Opposition leader says $1m transferred to Liberal party needs explanation but Scott Morrison dismisses call as ‘witch hunt’

This article is more than 4 years old

This article is more than 4 years old

Bill Shorten says Malcolm Turnbull has “questions to answer” over revelations $1m of funds have been transferred to the Liberal party from its database company Parakeelia.

But the treasurer, Scott Morrison, said Labor was engaged in a “desperate witch hunt” and the Coalition in turn accused Labor of directly providing software services to its own MPs and senators as recently as 2014.

Shorten denied that Labor recycled taxpayer funds to the party through the software provider Magenta Linas and called on the prime minister to explain whether his office allowance was paid to Parakeelia and whether receiving funds back was improper.

Liberal MPs and senators pay $2,550 from their office allowance to Liberal-owned Parakeelia Pty Ltd to provide software services. Parakeelia has remitted a total of $1m back to the Liberal party, including $500,000 in the last financial year, designated as “other receipts”.

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The foreign affairs minister, Julie Bishop, has said “the payments are for services provided through the party [and] it’s entirely legitimate”.

These “other receipts” have been disclosed to the Australian Electoral Commission but have not been explained by the party other than in Bishop’s remarks.

According to reports, Liberal parliamentary staff worked for Parakeelia providing training for the Feedback software, Fairfax Media reported.

On Wednesday Shorten said: “This looks like a Liberal party washing machine turning taxpayer dollars into Liberal party profits.”

The opposition leader labelled the arrangement a scam and called on Turnbull to say “he will either continue the scam and that he approves of it, or alternatively that he thinks it’s improper and will shut it down”.

Labor’s shadow special minister of state, Brendan O’Connor, has referred the matter to the auditor general. He said Parakeelia raises “serious concerns about the appropriate use of commonwealth resources where a transaction has been entered into which ultimately converts taxpayer-funded parliamentary entitlements into political donations to the Liberal party”.

In a statement late on Wednesday the federal Liberal party director, Tony Nutt, said Parakeelia “is run on a professional basis, independently audited and complies with the law”.

“In addition, as an entity of the party, it is subject to AEC oversight.”

Nutt promised the Liberal party would “fully assist” if the AEC, finance department or any other regulator had queries about Parakeelia.

“The provision of electoral roll systems and data management by the party complies fully with the statutory obligations imposed by the commonwealth Electoral Act on the use of such data including the prohibition on commercialisation.”

Speaking on ABC Radio National on Thursday, Morrison said Shorten’s comments labelling Parakeelia a scam were “a desperate witch hunt to distract from the terrible weaknesses” of Labor’s record on debt and deficit.

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“All of these matters were already addressed with the federal director of the Liberal party,” he said. “The Labor party until 2014 were making payments directly to the Labor party for this, using taxpayer entitlements.”

Morrison said Parakeelia’s Feedback database was used to communicate better with electors, which was “the core part of any local member’s job, whether it’s me or Bill Shorten”.

“Well there is absolutely nothing to suggest – and no one has presented a shred of anything credible – to suggest there is anything inappropriate about these arrangements,” he said.

At his regular doorstop on Thursday, Cormann said: “The interesting thing is that certainly as late as 2014 Labor members and senators were making payments in relation to their software support for equivalent services, directly to the Labor party.”

On Thursday Shorten responded that Labor used a company called Magenta Linas that was not owned by the party.

Shorten said Turnbull had questions to answer over Parakeelia. “Mr Turnbull needs to answer the question: is it improper? ... Will he continue the practice? ... Has he paid his own taxpayer allowances into this company?

“The Liberal party pay Parakeelia, a company they own, with taxpayer funds ... we pay Magenta Linas. We don’t own the business. We’re not recycling taxpayer funds into the bottom line of the profits of the Liberal party.”

At a press conference in Sydney, Turnbull took one question on Parakeelia and referred the matter of taxpayer funds being paid back to the Liberal party to the party organisation.

A Labor spokesman told Guardian Australia “no taxpayer money paid for the use of Campaign Central to Magenta Linas ends up as donations to the Labor party”.



However, Magenta Linas paid $1,018 to Labor in 2014-15 to sponsor a Labor data conference and covered the cost of the event.

Documents seen by Guardian Australia show between 2014-15 and 2015-16 the finance department increased the office allowance for software from $1,650 to $2575.50. Liberal MPs and senators pay Parakeelia $2,550 a year for use of the Feedback database.