Mayor’s donations show it’s time for laws – not words

If you had scheduled an appointment at the Town Hall on Thursday, you would probably have left with a good understanding of why The Age considers our local government elections unfit for purpose in modern society.

You would not have been allowed to take a photo or make a copy of what you saw. Numbers were limited. Next week the information will be online – long after it could have been useful to the public.

What was this highly sensitive information that needed to be so closely guarded? The list of donors who bankrolled the election campaigns of the City of Melbourne mayoral candidates, including now-Lord Mayor Nick Reece.

Nick Reece being sworn in as the 105th lord mayor of Melbourne in November.Credit: Justin McManus

Melbourne City Council is unique among Australian electorates in having an inbuilt majority for rate-paying businesses. Residents make up only 44.91 per cent of the electoral roll. After changes to voting rules for the City of Sydney, it is also the only electorate in the country in which businesses get two votes each compared with one for residents.

In October, the chief executive of the Victorian Chamber of Commerce and Industry, Paul Guerra, argued for even greater influence for businesses. “[It’s] probably time to revisit whether two votes [for businesses] is enough, whether it goes to three or more … we need to make sure that the business voice is heard through the election,” he said. “The best way to do that is to make sure that it’s weighted against the residents.”

The problems presented by this system – described by ANU professor and public law scholar Ryan Goss as “un-Australian and undemocratic” – are made even more troubling by the lack of transparency around donations.

During the campaign, a number of mayoral candidates — notably the Greens’ Roxane Ingleton, who finished runner-up to Reece, and independent councillor Jamal Hakim — pledged to disclose their donations in real time, a key recommendation that IBAC’s anti-corruption probe Operation Sandon made for local and state government. It is one The Age supported as essential to the continued reputability and sound functioning of local government.

Last year, the state government also established an independent review of the electoral system which, under recommendation 9.3, called for real-time disclosure of donations. One of the review’s panel members was former federal Labor MP David Feeney, himself a donor to the Reece campaign.

But while the victorious Reece conceded that the 2001 City of Melbourne Act governing the council’s elections “needs a refresh”, this week’s revelations about the campaign war chest of the lord mayor and failed aspirants to the job show that what is required is a root-and-branch overhaul.

Real-time disclosure of donations would have told voters that Reece’s controversial proposal to sell off the Regent Theatre to raise money for the arts was coming from a man who had received $25,000 in donations from the Marriner Group, which operates the theatre, just the week before.

What difference might it have made to voting if the public had been able to see that the man who declared he would not “accept donations from property developers in the City of Melbourne” had received thousands of dollars from Alan Schwartz, founder of the Trawalla Property Group, and his wife, Carol Schwartz, a former director of the Property Council of Australia? Or Harry Stamoulis, who along with Dug Pomeroy controls the rundown Coates Building at 18-20 Collins Street?

SIG Group, which on its website describes itself as “an Australian-based property development investment group specialising in world-class residential, commercial and retail projects”, donated $20,000 to Reece’s campaign. Questioned about this, Reece said SIG was not a developer in the City of Melbourne and that the other donors were “property owners, not developers”. He said he asked many of the donors to sign a declaration to say they were not property developers to ensure he kept to his promise.

These people include some of the city’s most respected business leaders, some of whom have interests in property development but would rightly not consider themselves primarily developers. Our scrutiny is not attracted by any question over their conduct but that of a politician making a pledge to voters.

The donations to Reece’s 2024 campaign dwarf anything former lord mayor Sally Capp received, and are more than double those of the supposedly cashed-up “Team Kouta”.

In the Operation Sandon report, IBAC’s 13th recommendation asked “whether the regulatory regime governing donations in Victoria would be strengthened by identifying and prohibiting high-risk groups (including, but not limited to, property developers) from making political donations to political entities and state and local government candidates”.

The case for a prohibition on donations by property developers, as exists in New South Wales, has only been strengthened by this week’s disclosures.

While there is no suggestion anyone has breached any laws, we have no faith the system provides robust protections against the potential for future corruption, and it is out of step with what voters expect in 2024. And that is before one even begins to consider the flawed and outdated postal voting system.

On the eve of the Melbourne City Council election, The Age told its readers that if they were voting on integrity alone, they would struggle to find a suitable mayoral candidate. That was based on the fact so few of the leading candidates were willing to lead by example on questions of donation transparency and electoral reform.

Reece quite rightly called his pre-election commitment on developer donations within the city a “self-imposed rule”. Having now seen how that rule works in practice, we believe it is time the state government implemented some proper rules that don’t allow wriggle room, imposed on all candidates by law.

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