Prime Minister Malcolm Turnbull

Yesterday Bill Shorten took his first jabs at the Coalition over the Parakeelia scandal, although the story was broken by The Sydney Morning Herald on Wednesday last week (perhaps taking the time to check nothing similar was happening in the ALP), calling for an urgent inquiry into the “scam”. But what is Parakeelia exactly? And why is it causing headaches for the Libs?

What is Parakeelia?

Parakeelia Pty Ltd is a company that is wholly owned by the Liberal Party. The company develops and maintains a software system called “Feedback”, which logs all the interactions an electorate office has with a constituent. It’s a powerful way to collate information about issues, demographics and contacts in an electorate, and MPs pay $2500 of their taxpayer-funded allowances per year for access to it.

Parakeelia previously made the news in 2007, when it was revealed then-Fairfax Media Chairman Ron Walker — who became the Liberal Party’s treasurer shortly after Parakeelia was established in 1989 — was still the majority shareholder in the company

Why are people mad?

A few reasons. The primary issue is that Parakeelia has poured about $1 million into the party over the past three years and was the second-biggest single donor to the Liberals in 2014-15. The set-up potentially turns taxpayers into unwitting Liberal Party donors. Shorten described it as “washing machine turning taxpayer dollars into Liberal Party profits”, and the Greens called for an investigation on Monday.

Former Liberal MP Dennis Jensen, who was ditched in the preselection battle for Tangney in April this year, has also criticised the software on privacy grounds, telling 7.30:

“The purpose that’s not so legitimate is basically the parties — and in the case of Feedback it’s the Liberal Party, but the Labor Party’s got a similar program — basically they suck up all of that information: people, what their issues are, what their voting intentions might be. Obviously of concern is you have sensitive information in Feedback, that constituents may very well not want you to have.”

How have the Liberals responded?

When the story initially broke, a Liberal spokesman said the money transferred from Parakeelia to the party was not donations but payments “for services provided through the party, such as technology upgrades”, adding Parakeelia’s operations were “entirely lawful”.

Both Prime Minister Malcolm Turnbull and Finance Minister Mathias Cormann evaded questions about Parakeelia, both saying it was a matter for the party’s organisational wing. Liberal national campaign director Tony Nutt issued a statement yesterday insisting Parakeelia was “run on a professional basis, independently audited and complies with the law”, and adding that the Liberal Party would “fully assist” the Department of Finance, the AEC or “any other relevant body” with queries about the set-up.

Is Labor doing the same thing?

Sky presenter Peter van Onselen put out a series of tweets yesterday accusing Shorten of hypocrisy on the matter, citing details of software providers for the major parties obtained under freedom of information in January 2014, which list “Australian Labor Party” as the party’s current provider. Thus, he tweets, “the ALP simply charge directly for taxpayer funded software federally. No better …”

Fronting a media scrum in Adelaide this morning, Shorten re-iterated several times that Magenta Linus Software, the company that created Labor’s Feedback equivalent, Campaign Central, was a third party, not owned by the Labor Party. The Australian has reported it found no payments from Magenta Linas to the Labor Party similar to those made by Parakeelia, while The Guardian found that the company had sponsored a Labor data conference at a cost of $1018 in 2014-15.

Back in 2007, then-fisheries minister Eric Abetz told the Sentate Magenta Linus was owned by two former ALP staffers, and that the software company had been illegally passing voter information to unions. He accused Labor senator Annette Hurley of being “intimately connected to this [ACTU] dirty tricks exercise”. Special minister of state Gary Nairn referred the matter to the Australia Electoral Commission to be investigated concerning the use of information.