Senate debates

Wednesday, 11 March 2009

Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 [2009]

Second Reading

11:21 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | Hansard source

Today I rise in support of the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 [2009]. This bill is part of a series of Rudd government measures that are designed to clean up government in this country. We cannot have clean government unless we have a strong and healthy democracy, and we cannot have a strong and healthy democracy unless we protect the integrity of the Australian electoral system. We cannot protect the integrity of the Australian electoral system without robust and transparent public funding for election candidates and robust and transparent regulation of political donations. Our commitment to better regulation of public funding and private donations was made crystal clear prior to the last election. The government has put forward these objectives, and they will be furthered in the bill that we have before us today. However, today I would like to focus my comments specifically on political donations. Perhaps the most significant of the reforms before us is our proposal to reverse the Howard government’s cynical attempt to hide donations and thus undermine the integrity of the electoral process by lifting the disclosure threshold from $1,500 to $10,000 and then indexing the threshold. On this point, the policy Labor took to the election could not have been clearer:

Labor supports public transparency of political donations. Labor will therefore reverse the outrageous changes instituted by the Howard Government to limit public disclosure of political donations. Labor will not support millions of dollars being hidden from public scrutiny.

Indeed, this policy cemented Labor’s position in relation to the Howard government’s mistitled Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2006, which raised the disclosure threshold. In this place, my colleague Senator Carr was categorical in his rejection of the coalition’s bill, stating that it should be rejected out of hand. The dissenting report on the bill by Labor members of the Joint Standing Committee on Electoral Matters stated the reasons for our objection. As the dissenting report outlined, the underlying principle behind our opposition to the Howard government’s bill was that the public has a right to know who is donating to political parties. Support for this principle entails support for all practicable measures that further it. It is clearly possible for political donations of $1,000 or more to be disclosed. It may be found inconvenient by some parties and candidates to have to disclose all donations above this threshold, but it is not impractical. Prior to 2006, the disclosure threshold was $1,500, and this did not prove impractical. I know—I have done the paperwork. In addition, most other states and territories, including my own state of WA, have similar thresholds, and these do not prove impractical.

The simple fact is that the Howard government did not want to be embarrassed by its donors for fear of the political consequences and it did not want its donors embarrassed by their donations for fear that they would stop donating. So the Howard government was prepared to sacrifice the principle that the public has a right to know who is donating to political parties to save embarrassment all round. The fact that the existing act allowed donors to donate to more than one branch of a political party provided each individual donation was under the threshold meant that an individual could contribute tens of thousands of dollars to a political party without being identified. Once again, there is no need for this loophole, and I am delighted that the Rudd government aims to close it via this bill.

Indexing the threshold also had an obvious, immediate and practical impact on disclosure—namely, it became harder for those making and receiving donations to be sure what the threshold was. Every year the threshold changed when indexation was applied, and after the first year it was no longer a round figure. To meet their obligations under the act, those collecting donations, many of them volunteers, must keep in mind this very difficult to recall threshold level—a threshold level that, what is more, keeps changing. Furthermore, potential donors, who have a right to know whether or not their donations are going to be made public, must be made aware of this difficult to recall and frequently changing figure. Once again, this is directly contrary to the principle that, when it comes to political donations, the public’s right to know should be protected by taking practical steps to facilitate disclosure.

I have worked on returns under both the Howard government’s system and the previous system and, from my point of view, it is much easier to have a transparent relationship with campaign donors—one where they are clear in their expectation that their donation will be disclosed and fundraisers are not obliged to have the conversation with them, ‘If you donate this much you are over and this much you are under.’ Such conversations are, frankly, better avoided. They are easier to avoid when the threshold is a fixed, round and low figure. So I say the expectation of disclosure from the outset is a good thing. Furthermore, having people split up donations to avoid disclosure makes a mockery of disclosure rules. Any substantial donor that does not want to be on the public record should not be making a donation.

Once again, I am delighted that the bill before us will remedy the Howard government’s defective approach to this issue. The Howard government’s arguments in support of raising and indexing the threshold were weak indeed. The Liberals argued that the old, low, flat threshold of $1,500 discouraged donations from small businesses and ‘ordinary individuals’. Yet these are the very donors likely to be put off by the confusion caused by indexation. The Liberals also argued that 90 per cent of donations received would still be disclosed under the new regime. This argument was based on the total amount of funds received and not on the number of donors. It was calculated to present a reassuring picture to the public of the impact of the changes. However, the public wants to know who all of a party’s significant contributors are, not just who contributed the largest amounts. Recent figures released by the AEC on donations have confirmed that, under the Howard government’s new threshold, the number of donor returns has plummeted.

Finally, the Liberals argued that $10,000 was really not enough to buy political influence. With respect, that is not something politicians should be judging. We all need to acknowledge that we have a potential conflict of interest here. It is far better to set the threshold as low as is practically possible and then let the public decide whether or not a donation is sufficiently large as to warrant concern regarding undue influence.

Once again the Liberals seem to be missing the point on these issues. They seem to be missing the very principle at stake—one hesitates to say, perhaps deliberately. So let me repeat it: when it comes to political donations, as far as is practicable, the public has a right to know. If the Liberals’ arguments in favour of raising and indexing the threshold are weak, the opposition’s arguments against this current bill are no more credible. The Liberals argue that Labor members are hypocrites in supporting this legislation because it seeks to ban overseas donations and the ALP has accepted overseas donations. Yes, like many branches of the Liberal Party, some branches of the ALP have received overseas donations. But the opposition raise a completely specious argument. It is a red herring. Just because a team plays by the existing rules does not mean that those rules are ideal. Nor does it mean that a team cannot credibly argue in favour of reforms to the rules to make the rules fairer. It is ridiculous to say that we have somehow ‘accepted’ existing laws by working within them and therefore we should not argue for reform. Senator Bob Brown and I agree on this point. That argument could be used against any reform of any law.

The opposition also argues that Labor members are not serious about campaign finance reform because Labor relies on union donations. Again, yes, Labor receives union donations and indeed affiliation fees. It also receives corporate donations, as does the Liberal Party. And, yes, Labor benefited from the union movement’s Your Rights at Work campaign, just as the Liberal Party stood to benefit from campaigns by big business in favour of Work Choices. In fact, returns show that the National Business Action Fund spent $13.2 million in political expenditure in 2007-08 and the Business Council spent $2.3 million. The fact is that the Australian public simply was not convinced by your arguments in favour of Work Choices. Why don’t you accept the fact that you fought a fair fight and you lost? Again, this is just a red herring. The proposed changes will affect union and corporate donations equally. The only difference is that the Liberal Party does not support these changes and the Labor Party do—because we are serious about campaign finance reform and the Liberal Party is not.

After this bill was introduced in May last year the opposition endeavoured to delay its passage by 12 months by sending it to the Joint Standing Committee on Electoral Matters for report in June this year. The stated justification for this? The Rudd government’s own green paper on electoral reform. The Liberals argued the bill should be delayed, that it should be sent off to a committee until the green paper process was complete. Indeed, Senator Ronaldson was arguing this just now. Never mind that the green paper process is designed to look at reform of political donations, funding and expenditure from all angles and to consider the options for electoral reform both in the short term and in the long term. Never mind that the bill before us is designed to fix a significant and very specific set of problems created by the coalition’s recent changes; it is not about implementing a wide-ranging reform program. Never mind that not being able to implement a perfect system now is no excuse for not repairing obvious and damaging holes in the existing system immediately. And never mind either that the Joint Standing Committee on Electoral Matters had already canvassed most of the issues pertaining to donation and disclosure during its previous inquiry into the Howard government’s changes to the threshold.

It is little wonder that when the Joint Standing Committee on Electoral Matters called for submissions on the bill before us, only one stakeholder other than the Liberal Party responded—and they supported the bill. The few, relatively minor issues arising from the committee’s report have been addressed by the government’s own proposed amendments. As for submissions to the green paper process, the deadline for submissions on donations funding and expenditure was the 23rd of last month. Forty-nine submissions were received from organisations and individuals. As expected they put forward a wide range of possible options for future reform in this area, most of which went beyond the scope of the bill we have before us today. Where submissions did touch specifically on proposals that pertain to this bill, the response was generally positive—although, as expected, many of those submitters expressed their hope that this bill will represent the beginning and not the end of a much needed reform process. The government agrees with that sentiment. But it is not an argument against this bill; it is an argument in support of further reform.

I would like to sum up by using the words of Professor George Williams of the Centre for Public Law at the University of New South Wales. He concluded his submission to the green paper process:

In regard to the reforms already proposed, I strongly support the measures set out in the Commonwealth Electoral Amendment (Political and Other Measures) Bill 2008.

These measures are essential reforms that should help pave the way for larger reforms to bring about a fairer electoral system in Australia.

This bill is one step in an ongoing process to help strengthen Australia’s democracy. I commend the bill to the Senate.


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