Tuesday, 20 June 2006
Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2006
We now move to amendment (7) on sheet 4879 revised. I move:
(7) Schedule 1, page 22 (after line 11), after item 79, insert:
79A After section 306B
306C Foreign donations and loans prohibited
It is unlawful for a political party or a State branch of a political party or a person acting on behalf of a political party or a State branch of a political party to receive a foreign gift, donation, loan or disposition of property originating by whatever means from a foreign source.
306D Forfeiture of foreign donations and loans
If a foreign gift, donation, loan or disposition of property is made to a political party or a State branch of a political party or a person acting on behalf of a political party or a State branch of a political party, the foreign gift, donation, loan or disposition of property is presumed to be in breach of section 306C and is forfeited to the Commonwealth.
Note: For strict liability, see section 6.1 of the Criminal Code.
306E Donations and loans by non-citizens resident in Australia lawful
A gift, donation, loan or disposition of property in Australia to a political party by a person who is a non-citizen resident in Australia is not a foreign donation or loan for the purposes of section 306C or 306D.
306F Donations and loans by Australians living abroad lawful
A gift, donation, loan or disposition of property by a person registered on a Commonwealth Electoral Roll living overseas is not a foreign donation or loan for the purposes of section 306C or 306D.
Before I address the substance of that amendment, I would like to make some brief comments which are general to the debate that preceded this. The minister ascribed a motive to former Senator Richardson. I do not know if it is true or not because I have not read former Senator Richardson’s book, so I pass no opinion. But I would like to say that, if that was the motive of Senator Richardson—it might not have been the motive of the Labor Party—it did not work, because better funding and disclosure rules did not harm the Labor Party’s opponents the Liberal Party.
There is a lesson there. I saw in the great resistance of many in the corporate world to better corporate governance rules that they thought they would harm their businesses. In fact, they have helped their businesses. Better governance helps businesses and better governance helps political parties. So I argue that stronger and better funding and disclosure laws improve the operation of our system and improve the chances of political parties rather than harming them.
The second brief thing I would say with respect to the previous issue is that issues such as those raised by the Australian Greens and others in this debate can be addressed by other integrity measures. I ask the government to look again at amendments of mine, on behalf of the Australian Democrats, which have previously been rejected. For instance, we put an amendment that would require in Corporations Law shareholders to approve the boards’ political donations policy—not each individual donation, but the policy. The coalition voted against that. That would be an integrity measure which would help prevent corrupt or improper behaviour.
The second amendment I would ask you to look at again, which I moved on behalf of the Australian Democrats and which the coalition also voted against, was an integrity measure built on the precedent established by part 4A of the tax act, which addresses the motives in the tax act to do with trying to construct an arrangement with a specific purpose of avoiding tax. I put an amendment which would prohibit donations being made with strings attached. The coalition voted against that. I would, in passing, offer those two integrity measures for you to look at again.
Turning to the matter at hand: the amendments before you build on and to a considerable degree repeat amendments we have previously put, but I think they have been given particular currency by common democratic opinion and concerns world wide. I refer to the prohibition of political donations or loans from overseas sources. It is our view and the view of many Australians that they represent a level of foreign influence in our domestic politics that is ethically and democratically unacceptable and indeed unwise.
For quite a few years now we have been calling for such donations to be banned outright, but recently we added loans to our perception because both have the same effect. I must stress that the Democrats have absolutely no issue at all with political donations from individual Australian citizens living offshore, and that is reflected in this amendment. If Australians living offshore want to make donations to political parties of their choice, they should be entitled to do so.
However, we believe that evidence has clearly shown that donations to political parties and candidates by foreign individuals and organisations can be used as a means of avoiding disclosure requirements. Even more pertinently, in the experience of the AEC, and they have put evidence to this effect before the Joint Standing Committee on Electoral Matters, it is virtually impossible for them to audit or check on donations from overseas, simply because they are made from overseas and the AEC cannot go overseas to do such a thing. While the recipients of such donations must still disclose details of the donor if the donation exceeds the disclosure threshold, there is no way to ensure that the donor was the real source of the money.
I have done an analysis, and in the last seven years the Australian Electoral Commission disclosure returns show that between 1998 and 2005 Australian political parties received close on $2 million from overseas sources. Note that this is disclosed amounts; I would not know what undisclosed amounts have been received. Of this amount, $1,557,804 went to the Liberal Party; just on $229,779 went to Labor; $170,564 went to the Australian Greens; $7,711 went to the Citizens Electoral Council—although I must say, without casting unnecessary aspersions, given the kind of expenditure they indulge in I am very wary as to whether they are funded extensively by loans as opposed to donations; they do seem to have a very strong connection with an American businessman—and $2,200 went to the Democrats. The disclosed donations came in from the Channel Islands, a well-known tax haven; New Zealand; Sweden; the Philippines; Great Britain; Liechtenstein, another well-known tax haven; Germany; China; Hong Kong; the United States; Japan; India; Fiji; and Taiwan.
The astonishing exposure, which I seem to recall was referred to in yesterday’s debate by Senator Carr, the shadow minister, of the $1 million donation to the Liberal Party from Lord Michael Ashcroft of Britain must surely serve as a new catalyst for reform in this area. This is believed to be the largest single donation from an individual in our political history, and I think that has been confirmed in evidence by the AEC. No single individual has ever made such a large donation.