Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise to address the report of the Standing Committee on Electoral Matters entitled Advisory report on schedule 1 of the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. Sadly it is a deeply disappointing piece of work—at least the majority report from the committee is. Political party fundraising in Australia is worthy of greater consideration than this report gives it. In recent times we have seen practices such as those at the Wollongong City Council, for instance, involving the intersection of money and influence with ALP donors and ALP councillors on Wollongong council. We have seen practices in Western Australia where fundraising intersects with the political process in a way that is deeply unhelpful; as a result, several ministers have resigned from the cabinet in Western Australia.

This report deals with political party fundraising, but I think it deals with it in a very inadequate way. Majority members who compiled this report have totally neglected the national interest in favour of the sectional interests of the ALP. Political party fundraising is an issue that is worthy of serious consideration by this parliament. The Australian people are rightly suspicious of the way that the political parties in Australia raise funds. I think that most members in this place would certainly not enjoy discussing the practices of political party fundraising in their entirety in a transparent way. If journalists were to ask questions of political parties about their fundraising processes, most of us would be reluctant to discuss it. I am not claiming the moral high ground personally on that issue; what I am saying is that it indicates that it is an issue that lacks certain transparency. The fundraising of Australian political parties in general is an issue that I think this parliament should take seriously.

The coalition parties do have a commitment to addressing this crisis of confidence in the fundraising of political parties within our political system. Many of the concerns of the public have been confirmed by the practices at the Wollongong City Council, which I referred to earlier, but such practices have also occurred in other jurisdictions, particularly in the Western Australian Labor Party. This makes people rightly suspicious of the way that political parties raise funds. It means that we need to have an urgent and sensible review of the way we finance campaigns at both the federal and the state level. A comprehensive inquiry should look at the way we do this. We should make sure that there are sufficient authorities, investigative powers and enforcement measures to prevent any illegal activity in the future. We also need to make sure that we have a framework that removes weaknesses within our regulatory system on these matters—a framework that gives us an environment where illegality will not take place in the future.

In pursuit of this the coalition has put forward a comprehensive reference to the Joint Standing Committee on Electoral Matters. It was moved in the other place by Senator Ronaldson. It asks that committee to undertake an extensive inquiry into campaign financing. Sadly, this motion was opposed by the government, but it was supported by every other political party in the Senate.

The coalition believes in confronting these issues head-on and dealing with them in a systematic and comprehensive fashion. We believe that we should address the challenges that have been thrown up by the illegal activity in Wollongong and by other practices in other parts of the country. By contrast, I think the government have shown their true colours by insisting on the progress of this bill in isolation from the other, broader issues and in refusing to support a comprehensive review in the other place. I think this shows that the government have no real interest in these issues. Now that they are in government they are really only concerned about maximising the power of their incumbency.

Coalition members of the Joint Standing Committee on Electoral Matters did put in a dissenting report. In that report they maintained their opposition to the progress of this bill until such time as it can be dealt with along with other issues that will arise when it comes to campaign finance. I think that is a reasonable position, and I think it shows a desire on their part to sensibly address these issues in a comprehensive fashion. Coalition members of the committee also believe that the inquiry failed to demonstrate the urgency of these matters and failed to demonstrate why this should be treated in isolation from other parts of the system.

I note that the majority report from the committee ignores the views that were put to the inquiry. Two-thirds of the submissions received by the inquiry either opposed the removal of tax deductability or required such changes to be counterbalanced by other measures. There was a significant question mark over the costings of the measure. Sadly, the government does not have a very good record on the costings of measures. Treasury came before the inquiry and said that the costings that they did on this measure were actually a bold guess. There is no reliable data on the claimed savings. This lack of data underlines the revenue estimates; therefore, the argument for urgency, based on fiscal necessity, is pretty empty and hollow.

In relation to donations, Treasury officials also confirmed in evidence the great difficulties in estimating revenue savings relating to claims for gifts and donations. You could say that Treasury really had no knowledge of the amount or the value of donations of less than $1,500, which, of course, is the subject of this bill. All they could really do was just give an estimate based on assumptions that they had made, and that makes for very unreliable costings. Coalition members did not dispute the internal logic of Treasury’s reasoning, but they did conclude that the results, based on a total lack of information, were by necessity totally arbitrary.

From the very start of this bill the Labor Party have been determined just to play politics as opposed to addressing the issues. They have been trying to push through measures within the bill that, without doubt, required further review. There is absolutely no reason why this measure for the tax deductability of political donations should have been included with other measures in this original TLAB legislation. I think it is cause for concern that they would include what was obviously going to be a controversial measure with other measures that were not controversial. When we have heard a lot of talk about open and accountable government, I hardly think that that is a very constructive way for the government to have proceeded with this measure.

I will go to the history of this measure, because there has been a substantial change of heart from the Labor Party in relation to the tax deductability of political donations. In fact, in the past the ALP has repeatedly supported tax deductability. Indeed, the initial bill that granted tax deductability for political donations was introduced by the Hawke government. As is proper, following every election the election process is reviewed by the Joint Standing Committee on Electoral Matters and obviously this matter has come up on a regular basis. In the reviews that were conducted after the 1987 and 1990 elections, the Australian Labor Party claimed that tax deductability for the additional funds that were raised by political parties would alleviate any pressure for increased levels of public funding, would encourage political parties to continue to seek support from the public and, very importantly—and these are the words of the ALP at the time—would help political parties more adequately fulfil their social functions. In December 1991, under the Hawke government, the House of Representatives had a vote along party lines that introduced tax deductability for political donations. In 1991 that level was $700. The bill was introduced by the then Minister for Transport and Communications, Kim Beazley.

When the ALP were in government during the Hawke and Keating years, they made up the majority on the Joint Standing Committee on Electoral Matters and they never had anything to say against the tax deductability of political donations. Reports were handed down after the 1990 and 1993 elections, and they made absolutely no mention of the tax deductability of contributions to political parties. But the 1996 report from the joint standing committee included a recommendation to make tax deductable donations of up to $1,500 annually. That is the exact measure in the report that we are discussing today. The committee’s report on the conduct of that election, the election that saw the Howard government come into office, nominated $1,500 as the maximum level of tax deductability. That is where the $1,500 figure comes from. That report was unanimously supported by all members of the committee. Of course, these committees are run on a bipartisan basis.

I would like to remind the House of the members of that committee, because they are now very senior people in the new government who apparently think this is a terrible measure. Members of that committee who supported the $1,500 level were: the now Deputy Leader of the Government in the Senate, Senator Conroy; the now Attorney-General, the member for Barton; and the now Parliamentary Secretary for Multicultural Affairs and Settlement Services, the member for Reid. These are heavy hitters in the new government, and they supported this measure. There are two cabinet ministers and one parliamentary secretary. It is not clear why they have had this change of heart. Really what we are discussing here is gross hypocrisy from the government. The coalition are very happy to have a sensible discussion about campaign finance. There is no doubt in my mind that the Australian people have very little faith in the way that political parties in Australia raise their money, and they have very little faith in it because it lacks transparency.

As I said in the opening part of my speech, I am not pretending to be an innocent party in this; I am not claiming the moral high ground. Like many members in this place, I engage regularly in fundraising. But that does not mean that we in this parliament should not have a good think about the way we go about it. The Australian people have concerns about it. What we do not need is a piecemeal approach, as evidenced by the introduction of one measure in a tax laws bill when it would be far more appropriately dealt with in a review of the entire campaign fundraising system.

I am particularly attracted to other examples that we see around the world. In Canada, as a result of very significant fundraising scandals, they comprehensively overhauled the way that political parties are financed. They have essentially taken money out of that process. Canadian political parties are publicly funded. There are limits on what individual members can spend in their seats; I think it is around Can$80,000. There are limits on what individuals and entities—whether they be unions or businesses—can donate to political parties, and those are set at a very low level. I would be very happy to have a conversation about that, but that should be a comprehensive conversation about the way we do it in Australia. There should not be a piecemeal approach, as advocated by the government and as condemned by the coalition members of the Joint Standing Committee on Electoral Matters.

I am deeply disappointed in this report; I am deeply disappointed that the government does not want to have a sensible discussion about what is a very important matter. I commend the dissenting report put in by members of the coalition on the joint standing committee, and I genuinely urge the government to rethink their approach to this because I do think that the Australian people deserve better. I think we need to look at the way things are done. I think that examples of illegal behaviour in Wollongong and in my home state of Western Australia give great urgency to these particular issues, and I urge the government to reconsider its approach.

See this speech in context