The banks are starting to pull back from donating to Australia's political parties

Voting Australian style. Photo: James D. Morgan/Getty Images

Political parties in Australia may soon lose the millions of dollars in donations and payments from the major banks now being called to account before a parliamentary committee.

The ANZ Bank is reviewing its political support after the NAB quietly went about cutting all of its donations, whether in cash or kind.

CEO Shayne Elliott was questioned by the House of Representatives economics committee today about $1.65 million donated by the ANZ to the Coalition and Labor parties.

He replied: “We are having discussions with our board about political donations and our position on that.”

The banks have been under pressure from all sides of politics, with the ALP calling for a royal commission into banking and the Turnbull government establishing an annual review of bank operations under scrutiny of the parliamentary committee.

The banks were widely criticised last month for only passing on about half the 0.25% cut in cash rates to 1.5%. The banks instead also increased some rates on deposits. They have also been hit by a series of scandals including giving faulty financial planning advice to customers, restricting payouts for disability insurance claims and allegations of rigging the bank bill swap rate.

The NAB has just revealed that it stopped making any political donations at a federal, state or local government level from May this year.

The Commonwealth Bank already has a policy of no political donations but it does attend events and the costs of this add up to“>as much as $100,000 a year, according to Australian Electoral Commission numbers. (An earlier report incorrectly stated $500,000).

The Australian Centre for Corporate Responsibility (ACCR) had been planning a resolution about political expenditure to be put to the NAB annual general meeting in December.

“ACCR would like to congratulate the NAB board on the new policy and to thank all fellow NAB shareholders who volunteered to assist us,” the centre said. “ACCR will not proceed with the NAB resolutions.”

The NAB’s old policy said: “Our donations are not to express support for one side over another; rather they are to support the development of sensible, rational and fact-based public policy.”

The new policy says: “NAB does not make donations or contribute funds to any political party, Parliamentarian, elected official or candidate for political office. This policy is designed to provide a realistic management model, which fosters trusted relationships with all political stakeholders, and ensures that the Group’s interests are best promoted.”

The Australian Electoral Commission’s records show NAB paid $553,000 to Australian political parties in the past three financial years. Three-quarters went to the Liberal party and the rest to the ALP.

The NAB, according to its new policy, says the bank can best fulfill its commitment to a balanced approach to stakeholders through continuing to support the community directly rather than through political donations.

Bank employees must get approval for all invitations to political events reviewed by NAB’s Government Affairs and Public Policy team.

Westpac’s policy of allowing donations is unchanged on its website.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.