Donations from foreign entities

Evidence clearly shows that donations to political parties and candidates by foreign individuals and organisations can be used as a means of avoiding disclosure requirements.

Australia's openness to overseas funded political activity is a flaw in our system for a number of reasons. As the WAEC and the AEC is powerless to audit foreign entities, their political donations are far less transparent than Australian-based donations. They also represent a level of foreign influence in domestic politics that is ethically and democratically unacceptable.

In its handbook, Funding of Political Parties and Election Campaigns, the International Institute for Democracy and Electoral Assistance state:

The most obvious danger comes from foreign funding. If a governing party depends heavily on financial resources provided by foreign governments or especially multinational corporations, their influence may undermine national sovereignty and the democratic principle of self determination.

A number of countries ban foreign donations to domestic political parties. Yet Australia is completely lacking in controls for overseas funding for political parties and is yet to learn from the experience of its peers.

For instance, in the United States, it is unlawful for foreign nationals to make donations. However US citizens living abroad can still donate. Canada prohibits foreign donations. In the United Kingdom, only those on the electoral roll or registered corporations can donate. The latter category is complicated though by European Union membership.

This is not a new issue. It was addressed within the scope of the Joint Standing Committee on Electoral Matters' (JSCEM) report into the 2004 federal election, but the committee failed to provide a recommendation or determination to correct this flaw within our electoral and political system. However, in their minority report, the Democrats did recommend that all political donations from foreign sources be banned. This is the principled and unequivocal position of the Democrats. Click here to read Senator Murray's recent briefing on foreign donations.

Previous attempts by the Democrats to move amendments banning foreign political donations have been blocked by both Labor and the Coalition. This was not entirely unexpected because they are the two key beneficiaries of foreign sourced funds. However, the lack of support from Labor was particularly hypocritical since their submission to the JSCEM 2001 inquiry expressed concerns about foreign donations on the basis that they could be a mechanism to hide the true source of funds.

In its defence though, Labor did indicate that whilst they supported the legislation in principle, it was not the right time. It appears that it is often never the right time for the major parties.

The Federal AEC on-line disclosure returns show that between 1998/99 to 2004/05, Australian political parties received $1,967,457 from overseas sources. Of this amount, $1,557,804 went to the Liberal Party, $229,779 to Labor, $170,564 to the Greens, $7,110 to the Citizens Electoral Council and $2,200 to the Democrats.

Document last updated on: 13:36 24th Mar 2006.