Senate debates

Tuesday, 9 May 2006

Committees

Electoral Matters Committee; Report

4:09 pm

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | | Hansard source

by leave—I move:

That the Senate take note of the report.

Mr Acting Deputy President Brandis, as you are also a member of the Joint Standing Committee on Electoral Matters, you would be only too well aware of the concerns that I have expressed about the government’s proposals, and I would like to take this opportunity to highlight to the broader chamber the nature of those concerns.

The opposition is particularly worried about these proposals—coming, as they do, as part of the legislation that is listed for debate on Thursday. It will cover not just these funding questions but also matters relating to changes to enrolment practices and the operations of what we on this side of the chamber call ‘the Australian ballot’. I am particularly worried that this government is attempting to fundamentally undermine the premises of Australian democracy as we have experienced it for many years in this country. I am disturbed that the government is seeking to fundamentally challenge the principles of the Australian ballot. We have been able to argue internationally that it is a benchmark for the proper operations of electoral law.

I am particularly concerned that the measures in this report relate specifically to money. This is a device by which this government will allow into the Australian electoral system the intrusion of the sort of dirty, big money politics that we see in the United States. We are seeing the Americanisation of the Australian ballot by these devices, which will allow a cloak of secrecy under which people can hide the manner in which they donate to Australian political parties. The six areas of greatest concern are the proposed changes to the thresholds for disclosure; the questions of tax deductibility; the nature of the disclosure regime; the capacity to allow big money to come in from overseas and be hidden; the audit arrangements; and, of course, the ancillary consequence of that: the capacity of the Electoral Commission to effectively monitor the situation.

I am worried that these proposals will mean a major change in the way in which electoral laws in this country are administered. These principles go to the fundamental notion that you do not have to be a millionaire to be elected to this chamber. If you look at the distribution of personal wealth in the United States Senate and compare it to this chamber, you will see a stark contrast. I think that is very much a measure of the difference between the approach taken in the American electoral system and that of our electoral system. In this country there are real opportunities for people without substantial private means to be elected: they are able to participate in elections and become members of this chamber. I am very worried that, when these laws are introduced, you will see a major change in the political culture of this country that will directly aid the conservatives in this parliament.

You are going to see the proposed changes to funding and disclosure strenuously opposed by the Labor Party. We are particularly concerned that the proposals here will mean that individuals will be able to make donations of up to $10,000 in secret. You can see that, through these arrangements, if individuals are clever about the way in which they present their money, they will in effect be able to make donations of up to $80,000 by spreading their contributions across the Commonwealth. It will reach the point where an $80,000 donation can be hidden from public disclosure. There will be occasions in this arrangement whereby the tax deductibility will be changed—so, instead of $100, you will be able to go to $1,500.

This is a recipe to allow millionaires to dominate the political system in this country, and the Labor Party will strenuously oppose these arrangements. There are arrangements whereby fundraising bodies and trusts, such as the Millennium Forum, are able to hide substantial contributions. Those activities will now be enhanced under these arrangements. We will see situations where anonymous donations can basically be laundered through the political system in such a way as to provide direct assistance without public scrutiny. The Liberal Party has for generations maintained the view that donations to political parties are essentially a private matter. I say that nothing could be further from the truth. The question of who actually pays the bills is a fundamental political issue and there ought to be proper disclosure about these questions.

There could be no clearer situation than the one we see with overseas donations. These proposals will allow for there to be a much higher level of overseas contributions to Australian electoral systems under the covers—under the counter. Foreign donations should be subject to quite stringent disclosure regimes. In fact, I think there is a substantial argument for the banning of foreign donations to the Australian political system. Think about some of the examples of recent times. There is Lord Michael Ashcroft, from the United Kingdom, who donated $1 million to the Liberal Party and filed a return with the AEC for 2004-05. The AEC could make no proper investigation of the authenticity of the information provided in that return, because Lord Ashcroft listed a foreign address on it. The AEC has repeatedly made the point that there has to be a tightening up of the laws in these matters so that we can make sure we know exactly where the money is coming from, and so that individuals or corporations do not hide behind identity-of-donor arrangements which, of course, keep from the Australian public basic information as to the amount of money they have been given.

So I say there is a serious issue here about the capacity to tighten up these laws. But what are we seeing? A proposal contained in this report which goes to allowing much higher levels of donations and to allow that to be done in secret. If you think about it, if you are going to have arrangements such as this, there is naturally a need to have a very stringent audit arrangement. What do these proposals do? They weaken the capacity to ensure that donations in excess of $25,000 are open to compliance orders by the AEC. We have a whole series of measures now being taken which fundamentally act to subvert the Australian ballot and the capacity for public disclosure, and which are clearly aimed at providing a cloak of secrecy for big money to be able to influence the political developments in this country.

The AEC does need appropriate powers and appropriate resources to ensure that there is effective regulation of political donations and that disclosures of those donations are made in a manner which is clearly authoritative and adequately resourced so that there are proper audit arrangements in place. I am very concerned about, and this report highlights, the dangers that are made prevalent by these proposals. What we are seeing is the Liberal Party, with control of this chamber, being able to pursue their long-held quest to undermine the Australian ballot and to provide an opportunity for their mates with the big money to be able to influence the outcome of elections. I am very concerned that now they have the capacity to impose those views on the Australian electoral system.

The recommendations endorsed by the majority report failed to address the majority’s fundamental responsibility to ensure that Australian ballots are kept clean and that we do not have dirty money dominating our political system. Instead, we have impediments being placed to ensuring that those objectives are met. I am very worried that these arrangements will in fact be carried by this chamber. I want to assure the Senate that we will be fighting these proposals vigorously and will make sure that the public understands precisely what the Liberal Party’s and National Party’s plans are in terms of the corrosion of democratic values in this country.

4:19 pm

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

I too wish to speak on the funding and disclosure report tabled today from the Joint Standing Committee on Electoral Matters. The Australian Democrats have a long history of activism for greater accountability, transparency and disclosure in political finances. We have raised funding and disclosure issues at length in our minority reports on the Joint Standing Committee on Electoral Matters inquiries into the 1996, 1998, 2001 and 2004 elections. Long before I held this portfolio, of course, other Democrats, such as former senator Michael Macklin, have been very heavily involved in this area.

However, despite this consistent Democrat effort, progress in achieving greater accountability in political funding and disclosure has been slow. In many ways, the major political parties have thwarted meaningful change. Today, with the Senate under coalition control, Senate scrutiny has become less effective. I must acknowledge that the Labor Party is a little more anxious for better standards than is the coalition; but, in our opinion, neither goes anywhere near far enough. The few funding and disclosure amendments that have gone through since the disclosure scheme was first introduced in 1984 under the Hawke Labor government have not closed the loopholes. In light of the strong resistance to change, we, as the Democrats, make no apology for repeating our concerns for the current funding and disclosure scheme.

Two major trends mark the last 10 years: firstly, a very large increase in the benefits of incumbency, paid for by taxpayers, disproportionately benefiting the major parties as a result, since they hold the majority of seats; and, secondly, a funding arms race that, while it appears to presently benefit the major parties, is of growing concern to many in those parties and, in my view, needs to be addressed. These developments do not add to the strength and stability of our pluralist democracy. Indeed, the aims of a comprehensive disclosure regime should be to prevent or at least discourage corrupt, illegal or improper conduct; to stop politicians being, or being perceived to be, beholden to wealthy and powerful organisations, interest groups or individuals; and to protect politicians from pressure being brought to bear on them by secret donors.

In some quarters, resistance to funding reforms is still argued on the grounds that the privacy and commercial confidentiality of donors must be respected. For those of us who cherish our democratic ideals, it is difficult to accept that secrecy is valued more than openness, that political donations are valued over grassroots political involvement, that political equality is a furphy and that incumbency and influence are what really matter.

This reveals a wide gulf between a central tenet of pluralist theory and its practice. This is the notion that of the multiplicity of groups in society no one interest group dominates—that political power is somehow fluid and can be accessed by all groups. However, every time electoral commissions release the annual returns of political parties, the real picture emerges: that of the close nexus between big corporate unions, big corporate business and big corporate politics—those with independent or corporate wealth are purchasing political capital and media political support. The domination of the rich has become so blatant that although some politicians—from all parties—feel quite uncomfortable about it no federal, state or territory government or opposition seeks to end it.

Disclosure proposals can be seen from two perspectives: improving present principles or establishing new principles. The first should in theory be easiest, but in practice it is not so. For instance, while it is a present principle that the source of donations should be known, there remains great resistance to ensuring that donations from clubs, trusts, foundations, fundraisers and overseas donors are publicly sourced. The Democrats’ principal recommendations for reform either build on those already in place or seek to introduce new principles.

Those Democrat recommendations that build on those disclosure principles already in place are: that the existing loophole allowing donations made to separate federal, state and territory divisions of the same political party at values just below the disclosure level be closed; that professional fundraising be subject to the same disclosure rules applying to donations; that political parties receiving donations from trusts or foundations be subject to additional disclosure requirements; and that political parties receiving donations from clubs be obliged to return those funds unless full disclosure of the true donor’s identities are made.

Those Democrat recommendations that introduce new principles of disclosure into electoral law include: that the media or any media entity be prohibited from donating in cash or kind to the electoral or campaign funding of a political party. It is particularly dangerous to democracy if the fourth estate becomes more partisan in politics. The next principle we seek to put into electoral law is that all electoral and campaign funding be subject to a financial cap, indexed to inflation and controlled by the Australian Electoral Commission. We also seek that cash or in-kind donations to a political party or its candidates be capped at $100,000 per annum. I know that is arbitrary, but we have to start somewhere in limiting the cost of democracy.

We also recommend that large donations—for instance, over $10,000—be disclosed regularly—that is, quarterly—and be made public immediately; that donations and loans from overseas individuals or entities be banned, unless they are from Australian citizens; and that donations with strings attached be prohibited. That would really hurt those unionists who stand outside the Western Australian parliament and threaten the preselection of good Labor members of parliament because they will not do what they want them to do. Our other recommendations are that shareholders and members of corporations and registered organisations such as trade unions be required to approve donation policies, and that the funding and disclosure provisions apply to other elections administered by the Australian Electoral Commission.

In our minority report, we discussed the role of the media. The value of funding disclosure rests on the premise of the availability of and accessibility to documentation for public scrutiny. This is the role of the media as governmental scrutineer. Comprehensive public scrutiny can only be achieved if issues such as political donations are covered by the mass media and if the media campaign for greater integrity. To this end, Joo-Cheong Tham and Graeme Orr submitted:

... funding disclosure schemes still serve to put the public, assuming a virile media, on notice of the risk of corruption and undue influence. If armed with such information, independent journalists (and indeed in a truly competitive electoral system, rival parties) will vigorously ‘shine a bright light and poke around with a long stick’, then there will be a useful antidote against corruption and undue influence. In the context of lazy journalism and lax political morality, however, the information disclosed by the disclosure scheme will by and large be meaningless.

In those circumstances the media have to be assisted by strong freedom of information laws, by an atmosphere of openness and not secrecy, and by better disclosure laws. I remind the chamber that in the United Kingdom the disclosure laws go to such an extent that you can actually find out how much each party leader paid to have make-up applied throughout the election or to have their hairdos done for their campaigns. That might seem petty, but it is an absolutely open system where you declare what you spend, what you intend to spend and where you spend it.

However, the relationship of disclosure by the media to the public is potentially undermined, according to a 2004 report by the Democratic Audit of Australia. The audit report notes that the symbiotic relationship the media maintains with government may lead in some cases to a reluctance to fully cover political donations for fear of a backlash in government access. It says the result could be reduced public pressure on the government due to a lack of scrutiny by the media regarding funding sources and, consequently, reduced transparency. There have been suggestions by a member of the House of Representatives that members of the media should be required to declare all conflicts of interest that may reflect on their reporting of political matters. These fears become more important if media concentration accelerates as a result of changed government policies. It is vital that any potential perception of political influence over the media, or vice versa, be avoided.

Because of those concerns, we did move a recommendation that no media company or related entity or individual acting in the interests of a media company may donate in cash or kind to the electoral or campaign funding of a political party. I think that, as media becomes concentrated, we have to pay more attention to the attempts of either the fourth estate or our own political class to interact too closely, to the detriment of our overall democracy. I seek leave to continue my remarks later.

Leave granted; debate adjourned.