All major parties appear now to want a ban on foreign donations, but the government looks set to exempt a certain class of foreign donations — coincidentally (we’re sure), those that make large donations to the major parties. 

Legislation to ban foreign donations is expected to be introduced into Parliament later this year, but the exact ban is unclear at this point. Speaking on Sky News on Sunday, Attorney-General George Brandis said he and Special Minister of State Scott Ryan had met with the Solicitor-General to determine how exactly a ban could work without potentially being in breach of the constitution. One exemption, Brandis said, would be for multi-nationals with a significant presence in Australia but not owned by Australians:

“There would be different considerations in relation to a foreign company that nevertheless conducted most of its, was a large element of the Australian economy like, for example, Toyota for example, that for many years as we know manufactured vehicles in South Australia but didn’t have any Australian shareholding, it was a foreign company. But I think the sort of considerations that apply to foreign companies which have a large trading and business presence in Australia are different from, for example, foreign donations from a foreign source with little or no Australian presence about whose motives one might be more suspicious.”

What this means is that those companies that employ Australians and have Australian offices would potentially be exempt. This is not just a constitutional issue — if donations were banned across the board, the political parties would face losing hundreds of thousands of dollars a year, which could be why the government was looking at a very narrow ban. Toyota does not appear to have directly donated to the major parties over the past few years, according to data on the Australian Electoral Commission’s website, but based on the donations made in the last financial year, companies that might seek to be excluded from the ban include a wide variety of financial companies, pharmaceutical companies and alcohol companies. And, strange as it may seem, they have given quite a bit of money to our political parties:

  • Deloitte Touche Tohmatsu: donated more than $40,000 to the Liberals and more than $60,000 to Labor;
  • Ernst & Young: donated more than $70,000 to Labor and more than $50,000 to the Liberals;
  • Lion: donated $90,000 to Labor and $55,000 to the Liberals;
  • Pricewaterhousecoopers: donated over $45,000 to Labor and more than $150,000 to the Liberals;
  • Roche: $30,000 to the Nationals, $22,000 to Labor, and $18,600 to the Liberals;
  • Singtel Optus: $33,000 to Labor and $31,500 to the Liberals;
  • Thales: more than $30,000 to Labor and over $24,000 to the Liberals; and
  • Visa: $88,000 to the Liberals and $65,000 to Labor.

All of these businesses are multinationals, but they have a significant representation in Australia.

One aspect not yet canvased will be the association groups. The government has flagged third-party organisations that undertake political activity like GetUp would also be banned from accepting foreign donations, but what of groups that have multinational members? These groups donate to political parties and might be based in Australia, but their members might not be.

The Australian Hotels Association, for example, donated hundreds of thousands of dollars to both Labor and the Liberal Party last year. This group counts among its major corporate partners Lion, Diageo, Coca-Cola (through its Australian subsidiary Coca-Cola Amatil) and Asahi, all multinationals not originating in Australia. Any such exemption for groups like AHA would mean that rather than donating directly to the political parties if it was banned, multinationals could simply join one of these associations, pay their membership fee, and have the donations made by the group.