How the NSW government can still benefit from developer money despite political donations ban
Anne Davies
GUARDIAN AUSTRALIA
Wed, 22 February 2023
The New South Wales government is indirectly benefiting from donations from property developers who are legally able to give huge sums to fund prestige projects in the state, despite there being a ban on financial contributions to political parties.
One of the state’s biggest developers, Lang Walker, and his charity the Walker Family Foundation are now a major patron of the Powerhouse Museum, Campbelltown hospital and even the bicentennial of the NSW parliament, which will be celebrated in 2024.
It comes as Walker’s development company, Walker Corp, seeks to get 1,284 hectares of land rezoned for 12,900 houses at Appin on Sydney’s south-west fringe.
The Walker Family Foundation is a separate charitable entity and there is no suggestion its support for the projects is linked in any way to the Appin development.
Property developers making large philanthropic donations to government projects is entirely legal and arguably desirable when the public benefit. But experts point out that it can raise questions about the potential for (or perception of) undue influence in the state government’s dealings with that developer.
Related: Sydney’s growing pains: land rezoning a potential billion-dollar deal for developers after local council sidelined
Until last year Appin had been designated as suitable for housing “in the long term”, and the Department of Planning had said it was not needed until 2036.
But in November the planning minister, Anthony Roberts, announced that the NSW government was fast-tracking rezoning approval of Appin and that the state would take over assessment of the proposal from Wollondilly council.
Roberts and the NSW premier, Dominic Perrottet, said the fast-tracking, which the department said was part of a pilot scheme, was designed to help drive down real estate prices in Sydney by increasing supply of housing sites.
The relationship of state governments to developers has long been a source of sensitivity because of their role in planning and approving developments.
The former NSW Labor government was mired in multiple scandals about the potential (or perceived potential) influence that political donations by developers might have had on decisions.
Related: Ten donors gave 77% of total political donations in lead-up to last Australian election
NSW Labor was a huge beneficiary while in power. For example, companies in the Walker Corp group alone were able to legally donate more than $1.2m to the party over eight years before the ban. Other developers, including Payce Consolidated and Meriton, were also regular donors to both the state Labor and Liberal parties. Payce donated $106,000, while Meriton contributed nearly $600,000 to the state parties’ coffers.
The growing concerns about some Labor MPs’ relationships with developers and the potential for undue influence this might have over planning led to a total ban on developer donations to political parties in 2010.
But the NSW government accepts monetary support, albeit indirectly, from developers in other entirely legal ways.
After the NSW ban, Walker Corp continued its support of the federal Liberal party, donating more than $700,000 over the last decade to federal campaigns. There is no restriction on federal donations from developers, which can be made via state offices, provided they are deposited into the federal campaign account and used to fund federal activities.
More recently, some of the Walker Family Foundation’s philanthropy has been directed towards projects in NSW that would appear to have indirectly assisted the state government, while complying with the state’s ban on developer donations.
Powerhouse lifeline
By 2021 it was apparent that one of the NSW government’s marquee projects, the Powerhouse Parramatta Museum, was running over budget and would cost more than $500m to build. The Powerhouse announced it would seek $75m in private support.
In October that year Walker, through his family foundation, threw a $20m lifeline to the project.
In 2019 Walker gave $20m to fund a building named after him at Campbelltown hospital, which will be home to the Ingham Institute for Applied Medical Research.
The Ingham family, of chicken fame, are also a major developer in western Sydney and set up the institute a decade ago. It has attracted support from other developers including the Perich and Vitocco families.
Related: Can you predict which parts of Sydney will be next to gentrify?
Walker has said his family has a history of investing in medical research, including at the Chris O’Brien Lifehouse and St Vincent’s hospital in inner Sydney.
He told the Australian Financial Review: “We’ve got a lot of land in the Macarthur region. We want to give back to the universities, the medical side of things and sport.”
The Walker Family Foundation’s support for the Powerhouse will establish the Lang Walker Family Academy, including four state-of-the-art education facilities, plus dorm rooms for students and teachers to stay at the museum.
It would inspire and educate students in western Sydney and beyond, Walker said at the time.
Wed, 22 February 2023
The New South Wales government is indirectly benefiting from donations from property developers who are legally able to give huge sums to fund prestige projects in the state, despite there being a ban on financial contributions to political parties.
One of the state’s biggest developers, Lang Walker, and his charity the Walker Family Foundation are now a major patron of the Powerhouse Museum, Campbelltown hospital and even the bicentennial of the NSW parliament, which will be celebrated in 2024.
It comes as Walker’s development company, Walker Corp, seeks to get 1,284 hectares of land rezoned for 12,900 houses at Appin on Sydney’s south-west fringe.
The Walker Family Foundation is a separate charitable entity and there is no suggestion its support for the projects is linked in any way to the Appin development.
Property developers making large philanthropic donations to government projects is entirely legal and arguably desirable when the public benefit. But experts point out that it can raise questions about the potential for (or perception of) undue influence in the state government’s dealings with that developer.
Related: Sydney’s growing pains: land rezoning a potential billion-dollar deal for developers after local council sidelined
Until last year Appin had been designated as suitable for housing “in the long term”, and the Department of Planning had said it was not needed until 2036.
But in November the planning minister, Anthony Roberts, announced that the NSW government was fast-tracking rezoning approval of Appin and that the state would take over assessment of the proposal from Wollondilly council.
Roberts and the NSW premier, Dominic Perrottet, said the fast-tracking, which the department said was part of a pilot scheme, was designed to help drive down real estate prices in Sydney by increasing supply of housing sites.
The relationship of state governments to developers has long been a source of sensitivity because of their role in planning and approving developments.
The former NSW Labor government was mired in multiple scandals about the potential (or perceived potential) influence that political donations by developers might have had on decisions.
Related: Ten donors gave 77% of total political donations in lead-up to last Australian election
NSW Labor was a huge beneficiary while in power. For example, companies in the Walker Corp group alone were able to legally donate more than $1.2m to the party over eight years before the ban. Other developers, including Payce Consolidated and Meriton, were also regular donors to both the state Labor and Liberal parties. Payce donated $106,000, while Meriton contributed nearly $600,000 to the state parties’ coffers.
The growing concerns about some Labor MPs’ relationships with developers and the potential for undue influence this might have over planning led to a total ban on developer donations to political parties in 2010.
But the NSW government accepts monetary support, albeit indirectly, from developers in other entirely legal ways.
After the NSW ban, Walker Corp continued its support of the federal Liberal party, donating more than $700,000 over the last decade to federal campaigns. There is no restriction on federal donations from developers, which can be made via state offices, provided they are deposited into the federal campaign account and used to fund federal activities.
More recently, some of the Walker Family Foundation’s philanthropy has been directed towards projects in NSW that would appear to have indirectly assisted the state government, while complying with the state’s ban on developer donations.
Powerhouse lifeline
By 2021 it was apparent that one of the NSW government’s marquee projects, the Powerhouse Parramatta Museum, was running over budget and would cost more than $500m to build. The Powerhouse announced it would seek $75m in private support.
In October that year Walker, through his family foundation, threw a $20m lifeline to the project.
In 2019 Walker gave $20m to fund a building named after him at Campbelltown hospital, which will be home to the Ingham Institute for Applied Medical Research.
The Ingham family, of chicken fame, are also a major developer in western Sydney and set up the institute a decade ago. It has attracted support from other developers including the Perich and Vitocco families.
Related: Can you predict which parts of Sydney will be next to gentrify?
Walker has said his family has a history of investing in medical research, including at the Chris O’Brien Lifehouse and St Vincent’s hospital in inner Sydney.
He told the Australian Financial Review: “We’ve got a lot of land in the Macarthur region. We want to give back to the universities, the medical side of things and sport.”
The Walker Family Foundation’s support for the Powerhouse will establish the Lang Walker Family Academy, including four state-of-the-art education facilities, plus dorm rooms for students and teachers to stay at the museum.
It would inspire and educate students in western Sydney and beyond, Walker said at the time.
Rezoning decision
When Roberts became the minister for planning for the second time in December 2021, one of the first meetings he had was with Walker Corp, according to his official diary disclosures. The meeting is listed as “introductory” and it is not known which executives attended or what was discussed.
On 2 November last year Roberts announced that the NSW government would fast-track Walker’s Appin site and Ingham’s nearby North Appin site for residential rezoning, despite earlier assessments by the Department of Planning that these areas were not required for housing until 2036.
In response to questions from Guardian Australia, the NSW planning department said no lobbying by any developer had affected decision making.Interactive
Asked what had changed to bring forward the need for development at Appin, the department pointed to future housing projections and specifically a future housing supply analysis for western Sydney in 2021. The study said there wasn’t enough rezoned land in the pipeline to meet housing demand, with a projected shortfall of 67,000 homes by 2036 and 118,000 homes by 2041.
The department said the analysis had been undertaken by the consultants Atlas Urban Economics for Walker Corp at the request of a panel set up to work through some of the technical and strategic difficulties associated with the sites.
The department also pointed to its technical assurance panel which over the last year has worked with agencies to overcome obstacles to development of Appin.
University endowment
Walker has also supported Western Sydney University. He provided an endowment for a chair of urban transformation in the school of engineering and design at Western Sydney University and is the major developer of WSU’s Bankstown campus.
Last year he was named as one of eight ambassadors for the bicentennial of the NSW parliament. He is just one of two private sector supporters, the other being Westpac, whose chairman (of the Bank of NSW, as it was then) was a member of the first Legislative Council.
Related: Soaring property prices in Australia’s most sought-after regional areas come tumbling down
The president of the Legislative Council, Matthew Mason Cox, said the ambassadors had offered support for programs such as mentoring young leaders. He said Walker had offered his support because he was interested in the history of the parliament. He could not say what the support would be worth but said the bicentennial was largely funded by a $25m allocation in the state budget.
Walker was the first, along with Western Sydney University, to support the Powerhouse but other developers have followed his example of generosity.
The Vitocco family, which has land in the other major development area, the Aerotropolis near the new airport, has given a $5m donation.
Last April Holdmark Properties, which has residential developments in Parramatta, St Leonards and Lane Cove, made a $10m donation to establish an architectural and engineering exhibition and the Holdmark Gallery at the Powerhouse.
Its founder and chief executive, Sarkis Nassif, said his donation was motivated by a desire to give back to the city that, as he described, has “given so much to me”. Powerhouse Parramatta is Nassif’s first philanthropic gesture in the arts sector.
‘Why are they doing this?’
Analysis by the Centre for Public Integrity has found that property developers donated $5.7m in 2019 to federal politics and their donations are increasing, with the federal Liberal party being the biggest beneficiary.
“Property developers are the second-largest donating industry behind resources,” said Geoffrey Watson SC, a barrister and director of the Centre for Public Integrity.
“Obviously there is a conflict created by the intersection of politics and development. The high court pointed this out in the McCloy case, and the potential for conflict of interest is not just apparent; it has shown to be real.”
Related: Powerhouse Parramatta: entertainment centre ‘masquerading’ as a museum has high flood risk, inquiry finds
The former lord mayor of Newcastle Jeff McCloy challenged the constitutional validity of the NSW developer donations laws in the high court after he was caught giving bags of cash to state Liberal MPs in the back of his Bentley, in breach of the ban. The high court upheld the laws.
Watson said charitable donations also had the potential to create ambiguous perceptions. “Although there is now no more direct influence through political donations [in NSW], there can still be influence which can be wielded covertly through other means.
“It can also come through charitable donations that are made to causes close to the hearts of politicians. Can you control this? It’s not easy and you don’t want to dissuade wealthy people from funding worthwhile projects. It requires more careful consideration.
“The question that needs to be answered is: why are they doing this?”
Icac advice sought
When the Coalition came to power in NSW in 2013 it pledged to clean up Labor’s planning regime, which had allowed the state planning minister to “call in” particular developments and become the decision maker.
In its 2010 report on the dangers of political donations the Independent Commission Against Corruption said: “The existence of a wide discretion to approve projects that are contrary to local plans and do not necessarily conform to state strategic plans has the potential to deliver sizeable windfall gains to particular applicants. This creates a corruption risk and a community perception of a lack of appropriate boundaries.”
Under the planning ministers Brad Hazzard and Rob Stokes, the NSW government moved to distance itself from planning decisions and instead established independent planning commissions and panels to make assessments and publish the reasons for those assessments.
The latest fast-tracking mechanisms, introduced under Roberts, bring assessment of major projects and decision making back to the planning department and the minister.
A spokesperson for Roberts told Guardian Australia: “Decisions with respect to planning are made on the basis of expert advice provided by the Department of Planning and Environment. No individual or corporation has the ability to impact the decision making outside formal processes employed by the department.
The spokesperson also said the nominating process for Appin and the other projects had been designed “in lockstep” with independent probity advisers and was being carried out in accordance with strict probity provisions.
“The Department proactively sought advice from the NSW Independent Commission Against Corruption to ensure the process safeguards against corruption risks.”
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