COLLAPSED managed investment scheme (MIS) company Great Southern donated $40,000 to the Australian Labor Party in the lead-up to the 2007 federal election — including $10,000 just two days before the ALP's victory.
Australian Electoral Commission records show Great Southern gave $30,000 to the ALP on July 31, 2007, and another $10,000 on November 22 — two days before the federal election, and two days after Labor released its MIS-positive primary industries policy.
It also made a $2000 donation on November 13, 2007, to the campaign account of Martin Ferguson, now the Minister for Energy and Tourism.
Great Southern gave nothing to the Liberal Party over the same period, but donated $5500 to the WA branch of the National Party in July 2007 and the NSW branch of the ALP $1000 in May 2008.
Great Southern entered administration on Sunday owing $600 million, weeks after rival MIS operator Timbercorp met the same fate. The collapse of the two companies, which sold tax-effective investment products linked to agribusiness ventures, has sparked debate about the use of MIS in Australia, and revived controversy over their impact on the environment and rural communities.
The fortunes of Great Southern, and of rival Timbercorp, rose and fell on government policy and Tax Office rulings — soaring during the pro-plantation early years of the Howard government, peaking after MIS tax breaks were reinstated in 2001, then plummeting after the Coalition moved to scale back non-forestry MIS tax advantages in early 2007.
Great Southern spent $62.3 million on commissions, marketing and promotion of its products and its industry in the year to September 2008.
Its high debts and reliance on annual MIS sales, as well as the drought and the global financial crisis, have been cited as reasons for its problems.
But the 2007 move by the Tax Office, backed by the Coalition, to disallow upfront deductions on non-forestry managed investment schemes — which both Timbercorp and Great Southern operated — was also highly detrimental to the sector. Although the move was overturned last year, it created taxation uncertainty for non-forestry MIS investors.
Labor's pre-election primary industry policy, released on November 20, 2007, was critical of the Coalition's stance, and promised to conduct a "comprehensive review" of the costs and benefits of MIS.
"In recent years, there has been significant debate about the use of MIS as a tool for attracting investment to rural and regional Australia," Labor said in its policy document.
"As a result (of the Howard Government change), thousands of jobs and hundreds of millions of dollars in investment in rural and regional Australia are at risk. This decision was taken without consultation with the MIS sector."
Treasury launched the promised review last year.
The 2007-08 political donations were Great Southern's first since 2004-05, when it gave $20,000 each to the Liberal, National and Labor parties. It gave $20,000 to the Liberals in 2003-04, $10,000 to Labor and $10,000 to the National Party.
The ALP's national office declined to comment on the donations. But the Labor Party's code of conduct on donations says the party does not accept funds that are subject to conditions of any kind, nor will it accept funds that, "even if only by inference", are aimed at gaining the party's support for "specific actions, attitudes or public statements".
A spokesman for Mr Ferguson said the donation was "received and disclosed in accordance with party rules".
Nationals WA president Colin Holt said the donation to his party was "part of the relationship between corporates and political parties that occurs".
"(I think) they decided to donate to our party to help form a relationship," he said.
But Greens leader Bob Brown said the Great Southern donations demonstrated the need for such corporate donations to be banned. "There's a general rule that companies don't donate to political parties for no gain," he said.
The Government is pushing for better disclosure of political donations. Legislation that would have reduced the disclosure threshold for political donations was defeated in the Senate in March after the Opposition and Family First voted against it.
Email a friend