UNIONS KEY FUNDING SOURCE FOR ALP

C O N F I D E N T I A L CANBERRA 000104

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 02/05/2018
TAGS: PGOV ELAB AS
SUBJECT: UNIONS KEY FUNDING SOURCE FOR ALP


Classified By: Political Counselor James F. Cole, for reasons 1.4 (b)
and (d).


1. (C/NF) SUMMARY: Unions provided the Australian Labor Party
(ALP) with a significant financial advantage during last
year's election campaign. In the year to June 30 2007, the
ALP raised A$66 million (USD 60 million) - almost 20 percent
more than the Liberal and National Coalition - with unions
contributing A$5.2 million.(USD 4.6 million) This does not
include the A$20.9 million (USD 18.7 million) the unions
spent during this period on their campaign against
"WorkChoices" - the Howard Government's workplace relations
reforms and arguably the most significant issue of the
Federal election campaign. Union leaders now want a return
on this investment, and Prime Minister Kevin Rudd, while
likely less willing than former ALP leaders to give organized
labor what it wants, cannot ignore the role union money
played in the election victory. Out of power in every
jurisdiction in Australia and with its state operations in
disarray, the Liberal Party is fearful the gap in resources
will widen as business donors in particular like to back
winners. Sensing the danger, Shadow Treasurer Malcolm
Turnbull has called for a ban on corporations and unions
donating to parties. END SUMMARY


DONATIONS REVEALED


2. (U) On February 1, the Australian Electoral
Commission(AEC) released its annual report for the 2006-2007
financial year. The ALP received A$66.5 million (USD 60
Million)in contributions, the Liberal Party A$45.2 million
(USD 41 million)and the National Party A$9.9 million (USD 8.9
million),giving the ALP an A$ll.4 million (USD 10.2
million)advantage over the Coalition. Changes to the
Electoral Act by the Howard Government in 2006 created a new
category called "political expenditure." For the first time
individuals and groups other than political parties and
associated entities were required to disclose how much they
had spent on anything related to politics. Subsequently, the
Australian Council of Trade Unions (the national union body)
disclosed that it had spent A$10.1 million on its "Your
Rights at Work" anti-WorkChoices campaign. Additionally, the
total spent by individual unions against WorkChoices was
A$10.8 million (USD 9.7 million). Effectively, the ALP
received a A$20.9 million (USD 18.7 million)advertising boost
from the ACTU on one of the ALP's strongest issues.


3. (SBU) After the unions, the next biggest-spending interest
group was the left-wing "GetUp!" (which has links to the ALP)
with campaign expenditure of A$555,234 (USD 497,667). The
ALP received almost A$15 million (USD 13.4 million)in
donations while the Liberals received just over A$9 million
(USD 8.1 million) and the National Party just under A$1
million. The rest was made up of investments, interest, and
public funding support for voting received in the NSW,
Queensland and Victorian state elections.


LIBERALS CRYING POOR


4. (SBU) New South Wales (NSW) Opposition Leader Barry
O'Farrell has called for a cap on the amount parties can
spend during a campaign, while Shadow Treasurer Malcolm
Turnbull called for a ban on donations from business and
unions. Soon after the Federal election, the Federal
Executive of the Liberal Party established a review into the
party's fundraising. In a speech in December, Liberal
Federal Director Brian Loughnane said that for the first time
in Australian history, a third external force (the unions)
had intervened in the political process with resources
Qhad intervened in the political process with resources
greater than either of the major political parties." (Note:
The Liberals are at a fundraising disadvantage. Overall,
corporate Australia donates roughly even amounts to the ALP
and the Liberals, but the ALP has a cash cow the Liberals
don't have - the unions. In addition, with the states making
many of the key regulatory decisions that affect businesses,
the ALP, which controls all state governments, has benefited
substantially. Out of government in every jurisdiction and
with its state divisions a mess, potential donors will think
twice about contributing to the Liberal Party.)


RUDD'S A$30 MILLION DEBT TO THE UNIONS


6. (C/NF) Comment: While the money amount raised from June 30
until the November 24 election will not be known until
February 2009, the 2006-07 figures affirm the integral role
unions played in the ALP's victory. ALP National Secretary
Tim Gartrell described WorkChoices as "the most important
issue of the campaign." Without the unions, it would have
only been a minor issue. For over 18 months, unions ran
advertisements in the media, targeted marginal seats, and
brought to light every case in which a worker may have been
exploited by WorkChoices. Union leaders, which imposed an
extra levy on their members to fund "Your Rights at Work",
are under pressure to deliver a return on their investment.
Responding to the Government's call for wage restraint to
combat inflation, the unions have asserted that they will not
accept a reduction in real wages. With the Reserve Bank
raising interest rates of February 5 to its highest level in
16 years, union leaders may be tempted to flex their muscles
to maintain their members' purchasing power.


7. (C/NF) Comment continued: Liberal Party,s Federal
Director Brian Loughnane conveniently "forgot" one key source
of campaign spending not covered by the AEC report: official
government funds that were used in "informational" spots for
the Australian public. These TV advertisements and mass
mailings, which totaled around A$200 million and
controversially included some senior public servants
(officially non-partisan),extolled the virtues of the Howard
Government,s policies on everything from WorkChoices to
keeping children safe from internet pornography. However,
this inconvenient truth actually reinforces the reality of
the Coalition,s financial plight: they won,t have access to
hundreds of millions of dollars in free advertising in the
next campaign.

MCCALLUM