Amid an Olympic boom, it’s risky timing to lift a ban on developers’ political donations

Queensland is a step closer to lifting a ban on political donations from property developers – despite a corruption watchdog’s warning that doing so in a A$7 billion Olympics building boom could raise “risks of undue or improper influence”.

Last Friday, a parliamentary committee with a majority of Liberal National members tabled a report supporting the state government’s proposed electoral law overhaul.

Among a raft of changes, the proposed law would undo a nearly decade-old ban on property developers donating to state political candidates. The current ban on developer donations to local government elections would remain.

Queensland, New South Wales, Victoria and the Australian Capital Territory all currently ban donations from property developers. South Australia has gone further, last year banning all political donations.

With billions in taxpayers’ dollars being spent on the Games, what’s the argument for lifting the ban? And does it stand up?

Billions in development underway

Between now and the opening ceremony of the 2032 Brisbane Olympics, at least A$7 billion will be spent on Olympic and Paralympic games infrastructure across Queensland, from new stadiums to athlete villages. Some $3.4 billion of that is federal funding – meaning all Australian taxpayers are chipping in.

Facing major challenges to meet that deadline, the Liberal National government passed laws to fast track approvals on Games infrastructure. That means they’re not subject to standard planning and environmental laws.

In a submission to the parliamentary committee, Queensland’s Crime and Corruption Commission warned of “increased risks of actual or perceived corruption” tied to political donations in the lead up to the Olympics.

There is concern that the reintroduction of property developer donations could exacerbate real and/or perceived risks of undue or improper influence, particularly as developer interests align closely with major projects.

Read more: The fast-tracking of Brisbane’s Olympic infrastructure plans could backfire

Why are developers treated differently?

But when does trying to guard against corruption cross the line into impeding people’s freedom of political communication?

A decade ago, property developer and former Newcastle mayor Jeff McCloy challenged the validity of NSW laws capping political donations and banning donations from property developers.

In 2015, a majority of High Court judges upheld the validity of NSW’s ban on property developer donations, noting in their judgement there was:

an apparently strong factual basis for the perception of a risk of corruption and undue influence as the result of political donations from property developers.

A series of seven reports and a position paper of the New South Wales Independent Commission Against Corruption (ICAC) has identified corruption and other misconduct in the handling of property development applications since 1990, and the existence of a large measure of public concern over the influence which property developers have hitherto exercised over state and local government members and officials.

That history is an example of why property developers’ donations have come under more scrutiny than others and face tighter restrictions in some parts of Australia.

Why did Queensland bring in a ban?

Queensland’s ban on donations from property developers was introduced by the Labor government in 2018. It followed a Crime and Corruption Commission investigation that exposed widespread corruption, non-compliance with election funding rules, and undisclosed conflicts of interest by local government officials.

Following that investigation, mayors, councillors and council officers in Queensland faced dozens of criminal charges.

Then anti-corruption commissioner Alan MacSporran said local government was a “broken” system, and “a hotbed of perceived corruption”.

The Queensland anti-corruption body had previously conducted investigations on developer donations and conflicts of interest in 1991, 2006 and 2015, showing this had become a systemic problem at a local government level.

The Crime and Corruption Commission report only recommended banning political donations at a local government level. But the then Labor state government took it a step further, arguing if it was “good enough for one level of government, it’s good enough for all levels of government”.

Looking ahead

The LNP has long argued the ban wasn’t recommended at a state level, unfairly stigmatises developers, and was really about Labor creating an uneven playing field for electoral donations.

However, there has been a long history of corruption in Australia directly relating to property developers. Any weakening of political finance regulation increases the risk of both actual and perceived corruption in government.

The LNP government has a clear majority to pass this bill. There’s every sign it will go ahead.

But the bill still has to be voted on in state parliament. This gives the Queensland government time to reconsider its approach, both to preserve the integrity of its electoral system and to protect public perceptions of the 2032 Brisbane Olympics.