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The murky business of political donations by the big banks

Neil Slonim /

Big banks

Source: AAP Image/Joel Carrett

 

The Australian Electoral Commission has just released its 2014-15 financial disclosure returns, which reveal that in the last two years Australia’s big four banks have donated $1.36 million to the major political political parties.

A closer analysis of the report reveals:

 

  • There appears to be an inverse relationship between bank performance and the amount donated to political parties. The best-performing bank, the Commonwealth Bank, donated $232,000 over the past two years. Meanwhile ANZ and National Australia Bank, the two worst-performing banks, donated $405,000 and $355,000 respectively.
  • Perhaps unsurprisingly the big banks favour the Coalition over the Australian Labor Party (64% to 36%). However, there is a substantial difference between CBA, which is more even-handed with a 55:45% split between donations to the parties, compared with NAB’s lopsided 73:27% split.
  • The two Melbourne-based banks, ANZ and NAB, happen to be the biggest supporters of the Liberal National Party.
  • Between 2013-14 and 2014-15 the banks increased their donations to the major political parties by 16%.

 

Full details of political donations can be found on the AEC website but the following table summarises the position of the big banks.

 

$M

2013/4

2014/5

TOTAL

% LNP

% ALP

CBA

$0.132

$0.100

$0.232

55

45

WBC

$0.192

$0.176

$0.368

63

27

ANZ

$0.225

$0.180

$0.405

61

39

NAB

$0.080

$0.275

$0.355

73

23

TOTAL

$0.629

$0.731

$1.360

64

36

These figures raise a number of questions which the banks, shareholders and regulators may consider including:

  • Should banks, or any other company, union or individual be permitted to donate shareholders’ funds to political parties?
  • Should there be a cap on political donations?
  • Does it make a difference if the donor is a public rather than private company or individual?
  • Should shareholders have a say in this like they do with executive remuneration?
  • What returns do donors expect and actually receive from these investments?
  • How and by whom are these returns measured and reported?

Neil Slonim is a business banking advisor and commentator and is thefounder of theBankDoctor.org, a not-for-profit online resource centre helping SMEs deal with the challenges of funding a small business.

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Neil Slonim

Neil Slonim is the founder of theBankDoctor.org, a not-for-profit online source of free, independent banking advice for SMEs.

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