Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Electoral Matters I present the committee’s report, incorporating dissenting reports, entitled Funding and disclosure: inquiry into disclosure of donations to political parties and candidates.

Ordered that the report be made a parliamentary paper.

On behalf of the Joint Standing Committee on Electoral Matters, I have pleasure in presenting the committee’s first report for 2006, Funding and disclosure: inquiry into disclosure of donations to political parties and candidates.

Australia has a proud history of progressive reform in electoral matters where necessary, and funding and disclosure rules are no exception. When the system was first introduced in 1983, on the recommendations of this committee’s predecessor, it was understood that public funding would provide all political parties with an equitable basis to present their policies to the electorate and to contest elections on a level playing field. In this way, public funding contributes to a more informed electorate and a more robust representative democracy. In this report, the committee delineates the current funding and disclosure scheme’s fundamental objectives. The committee states that:

• funding should be provided to parties and candidates as a subsidy to their costs of contesting a particular federal election campaign, and not a means by which to fund on-going administrative costs or to provide a financial base from which to fight future elections;
• a level playing field should operate between political parties and independent candidates;
• high degrees of transparency in donations to political parties and candidates should reduce the potential for undue influence and corruption in the political system;
• disclosure provisions should not impose a cumbersome administrative burden (and unnecessary duplication) on donors, participants in the electoral process, and the Australian Electoral Commission;
• the onus for the identification of the source of political donations should be on candidates and political parties, not donors; and
• financial reporting arrangements for all entities involved in the political process and covered by the Electoral Act, should be the same in the interests of transparency and consistency.

In stating these objectives, the committee also considers three avenues of reform to best achieve them.

First, the committee argues that higher thresholds for the disclosure of political donations would encourage individuals, small businesses and other organisations to make donations to political parties and candidates.

Second, the committee considers that proposals to ban certain types of contribution, or limit the amounts that may be donated, often arise from the apprehension of a potential for corruption and undue influence. However, to date, the committee has found no evidentiary support whatsoever.

Finally, the committee proposed that a higher tax deductibility level of donations to political parties and Independent candidates would encourage more people to participate in the democratic process and decrease the parties’ reliance on a smaller number of large donations.

On behalf of my colleagues on the committee, I would particularly like to thank the committees of the 39th and 40th parliaments and also the staff of the committees, who contributed to this inquiry by taking submissions and hearing from witnesses. I also thank the members and senators of the current parliament for their valuable time and assistance in preparing this report.

That having been said, and on behalf of my committee colleagues, I commend the report to the House.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

The guiding principle for the opposition on disclosure and funding is that the trail of disclosure, back to the true source of the funds, be understood by the public. ALP committee members believe that these amendments do not uphold this guiding principle.

Our dissent focuses on six aspects of the current funding and disclosure scheme: thresholds at which donations must be disclosed, tax deductibility of donations, the disclosure of donations given at fundraising events, anonymous donations, enhanced obligations and audit compliance of donation receivers, and the powers of the AEC in managing the scheme.

First of all, the underlying object of the government’s proposed changes is to make it easier, in our view, for corporate donors to give the government money without having to disclose it. The raising of the threshold to $10,000 means, for instance, that you could make eight separate donations of $10,000 without having to provide a return to the AEC. I think it is transparently against the wishes of this parliament and the Australian people that $80,000 is able to be given to a political party without it being disclosed. We reject as misleading the view, as asserted by Liberal national director Brian Loughnane at the JSCEM hearings into the 2004 federal election, that nearly 90 per cent of donations received in 2003-04 would be disclosed if the threshold were raised to $10,000. In our view, had the government’s planned changes been in place in 2004-05, roughly 80 per cent of receipts for the approximately $143 million received by the major parties would have escaped public scrutiny and, plainly, that is against the public interest.

On the issue of tax deductibility, we see no evidence for making the political system more democratic, as the member for Herbert has just claimed, by raising the threshold. The member for Casey previously criticised me, in particular, in this chamber, for saying that the ALP had previously supported this. He was obviously wrong. When individual members of committees make certain judgments on particular issues at times, they do not necessarily commit their political parties to doing that, just as the support of the member for Moncrieff and the member for Casey for four-year terms does not necessarily bind this government to it, although I wish it would.

On the issue of tax deductibility, two academic observers, Tham and Orr, submitted:

The problem with tax deduction regimes are that they are disproportionately attractive to high-income earners who benefit most from deductibility and least of an incentive to pensioners et cetera.

One of the other issues that concerns us is that the AEC has consistently recommended that all payments made at fundraising events be deemed donations and therefore required to be disclosed. From time to time, this has been a problem for both political parties. We understand that, for instance, the Millennium Forum has had major donations to the Liberal Party, yet it has never once been mentioned in a return by the Liberal Party to the AEC.

We also have issues with anonymous donations. This is clearly not within the legislation. There have been major anonymous donations where one cannot get to the source of the donors—for instance, from the Greenfields Foundation. In the National Party, we have recently discovered, the absurdly named Pilliwinks company in 2002-03 gave $95,000 and Doogary gave $661,000, without providing a return to the AEC. In 2004-05, Pilliwinks gave $30,000 to the Victorian Nationals and Doogary gave $374,000, again without disclosing who their donors were. The far right Citizens Electoral Council has also benefited from the legislation’s failure to deal with anonymous donations. That is why we believe that, if the true source of these donations cannot be understood, anonymous donations might as well be banned.

I turn now to donations from overseas. Australia saw the enormous donation to the Liberals from Lord Michael Ashcroft of $1 million. In 2004-05 we had Kingston Investments, which is based in China, donating almost $50,000 to the New South Wales branch of the Liberal Party. This group has not filed a return with the AEC and the AEC has no way of ensuring that the group complies with Australian law. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The time allotted for statements on this report has expired. Does the member for Herbert wish to move a motion in connection with the report to enable it to be debated on a future occasion?

I move:

That the House take note of the report.

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.