In the dark: almost 40% of Coalition funds in past 20 years came from unknown donors

Analysis of political donations over two decades reveals disturbing extent of ‘dark money’ given to all major parties

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Between $44m and $49m of major party income in 2019-20 came from unknown sources, new analysis shows. Photograph: Lukas Coch/AAP
Between $44m and $49m of major party income in 2019-20 came from unknown sources, new analysis shows. Photograph: Lukas Coch/AAP

Last modified on Sun 14 Feb 2021 11.32 EST

Almost 40% of the money injected into Coalition parties in the past 20 years came from unidentified sources, new analysis shows.

The Australian Electoral Commission’s recent release of donations data has reignited a debate about the country’s weak and opaque donation laws. An enduring problem is the presence of so-called “dark money” – or party income with an unidentified source.

Analyses by both the Guardian and Centre for Public Integrity have found between $44m and $49m in party income was hidden from public view in 2019-20. That’s almost 30% of the total income received by all parties.

Dark money is a problem across the major parties, but it is more pronounced for the Coalition. A Guardian analysis suggests last year the Liberal party received about $22m from unknown sources, about 38.5% of its total income, while Labor received $15m, or 27.2% of its total income.

That fits with a broader trend identified by the Centre for Public Integrity. In the past two decades, about 39.22% of the almost $2bn reported as income by the Coalition parties came from unexplained origins.

The figures were 27.69% and $1.7bn for Labor.

The problem is principally caused by the high threshold for donation disclosures at a federal level.

Parties need only declare donations above $14,300 and nothing prevents a donor from splitting up larger donations into multiple smaller amounts to avoid disclosure requirements. That compares poorly with donation laws in most state and territories.

The lack of transparency in the system is compounded by the slow reporting requirements – disclosures are only made once a year – and weak enforcement by the AEC, according to the auditor-general.

Centre for Public Integrity chair Anthony Whealy, a former NSW supreme court justice, said the presence of such high volumes of dark money in the system contributed to a loss of trust from voters.

“It means they are in the dark about where the real influence is in the political system,” he told the Guardian.

“That’s very unfortunate for the democratic system and I think it is just very discouraging for voters.”

The analysis finds the 2018-19 election year was a record both for total money received by political parties and for dark money.

The Centre for Public Integrity said that reform prior to the next election was critical in rebuilding integrity into the federal donations system.

It called for a strengthening of resources and powers to the AEC, and the reduction of the reporting threshold to donations of $1,000 or more. Aggregated donations of $3,000 over three years should also be disclosed, the analysis recommended.

The Centre for Public Integrity also recommended the introduction of a real-time disclosure system. Such a system already exists in Queensland.

Parties should set up a single dedicated campaign account to make auditing and enforcement easier, while related donors should be categorised as such.

Both Labor and the Greens have attempted reform in this area previously, without success.

In 2019, Labor attempted to have the donation disclosure threshold reduced to $1,000, ban donation splitting, and create a real-time disclosure system, but has failed to gain Coalition support.

“It is completely unjustifiable in the modern era that we consider someone making up to a $14,000 donation is not something a political party should disclose,” Labor senator Don Farrell said at the time.