Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

It would surprise a lot of Australians to know that the current legislation in this area places no restriction on foreign donations. It is a fact that in Australia, unlike in America, foreign individuals or companies can contribute to political parties and candidates in such a way as to potentially influence the way they might vote, think or act. This came to prominence in 2006 when it was revealed in a number of newspapers, including the Australian and the Canberra Times, that a prominent British peer, Lord Ashcroft, in 2004 had donated $1 million to the Liberal Party of Australia. That sort of thing is simply outrageous and should not take place. I think most Australians would think it a matter of national sovereignty that large overseas companies were not in a position to exert influence in such a way. The legislation before the House, the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009, deals with such actions and will ensure that in future they cannot take place.

Also, there is the matter of anonymous donations. It is outrageous that a person can contribute up to $10,900, CPI indexed, and remain anonymous. That is a large sum of money by any stretch of the imagination. To think that you can remain anonymous in the circumstances is simply ridiculous. The initial bill proposed to prohibit all anonymous donations to registered political parties, candidates and members of a Senate group, but we have made some amendments to include a $50 exception, in response to the JSCEM’s advisory report on the bill. Responding to concerns that were raised, the JSCEM report recommended that the definition of ‘electoral expenditure’ be broadened to cover a range of campaign costs. The government, through these amendments, proposes to add three further categories of electoral expenditure that can be reimbursed. These include the rental of dedicated campaign premises; the hiring and payment of dedicated campaign staff; and the purchase, lease, hire or hire purchase of specified office equipment used for or during an election period. There is also an expansion of the categories of electoral expenditure to ensure there is no potential to double dip, because we do not want members of parliament making claims that have already been met, through their entitlements, by the Commonwealth.

As I indicated, the report recommended that there be a $50 exception to the prohibition on the acceptance of anonymous gifts. The basis for this recommendation was simply to overcome onerous or burdensome record keeping in certain circumstances—for example, a trivia night or barbecue, which is a very small fundraiser. The legislation is not meant to cover those sorts of things, so the $50 exception is a sensible approach in those circumstances.

This legislation goes a long way to restoring the integrity of our electoral system and processes. It makes a big impact with respect to the transparency, openness and accountability of our system for political donations. It bans political parties and candidates making a profit from the public purse in circumstances where they get on the Senate ticket or other ticket simply to raise money for themselves or an institution they are affiliated with and not to strive to be elected. Not to treat the electoral process as fair dinkum is outrageous. We have seen it in the past, and I have seen it locally up my way. Providing that a candidate has sufficient proof of electoral expenditure in submitting their claim and provided they do it in the time frame set for public funding, I think the public, and certainly my electors in Blair, would think it reasonable and appropriate.

These amendments are sensible and reasonable, and I submit that the bill should be supported by both sides of the House. It is not contentious and, in my view, it should be accepted. It is really quite disgraceful and shameful that those opposite, who have not offered one idea about electoral reform in terms of political donations, have opposed this legislation. I look forward with interest to seeing those opposite make even one constructive suggestion in the future with respect to electoral reform rather than continue to delay the very important reformist agenda of the Rudd Labor government.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I call the member for Gippsland, and in calling him I commend both him and the member for Blair on their new hairstyles—very fashionable.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker. I fear the member for Blair is attending the same barber as me. I also join you in commending him for his involvement in the World’s Greatest Shave. I also take up the challenge of the member for Blair to make some constructive suggestions here this afternoon, in relation to electoral reform.

I rise to speak in relation to the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009. In doing so, I seek to highlight my view that campaign funding is one of the most critical challenges facing our democracy and we have an obligation to improve the current system. After having said that, I do not believe that this bill is the complete answer. It is more about tinkering around the edges and entrenching some competitive advantages, I believe, for the Labor Party, than a genuine attempt at reform. There are elements of the bill which have some merit, and the member for Blair referred to the profiting from public funding issue—and I think that is an important aspect of the bill. But the reform process, in my mind, must be a more comprehensive program and not just cherry-picking to suit one side of politics or the other.

The principles of election campaign funding and political donations and the overall conduct of elections are issues that—I agree with other members who have already spoken—should be above party politics. I believe there is also a genuine mood for reform in the community—an expectation that we will actually improve the current system as time moves forward. I take up the comments from the Special Minister of State, in his message to the electoral reform green paper released in December last year, where the minister wrote:

Australians want a healthy political system, with impartial umpires and processes underpinning our electoral system, keeping our campaigning fair and transparent and ensuring our systems are free from corruption and improper influences.

The minister went on to say:

The perception of undue influence can be as damaging to democracy as undue influence itself. It undermines confidence in our processes of government, making it difficult to untangle the motivation behind policy decisions. Electors are left wondering if decisions have been made on their merits.

I think they are important points that the Special Minister of State made. I highlight the comments because I believe they are the valid principles we should be following in relation to electoral reform. Despite the often expressed cynicism from the voting public about politics and politicians, Australians are proud of their democratic system and they want it protected from any threats.

One of the biggest threats to democracy is the spiralling cost of election campaigns—sometimes referred to as a campaigning arms race. The cost of participating in campaigns and having a realistic chance of winning has spiralled out of all proportion in the past decade. I know from my personal experience as a political staff member for four years and as a candidate at both state and federal level that the cost of participating in elections has escalated to the extent that it threatens the very principle of ensuring that our participatory democracy is open to all credible candidates. From direct experience, the first campaign I was involved in was, I think, in about 1999. It was a state campaign. The candidate had about $20,000 to spend and it was regarded as quite a significant campaign in its time. Then, in more recent times, I was the Chief of Staff for the Leader of the Nationals in Victoria. Any credible campaign in a state seat in Victoria was well over the $100,000 mark, and in some of the marginal areas it was closer to $200,000. I believe we are heading down a path which is fraught with dangers for our democracy. It is hardly a fair system when larger parties are in a position to spend hundreds of thousands of dollars on individual seats, while other candidates have significantly fewer resources at their disposal—even when you take into account where they achieved the four per cent benchmark for public funding.

I believe we need to implement a fairer system, a better system, where there is increased fairness among individual participants in the political process and the public can have increased confidence that decisions are made on their merits and without undue influence. It is my personal view—and I do stress it is my personal view and not necessarily a position shared by all within my own party—that we must head down the track of targeted, and possibly increased, public funding of candidates and registered parties, along with stringent caps on actual campaign spending. I believe there needs to be a greater debate and commitment to wholesale reform, rather than a tinkering around the edges that the bill before the House represents.

In my preferred system, the credible candidates would be entitled to a fixed sum of public funding to spend on legitimate campaign expenses during the campaign. I take up the definition of ‘campaign expenses’ in the bill before the House. The amount of campaign spending would be capped and strictly enforced, and limitations would be placed on any third party contributions or advertising—whether by unions, industry, business or individuals. Some may argue that such a system would amount to a constraint on freedom of speech, and I do not think we should be afraid to have that debate here in Australia. Rather than restrain freedom of speech, I believe a system of capped campaign spending would encourage a diversity of views, as the opportunity to participate in elections would be available to a wider cohort of people.

If, for example, the total cap for a House of Representatives candidate was set about $100,000 in the specified campaign period and all of the credible candidates were guaranteed $50,000 in public funding, the possible candidates would be less likely to be excluded because of campaign cost considerations. In this example, to become a credible or recognised candidate—whatever term you would like to use—for the purpose of receiving public funding, benchmarks could be set, such as being the endorsed candidate for a registered political party or, in the case of independent candidates, there could be a statutory process of officially registering 500 or a thousand local voters who intend to support the individual. I think we can quibble about the details later, but the principle remains the same—that candidates would be on a level playing field, rather than the current situation we are faced with. Each of the credible or registered candidates has access to the same amount of public funding and a cap on how much extra money they are allowed to spend in addition to that public funding. It is there where some of the recommendations of the bill, I think, would come into their own in terms of the transparency of the process and the declaration being timely.

In the example that I am presenting, it would be a $100,000 cap with a maximum of $50,000 coming from fundraising activities. I would argue that, if you cannot get your message out to voters with $100,000, you really do not deserve to be elected in the first place. Keep in mind that the basis for the introduction of public funding was all about reducing the cost of participation in our democracy. The electoral reform green paper highlights the public funding system started with very noble aims indeed. On introducing the bill to amend the Electoral Act in 1984 into the parliament and in subsequent debate, the Special Minister of State at the time, the Hon. Kim Beazley, spoke of a number of purposes of the legislation. They summarise along the lines of fair elections: different parties offering themselves for election have an equal opportunity to present their policies to the electorate. Some of the other expressed aims of introducing public funding were to provide registered political parties and independent candidates with equal opportunity to contest elections, promote fairness in the electoral system between political parties and candidates contesting elections, and promote the integrity of the electoral system by reducing political parties’ and candidates’ reliance on donations, which could compromise their ability to represent their electorates properly.

I suggest that public funding in that regard has not worked; it has not happened. The spiralling costs of campaign funding stand as a testimony to the issues we are facing now with electoral reform, and unfortunately those noble aims have not necessarily been fulfilled, despite the good intentions. At the moment the campaign arms race forces candidates and political parties to go bigger and better, and the campaign is often turned into a contest of marketing dollars rather than a contest of ideas. The Gippsland by-election campaign is a case in point. By my own estimations—and I stress that these are my estimations—the three main candidates representing Labor, the Liberals and the Nationals spent well in excess of $1 million in total on various marketing initiatives. We had the standard TV, radio, newspaper advertising, multiple mail-outs, websites, static signage and mobile signage, to the point where Gippslanders could not open their mailbox or turn on their TV without seeing one of our smiling faces. I can still recall the air of excitement in my own home when my children first saw the ads on telly. They were quick to rush around and find everyone to come and watch them, but by the end of the campaign they were so sick of seeing dad’s face on television they actually started switching channels. Such was the flooding of the media markets by candidates from all persuasions. It was marketing overload, but each campaign team was playing by the rules as they stand and getting its message out to the absolute best of its ability.

I am not criticising the Labor candidate, the Liberal candidate or my own team—which I commended for doing a great job. In fact, they did an extraordinary job in difficult circumstances to win the seat. As far as I am aware, everyone played the game by the existing rules; it is just that I believe the rules need fixing in the future. It was the first time that Gippslanders had experienced the extra attention that a by-election inevitably brings. When all the three parties were acting as if they had a strong chance of winning and spent money accordingly, the mountain of marketing material was difficult for people to come to grips with. The campaign spending really did take a lot of people by surprise as they were swamped with this material. I have received feedback from many constituents, both during that campaign and since, who believe there must be a better way—and I agree with them.

There are many options throughout the world, and the green paper canvases the arguments for capping expenditure in the manner that I have already outlined. The arguments for capping expenditure, apart from the ones that I have mentioned already, include that there is no real advantage for one candidate or party having access to greater financial resources. The caps do create a level of financial equality between candidates in the election—and heaven forbid that they would actually have to win the campaign based on the merits of their ideas rather than the strength of their marketing campaign! Caps reduce the level of election finance needed, meaning that more candidates, including some less wealthy candidates, may compete in elections—and I hasten to add that in our rural and regional areas, particularly through the difficult times we have experienced with drought, flood and now fires, the issue of wealth and the availability of candidates to participate in our democracy is becoming more and more important. Caps also help to contain overall election costs, which in turn reduces reliance on donations and the associated problems I have already referred to. The absence of caps encourages excessive television and other advertising. Many overseas jurisdictions place limits on election expenditure. Of course there are many contrary arguments, and I believe they are all manageable. On a national scene, limitations or caps could be put in place for the broader leadership campaigns which have become part of modern campaigning.

Whatever the cap, it must be stringently enforced, and any breaches would have to be heavily penalised, including the possibility of excluding candidates in the more extreme or deliberate cases of breaching any new regulations. I acknowledge that with such a system there would be difficulties in enforcing those regulations, particularly, I would imagine, in specifying a campaign period and keeping track of third-party spending. It would require further detailed analysis, and I believe that is a challenge for the House. The principle, though, is valid: if we are concerned about the spiralling campaign arms race, we must place caps on campaign spending in the future and nurture the development of a fairer participatory democracy. Part of such a scheme would necessarily entail the need to consider fixed terms, and I do not think we should shy away from that. Many jurisdictions in Australia have already taken that step.

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

Mr Danby interjecting

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I am happy to take up the interjection. We are having a broad debate today about the opportunities to improve our electoral operations and I am prepared to argue the case that if you are going to go down this path of capped spending you would have to consider fixed terms; otherwise, the logistics of managing the campaign capping phase would be quite onerous. I present this proposition in an attempt to broaden the debate rather than restrict the discussion to the current proposed measures, which I believe are not intended to provide the major structural reform that Australians are looking for. The measures in this bill are largely an attempt by the Labor Party to cherry-pick for its own electoral benefit. It is not a genuine attempt to reform campaign donations and funding, and should be rejected by the House.

The electoral reform green paper also seeks to encourage public debate about options for improving and modernising Australia’s federal electoral system. I have referred to it several times because I believe it is a very worthwhile document. I note particularly the experiences of other nations, in particular the Canadian and New Zealand experiences. It is argued that Canada, for example, have the strictest regulations of selected countries. It is based on an approach of encouraging small donations from a large number of donors, which I believe would be a positive step. Their scheme aims to limit the funding going into political parties and also caps the expenditure by political parties. Bans apply to donations from corporations, unions, associations and groups, and caps apply to donations to and expenditure by political parties and candidates. At the 2006 Canadian election the expenditure limit averaged Can$81,000 across electorates. The outcome of the Canadian approach, quoted in the green paper, is that the amount of money flowing in, as well as being spent by political parties, has significantly reduced in Canada. New Zealand has adopted a model which utilises a variety of different regulatory tools. For example, to reduce the pressure on candidates and parties to raise money through donations, election expenditure is capped, with political parties able to spend up to NZ$1 million plus an additional NZ$20,000 per candidate. So there are other options throughout the world that I believe are well worth considering. I am sure neither of those nations believe that they have a perfect system. A perfect system probably does not exist, and they are probably tweaking their system as we speak. I think it is inevitable that there will need to be a level of compromise and balancing of the competing demands in any reforms that we undertake now or in the future.

It is worth considering the ramifications if there is no major action on electoral reform in the short to medium term. We need only to look at the experience of the United States to get a glimpse of the future in terms of the extraordinary costs of campaigning. Such costs need to be funded. It is almost inevitable that there will be strings attached, or the perception of strings being attached, to huge donations from corporations, unions and wealthy individuals. We have seen some relatively small-scale scandals in Australia already, and I fear that the prospect of corruption, bribery and undue influence will only increase if the campaign arms race escalates in an uncontrolled manner in the future. There is also the very real prospect that political parties will choose candidates on their fundraising capacity rather than on their capacity to do the job on behalf of their constituents. In a world of uncapped campaign spending, political parties will look to the bottom line and we face the prospect of wealthy candidates effectively buying a seat in parliament in the future. In my view, these are just some of the risks of inaction on campaign funding reform on a broader scale rather than the piecemeal approach we are undertaking at the moment.

I refer briefly to the shadow minister of state in the other place, who has called for a broader approach to the issue. In his contribution to debate on amendments to the bill before the House, the shadow minister said:

Let us have a sensible discussion about where we are going to take the campaign finance reform agenda. Let us work together, which I think we are capable of doing, and let us get an outcome that is an appropriate legacy to restore some confidence in the system …

I am not suggesting for a second that the shadow minister endorses any of my personal views, but he does support the need for a proper debate and extensive reform process, not the cherry-picking or the self-serving changes that I believe we are pursuing at the moment. The green paper also notes:

The accelerating costs of political campaigning create pressures on our electoral system. Consideration needs to be given to how parties, candidates, and other participants in the electoral process, including associated entities and ‘third parties’, are funded and how best to ensure those methods of funding are transparent, open and accountable.

I believe that sums up the considerable challenge we face.

This may appear from the outside to be a dry topic, but I believe that members of our community are very concerned about the perception of inappropriate fundraising or donations to political parties. I think we need to consider the broader issues of how we want to take our democracy forward in the 21st century. Do we want a system where individual MPs spend a significant amount of their time involved in fundraising to secure their seat in future campaigns? Do we want to perpetuate the system where businesses pay thousands of dollars to sit down for a lunch with ministers or others, expecting the community to believe that there are no strings attached? Do we want a system where unions are able to splurge tens of millions of dollars on election advertising campaigns, regardless of the views of their members? Do we want to continue down the path of the campaign arms race, or are we going to get serious about the issue of electoral reform? I believe we must do everything in our power to protect and enhance the integrity of our electoral process, and I fear that this bill falls short of the mark.

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

The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 contains measures to address critical weaknesses in the Commonwealth Electoral Act relating to the funding and disclosure regime. These weaknesses have been identified by the green paper and by reports of the Joint Standing Committee on Electoral Matters, which I have had the honour to be on since being elected to this House. While I appreciate the sincere and thoughtful remarks of the member for Gippsland and some of the ideas that he raised about capping and fixed terms, this bill is essential because it reverses the regressive amendments that were made very deliberately by the Howard government to the Electoral Act—changes made in my view for the partisan benefit of the coalition parties. The previous government’s changes were motivated by a desire to help supporters who make large donations to the Liberal Party without disclosure.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

As opposed to your changes, which benefit you.

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

This breeds the suspicion of influence and other corrupt practices and damages the integrity of our electoral system. As the member for Moncrieff knows, one of the things that could be done under the previous system was that you could make a $10,000 donation to the Labor Party in Queensland, a $10,000 donation to the Labor Party in New South Wales and a $10,000 donation to the Labor Party in South Australia and it would only be revealed as one donation of $10,000 because they were allegedly separate entities. This was really not the clear intent of the legislation when it was framed in 1983, and we are setting about redressing what was done previously.

Moreover, I hope that further legislation will deal with the other regressive changes made by the previous government—issues that I have been raising over the last six years, particularly the early closing of the electoral roll and the requirement for photo ID to enrol or in the case of a declaration vote. I have spoken previously in this House about the disgraceful effect these small changes had on the electoral process at the last election. In my view, and I have spoken about it at other times, they crucially affected the results in four seats. This election was not that close, but to have these kinds of changes disenfranchise a sufficient number of Australians across the country so as to affect the results in four seats is not the kind of democratic Australia I believe in. Senator Faulkner, the Special Minister of State, has called this bill ‘a critically important first step in the electoral reform process’, and I am confident we will see further reform measures in this parliament.

Included in this bill is the area of the cash bonanzas that some people received because they got past the four per cent limit in the Senate and were able to claim the $2.10 per voter bonus—or cash bonanza, in the case of one person—without having to show any receipts. We are tackling this area of donations first because it is of immediate importance. People donate money to political parties all the time, not just at federal election times. Parties and donors need certainty, they need to know what the rules are and they need to know these things now.

The bill will reduce the disclosure threshold from the current CPI indexed amount of $10,900 to a non-indexed amount of $1,000. This will restore proper public scrutiny to donations of this size. The bill will improve transparency in the funding and disclosure regime by requiring participants in the electoral process to report every six months rather than every 12 months. The bill will provide consistency by reducing the deadline for lodging disclosure returns with the AEC to a consistent period of eight weeks. Currently, deadlines range from 15 to 20 weeks, depending on the person or the entity. The bill will treat donations to different branches of political parties as if the donations were given to the same political party, as they always should have been, to prevent a person giving multiple amounts below the threshold to various branches or divisions of the same political party—an entirely fictitious process, which the previous government knew was not the intent of the original legislation and which the member for Gippsland correctly described as having the noble purpose of enabling political parties to compete on an equal basis.

This bill prohibits the receipt of a gift of foreign property or an anonymous gift outright for some people and entities, while for other people and entities it will be unlawful to give or receive a gift of foreign property or an anonymous gift if that gift is to be used for political expenditure. In response to a recommendation from the Joint Standing Committee on Electoral Matters, the government’s amendments will allow low-level anonymous donations of $50 or less to continue—and this is done, as several members have said, for quite sensible reasons—where they are received through fundraising activities such as raffles. In our desire to make the process transparent, it is silly to affect innocent activities such as this very grassroots fundraising by insisting that there be disclosure of individual donations in raffles.

The bill prevents candidates or groups obtaining a windfall payment of election funding by tying electoral funding to the actual electoral expenditure incurred. In response, again, to a recommendation from JSCEM, the government has expanded the definition of campaign expenditure to ensure that it does not favour one form of campaigning over another. In these days prior to the Queensland election, we have seen on Today Tonight the extraordinary performance of the candidate for Beaudesert—who, I really regret to say, has been attacked by some of the tabloid newspapers in this country with salacious stories about her personal life, as if that had anything to do with politics. If anything, I would say that it has enhanced her profile in the coming Queensland election. It has nothing to do with politics. It is a shame, and it enables her to portray herself as a victim again. She is not a victim. She is a person who should be judged on an equal footing with other candidates at elections. Today Tonight posed a question to her about what she had done with the $213,000 cash bonanza that she had won from the 2007 federal election when she stood as a candidate in Queensland, scored above the four per cent minimum and was therefore able to receive $2.10 for each of those Queensland voters without having to furnish any receipts. That is clearly something that was never intended by the original legislation.

I conclude by noting the remarks of my friend the member for Banks, the splendid chairman of JSCEM, who pointed to the blockage of this legislation in the Senate by Senator Fielding. Senator Fielding really ought to be very careful in blocking this and other electoral legislation. The current government made a point before the election of pointing out the changes that it was foreshadowing to donations in regard to the issues of identification and of the early closure of the roll. It is an undemocratic reflection on Australian society that a person who was elected to the Senate with such a low primary vote—and then principally on preferences that came from the Labor Party—could block this legislation. I urge that this legislation be passed. I commend the minister for his excellent green paper and for the raising of all these issues. I hope that the process of democratic reform in Australia will continue and will be extended. I am very interested that the member for Gippsland has thrown his weight behind fixed terms, and I call on the rest of the opposition to stand up with the member for Gippsland, to join the government and to support that great reform, as originally envisaged by that great member for Werriwa, the former Prime Minister of Australia, Gough Whitlam. Let us pass this amendment and then go on to further reform in Australia, from the more obvious issues that grew out of the last election—such as revoking the measure of early closure of the roll, which was designed to prevent young people voting—to issues such as fixed four-year terms and ultimately a plebiscite and then a referendum on Australia having its own head of state.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I rise only very briefly to put on record my support for the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 and, in fact, my surprise that we are seeing this for a second time. Surely, given all the debate that we are seeing in regard to a campaign arms race—and I think that everyone within this parliament concurs with the use of such a term to describe the huge costs incurred, at both state and federal levels, by candidates and the major parties to run election campaigns—there should be general agreement in regard to the urgent need for reform in this field. I am certainly surprised, therefore, that we are seeing this a second time. I do not think the argument that was given as a reason for rejecting the legislation in the other place was strong—that we need comprehensive reform rather than what I would hope is only the start of a reform process. I do not buy that argument, and I do not think most people in Australia buy it either.

In response, I would certainly hope that this is not the end of the process for the government but the start of a process of reform, and it is in that context that I give the government my support and the support of the people of the mid-North Coast. This is a huge concern to many people within the democratic process. In many ways, I think democracy hinges on accessibility. If it becomes unaffordable for anyone to put their hand up for the democratic processes of becoming a member of this chamber or other chambers throughout Australia—whether for a major political party, as an Independent candidate or for a minor party—then our democratic processes are weaker because of it. I certainly acknowledge the starting principle, which is one of the pillar principles behind this legislation appearing—that is, that the figures that have to be raised by those wanting to be elected are now getting to a level of absurdity and to the point where there is the concern, which is becoming more than just a perception, that it is a buying of the vote and that the vested interests are now really, in many ways, wanting to see a return on their substantial dollars invested.

How will that reform process take place in regard to trying to deliver on other pillars of this process, such as transparency and greater accountability? I hope this is the start of that process. Whilst there are many different arguments that can be presented in regard to a reform process for political donations, at least this is a start. Certainly the reduction of the threshold is a start. Having spent 12 years in a state parliament, I had my eyes nearly pop out of my head when, coming to the federal by-election in September, I saw that the threshold was over $10,000. Whilst it creates huge opportunities for various players to make donations, I think that morally the man on the street would in most cases see that threshold as simply way too high. So for me that is an important part of this legislation.

I would strongly urge those in the other place, both the coalition and the crossbencher involved in blocking this legislation, to strongly consider the perceptions of the man on the street about the question of the accessibility of democracy for Independent candidates as well as for candidates from major political parties. I certainly hope that this is the start of a process that looks at the cost of standing as a candidate. I am talking about standing as a genuine candidate—not someone who wants to put their hand up and have their voice heard for 12 weeks but rather someone who, without having to spend a huge amount of dollars, can actually stand on a good platform of policies and principles and has a very good chance of getting elected if they argue their case well and if they present well. I would hope that all of us in this place support that as a principle rather than continuing the outrageous figures that we have seen donated, particularly in the last couple of elections, both at a state level in New South Wales, where I come from, and in the more recent federal elections.

On a related issue that I would hope comes up in further rounds of reform, it was only last week that the declaration figures for the recent by-elections in Mayo and Lyne were released. I found it absolutely extraordinary that for the seat of Lyne I came out on top of the list in regard to the amount spent. I was clearly outspent by a major political party in that field by a ratio of five, six or seven to one. There is no question about that. The fact that the declaration of your expenditure happens separately for non-aligned candidates versus candidates who are members of major political parties is an issue that I would hope this government strongly considers. Surely it should be the same rule for all, and that includes the major political parties as well as Independent and unaligned candidates. The fact that the major parties can bury their figures in some sort of global expenditure at the end of the year, separate from by-election figures, which have to be declared by people such as me within a certain time frame, is an anomaly. I hope it can be corrected through what I hope is the start of a reform process.

The people on the mid-North Coast would love to see the figures for the expenditure of all the candidates put on the table. Unfortunately they do not have that right and privilege given to them. Maybe the figure will never be known but will be lost in some sort of overall annual figure from the political party in question. I say this not to isolate them but to reflect on a process which now has built into it rules for political parties that are separate to the rules for Independent and non-aligned candidates. If the principles are to be fair to all within a democratic process, if it is about being accessible for all within the democratic process and if it is about allowing absolutely anyone who comes in off the street to stand as a candidate in a representative process then surely the rules that apply to one should apply to all.

I speak in favour of this legislation. I do not think it is perfect at this stage as far as the full political reform process goes. I am taking it on good faith that this is the start of a process of reform and that we will see more to come throughout the coming term of this government. I think the arguments in the other place are weak in arguing that only comprehensive reform, in one package and in agreement between the two major political parties, should be presented to this House. I think that is a weak argument. I think we should start a reform process now. Hopefully we can see the other place support this the second time around and hopefully all of us can in good faith play by the spirit of the legislation that is before us rather than look for ways around it.

Julie Collins (Franklin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009. I start by congratulating the member for Lyne on his valuable contribution. I too hope that this is the beginning of reform. Certainly this amendment bill was designed to improve accountability and transparency in our electoral system, and I hope that that continues also. What we are about is ensuring that political donations are not hidden, ensuring public scrutiny and ensuring the integrity of our democratic processes, something which we should all be aiming for. Labor have always believed in the values of fairness and transparency in the electoral system. We are the party that continue to reform the Electoral Act and that worked to make the system fairer in the past.

Our commitment to overturn the laws left to us by those opposite illustrates that our commitment to an open form of government where the public is able to scrutinise the actions of the government and of political parties is real. By introducing these amendments we will allow the Australian people to scrutinise donations and financial transactions of political parties. These changes are about being honest to the people who elect us. They also deliver on Labor’s election commitment to roll back the changes made by the former government in this area. This is also about bringing Australia’s electoral laws back into line with those of other countries.

This bill deals with many areas regarding political donations and forms an integral part of the government’s broader commitment to a robust electoral funding and disclosure system. We have heard today from other speakers about the fact that we have our green paper out there for discussion at the moment. This particular bill’s key areas include lowering the threshold for the disclosure of political donations and expenditure to a flat $1,000, down from the $10,900 currently linked to CPI; requiring a six-monthly time frame for disclosing donations and political expenditure, rather than just the current annual disclosure; no longer allowing donations to be made to separate branches of the same party but instead treating them as one entity; banning foreign donations; banning anonymous donations over $50; and tying public funding for elections to verified expenditure so that candidates will no longer be able to make a financial gain from public funding.

Reducing the disclosure threshold from $10,900 to $1,000 repeals the previous government’s increase. The aim of the measure is to provide transparency in donations. The current large disclosure limit of $10,900 allows huge amounts to be hidden from the public. It threatens the integrity of our system, as it can create a perception of large donors having a significant influence over political parties. In fact, when the existing threshold was introduced by those opposite, the then Special Minister of State, when introducing them, said:

Indeed, these measures are about making it more robust, fair and rigorous. As a result, people will be able to have even greater confidence in our electoral system

Talk about a load of rubbish! How does increasing a disclosure threshold to a relatively high level and hiding a number of donations made to political parties make them accountable? It does not. It shrouds our electoral system in secrecy. It seems to me that those opposite have increased the threshold in the belief that the public should not know who donated to political parties. I can only interpret their recent opposition to this bill as wanting to protect donors who donate to the coalition. My point about hiding donations is clearly illustrated when you compare the disclosure levels in the financial year 2004-05, when the threshold was $1,500. In that year there were 1,286 donor returns lodged with the AEC. For the financial year 2005-06, when the previous government raised the threshold, only 317 donor returns were launched and in the 2006-07 year—when it went up again, indexed to CPI—the number of returns dropped again, this time to 194. So we have gone from over 1,200 donor returns to 194. How can that be transparent? How can that be accountable?

This bill will also no longer allow donations to separate branches of the same party but instead treat them as one entity. Under the current system it is possible for a political party to raise over $90,000 anonymously, without any trace of where the money came from. For example, different state and territory divisions of a party with a national structure could each receive $10,000 anonymously from the same donor, which would equal $90,000 of untraced money. Currently donors who do not wish to have their identity disclosed can make multiple donations just below the threshold to various branches and divisions of the same political party. This bill will put a stop to that and eliminate donation splitting. It will treat donations to different branches of the political party as a donation to the same party, as it should.

The ALP are on record as opposing the 2006 coalition amendments, and we vigorously opposed them in parliament. I want to quote Senator Faulkner, who was arguing about the coalition changes when he said:

It is about money—dirty money and lots of it—in the coffers of the Liberal Party, and it is about making sure that no-one knows where that dirty money is coming from.

Clearly we have seen that here today with the Liberal Party’s ridiculous arguments: ‘It’s time for reform but not just yet; let’s do it later.’ I support the comments made by Senator Faulkner at that time, because the previous government was not—and is not now—in favour of open, transparent and accountable electoral and political processes. Their disclosure threshold changes removed the chance for the media and members of the public to scrutinise donations made to political parties.

This bill also allows for furnishing returns within eight weeks of polling day and will make it a much more timely reporting system. Candidates and members of Senate groups who have incurred campaign expenditure will be required to provide returns within eight weeks, instead of 15 weeks after the poll. It also requires donors, political parties and associated entities to lodge returns to the AEC within eight weeks of the six-monthly reporting period, instead of the current annual reporting, which can be provided up to 20 weeks after the end of each financial year. These changes will ensure that the AEC has details of gifts, revenues and political expenditure that are both timely and up to date.

This bill will also make it illegal for candidates and political parties to accept overseas donations. It will also make it illegal for other groups, such as associated entities, to accept overseas donations that are for the purpose of political expenditure. Making overseas donations unlawful will bring Australia into line with other countries that prevent foreign donations. Such donations are currently outside the jurisdiction of the AEC and can be impossible to trace. The United Kingdom, New Zealand and Canada place complete bans on foreign donations. The AEC previously supported a tightening of the law to address the issue. I want to quote the AEC in their advice to the Joint Standing Committee on Electoral Matters. It said:

… an obvious and easily exploitable vehicle for hiding the identity of donors through arrangements that narrowly observe the letter of the Australian law with a view to avoiding the intention of full public disclosure.

That is, people can clearly hide behind these laws. Under the current disclosure arrangements contained in the act it would be possible for political parties to channel money through untraceable overseas bodies and sources. This is not okay. There is no current requirement for overseas donors to disclose, making it impossible to determine whether they are the real source of the donation. There is also no adequate way to enforce accurate disclosure of information from overseas entities under domestic law.

The final part of the bill is about tying public funding for elections to verified electoral expenditure so that candidates are not able to make a financial gain. This gives effect to our election commitment that funding will be provided only for expenditure directly incurred by a candidate or a party in an election to prevent any candidate or any party making a financial gain. It will ensure that people receive only the money that they have actually expended. It is about being responsible with the taxpayers’ money.

We have all heard about the evidence presented to the Joint Standing Committee on Electoral Matters in 2005 when there was an example from the 2004 election of a candidate making a profit from public funding. The candidate received almost $200,000 in public funding but spent only just over $35,000 and made quite a substantial profit. This bill will put a stop to candidates making a profit from public funding. I believe the measure brings the electoral laws into line with community standards. New claims processed under these changes will require candidates, registered political parties and Senate groups to lodge a claim specifying all or part of their expenditure if they wish to receive election funding.

This bill does what we said it would do. It will ensure fairness, transparency, integrity and accountability in our electoral system. It is the start of electoral reform. It is clear to me that those opposite do not believe in an open and transparent system which strengthens our democracy. That is why, when in government, they opposed almost every measure to improve the disclosure of donations. This is why they increased the threshold. It is also illustrated by their delaying tactics in sending this bill to a parliamentary committee and then voting it down in the Senate last week. It is clear that they have difficulty with an open and transparent political system. This is why they changed the laws in the first place and that is why they made it harder to trace donations. We all have to ask: just what are they hiding?

I urge those opposite to change their position and to vote to bring fairness and accountability back into the electoral system, and I commend the bill to the House.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

This legislation, the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009, implements longstanding Australian Labor Party policy to clean up electoral donations and the electoral donations and funding system. It implements longstanding Labor Party policy to reduce the perception of undue influence from private donations to political parties, and it imple-ments longstanding Australian Labor Party policy to introduce electoral laws which protect the integrity of the democratic process.

We have seen some extraordinary positions adopted on the other side of the House in opposing the reforms that are bound up in this legislation—opposing them on the pretext that those opposite would wish only to support a larger set of reforms. What we have is opposition to partial reform on the basis that it is not good enough to introduce anything less than a full set of reforms.

It is a curious strategy. It might be explicable if there were a genuine risk that, if these reforms were to pass, it would mean that no further reform of electoral laws would occur. But there is no likelihood of that occurring. There is no such risk, because Labor is committed to ongoing electoral reform.

The Liberal Party position of opposing this bill on the basis that they—as they have claimed—are supporting only a larger and more comprehensive set of reforms is really accurately described as hollow, hypocritical and, indeed, duplicitous. It needs to be borne in mind that this is the party which increased the disclosure threshold during the last parliament from $1,500 to $10,000, indexed. This is the party which introduced not one electoral reform which could be said to have in any way improved transparency and accountability in the electoral system. This is the party, as other speakers on our side of the House have pointed out, which delayed the passage of this bill—introduced in May last year—through parliament by referring the bill to the Joint Standing Committee on Electoral Matters. And this is, of course, the party which voted against this bill in the Senate last week.

It might be worth just briefly examining some of the extraordinary statements that have been made by members of the coalition. We have this extraordinary statement from Senator Ronaldson, in the other place:

Again I put on the record that we are very, very strongly supportive of comprehensive reform …

He went on then to explain that, notwithstanding the support—the strong support, according to Senator Ronaldson—for electoral reform, the Liberal Party was going to vote, and did in fact vote, against this legislation.

We have had equally hollow statements made in the debate in this place from, for example, the member for Sturt, who also claimed to be a supporter of electoral reform—but apparently not these particular reforms. We had from the member for Sturt perhaps the most ridiculous—I think that is an appropriate term for it—statement that has been made in the debate in this House, which was to describe this bill as:

… an attempt … to crush even more the democratic freedoms that we, at least on this side of the House, hold dear.

How it could possibly be said that a bill which increases the requirements for disclosure, which removes the possibility of secrecy in relation to electoral donations, which improves transparency and which improves accountability is—and I will again use the alarmist words of the member for Sturt—‘an attempt to crush democratic freedoms’ is beyond me. I would suspect it is beyond every member of this House, including those opposite, to even begin to work out what the member for Sturt was actually talking about, in making the comment that he did.

We heard, too, from the member for Cook, who also adopted the position taken by those opposite that only a comprehensive set of electoral reforms would be supported by the coalition and that, because this was merely some reform and not a comprehensive set of reforms, it was going to be opposed. That is what has already occurred in the Senate, and that is the position that was taken by the member for Cook.

Perhaps one should not only listen to the words uttered in this debate but also look at what some of the members I have referred to, including Senator Ronaldson and the member for Cook, said in their dissenting report when the Joint Standing Committee on Electoral Matters reported on this bill in October of last year. They ran out their hollow proposition to this effect:

The view of the Coalition members of the Committee is that campaign finance reform is a complex issue that requires integrated reform, with no one measure considered in isolation to another.

It is hollow because—just to take one example—it did not seem to worry the coalition when they passed their change to the electoral laws increasing, effectively as a one-off measure, the disclosure threshold from $1,500 to $10,000 indexed. On no view was that introduced as part of an ‘integrated’ reform. It was an isolated change introduced because the Liberal Party in this parliament has always favoured measures which conceal the sources of the Liberal Party’s funding and which make it possible for very large donations to be made to political parties in this country without fear of disclosure.

When one looks at the actual measures that are bound up in this legislation, one is left to wonder why it is that members of the Liberal Party, members of the National Party and indeed Senator Fielding have chosen to oppose this legislation, because every single measure that one examines in this bill can be seen to be a measure which will improve the integrity of the electoral system, improve accountability and improve the necessary levels of trust that Australian voters should have in their electoral system. I mention Senator Fielding because there is, at the very least, curiosity in observing that, when the former government introduced its change to the electoral laws to increase the disclosure threshold from $1,500 to $10,000 indexed, Senator Fielding voted against the measure, saying that it was not a measure which he could support. One would have thought that this bill, a bill which would reverse the change brought about by the former government to take it back to an even lower disclosure limit of $1,000 not indexed, would be a piece of legislation that would be supported by Senator Fielding. But apparently, as demonstrated in the Senate last week, that is not the case.

I want to mention some of the measures that we find in this bill. The first group of measures is the one that I have mainly been using as an example: the reduction to a much more appropriate level of the disclosure threshold at which donors, registered political parties and candidates need to state and identify donors. As I have said, it had been increased to $10,000 indexed, which by this year had reached the high level of $10,900, and it was going to continue to increase annually with indexation. We now have in this bill a flat rate of $1,000, which is greatly to be preferred.

It is worth quoting just what was said very directly by the Joint Standing Committee on Electoral Matters in relation to this particular change. The committee concluded:

The proposals included in the bill to lower the disclosure threshold … to $1,000 (not adjusted for inflation) will lead to a significant increase in the transparency of financial support and expenditure by participants in the political process.

One could ask rhetorically: what could there possibly be to oppose in such a measure? How is it that those opposite or Senator Fielding could persist in opposition to this particular measure in the bill?

There are related provisions concerning the closing of an existing loophole which allows for donation splitting and which treats state and territory branches as separate entities. It allows donors to contribute—on the current disclosure threshold—up to $10,899.99 to nine separate branches of the same political party, which is almost $98,100 in total. That loophole is to be closed. As the Joint Standing Committee on Electoral Matters commented, that ‘will further improve transparency by limiting the opportunity to contribute large amounts of money to political parties and candidates and avoid disclosure’. Again one could ask rhetorically: how could anyone who was interested in the integrity of the electoral system or in increasing transparency possibly oppose such a measure?

The other measure to which I would refer is that which deals with changing the present possibility of a candidate in effect choosing to use standing for election as a means of earning money. We saw a dramatic example of that at both the last election and the election before that with the failed Senate candidacies of the former member for Oxley in this House. She, of course, had reached the status of being something of a professional leech, sucking on public funding for campaigns. Thus we saw that, in her failed Senate candidacy in 2004, the former member for Oxley, Pauline Hanson, spent some $35,000 but received in public funding more than $200,000, and in the 2007 election she collected some $213,000 in public funding. This bill will introduce a provision which requires that those funds be accounted for and that, instead of standing for election being simply a means of earning large amounts of money, the amount of public funding be directly related to the amount of money that was expended on an actual campaign.

There are other measures in this bill, all of which are measures that will increase the integrity and transparency of the electoral system. There will be a closing of a loophole in existing donor disclosure laws in relation to gifts from foreign companies. Again, this is something that was commended by the Joint Standing Committee on Electoral Matters. In relation to the present possibility of very significant donations being made anonymously both domestically and from overseas, and in particular for extraordinarily large donations to be made from overseas, the bill would make it unlawful for other players in the political process, such as associated entities and third persons, to receive overseas gifts to be used solely or substantially to incur political expenditure. Again one could ask, as one could in respect of every single one of the measures in this legislation: what is there that could possibly be opposed by any political party that was genuinely interested in integrity measures and in increasing transparency in donations to political parties in this country?

I would urge the coalition parties and the Independent senators—in particular, Senator Fielding—to reconsider their present opposition to this legislation. It is not a matter of waiting forever for some comprehensive scheme of legislation; these are discrete measures, each of which will improve our electoral system. I would urge those opposite, as I say, to reconsider their position. I commend the bill to the House.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

There are a number of measures included in the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009, as was indicated by the honourable member opposite. One could sum up the meaning of most of these amendments as essentially assisting the ongoing re-election of Australian Labor Party governments. One can have a debate on political funding in Australia, but I think most of us would agree that all political parties ought to have access to moneys to be able to put forward their points of view so that the public, at a state or federal level, as the case may be, have the opportunity of weighing what each of the parties has on offer, with a view to making a thoughtful decision which is well considered and in the interests of the country or the state.

The Australian Labor Party seems to have access to unlimited amounts of trade union dollars. These amendments will have little impact on the Australian Labor Party because many of the donations to the Labor Party come from the trade union movement. The Labor Party is the party of the unions. It is controlled in many respects by the unions and it governs for the unions, as we have seen in the industrial relations changes which have been introduced to the parliament by the Deputy Prime Minister. So it is not surprising that members opposite come in and quite enthusiastically support the provisions of the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009. I suppose that in a sense they are coming in here and voting not for personal self-interest but for the political self-interest of the governing party, the Australian Labor Party.

It is just ridiculous to suggest that the donations disclosure threshold in 2009 should be reduced from $10,900, the current rate when CPI indexed, to $1,000 with the removal of CPI indexation. Even if one could mount a valid argument, which I do not believe that one can, to reduce the disclosure threshold right back to $1,000, what on earth would be the moral justification for removing CPI indexation? After all, CPI indexation simply preserves the real value of the basic figure—that is, the $1,000.

I believe that we in Australia ought to have a debate about political reform. I believe we ought to have a debate about political funding. There are a range of views right across the political spectrum on the best means of guaranteeing political parties access to funds so that they are able to put forward democratically the policies that they have on offer. Our democracy would be crushed if this legislation became law and if political parties other than the Australian Labor Party were economically prevented from putting forward their case.

Given the fact that a lot of the policies introduced by the Labor government have been quite disastrous, it would be very sad for democracy in Australia if we had a situation where, come the next election, the conservative side of politics were starved of political donations because of the fear of retribution that some of those possible donors might feel were it necessary to disclose publicly the amount of their donations. No-one would support political corruption; I certainly do not. I do not believe that we have a high level of political corruption in Australia. We are fortunate that we have a system that is largely open and transparent. But the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 undermines the integrity of the electoral system in Australia, and democracy in Australia would be the poorer were it to become law.

It is important to recognise that the union movement is the basic financing vehicle for the Australian Labor Party. Were this legislation to become law we would find that, because of the disclosure requirements, more companies would feel intimidated into making perhaps equal donations to both sides of politics. If companies wish to make equal donations to both sides of politics as a matter of free will, that is fine and I certainly would support that. But it would be wrong if companies or individuals were coerced into making equal donations because of the fear of economic penalties from the government of the day.

It is appropriate in a democracy to have a disclosure limit, but the changed disclosure limit, as introduced in 2006 by the former Howard government, is indeed the appropriate level. It is also important, given the fact that we have a degree of inflation—and under Labor Party policies we will have more inflation—that we have CPI indexation so that the true value of the disclosure limit is preserved. As an aside, I think it is a tragedy that, for many years, the eligibility limits for access to the Commonwealth seniors health card have not been indexed. I am getting a lot of complaints from constituents who are now losing access to the Pharmaceutical Benefits Scheme at the concessional rate because they are losing the Commonwealth seniors health card because the income limits are not being indexed. So people who are at a stage of their lives where they have increasing health needs are being tossed off the card because there has not been indexation and there has not been a preservation of the real value of the income limits.

And the principle is the same for this bill. If one does not index the disclosure limit then one distorts the value of the disclosure limit. With the level of inflation, the value of the amount of $1,000 will be diminished. In five or 10 years time, if the disclosure limit is not altered, $1,000 will be worth much less in real terms than it is today. The Liberal-National opposition is indeed supportive of the principle of ongoing political reform, because if there is not integrity in the electoral system—a situation where the people of Australia get the government they vote for on the day—and if people do not have confidence in our political system then Australia will not maintain its good reputation for democracy.

Part of guaranteeing democracy is to make sure that political parties and independent candidates are able to get access to appropriate levels of funding so that the Australian community is able to look at what is on offer and make an intelligent decision. If this bill is carried into law, it is possible that the overwhelming message that will get back to the Australian people will be that of the Labor side of politics because our side of politics will be starved of the capacity to put forward the other point of view.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Mr Windsor interjecting

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The honourable member for New England is a fair-minded person and he would believe that everyone should be given the opportunity of putting forward a case and of being able to finance a campaign. But, unfortunately, the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 could be summed up as simply being a self-interested piece of legislation introduced by the Labor government to help guarantee the continuity of the Labor government in this country despite the appalling policies it is imposing in view of the international economic situation. I am not in favour of this bill. I think it is a retrograde measure, a regrettable measure. It is a trampling on democracy, and the government stands condemned for introducing it.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I rise to speak on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009. I thank the member for Fisher for those complimentary remarks about me being a fair-minded person in relation to these matters. But I would point out to the member for Fisher that our Constitution does not recognise the term ‘political party’; it actually recognises members of parliament who are elected by the various jurisdictions. One of the polluting factors which I think has occurred in terms of the electoral process and the way in which fundraising takes place—in terms of associated entities and a whole lot of other things that are assumed by the major parties to be acceptable in terms of raising funds so that they can advertise their wares to the electorate—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Mr Slipper interjecting

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

The member for Fisher is in a sense just compounding the problem by saying that all parties should have fair and equitable access. He should know that the Independent members of parliament—those people who still abide by the constitutional arrangements—do not in fact have fair access to some of the electoral processes that apply to the major parties. As the member for Fisher has left the chamber, I will not get into all of that, but I think he would take that as read.

One of the interesting parts of that—and it is a great shame the member for Fisher has left the chamber—is that, when one examines the disclosure documents for contributions to individual members of parliament, one finds it is the Independent MPs who have to make a disclosure. The party MPs, in the main—even though they may have spent hundreds of thousands of dollars of taxpayers’ money and their various donors’ money—will have on their return ‘nil disclosure’. That does not mean that they have not spent any money. It means that they do not have to declare who they received the money from in terms of their particular seat and they do not have to declare any allegiances.

As the major parties would know, the way that this nil disclosure business works is that most donations—and the public funding, of course—are made to the political parties. So the Liberal Party or the National Party or the Labor Party receive some public funding and, in other cases, washed through the associated entities and washed through the $9,999-donations under the current legislation, there is the capacity for people to have a financial interest in the political process and not declare that in any transparent way.

I do support the reduction in the disclosure threshold from $10,000 to $1,000. I do not support at all the member for Fisher’s explanation that somehow this should fit with some economic equation to keep it in real terms. I think what the general populace would like to see is who pays the piper, who is paying the money outside the public funding arrangements to the political parties—and Independent MPs—and who is actually making donations, so that people in the electorate and the parliament and others can make a judgment as to the authenticity of decisions that are being made on public policy and have a clear and transparent trail back to who paid what.

The member for Fisher made an important point about the union movement, which is a major donor for one side of parliament. I think it is generally assumed in the community that that money will always be there. The bulk may come and go slightly, but at least people know who is paying that side of parliament. In some cases, on the Liberal and National parties side, for instance, we do not know, particularly with the way that some of the associated entities are set up. There is the capacity to hold a dinner where hundreds of people may attend, and they may well make significant donations—buying a table et cetera—that do not necessarily flow through to the public knowing who actually paid the contribution. Regrettably, the information does not flow through in a transparent process when public policy is analysed. If we ever wanted a good example of how that pollutes the process and actually works to the detriment of political parties, we have only to look at the New South Wales Labor Party and the way in which there is a whole range of indiscretions and rorts and possibly corruption that have occurred. There is an inability to really track the money flow in relation to some of the accusations and allegations that have been made in that arena. It demeans the political process.

I am reminded in these debates, Madam Deputy Speaker Burke—as you possibly would be—of the late member for Calare, Peter Andren, and the various contributions that he made to these sorts of debates, particularly in terms of transparency. I am sure if he were here today he would be raising the issues in a much better fashion than I am about associated entities and all of these transgressions of the process that are built into the system. I am sure he would be indicating some sympathy for Senator Fielding’s position in the Senate.

If we remember back to why public funding was actually put in place, it was to achieve an outcome similar to what the member for Fisher was talking about—where all people could have a fair go, there would be a fair amount of funding expended and that would assist the political players to get their message out in terms of campaign expenses. What in fact has occurred is this explosion of money. It has not negated the political parties going after private donations. In fact, that has proliferated and it has been through these associated entities and other mechanisms—disclosure rules et cetera. I am pleased to see that gifts have been looked at in this legislation, but the disclosure rules under the previous government went from, I think, $1,500 to $10,000. There were any number of contributions being made just under that limit. So I think it is a positive move to restrict the disclosure threshold to $1,000.

Senator Fielding has made an important point: at what stage do we cap the public expenditure? The last thing we need in this nation is what has occurred in the United States. I am a supporter of President Obama, but the principle that he with the greatest amount of money should win the fight is something that I think we should avoid at all costs in this country.

On the associated entity problem that I have referred to, the great concern that the general public and I have is with the influence that the contributors have. We have recently seen an example in this parliament in relation to an amendment to legislation that was supported by the coalition in the lower house. I am talking about the Murray-Darling legislation. There was an amendment that called for an independent study into groundwater systems in the Murray-Darling Basin so that we could ascertain the interconnectivity of groundwater systems and the relationship that they have with river systems, in terms of the mechanisms of the Murray-Darling. The coalition supported that here and supported it in the Senate—and then the piper rang up. Mitchell Hooke, Chief Executive Officer of the Minerals Council, made some calls and all of a sudden there was a reversal in relation to the coalition’s vote in the Senate. If the coalition had stuck true to its position in the Senate, that amendment would have had the numbers in the Senate and would have been returned to the lower house for further adjudication. I think that just shows the power of some of these people.

I also suggest in terms of some of the workplace arrangements currently before the parliament that there may well be subtle pressure from people who have funded various political players or political parties. I am not suggesting that we are ever going to get away from that. What I am suggesting is that the transparency of the money flows should be far more obvious. Possibly the only thing this bill does, other than identifying foreign gifts and a few other things, is reduce that disclosure. The minister, as he is an undoubted expert on political funding, might correct me if I have not correctly interpreted it, and if there are some anomalies that I have not been able to ascertain, but I do not think it does anything about the way in which donations can be washed through the associated entity process and then disclosed in bulk as donations to the political parties, and then when the members of parliament make their private disclosures they have a nil disclosure. We really do need to look at that particular process.

The other issue I raise relates to donations and the capacity of the Electoral Commission to actually investigate donations. Madam Deputy Speaker, you would well remember, as I am sure the minister does, that I made certain allegations in terms of an intermediary making a suggestion to me that I vacate the premises for some promises in relation to life after parliament. Many members may recall that a Tamworth businessmen called Greg Maguire was that intermediary. A Senate inquiry evolved from that process. Part of that Senate inquiry process did involve the Australian Electoral Commission and did involve me and others, including the said Mr Maguire. During that process, under oath, Mr Maguire made certain statements that he had made political donations to me, on a number of occasions apparently. The Senate inquiry attempted to investigate whether that had in fact happened. As I understand it, the Electoral Commission was unable to find that any donations had been declared—because none had been received so they could not have been declared. But there is no way through our existing processes, other than severe criticism by the Senate inquiry, that that particular individual could be brought to book in terms of, first, misleading the parliament and, second, lying to a Senate inquiry under oath and not even being called on to substantiate those allegations in front of the Senate inquiry.

I think there are a number of outs for the political system if in fact both sides do not particularly want transparency to really flow through, even though they might suggest it in terms of legislative arrangements. You see in a number of speeches that this is about transparency. I think there is an enormous distance to go to achieve anywhere near transparency in relation to who actually pays the money to the political parties, how that flows through to the political candidates and how those political candidates repay or do not repay the favours in relation to those amounts of money.

So I ask the minister—I know he is a very fair man—to take those comments on board, particularly the issue of associated entities, if we in this place expect people to have respect for the way in which the private donations are made. There are some positive steps in this legislation and I will be supporting the legislation. But there is a long way to go before people have real respect for a process and can actually say that the process is transparent, we know who paid the money, we know which candidates received it and we can adjudicate on those issues. They can do so in some local government jurisdictions. They can adjudicate on those decisions and funding arrangements accordingly.

Mike Kelly (Eden-Monaro, Australian Labor Party, Parliamentary Secretary for Defence Support) Share this | Link to this | Hansard source

I thank all members who have contributed to the debate. The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 will reduce the disclosed threshold from the current CPI-indexed amount of $10,900 to a non-indexed amount of $1,000. This will restore proper public scrutiny to donations of this size. The bill will improve transparency and the funding and disclosure scheme. It will also ensure that the new $1,000 disclosure threshold is not avoided by a person giving multiple amounts below the threshold to the various branches or divisions of the same political party. The bill will treat donations to different branches of a political party as if the donations were given to the same political party.

The second group of measures concerns from whom donations may be received. The bill prohibits the receipt of a gift of foreign property or an anonymous outright gift for some people and entities, while for other people and entities it will be unlawful to receive a gift of foreign property or an anonymous gift if that property is used for political expenditure. In response to a recommendation from the Joint Standing Committee on Electoral Matters, the government amended the 2008 bill to allow low-level anonymous donations—that is, anonymous donations of $50 or less—to continue where they are received through fundraising activities or events.

Finally, the bill seeks to prevent the possibility that some candidates and other groups may obtain a windfall payment of election funding by tying electoral funding to the actual electoral expenditure incurred. I commend the bill to the House.

Question put:

That this bill be now read a second time.