Australian Financial Review 13 September 2017
In the past year, my career has taken me from the leadership of a major industry body to a think tank and to the role of acting federal director of the Liberal Party.
In each case, I have been staggered by the volume of money, superior tactics and ultimately greater impact of aligned interests standing against business and liberalism in support of the political left.
In this series for The Australian Financial Review, I will explore the corporate campaign model which is used by a group of close fellow travellers: unions, GetUp, environmentalists and industry super.
It is an explanation of the financial, tactical, data and "on the ground" advantage enjoyed by the modern left at a time where every debate on the role of government, taxation, regulation and even free trade is contested.
Unless the political right and business can counter and ultimately get ahead in the financial, technological and tactical campaign race, too many wrong decisions will be made, red and green-tinged governments will be elected and all Australians will be poorer.
THE DEMOCRATIC DEFICIT
Anyone who has watched the Wizard of Oz knows the scene where Dorothy and co are told to "pay no attention to the man behind the curtain".
The same could be said of Australian politics. This article aims to show just how money is amassed through various consumer fronts from strange and foreign sources and how legal structures such as charities – with tax-deductible status – are then used to channel those funds and run political campaigns.
The playing field is not level: $320 million supported the traditional left and $115 million was behind the traditional right in the 2015-16 financial year. That's a shortfall of $200 million. I call it Australia's "democratic deficit".
If the playing field isn't levelled, Australia risks becoming the Argentina of the 21st century: blessed with opportunity but captured by isolationists, special interest groups and quasi-socialists.
The anti-business agenda can be summed up as the following: more tax, more regulation and less free trade. The money comprising the $200 million democratic deficit is actual spending each year, not the total assets held by the organisations, which are often much greater.
THE LEFTIST WEB WE WEAVE
The modern left is a large grouping of coordinated bodies which carefully plan and choreograph their moves. There are four main groupings undertaking non-party but direct political activity: GetUp, environmental "charity" groups, unions and the industry superannuation lobby.
These organisations form a powerful web of interests that help finance campaigns to advance the interests of the broader political left. They help, for example, members of the Labor Party mount porous arguments for campaign finance reform such as banning foreign donations because Labor doesn't, itself, need the money. That's because a non-party political grouping has grown to do much of Labor's campaign work for it.
While much is made of banning foreign donations, this is just the latest trap to crimp funding for centre-right political parties: Such a ban wouldn't apply to GetUp, environmental groups or unions. Accordingly, I am in favour of maintaining foreign donations providing they are fully disclosed.
We also should be wary of knee-jerk campaign finance laws such as the silly property developer donation ban in NSW.
Are we really saying that under a system which delivers transparency on donations to parties we cannot trust our public officials to receive property developer donations, as opposed to any other group in society that could be the beneficiaries of government decisions?
Yet Australia allows opaque foreign sources to fund environmental groups to run political campaigns and have no idea why they are doing it. At least we know who property developers are and can guess their motivations.
THE TIMIDITY OF BUSINESS
An equally pressing problem is that the growth in the democratic deficit is underwritten by cultural timidity among business to engage in the democratic process through donations and by being outflanked by stupid laws.
One of the great coups of recent years has been unions and Labor convincing Australia's corporate sector to create "50/50" donation policies.
This means donations from many companies are evenly split between the two major parties. It neutralises a traditional Coalition advantage which Labor retains exclusively with union campaign support. Elsewhere many businesses have simply switched off political donations.
Neutralising and switching off the taps which favour the Liberal Party has been allowed to happen without almost any resistance from business or the Liberal Party apparatus itself.
THE LEFTIST WAR CHEST
A large proportion of $320 million spent by the anti-business cabal is drawn from legal structures which are specifically designed to build cash resources for advocacy purposes.
You see the results of it when GetUp develops and sends out an advert on a particular issue advert or when conservation groups drive protest trucks through an urban electorate like Kooyong in Victoria.
Where does the money come from to fund these seemingly organic activities? Is it really from punters? Mums and Dads and cats and dogs?
Unsurprisingly, it is not. There are major organisations using questionable tactics to amass this great wealth.
According to the Australian Electoral Commission, GetUp spent $10 million last year on direct campaigning in marginal seats. The closer you get, the stranger it looks. GetUp is in fact the front of a corporate campaign model unions have created and funded for a decade. GetUp runs campaigns for its big donors. It's an AstroTurf mob – a term derived from the US to describe the practice of masking the sponsors of a message, organisation or campaign. Think the US Tea Party movement at the height of its power in 2010.
GETUP: BOUGHT AND PAID FOR BY THE CFMEU
There are financial links between George Soros and his Open Society lobby group, Avvaz, and GetUp. Indeed, Avvaz has sent over $200,000 to GetUp since 2014. We have no idea why.
But of course, these big donations from opaque foreign organisations are much smaller than the contributions of big unions.
Few have bothered to examine this link but the CFMEU provided GetUp with $1.1 million in a single year – 2011 – their biggest single donation.
Other unions have made contributions in excess of $10,000 such as the Australian Services Union which reared the current Australian Council of Trade Unions secretary Sally McManus, the Australian Education Union and the Public Sector Union.
Why would the CFMEU, in particular, stick over $1 million of members' money into GetUp?
The answer is they purchased GetUp's advocacy for a pro big union agenda which included opposition to reinstating the Australian Building & Construction Commission and the creation of the Registered Organisations Commission.
The objective of these proposals is to stop lawlessness and cost blowouts on building sites largely perpetrated by the CFMEU and subject militant unions to corporate governance provisions applicable to corporations.
But GetUp and co told a parliamentary committee:
"The Registered Organisations Bill may create barriers to participation in workplace democracy for many Australians. Our organisations run on volunteers and voluntary action, we are concerned that this bill increases the compliance obligations on volunteers and voluntary groups to a level that will discourage their participation entirely, undermining an important part of our democracy and undermining our rights in the workplace."
Translation: we do not think unions should be held to the same standards as companies and we like to keep our financial arrangements a secret.
ROUNDING ON XENOPHON
But the big overreach from GetUp on the policy front in the past six months arose from the Senate's passage of the business tax cut package for small and medium companies with a turnover of less than $50 million.
This was achieved with Nick Xenophon's support. The same Xenophon who had backed the restoration of the ABCC.
In the wake of Xenophon's support for the ABCC and corporate tax cuts, GetUp's Natalie O'Brien said they would be "highlighting his corporate tax sellout".
"An on-the-ground organising presence in South Australia will build the sort of electoral power that can cause the Xenophon team real pain at the ballot box," she said.
"We're going to ensure that the next time Senator Xenophon thinks about cutting a deal, he can expect a people-powered reckoning on his home turf."
Yet GetUp had previously been on the record as backing small and medium business tax cuts for the three million businesses, employing six million Australians. That made the ferocity of the attack against Xenophon particularly brazen.
We can put it down to GetUp's major donors: the CFMEU, which also happened to declare war on Xenophon in February.
THE INDUSTRY SUPER LOBBY
Another case is the industry superannuation movement. Industry super isn't as bad as GetUp, after all their self-interest is evident. They constantly argue against reforms to super fund competition and governance laws to protect their own monopoly with $37 million of your retirement savings each year. They spend your money to get more for themselves. And because they control it all, there is no need to check with you!
Yet another case, and one of the most egregious, is environmental activists either using deductible gift recipient (DGR) status and opaque foreign money to run political campaigns. Hyper-partisan groups like the Australian Conservation Foundation and Sunrise are not legitimate public interest charities. The Menzies Research Centre has calculated that they spend $80 million on direct political campaigning every year.
When it comes to DGR status, the laws are weak. There's poor clarity on "political activity" in our electoral laws.
For example, green activist group the ACF declared just $174,000 in 2015-16 in political spending to the AEC, but their financial reports reveal expenditure of almost $13 million.
Discrepancies in legislation allow activists to campaign against business and development, subsidised by the taxpayer to the tune of $45 million in lost revenue from tax-deductible donations.
ARE THESE REALLY NON-POLITICAL ACTIVITIES?
A recent parliamentary inquiry headed by WA Senator Linda Reynolds documented examples of DGR status organisations undertaking naked political action:
- Friends of the Earth passed on a deductible donation of $262,000 from Graeme Wood to the political group GetUp!
- In August 2015, the ACF authorised a one-page advertisement against Greg Hunt. The advertisement included the logos of five other entities that are both registered environmental organisations and registered charities.
- The ACF hired a truck to drive through Josh Frydenberg's electorate during the 2016 election displaying a banner criticising the minister for refusing to sign the ACF's pledge.
- The Wilderness Society (Queensland) authorised campaign material during the 2015 Queensland state election urging voters to "Put the LNP last".
Sensibly there is now a Treasury consultation paper which is trying to determine whether these blatant political activities should continue to be underwritten by the taxpayer.
The bigger question is whether such organisations will shake the community's faith in charities.
As with GetUp's foreign-sourced income, the motivations behind political activity undertaken by "environmental" groups are kept secret. Even if Sam Dastyari's plan to ban foreign donations to political parties succeeded, (which he has previously accepted for party and personal purposes), it would not capture environmental groups, unions or GetUp.
DESPERATE TO AVOID DISCLOSURE
A ban on foreign donations to political parties will please the non-party political campaigners no end. We know they're worried about disclosure and we can thank Wikileaks' capturing of Hilary Clinton's campaign chairman John Podesta's emails for providing us with some idea of their worries.
One of the groups campaigning against coal and the proposed Adani mine in Queensland is the Sunrise Group. In July it worked with the Stop Adani group to organise a protest at Parliament House, which you'd think was political activity.
An email from Sunrise's John Hepburn to the Sandler Foundation which found its way to Podesta said:
" … we are seeking advice on steps we might take to avoid disclosure, challenge and limit disclosure, or to ensure that any disclosure is limited to the committee members and is not made public. I have no concerns whatsoever about our compliance with our charitable obligations but I do have concerns about the potential PR impact of disclosure of both our funding and grantees – should that eventuate."
Hepburn's attempt to maintain opaque funding for his political campaigns is simply not an option available to the political parties.
The playing field should be levelled and we shouldn't forget sunlight is the best form of disinfectant.