Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Electoral Matters, I present the committee's report entitled Report on the funding of political parties and election campaigns, incorporating dissenting reports, together with the minutes of proceedings.

When Australia's funding and disclosure system was introduced in 1984 it was a leader in the field. However, more than a quarter of a century later, Australia's political financing arrangements are in need of review and revitalising. In a democracy like Australia, it is vital to have transparency and accountability as core features of our political financing arrangements, so we can all have confidence in our system. The Australian people have the right to know where their money is coming from and where it goes, so they can make informed decisions when selecting their representatives.

It is important that any changes made in Australia to funding and disclosure arrangements at the Commonwealth level are not merely a reaction to incidents or calls for reform but a considered and carefully designed approach to help ensure transparency and accountability.

It is important to safeguard the integrity of our funding and disclosure system, but it is also vital not to unduly restrict the ability of individuals and groups to engage in the political arena, whether through donating to a candidate, political party or third party, or advocating on a particular issue. Australians' rights to freedom of political expression and participation must also remain a high priority. In making the recommendations in this report, the committee has sought to strike an appropriate balance between these competing concerns.

The committee considered a cross-section of views during the course of this inquiry and developed what it believes is a measured approach, providing practical reforms to improve the current funding and disclosure system.

Key reforms include increasing the level and frequency of disclosure by reducing the disclosure threshold from the current $11,900 (indexed to CPI) to $1,000, without indexation. The reporting requirement for political parties, associated entities and third parties will initially move from annually to six-monthly reporting, with a view to moving to contemporaneous reporting following an investigation of options by the Australian Electoral Commission.

The committee also recommended the introduction of special reporting of single donations over $100,000, which must be disclosed to the AEC within 14 business days of receiving the donation and made publically available soon after on the AEC website.

The committee also supports clarifying the definition of 'gift' to include the receipt of money from fundraising events, to help improve the transparency of money received from attendees at these events.

To improve the overall transparency of the flow of money, the committee also proposes requiring greater disclosure of political expenditure. Currently, expenditure is disclosed as a block sum with no specific details.

These increased disclosure requirements will place additional administrative burdens on those with reporting obligations. To help address this, an additional stream of funding is proposed to assist Independents and political parties in meeting their increased obligations. While the provision of administrative funding does mean additional public money, the increased transparency will leave electors better armed with relevant information about the movement of money.

The committee has also made recommendations to enhance the administrative efficiency of disclosure arrangements, including the AEC enhancing its online lodgement system to assist those with reporting requirements for donations and expenditure.

The committee also proposed reforms to the public funding arrangements, including having a reimbursement scheme to operate alongside the per vote payment system. Eligible candidates and parties will then receive the lesser amount of the two options. This will help ensure that payments received are appropriate and do not provide a windfall to candidates. It was also recommended that winning a seat should serve as a threshold for entitlement to public funding in cases when the member or senator has not attained the four per cent threshold.

The committee also recognised that effective compliance arrangements are essential for a workable funding and disclosure scheme.

Australia's system of compliance and enforcement of its political financing arrangements are based on an ex post facto approach—punishing breaches or noncompliance after the fact. The penalties for offences against the funding and disclosure provisions are relatively weak and have not been updated since the scheme's introduction in 1984. All offences are criminal offences and so must be prosecuted by the Commonwealth DPP before a penalty can be imposed on those who breach the funding and disclosure requirements.

However, the successful prosecution of offences has proven difficult. This has been attributed to the relatively low penalties for some funding and disclosure offences, which, it been suggested, sends a message to the CDPP that these offences are not viewed as serious.

I thank the committee secretariat and members of the committee, in particular our technical adviser, Ms Christine Wickremasinghe. (Time expired)

In accordance with standing order 39(f) the report was made a parliamentary paper.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

The report on the funding of political parties and election campaigns was a most contentious series of hearings and report. This is a very political report. The committee was split down the middle between the government and the Greens and the opposition, because this report is designed to benefit Labor, the Greens and their compatriots—the union mates and GetUp!.

In our dissenting report, we pointed out that the decision to lower the threshold for disclosure to $1,000 non-indexed was a requirement of the Greens in their alliance with the Labor Party to form government. It is designed to benefit both those parties, because it will penalise the coalition parties, who rely on small donations from individuals and small firms. Before the higher threshold was reached there was plenty of evidence around of the badgering of published donors who had donated to the coalition parties where both the Labor Party and the unions said, 'Where is our donation?'—or threats of another kind. We find this sort of thing is not conducive to and not compatible with participatory democracy, where it is important that individuals and firms, be they small or large, have both an obligation and a right to participate in having their point of view heard and may make a donation to their party of choice without expecting a penalty or to be abused by an opposing party.

The inquiry taught us some valuable lessons. It taught us particularly about GetUp!, which claims to be an independent body. We became aware that all the large donations it receives—for instance, $1 million from the CFMEU and other donations from ALP affiliates—mean that it is not entitled to call itself independent. Further, when I asked how many voting members it has, it claimed that it has 600,000 members. Yet, when you look at its constitution, the number of voting members by its own admission is less than 12. I also asked whether, if I clicked onto its website, I would be counted as a member, and its answer was yes.

On the question of the Greens and the donation of $1.6 million from Mr Graeme Wood, the founder of Wotif—and of course the purchaser, together with a partner, of the mill in Tasmania—we noted that disclosure of that $1.6 million had been 'put off', in the words of Mr Brett Constable, the Greens national manager, and that it was 'really out of respect for the donor'. We learnt that Mr Wood gave his reasons to the Financial Review on 30 July 2011 for his giving $1.6 million. He said:

I was a bit concerned that if the Coalition got in a lot of my investments in environmental causes would have been down the plughole. It will hopefully save me a whole lot of money in fighting other environmental wars or battles.

So much for the Greens and GetUp! saying they do not wish to peddle influence and they think it is wrong that donations to other parties would have a similar effect. The fact of the matter is that there was no evidence except that which I have read out that there is indeed an attempt to buy and peddle influence. The inquiry also showed the inconsistencies that exist with no willingness to attack the huge donations flowing from the trade union movement to the Labor Party and their friends. Trade union donations are a tax deduction and that makes available another pool of tax deductibility for union members, who can also donate a further $1,500 in addition to their union fees to the Labor Party cause.

The coalition is opposed to the thrust of this report where it benefits Labor and the Greens. There were some minor matters that were dealt with in the report to which we gave some support, but the overall thrust of the report is not full of integrity—a word that some like to use in association with these matters. Rather, it is one that is partisan. (Time expired)

Peter Slipper (Speaker) Share this | Link to this | Hansard source

Does the honourable member for Banks wish to move a motion in connection with the report to enable it to be debated on a later occasion?

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

Peter Slipper (Speaker) Share this | Link to this | Hansard source

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.