Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Hansard source

I want to say a couple of words, albeit briefly, in relation to the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. The opposition is concerned that at the eleventh hour we were given some quite considerable amendments. We will be supporting the government in relation to those and we will be opposing the bill, which will come as no surprise to anyone. But we are a little surprised, quite frankly, that it took them until the eleventh hour. This bill has been around for a long time. There are very detailed amendments to this bill, but I will address those when we get into committee.

I want to speak tonight about schedule 1. Schedules 2 to 6 were effectively dealt with last week, so the remaining matter that we have is schedule 1. I refer to the Joint Standing Committee on Electoral Matters advisory report on the Tax Laws Amendment (2008 Measures No. 1) Bill 2008, and I would draw the honourable senators’ attention to the minority report tabled on behalf of Mr Morrison and Mr Scott from the other place, Senator Birmingham and me. I will not go into great detail, but what the minority report effectively indicates is that there is no reason for this legislation to proceed in light of the quite detailed reference that is presently before the joint standing committee. We have asked on numerous occasions, and the minor parties have asked on numerous occasions, for the Senate to agree to deferring these bills until we can look at this whole political donation issue.

Honourable senators have heard me talk about my view of the rationale for this bill and also for the political disclosure bill, and we believe it is to address the political imperatives of the government and it is not addressing the real issue, which is political financing and donations. The committee tried, along with the Nationals, the Liberals and Senator Brown, to oppose it. I read from page 45 of the minority report:

Coalition Party members of the Committee, together with Senator Bob Brown of the Greens, have opposed this inquiry proceeding in isolation, preferring that the matters referred by the Senate in relation to the Bill, be taken up as part of the committee’s broader inquiry. This position was rejected by Government members of the committee on the casting vote of the Government Chairman.

For the honourable senators who were at this inquiry, it became very clear—as is articulated in the minority report—that there is no reason for this bill to proceed now. The evidence given by Treasury quite clearly shows that the Senate cannot rely on the figures that were given during that inquiry to substantiate the government’s claims in relation to revenue savings. They do not support the position of the government, and we believe that is the first reason.

I will read the first recommendation of the minority report:

That consideration by the Senate of the proposal by the Government for the removal of tax-deductibility for contributions and gifts made to political parties be deferred until such time that the committee has had the opportunity to conclude its broader inquiry into the 2007 federal election, including the extensive review of issues relating to campaign finance reform, furthermore no consideration should be given to the Bill until the Government makes its Green Paper public.

I refer the Senate back to the terms of reference lodged by me and supported by the Senate. This was lodged by me on 11 March and referred to the committee on 12 March. The inquiry, and, again, it was supported by the minor parties, was to be an exhaustive inquiry by the Joint Standing Committee on Electoral Matters. I will read the start of the motion I moved on 12 March:

That the following matter be referred to the Joint Standing Committee on Electoral Matters for inquiry and report:All aspects of the 2007 Federal Election and matters related thereto, with particular reference to ...

The motion goes on to refer in part (a) to the level of donations. The second part, part (b), refers to political fundraising. The third part, part (c), says:

(c) the take up, by whom and by what groups, of current provisions for tax-deductibility for political donations as well as other groups with tax-deductibility that involve themselves in the political process without disclosing that tax-deductible funds are being used …

The Senate, quite rightly in my view, made that referral. Part of that referral was for JSCEM, as the committee is known by honourable senators, to look at all these matters in conjunction with its inquiry into the 2007 election. There was no grey area here; it is quite clear. Those terms of reference, and everything involved in those terms of reference, including tax-deductibility and disclosure, were to be covered in the context of the committee’s inquiry. I am a member of that committee. We have substantial inquiries coming up right throughout Australia. I saw from the committee’s schedule that Senator Brown will be coming to a large number of those inquiries. That 2007 federal election inquiry takes into account, because of the motion passed by this chamber, a large number of matters, including tax-deductibility.

As the minority report says, there are some real issues in relation to equity. It is interesting that equity has been used by some to defend this legislation. I will go to page 48 and quote the minority report. It says:

The arguments for inequity were not raised unprompted in the hearing undertaken by the committee, and were raised only by the Chair late in the hearing, quoting from the submission received after deadline by Mr Sempill and Dr Tham as follows:

the current provisions are inequitable on several counts. They discriminate against those who do not have to pay tax. Job seekers, retirees without income, full-time parents and students not engaged in paid work who make small contributions or take out party membership are denied the benefit of the current system ...

The report then goes on:

In response to questioning by the Chair—

that is, Mr Melham from the other place; he was the chair of the committee—

in relation to this statement, Professor Orr—

from the Democratic Audit of Australia—

put this issue in its proper perspective:

As I said, you might as well say that any form of tax-deductibility, including donations to charity, discriminate against such people ...

The report goes on to say:

The only real argument advanced for this initiative in the majority report is an argument for the abolition of tax deductions in general. Coalition Party members of the committee do not believe such an argument can be accepted to justify the isolated progression of the measure contained in this Bill.

In further response to the Chairman’s comments regarding inequity, the advantage to Members of Parliament over members of the community was highlighted in evidence given.

This is the second point I want to raise. I find it quite extraordinary that this chamber would allow members of parliament to have effectively unlimited tax-deductibility to guarantee their own preselection or to curry favour within their own political party, yet if a member of the public wants to make a contribution to the process they will be denied that. I find that an extraordinary notion, and I find it extraordinary that this chamber would actually allow that to occur. Why would we allow members of parliament to curry favour within their own parties to achieve preselection but not be prepared to allow a citizen of this country the opportunity to participate and receive a tax deduction for a contribution to a political party? It beggars belief. I honestly do not believe that you can allow such a system, where members of parliament are in a privileged position and members of the community are denied even the smallest tax-deductibility for the smallest donation, to remain. That is why this should be considered in the context of these exhaustive terms of reference.

I think it was bitterly disappointing that Mr Melham from the other place used his casting vote on that committee when he had a very clear indication—in fact, I would say a bipartisan indication—from the Nationals, the Liberals and the Greens in relation to what we believed should happen with this legislation. Given everything that has gone on in relation to this, to actually allow members of parliament a privileged position I think is unacceptable—and I hope it is unacceptable to others in this chamber, apart from the Australian Labor Party, which I understand will be insisting on this legislation being put to the vote.

As I said earlier, the Australian Taxation Office were actually not in a position to justify the government’s estimation of revenue gained and expenditure saved. They were simply not able to. In fact, if you read the transcript, it is quite clear that they were, at best, guesstimates. No doubt I will hear from Senator Conroy about the budget and other matters, but I say to Senator Conroy through you, Madam Acting Deputy President, that it is incumbent upon any government to ensure that when they make political points about savings they can actually justify them. Anyone who cares to read the transcript of the evidence given by Treasury will understand very quickly that, despite their very best endeavours, they were unable to justify and substantiate the figures that the government has claimed in relation to savings.

In conclusion, I want to talk about the ALP’s past support for tax-deductibility for political donations. In its submission to the JSCEM report on the 1987 election and 1988 referendums, the ALP claimed: ‘The additional funds raised by political parties with tax-deductibility advantage would alleviate any pressure for increased levels of public funding, encourage political parties to continue to seek direct support from the public and help them more adequately fulfil their social functions.’

In December 1991, the Hawke government voted along party lines and introduced tax-deductibility for political donations of up to $100. The Political Broadcasts and Political Disclosures Bill 1991, assented to on 19 December, gave effect to the introduction of tax-deductibility for political donations of up to $100. That bill was introduced by the then Minister for Transport and Communications, Kim Beazley. The ALP in government, making up the majority of JSCEM, had nothing to say about the issue of tax-deductibility of contributions to political parties in the reports on the 1990 and 1993 elections. The JSCEM report on the 1996 election included a recommendation to make donations of up to $1,500 annually to a political party, whether from an individual or a corporation tax-deductible. And, in the same report, the ALP nominated $1,500 as the maximum level for tax-deductibility. The JSCEM report on the 1996 election was unanimous in recommending:

... that donations to a political party of up to $1500 annually, whether from an individual or a corporation, are tax-deductible.

Membership of that committee, which unanimously recommended tax-deductibility for donations of up to $1,500 for both individuals and corporations, included Senator Stephen Conroy, who was the deputy chair, Mr Robert McClelland, from the other place, and Mr Laurie Ferguson, from the other place. And I do not need to remind honourable senators that Senator Conroy is now a cabinet minister, that Mr McClelland is now the Attorney-General and that Mr Ferguson is now a parliamentary secretary—or he is at the moment; we will see what transpires over the next couple of months.

You cannot talk about the benefits of tax-deductibility and then turn around, with no justification at all, and go ahead—not supported by Treasury, not supported by evidence given to the committee, where the majority of people who gave evidence, irrespective of their views about whether there should or should not be tax-deductibility, viewed it as inappropriate for the matter to be dealt with at that moment. Indeed, they viewed it as appropriate for it to be discussed in the context of potential further, substantial changes.

I refer to comments I made the other day about the disclosure bill. They were matters that are going to be part of the green paper. How can you put through legislation that is going to be part of a green paper? How can you put forward a bill in relation to tax-deductibility that is also going to be part of a green paper? Senator Brown is in the chamber tonight. I believe that Senator Brown genuinely wants to discuss appropriate reform. We are quite happy to sit down with the government and discuss appropriate reform, but was the opposition part of the green paper negotiations or discussions? No. Wouldn’t you think, if this was such an important issue for the Prime Minister, that he would have said to Dr Nelson, the Leader of the Opposition, ‘Why don’t you and I sit down and have some discussions about what we are going to put into this green paper so that we can get an appropriate outcome?’ Rather than speak to the opposition about this, the discussions were with the state premiers. We saw the impact of that recently. We saw the impact of the New South Wales committee, which actually put out a very significant and substantial report, but we did not see anything from Premier Iemma, who was part of the consultative process about what was going to be in the green paper.

I will end where I started. The only reason that you can possibly insist on this piecemeal cherry picking involving disclosure and tax-deductibility is that you want to be seen to be doing something, and the only reason the government wants to be seen to be doing something at the moment is Wollongong. We are absolutely convinced that Wollongong has driven this piecemeal approach. We are convinced that this cherry picking is driven by the Wollongong sex and bribery scandal, and again we say to the government: if you want to sit down and talk about this sensibly, we will participate. I believe the Australian Greens want to sit down and participate properly in moving forward. We most certainly do, and I would be surprised if the Independents did not as well. We have said it before; we will say it again: we want this done holistically. We are not prepared to sit back and watch the government cherry pick parts of reform for their own cheap political purposes and we will be opposing this bill tonight.