the high cost of electronic media advertising elections are won and lost on television advertising, according to one state Liberal leader. A former member of the federal Liberal Party executive estimates it will need at least $30 million to fight the election tipped for later this year.

The party is so desperate to raise cash from companies that the Canberra-based secretariat has banned federal MPs from helping state-based counterparts to raise funds from now until the federal election.

Professional fundraiser Max Markson says there's a push to raise more money than usual. "It's not rocket science to work that out: it's a federal election year and this is the time to get money from the corporates."

Former Labor adviser Rod Cameron believes the sheer scale of the Liberal's new cash targets is a first in Australian politics. "There's no end to the hunger of the man who wants to spend campaign money," he says.

Liberal MPs in NSW say the targets have been upped from $80,000 in the 2001 election to $110,000 this year and parliamentarians in blue ribbon seats know they won't get extra help from head office to get them over the line.

So with the chook raffle out, how is the money to be raised?

The discreet dinner party where wealthy and well-connected guests pay a fortune to meet senior ministers is just one bright idea.

Chris Mackay , boss of investment bank UBS, hosted one of these dinners at his home in Sydney 's Hunters Hill last month. Many believe it was one of the most expensive fundraisers per head ever held in this country.

Ten business leaders paid $10,000 each to dine with Treasurer Costello and Small Business and Tourism Minister Joe Hockey . Those dining at that particular table represented Australia 's corporate elite and included Sydney Airports boss Max Moore-Wilton , pokie king Len Ainsworth and Peter Holmes a Court .

The financial services sector was represented by Michael Ullmer , talked about as a successor to Commonwealth Bank CEO David Murray, Australian Stock Exchange chief executive Dick Humphry, and Colin Bell , the owner of stockbroker Bell Potter.

Melbourne 's business community was represented by Andrew Burnes , Australia 's largest inbound tourism operator, and a long-time associate of Costello. It was just a "casual meal" says one who shared the table, while another says it was just a few blokes talking about the "big issues".

But it has been very difficult to find out what was actually discussed. "You've got to be joking," says one diner when asked. "I don't kiss and tell," says another.

Even before the dinner at the harbourside mansion, UBS tried to kill any publicity about it the bank made frantic calls to The Australian Financial Review begging that the story not be written.

It was, and the cosy gathering went ahead, going a long way towards helping Hockey meet his $150,000 fundraising obligation for the year.

Hockey had already brought in up to $15,000 earlier that evening with a $75-a-head fundraiser at a North Sydney hotel attended by swathes of tourism executives and party faithful. Hockey arrived with Costello, the drawcard, a bare half hour before the finish and the pair spent a hasty few minutes doing the rounds. They then made a bee line for the far more lucrative Hunters Hill do.

Long time political observers are appalled by how close politicians are to the money these days.

A senior figure in a former Liberal government said that when Malcolm Fraser was prime minister, they never knew who the donors were or how much they gave to the party.

"These targets show how far the party has drifted from the ideals of founder Sir Robert Menzies, who established the party in the 1930s with a goal of distancing politicians from business," the figure says.

Monash University 's Coghill says the fundraising targets have appalling implications for Australian democracy.

"We are being driven towards the United States model, which has a focus on fundraising rather than policy. These companies are getting influence that other Australians can never hope to achieve," he says.

The Liberals' targets are staggered depending on how safely a seat is held. Those in safe seats are expected to raise more than those in marginal electorates, such as Jackie Kelly in western Sydney . "We've always had safer seats helping marginal seats," says a South Australian Liberal official.

The Electoral Assistance Committee target for backbenchers in blue-ribbon and fairly safe seats such as Wentworth, in Sydney 's eastern suburbs, is set at $110,000 a year.

This target has been inherited by the new candidate for Wentworth, Malcolm Turnbull, who as a former party federal treasurer knows how difficult it can be to raise a buck.

But if someone of Turnbull's stature finds it hard, how does a lowly MP with no marketing expertise actually manage to snare the dollars?

One senator says, "phone calls are the most effective fundraisers. There's too much overhead with functions".

"Fundraising for the Liberals is declining because the major corporations have American CEOs who don't want to donate," he says.

A state-based party treasurer agrees that raising money, particularly from corporations, is becoming very difficult.

"There's an increasing reliance on approaching individuals rather than approaching companies," he says. "Companies say it's not worth donating because of the scandal. They scream every time their name appears in the paper. They feel they're being criticised.

"There's endless bloody dinners and chook raffles it's all time-consuming," he says.

The situation is even tougher for state politicians who are also under an informal ban on approaching any member of the NSW Liberals main fundraising vehicle, the Millennium Forum, which has raised millions of dollars, for their own campaigns.

Unlike their NSW counterparts, Queensland federal MPs are not subjected to meeting specific fundraising targets but must sign performance agreements or codes of conduct with state headquarters.

"This doesn't mean Queensland MPs are resting on their fundraising laurels," says a spokeswoman for Industry, Tourism and Resources Minister Ian Macfarlane.

Macfarlane is readying for his first fundraiser in Brisbane by the end of March, she says.

And Labor is not averse to setting targets, according to a senior ALP official and former fundraiser, who says MPs in Western Australia and South Australia have been given targets of $10,000.

But most party officials and donors don't want to talk money.

Asked how fundraising for the federal election was coming along, the Liberals' new federal treasurer, John Calvert-Jones, will say only: "I'm out there doing the job. It's nobody else's business as to how we run the party finances; we have internal processes and they are closely adhered to."

NSW Liberal state director Scott Morrison refuses to discuss campaign arrangements.

Moore-Wilton declines to be drawn on the $10,000-a-head dinner, saying he does not comment on private functions. Tony Abbott's spokeswoman also declines to comment. "It's a matter for the NSW Liberal party," she says. And Joe Hockey remains mum about the select gathering.

"Donations don't get you things you're not entitled to," says one corporate donor. "What they do is enable you to get politicians to pressure bureaucrats to progress things along."

FUTURE candidates for Manly Council will be under pressure to refuse donations from developers as a result of the council's recent adoption of councillor Brad Pedersen's political reform charter.

Under the charter, which was approved by six votes to five at the May ordinary council meeting, election candidates will be asked to sign a statutory declaration committing themselves to refusing direct and indirect donations from property developers.

Cr Pedersen said later that although the council could not ban developer donations, any candidate who declined to sign a declaration would come under severe scrutiny "in the court of public opinion".

The council also resolved to establish an independent expert panel to oversee "controversial" development applications.

These would include any application where the applicant, organisation or company has donated $500 or more, or an equivalent "in kind" offer of services, materials or labour, to any councillor or their political party.

It would also include where any councillor or family member has a direct financial interest, and any application considered by three or more councillors to warrant independent processing.

Cr Pedersen, who drafted the charter more than two years ago, made several unsuccessful attempts to persuade the former council to adopt it.

His final try, less than a week before the March election, resulted in the meeting finishing abruptly in the middle of a verbal brawl between factions over the issue of declaring campaign donations prior to the election.

Cr Pedersen said the charter entailed 10 simple reforms that would go a long way towards achieving electoral transparency, financial probity, and tightening loopholes to ensure the full disclosure of campaign donations.

"It's a practical and realistic document that addresses fundamental problems in our political system, which is inadequate, riddled with loopholes and invites corruption," he said.

Cr Pedersen said acceptance of his charter was gaining momentum Sydney Lord Mayor Clover Moore had publicly committed to implementing the charter and had called for state and federal governments to do likewise.

Although he has won the battle for acceptance of the charter by his own council, Cr Pedersen said it was now time to pressure state and federal governments to reform their campaign finance legislation, making it illegal for political parties and their candidates to accept any form of corporate donation.

Developers and the hotel industry have bankrolled the NSW Labor Party in the past year, as Sydney 's property sector boomed and pubs continued to reap poker machine-fuelled profits.

Publicans, registered clubs and gaming companies donated a total of about $1.6 million last financial year to the state ALP a year when the Carr Government was fine-tuning its gaming laws.

The Government has now announced plans to limit poker machine numbers and restrict gaming for three hours a day, but hotels have been the big winners from the 1997 decision to allow them to have poker machines.

They now have nearly a quarter of the state's 100,000 machines.

Annual political donation returns, released by the Australian Electoral Commission yesterday, also underscore the major parties' reliance on the support of the construction industry and property developers, especially in NSW.

The NSW ALP received more than $1.1 million from developers and the NSW Liberals received about $720,000 from the construction industry.

Both major parties insist that political donations have no influence on policy and are made to ease access and support the democratic process.

But the NSW Greens, who have been campaigning for donation reform, said the public will be appalled at the major parties' dependence on certain sectors. "The Greens are very concerned about the influence wielded behind closed doors by corporations dealing in armaments, gambling, alcohol, tobacco, finance and the media," said the MP Lee Rhiannon.

In September 2001, the ALP held a fundraiser with the former United States president Bill Clinton as the guest. About 25 companies, almost all hoteliers, paid $39,250 each to attend.

They included the Australian Hotels Association's president, John Thorpe, the veteran publican Cyril Maloney, and entities associated with the hoteliers George Thomas, John Crowe and the Walker family. The Steyne Hotel, the Hurstville Ritz, the Oaks, Scruffy Murphy's and the Wiley Park Hotel also paid.

Individual hoteliers made a total of about 100 donations to the ALP and virtually none to the Liberals.

The clubs made their donations through their industry organisation, which gave Labor nearly $160,000.

Canterbury Bulldogs gave $12,500 to Labor and the Penrith Panthers $15,400. Clubs in Australia and New Zealand gave $8000 to the NSW Liberals, but the Warringah Club alone donated $24,000 to the party.

Other gaming interests gave $51,000.

After the March state election, pubs and clubs fear Government measures will hurt their poker machine profits such as extending the shutdown of the machines to six hours a day and are understood to be lobbying against changes. Taxes on gambling revenue will also be reviewed and operators fear large increases.

The property sector has long been a major source of donations for the major parties.

Lang Walker's McRoss Developments gave NSW Labor $122,000 and the Liberals $100,000.

Harry Triguboff's Meriton Apartments gave NSW Labor $107,000, according to the company. The NSW Liberals received a more modest $25,000, but Meriton gave a whopping $250,000 to the Liberals' fundraising Free Enterprise Foundation.

The shopping centre magnate Frank Lowy's private company, Croissy, gave each party $300,000. John Roberts's Multiplex gave $99,000 to the ALP and $60,000 to the Liberals.