Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Electoral Matters, I present an advisory report of the committee on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the report.

The Senate asked the committee to review the bill, which proposes a number of amendments to the Commonwealth Electoral Act, including: ensuring that claims for public funding are limited to verifiable electoral expenditure; reducing the disclosure threshold from more than $10,000 to $1,000; facilitating the publication of disclosure returns in a more timely manner; making it unlawful to receive foreign or anonymous donations; and strengthening associated penalties and compliance processes. The committee believes that the changes proposed by the bill will significantly improve the transparency of financial support for political parties and candidates as well as the political expenditure and income of other participants in the electoral process.

The committee has made two recommendations to amend the bill. The first is to expand the definition of ‘electoral expenditure’ to allow for reasonable administrative expenses relating to campaigning. This will ensure that minor parties are not disadvantaged by the proposed changes, which are designed to ensure that ‘celebrity’ candidates cannot profiteer from public funding.

The second recommendation to amend the bill relates to the proposal to ban receiving anonymous donations. As currently provided, the bill may create an onerous burden in minor situations such as small-scale raffles and fundraising activities. The amendment proposed by the committee is that a cap of $50 apply, below which anonymous donations can be received.

The committee’s choice of a $50 threshold for accepting anonymous donations was based on a suggestion by the Democratic Audit of Australia. The committee did not receive feedback from the political parties on this issue. Others have argued for the threshold to be set at a higher level. However, the committee considers that a $50 threshold provides the appropriate balance for small-scale fundraising activities to be conducted without the fundraiser needing to identify all contributors.

The committee worked to achieve consensus on the report, with changes made to accommodate concerns over the definition of ‘electoral expenditure’ and the unlikely situation where a donor may be subject to harassment or intimidation. The committee recommended that the existing protections for interference with political liberty in section 327 of the Commonwealth Electoral Act be supported by establishing a dedicated unit within the Australian Electoral Commission that is responsible for promoting awareness of this section of the act and for maintaining a formal complaints register, and is directly contactable by a separate website and an advertised telephone hotline number.

The Australian Electoral Commission told the committee that it estimated that the proposed measures were likely to lead to at least a threefold increase in their workload. It will therefore be important that the government allocates appropriate resources to the commission so that it is able to implement the proposed arrangements in a manner that minimises compliance costs on participants, reduces publication time frames and ensures that compliance processes operate effectively.

Some inquiry participants have argued that the proposals included in the bill should be deferred and considered as part of a broader review process, including a government green paper and a separate inquiry by this committee. The committee does not share this view. The incremental reforms proposed by this bill are based on the overriding principle of openness and transparency in the financial transactions of participants in the electoral system. This principle will remain, notwithstanding any reforms which are progressed into the future. It is also important that the proposed changes are not delayed to close off the disclosure loopholes that currently exist and to give participants greater certainty over the arrangements that apply from 1 July 2008.

Changes to financial disclosure arrangements by the previous government—in particular, the lifting of the disclosure threshold from $1,500 to more than $10,000, indexed to inflation—have allowed significant funding to be provided to political parties and candidates without being disclosed. To give an example of how the lifting of the threshold to more than $10,000 weakened transparency, figures provided by the Electoral Commission revealed that the number of donor returns fell from 1,442 in 2004-05, when the threshold was $1,500, to only 229 in 2006-07, when the threshold was $10,300. The lengthy delay in the publication of disclosures above the threshold has meant that up to one year and three months may elapse after a donation has been made before it is made public. These arrangements clearly do not allow information to be provided to the community in a timely manner about financial support for political parties and candidates. The committee acknowledges that the proposed changes may lead to some additional compliance costs for participants in the political process. However, the committee considers that the proposed changes achieve the appropriate balance between transparency and the freedom to participate in the political process.

I would like to take this opportunity to thank my fellow committee members for their contribution to the inquiry, and those who participated by making submissions or appearing at the public hearings. I would also like to thank the committee secretariat for their assistance. I commend the report to the Senate.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the advisory report on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 tabled by the Joint Standing Committee on Electoral Matters. At the outset, let me say that I welcome reform in the areas of electoral and campaign funding. It is a critical step that needs to be taken to ensure that public confidence in our electoral system is maintained. That is of the key aims of all members of this and the other place as we move through the process of campaign reform.

The opposition is, however, concerned by the manner in which this is being approached. We welcomed the establishment of the green paper process. It promised a holistic approach to campaign finance reform. It promised that all issues would be taken into consideration and that, if we were to restructure the campaign financing system in Australia, we would do so in a thoughtful and well-considered manner. It promised to balance all of the concerns that the different stakeholders may have, and it sought, ultimately, to lay down a fresh, new arrangement that would guarantee maximum levels of government support.

Regrettably, however, we have instead seen a piecemeal approach run in tandem with this green paper approach. We have seen the government pick off and try to push through certain issues ahead of any type of comprehensive, overreaching campaign finance reform. We have seen this done in a manner that has not embraced a consultative approach with other parties or other stakeholders, but instead has simply sought to target particular political issues. It has been a breach, sadly, of the principles and goals that I would have thought should have stood behind the green paper and the proposal to ensure that we have clear, comprehensive campaign finance reform to the benefit of the Australian polity in its entirety. The tabled report demonstrates the piecemeal agenda that the government has pursued. It contains one of those random pieces that have been taken out of the context of what could be, and ideally should be, a bipartisan, sweeping and comprehensive reform that guarantees future public confidence in our electoral system, in campaign finance and in avoiding the concerns that we have seen—particularly in states like New South Wales—about campaign finance arrangements.

The opposition not only holds the broad concern that this is being done in isolation and that it should instead be tackled as part of the comprehensive measure; we also hold some specific concerns about the proposals. One concern, which Senator Hutchins mentioned before, relates to the treatment, under the bill, of anonymous donations. In the initial context of the bill as it has been introduced, anonymous contributions are totally banned. That would lead to the absurd arrangement where party organisations—local branches from all political parties—would have to be keeping some sort record of every contribution, every donation, every raffle ticket sold and every dinner attendee. We welcome the fact that the government members on the Joint Standing Committee on Electoral Matters have supported a recommendation that would at least set a threshold level for when such records would have to be kept, but we are disappointed that that level has been set at just $50. As any member in this or the other place would know, if they were being quite honest, the $50 threshold is not a satisfactory threshold when dealing with these issues—far from it. We all know that many of the average branch functions that are held nowadays will have a $50 or $60 cover charge for a fairly run-of-the-mill dinner that is hardly a significant fundraising event for the party. And yet, under these laws, we will be expecting that, if audited, branches will be able to produce a record of all who attend such functions and part with $60—all for a pub dinner at a small branch fundraiser. It is obviously not the government’s intent to tie up volunteers operating in all political parties in a form of red tape that is unnecessary for the type of disclosure regime that we really need.

I urge the government to consider the recommendation in the majority report to increase the $50 threshold and to set the anonymous threshold at a higher level. In our dissenting comments, we recommended a $250 threshold or something in that order. It could be $200, which in legislation up until 2004 was treated as the level for anonymous donations. Up until 2004, we said that we did not expect volunteers to keep records of donations below $200. It is madness to now suggest that records of donations above $50 will have to be kept. If this type of legislation is put through in isolation of the more sweeping and broader comprehensive green paper process, we will need to ensure that we get things right and not place unfair burdens on volunteer members of any political party in Australia. We all know that it is hard enough to get people engaged with and involved in the political process. I am sure that the role of branch treasurer is one that many people in all parties hate to take on. Treasurers already have to fulfil requirements for their party head office in relation to the reporting of financial arrangements of the branch. If we take it further and increase the burden on the volunteer level of all party organisations then we will be sending a message to people that it is too hard to be involved in the grassroots activism which we should be encouraging and fostering and which is healthy for our democratic process.

I also note with pleasure that recommendation 8 of the report was adopted. Recommendation 8 is about protections against harassment and ensuring that there is a broad understanding in the community of the type of protections that apply. If we are to have a significantly more open disclosure regime, it is important that those who make contributions to political parties, whose names will be known to all and sundry, understand that there are certain protections afforded to them and that they cannot be unduly harassed as a result of their contributions to or involvement in a political party. We urge the government to take that recommendation seriously and to look at the resourcing provided to the Australian Electoral Commission and the funds required to deliver the complaints register and complaints processing procedures that we have called for.

In closing, I thank the witnesses who brought issues to the attention of the committee, particularly those witnesses who highlighted some of the issues surrounding anonymous donations. I again urge the government to consider those. Finally, I make a further plea to the government that, instead of this ad hoc, piecemeal approach of throwing pieces of legislation at us on a random basis, they go back to first principles on campaign finance reforms and deliver a green paper that is comprehensive, that allows for discussion and dialogue with the opposition, the minor parties and other stakeholders throughout the community and that also allows us to tackle these issues in a holistic way, not in a partisan way where it can be seen that one side or the other is benefiting. It actually needs to be seen as serving the aims of a better democracy for Australia and an electoral system that the Australian people have faith in and can be proud of.

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

I want to endorse the very eloquent words of Senator Birmingham. In light of his contribution, I will significantly limit my contribution today. Also, I am pleased that Minister Faulkner is in the chamber. As the Senate would be well aware of, in March this year, on behalf of the coalition parties—the Liberal Party and the National Party—and with the support of the Greens and the Democrats, we put through the Senate a reference to the Joint Standing Committee on Electoral Matters. It was a very substantial and, dare I say it, holistic reference to the joint standing committee to report on campaign finance reform. Without making too strong a point about it, I will remind the chamber again that the Australian Labor Party actually opposed that reference.

Minister Faulkner, who is in the chamber, will know that we have supported the green paper process. The minister will be acutely aware that the timing of the release of this green paper was to be in July, with a second paper to be released in October. I, on behalf of the coalition, have made it quite clear that we will not be making any public comments about the slippage in that timing, because our strong view is that this issue is far too important for us to be playing politics with. If this green paper needs another month, two months or three months then, in our view, so be it. Rather than being rushed, we would like to see it done properly and have an outcome that will benefit the Australian community.

In my view, part of the deal—and I obviously do not mean a literal deal—is that that article of faith can be repaid by the government in relation to the two pieces of legislation on disclosure and tax deductibility that have been brought in ahead of the release of the green paper. I refer honourable senators to the dissenting report, in which coalition senators said that any debate on those two pieces of legislation should occur after appropriate consideration of the green paper. It is not a case of there being no scrutiny of those two pieces of legislation by the Senate—to the contrary. The debate on those two pieces of legislation should be after an appropriate level of community debate and discussion following the release of the green paper.

While the minister was speaking to one of my colleagues in the chamber, he might not have heard me say this, so I will repeat it: we are and have been quite happy about the process and have made no comments in relation to the slippage of time with the release of the green paper because we believe that this needs to be done properly. I assume that the delay has been caused by the requirement to do that. We will make no comment at all, Minister. As I said, if it is another three months or four months then the coalition will not be making any adverse political comment in relation to that.

I ask the government, as an act of good faith, to ensure that there is not debate in this place on both this bill and the tax deductibility bill until the release of and appropriate level of discussion on the green paper. Some of our colleagues on both sides might disagree with these reforms, but I think the minister and I agree that status quo is not an option. There will be other colleagues in the other place and here who might disagree with that. I do not think that it is an option. If it is not an option and we do need to make changes, let’s do it on the back of agreement between the political players in this process to ensure that we get the right outcome. The right outcome can only be done on the back of an acknowledgement that we need to look at this whole area as one and not cherry pick bits and pieces out of potential campaign finance reform.

I again confirm to the minister that he has our full support to make sure that the green paper process is done properly. We are not concerned about the timing of the release of the green paper. What we are concerned about is that the government has attempted to cherry pick certain parts of campaign finance reform before the joint standing committee has had the opportunity to finish its inquiry on the motion put by me and passed by the Senate in relation to a holistic approach to campaign finance reform. Let’s do this properly because the decisions that we make on campaign finance reform will have huge ramifications for not the next two or three years but for decades. The Australian community quite rightly believes—as I suspect the minister does, and as I most certainly do—that the status quo cannot continue. I am not going to use the next 4½ minutes to talk about Wollongong and other areas because this debate quite frankly is above that in this particular climate. But if we are going to do it, let’s do it properly and let’s do it in a climate of realistic and reasonable discussions between the political parties and the Independents to ensure that what we do is right and that it is right for the Australian community. I think it would be an act of good faith on behalf of the government to look at the dissenting report and to hold any discussion of this legislation over until after the green paper has been considered, because I would be very surprised if further legislation did not follow from an appropriate and considered inquiry into the green paper—both aspects of it—and that, in my view, is the time when we look at a wider legislative process.

John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

The government welcomes the report of the Joint Standing Committee on Electoral Matters on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008, which was tabled in the House of Representatives on 23 October 2008. I particularly thank the committee for two things that it recommended: that the bill—which I believe will help restore accountability, integrity and transparency to our electoral laws—be supported, and also that the committee report in October this year rather than in July next year, which the opposition originally wanted, for no other reason, I fear, than delaying its passage.

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

The Senate wanted it.

John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

Just so that we are clear, when this bill was originally referred, the government and all the then minor parties in the Senate—which included the Australian Democrats, the Australian Greens and the then Independents that were represented in the Senate—were happy to see this particular piece of legislation brought forward for debate. I refer you to the Hansard so that you can refresh your memory on those matters.

Let me say that the issues and the measures that are dealt with in this bill are very important, and I hope all senators would acknowledge this. First of all, the legislation includes a measure to lower the threshold for the disclosure of political donations and political expenditure to $1,000 as opposed to the $10,900 index-linked threshold that it was raised to under the Howard government. It also proposes to introduce a six-monthly disclosure of donations and political expenditure rather than just annual disclosure. There is a proposal in the bill to ban foreign donations and anonymous donations. The bill also proposes that donations to separate branches of the same party being treated as separate donations for disclosure purposes will no longer be allowed, which obviously closes a loophole where multiple donations below the threshold can be hidden. It also makes the receipt of public funding for elections more accountable by tying it to verified expenditure—actual electoral expenditure—so that candidates are not able to make financial gain from public funding.

I made very clear at the time this bill was introduced that we consider these measures to be urgent. I still believe they are urgent. I still believe these measures are critically important reforms. I also believe that the green paper process is important, and I am pleased that other senators have acknowledged that that is the case. That green paper process is well in train. There is a consultation draft—best described as that—before state and territory governments as we speak. They are considering that, and I think that is absolutely appropriate to ensure that we have that level of consultation in the green paper process.

The involvement of the states and territories is important because, obviously, we must work for harmonisation of our electoral laws across the Commonwealth. Also, I think the involvement of the Joint Standing Committee on Electoral Matters is important, and I appreciate their report on this bill. It is also absolutely vital that we work cooperatively with the political parties—political parties of all persuasions—because they are at the coalface in relation to these matters, so that we can progress these important issues that are dealt with in the green paper. We must work within the framework that is provided by our Constitution and our democratic system, and we must work in accordance with the values of our Australian democracy, which are values that I hope would be shared by all in this parliament.

So that process is progressing, but this bill that the JSCEM has reported on remains urgent. We still have a situation where a person can be in receipt of public funds for elections without having spent those amounts of money on the actual electoral campaign itself. It has been a scandal. We need to fix it. The threshold of $10,900—courtesy of Mr Howard’s government—needs to be reduced to $1,000. These reforms are urgent, and I would commend their being dealt with by the Senate. (Time expired)