LEIGH SALES, PRESENTER: It may surprise you to learn how much political parties know about you personally and that in the case of the Liberal Party, you're the one paying them to gather that information.

The Government got into trouble today with a senior minister stumbling to explain why taxpayers should pay for Liberal software called Feedback, particularly when the company that designed it has donated more than a million dollars to the party.

A former Liberal MP has told 7.30 he has major privacy concerns about the practice.

And Labor has its own problems over the alleged misuse of confidential information with a former party boss facing court this week over claims he illegally used Labor's version of the software.

Conor Duffy reports.

CONOR DUFFY, REPORTER: In a tight election race, the major parties are desperate to peer into the minds of the swinging voters that are king-makers.

It's been revealed how the Liberal Party's doing it through a secret software program called Feedback that MPs use to track information on their constituents.

DENNIS JENSEN, FORMER LIBERAL MP: The purpose that's not so legitimate is basically the parties - 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, etc., etc. And obviously of concern is, you know, you have sensitive information in Feedback that constituents may very well not want you to have.

CONOR DUFFY: Every time you walk into your local MP's office, call them or sign a petition to talk about your local hospital or school, that information is logged and stored. As well as some of it being personal and sensitive, there's concerns about how the database is paid for through a taxpayer-funded subsidy.

The Liberal program Feedback is designed by a company called Parakeelia. It's registered in the same office as the federal Liberal Party and wholly owned by it. Its directors include the party's boss Tony Nutt and former minister Richard Alston. Disendorsed Liberal MP Dennis Jensen says he was told to pay $2,500 to buy access to Feedback and that most other MPs were required to do the same, giving the company a lucrative revenue source funded out of MPs' electorate allowances, paid for by the taxpayer.

DENNIS JENSEN: There was a very clear understanding there's Feedback training provided to staff members and basically the training is to use it as a database politically rather than to assist constituents. Indeed the instruction given by Feedback trainers is that if there's not a vote in it, don't do it.

CONOR DUFFY: What's really raised eyebrows is that Parakeelia is also funnelling that revenue back to the Liberal Party through political donations. Last financial year, it was the party's second biggest donor, chipping in half a million dollars. All up, it's donated more than $1 million to the party.

PETER CHEN, UNIVERSITY OF SYDNEY: I think the funnelling of public money back into political parties for campaigning is concerning. I think it is completely against the spirit, if not the letter of the law.

CONOR DUFFY: This is the Feedback user manual. Its first page instructs staff to keep its contents secret, saying, "We do not discuss Feedback outside of the office." Dennis Jensen is furious with the Liberals for disendorsing him in his Perth seat. He's now running against them and is attacking his former party.

DENNIS JENSEN: The legitimate use is not the main use. And as proof of that, the taxpayer has paid for my Feedback until November this year, yet the Liberal Party has removed my access to Feedback and have given it, for instance, to - given access to the Liberal Party candidate in my electorate.

CONOR DUFFY: The Liberal Party says the lack of access is due to technical issues. The Government's cabinet secretary, Arthur Sinodinos, struggled to explain Feedback in an interview late last night, saying he was unsure if taxpayers had shelled out for his office to use Feedback.

DAVID SPEERS, SKY NEWS JOURNALIST: Have you used your allowance, your taxpayer-funded allowance?

ARTHUR SINODINOS, CABINET SECRETARY: Well I'd have to check, but I think I would've, yes.

DAVID SPEERS: Why?

ARTHUR SINODINOS: I beg your pardon?

DAVID SPEERS: Why?

ARTHUR SINODINOS: Well that - that - that would be used to provide information on - which we gather on electors and the like and we use it to try and do our electorate business.

DAVID SPEERS: Alright and that's a legitimate use of taxpayer allowance?

ARTHUR SINODINOS: I'm not quite sure what you're getting at there.

DAVID SPEERS: I'm just wondering whether it's a legitimate use of taxpayer funds. I don't know anything about it.

ARTHUR SINODINOS: Yeah, I believe it is, yes.

CONOR DUFFY: Finance Minister and campaign spokesman Mathias Cormann defended the program this morning.

MATHIAS CORMANN, FINANCE MINISTER: The work expenses arrangements that you referred to apply equally to all members of Parliament across the board and I think you'll find that the arrangements that are accessed in terms of the relevant software by Liberal members and senators are the same as those accessed by Labor members and senators and indeed are accessible by all members of Parliament on the same basis.

CONOR DUFFY: The Labor Party has its own similar program called Campaign Central. It was developed by an independent software company that does not appear to donate back to the party. Even so, the program's caused the ALP trouble during the campaign.

Former Labor boss Jamie Clements has been charged with illegally accessing voter details via Campaign Central and the case was mentioned before a registrar this week. Mr Clements denies the charges.

Political experts say the parties are given privileged information to our personal details and voters even have to pay for the privilege.

PETER CHEN: They are a distortion of the democratic process. I think most people wouldn't accept that this is legitimate. And when we start to see the large amount of moneys that move around, people do get concerned.

LEIGH SALES: Conor Duffy reporting.