David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the report.

I rise to speak on the Joint Standing Committee on Electoral Matters, Interim report on foreign donations. That report recommended prohibiting foreign donations to political parties.

The Manchurian Candidate is a story about a cunning foreign power pulling the strings in domestic political affairs. It is a work of fiction, but it seems a lot of people think it was a documentary. They imagine foreign bad guys seeking to control Australian politics, and they cast themselves as the hero stamping out the foreign threat with a patriotic flurry of regulation. The truth is a whole lot more boring and is not the stuff of a Hollywood movie. Regulating just because something sounds bad, without knowing whether it is, is wrong. A ban on foreign donations is a solution in search of a problem.

I am a participating member of the Joint Standing Committee on Electoral Matters. I heard the evidence it received in relation to foreign donations. Various people and organisations argued in favour of prohibiting foreign donations, but none against it. However, several urged considerable caution—including the Liberal Party and the Australian Labor Party. This is interesting, as the leaders of both parties have declared their opposition to foreign donations. What is significant is that both parties were keen to warn against doing more harm than good. Among the points they raised were the following. How should a foreign donation be defined? Is it a donation from a foreign entity? That is, a person or organisation that is not Australian. What about permanent residents or dual citizens? What about domestic branches of foreign entities, such as international environmental groups or businesses? Then there is compliance. How could a party, particularly an Independent candidate or minor party, possibly know whether a donor is an Australian citizen or company? And what about an Aussie who sources funds from overseas before donating them to an Australian political party?

Another option was to define a foreign donation as one from a foreign source—in other words, a bank account not in Australia. There are problems with that too. Expatriate Australians who would like to donate to a political party but have not retained a domestic bank account while living overseas might be affected for example. Some argued that only voters on the electoral roll should be permitted to donate. That is the approach taken by the New South Wales government. The High Court decided it was unconstitutional, declaring that democracy involves more than just voters. New South Wales still has the most stringent laws on political donations in the country, and they are a compliance nightmare, as the Liberal Party submission noted. And yet, is New South Wales the least corrupt jurisdiction in the country? Eddie Obeid and Ian Macdonald might be the only ones to say so.

The fact is that foreign donations are insignificant. To the extent there is any data at all, it shows that foreign donations typically amount to only about one per cent of all the funds Australian political parties receive. And that data shows it is not increasing. The bulk of political funding comes from taxpayers, not donations. But rather than deal with this realistic story, we get foreign bogey men, and patriotic regulation to stop them in their tracks. The truth is that the committee heard no evidence that would support specific prohibition of foreign donations. It heard no evidence to validate the claim that there was any significant community concern about foreign donations. Senator Dastyari's use of a foreign source to pay a private bill is not about foreign donations to political parties.

Even if there was widespread community concern about foreign donors exerting influence, imagining mischief does not make it a reality. Not a single instance of a foreign player using donations to influence domestic policy was heard. No witness outlined how foreign donations could influence domestic policy. No reasoning was provided to suggest that foreign donations could be problematic in the future, where they have not been in the past. No witness was able to indicate how a substantial foreign donation may have a detrimental effect on Australia's democracy.

There were assertions that major domestic donors secure privileged access to senior members of the government, but no-one could point to specific benefits that a donor might receive. There was zero mention of why this is relevant to minor parties and others, which are never likely to form government. The committee did not explore the distinction between a foreigner donating to a party so as to amplify the party's longstanding and strongly held policies, and a foreigner donating to a party in an attempt to change the party's policies. The former motivation may be the predominant one, and may be of little concern to the Australian community. Many Australians care about American politics, and may consider it acceptable to have donated to either the Hillary Clinton or Donald Trump campaigns. If this is the case, they may also consider it acceptable for a foreigner to take a similar, arms-length interest in Australian politics.

Some witnesses raised concerns about donations by foreign governments. This could be countered by specifically banning donations from foreign governments, although a foreign government could still funnel donations via private entities. And what exactly are we trying to stop?

The committee was informed by International IDEA, a group that monitors political transparency issues internationally, that many countries restrict or prohibit foreign donations. And yet that group acknowledged that there is a lack of correlation between political corruption and the regulation of foreign donations. In other words, the evidence does not show that restricting foreign donations reduces corruption, which raises the question: why bother?

Most of those seeking to prohibit political donations prefer public funding of political parties. Support for increased public funding is inherent in arguments to restrict avenues for private donations. However, the committee heard neither a theoretical argument for suggesting that democracy is enhanced by public funding nor empirical evidence confirming that such an outcome is achieved.

There is a further aspect to consider, and that is whether bans on foreign donations should also apply to others seeking to influence electoral outcomes. Should businesses, industry bodies, unions, charities, universities and social issues groups—but not political parties—be able to campaign for particular electoral outcomes with the assistance of foreign donations? In the USA, donations to political parties are strictly controlled, while those to third parties are not; hence the growth of political action committees, or PACs. Is that what we want?

There is a better way. Donations, domestic or foreign, only matter if they have an impact on democracy. Since this is determined by voters, all that is needed is for voters to be aware of donations before they vote so they can take them into account when deciding how to vote. If voters are indifferent to donations, either in general or in a particular case, voting outcomes will not be affected and the fact of the donation is irrelevant. If voters disapprove of any particular source or type of donation, they can take this into account when they vote.

It is remarkably patronising and reflects nanny-state thinking for governments to assume that voters are incapable of deciding for themselves whether a recipient of a donation deserves their support. It is also inherently antidemocratic. If voters are assumed to lack the competence to form a judgement about donations, it follows that they must also lack the competence to form a judgement about party policies generally.

Democracy simply requires voters to be adequately informed. Disclosure of donations should occur at an appropriate time so voters can take it into account when casting their vote. The only regulation needed for this is to prohibit donations made so close to the election that they cannot be disclosed in time.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I also want to say just a few words on the Second interim report on the inquiry into the conduct of the 2016 federal election: foreign donations, by the Joint Standing Committee on Electoral Matters, and the recommendation that Senator Leyonhjelm has just been talking about. The committee, as I recall, has recommended that foreign donations to political parties, to associated entities and to third parties who take part in election campaigns should be prohibited, or words to that effect.

It is interesting to note, however, that, whilst the majority report made this recommendation, there was a dissenting report by the Labor Party and the Greens to effectively ban foreign donations to political parties but not to the unions or to third parties—namely, conservation groups or GetUp! So, whilst it was inappropriate, according to the Labor Party, to have donations to political parties from foreign sources, it was okay for foreign sources to donate substantial money to the unions, to the conservation groups and to GetUp!, all of whom directly or indirectly support the Labor Party or the Greens political party. What a surprise that the Labor Party and the Greens, in a dissenting report, would oppose that!

I would love to have someone just explain to me why, if foreign donations are inappropriate for the major political parties, they are okay for the third-party groups that support the Greens and the Australian Labor Party. You see, the Australian Labor Party does not these days put much money into election campaigns; it all comes from the unions. Some of it comes from members' funds; some of it comes from sources we do not know. They could be foreign; they could be elsewhere. GetUp!, who support the Greens political party and the Labor Party indirectly through the Greens political party, get huge donations from overseas—and this is all on the record—and that is okay, apparently, according to the Greens and the Labor Party. That is okay, but, if someone wants to donate to the Liberal Party and the Labor Party, that is not possible.

As I say, these days, the Labor Party are not the main campaign arm and certainly not the main campaign funders for the Labor Party in any election. Those are the unions. That brings to mind, of course, the commitment by the Queensland Labor Party—so they say in this chamber—to put One Nation last. I will believe that when I see it in their preference allocation. But of course, whilst the Labor Party might do that, the unions, who are the main campaigners and the main funders for the Labor Party in the Queensland election, will not be putting One Nation last; they will do what they have done in the last few elections. They will have signs, and campaign loudly and strongly—and belligerently, I might say—to put the LNP last. The Labor Party senators here say, 'No, that is not going to happen. The Labor Party is going to put One Nation last.'

Senator Moore, I notice you are in the chamber. You are a Queensland senator. You might use this opportunity to get up and assure the Queensland voting public that not only will the Labor Party put One Nation last but your principal campaigners, the people who fund you—that is, the unions—will also follow suit. Because I will bet you that you cannot say that, and that when we have the state election in Queensland you will find the major Labor Party campaign, funded by the unions, will be saying, 'Put the LNP last.' If I am wrong, I would love you, Senator Moore, or one of your Queensland colleagues, to get up and say, 'No, not only will the Labor Party be putting One Nation last but so will our main campaign arm,' which these days are the unions.

We all lived through the last federal election, where we saw all the polling booths manned by paid union officials. In my city of Townsville, where I was working with volunteers from the LNP, we were competing with foreign—that is, non-Townsville—unionists, bussed in from the south, or flown in from the south—

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

Southerners!

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Southerners, indeed, yes. But they were not locals. They were on the local polling booths. LNP polling booths were being manned by volunteers, local volunteers, from Townsville. But who was manning the Labor Party booths and, I might say, then Senator Lazarus's booth? It was the CFMEU, the CPSU and, in Lazarus's case, the MUA. They were all there. They were all being paid. They were not there as volunteers, like the LNP supporters. They were all there supporting the Labor Party, with campaign slogans that said 'Put the LNP last'—not 'Put One Nation last', put the anti-immigration parties last, put other parties, even Palmer's party, last, but 'Put the LNP last'.

I really look forward to any Labor Party person with any semblance of standing in that organisation coming in here and assuring me that not only the Labor Party will not be preferencing One Nation before the LNP but the unions will not be preferencing One Nation before the LNP. If the Labor Party want to preference One Nation, that is fine. I do not care. There is nothing wrong with One Nation, if the Labor Party want to preference them. It is about the dishonesty of the Labor Party saying, 'We are putting One Nation last because we do not like them,' and getting up in the chamber here and hurling some abusive, unparliamentary comments at Senator Hanson and her colleagues—unnecessary, but that is what the Labor Party do—and saying they are totally opposed to One Nation, but, come the Queensland election, I will bet you any money you like that the unions who support and run the campaign for the Labor Party will have signs saying, 'Put the LNP last,' which means, by implication, that the Labor Party will be preferencing One Nation before the LNP. If I am wrong, I would love someone of standing in the Labor Party in Queensland to come in and tell me I am wrong—that not only will they be putting One Nation last but the unions will be as well.

As I say, I have nothing against One Nation in particular. They are not the best political party. The best one, of course, is the LNP in Queensland. There is no doubt about that. But I just cannot control my mirth at the hypocrisy of the Labor Party. In spite of all their abuse of One Nation—inappropriate abuse, more often than not—you will find that, at the Queensland state election, the Labor Party in Queensland will be preferencing One Nation over the LNP. One might ask, 'What about their honesty, what about their commitments, what about their integrity?' Well, we will see at that time.

I have diverted slightly from the subject before the chamber, but I return to that report and I ask why it is that the Labor Party and the Greens think it is okay to ban donations from foreign sources to the Labor Party and the Liberal Party but not to the conservation groups, GetUp! and the unions, who are the main funders and supporters of both the Greens and the Australian Labor Party in any election.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.