Banks hit back on donations to political parties

The Australian 12:00am October 6, 2016

David Crowe

Australia’s big four banks are staging a dramatic retreat from making direct donations to political parties in a move that could deprive Labor and the Coalition of millions of dollars amid a growing dispute in parliament over regulating the finance industry.

The ANZ Bank board is considering whether to follow the National Australia Bank in halting the donations out of concern that it should be up to shareholders to decide whether company funds are poured into political coffers.

Liberals fear the moves will wipe out an important source of campaign finance and leave conservative governments weakened in their contests with Labor, which can rely on strong funding from the union movement.

ANZ Bank chief executive Shayne Elliott told The Australian the board had a “variety of views” but that a key issue was whether companies should be active in the nation’s political affairs.

“It’s not our money, it’s our shareholders’ money,” he said, after appearing before a parliamentary committee yesterday where he apologised for the bank’s poor treatment of customers and admitted the industry had lost touch with the community.

“Do we have a role to play in supporting the democratic process, or do we say that if our shareholders want to donate then it’s up to them?

“So it’s a philosophical debate about the role of corporates in the political process. It’s not about value for money or anything like that.”

The rethink on political donations comes as the banks are under intense pressure on two fronts, with the Coalition clearing the ground for a new tribunal to hear customer complaints while Labor insists on a royal commission that could lead to structural changes to the industry.

The NAB yesterday revealed a board decision that was taken in May, overseen by company chairman and former Treasury secretary Ken Henry, to stop making political donations, effective immediately.

The decision is a danger sign for the Coalition given the NAB’s traditional preference for the conservative side of politics — giving about $240,000 to the Liberals last year but only about $35,000 to Labor.

The Commonwealth Bank told The Australian it no longer made political donations but would pay to attend major party events as a business observer — a practice that also generates revenue for the major parties — while Westpac has already stopped donations.

“Any expenditure reflects payment for participation in legitimate activities where they were assessed to be of direct business relevance to Westpac,” said bank spokesman David Lording.

“This includes business observer programs attached to annual conferences, policy dialogue forums and other political functions such as speeches and events with industry participants.”

Westpac’s last disclosure with the Australian Electoral Commission showed it gave $176,000 to political parties in the year to June 2015, with about 60 per cent going to the Liberals and the remainder to Labor.

The ANZ Bank gave $100,000 to the Liberal Party last year and $80,000 to Labor. The Commonwealth Bank gave $100,000 in total last year, split down the middle between Labor and the Coalition.

Bill Shorten dismissed the NAB move as a “party political matter” for Labor administrators. “Frankly if NAB doesn’t want to donate that’s fine for me,” he said.

“All I want is a banking royal commission. If the banks want to punish the Labor Party by never making a donation because we’re standing up for the consumers of banks, be my guest.”

But the impact of the shift is certain to be more troubling for the Coalition than for Labor, which received $131,000 last year from the Electrical Trades Union’s Victorian branch as well as $55,000 from the construction division of the Construction Forestry Mining Energy Union.

The union donations do not include voluntary support from the ACTU and its members, a crucial factor in some of Labor’s gains at the last election.

Mr Elliott acknowledged the ANZ Bank’s considerations could worry the major parties.

“That’s part of the debate we have — it may be very easy for us to say ‘it’s up to our shareholders, let them do it’ but if they don’t, are we all poorer for it as a part of the democratic process?” he said.

Greens MP Adam Bandt asked the ANZ chief during yesterday’s hearing why the bank only donated to the two major parties rather than others — a question seen by some as a suggestion that the Greens should get some of the funding as well.

Asked about Mr Bandt’s question, Mr Elliott said it was “quite apparent” that the Greens MP was suggesting his party should receive more donations.

“A view is that if your argument is we’re supporting the democratic process, in order for that process to be effective you need two major parties. The other argument is you could fund the parties relative to the votes they receive,” Mr Elliott said. “It’s something on our board agenda and it will continue to be discussed. There’s no particular time frame. And I would say the board has a variety of views.”