Wednesday, 11 March 2009
Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 
Debate resumed from 15 May 2008, on motion by Senator Ludwig:
That this bill be now read a second time.
I welcome the opportunity to speak on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008  this morning. The first thing that I will say about this is that I think it is entirely inappropriate that we are debating this matter today. In fact, I think that it is totally inappropriate that we are debating it at all prior to comprehensive electoral reform. I remind the Senate that back in March last year it was the coalition which initiated a comprehensive terms of reference to go to the Joint Standing Committee on Electoral Matters, which was supported by the then Democrats, the Greens, Family First and us, and opposed by the Labor Party. I am not going to go through that again because I have done that in this place ad nauseam but it was a comprehensive proposal which addressed all the matters which we believe need to be included in a comprehensive campaign finance reform. Again I put on the record that we are very, very strongly supportive of comprehensive reform. I put on the record that it was actually the coalition parties that initiated this process with the reference to the joint standing committee. I reiterate the point that it was the Australian Labor Party that opposed that. So anything that they are doing at the moment has to be seen through the prism of March 2008 and what has been done from there.
I take the government at face value—that they are committed to campaign finance reform. I assume that they also acknowledge that we are likewise. But, as the minister knows and as the chamber knows, we have objected quite passionately over a number of months—in fact nearly 12 months now—because this cherry-picked campaign finance reform is an animal that has come with many coats, initially in relation to the tax deductibility part of a bill that was introduced as part of another package and then that was withdrawn and introduced on its own. The tax deductibility question and the disclosure question are two issues that the government has chosen to pull out of comprehensive campaign finance reform for its own purposes.
I will not go through the reasons again because I am on the public record in relation to this matter. But the question has got to be: if you are convinced about comprehensive finance reform, why were we debating the tax deductibility bill previously, why would we be debating this bill today, when these measures clearly should be part of comprehensive reform?
I have got some other things to say about those who might have influence in relation to the Labor Party but it begs the question, when every commentator in this country has talked about the level of influence of unions, third parties and large corporate donors, of why those issues were not also a part of these measures. The reason that was not done was that the Labor Party views these two isolated pieces of campaign finance reform as good for them and bad for everyone else in the political process. Well, so be it. But why not just be upfront about it and say, ‘Well, we’re trying to get a couple of bits of reform through which we think will be bad for the opposition parties and good for us.’ Just say it, because we all know it is true. Just acknowledge it and say, ‘Despite that, we’re now convinced that we should have comprehensive campaign finance reform.’
I will indicate at the outset that the opposition will be supporting the government’s suite of amendments, the great bulk of which came out of the Joint Standing Committee on Electoral Matters. I will have more to say about that because we do indeed have some concerns about administrative burdens. Nevertheless, despite the issues in New South Wales in relation to reporting dates et cetera, which we understand both major parties are finding very difficult to manage, we are prepared to see whether it can work any better in a federal sense.
We also believe that there should be stronger penalties for infringements of the Commonwealth Electoral Act but we note that most of these electoral abuses are actually committed by the Australian Labor Party itself, such as the multiple cases of electoral fraud in Queensland which resulted in the Shepherdson inquiry, the Gino Mandarino fraudulent enrolment, the Christian Zahra fraudulent enrolment and the Wollongong council sex and bribery scandal. Indeed, when you look at what started the frenetic media attention to this long overdue requirement for campaign finance reform, it was actually the Wollongong sex and bribery scandal—the most obscene abuse of responsibility, the most obscene abuse of matters of principle, the most obscene abuse of a whole range of acts you could ever see. The Wollongong sex and bribery scandal is up there in shining lights, showing what is wrong with the system. But do we get any response to the Wollongong sex and bribery scandal in these two cherry-picked pieces of legislation? No, we do not. Do we see anything in relation to the excessive influence of the trade union movement on the political process? No, we do not.
I note with great interest, just to reinforce the point, that it is now common knowledge that the Australian Labor Party received in excess of $30 million from the trade union movement in the run-up to the last election, and, of course, if you look at the government’s so-called Fair Work Bill, guess who picks up $30 million worth of thanks? It is the union movement. What we have objected to in relation to the government’s bill is the right of unions to come in and demand access to records. If you look at all those issues which we object to, which were not in the government’s initial procrastinations in relation to their changes to industrial relations, all of them not part of the mandate, they revolve around giving to the union movement 30 million bucks worth of thankyous.
I have a lot of friends in a whole variety of places and I have been very lucky to be given some financial statements of the New South Wales branch of the AMWU—very lucky, from off the back of a truck. Under the heading ‘National Council Political Fund’, it is all neatly typed out with some nice green on it indicating the stuff I am going to talk about today; it is all there and all public. On page 3, I note the following item: affiliation fees, $401,846. Now I might be terribly wrong—and I will be publicly flogged if I am—but I would hazard a guess that that was not affiliation to the Liberal Party or affiliation to Family First, probably not even affiliation to the Greens. We know who those affiliation fees were paid to. Donations, $209,591. Again, at the risk of a public flogging, I suspect that those donations were not made to the Liberal Party, or the Greens or Family First. Election advertising, $8,120. That brings in total, in one year, overtly political expenditure to over $620,000. But the best is left till last because there is a specific line in these accounts which says: ‘Marginal seat campaign’, $150,352. I will say that again. From a leaked document from the New South Wales branch of the AMWU under ‘National Council Political Fund’ there is $150,352 in marginal seat campaigning alone for the Australian Labor Party. Quite frankly, as I have said before, who pays the piper? This is what we have seen now for some time.
Senator Conroy can jump in as much as he likes. I think he would be better employed spending a bit of time with Senator Feeney and others and perhaps trying to convince me and others that he and Senator Carr are not the bosom buddies they are alleged to be, because no-one believes that. I rather suspect that even Senator Conroy himself does not believe that, because they would be the strangest of bedfellows.
So there is $30 million going to the Australian Labor Party. It is so overtly in this document for marginal seat campaigns. You do not need to look any further than the Fair Work Bill 2008 to see that it is all coming home. It is all coming home because all of the non-mandated part of this bill just happens to be about excessive union powers and giving the rights to unions to interfere in the lives of Australian workers and their employers. This is just the $30 million square-off for the union movement’s massive financing of the Australian Labor Party in the run-up to the last election. The question is: why was this not part of some cherry-picked legislation before comprehensive campaign finance reform was addressed by this chamber and indeed the other place as part of a comprehensive piece of legislation? No-one believes that the status quo is appropriate. Everyone believes that we need to do something. The fact that it was sparked by an incident such as the Wollongong sex and bribery scandal is probably neither here nor there. But it does indicate some of the bona fides in relation to this matter.
We put again on the public record that we want to work with the government to make sure that we get something decent out of this. We have an unprecedented opportunity to make dramatic improvements to the system of electoral funding. With a broad consensus across the political system that our electoral funding system requires serious reform, substantial enhancements to the transparency and credibility of our political system are within our reach. But this bill does nothing to account for or limit the influence of trade unions—or indeed industry associations, advocacy groups or other well-funded third-party entities—on the political process. Regardless of who is in government or in opposition, the Electoral Act needs to be fair, open and neutral, as it outlasts governments and oppositions as well as political parties. It should serve as a facilitator of democracy, not as a government’s prejudicial tool.
I again ask the government, the Greens and the Independents to give this bill the opportunity to be debated when we have in front of us comprehensive legislation for campaign finance reform. I do not in my heart of hearts believe that the Greens or the Independent senators believe that it is appropriate in any measure to be debating this matter outside the context of comprehensive finance reform. We have an opportunity still to delay this bill until after that has been put on the table. It should be put on the table and we believe that there is no reason that, with appropriate levels of goodwill, we cannot collectively get a system that will make it better for the Australian community now and into the future.
I want to make a couple of other comments. The amendments that will be moved by the government—as I said earlier on—are supportive. We also have to make sure that what we do enables the system to be workable, because unworkable systems are often the systems that get abused. This is not just about a set of principles; comprehensive campaign finance reform is actually about making sure that all the dots are joined up, because when the dots are not joined up someone will join them up somewhere else. That is why we saw things like the Wollongong sex and bribery scandal, where someone got the dot and drew it elsewhere, and abused the system.
Let us work collectively in relation to this. Let us not allow the government to cherry pick parts of that reform for its own cheap political purposes. This issue is too serious to be debased by having cherry-picked legislation. I repeat my call to the Greens and Independent senators to make sure that this bill does not proceed today and is debated in the context of comprehensive reform, because in my view, quite frankly, to do otherwise would limit an enormous opportunity for this to be done in toto and not with pieces pulled into it and out of it. I end where I started: we are committed to comprehensive campaign finance reform. We are willing and anxious to work with the government and other parties in this place to ensure it, but can it please be done on the back of legitimacy? It is not legitimate to pull pieces out of campaign finance reform. If it is going to be done legitimately then let us do it in toto.
The Greens will support the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 . I listened carefully to Senator Ronaldson’s plea that the legislation not be supported until we get comprehensive legislation into the parliament, but that is not the example that was set by the Howard government over the previous 12 years. In fact, piecemeal legislation which increased the ability of donors to the political system to be hidden and not identifiable was the order of the day. It is a good thing that we now have legislation that is reversing that order.
We look forward to consequent legislation in this parliament, and I hope that will be this year, to clean up the electoral processes in Australia, and that means quite massive and comprehensive changes to electoral laws. The Greens would like to see Australia going in the same direction as Canada, which effectively banned political donations—except those with a limit of $1,000 from individuals, but it banned those from corporations, unions and all the entities that Senator Ronaldson listed—back in the 1990s, following a series of corruption scandals in that country. It is a pretty sad thing that the current conservative government in Canada apparently wants to unwind that electoral system. The quid pro quo for getting rid of the corrupting influence of donations—and they are effectively utilised by the lobbyists who come into this parliament—as a lever is, I have no doubt, public funding. That is always a big matter for governments to take up, but it would improve the electoral system if we had a wholly publicly funded electoral system. It would provide a much less corruptible and much more accountable electoral system for voters.
We are in a world in which wealth is power, and that power is leveraged right around the world to buy democracies. The most insidious thing that democracies face is, effectively, a plutocracy which buys political favour and political leverage through making massive donations to political parties and individuals. It is something that we have to bring to an end. If we really believe in the fundamental principle of democracy being one person, one vote, one value, then we have to ensure that people have an equal say in a democracy. You cannot do that if millions of dollars are being passed into the political system and that ultimately means that those who have the most money have the most power. That defrauds democracy. There is a very big challenge here to stop that process. This planet is in real trouble because of the power of the wealthy elites. They have their sway not only through autocracies, and that means through political systems that have dictatorships or police state regimes, but also through democracies.
It is a massive challenge for us, a century later, to act on the fears of American President Cleveland when he saw the mounting influence that corporations were having on Washington. One has to worry about President Obama, and all the hopes of the world that go with his new presidency, as he faces 80,000 political lobbyists, backed by a huge amount of money and not least by entities like the armaments industry. They pervert and corrupt the political system and the ability of democracies to carry out the highest tenet of the inherent hope of democracy—which is to give some sense of equality and a fair go to all citizens who work and live under a democracy and whose hopes are based on the democratic system.
This legislation lowers to $1,000 the threshold for donations which have to be disclosed. The Howard government lifted it to $10,000 and, through indexation, it is now at over $10,500. As we know, people could donate to each of the state and federal entities and get away with donating more than $100,000 to political parties without it being made public. The new threshold will put an end to that and the Greens support it. The legislation removes the loophole for donation splitting so that donations to political parties have to be put forward as having been made to a single entity and not eight or 10 as I just described. It would make foreign donations unlawful. I do not think there is anybody in this place who wants to oppose that. The bill also introduces new offences to the reporting and disclosure regime and increases the penalties for those offences. It tightens up public disclosure and the framework for lodging returns and disclosing gifts and expenditure by donors, candidates, political parties, associated entities and third parties.
Then there is something you have to put a lot of thought into while we have a system supported by donations, and that is anonymous donations. The Greens supported this amendment by the government, though it does impose quite onerous accounting mechanisms. The smaller parties and Independents standing for electoral office will know that you depend on a lot of donations. If you are going to run a campaign, you have to get money. There is not the great wherewithal of the big parties, with huge corporate and union donations. It depends on raising money from the public and on lots of little gifts coming in. We saw Obama take the path of appealing to the public rather than to the big corporate sector, and his campaign was massively based upon $5, $10, $20 or $100 donations. Here a limit of $50 has been set before the donors must be revealed. The fundraisers—people taking around the bucket, for example, at a public meeting—must take responsibility for ensuring that no-one attempts to donate more than $50 or they risk strong penalties. At fundraising dinners, the organisers must ensure that the amount raised does not exceed a donation of $50 multiplied by the number of people present. If you have 1,000 people, you must make sure that there is not more than $50,000 raised or obviously you are infringing upon the restriction of $50 per person without the donations being specified. That is a rule that will need to go out. You can see the difficulties for people handing around the bucket at public meetings or at some sort of fundraising concert in making sure that nobody puts $100 in the bucket. It is going to be interesting to see how well that is governed.
Then there is the claims based funding framework for public electoral funding. The Greens understand the purpose of the measure and support its intention, which is to address the problem of profiteering, which can occur under the current system. However, the claims based system, and, in particular, the time frame—that is, you can only claim public funding for election expenditure after the writs are issued and during the actual election period—is very restrictive for smaller parties in particular. The big parties can claim the full limit of their public expenditure by simply putting their TV advertising bills in and saying: ‘Pay for this. Out of our own private funding, we will pay for all the administration.’ For the smaller parties and Independents, that is not the case. They do not have massive media advertising campaigns, because they cannot afford them. But they do have comparatively large administrative expenses. They have to have offices, pay for office equipment and employ people during campaigning times. This will prohibit claims being made for parties that set up an office, employ somebody and get in computers and phones before the writs are issued for an election. It is quite obvious that we are going to have an election within the next 18 months—those are the electoral rules in this country—but if a political party moves now to set up an office and get the bones of a campaign going, and all parties know that you need to do that not when the writs are issued but months or years out, the smaller political parties will not be able to claim that expenditure. It does not affect the big parties, because, as I said, they will simply put in their maximum claim with their media advertising receipts, but it will affect the smaller parties.
I move the following second reading amendment:
At the end of the motion, add “but the Senate calls on the Government to introduce truth in advertising measures in relation to elections so that voters are not deceived”.
I am very keen that we do not permit the current system, whereby people can attack candidates or parties at election time using lies and deception, to continue. There used to be a truth filter. If you wanted to put an ad on TV 10 years ago, that ad had to go to the regulatory authority set up by the private networks and you had to be able to show that it was truthful. I know that, because there were very contentious forestry issues in Tasmania. Every time the Greens put up an ad talking about the destruction of forests that was going to occur if the Labor or Liberal parties were elected—and that is still going on—we would have some objection from the logging industry. We had to be able to show that the claims were true and that the area that was flattened and that the smoke rising from the previous life-filled rainforest was, in fact, dinkum. We could do that.
But that has been removed. There is no longer any arbiter. Senator Fielding’s Family First party ran a series of ads the election before last claiming that Senator Brown—that is me—wanted to give drugs to children. That was an outright lie—it was defamation—and it was played hundreds of times across television networks in this country. Effectively, there was nothing I could do about it. But I have broad shoulders, and I have tackled Senator Fielding on that in private since then. He has made no correction, and the onus is on him to accept or reject that. However, what is wrong is that electors are deceived by such advertising on the way to the ballot box. If a democracy is going to be healthy, it has to ensure that the advertising that informs people about the competing claims is true. The Greens want to see in the more comprehensive legislation coming down the line—and I hope it will be this year, Senator Ronaldson, so that we can look at it and pass it into law before the next election—the Electoral Commission, or a body set up under the aegis of the Electoral Commission, vet contentious advertising to make sure that it is true. Surely that is fundamental if you are going to have a fair dinkum and honest political campaign.
There is a matter at hand that I address in the time left to me: the article in today’s Mercury under the headline ‘Labor smear bid backfires’. This is by Sue Neales, chief reporter. Yesterday in the state parliament, the Attorney-General, the chief law officer of Tasmania, made a series of allegations about a donation to the Greens from some very decent people that I know in New South Wales—Susie Russell and Greg Hall—who have been forest campaigners for decades. They are very committed to the protection of forests and have been successful in helping, for example, the World Heritage rainforest areas of northern New South Wales to be protected. They made donations to the Tasmanian Greens because of the campaign against the Gunns pulp mill, which would, were it to be built, log some 200,000 hectares of Tasmanian forests full of wildlife.
These are good people who are motivated and see that, if they can help protect forests elsewhere, other than in their own neighbourhood, they would do that; but, according to the Attorney-General of Tasmania, their donations to the Greens at the last election left ‘serious and unanswered questions’. This is a $45,000 donation. Amongst the claims were that Ms Russell was an employee of Ian Cohen, the upper house MLC in New South Wales—she had been till 2003 but has not been since then, so that claim was true—and that the address given on the donation disclosure form was for a vacant bush block. It happens to be the home address of these two very fine people in northern New South Wales. Ms Giddings made implications as to whether the names of the real donors had been disguised, and yet they are there on the donation forms.
I have things to say about this. First, yes, let us get rid of private donations—but you cannot expect any political party to survive without them, and under our current system good people will be open in putting forward the money they can get. Apparently this money from Susie Russell and Greg Hall came from an inheritance. Most people would think about spending that money on themselves. They put forward what for individuals is a large amount of money to help save Tasmania’s forests. They put it into the public good out of their own private domain and, as a result, the chief law officer ran a smear campaign through the parliament yesterday, apparently on the basis that if you throw enough mud some will stick. I would have thought much better of the Deputy Premier of Tasmania; I held her in higher regard than this. It was a cowardly thing to do, and it is ultimately counted against the chief law officer of Tasmania. What a sad reflection it is that it turns out that Labor Party operatives had spent some time digging all this up to put falsely before the parliament a claim against two very fine people who should never have been subjected to that sort of false vilification by an Attorney-General in Tasmania—or anywhere else in a democratic system. Yesterday was a pretty sad day for the Tasmanian government and the Tasmanian Labor Party.
By the way, the Tasmanian Greens leader, Nick McKim, was hit with that without warning and did a remarkably fine job of defending these people. I know them; I do not know whether Nick McKim knows them, but I hope one day he gets to meet them. I rang Ms Russell this morning, and she has invited me to come and stay at their place, because they bought a couple of photographs out of an exhibition I had in Hobart over the weekend—let me disclose that right away. I had great pleasure telling her I would love to come and stay at her place. I think they are fantastic people who do not deserve the treatment that Lara Giddings dished out yesterday.
That said, I am glad this legislation is here. It is a big step forward. I hope the opposition will reconsider any potential for opposing it, because it is a step forward. It may be cherry picking, but they are important cherries. I look forward to the more comprehensive legislation. Finally, I pay tribute to Senator John Faulkner. He is driving a review of our electoral laws, which do need fixing up. That is tough. There will be huge debate within all political parties—I have no doubt there will be within his party, as there is within the Greens and as there will be everywhere—about the pros and cons of any move to change the electoral system, but it must be changed. He has the courage and tenacity to make that change. I appreciate that. He is the right person to be doing this, and I wish him great success.
Today I rise in support of the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 . 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.
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.
I rise on this occasion in the Senate to speak on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 . We are a proud nation blessed with a democratic system of government, a system that allows all voters to express their wish without fear of retribution. Many nations throughout the world strive to achieve the freedom we have in terms of the right to free speech and the right to contribute to electing a government to rule their land. The concept of democracy allows for the formation of political parties and for their respective members and other Australian citizens to contribute to the process. This, however, comes with responsibilities and the need for transparency in the eyes of the Australian public to ensure that the funding for political parties is an open process and not secretive or deceptive—hence the need for these amendments. This bill is needed because of another example of the cynical political exercise of the former Liberal Howard government.
Over many years, there has been criticism from the Australian population regarding the amount of money donated and spent during election campaigns. In order to ensure that this process is open and transparent, certain standards are necessary to ensure that the declaration and reporting of donations is honest and fair. The Australian population deserve to know where donations have been received from, be it from public or private sources. As many Australians are also shareholders in Australian companies, they also have a right as shareholders to know whether the company concerned has donated to a political party.
The bill endeavours to ensure that the Commonwealth Electoral Act is respected as a means to maintain transparency, accountability and integrity in the eyes of the Australian population. The proposed amendment bill will come into effect from 1 July 2009. The bill has several main features. It is proposed that the donation disclosure threshold be reduced to a flat rate of $1,000. Presently, that threshold stands at $10,900—$10,000 plus CPI. The threshold previously stood at $1,500. However, that was lifted to the $10,000 level by the previous Liberal government, without explanation. It can only be assumed that this was done to hide away small donations from the eyes of the public, thus thwarting fair review and discussion by them.
Donations made to different state branches of a political party should be accumulated to determine the true amount being donated by that person or organisation. This will prevent the situation of persons or organisations splitting their donation to the non-declarable amount and then donating to several branches, thus negating the need for declaration and reporting. These actions can only be seen as a measure to avoid the existing requirements of the act. This action also denies the Australian public the opportunity to see the true value of donations from these sources as they are omitted from the reporting radar. This is why I have been cynical in some of my previous comments about the actions of the former Liberal government.
Under the existing legislation, it would be possible for donors to contribute almost $100,000 by splitting their donation amongst state and territory branches without having to declare them. I believe that the majority of the Australian public would view this action as dishonest and a means to conceal the true value of the donation. It is an example of utilising loopholes within the law to achieve a solution that is not in the essence or spirit of the existing law. The purpose of the bill is to provide valuable information to the Australian population for their own information and consideration. This type of action does not display the honest and accountable behaviour the Australian people deserve.
Presently, political parties have up to 20 weeks from an election date to meet reporting obligations. It is proposed that this period be reduced to eight weeks. This change aims to ensure that the Australian public receive more timely information for perusal and consideration. Access to up-to-date information is essential for the many decisions we make in our lives, and this case is no exception. Potential investors may wish to know whether an organisation in which they intend to invest their valuable resources has been associated with a political party. This information should be easy to find and in a format that is easy to understand. This proposed change to the act ensures that it is also available to be considered.
The existing act requires ‘donors, political parties, associated entities and people who have incurred electoral expenditure to furnish returns within eight weeks of the end of the six monthly reporting periods’. At present, donors, political parties and associated entities and people are required to report annually, and this can be done up to 20 weeks after the end of the financial year. The current guidelines meant that the reporting from the 2007 federal election needed to be submitted by 2 February 2009—that is, 14 months after the date of the election. This does not provide timely information for decision making to the Australian public and other key stakeholders.
The bill seeks to ban donations from overseas. This area can be broken into several aspects, each requiring consideration. The banning of donations from overseas seeks to ensure that all parties and candidates commence campaigning on a level playing field. In Australia’s quest to be seen as a fair and just nation, all candidates should have access to the same level of support. Whilst this in reality is not the case, donations from overseas could significantly distort the final outcome of campaigning during the intense time leading up to a federal election.
The Australian public are hungry for information to enable them to vote in the knowledge that they are selecting the party and candidate who will best serve them. Should, for example, overseas donations enable the disproportionate advertising of a particular party’s policies, then the information the voter may receive could be distorted in terms of quantity and quality. It could also be argued that Australians would expect that funds for political expenditure be generated from their own economy and not brought in from overseas. Overseas donors, no matter how good their intentions may be, should not have the ability to give any party an advantage over another, especially given that a party’s ability to ultimately form government could be affected.
This change seeks to bring Australia into line with other countries—for example, the United States—where overseas donations are unlawful. There have been cases where overseas donations have been received by associated entities and other third parties purely for the purpose of incurring political expenditure. Whilst I acknowledge that several of the major parties received overseas donations—including the Labor Party, as was declared in the returns released on Monday, 2 February—the Rudd Labor government wants to put an end to this practice. At the appropriate time, it would be enlightening to find out where the opposition now stands on this matter.
A further change included in the bill is the requirement that public funding be genuinely associated with campaign expenditure and genuinely incurred during the period of an election campaign. This could be defined as the period from the issuing of the writs to the close of polls. The inadequacy in the existing law has resulted in some political parties and candidates making a profit from public funding. This unfair practice would be frowned upon by the community and would be seen as a rort. Given that public funding is derived from taxpayers, the public have a legitimate expectation that it be expended on genuine campaigning costs associated with the election. They would also expect that funding be provided only to the extent that it covered the actual cost of running the campaign. With good reason, the Australian people expect sound financial management of the funds to which they have contributed through taxes from their hard-earned income.
This bill also introduces changes to the offences and the levels of penalties under the existing act. Some of the new offences cover areas such as failing to lodge returns, lodging incomplete returns and providing false or misleading information for the purpose of increasing the level of public election funding. The current penalties have remained unchanged since 1983 and over time have become an inadequate deterrent against not meeting the current requirements of the act. In addition, the current penalties no longer reflect the magnitude and seriousness of the offences. As Australians are expected to be honest with the submission of their tax returns and associated income declaration and expense claims, a corresponding standard is being placed on political parties and candidates to ensure the same level of honesty and integrity is maintained. The Australian public deserve nothing less.
The Joint Standing Committee on Electoral Matters report delivered in October 2008 recommended several amendments. One of these was the issue of anonymous donations and whether or not they could be accepted. The committee recommended that some small, low-scale, anonymous donations be allowed and this recommendation has been accepted by the government. Anonymous donations of an amount up to $50 may now be received at public fundraising activities such as fetes and street stalls or at private fundraising events such as trivia nights, barbeques and dinners. Various records are required to be maintained for provision to the Australian Electoral Commission for these types of events. These include the nature of the event, the total number of attendees, the total amount of the donations collected and details regarding the personnel collecting the money. It will also be an offence to knowingly create or keep misleading or false records of these facts.
An additional amendment has been proposed to ensure that third parties cannot receive anonymous donations purely for the purpose of avoiding the existing reporting requirements, yet it will allow the recipient to incur expenditure directly related to an election campaign. Organisations that incur particular types of political expenditure above the threshold level in a reporting period will be required to declare anonymous donations targeted towards the purposes of conducting a political campaign.
A further aspect of debate has been the element that may be legitimately included as political expenditure for the purpose of claiming public funding. This was the other main recommendation of the committee, and the government has since approved it. There are several additional approved expenditures that are now able to be offset by public funding. The first is the rental cost of premises dedicated solely to the running of the campaign. This may be a commercial office or a shop located in a major shopping centre or strip. The location of a campaign office or shop can be crucial to increasing public awareness of candidates and the party and policies they are supporting. A constituent may feel more comfortable asking a question in a friendly, campaign environment rather than approaching the office of a local member of parliament. The second is the employment cost of hiring staff who are dedicated to working on the campaign. This may include people with media and public relations skills, secretarial skills, project management skills and general organisational skills. Campaigns as we all know are extremely busy times, usually with tight time frames and much work to be completed. The ability to hire staff with professional skills allows the campaign to run more smoothly whilst providing a better service to constituents and more effective publicity throughout the electorate.
The third is the provision of office equipment, whether by purchase, hire or lease. As each of the senators in this chamber would be aware it is a necessity that the campaign office be able to produce local media publications, constituent brochures, information leaflets, policy fact sheets, letters and a myriad of other material for distribution to their electorates. The timely production and distribution of these items is critical in providing information to the voting public, who wish to make the best informed choice of a member for their respective electorates. Reliable office equipment is essential for the sound operation of any office, particularly during times of high stress levels such as election campaigns. As is the case where the government is providing public money for other purposes, the Australian people should expect nothing less than transparency, integrity and accountability when providing public funds for the purpose of electoral campaigning.
In summary, the general public have a right to know where their contribution, through taxes to the government, is being directed and how it is being expended and, in addition, they have a right to information regarding the amount and the source of donations. I reiterate that this information is also of more value if it is provided to stakeholders in a more timely manner, hence the changes to the reporting period time lines. Australia is a great nation with a fair system of government. The strengthening of laws in regard to the declaration and reporting of political donations can only serve to provide a better level of information to the Australian people. I would like to commend Minister Faulkner for his leadership in this very important area and I commend this bill to the Senate.
I can indicate that I will be supporting the second reading of the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008  and am quite supportive of the measures contained in it. I acknowledge the concerns of the coalition: they say that it is a piecemeal approach and that we should wait until the more significant, comprehensive changes are dealt with. Whilst I understand that position, I think it is preferable to deal with the issues contained in this bill now. I note that it is the intention of the government to bring in legislation in the coming months and I look forward to this matter being dealt with by no later than the end of this year.
I am on the record as being a strong supporter of electoral finance reform. Amongst my proposals on this to the Joint Standing Committee on Electoral Matters, I suggested that there ought to be a mechanism in place so you could have continuous online disclosure of donations. I think that is the preferred course. It gives a level of transparency, particularly in the course of an election campaign, when I think the public ought to know who is donating what and in what amounts. That is quite important. I also think that public funding should be linked to expenditure and having restrictions on donations.
I have spoken publicly about the need for sensible approaches to disclosure and tax exemption for political donations to candidates, Independent members and parties. That is why I support the Greens amendments, proposed by Senator Ludlam, for a $1,500 ceiling for tax deductibility but that it would only apply to individuals and it was not appropriate for it to apply to corporations. Political donation schemes need to be transparent and they must be structured in such a way that they foster democracy. They should not be an avenue to give incumbents and political parties an unfair advantage, nor should they be a mechanism for donors to exert undue influence on decision making.
Can I indicate in relation to the issue of donations at the last election that I offered, after getting advice from senior counsel, a moneyback guarantee to donors so that they would receive a proportion of their donations back as a proportion of the level of federal funding I received. I did in fact refund a significant amount of money to donors in accordance with that guarantee. Some did not want their money back, and that was used to run a skeleton office from the time of the election to the time I started in this place. I think that is important. I also think it is important to address the concern about rorts with respect to some candidates whose campaigns may have cost them next to nothing but who then pocket the windfall. That is inappropriate, and I welcome the reforms with respect to avoiding those windfall payments.
In relation to foreign donations and gifts from foreign companies, I think it is appropriate that those donations be excluded. I note that in other jurisdictions such as the United States that is banned. The provision relating to more frequent disclosure—from 15 weeks to a period of eight weeks after polling day—is appropriate, as is the requirement for disclosure twice a year. You often get the situation where people do not know who has made a donation for 15 months or thereabouts, depending on when the election was held, because of the time lags involved. I think that is inappropriate. I look forward to discussing with the government the possibility of having more continuous disclosure mechanisms.
I believe we need to get on with these particular amendments, which I welcome, but we also need to look at the big picture in terms of comprehensive reforms. Even Senator Faulkner’s critics would acknowledge that he has been very genuine and has put in an enormous amount of work on reforming electoral laws in this country on donations and funding, and that is welcome. I think our current laws are inadequate. This is one step that will make a difference, and that is appropriate. I do not want us to go further down the path of the United States, where you have the best democracy that money can buy. The enormous amounts of money that are involved in US election campaigns, even for Senate or congressional races, are just mind-boggling. We need to have a good hard look at that, otherwise only the very wealthy will be able to run. We also need to look at the issue of public funding and donations in the context that if you take public funding you then elect to be circumscribed in the level of donations you receive, both the quantum of donations overall and the individual donations. I do not think you should have your snout in both troughs, so to speak, in terms of public funding and non-public funding from private or other sources.
With those few words, I indicate my support for the second reading of this bill. I look forward to the committee stage. I am also looking forward to further and comprehensive reform of electoral funding and disclosure laws in the coming months.
Australia is often described by people as ‘the lucky country’. Unlike many other nations, since Federation the Australian people have known only one form of government—democracy. Even though there are plenty of countries around the world that are democratic, our democracy is special. Just like anything special in life, we need to protect it from harm’s way and make sure that it is safe and sound. That is why we have laws regulating how democracy works. It is too important to be left to operate without boundaries or controls. Power is vested in political parties, and these same parties are responsible for setting the rules for themselves. This makes it all the more important that, as self-regulators, we do everything we can to retain the public’s trust. The Australian people place a lot of trust in their elected representatives and we owe it to them to demonstrate the principles of responsible government.
A vibrant democracy is a democracy where people have confidence in the system. It is a democracy which is free from corruption. That is why I joined the Parliamentary Joint Committee on the Australian Crime Commission. Rooting out corruption is something I feel very passionate about. I have always taken a strong stand on this issue because, for me, it is black and white; there can be no grey. Corruption must be exposed, no matter what shape or form it comes in.
One of the biggest opportunities for corruption arises under public funding for federal election campaigns. Without proper controls it can easily turn into a set of kickbacks for the major political parties. Public funding of federal election campaigns began for a legitimate reason: to provide for the reimbursement of legitimate campaign expenses—and fair enough. The key word here, of course, is ‘legitimate’. But since this legislation was introduced in 1984, it has been rife with rorting, rife to the degree that public funding of federal election campaigns has skyrocketed by more than 55 per cent over the last four elections. In real terms that means that public funding for the major political parties has spiralled. It was $28 million of public funding—and that was excessive enough—but it has jumped to an obscene $43 million of public funding for election campaign spending. That is $43 million of hard-earned taxes paid by ordinary Australians that is spent by political parties to brag about themselves and what they have done and what they are going to do. It is all about them.
Times are enormously tough for so many in Australia and our leaders are telling us to expect tough times to continue. We have even heard the grim news from one of the Rudd government ministers that no job is safe. So how can political parties justify taking that money given to them by hardworking Australians and then excessively spending that money to tell those same Australians how fantastic their political parties are? If political parties want to spend huge amounts on election campaigns they can dig into their own pockets and get their hands out of the public purse. Australian families should not be expected to fund excessive spending by the major political parties. We are sick and tired of being bombarded with excessive TV ads every night and having our letterboxes stuffed full of excessive campaign mail during every election especially when we end up paying for it—that is, taxpayers are paying for it.
The government’s Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008  fails dismally to address this rorting. Labor has only proposed to limit public funding of political parties to actual campaign expenses. This will stop profiteering but will do nothing to rein in the excessive campaign spending. That is why Family First is moving to cap the amount that each major political party can claim from the public to fund their election campaign to a maximum of $10 million.
Let us be real: $10 million is more than enough for any one political party to spend in each election. Having this cap of $10 million will save the taxpayers over $20 million per election. So by capping how much each political party can claim to be funded by taxpayers to $10 million, this will result in stopping political parties rorting the system and will save taxpayers $20 million per election. This saved $20 million could be spent on giving a fairer go to veterans and pensioners and giving more funds to hospitals and schools. All Australians would agree it would be better to spend the $20 million on these services rather than seeing it spent on politicians telling us again and again how good they are. Let us stop the real political rort and stop political parties from spending excessive amounts on the election at taxpayers’ expense. Ten million dollars is enough money for that. Let us use the rest for something much more important.
I thank all those senators who have contributed to the debate on this important piece of legislation, the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 . In March last year, the Prime Minister told the 7.30 Report that the ‘time has well and truly come for Australia to have comprehensive campaign finance reform’. This bill is the start of the process.
The first group of measures to start this process concerns the disclosure threshold and reporting periods. This bill will reduce the disclosure threshold from the current CPI indexed amount of $10,900 to a non-indexed amount of $1,000. This will restore proper public scrutiny to donations of this size. The bill will improve transparency in the funding and disclosure regime by requiring participants in the electoral process to report every six months rather than every 12 months.
The bill will also provide consistency by reducing the deadline when the participants in the political process have to lodge disclosure returns with the AEC to a consistent period of eight weeks. This measure will replace the haphazard deadlines currently in the Electoral Act which range from 15 weeks, 16 weeks or 20 weeks, depending on the person or the entity.
To ensure that the new $1,000 disclosure threshold is not avoided by a person giving multiple amounts below the threshold to various branches or divisions of the same political party, the bill will treat donations to different branches of a political party as if the donations were given to the same political party.
The second group of measures concern from whom donations may be received. The bill prohibits the receipt of a gift of foreign property or an anonymous gift outright for some people and entities while for other people and entities it will be unlawful to receive a gift of foreign property or an anonymous gift if that gift is used for political expenditure.
In response to a recommendation from the Joint Standing Committee on Electoral Matters, the government’s amendments will allow low-level anonymous donations—that is, anonymous donations of $50 or less—to continue where they are received through fundraising activities or events.
Finally, the bill seeks to prevent the possibility that some candidates and other groups may obtain a windfall payment of election funding by tying electoral funding to the actual electoral expenditure incurred. Again, in response to a recommendation from JSCEM the government has expanded the definition of ‘campaign expenditure’ to ensure that it does not favour one form of campaigning over another.
As I have outlined, the bill contains urgent measures to address critical weaknesses in the Commonwealth Electoral Act relating to the funding and disclosure regime. I provided details of these measures as long ago as 28 March last year. These measures are very critical and important reforms, although small in number, and they are targeted to deliver a more transparent and accountable electoral system in this country.
In terms of the second reading amendment that Senator Bob Brown has moved on behalf of the Australian Greens, I acknowledge the interest that has been consistently demonstrated by Senator Brown in addressing issues about our electoral system. I acknowledge also Senator Brown’s and the Greens’ interest in this particular issue over a long period of time. It is also true to say that the concept of truth in advertising has had a long and complicated history. Indeed, previous reports of JSCEM have identified the difficulties of legislating in this area and have argued that voters remain the most appropriate arbiters of the worth of political claims that are made. That is just one of the reasons the government does not support this amendment at this time. I do acknowledge, as I think senators would expect me to, that this is an issue which warrants further and detailed consideration for this reason: the question of truth in advertising is being examined as part of the second green paper on electoral reform, which will be released later this year.
I commend to the Senate the government’s view that the green paper process—in other words, considering this issue as part of a raft of broader issues surrounding the campaign process and then having these issues subject to consultation with the public, the states and territories, political parties and others involved in the political process as well as other interested people—really is the best way forward to deal with this important issue. I can indicate to Senator Brown, the Australian Greens and of course to the Senate that the government will examine the question of truth in advertising in that green paper process. As I indicated earlier in my contribution, the government does believe that this bill is a critically important first step in the electoral reform process and I have much pleasure in commending the bill to the Senate.
by leave—The opposition fully understands the principle behind Senator Bob Brown’s comments. It is potentially an extremely difficult area and it is probably something better dealt with in the fullness of time as opposed to through this very simple amendment. The opposition does not support Senator Brown’s amendment, although we do support the principles that underpin his amendment.
That the bill be now read a second time