Tales of Australian Democracy

by Hungry Charley

Australian Labor, the CFMEU and their secret money


2nd January 2020.

Labor, the CFMEU and their secret money.

As Australia burns, corporate sponsored climate denialism it seems, has been working overtime. It is also becoming more and more obvious that the current government is taking is public cues on this topic from the likes of the IPA and the Murdoch Press.

But what about party donations? People are increasingly unwilling to accept that all political donations are benign and do not generate favours as the political parties would have us believe.

In fact, the need for greater political transparency has never seemed more urgent. Attention has rightly been on the influence that the fossil fuel sector has over the Liberal and National Parties (LNP) – and it is considerable. So, I think it’s now time to look at Labor and who is donating to their war-chest.

Why? Simple. Climate change is the most pressing issue we and future generations will face. Labor is the alternative government, they should be subject to the same level of scrutiny as the LNP. As public trust in democracy crumbles, we need to ask, are Labor offering a real alternative or will a future Labor government just be more of the same? These are real questions that deserve analysis. Labor have a couple of years to make some adjustments, so let’s compare the major parties and see how their donor mates stack up.

Firstly, the LNP get slightly more money via large donations, by large I mean over $13,500, because that is the minimum parties are required to disclose to the AEC. By the way, even though the last financial year ended on the 31 June last year, disclosures for that period have not yet been released by the AEC - so we’ll have to be content with the previous financial year records (2017-2018).

Over the last 20 years since records have been kept, the LNP has received $ 542,303,641, while Labor has received $518,174,402 in donations and ‘other receipts’. Ok so similar amounts over 20 years but, what sectors dominate for each party? For the LNP, the sectors of decreasing importance are: associated entities, $121,741,277; intra-political party donations, $89,297,765; finance/insurance, $69,620,607; resource and energy $23,055,402; pharmaceuticals $11,308,890; media companies, $6,752,947; and tobacco, $3,454,294. The LNP has received only $199,117 from unions over the 20 years.

For the Labor Party, the largest donations and receipts are from: unions, $125,998,804; associated entities, $118,809,074; finance and insurance sector, $67,690,231 (mostly as ‘other receipts’); media companies, $18,457,276; resource and energy companies, $9,277,312; pharmaceuticals, $5,615,431; and tobacco, $697,805.

So for the finance (mostly banks) and insurance sector it seems they are having a bet each way as far as donations to the major parties are concerned. And it seems to have paid off. Up until the banking royal commission and other subsequent scandals last year, banks have been well looked after by both camps. Both majors also received similar amounts from ‘associated entities’, which I will discuss a little further on.

As the Guardian’s Transparency Project indicates, the vast majority of money received by both the Labor and Liberal Parties are “undisclosed donations” – money from sources which parties are able to avoid reporting on using disclosure loopholes, such as use of ‘other receipts’, split donations and party front groups registered as ‘associated entities’.

But there the similarities cease. Resource and energy companies, pharmaceuticals and tobacco clearly favour the LNP. The LNP also relies significantly on ‘intra-political party’ donations for its revenue, that is donations mainly from state branches to the federal party. Unions clearly favour Labor, as would be expected.

If we look at the resources and energy sector, while the LNP receive donations from a wide range of coal, gas and iron ore companies, Labor on the other hand receives the bulk of donations from the gas sector, principally players such as Woodside, Santos, Origin and Chevron. How has this investment payed off for the gas sector?

As Simone Marsh explains, very nicely indeed, with Queensland gas reserves signed off to China, prior to any assessment or transparent process, and key Labor figures, Martin Ferguson and Craig Emerson now making pretty good money from the gas sector. Now Labor supports the opening of the Beetaloo Basin in the NT to fracking and will not oppose expansion of the sector in the Bowen and Surat Basins in Queensland. Development of gas fields in Qld has not stopped since the initial approvals 15 years ago. Anyone who still contends that lobbying and donations do not bear favours is talking to blue fairies in the garden.

So, what about the union donations to Labor, such a significant amount of money must be burning holes in members pockets? Well, not really, most of this money actually comes from corporations. In the first place, while union donations are significant, the majority comes from a small number of large unions, primarily the CFMEU, Mining and Energy and the CFMEU Construction and General Divisions. The CFMEU mining branches contributed $4,640,103 to the Labor Party over the last 20 years according to AEC disclosures.

But Labor may have received much more from the CFMEU through the unions’ registered ‘associated entities’ than is publicly acknowledged. The Queensland District associated entity have receipts for more than $23,000,000 and the NSW Northern District entity of this union has received more than $34,000,000 in 2017/18 alone.

Where did this money come from, or more rprecisely, how much is from the mining and gas sector? AEC listed Associated Entities are required to detail receipts, donations and debts on annual returns, but disclosure is not always transparent. For the Qld District in 2017/18, while they state that income exceed $23 m, receipts are provided for only $945,000 of this amount. Disclosed providers include miners Anglo American, Austrack and the Gladstone Port Authority.

What of the rest? The answer is unclear and where this money went is also not clear, as while the annual return states that the district payed over $24m in ‘payments’ details are not provided. Total debts for the year are said to be over $3.6m, while details are provided for only $1.3m. It is interesting to note that while these organisations are registered Labor Party associated entities, the AEC register records that the Labor Party did not received any funds from these entities in 2017/18. Where did this money go?

For the NSW District, of the $34 m received in 2017/18, $28 m is accounted for in receipts, the primary 'service providers' are AGL (both as Macquarie and Bayswater Power Station which AGL acquired in 2014), and various Hunter Valley mining operations including parent companies Rio Tinto, Yancoal and Glencore. Again, while payments amount to some $33.5m, details of payments are not disclosed to the AEC.

A cursory glance at other year’s statements show that of all organisations in Australia, including the LNP, it is these unions, registered as ‘associated entities’ which receive the largest amounts of money from the fossil fuel resources and energy sector. ‘Associated Entities’ are now the primary way in which lobby money is provided to the major parties in Australia. While the LNP has entities such as the Cormack Foundation, the amount of fossil fuel money flowing into union registered associated entities puts this to shame.

Besides Unions, Labor also has a number of other entities which provide funds, particularly the John Curtin House Ltd, which has provided $ 32,279,330 to the Party over the last 20 years and Labor Holdings Pty Ltd which has provided over $55,703,665 to various branches of the Labor Party in the same period.

In the 2017/18 financial year, John Curtin House Ltd received $639,859 in receipts, though provides details for only $408,102. Payments are given at $1,487,017, though no details are provided. According to AEC, nearly all the money received by this associated entity was from the National Labor Party head office.

A similar pattern can be found with the largest associated entity contributor to the Labor Party, Labor Holdings Pty Ltd. While receipts are provided for nearly the whole amount in 2017/18 (amounting to some $4,508,278), no details for the $6m in payments are provided on the AEC entity register. Receipts show that the primary sources of money received are National Labor Party Secretariat and Morgans Financial Limited, an equity and financial management firm.

Not to be confused with Morgan Stanley, whose Australian subsidiary has provided substantial funds, through 'services' (~ $5m in the last four years) to the CFMEU NSW Mining and Energy associated entity.

Given the extent of money flowing into Labor’s associated entities, questions remain to be answered by the AEC as to the destination of the payments made by these entities. What is also clear is that the money flows in a circular fashion between the various Labor branches and associated entities. One can’t help drawing a comparison with the way laundered and dirty money is put through a casino ‘washing machine’ to be legitimised. The sources of most of this monery remains unclear.

But one thing is clear, the lack of transparency in our political donations system is disturbing. One can only imagine what the most recent AEC disclosures, when the last election occurred will reveal, or not reveal.

But what has all this union money achieved? One only has to look at Labor’s support for the gas sector and mining in Qld and NSW (come on down Joel FitzGibbon) and draw your own conclusions. Until the political donations process in this country, particularly through ‘associated entities’, is made publicly accountable or preferrably stopped, we can only guess as to extent our politics is being influenced by vested interests.

CFMEU president, Tony Maher, speaking on climate change issues at the Sydney Institute