Thursday, 23 October 2008
Electoral Matters Committee; Report
On behalf of the Joint Standing Committee on Electoral Matters, I present the committee’s report, incorporating a dissenting report, entitled Advisory report on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008, together with the minutes of proceedings.
Ordered that the report be made a parliamentary paper.
- 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 related 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 the receiving of 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 maintaining a formal complaints register and which 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 its 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 timeframes 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 processes, 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, in order to close off the disclosure loopholes that currently exist and give participants greater certainty over the arrangements that apply from 1 July 2008, that the proposed changes are not delayed.
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 donors 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. I add that this is in the lead-up to an election, and I think people can draw their own inferences as to what happens in the lead-up to elections regarding donations.
The lengthy delay in the publication of disclosures made 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 House.
by leave—I commence my brief remarks by also giving my thanks to the Chair of the Joint Standing Committee on Electoral Matters, the member for Banks. Working with the chair of the committee has been a very positive process. I appreciate the very even-handed way in which he has dealt with committee members from this side of the House. I also pass on my thanks to the secretariat and to those who participated in the hearings on this matter.
The opposition members of the committee have issued a dissenting report as part of this paper. We note, particularly for this reason, that there is a green paper that is being put together by the government. It is taking some time for this green paper to emerge. There are very important reforms that need to take place as part of this process, and I think members right across this chamber agree with the need for that. It highlights all the more that we should not deal with reform of campaign finance in a piecemeal fashion. We need to deal with these matters comprehensively and inclusively. Things need to be looked at system-wide and not in a piecemeal way. Once again, we have outlined in this report the need not to go off on one-off measures but to consider these matters in their totality as part of the proper green paper process.
Those on the other side, particularly those outside this place, seem to have some disagreement about issues relating to the reform. We have the Premier of New South Wales very much for the reform process. We have the Premier of Victoria very much against it. We have the just-departed general secretary of the Labor Party, Tim Gartrell, who made very interesting comments on the weekend in the Sydney press. Who knows what the new general secretary’s view is? I think it is very important that the parties form very clear views about this and engage with the reform process as a matter of urgency. We look forward to receiving the green paper in due course and to engaging in that proper debate.
The other point I make is that we welcome the accommodations that have been made, which the chair of the committee has referred to. In particular, I wish to thank the chair and the committee for taking up the position on increasing the protections from intimidation available to citizens who are making donations. There are provisions in the act which clearly make that sort of intimidation illegal. There are—and should be—harsh penalties for that type of behaviour in the act. If you are going to lower the threshold for disclosure then we need to make sure that people understand that there is someone they can go to if they feel they are being intimidated. Those people are available on a hotline and through a website, and the resources need to be there for the AAC to make sure that those complaints can be taken seriously.
We also note in our dissenting report the issue of a compliance burden. We have to be very careful, in going through these reforms, that we do not overload what is basically a volunteer membership across political parties with compliance measures which herd them into default. With the penalties here in this bill, we are trying to ensure that negative behaviour, dangerous behaviour that comes from the culture and the politics of money, does not infect our political system. In doing that, we have to be careful not to create a compliance burden which traps the wrong people. To that end, we have argued that the anonymous donation threshold should be $250, not $50, to ensure that those penalties are not imposed on people simply making administrative errors. I thank the House for its indulgence in allowing me to make these statements and, again, I thank the chair.