Spotlight on Country Labor as donor ‘tool’

NSW Labor has been hiving off money from $1 million collected in annual union affiliation fees to help prop up Country Labor.

NSW Labor Party president Mark Lennon. Picture: Justin Lloyd

NSW Labor has been hiving off large sums from $1m collected in annual union affiliation fees to help prop up Country Labor — even though its financially ­troubled regional brand is registered as a separate party and legally independent.

An investigation by The Aust­ralian, in the wake of a corruption inquiry that found “fake” donations went to Country Labor as part of attempts to hide a $100,000 cash contribution, raises new questions about whether the NSW ALP’s regional support base is a “sham” as many party insiders ­believe.

Annual “major political donor” forms sent to the NSW Electoral Commission for the 2018 financial year show Labor’s head office in Sydney’s Sussex Street split into two the lump-sum payments from at least 16 affiliated unions that provide the bulk of the party’s funding. It gave an average 18 per cent to Country Labor.

Head office sent its union donors­ receipts stating separate amounts went to NSW Labor and the separately registered Country Labor, but receipt numbers were identical for both parties in almost all cases.

NSW Labor, reeling from a dona­tions scandal that cost the job of party secretary Kaila Murnain and facing related legal bills exceeding $1m, has battled persistent allegations it registered Country Labor as a party “fundraising tool” to get around donation caps.

The broader challenge has been to fend off claims that — with the same staff, same office and same MYOB file for both — ­Country Labor is fully controlled by NSW Labor in possible breach of electoral provisions saying that they are separate. Several senior NSW union leaders confirmed they paid NSW ALP affiliation fees in annual or quarterly “lump sums” and made no split between the main party and Country Labor.

“We pay it upfront, anything after that would be done by head office,” one said.

Former NSW Labor governance director Julie Sibraa said in evidence to the NSW Independ­ent Commission Against Corruption investigation last month that she found party finances were ­“enmeshed” with Country Labor when she arrived in 2016.

NSW Labor defended its donations split with Country Labor on Thursday, a spokeswoman for party president Mark Lennon saying the “apportionment” of union affiliation fees was set “using the calculation in a service agreement between the two parties”.

She said the agreement had been “endorsed” by the NSW Labor governance committees and “overseen” by the NSW Elect­oral Commission.

Left unclear was the nature of the service agreement, who provided­ service and for what purpose­.

The Electoral Commission did not respond to questions.

One of the biggest NSW ALP-affiliated unions, the Shop Assistants and Warehouse Employees Federation, donated $75,826 in 2018. Head office split it as $62,434 for itself and $13,381 for Country Labor. Unions, like all donors, have $6400 individual funding caps but no limits apply to per capita­ affiliation fees.

The NSW Electoral Commission rejected a proposed NSW Labor bailout package in 2016 on the basis that the two parties were separate. But it did agree to a $1.68m loan to Country Labor, ­recently refinanced.