Carmen Lawrence (Fremantle, Australian Labor Party) Share this | Hansard source

The bill before us, the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2005 does, as the previous speaker was suggesting, pose a full-frontal assault on core democratic principles, particularly that very important principle of political equality in exercising control over decision making. Democracy is after all based on the principle of government by the people—and that means all of them. The bill is a vivid illustration to me of one of the consequences of unfettered government control of both houses of parliament, because less ambitious proposals than these failed in 2004 in the face of Senate opposition. And I think the bill should raise questions about the role of political parties in the Australian political system and the adequacy of the existing system of political finance in Australia, as well as the specific provisions of this bill, and I intend to address both those questions.

As former speakers have indicated, the key provisions raise disclosure thresholds for private donations to parties and candidates from $1,500 to $10,000 and increase tax deductibility. Below the level of disclosure, people will not be required to specify the amount or the source—name, address and so on. There are also provisions for early closure of the roll. The legislation will make enrolment more difficult, allegedly to protect the integrity of the roll despite the AEC’s repeated assurances of its continuing integrity. It will also amend the definitions of associated entities and third parties to encompass groups such as trade unions and environment groups. It will disenfranchise prisoners. It will prescribe a scheme for deregistration and re-registration of parties. And it will remove requirements for publishers and broadcasters to furnish returns—curiously, and with no justification that I have been able to discern.

Today I am going to speak principally on the question of disclosure requirements. The minimum requirement of any representative democracy is that the government be elected. But it is important that all adults should have an equal right to vote and that votes should be of equal value. In broad terms, this has been achieved in Australia, with universal suffrage, electorates of roughly equal size and independent electoral commissions to determine electoral boundaries and prevent gerrymandering—unlike in the United States, I might say.

This bill will make it much harder for some people to exercise their rights. As we have heard, there are estimates that over 300,000 people will be disenfranchised by early closure of the roll and removal of prisoners’ rights to vote. In that case, what we are doing—what this government will do; I certainly do not endorse it—is further marginalising the already marginalised. We should be doing everything we can to keep people in touch with citizenship.

But it is important to recognise that the promise of democracy goes further than equal voting rights. Each citizen should share equally in political power. That is much harder to achieve. Already many Australians are suspicious that not all of them are equally able to influence their representatives. This breeds cynicism and the belief that the ordinary voters’ needs and views are ignored while preference is given to the interests of the wealthy, big business and political cronies.

Some features of our political system already contribute to these attitudes. Substantial campaign donations to the major parties by corporations and large organisations such as unions and business foundations inevitably foster the perception—and perhaps the reality—that it is possible to buy privileged access to MPs and ministers and that this influence is in proportion to the amount of money that is donated.

The disclosure that business leaders pay $10,000 a head for dinner at The Lodge indicates that not even the Prime Minister’s office is free of the practice. And reports on the extraordinary level of what was at the time secret access to the Prime Minister afforded to the CEO of the Manildra Group, Dick Honan, and the favourable treatment of his ethanol producing company—over $20 million in taxpayer funded subsidies at last count—quite understandably sparked controversy. People saw the purchase of influence going on.

Like many Australians, I am perturbed at these tendencies, wherever they are. We run the risk of becoming a corporate democracy run by money politics—a ‘donocracy’, as it has been called in other places—in which the number of shares you have purchased in the party of your choice determines your effective voting power. While there has been extensive debate about big money politics in the United States, for example, there is still a conspicuous silence on the issue among a lot of Australian politicians.

Public funding of elections was supposed to reduce the parties’ reliance on private corporations and union donations, but all that has happened is a blow-out in both public and private funding as parties engage in an increasingly expensive bidding war at election time. Corporate contributions have become an accepted part of the election landscape. We are unlike our New Zealand and Canadian cousins, who have placed wide-ranging legal restrictions on such contributions, with the explicit aim of limiting the political influence of the wealthy.

The substantive problem is the possibility that such donations can actually purchase influence. Controversy surrounding the exercise of ministerial discretion on the issue of visas some time ago gave credence to this concern.

I do not know of any comparable Australian data, but there are surveys of major corporate donors in the United States. Some of those companies are the same ones that donate in Australia. The surveys show that they do not donate out of a charitable impulse or a sense of civic duty; they expect a return for their money. A Business Week-Harris poll, for instance, surveyed 400 senior executives from large public corporations to explore their reasons for donating to political parties. Over half nominated securing access to law makers to ensure consideration of matters affecting their businesses as the main reason. A further 27 per cent indicated that gaining access was at least part of their rationale, while 58 per cent nominated losing influence to the unions or to environmental organisations as relevant considerations. In addition to those not very honourable reasons, a worrying 41 per cent said that at least part of the reason that they made political donations was the hope of receiving ‘preferential consideration on regulations and legislation benefiting our businesses’. That is precisely the reason for my concern.

As retired US senator Paul Simon said in speaking on this issue, anyone who has been a candidate for major public office and says that campaign contributions do not affect them is simply not telling the truth. He went on to say that ‘the financially articulate’, as he calls them, ‘have inordinate access to policy makers’. By way of example, he cited his own responses, which I think are probably pretty typical. He said:

I have never promised anyone a thing for a campaign contribution. But, when I was still in the Senate, if I arrived at a hotel in Chicago at midnight there might be twenty phone calls waiting for me. Nineteen of them are perhaps from people whose names I did not recognize, and the twentieth is someone who gave me a ... campaign contribution. At midnight I am not going to make twenty phone calls. I might make one. Which one do you think I am going to make?

As I say, there is no reason to believe that the same observations do not apply to Australian MPs. Reliance on donations may also create a strong inducement for political parties generally to bias their policies toward business and high-income earners who provide the bulk of funding, thus conspicuously undermining that very important promise of democracy that we all share equally in political power.

A few years ago, during the debate on native title, some people may have noticed the threat by the mining industry that they would withdraw campaign contributions altogether from both major parties unless they made changes to native title and other policies. That they should say so publicly shows just how blatant the exercise of such influence had become.

Donations to political parties and candidates are often controversial, and rightly so. They have the potential to corrode democracy and in some cases may amount to outright corruption. Transparency and accountability are fundamental; we should be doing everything we can to improve them, not to undermine them as this bill does.

A key question for democracy was highlighted in a recent Democratic Audit of Australia conference. It is a simple question: how democratic is the way political parties are funded in Australia? It is not enough that we call ourselves a democracy. How do we fund our parties?

It is reasonable to say that parties need funding. Funding is necessary to enable parties to perform their functions in democracy. Parties are central. They have a privileged position. There are the functions of representation, agenda setting, participation and engaging as many people as possible. There is the function of governance. We do after all form governments in every state and territory in the Commonwealth. At the same time we must ensure equality in participation and freedom of political association. They are reasonable objectives.

The truth is that any reasonable examination will show that the existing system falls well short of these ideals. We should be seeking to improve, not further undermine, the quality of our democracy. The risk that we face with the sort of funding we have, underpinned in this bill, is that funding as we have it favours existing parties and incumbents. It denies electoral choice and reduces the competition of ideas. It is possible that funding and other electoral laws entrench the interests of the major parties. I am a member of one of them, so in some senses I am speaking against my own self-interest; but I do not think it is good for democracy—what the Democratic Audit of Australia called ‘corruption as partisan abuse’. Some people simply cannot get the money to run campaigns.

The second risk with the current way we fund our elections and our parties is that funds are misused for personal benefit or for the benefit of partisan allies, and I have touched on this. Some people will have followed the recent furore over the nomination to the House of Lords of big donors to the British Labour Party. We are all aware of the appointment to the Reserve Bank here of a Liberal Party benefactor.

A third risk is that political donations might be made to favour donors—that is the ‘corruption as undue influence’ described by the Democratic Audit. That violates the key principle I was speaking of earlier, equality of voters. We should have equal concern for the interests of all citizens, regardless of whether they have given us or our parties funding. They should all have a capacity to influence the outcomes of political decisions, which should not be distorted in favour of party financiers. Australian Election Studies data shows that almost half the voters in this country actually believe that it is the preferences of big interests that determine policy and not the preferences of the voters. So people out there clearly believe it already.

Transparency is fundamental to preventing abuse. We need to know who is donating and how much. We need to hold parties and members of parliament responsible. We need adequate disclosure of the sources of funds, as well as the uses to which funds are put, and we also need the media to play its part in bringing information to public attention. This legislation is going to make it harder to identify sources and does nothing to improve the already inadequate provisions relating to use. We do not know the uses to which many of these funds are put.

We need to remember, too, that all parties now rely heavily on private funding—for the major parties it is approximately 80 per cent. Most of it appears to be used for advertising and electioneering, and those other functions I mentioned do not get a look in. We do not know how much is actually used for other political participation, policy development, research, increasing membership and so on, but I would hazard a guess that it is not much.

The existing provisions fall short of desirable standards. Firstly, there is inadequate information regarding the donations. It is not required under the existing law to accurately categorise receipts as donations or otherwise, and it is actually very difficult to track sources right now. The sale of political access is a worrying trend and an increasing source of funds for which there is no disclosure. Some receipts which most would presume are donations are not so declared. They involve the direct purchase of political access. Parties will access directly or through third parties seats at the table, for instance, of a minister or the Prime Minister. An example—and examples are on our side as well—is the ALP ‘It’s time’ dinner; $10,000 a table. The Prime Minister’s table is worth a bit more—$11,000 at the last election.

Through fundraising organisations like the Millennium Foundation, companies can be sponsors and the cost need not be publicly specified. For their sponsorship, they get a variety of entitlements that are not available to ordinary citizens, including access to ministers, briefings and so on. There is no public information about who is contributing and how much. It is precisely these payments, in my view, where disclosure is vital, because of concerns about undue influence. It is also more readily available, with these big price tags, to the already well-off; and there is an unfair advantage to the incumbents, who are able to put ministers and the Prime Minister at their tables rather than shadow ministers from the opposition, who are not nearly so politically attractive.

Under the existing legislation, disclosure is not timely. We need to know before an election, not after, whose promises are being funded. There is right now a lack of compliance. Democratic Audit and the AEC have both expressed concern on a number of occasions about a culture of evasion, that the parties are not according sufficient priority to disclosure and that they are siphoning large sums through associated entities that make up between half and 80 per cent, depending on the year. This compromises transparency and makes funding less visible to the media and more resistant to a disclosure regime, and bodies like the Greenfields Foundation are included in this criticism.

Democratic Audit of Australia researcher Joo Cheong Tham concluded that disclosure schemes are limited by the inadequate disclosure of the nature of contributions and delays in disclosure. There also seems to be a culture of noncompliance. The inevitable attempt by parties to exploit loopholes appears not to be sufficiently counteracted by robust enforcement and regulation. In short, such schemes are leaky sieves that permit evasion of adequate disclosure. That is the current system.

Lack of transparency will be compounded when this legislation passes. Members will be aware that the Parliamentary Library estimates that, allowing for some lack of precision in the definitions of ‘donations’ versus ‘other receipts’, current disclosure requirements mean that details of funding were available in approximately 82 per cent of the 144 million receipts in 2004-05. Of this, 118 million, or 28 per cent, were donations. Lifting the threshold would mean that details would be disclosed for only 70 per cent, with 25 per cent classified as donations, or just 17 per cent of total declared receipts. Averaging over the last seven financial years, it is clear that the proportion of receipts for which the coalition and the ALP would be required to disclose details will drop from three-quarters of their declared receipts to about two-thirds—a clear loss of transparency and accountability. When account is taken of the fact that multiple donations can be made to separate branches of the parties, changes proposed in these bills could allow a donation of as much as $90,000 a year, depending on the party, without triggering disclosure. Partners in a relationship could each give this amount, so you could end up with $180,000 without disclosure.

Disclosure legislation should be crafted to reveal relationships between politicians and donors, not hide them; to enable scrutiny of their subsequent relationship; and to prevent graft, which our law does but only indirectly. It cannot establish causal links between donations and subsequent actions, but it should at least allow for the public testing of relationships, as we saw with Minister Ruddock’s ‘cash for visas’ controversy—at least it did see the light of day. Generous support of the Liberal Party by an appointment to the Reserve Bank board did eventually become public.

A fundamental principle is that everyone should have the same chance to influence government decision making. Corporate interests and trade unions make up approximately 40 per cent of donations to the major parties—probably more, in fact. Even for the ALP, business interests are more substantial contributors. Unions, in theory at least, are democratically constituted; corporations are not. So we do not have democracy in these bodies. Such dependence on these big donors is likely to facilitate special treatment and access for such bodies over ordinary citizens.

Institutional dependence on this ‘interested money’, as it is called, means that we do not have the necessary accountability, particularly because those institutions themselves are not accountable. Companies are not required to consult shareholders. Even in democratically elected union committees, the danger is that officials will contribute to further their own careers rather than to protect their members’ interests. The risk is that MPs and party officials will not form independent judgments of public interest but shape their positions according to the interests of financiers. This gives advantage to the already established and well-heeled parties in our democracies.

We should have fair competition. If we measure how private funding compares with electoral support, for instance, it shows that the current system is unfair. The ALP gets roughly $22 a vote; the Liberals, $18 a vote; The Nationals, $28 a vote; the Democrats, $6 a vote; and the Greens, $8.50 a vote. This is a dramatic inequality, and it shows and entrenches the privileges of the two-party system. It is very difficult for the minor parties to be heard. When access is sold, as it is, there is a very real possibility of corruption and the exercise of undue influence. Without scrutiny, that becomes worse. Of course the costs are prohibitive for ordinary citizens. They simply cannot get a foot in the door.

It is time we stopped tinkering and followed the lead of many Western European countries, as well as Canada and New Zealand. While I oppose this bill, our existing system does not work very well either. I have said elsewhere and I want to repeat today that it is time to rein in the exponential growth of corporate donations—union donations as well—and to curtail the proliferation of content-free, coercive media advertising that passes for policy debate during elections. That is what we are funding, after all. Most of that rubbish comes from corporate donations. The retention of public funding of elections should be accompanied by measures to limit the size of individual private donations to $1,500 or thereabouts and to proscribe—in other words, to stop—any donations from corporations and large organisations, as exists in parts of Europe. An extension of free-to-air radio and television could accompany these changes so that political parties are able to compete in getting their messages and policies across to the Australian people, so that we have a genuine democracy worthy of the name.

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