Corporate Lobbying in Australia: a billion dollar business
at 12:15 am on November 9, 2017
By Leith van Onselen
https://www.michaelwest.com.au/corporate-lobbying-a-billion-dollar-business/
In case you missed it, independent Investigative Journalist, Michael West, has released a ripper new report on corporate lobbying in Australia, which was commissioned by GetUp!.
Below are the key points from the investigation:
- The analysis covered the financial statements of 20 business peak bodies. Together, their revenue surpassed $1.94 billion over the past three years.
- Besides funding advocacy via their peak bodies, large corporations also have “in-house” government relations capabilities and communications teams whose role is to effect political outcomes.
- Many large corporations also hire specialist government relations consultancy firms to lobby. This spending may sometimes be claimed as tax deductible.
- Membership of business and professional associations is tax deductible.
- Our analysis of 20 peak bodies is by no means exhaustive. Overall, peak bodies number in the hundreds. The analysis did not cover entire sectors such as food, retail, media, advertising and insurance. It covered only the major peak bodies in health, property, energy and banking and finance.
- Like political donations, funding of peak bodies tends to rise and fall with the electoral cycle and with funding requirements for specific lobbying campaigns.
- Many advocacy bodies receive government grants on top of their favourable tax status although these tend to be organisations which are not funded by large corporations.
- Some of the top tier lobby groups representing big resources companies, pharmaceutical giants and the global oil majors – such as Minerals’ Council of Australia (MCA), Medicines Australia and Australian Petroleum Production and Exploration Association (APPEA) – are majority controlled and funded by foreign shareholders.
- Many of the business peak bodies surveyed champion the same causes such as lower corporate tax rates and lower entitlements for workers.
- Most big resources companies have multiple memberships. BHP for instance is a member of the Business Council of Australia, MCA, APPEA and the Corporate Tax Association.
- The big banks also have multiple memberships and directorships of peak bodies such as the Australian Bankers’ Association, the Financial Services Council and other financial services peak bodies.
- Many peak bodies also offer education and professional development services so advocacy is one part of their operation.
- In most cases, the standards of financial reporting and disclosure are poor.
The following quote is key, and highlights the power wielded by these lobby groups over public policy all the while operating on a tax-free basis:
The Minerals Council for instance, thanks to an aggressive media advertising campaign, managed to oust an elected prime minister in Kevin Rudd, who was trying to impose an increase in mining taxes. It later emerged the corporate cost of deposing a prime minister was $22 million. This spending is evinced by the spike in MCA funding during those years when the lobby group fought higher minerals taxes.
The nation’s premier peak body, the BCA, successfully – and along with other lobby groups and corporate voices – helped to garner government support for $50 billion in corporate tax cuts via the government’s Enterprise Tax Plan, which would reduce the company tax rate from the present 30 per cent to 25 per cent over ten years.
Further to this, there is considerable overlap in the activities of many business peak bodies. Most campaign for lower taxes for their members and often lower wages or reduced entitlements for workers.
It is often difficult to evaluate the impact of peak body campaigns with any precision though.
Governments of both stripes have dithered for the past decade on introducing the second tranche of the Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) legislation which would require lawyers, accountants and the real estate sector to disclose their sources of funding.
The current Minister for Justice Michael Keenan continues to disclose only that the government remains in discussions with “stakeholders” over the legislation which was originally slated for introduction in 2008. The identities of these “stakeholders” remain hidden and the submissions and other entreaties of peak bodies is often undisclosed but it would not be surprising to find the property, legal and accounting peak bodies opposed the AML legislation…
The Property Council of Australia, with its revenues of $20 million to $30 million a year is a powerful force for advocacy and has opposed measures such as the abolition of negative gearing which would make housing more affordable…
There is an important point about democracy to be made here: peak bodies operate on a tax-free basis, they are subsidised by taxpayers but are not compelled to make their submissions to government public so taxpayers can see what campaigns they are indirectly subsidising.
I find it curious that the Turnbull Government would lambast an activist organisation like GetUp!, and demand that the Australian Electoral Commission recognise GetUp! as an “associated political entity” of Labor and The Greens, all the while ignoring the various lobbyist groups – like the Property Council of Australia, the Business Council of Australia, the Australian Bankers Association, and the Minerals Council – that are pulling the Coalition’s strings.
Full report here. https://www.michaelwest.com.au/corporate-lobbying-a-billion-dollar-business/