Memo to media and social media warriors: at 9am on Tuesday, February 1, the Australian Electoral Commission will simultaneously do its annual dump of political donations data for the federal government, and the eight states and territories.
There will be hundreds of interesting morsels in the data so take the time and devote some resources to give it the attention that it deserves.
Editors and political reporters should be particularly aware of governments or oppositions which attempt to create news diversions on the day. This campaign finance story should be leading radio bulletins from 10am, the television bulletins in the evening, and the front pages of the newspapers the following day.
It’s a shame that the AEC has never bothered to organise a lock-up that gave reporters the time to work up considered stories without feeling overwhelmed by a deluge of difficult to analyse data and up against the clock.
One thread worth following will be the clues about the two large but little known share portfolios controlled by both major parties.
For instance, did you realise that the Queensland division of the ALP owns more than $10 million in shares in pharmaceutical giant CSL? I’ve had a recent look at the CSL share register and “Labor Holdings Pty Ltd” pops up in the top 150 with 37,700 shares registered with stockbroker “Morgans WealthPlus” in Brisbane.
As was detailed in this 2008 piece in The Sunday Age, the ALP’s Queensland division pocketed $16.5 million in 1986 when it sold radio station 4KQ. The proceeds were put into the sharemarket and the portfolio is now worth more than $60 million, although the “associated entity” Labor Holdings stopped disclosing individual dividend payments to the AEC in 2015, as you can see from this pathetic effort in 2019-20.
By way of comparison, the Victorian Liberals have arguable control over an estimated $90 million share portfolio housed in the Cormack Foundation, which was seeded in a similar way when the party sold Melbourne radio station 3XY for about $16 million in the late 1980s. Cormack’s largest investment is about 266,000 Commonwealth Bank shares which are currently worth $25 million. No conflict there when it comes to failing to take action after the Hayne royal commission or the Reserve Bank lending CBA $51.1 billion for three years at just 0.1%.
We know about this whopping Liberal Party equity play with CBA because the Cormack Foundation does disclose its individual dividend payments to the AEC, as you can see here, rather than hiding everything behind stockbroker Morgans, as Queensland Labor does.
With a federal election around the corner and the sharemarket near record highs in recent weeks, it will be interesting to see if either fund has been partially liquidated to increase the campaign firepower that is available. History suggests not.
John Howard joined the board of the Cormack Foundation as part of the settlement of a Supreme Court action initiated by then Victorian Liberal Party president Michael Kroger in 2017. If you read this Wikipedia explanation of the Cormack Foundation, it sounds as if Kroger wrote it himself.
Sadly for the Liberals, Cormack has never owned CSL shares. Interestingly, there are now more than 5000 individual Australian retail investors who own more than $1 million worth of CSL shares. This is because anyone who paid $4800 to buy 2000 shares at $2.40 in the 1994 float is now the proud owner of 6000 shares (there was a three-for-one split in 2007) worth $1.5 million based on yesterday’s close of $249.43.
The Queensland Labor Party first bought into CSL back in March 2008 when the stock was trading at about $40, so it has made about 600% on its money and showed good discipline in not selling out as the stock kept soaring.
As for the rest of the data, there will no doubt be big fossil fuel donations for the Liberals and the gambling industry will do its usual $1-$2 million in big party contributions.
The Queensland and Western Australia state elections were both held in the 2020-21 financial year, so the major party divisions in those two states will have larger than usual revenue declarations — although it would have been a brave corporate who punted against Mark McGowan winning.
So the Queensland ALP own $10m of CSL shares, and the Victorian Liberals own $25m of CBA shares.
Is this problematic? How so?
Exactly what I was thinking
The tories always get pissed when the ALP does better at the system than they do because they are supposed to be the good financial managers. Just like the USA is pissed with China because those filthy commos are doing better economically than the Capitalist, “I did it my way.” Americans.
Who proposes and passes the legislation that regulates these businesses?
Yes, who indeed? And what regulation anyway? Just as electoral finances need regulation, too. The lack of transparency of party funds, the free-for-all spending during elections, the breath-taking corruption that follows, all suggest that Australia needs at least to come into line with European electoral and funding regulations to begin to clean up the politicians’ financial pig-swill. It matters enormously because this behaviour undermines democracy, big time.
We cannot stop underhand income/donations in politics – what we can easily assess however is the expenditure on campaigns & electioneering.
and thus tax,
And expenditure unaccounted for by sou8rce would attract an extra tax – say 150%?
Could you suggest an example of potential legislation that might be a problem?
I’m curious what legislation could give those parties a significant increase in the value of their investments.
Wouldn’t this legislation also benefit Australians who own shares in CSL and/or CBA? If you include super portfolios, that would be a lot of Australians, wouldn’t it?
I’m sorry, you’re suggesting that you can’t think of legislation that would affect the profitability of the big banks? Or their competitive position against the smaller banks and building societies? But it’s cool if the Libs do that because your super line goes up?
Exactly. But I suspect there are very many Frank McGills who have been so brain-washed by all the propaganda and bullsiht about Australia’s banks and the whole rapacious finance industry that they really believe that what is good for the banks must be good for themselves as well. Maybe gamblers admire Crown Casinos too.
On the other hand, maybe Frank McGill is a director of one of those banks and I’m on the wrong track here.
You might not like bank propaganda or corrupt casinos, or even corrupt bankers, and I might join you in those sentiments, but those things we dislike so vehemently are not germane to the point being discussed here, Sinking Ship Rat.
The notion that $10m – $25m shareholdings by a party are going to influence the conduct of ministers with portfolio responsibilities in the hundreds of billions is a stretch. How much time do you think a minister is going to devote to managing the value of her parties investment portfolio? That’s the job of a party president, who would delegate it to a committee.
Think it through. If a policy decision could increase the share price by as much as 10% in a year, the gain would be so small, and so distant from the minister’s personal perview as to be invisible.
Nevertheless, you might imagine a party president might pressure a minister to take policy decisions that would boost the parties investment portfolio. Is that what you are thinking? Even if that were the case, I’m wondering what legislation is actually capable of delivering such gains to CBA and/or CSL.
If you can identify such legislation, ask yourself how long it would take to prepare, get approved by the party room, and pass the parliament. What minister is going to invest in that effort just for the chance to increase her parties asset base by $1m – $2.5m?
It would be far more lucrative and personally satisfying for a minister to get a mate to set up a company on the side and benefit from grants, rezoning, mining leases, energy projects, jobs, titles, appointments, honorariums… you know, the traditional forms of corruption that yield tens or hundreds of millions in benefits invisibly to individuals.
If anything, publicly discoverable investments by political parties in ASX heavyweights such as CBA and CSL serve to align the parties interests with the general population, or at least those ordinary people who have super. It’s not a potent vector for corruption, at least, not in any way I can think of that makes mathematical sense.
But I may just lack imagination, which is why I’m asking others to explain it to me here.
Can you present an example that delivers sizeable returns from those relatively modest investments, or even modest returns that are odious in some corrupt way that an appropriate government minister with portfolio responsibility for banking or biotech would be willing to buy in to?
You seem to think that influence and any favours gained must be reasonably proportional the value gained by those granting the favours or advantages, as though it compares with the way a buyer and seller might haggle over the sale of an item. It is nothing like that. The way politicians in power return favours shows no sense of proportion. They will give away billions through legislative measures, grants, permissions, licences and so on after receiving thousands, or even less, in donations. And why not? What they receive goes straight to the benefit of their party. What they give away does not belong to them.
It’s not only politicians because this is part of human psychology. It’s very simple to build up goodwill with quite trivial gestures, which is why, for example, pharmaceutical sales departments shower doctors with free notepads and biros etc. Petty little gifts, but the results in terms of increased prescriptions of that company’s drugs are easily measurable by the company, which sees a spectacular return on its investment.
The idea that a political party would not favour a company if it can once it has made an investment in that company is unbelievable.
Spot on! These “grey gifts” and their institutionalisation in Australia are explained in detail in the 2017 book “Game of Mates” by Cameron Murray and Paul Frijters.
What is an elected politician supposed to be doing, if we go back to the theories about this representative democracy we are supposed to have? Representing a constituency, or working for the commercial interests of a political party with a substantial portfolio of investments? What happens when these interests collide? Which takes priority? Is ‘political party’ a front or euphemism for a financial business which runs a profitable sideline in political power?
It’s not exactly news that the Liberals represent business. They say it often enough that it is reasonable to conclude that party only cares about Australians or the nation generally to the extent they serve business. It no doubt helps the Liberals keep focus when they too have their investments, not only personally but as a party. And now here is Labor doing the same.
No wonder the Libs are moaning about unions and support for Labor, as the both of the latter seem to have superior financial management skills, capital and income, as opposed to the Liberal Party?
how is it a secret when we all reading about it??
To his credit, Mayne does not use that word. It appears to be a sub-editor’s ill-chosen contribution. Mayne says clearly the information is available, for example anyone who studies the CSL share register will have noticed Labor’s holding. And who doesn’t study these share registers regularly?
I do not study shares, is like watching a horse race at trying to pick a winner
Studying a share register only tells you one thing about the shares, which is who bought them. On the horse racing analogy it would be like using a list of horse owners as a form guide.
You’ve lost me on this one, Stephen. What’s your point?
For a start, a business is saved the trouble of bribing a party to get favours if the party has already bought a financial interest in the business.
Fair enough. But if that’s the case, why lead the article with a headline referring to the party which holds the lesser amount of money? And if potential for corruption is the implied issue, I would think that investment in one of the big four banks would be much more problematic than an investment in CSL? Or is the implication that Labor is betraying its socialist roots by investing in the stock market or, even worse, doing so profitably?
You should be asking the sub-editor about the headline, unless there is some reason to think Mayne wrote it. Normally the journalist knows nothing about the headline before seeing the article published.
I think it is just that journalists should have a good look….possibly that in the detail of these disclosures, darker intentions may be identified. Bottom line- few journalists get into this detail these days due to the sound bite/short attention/ 24 hour news cycle?
It’s in the interest of balance mate, unlike at the ABC with a gun to its’ head.
Libs are just better at hiding things aka Porter and the backer. Libs are better at under handed dealings as they could teach the Mafia a rick or two.
ALP is not squeaky clean , hense need for independent ICAC, compared to L/NP they are on training wheels!
I say well picked ALP 🙂 Though even better if it remained part of our Common Wealth! I’m very pleased I have CSL shares too! 🙂