Analysis: Political funding and donations by the Big Four

The Australian Electoral Commission has released its political donation data for the 2021-22 financial year, with the Big Four once again splashing out in support of political leaders and parties. A deep-dive into where and how the country’s four largest accounting and consulting firms donate.

The Big Four have again featured toward the top of the donor’s list according to the latest Australian Electoral Commission (AEC) data release on political funding, together channeling a combined $860,000 in declared donations to Australia’s major parties. As is often the case in an election year, the figure is greater than the $655,000 sum reported to have been given over the previous financial year, although the difference in spending is far narrower than originally stated.

Amended only at the very end of last year, there was a significant discrepancy between EY’s original 2020/21 financial year submission – released by the AEC and reported on this time last year – and the updated sum of $142,000, which corresponds to the listed receipts.

Despite leading its peers for audit quality, it appears EY had overlooked $66,000 worth of donations to Queensland labor. Last year’s true figure then is $725,000, with the uptick exclusively attributable to Deloitte.

Regardless, disclosures for the 2021/22 financial period to July – released now eight months after the federal election – show that PwC once again led the way among its peers in terms of hand-outs, with $246,500 donated, just slightly ahead of the $240,000 given by KPMG. While these figures are consistent with the previous period, when both firms bumped up their spend by about $75,000, it was Deloitte’s significant increase which lifted the overall combined tally.

The least-giving political donor among the Big Four since 2015, Deloitte over the past financial year upped its budget from a shade under $100,000 to almost equal that of PwC and KPMG – such that three of the Big Four occupied three out of four consecutive slots on the rankings list for the largest corporate or individual donors in 2021/22. Ernst & Young meanwhile ultimately decreased its outlay by around $12,000 – giving barely half of that compared to its rivals if the figures can be trusted.

Donations: Labor versus Liberal

The division in donations directed to each major party and differences among the firms was particularly intriguing, especially in light of Labor’s vow to drastically slash the government’s consulting spend. In 2020/21 prior to the full election build-up, their donations were almost evenly split between the Coalition and ALP.

While PwC, the largest political donor of the quartet with almost $2 million given since 2015, largely maintained this approach alongside KPMG (albeit slightly geared to the right), the Deloitte and EY figures reveal a greater bias – but tilted in different directions.

Of the $240,000 donated by Deloitte, almost $150,000 of that was gifted to the various federal and state branches of the Liberal and National parties, with only around $90,000 handed over to their Labor counterparts, including $13,750 of that total given to Labor’s WA branch post-election. EY on the other hand recorded a roughly $100,000 - $30,000 split in Labor’s favour, although, again, more than half of Labor’s total was donated post-election, in both Queensland and WA.

Looking closer

Such variances in the dates and location of donations highlights the problematic nature of drawing election-year conclusions from the headline national annual totals alone, as by digging deeper the data can paint a somewhat different picture. For example, PwC – which has had strong personal links to the Liberal party among its upper echelons in the past – gave some $53,000 to federal Liberal in the month of the election, compared to a paltry $500 bucks forked over to Labor.

On a similar note, while the aggregate total has been distributed fairly evenly between ‘Liberal’ and ‘Labor’, a deeper dive reveals different parties in particular states to be the major beneficiaries, skewering the national figure. Here, the Labor party’s WA branch, which governs Australia’s mining capital with an overwhelming majority, received more than a quarter of all Big Four Labor donations at state or federal level, and around a third of those given to ‘Labor’ by PwC.

Meanwhile, on the other side of the continent, the incumbent NSW Liberal party – which continues to face criticism for its ballooning consultancy bill – raked in approximately $80,000, with EY its most generous benefactor in handing over more than $30,000. Looking more closely then at a breakdown of EY’s donor activities, and just three state entities – the Queensland and WA Labor branches and NSW Liberal – received close to 70 percent of its $130,000 total.

Elsewhere

The cash given by the Big Four places these firms a fair way ahead in terms of their largesse compared to a number of organisations which generally draw a great deal more scrutiny as to political influence, such as those from the mining & resources sector. Inpex and Santos each donated around the $150,000 mark, while Woodside and Adani were closer to $100,000. The Minerals Council of Australia (of which the Big Four bar Deloitte are members), however tipped in close to a quarter of a million.

Meanwhile, outside of a single, mysterious $24,000 donation from McKinsey & Company to the ALP in February last year, no other major management consultancy or mid-tier accounting and advisory network is registered as having given a direct donation to either major party above the $14,500 declaration cut-off. Though one lesser known consultancy, Nexus, which describes itself as the nation’s “leading corporate advisory & public affairs firm”, did donate more than $120,000.

Dark money

Still, with the disclosure thresholds as they currently stand together with loopholes such as the opaque ‘other receipts’ income category, it’s difficult to gain a true picture of the movement of funds between corporate Australia and the nation’s leading political parties. According to Australian Democracy Network’ sums, some 40 percent of the total funding raised among the major parties in 2021/22 – or almost $120 million – was so-called ‘dark money’, with no publicly identifiable source.