Companies that make political donations are more than twice as likely to win government contracts and should be banned from working with departments for an entire electoral cycle, according to a key transparency group.
But a constitutional expert has warned that a ban could be an overreaction that confuses coincidence with corruption, given that public servants who award contracts may have no knowledge of donations to political parties.
The Centre for Public Integrity, which assessed 10 years of donation disclosures and procurement data, found the average value of contracts awarded to political donors ($3.3m) was significantly higher than non-donors ($762,449).
“We have found that over this period, donors were 2.49 times more likely to win procurement contracts than non-donors,” the analysis said.
While the group states there is no formal link between political donations being made and government work being awarded, it has raised concerns about money being used to increase a company’s access and influence.
Geoffrey Watson, a former counsel assisting the New South Wales Independent Commission Against Corruption now with the Centre for Public Integrity, said the decade of data showed why reform was necessary.
“The people who are making these donations are not fools and are doing it for a reason,” Watson told Guardian Australia. “The data demonstrates that the donations achieve their purpose because they’re receiving more government work. It’s as simple as that.”
This year the Greens introduced a private member’s bill that would ban firms from winning government contracts within a year of their last political donation. The Centre for Public Integrity supports that measure but believes the ban should last for an entire election cycle.
“In our view, this would allow for better protection against the risk that donations are used to influence the allocation of public funds,” the centre told the inquiry.
But the bill was not supported by constitutional expert, Anne Twomey, who said the amendments should be “more focused upon actual corruption rather than coincidence”.
“There seems to be an automatic and unjustified assumption that all political donations are made for the purpose of causing corrupt conduct and that government contracts, grants, etc, are made for the corrupt advantage of political donors,” Twomey said in her submission to the inquiry.
“While these things may well occur in some instances, it is over-inclusive to include all contracts, grants, permits, etc, especially where ministers are not involved as final decision-makers.”
The Greens senator Larissa Waters, who moved the private member’s bill, described the proposed 12-month ban as “modest” and “uncontroversial”.
“This obscene merry-go-round of public money for political donors is an ongoing blight on our political system, the idea that it is all a big coincidence doesn’t fly. It needs to be called out for what it is; legalised bribery,” Waters said.
The Centre for Public Integrity said modest donations from individuals could “contribute to a thriving democracy”, but raised concerns about those aimed at “securing favourable outcomes or giving donors privileged access to decision-makers”.
It also raised concerns that laws governing donations were too narrow to capture “the full range of payments used by private entities to influence and access the political process”. These payments include in-kind donations, fundraising events, catering and event-hosting. The Albanese government is considering changes to donations rules.
The so-called big four consultancy firms – KPMG, PwC, EY and Deloitte – have used these methods to donate $4.3m to Labor and the Coalition over the past decade. During that time, the value of their government contracts increased by 400%.
“While PwC, following recent events, has publicly committed to stop making political donations – on the sound basis that this is the ‘best way of ensuring the highest standards of governance’ – the other firms have so far failed to do so,” the centre’s submission said.
Deloitte and KPMG did not follow PwC Australia’s lead and have defended in-kind donations – rather than cash payments – as contributions to public policy discussions and networking between government and the private sector.
