Tuesday, 20 June 2006
Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2006
Consideration resumed from 19 June.
I rise to support the amendment moved by Senator Murray for the Democrats to strike out the disclosure threshold increase to $10,000. I do so because the people of Australia must understand that, by increasing the disclosure threshold to $10,000 and not regulating the capacity to compound this donation by giving it to the same party but different branches, this means we should virtually tear up the disclosure legislation in Australia. I do not think we should continue pretending that we have got political donations disclosure if we take this particular measure, and I will explain why. I would like Senator Abetz, through the chair, to tell me whether what I am going to say next is true.
Let us say BHP wants approvals for its expanded uranium mining or that Pangea Resources, however it comes back in a new form, or some of these uranium mining companies want to make sure that their agenda is facilitated by the government, why can’t such companies that are trying to secure an outcome increase their directors’ fees by $10,000 to each director? Let us assume they have got eight directors—that is, $80,000—and those directors each then make a $10,000 donation to the Liberal Party. Because it is $10,000 and it is an individual donation of $10,000 facilitated by additional directors’ fees, let us assume that is $80,000. The company itself can then make a $10,000 donation to each of the Liberal Party branches, therefore making a donation of $170,000 each and every year without having to disclose that they have made any donation at all.
Let us assume that a company like BPH Billiton has at least a dozen subsidiary companies and the corporate strategy of the organisation is to go for it. Even if three or four of the subsidiary companies decide to make the $170,000 donation, that is not disclosable. They could do it simply by increasing their directors’ fees and increasing the amount, so you are looking at many millions of dollars that could flow into the Liberal Party or the Labor Party—or any other party, for that matter—without any disclosure at all. That is the concern I have about these particular donations. I am going to get to third-party donations again in a minute, because that pertains to what I am saying.
Let me give you another example: what about a church that runs a number of businesses that depend on tax deductibility for those businesses? Let us assume there is a church which runs a medical centre that is competing with local GPs but the medical centre does not have to pay payroll tax. None of the GPs in the centre pay payroll tax because it is run by the church. What if that church organisation decides it is in their interests to maintain the tax laws that give tax deductibility for all church businesses regardless of whether they are for profit or not? It is in their interests. So what is to stop 10 or a dozen elders in a church making a donation of $10,000—let us say a total of $100,000—to the Liberal Party, the Labor Party or to whoever they want? They give $100,000 and, if they are each reimbursed to the extent of $10,000, that does not turn up in any disclosure.
This measure is set out so that companies or any group that wants to influence government policy can easily find a way to do so without ever having to comply with an electoral return. I would argue that, by increasing the threshold to $10,000, the government is tearing up the whole notion of disclosure. I think it would be more honest, if you want to tear up the whole notion of disclosure, to just abolish it, not to increase the threshold to $10,000 and allow for cumulative donations across all state branches of up to $90,000 to the Liberal Party in any one year without having to disclose.
I think that is a critical issue when put together with the narrowing of the franchise by stopping about 80,000 young people from getting onto the roll. So you are narrowing the franchise and reducing the number of people who can vote but increasing the ease with which large corporations and the wealthy in the community can influence the outcome of an election. It is clear to me that, whilst you may not be able to steal a ballot box in Australia, you can certainly buy one. You will be able to buy one without disclosure because of this increase to $10,000.
I would like to hear from the minister in regard to the example I have just used with BHP Billiton, or any other company or set of companies, or a church group that has an outcome in mind in terms of maintaining the tax deductibility of all their church businesses and their tax-free status and might have a well and truly good reason to not disclose. Let’s stop pretending that businesses donate to government because they have a view that it is a good thing to do. No business donates to a political party unless it expects an outcome.
As Senator Brown, Senator Murray and others have said in this place in the last 24 hours, the corporate requirement of the board of directors is that they spend money to maximise the profits of a company. If they were to give $100,000 to political parties in elections, and that in no way was associated with maximising profits, then they would actually be accountable and would be breaking the law as it currently stands. They say the reason they do not invest in ecological and social justice outcomes is that their primary responsibility under the law is to maximise their profit. So why do they give to political parties? They do it because they expect access. If you give enough, you can ring up the minister and get access. If you have enough money, you can buy yourself a seat at a table with the minister to whom you want to talk. If you are extremely lucky and can influence the government significantly, you can get what you want in terms of legislative outcomes.
I would be very interested to hear from the government as to why there was a special regulation in the industrial relations legislation that exempted specifically the Exclusive Brethren church from having unions in the workplace. I am interested to know why one particular church group got that exclusion. However, my main point is that business donates because it expects to get outcomes which advantage business, and now with this bill you will not even have the transparency to see which businesses are donating.
I am not naive enough to think that, coming into the next federal election, the nuclear industry in Australia is not going to be a major donor to the Liberal Party, but we will never know that. We will absolutely never be able to know whether the nuclear industry is a major donor to the Liberal Party because, on my calculations, depending on how many people they have on the board, via the mechanism of directors fees, any company can give up to $200,000 or more to the Liberal or Labor parties without any disclosure or transparency. That is a grossly unfair thing to do in a democracy. It is antidemocratic, and it is why the Canadians have moved to abolish corporate donations. They have been completely abolished in Canada because of the rorting that has gone on in the past and the recognition that, no matter what laws you write, companies and wealthy people will find ways around them. Minister, I would be interested to know whether your disclosure provisions mean you can give that amount of money to the Liberal Party in one year and never be identified.
I invite senators to reflect upon the fact—and I remind them—that this is the committee stage. Yesterday, we had a number of people giving quite substantial and lengthy speeches rather than engaging in questions. I do not put Senator Carr in that category. The three of us who have had carriage of the matter—Senator Murray, Senator Carr and me—have tried to keep things as short as possible. We are seeing an ongoing mix of issues that will be debated later on under separate amendments. The current issue that we are dealing with is the threshold.
Senator Milne agrees, which is good. But when you start spending minutes and minutes talking about the early closure of the electoral roll and other matters and having a bash at the Exclusive Brethren church, which has now become a mantra of the Greens, I just do not think it assists the committee stage debate.
In relation to the disclosure laws, it is well known that some 20-plus years ago a new regime was introduced into this country for public disclosure. I have pointed out, on a number of occasions now, the basis of that. Former senator Graham Richardson bragged in his book as to why he did it, and he even acknowledged that, at the end of the day, you could not even argue that Australia is better off for it. That was his own analysis of what he did. He did it to try to damage the cause of their political opponents—that, of course, being the Liberal and National parties and, indeed, the smaller parties.
Therefore, it is interesting to reflect on the debate back then. At the time, the disclosure threshold was deliberately set by Labor at $1,000. The Australian Democrats more sensibly were of the view that it should be set at $2,000. We believed then, a quarter of a century ago now, that it should have been set at $10,000. If $1,000—or $2,000 for the Democrats—was an appropriate threshold a quarter of a century ago, those involved in this debate have to indicate to the Australian people why the inflation factor should not be applied as an absolute minimum. We know that if you did that—as the Australian Democrats asserted in 1982—in today’s figures, therefore, a sum of $5,376 would in fact be the appropriate disclosure threshold. All of a sudden, we are being told that, in relative terms, this $5,000, which equated to $1,000 a quarter of a century ago, will somehow lead to corruption. If it leads to corruption today, (1) show me the proof of it and (2) explain to me why it was not corrupt when it was originally introduced in 1984. Of course, that is where the arguments fail.
We the Liberal Party have always believed that the threshold should be $10,000. We have not sought to index that to justify an even higher limit, but what we are saying is that we are willing to take into account inflation over those 20-plus years and put down a threshold. And then, more importantly, let us have a CPI on it so that, as the value of money decreases, we have the same level and we do not have the nonsense of what we are experiencing today, where the monetary value has been substantially eroded.
We have been told about corruption and the potential for corruption. I need only remind those opposite of a particular Labor senator who assisted the now member for Hindmarsh, Steve Georganas. They ran a bogus raffle, a raffle that cost $10,000. Only one person bought the raffle tickets. There was no prize, no declaration. When it leaked out, former Senator Bolkus finally put in a declaration. Those who are minded to manipulate will unfortunately always do that.
In relation to Senator Milne’s proposition about BHP, I simply say that that is just a flight of fancy. Nobody has suggested that that is happening under the current disclosure requirements. We are not changing the disclosure requirements other than the actual threshold figure. Former senator Don Chipp admitted that people should be protected if they gave insignificant amounts, and at the time he put that figure at $2,000.
you would know that that is a matter that the government was challenged on and which I am seeking to respond to. But, of course, when you respond to the Labor Party’s allegations about this and remind them of what they did with the Steve Georganas raffle, all of a sudden they want the government to shut up—
What I say to those opposite is very simple, and it is this: if you feel so strongly about this, there is nothing stopping the Labor Party from voluntarily disclosing every single red cent they get—as Kelvin Thomson, the shadow minister, suggested, until I indicated the huge cost involved in relation to raffle tickets et cetera.
We as a government have held our view on this figure now for 20-plus years. We support it. Sure, there are going to be disagreements about it. But, coming back to Senator Milne’s proposition, there is nothing stopping a family that has 18 children, for example, if they want to, from each individually donating $1,499.99 under the current regime. If people are so minded, good luck to them. But at the end of the day we have a good, robust democracy in this country, but we have a system of disclosure now that I think is unfairly skewed. We need to balance it up to put us in line with countries such as New Zealand and the United Kingdom, both of which have Labour governments and both of which think that the equivalent of $10,000 is the correct threshold. The arguments in this debate have been well rehearsed and the arguers well versed, and I suggest that we no longer filibuster but get on with the votes.
Mr Temporary Chairman Watson, it is not a filibuster. I asked a specific question, which is a realistic question in the context of Australian business. Currently, with the $1,500 threshold, substantial sums of money donated to any political party are publicly disclosed. The question I asked the minister was: would it be possible for a company with eight directors to pass on a $10,000 increase in directors’ fees to the Liberal Party, plus make a company donation to each state, and achieve a donation of $170,000 without a requirement for disclosure?
The difference between the regime now and the proposition you are putting forward is that, if eight directors in the same company gave $1,500 and the company gave $1,500 to the states, the total they could give would be $25,500. So there is a huge difference in disclosure. At the moment, a company that gives anything more than $25,000—or, under the scenario that I am suggesting, $25,500—escapes disclosure; but, realistically, most of them do end up having to disclose it. Under what you are proposing, under the scenario I have put to you, a company could provide $170,000 and not have to disclose it.
That is a substantial difference, and that is because you are increasing the threshold from $1,500 to $10,000 but not capping it by putting in a provision which prevents a company making a donation to the state branches as well as the federal party. That is the change here. It is the substantial increase in the amount of the threshold plus the failure to cap the number of branches that you can give money to that makes the huge difference. What will happen is that companies that used to be caught by the disclosure provisions and were required to admit or to demonstrate up front what they donated will no longer have to do so; they will be able to give a large sum of money every year over the life of a parliament and nobody will know about it. That is the difference.
Corruption occurs when people do not know what money is being spent because they have no way of knowing what the outcomes are and why. That is why I am putting this to you, and I would like a straight answer as to whether you could donate that every year because of this failure in the legislation. That is why I say it is antidemocratic. The minister is suggesting that this is somehow just recognising the different inflation value for money and so on. The fact is that the Canadians have been in precisely the same situation and they have amended their Canada Elections Act to reduce the role of private money in elections by limiting the amount any individual can contribute to a party or a candidate in a given year to a $1,000 donation. Their amendments also introduce a total ban on contributions by corporations, trade unions or associations, which were previously allowed to contribute up to $1,000.
Canada have recognised that they had disclosure limits previously and they did not work. They have gone for a ban. What you are doing is compounding the problem. That is why I am saying that there are no disclosure laws if this threshold of $10,000 applies, because of the capacity to expand the $10,000 donation to $90,000 around the country for the Liberal Party. Also, if a board really wanted influence, it could get it through its directors fees, and the company would not have to put in a disclosure form because, as a third party, you can reimburse an individual for giving $10,000 without having to disclose it. That is why I am asking specifically: can what I am saying happen? Yes or no?
It is a fanciful proposition that is being put to the Senate. It is hypothetical in the extreme. What would stop a front group such as Doctors for Forests, for example, being used to get money from high-wealth individuals who happen to be from the medical profession to then provide money to the Australian Greens or sending money overseas and having it come back courtesy of the Swedish Greens? What would stop them having high-wealth individuals buying artworks at public auctions from high-wealth artists as some sort of commercial transaction?
I put this question to Senator Milne and the Senate: in the real world, do you honestly think that nine state directors of a political party, with all the directors of the particular company that Senator Milne is talking about, would be involved in this extensive conspiracy which would be of little monetary value at the end of the day? I indicate to the Senate that, with this increased threshold, we are talking about only 12 per cent of the disclosable revenue. On current figures, over 80 per cent would still be fully disclosable as transacted today. The Greens organiser in Tasmania herself came out on the radio lamenting the amount of time it took to deal with the rats and mice of donations to comply with the current laws.
Indeed, it was interesting to see why the Labor Party seemed to be opposing this. Looking at Senator Hutchins’s contribution, I note that he said that he was against this increased threshold not because of the threat of corruption in the major parties but because he thinks that this will advantage the minor parties. We are getting a mishmash of reasons from those opposite. I do not know why you are just trying to latch onto any reason or excuse to oppose this.
As to Senator Milne’s suggestion, it is hypothetical and fanciful. The reality is that those who want to engage in corruption will not be donating through extra moneys being made available to each of the directors, who then make it available individually to each of the state directors through a state party organisation. The unfortunate history is that, when that does occur, it is usually done with a pair of white shoes and a brown paper bag that has cash in it. Even under this legislation, that will not be detected unless somebody blows the whistle. Even in the Canadian situation, with its new guidelines, the brown paper bag and the white shoes will not be detected. Unfortunately, until such time as human nature changes considerably, that sort of behaviour will occur. This regime will not overcome that. I invite senators to consider the very wise words of former senator Don Chipp as to why you do need an appropriate threshold to protect privacy.
A recent Prime Minister of Italy Mr Berlusconi, using the numbers that he had in both houses of parliament, changed the laws to escape charges against him on corruption from his previous activities and also to facilitate him being able to keep going the way he was into the future. He made the corrupt and unlawful legal—ergo, making it no longer corrupt. This legislation is the same. It is saying, ‘It would be corrupt to have a collective of people donating $10,000 to the coalition or to another political party, but that is a good thing for the political party, so let us make it legal so that it is not corrupt.’ That is the process we are looking at here. With that comes all the concern that large amounts of money are going to be able to be fed into political parties. The money is not given without strings attached. They are always there, visible or invisible.
The minister interjects about a very worthy party organiser talking about the amount of time it took to fill in the forms. He is, of course, misrepresenting her by saying that she did not want to do that or that she supported this legislation. Of course she does not. What she was saying is that the Greens are not as rich as some other parties, and that it is a lot of work to employ people—if you do employ them—to make sure that the current requirements are filled out. The simplest way would be to take the Greens’ policy here and take the Canadian route: get rid of these donations and their corrupting influence. But here we have the potential for hundreds of thousands of dollars to be given in the future by a coordinated group of people, off the public record but within the law.
I beg to differ. I think groups like the Exclusive Brethren have been sailing very close to the wind—and I will be interested to see what inquiries discover there—by advertising for Prime Minister Howard in Bennelong and Parramatta and elsewhere, including in South Australia and statewide in Tasmania, without furnishing a return. It may be that their members somehow, magically and independently, decided to spend the tens of thousands of dollars involved in that, but I will be interested to see whether they put in returns. What we do know is that $1 million was spent by that organisation in New Zealand against the Labour Party and the Greens. It is insidious, as that almost got to an election without being known. If you are going to have large amounts of money like that coming, with very big strings attached, from concerted efforts by organisations, it should be well and truly on the public record. The problem with this legislation is that it is going to allow an enormous increase in the donation potential to political parties, and the government is doing this because it sees it has most to gain from it not being on the public record. That is a formula for corruption. We strenuously oppose it and we think the government should think again.
To answer even more specifically: I thought it was a fanciful proposition that Senator Milne was putting to the Senate about a company giving money to its directors so that they could then give that money to political parties. That is specifically disallowed by section 305B(2), which says:
If a person makes a gift to any person ... with the intention of benefiting a particular registered political party ... the person is taken for the purposes of subsection (1) to have made that gift directly to that registered political party.
So, if a company gives money to each of its directors as a method of laundering that money for the political party, it would be captured by the existing legislation.
It is up to each company or trade union—or, indeed, the Wilderness Society or Doctors for Forests—to determine whether or not it is within the interests of its organisation, of its members or of the community at large. On trade union donations, whilst I cannot understand them, I do accept that trade unions honestly, in a warped sort of way, believe that the country would be better off with a Labor government. I accept that they genuinely believe that, and they ought to be entitled to make their donations. I do not seek to look behind those donations and ask whether their purpose for giving them is good, bad or indifferent. That is the great thing in this free society—one that the Greens would of course close down, especially on the Exclusive Brethren. I do not look for why people want to donate or not donate; just as long as it is within the law then that is all that is important.
The minister did not answer the question, for the obvious reason that no company can reasonably make a donation to a political party on its own behalf if it is going to disadvantage shareholders. That would be unethical. Of course there are strings attached when political donations are made. The minister must think that we are in some way or other unaware of how the world works if he thinks we believe that political donations are given without the expectation that they will buy political influence. That is why we oppose the proposals, that is why we think that Canada has gone a much healthier route and that is why we know the government wants to go in this direction, so that it can cover up massive donations flowing into its coffers that have strings attached and that create the potential for quite substantial corruption resulting from the process. This legislation is, as other speakers have said, one of the biggest attacks on democracy in this country since Federation. We are not exaggerating about that; it is very dangerous and insidious legislation, if you believe in a healthy democracy.
Very briefly: I think we are now getting into the realm of a great degree of repetition. The Greens were exposed when I read out section 305B(2). The fanciful proposition put by Senator Milne had no wings or feathers to fly with, so Senator Brown has made the bald assertion that every political donation is made with the purpose of buying influence. Can I say that that is a very good insight for the Australian people as to how the Australian Greens leader sees political donations. Can I tell you that a lot of people who donate to the Liberal Party may well be disappointed with our policy in a particular area. As far as the Liberal Party is concerned, we do not accept donations if there are any strings attached to them. That has been the rule for a long time. The fact that the Greens have exposed that they accept donations with strings attached reflects very badly on them.
That schedule 1, item 79, stand as printed.
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.
I am referring to individuals and, as you know, I was a critic of the Centenary House arrangement. Why did Lord Ashcroft make this donation? In my experience, rich people and $1 million do not part that easily. What we do know is that Lord Ashcroft has a widely criticised history of donating large amounts of money to the Tories in Britain. I understand that they were made from a tax haven called Belize, but perhaps that is not an accurate report. It is also reported that he has a history of political donations that prompted and resulted in the banning of foreign donations in the United Kingdom.
Under British law, a donation of more than £200, or $A470, is allowed only if it comes from a person eligible to enrol to vote in Britain or from a registered corporation operating in Britain. A number of other democracies also ban foreign donations, including the United States, New Zealand and Canada. The Australian government, in this debate and in others, is quick to refer to these countries in comparative terms, and I suggest that the government could look at embracing the laws of those countries to ban any foreign influence on domestic politics in our country.
In the United States, it is unlawful for foreign nationals to make donations; United States citizens living abroad can donate. But the fundamental principle that I think should concern us most is that a principle of our electoral funding law is that the Australian Electoral Commission must be able to verify the nature and source of significant political donations. I think offshore based foundations, trusts, clubs or individuals, funded from tax havens, making political donations to Australian politics are a real danger, because those who are behind those entities are often hidden and beyond the reach of Australian law. With those motivating remarks, I do hope that as an integrity measure this amendment of the Democrats gets cross-party support.
The Australian Labor Party does have very deep concerns about the level of foreign donations to the Australian political system. Labor members of the Joint Standing Committee on Electoral Matters made the point in their minority report that there are currently no restrictions placed on political parties regarding the source of their donations and that Australia’s current electoral law allows political donations to be received from overseas sources, although it is generally regarded that they are relatively rare. It is a matter of some concern, however, that we saw an individual contribute $1 million to the Liberal Party at the last election.
I am particularly concerned that Australian electoral law at this time effectively allows for no legally enforceable mechanism to check on the source of funding from overseas. We do not know how widespread the practice is. We do not know how many other donations have come through the back door, because there is no way of determining the true donor, nor are there any penalty provisions enforceable against persons who seek to abuse our electoral laws.
We know that at the last election an investment company by the name of Kingston Investments, which I understand is resident in China, donated $50,000 to the New South Wales branch of the Liberal Party and that it did not file an electoral return. As a consequence, the Australian Electoral Commission has no way of ensuring that the group complied with Australian law, given that it is based overseas and was not seeking to contribute by way of an electoral return. The Labor Party members of the committee made the point in their report that this was a matter that required urgent action. We take the view that there ought to have been a thorough inquiry by the government, which should have joined with us in ensuring that these matters were properly investigated.
I think it is fair to acknowledge that at this time there are a number of occasions that could be identified where political parties have received overseas donations. I acknowledge that the Labor Party has received small levels of donations from overseas. I know the Greens have. They are a little bit smaller again but, given their size, they are probably more significant for their financial position. I know that the racist and highly reactionary organisation the Citizens Electoral Council has received considerable support from overseas. I know it is an anti-Semitic organisation that has peddled the politics of hate throughout this country, and it is essentially funded from overseas. It could not possibly sustain its level of political activity based on its contribution from domestic sources. I know that its head office, which is based not far from where I live in Melbourne, could not possibly be maintained on the basis of local contributions only. Its offensive, racist propaganda is spread throughout the length and breadth of this country and it is essentially financed by Jew-hating organisations in the United States. I think it is obscene that organisations such as that are able to function in our political system, and the Australian electoral laws ought to be cleaned up to prevent that from occurring.
I am concerned that there be a proper inquiry. In government, the Labor Party will ensure that a proper inquiry is conducted to establish just how widespread these practices are, who it is that contributes and the circumstances under which they contribute. We need to properly establish how we can define the nature of foreign donations. As has already been indicated, there are various ways in which this matter can be tackled in international law.
It is a tragedy that this government seeks to pick the worst aspects of American political life and not the best aspects of it when it is pursuing its models. The Americans take the view that, if you are a citizen, you are able to contribute even if you live overseas. Prima facie, I cannot see a serious argument against that. But I take the view that they are right when they say, ‘We should not allow our political system to be subject to the dictates of foreign interests.’ There is no clearer way that that can occur than through the purse. As you know, Minister, the purse strings carry considerable weight in any political system.
That brings me to a recent example that has highlighted the problem that has emerged in this country. Lord Michael Ashcroft of Belize is a member of the House of Lords. As I understand it, he has been prominently mentioned in recent controversies because of his contribution of loans to the Conservative Party in England. A £3.6 million loan was provided to the Conservative Party in the United Kingdom. He is a man mentioned in recent times as a person of some interest to the Drug Enforcement Agency in the United States. He was subject to their investigations—as I understand from reports I have seen—in regard to money laundering.
Lord Ashcroft is also a man who I understand has attracted considerable honours in the United Kingdom. One knows how much of an honour it is to be a person of such wealth, to take a place in the House of Lords and to collect Victoria Cross medals. I am told he has the largest private collection of Victoria Cross medals in the world. I am also told that he was knighted for public service to the people of Belize. There was some criticism, however, when he was appointed to the House of the Lords, because there was a concern that he did not actually live in the United Kingdom. As I understand it, one of the requirements for him taking a seat in the House of Lords was that he was required to live in the United Kingdom. They are very tough, so extraordinarily tough, the English, aren’t they!
Lord Ashcroft was Treasurer for the Conservative Party between 1998 and 2001 under William Hague. I recall that he ran into some controversy in the last election in United Kingdom because he sought to personally contribute by way of donation some £2 million on the basis that he got to pick the candidates who received the money. That is a measure of the way in which the British Conservative Party undertakes its politics. He is well known as the deputy treasurer of the International Democratic Union, an organisation the Prime Minister enjoys spending a lot of time with.
I understand the basis on which the $1 million donation was contributed to the Liberal Party of Australia was through the International Democratic Union. Shane Stone, the man who told us that this government was mean and tricky, organised for the $1 million donation to be sent by Lord Michael Ashcroft to the Liberal Party. It was on the basis that he had a longstanding admiration for the Tory government of Australia and he felt that providing the largest personal donation in the history of the Commonwealth was an appropriate way to prove this longstanding commitment to Prime Minister John Howard.
We do not know whether or not it complied with all the requirements of the AEC because there is no way the AEC, the Australian Electoral Commission, could effectively investigate the authenticity of the information that was provided on the return, if it wished to, given Lord Ashcroft’s foreign address. There is no way that we could establish what the terms of his $1 million contribution to the Liberal Party were. So this is a clear example of where we see not just the worst aspects of American political life but also the worst aspects of the United Kingdom’s political history being force fed into the Australian political system by this government. Even in England, they are now saying that this sort of behaviour is not acceptable and they are banning these sorts of donations. The Labor Party say we should ban them as well, and we will be supporting this amendment.
The Australian Greens will also be supporting this amendment for the same reasons that the Democrats and the Labor Party have outlined. It would make the Australian electoral process a lot more transparent if we had that particular measure. As other people have indicated, probably all political parties have received donations of various kinds over the years. Certainly, the Australian Greens, when we hosted the global Greens conference in Canberra in 2001, had a donation from the European Greens to help pay for the cost of running the conference that we held. Regardless of that, I still think it would be an important measure for transparency in Australia if we banned all of these foreign donations and loans and if the Australian people had much better disclosure laws or the banning of corporate donations altogether. With regard to this particular amendment, we totally support banning foreign donations and loans as per the amendment, and we support it.
Briefly, can I indicate that the government opposes the amendment. In relation to the matters Senator Murray raised, I understand they will be addressed in the government’s response to the report by the Joint Standing Committee on Electoral Matters regarding the last election. I think you raised that in that context. A response will be coming in relation to those matters.
In relation to Senator Carr’s contribution, it was all very interesting but not all that relevant. I could take him back to Benito Salazar, a Filipino middleman who was later charged with murder, who refused to disclose the original donation of $25,000 to the Australian Labor Party. I could talk about Centenary House. At the end of the day, all the sums that we have been talking about are well and truly in excess of $10,000. I do not think that any foreign person seeking to influence Australia’s domestic politics would even consider that a sum less than $10,000 would have any influence.
Much as I hate Senator Murray going back to previous votes and discussions, as he often does, can I quickly commit the same sin to respond to the Greens’ assertion that there was an inclusion in the workplace relations legislation that we recently passed in response to the Exclusive Brethren. If that is what we did then the Greens, in their great conspiracy theory, would have to advise why New Zealand did that in their Employment Relations Act 2000 and still have it on the statute book, why South Australia did it in its Fair Work Act in 1994 and still has it on its statute book and why the Labor government in New South Wales included it in their Industrial Relations Act in 1996. It is a great conspiracy theory but, when you put a bit of light onto it, it just does not stack up. We are in fact following the provision of what is accepted by two state Labor governments in Australia and the government of New Zealand, which also happens to be a labour government.
I am very concerned about this question. I have mentioned the $1 million. I take it the minister does not dispute that the Liberal Party received $1 million from Michael Ashcroft, which is the largest personal donation. You do not dispute that, do you? I ask the minister: can you confirm that the Citizens Electoral Council’s return in recent years has shown that they have had income in excess of well over $1 million and that the bulk of that income has come from the publications and general management of Leesburg, Virginia, in the United States, which I understand is the headquarters of the LaRouche organisation and that, while the Citizens Electoral Council does declare a small percentage of its fundraising, the overwhelming bulk of it—to the tune of well over 80 per cent of their funds—actually cannot be verified because, while their incomes are stated, the sources of their revenue are not in full but there are claims made that debts are owned to foreign corporations and for printing and other general management services?
Just before the minister responds, for the assistance of the committee: I told the committee I had a list of foreign political donations drawn from the AEC site, running for the seven years from 1998-99 to 2004-05. My quick addition shows about 50 entries there. Twenty-nine of those foreign donations were below $10,000. So 29 of those would not be disclosed under the new regime.
Very briefly: I am not in a position to either confirm or deny what is in the Citizens Electoral Council’s returns, other than that I am advised that the Australian Electoral Commission does an audit and checks up to ensure that those moneys that are asserted to be received are in fact accounted for. There is a very similar allegation to the one that Senator Carr is making against the Citizens Electoral Council, although not that the money is being received overseas. A similar criticism was made by a columnist in the Hobart Mercury about the Greens. Supposedly they have about $750,000 of undisclosed moneys. What I say to that is that the chances are that they are small donations, small contributors, that do not have to be publicly disclosed. Of course, that is why Senator Hutchins made his comments during the second reading debate. I am advised that the Electoral Commission does undertake audits. If there were the suggestion that all this money was coming from overseas in large lumps then undoubtedly there would be the requirement that they be disclosed.
That the amendment (Senator Murray’s) be agreed to.
I move Democrats amendment (8) on sheet 4879 revised:
(8) Schedule 1, page 22 (after line 21), after item 83, insert:
83A At the end of section 314AB
(3) A return which is illegible shall be deemed not to be furnished in accordance with subsection (1).
This is an item which asks that the returns, which all political parties and others have to put in, should be legible. I do not know if the Temporary Chair or the rest of the chamber is aware, but the people who analyse or assess returns have to assess the return that has been provided. The returns are often in handwriting and quite a number of them are illegible. On my website I have an analysis of all the donations in WA for instance, and even if you get scanned or photocopied copies they are impossible to read. It is a simple technical amendment which would assist all who use those returns. It is a common requirement in other law, for instance in Corporations Law and other law of that sort, that returns have to be able to be read. That is why the amendment is there.
The government opposes this amendment. It is of the view that it is not necessary to try to define in legal terms that which is legible or not legible. When I go to a doctor every now and then—thank goodness, not very often—I am given this scribble which I cannot read but the chemist or the pharmacist is able to understand without any difficulty whatsoever. I suggest that there is no need for this proposed amendment.
As far as the opposition is concerned there is not a major issue as to whether people put in handwritten returns. There is a major issue that they be legible and we would encourage all action to be taken to encourage people to write in a legible form, but I do not think this requires an amendment to the electoral act.
I move the Australian Greens amendment (1) on sheet 4972:
(1) Schedule 1, page 26 (after line 8), after item 87, insert:
87A After section 328
328B Electoral advertisements by third parties
(1) A third party commits an offence if either:
(a) it prints, publishes or distributes an electoral advertisement; or
(b) it causes, permits or authorises an electoral advertisement to be printed, published or distributed; and
the electoral advertisement is intended to affect the casting of a vote in an election.
(2) Subsection (1) does not apply if the following registration requirements prescribed under the regulations are met:
(a) compulsory identification of a third party, including the identification of all persons and in the case of a corporation, directors and other officers of that corporation; and
(b) compulsory disclosure by a third party of any contributions made to it by any person, or in the case of a corporation, directors and other officers of that corporation who have made a contribution of more than $1,500 for the purposes of electoral advertising; and
(c) compulsory disclosure by a third party of its relationship with a registered political party or independent candidate.
This is with regard to electoral advertising by third parties. It goes to the heart of what I was saying before. I appreciate Senator Abetz’s explanation that if a company gives money to a board of directors to give on to a political party then they would have to declare it. However, if a company coincidently increases board fees and at the same time individual board members give the same amount of money then it would not have to be disclosed. So I stand precisely by what I said before about the extent to which these donations can be made to the government, or to any political party for that matter.
The other clarification I would make before question time is that Senator Abetz referred to a Hobart columnist. He was talking about Greg Barns, a disendorsed Liberal Party candidate of the past who writes columns for the Mercury. He talked about the Greens having $750,000 between 2001 and 2005 which were not donations. No, that is right. It was money which was paid back in public funding for campaigns, so where that money came from can be very clearly traced. It is certainly wrong to infer that those donations had not been in any way declared. It was very clear that it was public funding and I want to put that on the record.
With regard to third parties, the issue here relates to a specific example during the last election when, in Tasmania, a group called Tasmanians for a Better Future—who were not incorporated, who have no names associated with them, no addresses or anything—suddenly came out of nowhere and started advertising in the campaign. They got a public relations company to act on their behalf. The way that this legislation is currently set out means that corporate Australia, or any business which does not want to be known for what it is doing in influencing elections, can go to a public relations company. The public relations company can then run a half a million dollar or a million dollar campaign if it wants to. The public relations company would have to put in the electoral return that it had spent the money on the election, but the people who donated to the public relations company do not have to be named if the donations they have made under this legislation are less than $10,000.
So 20 or 30 businessmen can get together, put in $10,000 each and then run a campaign, and you can never establish who these people are. This is what occurred in the last election. The level of dishonesty associated with it was appalling to the point where one person—the President of the Chamber of Commerce in Tasmania, Michael Kent—when he was questioned about it denied knowledge of it, saying he thought they were just concerned businesspeople. Later he proved to be one of them.