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Caitlin covers social media, marketing and technology and is BRW's social media editor. She has worked as a journalist in Sydney, London and San Francisco, writing for titles including The Guardian and The Australian Financial Review.

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The Rich Listers who will be digging deep this election

Published 07 February 2013 01:17, Updated 11 February 2013 14:44

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The Rich Listers who will be digging deep this election

Prime Minister Julia Gillard may have only announced the election date a week ago, but Australia’s political fund-raisers have been targeting Australia's wealthiest entrepreneurs for months.

One BRW Rich List member and businessman, who asked not to be named, says he is offered invitations to intimate fundraising dinners - where a place at VIP table costs $10,000 and guarantees a word in the leader’s ear - once or twice a month.

Those invitations are likely to become a lot more frequent as this campaign drags on.

There are few certainties in this year’s federal election, but you can guarantee that Australia’s richest people and biggest companies will once again make a collective contribution to the tune of millions of dollars to both sides of politics.

BRW Rich 200 members including the Pratt and Kirby families, Frank Lowy, Paul Ramsay, Harry Triguboff, Harold Mitchell and Dick Honan are likely to be among those signing large cheques this year, judging by previous years - whether individually or via their associated companies.

The practice director in government relations at STW Group, Justin Di Lollo, says the strategy for wealthy individuals is to have them being seen as part of the political process.

“It puts them into circulation and has the sense of someone being an active participant and someone willing to put their hand in their pocket in a meaningful way,” Di Lollo says. “I’ve never seen an instance of a particular donation resulting in an outcome.”

Australian political donations don’t reach the extraordinary levels of United States presidential elections, where in the recent contest between Barack Obama and his opponent Mitt Romney the two sides raised more than $US1 billion each.

Australian political donations are more in the ball park of tens or hundreds of thousands, according to compulsory financial disclosures made to the Australian Electoral Commission.

The largest single donation to an Australian political party was in 2010 when Rich 200 member Graeme Wood made a personal contribution to the Greens - $1.47 million in July 2010, supplemented by two further large donations later that year.

Campaigns and Communications Group managing director Bruce Hawker, a former Labor campaign strategist, says the early election announcement could take the pressure off fundraisers, since the Liberals can now plan in great detail without spending on preparations for different timing scenarios. “I don’t think it will make people spend much more because they’ll still focus their advertising spending in the last month of the campaign,” Hawker adds.

Political donations also tend to be less partisan in Australia than in the US - most large donors donate through companies and give to both the Australian Labor Party and the Liberal-National Coalition.

The exception is public figures who are known for their association with one side of politics, such as Clive Palmer. His company Mineralogy donated about $400,000 annually to the Liberals for several years. However, the Liberals probably can’t bank on his support this time around, given his well-publicised falling out with the party. In 2011-2012 Mineralogy donated just $27,500 to federal parties and it went to the Nationals.

The Millner family is another example - their company, pharmacy chain Washington Soul Pattinson generally donates $200,000 a year to the federal Liberals, with no similar largesse for Labor.

However, STW’s Dil Lollo says partisan donations are risky. “It would be a brave businessman who would just pick one side or another because you can be surprised by a change of government and find yourself flat-footed. You don’t want to be what they call in the States, a ‘Wednesday morning Democrat’,” Di Lollo says.

It is unclear whether the Pratt family fell into this trap or if there is another explanation, but it is interesting to note that Pratt Holdings donated $150,000 to the Liberals less than a fortnight before the 2010 election with no matching funds for Labor, then made a $75,000 donation to the Labor Party nearly a month later, after Julia Gillard had formed a minority government. Pratt Holdings did also make a $50,000 donation to both the Labor and Liberal parties in December 2009.

ECG Advisory Solutions co-founder David Gazard, a former adviser to Howard-era treasurer Peter Costello, says the rise of activist shareholders mean that even-handedness is expected of public companies more than ever. “The Labor Party has been successful in getting into the corporate donor base ,” Gazard says. “The reason for that is that the board comes under pressure at the AGM if they don’t.” He adds that some large corporates have ceased donating altogether as a result. (The fact that state-based reforms on disclosure have resulted in a patchwork of regulation around the country is another contributing factor).

Lowy’s Westfield Group gave $150,000 to both federal parties in the 2011-2012 financial year.

Other Rich 200 members donate to both sides but reveal their political colours by donating unevenly. For example, Paul Ramsay’s Ramsay Health Care gave $100,000 to the Liberal Party and $50,000 to Labor in the 12 months before the 2010 election. Peter Bond’s Linc Energy gave $55,000 to the federal Liberal and just $2,200 to federal Labor during the same time period.

On the other hand, Village Roadshow, owned by brothers John and Robert Kirby, donated $230,000 to federal Labor in the year before the 2010 election and $100,000 to the Liberals.

In aggregate, corporate donations tend to favour the Liberals. This is partly balanced by union donations to Labor, but Australian Workers’ Union national secretary Paul Howes says it’s a “self-perpetuating myth” that the numbers are at all even. He points out business and industry groups donated a combined $14.77 million in 2011-2012, while trade unions gave $2.81 million.

The rules on fundraising disclosure vary state by state but at federal level, individuals and companies are required to disclose donations that add up to more than $11,900 over a year.

Yet for donors wanting to stay out of the spotlight, there are a number of ways they can assert their influence outside of the disclosure rules. Legal opinions differ about whether people need to disclose membership of the Millennium Forum, which supports the election of Liberal governments, or tickets to fundraisers.

However, Di Lollo says it tends to be the corporate affairs directors of the associated companies that actually go to these events,. because the captains of industry can meet the prime minister whenever they want.

Additional reporting: Matthew Smith

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