A detailed and extensive examination of corporate political expenditure has found that Australia’s publicly-listed companies disclose little information about their political expenditure, lagging well behind their US counterparts.
The report, commissioned by the Australia Institute from corporate governance and responsible investment solutions provider ISS-ESG, assesses the corporate expenditure disclosures, policies and oversight of 75 of the 100 largest companies on the Australian stock exchange (ASX), with stark findings.
- 75 large, publicly-listed Australian companies were scored for disclosure, policy and oversight of political expenditure
- The average scores for Australian companies lagged those of US companies scored against an equivalent measure: on disclosure (22% for Australian companies vs 50% for US companies), policy (28% for Australian companies vs 68% for US companies) and oversight (14% for Australian companies vs 50% for US companies)
- Only one in three Australian companies assessed (33%) had complete disclosure of payments to political parties and candidates
- Three in four Australian companies assessed (73%) had no disclosures of payments to trade associations
- Investors can promote responsible governance of corporate political expenditure by paying attention to direct and indirect political expenditure, establishing structures for independent oversight, reviewing policies and actual spending and considering the broader implications of ESG issues associated with political spending
“In campaigns by vested interests against the mining tax, the carbon tax and limits on poker machines, corporations have used massive political expenditure to distort the public debate,” said Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program.
“In one of the most comprehensive and detailed studies of corporate political expenditure ever conducted in this country, ISS-ESG finds that publicly-listed Australian companies are significantly behind their US peers on disclosure, policy and oversight.
“A lack of systemic disclosure and scarce voluntary disclosure means the true impact of political expenditure from the nation’s largest and most powerful companies is essentially impossible to quantity.
“This report makes it clear that big corporations have the capacity to greatly influence public policy debates but are not held accountable for it.
“Corporate political expenditure involves shareholders’ money – but it is not always spent in shareholders’ best interests.
“Corporate political expenditure should be transparent, scrutinised and subject to shareholder approval.”