James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I present the second advisory report of the Joint Standing Committee on Electoral Matters on the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017, and I move:

That the Senate take note of the report.

The government approached the Joint Standing Committee on Electoral Matters to seek its views on proposed amendments to the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017. I am pleased that the government gave the committee the opportunity to review its proposed amendments to the bill. This bill prohibits the use of foreign donations to influence voting in federal elections. It is vitally important that Australians have confidence that foreign entities are not influencing the course of Australian democracy.

The government has worked constructively with JSCEM, sharing its proposals with the committee to facilitate scrutiny of the changes and to enable wide consultation with the public on the proposed reforms. Indeed, JSCEM has considered the matter three times, including an initial inquiry that considered the general issue of foreign donations, which reported in March 2017; an inquiry into the bill in its original form, which reported in April 2018; and then the current inquiry into the proposed government amendments to the bill, which we are reporting on today.

As chair I have appreciated the collaborative approach of JSCEM members during this inquiry and I recognise the work that has been invested in the preceding two inquiries in support of a goal that a foreign political donation ban must apply to all relevant electoral expenditure. I also appreciate the extensive input into the committee's deliberations from charities, academic institutions, think tanks and various non-government organisations with an interest in public affairs. In the committee's report tabled in April there were 15 recommendations. The minister responded positively to these proposals last month, sharing a draft of specific legislative amendments to address the majority of those recommendations that require a legislative response.

The minister's response to our last report also explained the government's plans for advancing the remaining proposals that need administrative action or warrant inclusion in other reforms—for instance, recommendation 14 dealing with breach of DGR obligations. In its proposed amendments the government has addressed all prior recommendations relating to reducing the compliance burdens for political actors. I highlight four changes in particular. The amendments establish a single transparency register on which key political actors are required to report electoral expenditure and large gifts. Most importantly, the new definitions ensure that pure issue advocacy is not treated in the same way as campaign activity. The new terms 'electoral matter' and 'electoral expenditure' will capture only activity that is aimed at influencing how people vote in a federal election. The new general anti-avoidance provisions are a welcome, simplified replacement for more-specific provisions while still protecting national sovereignty, voter transparency and democratic freedoms. Another important simplification is revision of penalty provisions, making them more proportionate to the scale of the breaches.

The government's draft recommendations go further than the committee's recommendations in two areas, to minimise red tape without compromising the bill's core policy objectives. First, in evidence submitted to the committee's inquiry, representatives from the not-for-profit sector indicated that there has been widespread inadvertent noncompliance with longstanding disclosure obligations in the sector. To assist these third parties with the transition to the bill's new requirements, the amendments provide statutory forgiveness for historical noncompliance. Second, the committee recommended that the bill include anti-avoidance rules dealing with the movement of funds through other organisations or jurisdictions. In responding to that earlier JSCEM proposal, the government proposed changes that would ensure that the Commonwealth laws apply to donations that may be spent on federal elections.

Of particular relevance, the committee took evidence about complications that arose from the Awabdy case, which was decided in the Queensland courts earlier this year. The court case found that there can be a concurrent overlap between the laws of different jurisdictions. If the government had not proposed amendments, there would be confusion for regulated entities. Such ambiguity would increase the regulatory compliance burden for affected entities. The committee heard evidence from legal experts in constitutional law about drafting amendments to clarify which laws apply when. Professor Anne Twomey suggested that there was a drafting flaw in the amendments. But if that issue was addressed, then the rule to prevent state and territory laws from regulating donations for federal elections would be considered valid and appropriate. As Professor Twomey said:

These provisions need to be altered to ensure that the Commonwealth law does not purport to override the State law where the donation concerned is used for the purpose of State electoral expenditure. Certainly, if it is used for Commonwealth electoral expenditure, then the Commonwealth law should prevail over the State law.

This view is endorsed in recommendation 10 of the committee report, which proposes an adjustment of the rule on the interaction of laws to safeguard the legitimate interests of states and territories in regulating donations within their jurisdictions.

The opposition has flagged in its dissenting report that the Commonwealth law should not interfere with legitimate state legislation. However, I would note that this principle ought to work in both directions, as it would be inappropriate for state and territory law to regulate donations that are used for federal elections. I would hope that appropriate adjustments can be made to the government's amendments to ensure that Commonwealth law applies to donations for federal elections while state and territory laws apply to donations for state and territory elections. I don't think the opposition is far apart from the committee's recommendation 10. I would encourage the opposition to engage positively with the government on the detail of the relevant amendments after the government has reconsidered the wording. Just as this bill would ensure that only those with a meaningful connection to Australia are able to fund Australian political activity, it is also appropriate to ensure that only the laws of the Commonwealth apply to the regulation of donations made for the purposes of a federal election.

The committee made a number of other constructive suggestions with cross-party support. I expect that the government will consider these on the same positive basis that it considered the proposals in our earlier report. These important reforms are necessary to support the integrity of Australia's electoral system and ensure that Commonwealth electoral laws keep pace with international developments.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the JSCEM report on the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017. This is a very clever bill, because the government is selling it as a bill that's meant to restrict the impact of foreign money on our political system but in fact it does that very poorly. What it does very well is restrict the ability of charities and not-for-profits to undertake advocacy work to reform our system and to work for public interest outcomes and the social good of us all. So this is yet another exercise by the government where they're pretending to do something when in fact they're continuing their attack on the not-for-profit sector, which has been going on for several years now in various guises under countless different Prime Ministers. So we take great umbrage at the government's purporting to try to clean up the influence of money on our political system when they have completely left alone the issue of corporate influence over our democracy and the hundreds of millions of dollars that they and the opposition have taken from corporate donors, particularly in the last decade. This is a fig leaf of a bill that's just designed to keep attacking the charity sector, which has been resisting the clampdowns on civil society that this government has been promulgating since it's been in office.

The other sting in the tail of this bill, and in this report pertaining to the bill, was a new little bit the government snuck in that the committee didn't take any evidence on and it allows the Commonwealth to override state government donation laws. We're finally seeing some state governments start to tighten up the rules around how big money influences state politics. We have seen good restrictions brought in, thanks in part to the Greens, to stop donations from property developers and other large vested interests. We have finally seen the Queensland government, under threat from the Greens in the recent state election, bring in restrictions on property developers making donations. But this Commonwealth bill would override those restrictions. It is drafted very deliberately. If a donor doesn't say their donation is specifically for the state election then, hey presto, it just so happens that it can be used in any way that that political party deems okay, which is a back-door way of getting around those state restrictions.

This is not a drafting error; it is a deliberate attempt by this government to facilitate corporate dollars flowing into its own pockets—and, frankly, into the pockets of the opposition as well. This is a dirty deal to allow those corporate dollars to keep flowing into the coffers of the major parties. Thankfully, the opposition have decided that they don't like this part of the bill either. I flag that I will be moving amendments to remove this bit from the bill entirely. You can't have a bill that you say is about restricting the influence of foreign money on politics, and at the same time remove from your state governments the restrictions on dirty money influencing politics. It is sheer hypocrisy. So I hope we will get support from the opposition on those amendments. I think the government should think long and hard about whether they even bring this bill on for a vote this week because, frankly, it looks like it is going down—which I would celebrate, because we don't need another attack on the charity sector.

What we do need is genuine reform of the political donation system so that our democracy starts working for people. At the moment, it is working for vested interests, for corporate lobbyists, and for the people these folk go to fancy lunches with. Since 2010, we in the Greens have been moving to clean up politics and end the corporate donations from vested interests like big mining, property developers, and the tobacco, gambling and alcohol industries. All sorts of influence is peddled through those vested interests' donations. They get access that nobody else gets. The community doesn't get that sort of access to Parliament House. You have to have a lobbyist's pass and some dollars that you're prepared to donate to the political parties. You then get access and, hey presto, you get a decision that suits your bottom line.

Our democracy shouldn't be for sale. We are meant to be here to represent the public interest, the interests of people and the interests of our future—and, frankly, the interests of our planet. But this government has been completely hijacked by corporate interests. They don't even know what they stand for any more. They are being puppeteered by big corporates and big business who have made generous donations to both sides of politics to buy the outcomes that they want. It is disgusting and it deserves to be cleaned up. We have been moving to try to clean up the system, and there is growing discontent among the public that their democracy doesn't work for them.

When we see this sort of access and influence by big corporates and big business is it any wonder that people now hold politicians in very low regard? It is about time we started remembering who we are here to represent. It is about time we passed some of those measures to clean up our democracy, to ban those dirty donations from vested interests and to tighten up the lobbying rules—and stop the revolving door between ministers, frontbenchers and staff and big industry lobbying groups once they leave parliament. You can literally track it: they go back and forth, give or take a couple of years. It is an immense conflict of interest that has corrupted our system.

We will not stop trying to clean up politics. We think parliament is meant to work for people and the planet. We don't think you should be able to buy the outcomes that suit your bottom line. That is definitely not how democracy is meant to work. Unfortunately, that is how it works at the moment. This bill does nothing to change that. It is an attack on the not-for-profit sector. It doesn't actually stop the influence of foreign money. It pretends to, but they can actually keep donating through Australian subsidiaries. So it doesn't even achieve the stated purpose. It is a thinly disguised attack on charities to silence them and to put a shroud of uncertainty over the rules that they will now have to comply with if they venture into issue based advocacy.

We know this government can't stand advocacy, and it has been trying for many years now to restrict not-for-profits' undertaking any advocacy work. They're now saying, 'You'll have to comply with a whole range of red tape.' I thought they didn't like red tape; it turns out they like red tape for the folk whose opinions they disagree with. It puts a whole lot of red tape on charities which will have the effect of silencing those small organisations that can't afford the legal advice to tell them what the rules are meant to mean. It is drafted in a deliberately confusing manner to have precisely that effect, and that's shameful. The government needs to fix up that drafting if it wants to have any semblance of integrity. Hey, I'm an eternal optimist, but I won't be waiting for that.

Question agreed to.