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Cost Of Democracy
<p>Fiona Katauskas</p>

Fiona Katauskas

The Half-Million-Dollar Cure

How to lose half a million dollars and feel better in no time.


Not many of us could give away $500,000, then forget we’d done it. Paul Ramsay is one of the few.

But, hey, that kind of money probably looks like small change, when you’re worth roughly $2.5 billion.

Still, the tale of the forgotten half-mill is worth telling, because of where the money went – to the Liberal Party of Australia. It’s interesting, too, because of the timing, which we’ll get to later.

First a little background on Ramsay, who made his billions in the health sector. Ramsay Healthcare, established in Sydney in 1964, currently operates 120-odd hospitals and day surgeries globally. Ramsay also has various other interests, including Prime Media.

The other important thing to know about Paul Ramsay, is that he is extremely politically partisan, even by the standards of Australian business leaders.

The Global Mail’s analysis of Australian Electoral Commission donations data shows that over the past 14 years, his companies Ramsay Healthcare and Paul Ramsay Holdings have given more than $1.8 million to the Liberal Party.

In both the magnitude and the one-sidedness of his giving, Ramsay stands out.

And they’ve given nothing to Labor or any other party.

Now, as we’ve noted before, business donors tend to prefer the conservative parties, and to donate accordingly. But it’s also true that pragmatism encourages them to hedge their bets, particularly when Labor is in power or is likely to win power. You can see it quantified in our graphs here.

And the health sector is no different from any other industry sector. It prefers the conservatives, but hedges with Labor.

Medicines Australia, the peak body representing the pharmaceutical industry, is pretty typical; over the past 14 years, it gave about $355,000 to the Coalition, and about $266,000 to Labor. The Pharmacy Guild gave $820,000 to the conservatives and $784,000 to Labor.

Not Paul Ramsay. Regardless of who’s in power, or what policy issues are running, his donations all flow one way. In both the magnitude and the one-sidedness of his giving, Ramsay stands out.

Now, to the wayward $500,000.

Paul Ramsay Holdings kicked the money into the federal Liberal Party can on February 2, 2012. On March 1, it gave $10,000 to the Victorian division of the Liberal Party, and on June 22, gave another $5,000 to the federal division.

But, here’s a funny thing: the company’s return to the AEC, submitted on November 16, just one day before the reporting deadline, records only the two smaller donations. Apparently they just forgot half-a-million dollars.

But here’s the second funny thing. The return submitted by the federal Liberal Party to the AEC does not record the $500,000 either. The Libs’ return does record a $100,000 donation from another Ramsay company, Ramsay Health Care Limited, given on August 26. But of the much bigger donation, given six months earlier, no sign.

As for the separate $5,000 donation – it does not turn up on the party return either, because the Howard government (as we’ve also mentioned before) increased and indexed the threshold above which parties must report donations. That threshold currently stands at $12,400.

So, how do we know about the big donation, given that both the donor and recipient did not mention it in their returns?

Because the electoral laws also require returns to be submitted by so-called “associated entities”, which is bureaucrat-speak for front organisations. These organisations collect money on behalf of parties and then pass it on, scrubbed of the details of the actual source of the dough.

It’s basically a laundering service. In order to find out who’s really bankrolling politics, it is not enough to just search the party returns to the AEC; you also have to look at the donor returns and the associated entity returns.

One of the biggest of the associated entities is called the Free Enterprise Foundation. Over the 14 years analysed by TGM, the foundation has collected more than $3 million on behalf of the Liberal and National parties.

In years past, the foundation has bundled donations from large numbers of donors, but when it submitted its return for the 2011-12 financial year, on October 20, it recorded just one donation: $500,000 from Paul Ramsay Holdings.

<p>Fiona Katauskas</p>

Fiona Katauskas

After laundering through the Free Enterprise Foundation, the money, or at least $490,000 of it, went on to the Liberal Party, which recorded the source as the foundation, not Ramsay.

But clearly somebody noticed that Ramsay, by failing to declare the huge donation, was in breach of its obligations under electoral law. Whether it was the AEC – which does check these things – that spotted it and got onto Ramsay Holdings, or whether the company noticed the omission itself, we can’t be sure.

But a correction was made. Three months after the deadline for filing its return, on February 24, 2013, Ramsay Holdings submitted an amendment to its original disclosure return, declaring the $500,000.

The return says the money went to “Liberal Party of Australia, PO Box 6004, Kingston, ACT, 2604”.

Which isn’t correct either, because it went to the foundation. But at least the money was, finally, declared by the forgetful donor.

Now let’s go to the timing of the donation.

As we said earlier, Ramsay is a consistent supporter of the Liberal Party. However, this donation was huge, even by his standards.

The question is why so much, and why then?

Well, as we’ve noted before in this series of stories on political funding, donation patterns are apt to shift when companies are lobbying on matters of specific policy interest. For a classic example of this, relating to poker-machine reform, look at this.

And sure enough, in February 2012, when Paul Ramsay Holdings made its lavish gift to the Libs, there was a big policy issue before federal parliament. One of great concern to an owner of private hospitals.

The Labor government was proposing to means test the private health-insurance rebate, which had been introduced by Ramsay’s friends in the previous, Howard Liberal government.

Such a move would direct traffic away from the private sector and back into the public health sector.

No doubt the government was primarily motivated by the immediate pressures of its blown-out budget, but there are also good longer-term public-policy reasons for means testing rebates for private health insurance – indeed for scrapping them altogether – as you can see here.

But those corporate interests which benefit from the rebate, health insurers and private hospitals foremost among them, immediately began a huge campaign to prevent change.

And Liberal Party parliamentarians were with them all the way, arguing vehemently against this bit of good policy, as you can see in this graph from our Party Lines tool.

Alas for them, it did no good. The changes scraped through with the support of the Greens and independents.

That battle was lost. But fast-forward to election 2013, and the announcement of the Liberal Party’s health policy, and what do we see? A promise by Tony Abbott to restore the rebate, as soon as budgetary conditions allow.

And you can bet that is one promise he is very keen to keep. Conservative ideology demands it. More than that, conservative party funding depends on it.

During the 2010 election, The Global Mail’s philanthropic backer Graeme Wood made (fully and properly declared) donations of $1.68 million to the Australian Greens.

12 comments on this story
by David Thompson

Ramsey is also all over this Uk Government too
money lobbyists etc buy s what one wants
blue Tory Westminster Millionaire cabinet like Fracking-
also like Ramsey healthcare and taking business from NHS -
have the Cameron and Abbott through Crosby made a deal
so Ramsey and others make their many mIllions back? Despicable

August 24, 2013 @ 7:46am
by dorothy lascelles

Congratulations Mike. I do hope you'll continue to "keep the bastards honest" when we have to endure this frightful mass of conservative politicians.

August 24, 2013 @ 8:30am
by Heather

Does the corruption ever end?

August 24, 2013 @ 8:55am
by Derek Jon Holden

Don't union's do the same thing with Labor & I bet they don't hedge their bets with other parties. Where is the difference.

August 24, 2013 @ 2:29pm
by Steve Carey

Another instance of the pernicious effects of donations to political parties. We would be better off if these transactions, which are surely quid pro quo, were banned. Good article. The coming conservative administration will see big money really let rip. A sad prospect for our country.

August 24, 2013 @ 6:21pm
by michael mills

this only balances the huge contributions from the trade unions which of course they also give to the coalition - some chance.

August 25, 2013 @ 2:08pm
by Michael Johnson

Surely – if The Global Mail and its philanthropic backer Graeme Wood are to continue and/or increase public respect – an article such as Ramsay Group's obviously extra ordinary donations to the coalition – could and should be balanced with research's comments regarding above and/or below view donations other parties may be receiving – for example, reputedly/allegedly the labor party currently has in its snout in the trough of
– numerous unions and other/similar trade associations SPL=CORRECT!!!!labour party currently having its snout in the trough of
– numerous labour Unions and trade associations
– big time into taxpayers funds for massive election-focused advertising , including
(A) a reputedly $20+ million advertising program within Australia promoting ban the boats – with little if any communication power at the source of the boat people ... compared to News (at $0 cost) within and International eg, radio Australia and pushing all the boat people source governments to run the news regularly on radio and TV
(B) various other "we are doing it great for you" programs pushing the current government

Noting no other political interests can originate or gain anything from any of the above-mentioned public expenses – and – I believe you will find the coalition receives little if any donations from any unions or trade associations

August 25, 2013 @ 2:44pm
by Peter

This is the lowest of the Low. Paul Ramsay is basically making his profits out of people needing health care and is concerned that a flow to the public system will reduce his profits.

August 26, 2013 @ 11:11am
by Korstraw

Here's a hint to them criticizing union donations to the Labor Party, have a look at the history of the party, the bigger clue is the word LABOR.

August 26, 2013 @ 2:38pm
Show previous 9 comments
by Cait

How tedious that some people here seem to justify corrupting behaviour by suggesting others do it (evidence apparently irrelevant!) . There is no end to that form of argument -eg. arguing that because terrorists kill people we need to do the same. Alas, it becomes a race to the bottom.

Democracy is like a cat. If you don't look after it it goes away.

August 31, 2013 @ 1:00pm
by Ric Svanberg

The sub-text to all of this is that conservative political parties can be bought for a very small relative amount of money when compared to corporate profits. The recipients of these donations are either naive, dumb or financially illiterate .....all a bit of a worry when the qualities of critical thinking, worldliness and a broad understanding of finance and economics are what we need from our politicians to lead and manage our country. To compare union funding of the Labor party to these alleged Ramsay rent seeking donations is misleading. Unions, even in their current diminished state, represent far more people (including those who don't pay union fees) than Corporate Australia. Leaving aside the more recent failures and corrupt practices of some Union officials, Unions leaders, on the whole, do not push their own specific self interest with an eye on profit outcome for themselves, they concern themselves with the welfare of all their members. So before the conservative supporters throw stones at Union power and corrupted interests just remember the Cartel fines against Visy, illegal price fixing (tendering) in the building construction industry, tax avoidance schemes etc.

September 2, 2013 @ 11:10am
by Paul Rogerson

And the 10 million donated to the labor party by the unions ... to be repaid by the 10 million granted by labor to the unions .... hmmmm not a mention

September 24, 2013 @ 5:25pm
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