Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

I just want to briefly respond to Senator Madigan's comments about my comments before question time. I actually agree with him. I hope I did not misconvey the point that I was trying to make. He makes the point about legitimate collective bargaining, which is guaranteed in the Fair Work Act and in competition and consumer law. I am not challenging that at all. The point that I was making earlier, which Senator Madigan has responded to, was about where the money ends up and the means by which money that political parties get hold of is treated differently.

Senator Madigan rightly referred to tax deductibility not only of union dues but also of membership of professional associations or industry groups like the AiG or the Real Estate Institute or, for that matter, groups like the AMA. The difference is that those groups do not hand money to political parties as membership fees. The point I was making, Senator Madigan, was in regard to the fact that someone who chooses to contribute money to the Labor Party through their union membership fees and then also through a donation or through their membership of the Labor Party more directly is availing themselves of two different tax-free thresholds. They are availing in terms of the tax deductibility of that money. The union money is deductible in one way, whereas the money for membership is deductible in another way. It means that in that all-important sense the money that unions hand over to the ALP is tax free, whereas the money that individuals or that corporates may hand over to another political party or, indeed, to the ALP itself is dealt with primarily, if it is above the deductibility threshold, out of post-tax income, which actually leads to a very different real cost of that donation.

The point I was making about the comments from that particular member of the Democratic Audit was that a structure which favours corporate membership such as the unions have—which is a corporate membership sense of the Labor Party, where the body is the member as opposed to an individual-based membership, which I understand the Democratic Labor Party and the Liberal Party have—is not equal tax treatment of the money that goes to political parties. It has nothing do with collective bargaining, and I do not wish to do anything about the collective bargaining space; it is purely about how the tax system treats the money that political parties get hold of.

I note that in Canada the tax system actually counts tax deductibility as part of the public funding amount, and all moneys that go to political parties that are tax deductible are treated equally. There are no different routes, whether it be by union membership fees or by donations. I think that is an important point. We do not want to have an unlevel playing field with money in politics in terms of its legal treatment. I was not trying to make a point about collective bargaining in that sense at all. I think this could be resolved without having any impact on collective bargaining, because the examples you mentioned, such as dairy farmers and their collective bargaining with a milk processor—all those things—would be untouched. The issue here is about money that flows to political parties from what is rightly pointed out to be the historic arrangement they have with unions, but that should not give them a financial advantage over other participants in the political process purely via the tax system.

With respect to the contribution from Senator Rhiannon, I will not stand here and be lectured on transparency by a political party that does not allow the media into its national conference.