Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Hansard source

The Tax Laws Amendment (2008 Measures No. 1) Bill 2008 seeks to introduce a number of measures that lapsed in the previous parliament. I am particularly pleased to see the provisions relating to a carbon sink forest. Part of the previous government’s commitment to dealing with climate change was taking on the battle against deforestation everywhere in the world—in Australia and internationally. We established the Global Initiative on Forests and Climate, which was a world-leading effort to take on that part of human activity, deforestation, which constitutes 20 per cent of global greenhouse gas emissions. In that respect we were genuinely leading the world—we brought together an international conference—and it is no accident, and in large measure due to Australia’s hard work and our leadership, that deforestation was such an important issue, and its connection with the greenhouse challenge such an enormous issue, at the Bali conference.

I am also delighted to see the tax offset for the equine workers hardship wage supplement payment. Again, that is a carryover from the previous government. And I know that my colleague the shadow minister for finance will be pleased to see the provisions relating to superannuation lump sums paid to a member having a terminal medical condition; again, that being placed back into the legislative process here in this bill.

But this bill also contains a malign element which should not be bundled up with what are, essentially, administrative matters—that is, it picks up items of legislation that lapsed in the last parliament. The linking of those very important and very positive measures with a piece of legislation to remove tax deductibility for contributions to political parties is designed to make it difficult for the House to properly consider the important issue of campaign finance. I foreshadow that we will be moving an amendment to address that matter later in this debate.

There is nothing more important in our democracy than contestability. The thing that keeps governments honest is the fear that they may be turned out. If we get to a point where governments—and this would apply to governments of any political persuasion—were so entrenched in their incumbency that they could never practically be removed then we will have lost what lies at the very core of the democratic process. At the moment, we have the Australian Labor Party in government in every parliament in Australia. The Australian Labor Party not only has the benefits of incumbency, which are considerable, but also has the benefit of an enormous financial advantage in terms of fundraising and money for campaigning. In every election over the last decade, we have seen the Labor Party—be it at state or federal level—outspending by many times the Liberal Party in their campaigns and in particular in their advertising in the media. The question that we have to ask ourselves, as Australians committed to a contestable democracy, is what price democracy if one side of politics has an inordinate share of the financial resources available for campaigning? How has that come about? Years ago, the trade unions would give money to the Labor Party and business, particularly big business, would give money to the conservative parties. There was a rough equivalence.

What has happened in recent years—and I speak with some personal knowledge of this, having formerly been the honorary federal treasurer of the Liberal Party—is that the larger public companies have either ceased to make political donations at all or, when they have made donations, split them fifty-fifty. Of course, state governments are controlled by the Labor party and have enormous leverage over property developers and the hospitality industry. Look at what the Labor government in New South Wales has done for the hoteliers of that state by putting poker machines in every hotel. That is a wonderful contribution to the social welfare of the people of New South Wales! It has done a great job for party fundraising but it means that the Labor Party now has at least as large if not a larger share of contributions from the business sector as the Liberal Party. All of this is publicly disclosed; this is all a matter of fact. This is not a contentious observation.

At the same time, the Labor Party has 100 per cent of the donations that come from the trade union movement. So, as every year has gone on, Labor’s financial advantage has become greater and greater. That has put us in the position where we have to ask ourselves: what price democracy? Where is the contestability? Look at a government as hopeless, flawed and failed as the New South Wales Labor government and it got re-elected not least because it was able to spend five times as much on television advertising as the opposition was. There is no longer a contestable democracy if one side of politics has such an enormous advantage. Senator Faulkner is seeking to entrench that advantage even greater; he seeks to take Labor’s existing advantage and make it greater still. This proposal to remove tax deductibility for donations obviously affects the Liberal Party but it does not affect the Liberal Party exclusively because, of course, it means donations to the Labor Party are non-tax deductible as well.

If the government were seriously committed or interested at all in removing tax deductibility for donations to political parties then it would take some action with respect to the activities of trade unions—because trade unions are tax-exempt, union fees are tax-deductible and the unions are the largest single source of funds of the Australian Labor Party. If they were serious about this and said, ‘No, we only want to have after-tax dollars, dollars on which tax has been paid, going into political parties,’ then, when a trade union gave a million dollars to the Labor Party, it would be obliged to gross it up for the tax and pay the tax to the Australian Taxation Office. Then you would get some degree of equity, but we see nothing of the sort. What Labor is seeking to do is take a playing field, the contestable playing field of democracy, upon which the great political parties of this country contend—and it is already tilted in favour of Labor when it comes to financial resources—and tilt it even further to give itself incumbency and an ability to resist a challenge from an opposition with the same kind of impregnability that it has been able to achieve in the states around Australia.

This is a big moral issue. It is not just a financial issue; it is not just a political issue. It goes to the very heart of our democracy. We cannot afford to allow our democracy to become less contestable than it is today. I am, and have been for many years, very committed to campaign finance reform. I would love to see a day when no unions or corporations could give donations to political parties. I would love to see a day when only individuals on the electoral roll were able to give money to political parties—with an annual cap. I would support that but this is a big issue and one that this parliament owes the nation a careful consideration. That is why we will be shortly moving an amendment to take this obnoxious element of this bill—and indeed all the related campaign finance issues—to the Joint Standing Committee on Electoral Matters for careful consideration.

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