Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Hansard source

The issue of political donations is a vexed one in politics and it is fundamental to the integrity of our political system. An important aspect of political speech and political freedom is the ability for people to make a financial contribution to a political party, candidate or cause. But we all know that very real concerns arise about the independence and the integrity of political parties and candidates where the sums involved are so large that something must be given in return—or something must be assumed to be given in return.

The Labor Party has a very different history to the Liberal Party. The Labor Party is the political wing of the labour movement. The trade unions are the industrial wing of the labour movement. The Labor Party was established as a means of getting the representatives of the trade unions into parliament. The operations, the preselections and the policies of the Labor Party are to a very large extent controlled by the trade union movement.

We have reached a point in Australia in the campaign finance area where the Labor Party enjoys an enormous advantage in terms of fundraising and campaign finance. They receive 100 per cent of the tens of millions of dollars that the trade unions give to political campaigns—the unions do not give any to the Liberal Party. Those in the business sector—particularly the large public companies—increasingly do not make political donations at all or, where they do, they split them between both parties. But increasingly they do not make political donations at all. If you go back 20 years, you could say that the big end of town gave to the conservatives and the unions gave to Labor, and there was a rough equivalence. That is not the case any longer.

Increasingly, you have Labor dominated financially by the trade union movement. They have an organisational leverage over the Labor Party because of the history and structure of the Labor Party. But they also have a financial stranglehold over the Labor Party—it cannot function without the massive support from the trade union movement. At the same time as the large public companies that used to make political donations have increasingly not made them, more and more we have seen political donations from business that used to come to either party go overwhelmingly to the Labor Party because of their domination at the state level for some time. Further, political donations that come from business tend to come from businesses that have a particular interest in government policy—for example, the liquor industry, the gaming industry and property developers.

There have been many efforts—false starts—at trying to do something about this. The issue of disclosure is being sought to be addressed in this bill, but this bill is not calculated to restore integrity to campaign finance. It is designed to tilt a campaign finance playing field that is already tilted in favour of Labor even more in favour of Labor. Because of the large sums that the trade union movement gives to the Labor Party, it is immaterial whether the disclosure level is $11½ thousand or $1,000. The donations are going to exceed the higher disclosure level. There are many small and medium sized businesses that know that if they make a donation to our side of politics and that is disclosed they will come under pressure to make an equivalent donation to the Labor Party. There is no point being naive about this. Those honourable members who have been involved in campaign finance—in particular, those on the Labor side—know that that is exactly how it works. The pressure, the standover, is brought to bear and a business is pressured to make an equivalent donation to Labor or, alternatively, decides that it is all too hard and stops making donations at all.

This bill is designed not to effect campaign finance reform. We have sought over the years to engage the Labor Party in constructive discussions about real campaign finance reform. What that would look like is campaign finance reform that puts a cap on donations and eliminates donations. This is my own view. It is based on submissions I have made over the years and my own experience as honorary Federal Treasurer of the Liberal Party in a previous life. I was the principal fundraiser for the Liberal Party in that capacity. My view is that we should have a system whereby there is a cap on donations and donations can be made only by natural persons—that is to say, human beings—who are on the electoral roll. Donations could not be made by trade unions or by companies or associations. That would restore a degree of equivalence, an equity, and would address many of the issues of perceived influence that we see at the moment.

I make the point that these issues of influence are very, very substantial. All of us on our side have complained over the years about the influence the trade union movement has over the Labor Party. The Labor Party would say in response to that, ‘Well, the trade union movement created our party; it is only reasonable that they should have influence.’ However, consider this: the Labor government in New South Wales—which I hope is entering into its last months in office—in its time under Premier Bob Carr, permitted an extraordinary expansion of gaming facilities in hotels throughout New South Wales. Every hotel in New South Wales, with very few exceptions, was turned into a small casino. That was done to protect the economics of the hotel industry. You would have to be one of the most naive people—and I hope I do not fall into that category—to imagine that that extraordinary change in policy, which I believe has done great social harm in New South Wales, was not connected with the massive donations from the hotel industry and from the gaming industry to the Australian Labor Party’s New South Wales branch.

These issues of influence, perceived or real—people have different views about them—have to be dealt with. This bill does not deal with them. This bill is designed to do one thing and one thing only. It is designed to make it harder for small businesses to support the coalition, because they are the ones that will be sensitive to disclosure due to the pressure that they come under. The unions do not mind, because their donations are very big—they are well over the $11½ thousand threshold. Large companies are not fussed, because their donations are also going to be well over $11,500. If you think about the sorts of people and the sorts of people and businesses that are making $5,000, $6,000 and $7,000 donations to political parties, they are small and medium business and their owners. They are overwhelmingly supporters of the coalition, and they will be vulnerable, once their donations are disclosed, to being hit up by the Labor Party.

That is what this so-called reform is all about. If Labor were fair dinkum about campaign finance reform, it would look at caps being placed right across the board and donations being limited to natural persons. So take unions out of it, take companies out of it, limit it to people on the electoral roll and then focus on what measures can be taken to ensure that those rules are not subverted by third-party activity. We have come close in discussions with different people in the Labor Party over the years to achieving we thought some kind of consensus in this area. But Labor, with this legislation, is quite clearly not interested in real reform; it is interested in changes that benefit it as opposed to the coalition.

So I cannot support this legislation. I have a longstanding commitment, publicly documented over nearly a decade, to campaign finance reform, but it has to be fair dinkum. That means it has to be root-and-branch reform, not just fiddling at the edges—not just twirling the knobs to make the system that much more favourable to the Labor Party. The playing field is already tilted in favour of the ALP. This legislation is designed to tilt it even further in that direction. It does not address the real problems of perceived influence, real influence, integrity and equity that we face in campaign finance. We need to face those issues, and we can do so. There is a common will to do it. At least I thought there was a common will when Senator Faulkner was in a leading role in the government ranks, but that seems to have dissipated, and Labor is again trying to game the system to make it work better for it at the expense both of its political opponents and of democracy.

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