Australia’s political donations regime is so inadequate that 85% of the privately raised income going to major political parties is hidden from public scrutiny, a new report has found.

The report by the activist group GetUp, Dark Money: The Hidden Millions Corrupting Australian Politics, shows the disclosure of donations is “entirely optional” in practice, since sums as large as $20m can easily be hidden using donation splitting.

“Dark money” refers to privately raised income that cannot be attributed in a transparent way to specific donors.

The report – written by Belinda Edwards of the University of New South Wales, a former economic adviser under John Howard – shows the amount of declared donations has shrunk over the past decade.

Donations declared to the Australian Electoral Commission (AEC) made up 30% of the Liberal party’s income in the 2007-08 election year, but only 25% in 2013-14 – $19.3m of the party’s total income of $78.6m.

For Labor the pattern was less clear, complicated by the fact its income fell over the period.



In 2013-14, Labor’s declared donations made up 25%, or $11.6m of its total income of $46.3m. The unions accounted for $3.8m of that $11.6m, and another $1.8m came from organisations whose sources of income are difficult to track.

“Only 12% of [Labor’s] income of $46m can be seen to be clearly and easily identified as political donations in the AEC database,” the report said.

Natalie O’Brien, GetUp’s campaigns director, said where such huge proportions of party incomes were not transparently disclosed, it threw “considerable doubt” over the disclosure system.

“By piecing together fragments of publicly available data, this research reveals millions of dollars in dark money hidden from public scrutiny,” O’Brien said.



“Australian law requires all payments to politicians over $13,200 to be publicly declared – an important transparency measure to stop corruption.



“But right now there are gaping legal loopholes that see tens of millions of dollars funnelled into the pockets of our politicians with no oversight, no accountability.”



The report said there were significant problems with the way the AEC presented political donations data, making it impossible for researchers and journalists to know who was donating to whom, and how much was being donated.

In the 2013-14 election year, the year for which the most recent data was available:



The two major parties declared less than 25% of their privately raised income as donations to AEC

About half of those donations came from party fundraising bodies. As a result, only 12-15% of the two major parties’ incomes could be clearly and easily attributed to specific political donors.

This meant the majority of major party income was undisclosed dark money – 63% ($48m) in the case of the Liberal party, and 50% ($23m) for the Labor party.

Similarly, 79% ($4m) of the Nationals income and 85% ($8.9m) of the Greens income, was undisclosed dark money, although the total sums involved were far lower.

GetUp says all donations to a party or party group above $500 a year should be disclosed on the internet in real time.

It also wants to cap the amount any individual or corporation can donate at $1,000 per financial year, and introduce expenditure caps on election campaigns to remove incentives to accumulate large political fighting funds.

Edwards, in her submission to the parliamentary inquiry into electoral matters, said the AEC could improve its data presentation by categorising political donations and other receipts received from businesses, unions and other organisations using Australian Bureau of Statistics industry codes.

She said donations should also be categorised by the electorates the donor records as their address.