House debates

Wednesday, 29 February 2012


Electoral Matters Committee; Report

11:33 am

Photo of Michael DanbyMichael Danby (Melbourne Ports, Australian Labor Party) Share this | | Hansard source

Mr Deputy Speaker, I seek leave to make some remarks without closing the debate.

Leave granted.

Firstly, I want to express my thanks to the opposition for making it possible for me to speak in this debate, otherwise I would have had to run out and not be able to make some remarks which I think people across the spectrum might find interesting.

Mr Tehan interjecting

You are very nice people. I want to congratulate the chairman, Daryl Melham, and his committee for moving what I regard is an essential change to the electoral law that will prevent candidates trousering, as they did at the 2004 and 2007 elections, $200,000 without record of expenditure. We will remember that at one election a certain candidate in Queensland from the seat of Oxley, which the chair at the moment ably represents, was able to score over four per cent of the vote, get $1.90 per vote and then only spend $35,000, harvesting a profit of $200,000. This is something I have often observed that reminded me very much of Zero Mostel's famous film The Producers,where the Broadway producer had to get several thousand per cent of investment by investors and then hoped to make a profit if the play closed on the first night. This was the electoral equivalent of that, and recommendations 15 and 16 of the committee's report do an excellent job of addressing this by saying:

… members elected with less than four per cent of the first preference vote be eligible for election funding. These members should be entitled to the lesser of:

      So we will never have this precedence of making election day Pauline Hanson's payday in the future. This issue has finally been addressed by this parliament, and I hope the government takes it on.

      The second thing I want to turn to is the recommendations about timing of single donations above $100,000 to a political party or a third entity being a special reporting event. I was very surprised that this resolution was passed by the committee. We know it has been a matter of great controversy in the Australian Greens political party in relation to the extraordinary $1.6 million donation received by that party from the company associated with Wotif. I make no remarks about the issue that is going before the Privileges Committee; I do, however, record my amazement that this appears to further the differences between Senator Rhiannon and Senator Brown. Senator Brown maintains that this was reported as under the current regulations, which I am sure is true knowing him. He is a very upright and ethical person. One can politically disagree with him, but the Greens political party is deeply split as we know on this and other issues. The New South Wales branch is often referred to by its own members in the New South Wales upper house as being run by the 'Eastern Bloc'. They all live in the eastern suburbs and are all communists, according to other members of the New South Wales Greens.

      So the 'Eastern Bloc's' longstanding plan has been to torpedo the current model of electoral funding so that we would not have the mixture of private, public, government and organisational funding with this increasing pattern of public disclosure and transparency, which is a very good thing that this committee has recommended. Transparency, openness and timeliness are very good things. They wanted an alternative model which would have seen political funding exclusively from the federal government.

      I costed this model according to the pattern of the Australian political parties in the last electoral cycle, and it would have cost the Australian taxpayer $450 million to entirely fund the political parties at their existing level of activity. The unstated benefit for the Greens political party was that it would have increased their funding fivefold—from $10 million to $50 million. The Australian taxpayer, instead of paying some $20 or $30 million matching funding at election time, again with the pattern set out by this excellent report of increasing transparency, timeliness and openness, would have been contributing entirely to the funding of political parties with the benefit going especially to the Greens.

      It surprises me that Senator Rhiannon's views on the funding from Wotif to her own political party seem to have been carried through with this report by saying that donations above $100,000 have to be disclosed within a recommended period of weeks. It is called a 'special reporting event' and must be disclosed within 14 days of the donation. I am not against that, but this is a continuing reflection of the internal divisions in the Greens political party.

      11:40 am

      Photo of Darren ChesterDarren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | | Hansard source

      I appreciate the opportunity to contribute also to this debate on the report on the inquiry into funding political parties and election campaigns. I would like to thank all members of the committee for their involvement in what the member for Mackellar has previously noted was quite a contentious issue and an inquiry process which traversed some quite controversial territory.

      The coalition members prepared a dissenting report because of our concern that many recommendations in the report served the interests the Australian Labor Party, the Greens and left-wing activist groups such as GetUp!. The most obvious example is in relation to the recommendation to lower the threshold for disclosure to $1,000, which we believe was another deal done to try and appease the Greens.

      I want to take up the comments from the previous speaker in relation to the Greens involvement in this issue. When it comes to the issue of electoral donation reform, there is a remarkable exercise in double standards from the Greens. Over a period of weeks, months and years, the Greens leader, Senator Bob Brown, has lectured other parties on a regular basis—posturing and pontificating about the need to ban all corporate donations to political parties. At the same time, Senator Brown and his colleagues have lectured the other parties about what they regard as inappropriate sources of campaign funds or campaign donations and have sought to ban donations from tobacco companies.

      But it was revealed during the public hearings that Senator Brown was directly involved in negotiating a $1.6 million donation to his party. He was also involved in discussions about whether to announce this massive donation before the election. I am not reflecting on any other matters that might be before the other chamber, but after all the bluster about transparency and the potential for large donations to influence party policy, the Greens were exposed as having received the biggest donation of all.

      Evidence was given by the Greens that the sum of $1.6 million did not exert any influence at all upon the party. But Senator Brown and his colleagues continually allege that corporate donations, from organisations like tobacco companies, can have undue influence on political parties and individual MPs. Somehow we are meant to believe that the Greens are above reproach but all of those other nasty MPs in the Liberal Party, the National Party and the Labor Party can be bought off by political donations. The double standard here is quite appalling. We are talking about a sum of $1.6 million, which the Greens indicated in evidence to this parliamentary inquiry did not exert any influence over their political party at all in terms of its formation of policy—there were no strings attached. But we are being lectured on an almost daily basis by the Greens that other corporate donations received by other parties have the potential to exert undue influence over our policy-making processes.

      This is yet another example of the 'do as I say, not as I do' mentality that the Greens have become infamous for. During the inquiry, Mr Brett Constable said:

      I agree that it can be seen as hypocritical in terms of the direction we want to go, but it is the direction we want to go and we are not there yet, so we are constrained by the system we have. In order to be successful in election campaigns at the moment, you need a significant war chest. The $1.6 million was a fantastic contribution to our campaign.

      He agrees that it could be 'seen as hypocritical'. I say to the Greens: you cannot have it both ways. If you are going to be out there advocating for a ban on corporate donations, if you are going to be out there advocating that certain companies are not allowed to give donations to political parties because they might exert influence on their policy-making processes, then you cannot accept $1.6 million from one donor and pretend that it has had no influence on your policy-making processes. This issue of political donations and public funding of election campaigns has exercised the minds of many MPs at the state and federal level in many jurisdictions around the world. I do not believe that a perfect system actually exists. We may not ever get to the stage where we have something that we can all be satisfied with.

      It is critically important that the public has confidence in the system and can be reassured that there is no undue influence to be brought by people who can afford to make a donation to political parties. It is equally as important that any rules and regulations which are enforced are manageable and are applied equally to third parties such as the union movement and activist organisations such as GetUp! seeking to influence political decisions. I think we will see more of these organisations in the years ahead—organisations one step removed from the direct political process, which will not actually run candidates but seek to influence the political policy making of the day. It is very important that any rules, regulations or laws we impose in relation to political donations and campaign funding reform also capture these groups, which seek to have a significant influence on the public policy making of the day.

      From my own perspective, I have previously expressed concerns about the so-called campaign arms race when we debated the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2009 in the House. At that time I raised several points which I think are still relevant today. At the risk of repeating myself, I think that we need to recognise in this place that the Australian public want to be reassured that the model of campaign funding that we have in place is above reproach. They want us to provide leadership in that area. Campaign funding reform is one of most critical issues facing our democracy. We have an obligation to reform it where we can and, where possible, to improve the current system.

      But we must resist any reforms which would give one side a political advantage over the other. That is one of our biggest challenges and the key reason why the coalition members of this committee submitted a dissenting report, as we believe many of the recommendations in this report were designed to give a political advantage to one side over the other.

      We need to ensure that the community has confidence in our system. This perception of undue influence can be equally as damaging as undue influence itself. Even if there is no influence actually being exerted, if there is a perception of it then that can result in the community losing faith in the process.

      In the past I have advocated campaign funding caps but, through my involvement in this inquiry, I am becoming increasingly aware that it would be very difficult to enforce that type of model and those requirements in an election period, particularly when you consider the participation by third parties such as the union movement or organisations like GetUp!

      Without fixed terms at a federal level, the issue of what is the election period becomes very difficult to define. So if you were to introduce that system of caps, when would they apply? That would be difficult for us to do at a federal level, when we do not have fixed term processes.

      There is an aspiration in many of the debates in relation to campaign funding reform that we need to level the playing field. I suppose that is an honourable objective, but it is probably more realistic to suggest that we need a fair playing field. I do not think we will ever get to a situation where it is level in the sense that everyone necessarily competes with the exact same amount of funding for the campaign. I have become even more committed to the important role and participatory nature of corporations and individual donors in our democratic system.

      We do not want to head down a path where candidates are chosen because of independent wealth or their capacity to raise funds, but we do need to ensure that there are opportunities for participation in our democracy through active involvement in parties or through making donations to the party itself.

      In recent times I have developed a greater appreciation of the role that the corporate sector can play in our democracy. My view on that has evolved over a period of years. I think the corporate sector has often been maligned for making political donations but the involvement with the corporate sector which I have had in recent years, since becoming a member of parliament, has given me a better appreciation of the positive role that it can also play. The corporate sector can be an excellent source of information for members of parliament and it can provide some technical expertise that members of parliament themselves would not be able to access in any other way. It is important that we have that relationship with our corporate sector, whether it be big business, small business or individuals. While I hasten to add that a cash-for-access type of approach is reviled by the general public I still think there is a very good role for the corporate sector to play in supporting our political parties. That role is in providing an opportunity for us to get a better understanding of how government policies affect real people on the ground. It is an important part of the process.

      The coalition's dissenting report made a very important point in relation to that active participation in our democracy by campaign donors. We also made the point that there has been no evidence during the funding inquiry that there has been a particular problem with donations under the $11,900 threshold buying political influence. So in our submission we have rejected the position of the Labor Party and the Greens that the threshold be reduced to $1,000.

      The coalition also raised some very good points in the dissenting report regarding the use of affiliation fees of associated entities obtaining to both political parties. The coalition believes that these affiliation fees, which often are in the hundreds of thousands of dollars, are far more cause for concern than donations which are under the $11,900 threshold.

      I appreciate the opportunity to raise a few points today in relation to this issue. I think the debate about campaign funding reform will continue beyond today and beyond this report because it is such an important issue. As I said at the outset, any reform which is undertaken must be fair to all parties and not designed to give one political organisation an advantage over another.

      11:51 am

      Photo of Dan TehanDan Tehan (Wannon, Liberal Party) Share this | | Hansard source

      I was also a coalition member on this Joint Standing Committee on Electoral Matters, and I rise, basically to support the dissenting report that was put in by the coalition on this inquiry.

      The inquiry found some rather disturbing things. I think if the inquiry had not been in many ways a political exercise it could have done a lot of good work in doing some further investigations into some of the things that arose from it. I point, in particular, to a matter which is with the other chamber. I do not, in any way, want to reflect on that, but evidence was given with regard to a specific large donation to the Greens. Also a large donation was given by the CFMEU to GetUp!. That opened a political can of worms in relation to how we deal with affiliations when it comes to campaign donations.

      If this inquiry was to lead to anything, the next steps taken should be to look at how we deal with the whole issue of affiliates. Sadly, what happened was that the Labor Party and the Greens—one assumes that this was part of the grubby deal that was done by the Labor Party, and by Julia Gillard in particular, to get Greens support for her minority government—recommended that the threshold be reduced for political donations. There was really no compelling evidence whatsoever provided to the committee that would lead to this.

      So, sadly, we can see that the inquiry was set up with a preordained purpose and outcome. But sometimes inquiries that are set up do not go the way you want them to go. We saw this with the whole issue of affiliates. If we are to go further in looking at how funding of political parties and political campaigns can be addressed and made—if not fair—transparent, we need to look at the whole issue of affiliates. Some of the evidence which was taken with regard to GetUp! points to the fact that it seems to have been set up deliberately to help the left wing cause in Australian politics, especially during campaigns. It has been set up to get a large email database. It does not seem to have a proper membership base. How the money is directed to various campaigns seems to be a decision that is taken by a rather ad hoc committee. The whole democratic principle around how that committee is formed and how decisions are made seems to be a rather large grey area. It became clear to me that how they decide what campaigns they will favour or will not favour seems to be that they will always favour left-wing campaigns; it is just a matter of whether some of them are more to the extreme Left or not.

      We have to be very clear and very transparent about what the organisation is about. I am not saying that we need to ban affiliates. All I am saying is that, if we are going to be truly transparent about the processes we look at, we have to ensure that there is full transparency of all those involved in election campaigns. If we do not we will see a move, which we have seen in many ways in the US, to these affiliates being set up and see large amounts of money pour into those affiliates. That will be at the expense of the proper and transparent process which occurs normally now where, if people donate to a political party and that donation is over the current threshold, it is rightly recorded and is there for all to see.

      I also think that we need to be very careful to make sure that the threshold is set at a sensible level. One of the worries that small businesses, farmers and corporations have in donating to political parties is that they do not want to see retribution as a result of their donation. There needs to be the ability for them to donate without having a political party go through and examine records and then, potentially, seek retribution for that donation. That said, the threshold needs to be set at a sensible level so that people can give to a cause they believe in and that they think serves their overall interest by reducing red tape, by cutting taxes and by stopping government waste. They should be able to contribute to making sure we get good governance in this country and they should be able to do that without their names being held up on the public record.

      I think the current threshold that we have is very sensible in that regard and should be maintained. In this report we have one side saying that the threshold needs to be lowered. It seems quite ironic that the Greens in their deal with the Labor Party made it a precondition that the threshold be reduced, yet we saw compelling evidence that a very large donation had been made to the Greens without their even batting an eyelid. How you reconcile that seems, on the face of it, to be gross hypocrisy, and as you delved into it it became even more apparent that it was gross hypocrisy. I do not know. That is why I think that, if we are serious about taking the next steps in this inquiry, there definitely should be a detailed examination of how affiliates work in our electoral system. We saw that with GetUp! There are also arguments to be made about how the trade union movement should be examined in that regard. I think we are seeing some interesting developments in the Australian democratic process because the unions have, on the whole, always donated to the Australian Labor Party but now we are seeing more and more that they are prepared to throw their weight behind the Greens as well. I think we need to have a look at the nature of that funding, what is happening with it and how it would be used because those affiliations are important. In the same way that we do that, we should look at affiliations across the board. I think that is where we should head with this inquiry.

      I am sad to say that this inquiry did seem to be preordained in nature. We did hear some very good evidence, but the line of questioning seemed be heading in the direction that the government and the Greens want to go on this. Therefore the coalition has put in what I think is a very detailed and a very good dissenting report. I would like to take this opportunity to thank the other members of the coalition who worked so tirelessly on this report. We had Bronwyn Bishop leading the way. Anyone who sat in on any of the hearings would find it difficult not to have been impressed by the way that Bronwyn interrogated, examined and left no stone unturned in trying to get to the bottom of all the issues when it came to this inquiry. Occasionally there were some fierce interchanges with the chair, but I think Ms Bishop was very determined to make sure that all the issues were examined very thoroughly and that we were not wasting our time. I commend her for the way she went about her business. As a new member of parliament in my first term, there was a lot to learn from the way Bronwyn Bishop went about her interrogations. To the member for Mackellar I say well done.

      Senator Scott Ryan, who has a very detailed knowledge and interest in these areas and follows these issues extremely closely, was also a pleasure to work with on this committee. His knowledge and background was invaluable in teasing out all the issues. I must say that his dedication to the cause also came out. Scott became a father during the process and I would like to congratulate him on that wonderful achievement. That did not stop him from being on the phone when we had hearings. I would like to thank the committee for allowing that practice because it meant that Scott could continue to participate, examine witnesses and get to the heart of what the inquiry was all about. He did an outstanding job at that.

      It was a very good experience to sit on a committee such as this with my friend from the other side of Victoria, the member for Gippsland, Darren Chester. We were both able to bring a very strong regional and rural perspective to this issue, which I think is important because in trying to raise funds for election campaigns we have to deal with these issues in a different way to our urban colleagues. I think we both agree that this is one of the reasons why reducing the cap is going to make it harder, especially for those out in regional and rural areas where communities are a lot smaller and public disclosure of these things can be more significant. There is a need to set a sensible threshold. I would like to thank the member for Gippsland for his camaraderie and, I think, the very valid points that he raised through this.

      I would ask that when this issue is taken forward our dissenting report be examined as closely, if not more closely, than the government's report. We put a lot of time and effort into really getting to the heart of the matters here. I think in particular that if we are serious about taking the next step from this committee inquiry that we need to have a serious inquiry on how affiliates work in the electoral process—particularly when it comes to funding campaigns. I think we all would agree that transparency is the first step we need to ensure.

      12:05 pm

      Photo of Paul NevillePaul Neville (Hinkler, National Party) Share this | | Hansard source

      I have been a part of the political process for 53 or 54 years. I have my 50-year medal from the National Party, and I am now a proud member of the LNP as well. I have seen a lot of developments go on in how funds are raised and the purpose to which they are put at election time. Let me say that the vast majority of people in all political parties go out with their chook raffles and run all sorts of things, like jam stalls, gymkhanas and race meetings—all sorts of things—to raise money to participate in the political process.

      The vast majority of members work in their electorates at small functions and raise small donations. This is all to do with participatory democracy. It allows everyone to play a part. I must admit that when I saw this report I was quite taken aback. As I think two of the previous members said, this inquiry was an opportunity for a new start: to simplify laws, to simplify the rules, to remove the excesses and to make the whole process transparent. But it has become the exact opposite.

      If you want any further proof of that—and, by the way, I do not reflect on the secretariat of the joint standing committee—just read the press release which, presumably, was under the hand of the chair, Daryl Melham. Read the recommendations that were in that press release: reduce the threshold from $11,900 to $1,000; single donations of $100,000 to be disclosed within 14 days; and treat related political parties as the same party—all these things. You can go right down through the whole list, and they all say, 'Let's make it as hard as possible for the conservative side of politics. We will make it as difficult as you can possibly imagine. Hey, but hands off the unions, hands off any related environmental groups that might be supporting the Greens and hands off things like credit cards paying for political material.' If you are going to be fair dinkum and you are going to have transparency, then the rules have to be not only in actuality but in spirit the same for both sides. As previous speakers have said and as the dissenting report concludes, there has been no evidence over recent years of any abuses of the threshold, of $11,900. Is anyone seriously going to be corrupted for $11,900, particularly a businessman? Of course not. Is any member of parliament seriously going to be corrupted because one or two people give a large donation of around $10,000 or $12,000? Of course not. To reduce that to $1,000 will hogtie the party that relies on that form of donation more than other parties.

      On the proposal that single donations of $100,000 or more be disclosed within 14 days, I would not die in a ditch on this one. The principle of large donations being readily disclosed probably has some merit. But there is one clear implication of the 14-day limit: if the conservative side of politics were to get a large donation in the course of an election campaign, this rule would almost certainly force the donation to be revealed before the election day. At the same time, if affiliated third parties are spending the same sort of money—as unions have in the past to support the other side of politics—then somehow that is deemed to be okay.

      Treating related political parties as the one entity would have a particularly unfair effect on the Country Liberal Party in the Northern Territory, on the LNP in Queensland and on the Nationals in Western Australia. They are individually-run state parties. And for that matter the Nationals in Victoria, South Australia and New South Wales fall into the same category. They are state based parties. They have efficient head offices. They raise funds and they report their funds. Why should their funding have to be considered in concert, for example, in the case of the LNP with either the Liberal Party or the National Party? It is by its very nature an already merged political entity. Would it have to report through both the Liberal Party and the National Party? How would you differentiate the amounts that they would have to declare in each case? To differentiate that would be a nightmare. It would place another layer of unnecessary compliance and bureaucracy over state based parties.

      Those parties that I just mentioned have always tended to be state based parties. That is not said with any intended criticism of the Liberal Party or the Labor Party, which tend to be nationally controlled parties. But an electoral act should make provision for all sorts of parties, not just provisions for the political convenience of one side or the other.

      The proposal that the money raised at fundraising events be counted as donations is one of the most ridiculous propositions that we have heard here. New South Wales and Queensland are already trying to enforce this, and what a nightmare it is. Every person who goes to a dinner has to get a receipt and that receipt has to play back through the political process to make sure that over a year any particular person did not donate above the threshold. It virtually looks into the chequebooks or bank accounts of anyone who happens to like a political party.

      Some people like to go and hear Kevin Rudd or John Howard at a function—some people really like to go to those functions; that is their buzz. They see those big events where party leaders make national statements and up to 500 of the faithful turn out as significant. People like to be part of that participatory democracy. Are they going to be corrupt because they pay $50, $100, $250 or $500 to go to that function? Why would we want to turn those things into political donations? Make the proceeds of the actual function a declarable political donation—that is fair enough; I have no hang-up with that—but interfering in people's lives to this effect seems to me totally unnecessary and, if anything, it dampens down the vibrancy and the participatory nature of our democracy.

      I repeat that I am working from the committee's own report, and I stress that I am not making any inference against the secretariat. The report has come out in the name of the chairman and therefore his side of politics can answer for it. Disclosure reporting is to occur six-monthly instead of annually. Isn't there enough bureaucracy going on without that? What possible good purpose would that serve, especially if you are going to have another rule that donations of $100,000 or more have to be revealed within 14 days? There is not much scope left—there will not be a lot of big donations between federal elections, but there might be some in the election year. So why would you start imposing that rule for six-monthly periods? What possible good does it do?

      There is a recommendation that anonymous donations above $50 be banned. There are some sporting events in Australia now that you cannot go to for under a hundred bucks. I have never been a great believer in all this high-powered national sport which has killed off a lot of the great participation of suburban teams in football and cricket and other competitions, but we have it here now and we pay a lot more than $50 to go to major sporting events. At the very least we could make it $100 or perhaps $250, but $50! Are you going to try to tag all those $50 donations somehow? You can't. The best thing to do in a case like this is to set a realistic level.

      If we move to the other side of politics, we have the Greens accepting a donation after insisting, hand on heart, with the purest of intentions, that these donations to the dreadful major political parties had to be capped. They accept from Graham Wood the biggest donation in Australian political history, $1.6 million, and they try to say that in their case it did not garner political favour—it always does with those dreadful Labor Party and Liberal Party and National Party people, but not with them. Mr Constable, who is the national manager of the Greens, said in evidence before the committee that the donation was 'a fantastic contribution to our campaign'. That is it, plain and simple.

      The union movement has a great deal of influence in Australia. I am not against unions—I am a great believer in them, and especially voluntary unionism. It is fair enough if unions want to participate in the political process on either side of politics, providing the rules that apply to the broader community apply to unions. It can be seen, for example, that because the membership of unions is tax deductible and certain donations for unions are tax deductible, then therefore, if you channel your funds into political campaigns that way then yes, you do get tax deductibility. Not only that, but with the union being a third party in the process it is not subjected to the same rigours as the major political parties. As I said, I am not knocking unions, but I think that what we need to have is a rule that fits all.

      I am disappointed in this report. I think it was a lost opportunity. I do not think it is going to make the political process any fairer, and I think it is going to lead to untold bureaucracy and an unnecessary strain on people that may drive them out of the participation process.

      Debate adjourned.