Nick Xenophon (SA, Nick Xenophon Team) Share this | Hansard source

I do not know when I'll be making my last speech in the Senate. I hope this won't be it, because I have a lot to say about many issues affecting my home state of South Australia, but, like others, being part of the 'citizenship seven', I am in the hands of the High Court—of the wise women and men of the High Court. I will be leaving this place, however, one way or the other and sooner rather than later, once that decision is handed down.

I am not really one for valedictories, but I thought I would use the time available this evening to discuss one issue that, for me, and, indeed, for this parliament, remains unfinished business, and that is the issue of political donations reform. This has long been an issue of concern for me, as I have wanted to see much greater transparency in the financial underpinnings of our democratic system. Without radically improved transparency we have a serious and increasing risk that our nation's democracy will be eroded by money politics. We will have the best democracy that money can buy—and I say that with a great degree of irony. We will be affected and infected by behind-the-scenes influence of powerful vested interests and, indeed, as revelations this year have shown, by foreign governments that may wish to influence our politics to their advantage.

As things stand, our federal political donations regime is quite inadequate and no longer able to provide the transparency required to ensure the integrity of our democratic politics. Just about everyone in this parliament knows it is true that the system is broken, but so far agreement has not been reached on the reforms needed to fix it. The current federal disclosure threshold of $13½ thousand is too high, and the belated publication of political donation returns, sometimes up to 19 months later, is woefully inadequate and manifestly unacceptable. More than a year has passed since the last federal election and we have not yet seen all of the financial returns.

Political game playing and partisan self-interests have been all too obvious in how both major parties have dealt with this vital issue. Everyone says they want reform but only, apparently, reform that disadvantages their opponents or glosses over their own vested interests. I very much hope that the current work of the Joint Standing Committee on Electoral Matters will provide a basis for cross-party agreement on an effective package of reforms before the next federal election, and I believe the Special Minister of State, Senator Ryan, is doing some good work in this area.

I will also be interested to see that the Attorney-General's legislative proposals to address the threat of covert political interference is dealt with adequately. I previously advocated the enactment of an Australian equivalent of the US Foreign Agents Registration Act to address the activities of organisations and persons that work on behalf of foreign governments or political organisations to influence decisions in our countries. But threats to the democratic process are not primarily from foreign sources. Where the light of transparency is inadequate, unaccountable influence grows. If we don't reform our federal political donation laws, the business of government and this parliament will be increasingly open to compromise and, I fear, corruption.

Further delay in reform would be most unhealthy, but there is some progress elsewhere. Senators would be well advised to take a close look at the new political donation laws introduced by the Andrews government last month. Under this proposed legislation in Victoria there will be a cap on political donations at $4,000 over a four-year parliamentary term, eliminating large donations to political parties, associated entities and third-party campaigners. The disclosure limit will be reduced from $13½ thousand to $1,000 per financial year. Foreign donations will be banned. It is also proposed that every disclosable donation under the new rules be published online in real time by the Victorian Electoral Commission. Other bodies and organisations involved in political fundraising or campaigning will face the same restrictions and scrutiny and be required to submit annual returns to the Victorian Electoral Commission.

Of course, self-interest is not entirely absent from the reforms proposed by the Andrews government. Significantly, the so-called membership fees paid to political parties will not be covered by the disclosure reforms. These include affiliation fees paid by unions to the Labor Party, representing an aggregate on membership fees paid by union members. These omissions should not be overlooked. They are gaping loopholes that would fundamentally undermine the intent and integrity of such legislation. A full disclosure regime ought to include membership fees and regular returns of party members, including different classes of members. However, these Victorian proposals are still a significant advance in transparency and deserve the close attention of other jurisdictions, federal and state.

They would certainly be an advance on the political donation laws in South Australia, which, whilst they have improved in recent times, are still quite inadequate to ensure proper transparency. The current donation disclosure threshold in South Australia is $5,191. There are more regular disclosure requirements imposed on political parties so that during a general election there are additional lodgement obligations. In the year of a general election, registered political parties and third parties must lodge a return for the month of January by 5 February, and then there are higher frequency returns in the lead up to the election.

There are no caps on donations, although South Australia does have caps on overall campaign expenditure—on the surface—and for candidates. In the case of lower house seats, a political party that endorses candidates for election in the House of Assembly districts is allowed election expenditure of $77,855 for each district in which it endorses a candidate. Parties must, by agreement with their individual candidates, allocate a portion of this cap to each candidate. The amount allocated to each candidate must not exceed $103,806.

I believe that neither the South Australian Labor government nor the Liberal opposition has demonstrated much appetite for political donation election expenditure disclosure reform in a real sense, because both sides seem comfortable with an opaque regime. Some indication of prevailing attitudes was given to me in a recent conversation I had with one of my parliamentary colleagues, who happened to be a Liberal federal member of parliament. As senators will be aware, I intend to contest the currently Liberal-held House of Assembly seat of Hartley in Adelaide's eastern suburbs. I'm a local. I've lived for over two decades in that particular area. Basically, I have lived in that area for virtually all of my life.

I was told by my colleague that the Liberal Party has a huge war chest committed to financing their campaign against me. It was stated to me that some $250,000 has been committed to efforts to hold onto the seat. When I questioned whether that would be a contravention of the campaign expenditure cap, I was told that it wouldn't be a problem because funds can be provided and spent by unnamed third parties. That points to a gaping loophole in the donation disclosure regime in South Australia, which both major parties can abuse. In announcing my intention to run in the March state election I anticipated that both Labor and Liberal parties would throw the proverbial kitchen sink at me. By the sounds of things, it will be a very expensive kitchen sink—a $250,000 sink, no less.

It's fair enough to wonder who those anonymous third parties would be. The most obvious candidate would be the poker machine industry—the owners and operators of the thousands of poker machines that suck money out of our state and where hundreds of millions of dollars are lost. Some $680 million a year is lost on poker machines, especially from those who are vulnerable. Money is being taken out of vulnerable communities, where over 40 per cent of those poker machine losses come from people who are addicted to those machines.

My challenge to Labor Premier Jay Weatherill and Liberal leader Steven Marshall is this: you should not take any donations from the gambling industry in the forthcoming campaign. If they can't give that undertaking, voters are quite entitled to ask, 'Who will be paying for the tidal wave of TV and radio and print ads, as well as pamphlets and letters, that will be heading our way in the next few months?' They will be entitled to ask, 'What interests can pull the strings of the government and the opposition?'

In any case, should my party, SA Best, secure representation in the South Australian parliament, we will introduce legislation to implement a radically improved political donation disclosure regime, particularly in relation to third parties. We will want to see more transparency, more real-time disclosure of donations—especially full coverage of so-called third parties engaged in political campaigning—as well as much improved disclosure of all sources of money and support provided to political parties. These are issues that would be a reasonable subject of community consultation and parliamentary debate, for the objective and outcome must be a radical improvement in transparency.

Support for such reforms will certainly be a factor SA Best will weigh in the balance should we be in a position to influence who will form the next South Australian government. Political donations are part of our democracy, but they are something that should take place in the open and not behind closed doors. I hope that all jurisdictions, federal and state, will make progress in agreeing on and implementing reforms that are urgently needed to preserve the health of our democratic politics.