10.20 Intervention in political and judicial processes—political donations

Last updated: November 2017

Suggested citation: Hagan, K, Freeman B and Greenhalgh, EM. 10.20 Intervention in political and judicial processes. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2016. Available from http://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-22-donations-to-political-parties

In Australia it is a legal requirement that donations of more than $13,500 made by individuals or entities to registered political parties are declared to the Australian Electoral Commission.1 The Australian Electoral Commission posts on its website donor annual returns dating back to the financial year 1998–99. Tables 10.20.1 and 10.20.2 show the total amounts of tobacco money received by the three major political parties in Australia since then.

Table 10.20.1
Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2016–17

Source: Australian Electoral Commission, Donor annual return search 2, 3

Table 10.20.2
Donations to Australian political parties by British American Tobacco Australia Limited, 1998–1999 to 2016–2017

Source: Australian Electoral Commission, Donor annual return search 2, 4

In February 2004, the then leader of the Australian Labor Party (ALP) opposition, Mark Latham, announced that the ALP would no longer accept donations from tobacco companies. In August 2013, when Kevin Rudd was leader of the ALP, he pledged that if re-elected he would amend the Electoral Act to ban donations from tobacco companies to all Australian political parties and candidates. The leader of the Liberal Party of Australia, Tony Abbott, then quickly announced ahead of the September 2013 election that his party was banned from accepting tobacco company donations from August 215. However the Nationals and Liberal Democrats have continued to receive tobacco industry donations on an ongoing basis. 

The Australian National Party remains the last major party  to accept donations from the tobacco industry. The Nationals have received $41,280 from Philip Morris since their Coalition partner the Liberals rejected tobacco industry donations in 2013.2  There have been reports that senior party figures are pushing for a ban on donations from tobacco companies, however the party’s then federal director, Scott Mitchell, told the Sydney Morning Herald in October 2016: “…the view of the executive is they are legitimate companies and they’re as entitled as anyone else to make a donation if they choose to do so”. Former party leader and Deputy Prime Minister Barnaby Joyce reportedly left the door open for change but said tobacco industry donations should be considered as part of broader donations reform.6  

The Liberal Democratic Party has accepted $75,140 from tobacco companies since 2013-14. Party senator David Leyonhjelm told the Sydney Morning Herald in 2014 that he had no qualms about accepting donations from companies that produced products that could kill users, because smokers could "freely choose" to take up the habit. He said donations from Philip Morris had influenced his stance on plain packaging: "I've gone from being strongly opposed to totally opposed to plain packaging”.7

The Australian Greens5 do not accept tobacco company donations as a matter of policy. In 2014, the party introduced to the Senate its Donations Reform Bill which would ban political donations from property developers and the tobacco, alcohol, gambling and mining industries.8 At the time of writing (March  2018), the bill was still before the Parliament9, as was a Labor bill which would  introduce various reforms including reducing the disclosure threshold to $1000; banning all anonymous gifts to registered political parties and candidates; and introducing new offences and penalties.10 Despite the Labor Party’s ban on tobacco industry donations, investigations are underway into donations by a Chinese tobacco company executive, Peter Chen, of $200,000 each to the party’s NSW and federal branches.6

Prior to the ALP's official refusal of donations from tobacco companies in 2004, all three major political parties received significant contributions from Philip Morris Australia and British American Tobacco Australia. Imperial Tobacco Australia does not appear to have made political donations. In general, substantially larger amounts of funding have been directed by both tobacco companies towards the conservative parties (the Liberal and National parties) even prior to the ALP ban, which is likely to reflect preference by the tobacco companies for conservative politics, as well as the fact that the Liberal–National Coalition was in power for the entire period shown in the tables.

As of 2016–17, in total since 1989–99 Australian political parties had received over $2.06 million in donations from British American Tobacco Australia, and over $2.1 million from Philip Morris Limited. 



Figure 10.20.1
Donations to Australian political parties by Philip Morris Limited, 1998–99 to 2016–17

Source: Australian Electoral Commission, Donor annual return search

Figure 10.20.2
Donations to Australian political parties by British American Tobacco Australia Limited, 1998–99 to 2016–17

Source: Australian Electoral Commission, Donor annual return search

In December 2005, under the Coalition federal government led by John Howard, rules concerning the minimum value of donations requiring disclosure were changed and the threshold for reporting  increased from $1,500 to “more than $10 000”. This amount is indexed from 1 July each year, based on increases in the Consumer Price Index.1 According to The Age newspaper, this has simultaneously led to an increase in political donations from all sources as well as opacity in tracing their origins. For example, investigations by The Age showed that although the donor annual return filed by the Liberal Party for the financial year 2005–06 detailed income directly received by the party from tobacco companies, it could not be ascertained from the return that some of the Liberal Party's closely allied fundraising organisations such as The 500 Club and the Bayside Forum were also in receipt of tobacco money.11 Although these donations were declared by the tobacco companies in their own annual returns to the Australian Electoral Commission, the current system of reporting does not guarantee clear, one-stop disclosure of funding sources. There are also concerns about the timeliness of disclosure, since under the Australian Electoral Commission’s system of annual disclosures, it can take more than 18 months for large donations to be made public.12

Tobacco companies may also influence the political process by making donations to third-party groups such as trade associations and think tanks. The Alliance of Australian Retailers, recognised as a front group for the tobacco industry13, donated a total of $90,000 to the Liberal Democratic Party in 2015-16. The Alliance has also declared high amounts of “political expenditure” which includes printing, broadcasting and polling and research on electoral matters. In 2010-11, prior to the introduction of plain packaging on December 1, 2012, the alliance’s declared political expenditure was more than $9 million.2

The University of Bath’s Tobacco Tactics website notes that the Institute of Public Affairs, one of Australia’s leading right wing think tanks, has long been a strong opponent of tobacco control and has put forward arguments similar to those of the tobacco industry. On the day the Australian Government announced its plain packaging policies, the IPA’s Tim Wilson took part in several national and local broadcast interviews. He supported the industry claim that the new law violated tobacco companies' intellectual property rights and said that taxpayers would have to compensate the firms for the loss of their trademarks. While arguing the tobacco companies' position, the IPA did not disclose receipt of any funding from the tobacco industry. In April 2002, the IPA's Don D'Cruz wrote an article for The Australian newspaper’s opinion page, disclosing that the Institute "receives support from tobacco companies". When asked in 2010, the IPA refused to say if it was still accepting industry money.14

At the time of writing (March 2018), a federal parliamentary inquiry is considering how to improve the integrity of political decision-making. The Senate established the Select Committee into the Political Influence of Donations on 17 August, 2017, to inquire into and report on:

a. the level of influence that political donations exert over the public policy decisions of political parties, Members of Parliament and Government administration;

b. the motivations and reasons why entities give donations to political parties and political candidates;

c. the use of shell companies, trusts and other vehicles to obscure the original source of political donations;

d. how to improve the integrity of political decision-making through our political donations regime and the public funding of elections;

e. any other related matters.

The closing date for submissions was ​9 October 2017, and the committee was due to report on 28 March 2018.15 In its submission, the Public Health Association of Australia argued that political donations should be banned, particularly from companies whose products cause demonstrable public health damage such as tobacco. If political donations were to be maintained, the association called for a single national online register of all donations, regardless of the amount, updated daily to achieve real-time disclosures.16

The Joint Standing Committee on Electoral Matters is also conducting an inquiry into political donations as part of its review of the conduct of the 2016 federal election. The inquiry will cover the current donations, contributions, expenditure and disclosure regime, its application and timeliness, and alternative approaches available to Parliament. Submissions were due by 20 September, 2017, but the committee had not yet reported on political donations at the time of writing.17

The tobacco lobby is also a powerful presence in government decision-making elsewhere. The tobacco industry contributes millions of dollars each election cycle to candidates for Congress in the US, and has influenced the obstruction of many tobacco control policies.18, 19 Both Democrats and Republicans accept donations from tobacco corporations, and for decades members of both parties have in turn voted pro-tobacco.20, 21 Although the tobacco control community is unable to match the financial resources of the tobacco industry in promoting its goals, non-government and community organisations have managed to advance tobacco control at least to some degree through persuading decision makers to counter the tobacco lobby.22  

Some countries have banned corporate donations to parties and candidates, including Belgium, Canada, France, Israel and the Republic of Korea.23 In Poland, the Tobacco Control Law of 1995 included a total ban on tobacco ads, promotion and sponsorship (including of political parties) beginning in 2000.24 Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control requires that “in setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry”.25 In particular, guidelines for implementation of Article 5.3 recommend that “parties should not allow any official or employee of government or of any semi-quasi-governmental body to accept payments, gifts or services … from the tobacco industry”.25   

References

1. Australian Electoral Commission. Disclosure threshold.  2018. Available from: http://www.aec.gov.au/Parties_and_Representatives/public_funding/threshold.htm.

2. Australian Electoral Commission. Political parties financial disclosure. Canberra: Australian Electoral Commission, 2018. Available from: http://periodicdisclosures.aec.gov.au/.

3. Australian Electoral Commission. Donor annual return - 2011-12 to 2016-17  Philip Morris limited.  2018. Available from: http://periodicdisclosures.aec.gov.au/Donor.aspx?SubmissionID=55&ClientID=10094.

4. Australian Electoral Commission. Donor annual return - 2011-12 to 2016-17  British American tobacco Australia.  2018. Available from: http://periodicdisclosures.aec.gov.au/Donor.aspx?SubmissionID=55&ClientID=10094.

5. ABC News. Parties urged to stub out tobacco firms' donations. 2006; 7 March. Available from: http://www.abc.net.au/news/stories/2006/03/07/1586022.htm

6. Gartrell A. Nationals mp breaks ranks on tobacco donations as party figures agitate for ban Sydney Morning Herald, 2016. Available from: http://www.smh.com.au/federal-politics/political-news/nationals-mp-breaks-ranks-on-tobacco-donations-as-party-figures-agitate-for-ban-20161029-gsdm7n.html

7. Bourke L, Cox, Lisa,. Phillip Morris donated to liberal democrat senator david leyonhjelm. Sydney Morning Herald, 2014. Available from: https://www.smh.com.au/federal-politics/political-news/phillip-morris-donated-to-liberal-democrat-senator-david-leyonhjelm-20141001-10oux4.html

8. The Greens. Greens bill to ban political donations from developers, tobacco, alcohol, gambling and mining industries. 2014. Available from: https://greens.org.au/node/6743

9. Commonwealth electoral amendment (donations reform) bill 2014. 2014; Available from: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=s992 .

10. Commonwealth electoral amendment (donation reform and transparency) bill 2017. 2017; Available from: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr5808%22.

11. Koutsoukis J. Big tobacco, big pay packet − big influence? The Age, 2007; 11 Feb. Available from: http://www.theage.com.au/news/national/big-tobacco-big-pay-packet-8212-big-influence/2007/02/10/1170524347049.html

12. Editorial - political donation regime open to abuse. The Age, 2016. Available from: https://www.theage.com.au/national/victoria/political-donation-regime-open-to-abuse-20160201-gmiz0h.html

13. Tobacco Tactics. Alliance of Australian retailers. 2016. Available from: http://www.tobaccotactics.org/index.php/Alliance_of_Australian_Retailers

14. Tobacco Tactics. Australia: Funding think tanks and hiring independent experts. England: University of Bath, 2017. Available from: http://www.tobaccotactics.org/index.php/Australia:_Funding_Think_Tanks_and_Hiring_Independent_Experts .

15. Parliament of Australia. Select committee into the political influence of donations.  2018. Available from: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Political_Influence_of_Donations.

16. Parliament of Australia. Select committee into the political influence of donations - submissions.  2018. Available from:  https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Political_Influence_of_Donations/PoliticalDonations/Submissions .

17. Parliament of Australia. Inquiry into and report on all aspects of the conduct of the 2016 federal election and matters related thereto. 2018. Available from: https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Electoral_Matters/2016Election

18. Givel MS and Glantz SA. Tobacco lobby political influence on US state legislatures in the 1990s. Tobacco Control, 2001; 10(2):124-34. Available from: http://tobaccocontrol.bmj.com/content/10/2/124.abstract

19. Campaign for Tobacco Free Kids. Tobacco industry contributions to federal campaigns. Available from: https://www.tobaccofreekids.org/what_we_do/federal_issues/campaign_contributions/

20. Action on Smoking and Health (ASH). Big tobacco buys big political influence. 2012. Available from: http://ash.org/big-tobacco-buys-big-political-influence/

21. Luke DA and Krauss M. Where there's smoke there's money: Tobacco industry campaign contributions and US congressional voting. American Journal of Preventive Medicine, 2004; 27(5):363-72. Available from: http://www.ncbi.nlm.nih.gov/pubmed/15556735

22. World Health Organization. Tobacco industry interference with tobacco control. Geneva: WHO, 2009. Available from: http://whqlibdoc.who.int/publications/2008/9789241597340_eng.pdf.

23. Institute for Democracy and Electoral Assistance. Funding of political parties and election campaigns: A handbook on political finance. Sweden 2014. Available from: https://www.idea.int/publications/catalogue/funding-political-parties-and-election-campaigns-handbook-political-finance?lang=en.

24. Campaign for Tobacco Free Kids. Tobacco control laws - Poland.  2017. Available from: https://www.tobaccocontrollaws.org/legislation/country/poland/summary.

25. World Health Organization. Article 5.3 of the who Framework Convention on Tobacco Control 2003. Available from: http://www.who.int/fctc/text_download/en/

 

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