Senate debates

Tuesday, 13 September 2016

Matters of Public Importance

Donations to Political Parties

4:07 pm

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

I inform the Senate that at 8.30 am the Leader of the Opposition in the Senate, Senator Wong, and Senator Siewert each submitted a letter, in accordance with standing order 75, proposing a matter of public importance. The question of which proposal should be submitted to the Senate was determined by ballot. As a result, I inform the Senate that the following letter has been received from Senator Siewert:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The need for the Turnbull Government and the Labor Party to commit to comprehensive and immediate political donations reform.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clocks accordingly.

4:08 pm

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

This question of political donations is of considerable interest to me and my party. The view we take is that individuals, organisations, companies, whatever structure we talk about, is entitled to use its own money for its own political purposes to promote political speech. Most of the time political donations are made because the donor likes what they hear. They like what the recipient is saying and they want them to do more of it. Certainly that is the basis upon which so many donors contribute to the Liberal Democrats, my party. But we repeatedly hear from people who say those donations should not be made or at least they should not be made from particular types of donors. Common are: overseas donors, developers, tobacco companies. We hear it said by some that big coal should not donate. We are even likely to hear it said that big tourism should not donate, which would have implications for the Greens party.

In New South Wales we see these sorts of rules already in law. There are rules affecting developers. There are rules affecting tobacco companies in relation to whether they can give to a political party or a candidate and how much they can give. Those rules are very stringent and they have a very substantial impact on political speech. In fact the New South Wales government went too far. It put too many constraints on political speech in the state and they were found to be unconstitutional by the High Court. And yet, notwithstanding the fact that it went that far and then had to reel them back again, in New South Wales we have plenty of politicians who have found themselves in breach of those laws, and the now somewhat maligned Independent Commission Against Corruption has had a lot to say on the subject. Some politicians' careers have indeed been terminated as a result of breaching these donation laws. And yet what did they achieve? Did they really produce less political influence by donors in New South Wales politics? I do not think there is any evidence whatsoever for that.

I have a better suggestion: transparency. Transparency is publishing the names of the donors irrespective of who they are—and I make no distinctions between international foreign donors and local individuals on the electoral roll. As soon as that donation is made, as soon as is practically possible, within a few days, a week at the most, those donations are published and people can see who has given to whom and how much. The problem we have at the moment in Australia is that transparency basically does not exist. We have disclosure well after the donation has been made, more than 12 months later. The United Kingdom and the United States have much more current transparency. They have reporting at least quarterly, and in the United States, I understand, it is more often than that.

On the basis that you have transparency—so you know who is donating, when they are donating, how much they are donating and obviously to whom—you then have a situation where the voters are entitled to make a decision for themselves. It is up to the voters what they make of those donations. Do they agree that that donation was a good thing or do they disapprove? Obviously they can do what they like with their vote on the basis of that knowledge. Refusing to give voters that choice, refusing to allow voters to make that decision is exactly the kind of nanny state thinking that I have railed against in this place on other issues. It is assuming that the voters are too stupid, too dumb, too incapable of making up their own minds and making an informed choice based on the knowledge that transparency would provide. I do not believe we in this place are more capable of making decisions for voters than voters themselves. I do not believe that we are any smarter than the voters in their collective wisdom.

There is an answer to this whole discussion about political donations—that is, voters should not elect corruptible politicians. So how would an elector know if a politician was corruptible? I have a suggestion for electors: those politicians who do not like donations, who want to ban donations, obviously regard themselves as corruptible. If they want to ban donations, it must be because they think they would be susceptible to the donation and therefore other politicians are similarly inclined. I do not believe that donations should be banned. I do not believe corruptible politicians should be elected. So for voters, the obvious thing to do is to not vote for politicians who want to ban donations because they are the corruptible ones. All they need is transparency and it then becomes a matter for voters. Leave it up to the voters, and they will get it right.

4:15 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Just to make it clear, as I make my contribution to this debate, can I assure the chamber and those who are listening that I have never received a donation from a Chinese company that has associations with the Chinese government. I also want to make it clear, by way of disclosure, that never have I personally received any money from a Chinese company associated with the Chinese government. I am aware that not all senators in this chamber can say that, because we know Senator Dastyari clearly did receive money for his personal use from a Chinese company associated with the Chinese government. Can I also make it clear that I love investment by foreign companies, by foreign investors, in Australia, because we need foreign investment to create wealth and activity and jobs for Australians. So do not ever suggest to me that I am anti Chinese investment in proper investment venues within Australia.

However, I am concerned that members of the Labor Party seem to think it is okay to receive personal donations from Chinese companies associated with the Chinese government—personal donations not only for campaigning purposes but also for purely personal purposes. That concerns me. We remember the celebrated case of a Labor politician who ended up being convicted of fraud. He was defended for most of the duration of that incident by the New South Wales Labor Party, the secretary-general of which at the time was Mr Sam Dastyari. We kept wondering where all of that money was coming from to pay the legal bills of Mr Craig Thomson, because they were substantial. We understood they were being paid by the Labor Party, but one can only wonder where that money was actually coming from. I agree, and I think the Prime Minister is on record saying this as well, that there should be some reform of the political donation system. In fact, the Special Minister of State has asked the Joint Standing Committee on Electoral Matters to look into that. Mr Turnbull is quoted as raising some issues, and I think they are sensible issues.

It is not only the Labor Party that is involved, of course. I see Senator Xenophon over there. He gets a very, very substantial donation from the guy who owns the Optical Superstore. That is the optometrist I used for ages, because they did not give bad service. I only bought these new spectacles a few months ago, and I have since brought another pair from the Optical Superstore. But, when I learnt that the profit from my consultation and from my purchase of these spectacles was going to one of my political opponents, I told the Optical Superstore, 'Thanks for your service. I appreciate what you've done for me, but I will no longer be dealing with you. I will no longer be dealing with you because a substantial part of every $500 I pay for my glasses is profit.' I am told by people who know that you can get these spectacles for about $10. They are made in China, they are very cheap, but in Australia I think I paid almost $500. That is business. I do not mind people making profits at my expense, but I do object when I find that their donations are funding political campaigns against me.

Then we get onto the Greens political party. The largest single donation ever in the history of Australian political campaigns was given to the Greens political party by a Mr Graeme Wood. Those of us who were around—and there are not many left—remember that Mr Wood was trying to set up an online newspaper which he wanted tax-deductible status for. Do you remember that? It all happened just about the time the Greens got this $1.6 million donation.

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I have a point of order: an unfair inference on members of this chamber. There is absolutely no connection between those two matters, and the senator should withdraw that inference.

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

That is a debating point, but thank you very much for making it. Senator Macdonald, please resume.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Mr Acting Deputy President, I have only just started! At various Senate committees, who was the greatest protagonist of this tax deductibility for those who—no names mentioned—might just want to set up an online newspaper? The greatest protagonist was former Senator Bob Brown, the then leader of the Australian Greens. He did not declare an interest at the time. Mr Wood is quoted as saying that the $1.6 million he gave to the Greens was the best investment he had ever made. People can draw their own conclusions from this. I only raise these issues involving the Labor Party, the Greens and Senator Xenophon because clearly we need to have a look at these sorts of things.

I know the Greens receive enormous amounts of money—as does Mr Katter, I might say—from the union movement. It comes from the CFMEU, a union that is always before the court for criminal activity and breaches of its act, and the Greens and Mr Katter both happily accept donations from the CFMEU. We do not know where the CFMEU gets its money from. We know it does not pay tax. We know from recorded evidence in various court cases that the CFMEU does deals with some unscrupulous employers. Do we know whether those employers who pay big money to the CFMEU—who then pay it to the Greens and the Labor Party and Mr Katter—and those companies that the CFMEU gets its money from are Chinese companies, Indian companies, English companies or American companies? We really need to look into that and see where these moneys are coming from.

I notice the Greens and the Labor Party are always keen to want certain donors banned, but they never seem to raise the issue of the union movement, who are completely unaccountable to the Australian—

Senator Waters interjecting

You have raised that, have you? So you are going to insist that donations by unions are no longer allowed. I am pleased to hear that, Senator Waters. That is very, very good news. I wonder how you will account to the CFMEU—and, I think, to the MUA as well, wasn't it? I will be interested to see how you are going to explain to the CFMEU and the MUA that you are no longer going to allow them to make these donations to the Greens political party, because the Greens are always holier than thou when it comes to these sorts of things, but they are always a bit embarrassed when people point out that the CFMEU—that union that is always in trouble before the courts—made substantial donations to the Greens political party.

One might then ask: why do you think it is that the Greens political party and the Labor Party were so antagonistic to the ABCC? They voted against it time and time again. If you were to follow their donations, if you were to follow why they are here—their raison d'etre—they are here because of donations not only from big business, in the form of Mr Graeme Wood, but also from the CFMEU and, I think, the MUA. And if I am wrong there I will apologise for that later, but I am certain about the CFMEU.

These sorts of donations really need to be looked at a little further, and I think Mr Turnbull's floating of the idea that donations should be only from individuals seems to be a very good one. That is something that needs to be further investigated, and it is something that I hope the Joint Standing Committee on Electoral Matters will do. So whilst I am not certain about committing to comprehensive and immediate political donations reform, I do think the JSCEM should look into this— (Time expired)

4:26 pm

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

I rise to speak on this matter of public importance, and I welcome a discussion on political donation reform and how we can best protect our vital democratic traditions. Labor has a proven track record when it comes to donation reform and has tried to legislate on multiple occasions to reform the political donation system, and there is the great irony of this issue. Here today we have the Greens calling on Labor to 'commit to comprehensive and immediate political donations reform'. The hypocrisy of the Greens political party knows absolutely no bounds, because when Labor tried to implement comprehensive donation reform in March—not 10 years ago, not five years ago, not three years ago—

Senator Rhiannon interjecting

In March, when they had the numbers they were more interested in trying to do over Senator Hanson-Young. They were more interested in trying to do over one of their own—it was a spectacular own goal on that front. You just cannot rely on those party members in South Australia to do the dirty work for you, can you? But it is all right, you got her later this year; you got her after the election.

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

Through the chair, Senator.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

My apologies, Mr Acting Deputy President. The Greens teamed up with the Liberal and National parties and did a filthy deal. As part of that filthy deal on Senate voting reform, the Greens voted against their own platform to defeat a Labor amendment that would have comprehensively reformed political donations in this country. So the Greens had the chance, they had the leverage and they had the bargaining power, and they rolled over for their own selfish political interests. The self-proclaimed shining lights of progressive politics got down in the mud and did a dirty deal to try to put more Green bums on red seats.

They failed in that too, because there is one less of them today than when they did that deal. They sacrificed all of their principles and managed to throw former Senator Simms under the bus in the process.

Senator Rhiannon interjecting

Now, I know that was not actually the plan; it was Senator Hanson-Young who was to go under the bus. But I appreciate those South Australian Democrats members threw a bit of a spanner in the works of Senator Di Natale and friends. I am not actually holding you responsible for this one, Senator Rhiannon, and I know where you stand on those issues.

What leadership old fancypants himself has shown! What leadership has Senator Di Natale shown here! Time and time again the Greens have been happy to make all of the noises, make all of the accusations and throw all of the muck, but when a chance came to do the right thing—to not even do the right thing; how about voting for your own party platform just this once—what happened? The Greens threw away the opportunity, rolled over and then wanted to come in and, as usual, lecture the Labor Party.

So, just in the last week, we have seen Senator Di Natale imploring Australia to:

… move away from a system of huge corporate and foreign donations influencing the decisions that are made in Canberra.

What a fine sentiment! Yet, when Senator Di Natale says this, he fails to mention that it was the Greens that happily received almost $27,000 in gifts, in kind, from a New Zealand company ahead of the 2010 election. I know we have the closer economic relationship and I know we consider ourselves very close to New Zealand, but my check of geography is: they are not part of the Commonwealth; they actually decided not to join the Commonwealth. And that makes it a foreign corporation. Happy to take the dough back then!

When Senator Di Natale gives these lectures, he fails to mention that in 2010 the Greens received what was—and will continue to be until, I suspect, the next exposures next February—the largest single political donation in Australian history: more than $1.6 million from Graeme Wood, the founder of One point six million dollars in one hit. Wow! Well, we know who owns you. One point six million dollars!

Senator Di Natale, again, when he lectures everybody else, fails to mention that that same Mr Wood donated a further $630,000 to the Greens in the lead-up to the 2016 federal election. As Senator Macdonald said earlier, Mr Wood felt that that $1.6 million was the best investment he ever made—enough to donate another $630,000. I do not know anybody who has ever donated $630,000 dollars to me or the Labor Party, but that comes to nearly $2 million, across a couple of elections, from one person.

But not one to let the facts get in the way, Senator Di Natale has ploughed on, claiming that the Greens 'don't accept donations from developers'. He claimed: 'We don't accept donations from the alcohol industry, from the gambling industry and so on.' Once again, he failed to mention that the Greens have received donations of more than $585,000 from Duncan Turpie—a mathematician and a known high-end gambler. A high-end gambler gave you $585,000 for this election. It must be wonderful having these sugar daddies, Senator Lambie; it really must!

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

Through the chair, Senator Conroy.

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | | Hansard source

Sorry; my apologies, Mr Acting Deputy President—through you: Senator Lambie, it would be lovely to have a sugar daddy like this, wouldn't it? They stand condemned by their own actions and deeds.

And, Senator Rhiannon, I have not seen you stand up and say, 'Let's not accept a donation of over $1,000 from an individual.' I have not seen you stand up and say that. 'Developers? Yeah, that's okay. High-end gamblers? We'll take their money—$585,000.' So the Greens stand condemned—condemned by their own actions and deeds. And no amount of trumped-up moral outrage can hide the Greens' hypocrisy. So I look forward to seeing how you justify accepting these huge donations from two or three individuals.

Of course, the Greens are not alone in adopting a shambolic approach to donation reform. While Labor has been clear and consistent in our approach, the Liberals are hopelessly divided. I have said this before, Mr Acting Deputy President, but I am not surprised the Liberal Party sent Senator Bernardi to New York, to the UN, because this is what he has had to say on a multitude of issues; I am just going to pick on one today. He said:

It's wrong for substantial amounts of money from foreign entities in non-democratic governments to flow into [the] Australian body-politic.

Well, you do not want to ban those. Mr Pyne said, 'No, we don't want to ban those.' I will bet I know why. I bet you want to extend his holiday, using a foreign donation—anything to keep him out of the country, Senator Back, anything!

As to former Prime Minister Tony Abbott, what a week we have seen from him while the Prime Minister was overseas! Former Prime Minister Abbott got a new lease of life. He said:

… "I think it is time to look at donations reform again.

"We need to look long and hard at restricting donations to real people on the electoral roll. To that end, there should be no union donations, company donations or foreign donations."

Yet, astonishingly, as I have already alluded to, the government's Leader in the House, Mr Pyne, has said that he is 'unfussed about foreign donations'—'unfussed'! Well, let me tell you: I saw a poll today that showed that Mr Pyne is in a category of 12 per cent of Australians, with the other 88 per cent going, 'Just a minute. We're not "unfussed" about receiving foreign donations!'

Then again, yesterday, here in the chamber, Senator Ryan said that he was:

… a believer that people who want to make a contribution to our political process should be able to do so.

So they are running up the barricades. They had a lot of fun at Senator Dastyari's expense over the last two weeks. But, when it came to actually making a difference, they started to dig a hole, and they are going to barricade themselves and put the wagons around.

Perhaps it is okay, because the foreign minister wants to see hundreds of thousands of dollars continue to flow into the coffers of the Western Australian Liberal Party from Chinese-linked companies that do not even have any business in Western Australia. You have to ask yourself: why does a Chinese company with zero business interests in Western Australia donate nearly $600,000 to the Western Australian branch of the Liberal Party? Senator Smith, I see you smiling over there. Is it your winning smile? I am afraid I suspect not. But perhaps— (Time expired)

4:36 pm

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

It is a very simple MPI, calling on the government and the opposition—Liberals and Nationals, and Labor—to commit to electoral funding reform. But, when you hear Senator Conroy again going into what seems to be the only mode he knows, attack mode, you wonder about the level of commitment that there could be, because, really, he has become, again, the senator for hypocrisy. It is a hypocrisy that runs deep, and he knows it well and truly; he often has a laugh about his own comments here.

So it is worth just putting some of the things on the record, because he makes out, time and time again, that there is poor Labor, trying to get electoral funding reform—those are the grand statements he makes. But let us remember that Labor had the opportunity—we had the numbers. Come the 2011 election, Labor and the Greens had the numbers in both houses to pass comprehensive electoral funding laws, and Labor would never bring on the legislation. They would not bring it on. So, yes, other times it has been defeated, but that time it would not have been defeated but it was not brought on.

So the deception that he runs is very extreme. Again, considering he tries to conflate the issue of Senate voting reform with political donation reform, that does need to be answered too. They are two issues that the Greens have worked a long time for. And, again, Senator Conroy, and his colleagues sitting there with him on the opposition benches, knows why they did that. They were not trying to get political donation reform at that time; they were trying to scuttle Senate voting reform, because at that time the government had made quite clear they were not going to be working on political donation reform. What we were trying to achieve—and it was a much fairer system as we can see here.

Let’s remember all those grand speeches coming from Labor about the damage Senate voting reform would do; arguing that it would lock in a coalition government forever, that it would wipe the crossbench out completely; just ludicrous statements. Often they actually contradicted themselves. One time they said that it would be an advantage to the Greens; other times they said that it would wipe out the Greens. So, again, we see those tactics.

Sadly, Senator Conroy is still stuck in that mode. You walk in here, you talk about political donations, you go for the attack, rather than looking for how do we develop common ground? Hopefully—but it does not look as though we can have any hope after listening to the previous speaker—what is needed is the comprehensive electoral funding reform. That is the message we should all take from the past week.

As we know, the amount of money that Senator Dastyari was caught out for was not big in the scheme of things when it comes to political donations, but the outcry was something that we have never seen the likes of before. I would just like to comment on this, because I have been working on this issue since the early 2000s.

The Greens set up a project called Democracy for Sale. When we would present evidence about wrongdoing, often the journalists would say, 'But show us what the outcome was.' But here, in this debate—and all the commentary about what Senator Dastyari had done and many other examples of wrongdoing—the assumption was made by commentator after commentator, in letters to the paper, politicians and commentators alike, that when donations are given they are given to buy influence. At no time was I asked to prove that; it was just the assumption of where the debate had shifted. That is a very significant shift. It is something the High Court recognised in a very important decision last October. Now that understanding is much broader.

Now our responsibility is to be working together. It is certainly the Greens commitment to be working, through JSTEM, the Joint Standing Committee on Electoral Matters, for a consensus position on these very challenging issues. We acknowledge that—while I am very proud of our policy—we now need to go deeper into it.

Just on the points that we have worked for, for a long time, our position is to ban corporate donations from for-profit organisations, to ban overseas donations, and to have caps in place on donations from individuals and not-for-profit corporations. We need, most definitely, caps on election expenditure. There is a range of other aspects that come into this.

I just wanted to put those details in there, because that is what we have been talking about in the past couple of weeks. But, if you listen to what Senator Conroy ran with today, if you listen to what Labor leaders were talking about when their colleague Senator Dastyari was caught out in such an embarrassing way, the two reforms that they would run with were a ban on overseas donations—and I think they had nowhere else to go but to talk about that, because it just became so embarrassing for them—and transparency.

Improved transparency is essential. It is something which is a great outrage of the Howard years. He brought in that change, lifting the disclosure to $10,000 per annum. It is now at $13,200, and you could give donations to different branches of the party just under that amount of $13,100 and quickly you are a very significant donor but nobody will know about it.

So, yes, transparency is very important. Again, it is something the Greens have worked on, and I acknowledge Labor has as well. But Labor needs to start talking about their position on other aspects of this, about limiting political donations. What is their position on corporate donations, on donations for not-for-profit? Do we bring caps in on individual donations? And that is what they are shying away from and what is quite disturbing.

I think what is also relevant here is that we need to remind ourselves that we need to get back to the issue of addressing the integrity of electoral process. I would imagine that we are all aware that for a long time political donations have really undermined people's confidence in our democratic institutions, undermined their confidence in people like ourselves, elected representatives. It does damage to all of us. I acknowledge that.

I just wanted to share with you some comments made by Professor Marian Sawer from the ANU School of Politics and International Relations. I think she really nailed the issue of integrity very well. She said:

Australia was once a pioneer in developing mechanisms for electoral integrity. We gave the world the secret ballot, for instance, as well as non-partisan electoral administrators and non-partisan processes for electoral redistribution. But our political finance regulation now falls way behind international standards.

And indeed it does.

You can look at so many other countries that are really tackling electoral funding reform in a comprehensive way, but in Australia we have just stalled. When it comes to disclosure—and this goes back to the issue of transparency—the current disclosure system, you have got to say, is a joke. As I think probably everybody in this place would be aware, there is the disclosure that the donors put in and the disclosure that political parties put in.

The Greens Democracy for Sale project looks at these disclosures in detail. We have uncovered many discrepancies. Then we thought we would look at both sides of the ledger and compare the donor disclosures to the party disclosures. And the system has failed. It has failed from day 1. These are some of the figures: about $8 million has gone undeclared as donations by parties in the past five years. Someone searching for donations through party returns on the AEC database would not find this money. Disturbingly, over $4 million of that money has come from the financial, insurance and resource sectors. I do not think anybody could really deny the influence of those sectors—the big mining companies, the finance institutions. So many of the laws in this place are watered down to suit their influence. Anybody ripped off by a bank would certainly agree with that. The influence of that money makes the injustice of fossil fuel subsidies in this era of global warming particularly outrageous.

Our most recent research found that $3 million has gone undeclared as donations by donors since the last election. Someone searching for donations through donor returns would not find this money. We were able to find it because it was declared by one side though not the other. It is a reminder of how comprehensive reforms are needed. It is also a reminder of why all the parties in this place need to put on the table what they think the changes should be, be willing to work with each other, and listen to each other about how we can get a consensus position on far-reaching reforms to limit the private money that goes into elections so we can return to the level of integrity that is so urgently needed.

4:46 pm

Photo of James PatersonJames Paterson (Victoria, Liberal Party) Share this | | Hansard source

I would like to begin by making what I think is an important and what should be an obvious point but one which has been largely missed in the debate so far: donations reform, including banning foreign donations, would not have protected Senator Dastyari from his own poor judgement. That is because Senator Dastyari did not receive a foreign donation. He received a gift. The most regulated political donations system in the world would not have helped Senator Dastyari.

I acknowledge that there are very well-meaning advocates of change, of more regulation of donations, including in my own party, and there certainly are imperfections in the current donations system, which could be improved. It is appropriate that there be a review of the system that we have in place, and the best vehicle for that review is the Joint Standing Committee on Electoral Matters, which is very capably chaired by my colleague Senator Reynolds. But I want to issue a note of caution: donation reform is not something to rush into without careful consideration of the full implications of change.

One idea which has been widely suggested is that we confine donations to people who are on the electoral roll—that is, effectively, ban donations from unions, businesses and not-for-profit organisations. This reform would at least, to its credit, have the benefit of being relatively politically neutral between left of centre and right of centre political parties, unlike the shamelessly self-interested proposal by the Greens to only ban businesses from making donations but to continue to allow unions and NGOs to donate. But I think this idea is misguided for other reasons. It is almost certain to be unconstitutional following the 2014 Unions NSW case. That case found that the Australian people have an implied right to participate in the democratic process by making donations to political parties and other organisations which campaign in and around elections. Crucially, that judgement found that just because some Australians choose to exercise this democratic right collectively through an organisation that does not mean that they should lose that right. That is a very sensible and philosophically sound conclusion. After all, a business, a union or a not-for-profit organisation is just a vehicle for individual citizens to come together to advance their objectives as a group. Any right which an individual possesses alone should also be able to be exercised collectively.

Setting aside constitutional questions, though, it is also my personal view that banning donations from all third parties to political parties is misguided for other reasons. As we have seen elsewhere around the world, particularly in the United States, attempts to prevent organisations like companies from donating directly to political parties just encourages them to seek to influence political outcomes using other means. For example, they may set up third-party organisations of their own and fund them generously to engage in either the issues-based or even the quasi-partisan advocacy that occurs alongside political parties in elections. By their very nature, these third-party organisations will never be subject to the same standards, the same scrutiny or the same regulation that a political party is and can be. For the sake of transparency, we should encourage those that do seek to influence the political system—as is their right in a free and democratic country—to do so through the most formal channels available.

There are those that say we could solve this problem and prevent it from occurring simply by regulating the conduct of third-party organisations or even banning them from campaigning. Again, this is highly, highly likely to be found to be unconstitutional, but I also think it is wrong. In a free country, civil society organisations must have the freedom to advocate their interests and the interests of their members. It cannot be that the only legitimate vehicle through which people can participate in the political process is an established political party.

Many propose that if we were to substantially regulate donations then we could replace any of the lost revenue to political parties with more public funding. That is not an approach that I support. Firstly, I am sure that we can all think of a better use of taxpayers' money than paying for political campaigning. As politicians, I think we sometimes already test the patience of our constituents at election time. Imagine how they would feel if they knew that virtually every ad they saw on television, or virtually every letter or pamphlet they received in their letter box, was funded by their own taxes.

Secondly—and you may be surprised to hear me say this—I think that public funding, which is typically awarded on the basis of the vote received after an election, gives a huge advantage to incumbent political parties. As a major political party we can spend, and if necessary borrow, with certainty during an election campaign knowing full well that we will effectively be reimbursed for that expenditure after the election with public funding because we will have a relatively predictable share of the primary vote, whether we are going to win the election or lose it. New political parties do not have this same certainty. Until they have run at least a few times, they cannot be sure how much of the vote they will get and therefore the amount of public funding they would receive after the election. It will be even more difficult for a new party to compete with existing ones, who are lavishly funded with public support, if we limit their ability to raise private donations.

Thirdly, increasing public donations continues further down the road of fundamentally changing the relationship between the state and political parties. I acknowledge that we have already taken some steps down this road, but it is not one that I am keen to continue down any further. It would give the state more power over parties, especially opposition parties and minor parties. It is not that hard to foresee—as former Prime Minister John Howard pointed out this week—a future government which imposes onerous and potentially partisan conditions on an opposition political party in order for that political party to receive funding. If, at the same time, we curtail their ability to raise those funds privately, they will be at the mercy of the government of the day. In a free and democratic society, we should all be concerned about this prospect. We will all be in opposition at some period during our time here.

Finally, I think there is an important broader point here. If you do not want people to seek to influence political parties and governments with donations, there is a much better way to proceed than by regulating those donations. While ever government is large and intervenes heavily in our economy and our society, there will be people who profit from that and people who lose from that. There will be people who benefit and lose from government decisions, and they will always have the incentive to use whatever means possible, whatever means available, to try to influence those decisions. Instead of further regulating donations, we could choose to tread more lightly on society and the economy. The smaller the government is, the less capacity it has to favour or harm individuals, businesses and civil society, and the less incentive they will have to try to influence us through political donations.

I want to end on a note of bipartisanship and congratulate Senator Conroy for his excellent contribution to the debate earlier on the hypocrisy of the Greens. I also want to congratulate Senator Rhiannon for her honesty. I marvel at the clearness of advertising in their fundraising program called Democracy For Sale. We know what democracy costs in the Greens political party. It is $1.6 million. If you have got $1.6 million—if you are an eminent businessman like Graeme Wood—then you have the capacity to buy them. Graeme Wood said after the election that it was a great return on investment, and Senator Bob Brown, the former leader of the party, said he would be forever grateful. So we know what the price of democracy is in the Greens political party.

I would also like to point out that the Greens often rail against some industries, such as the fossil fuel industry, for making donations to political parties. I am yet to hear them complaining about a new, emerging player in the donations space—that is, the renewable energy industry, which also now makes very generous donations to all sides of politics. It is an industry whose profitability and viability is inextricably linked to the regulations applied to it by government. During the debate about the renewable energy target, we saw that the whole viability of renewable energy companies would be threatened if that favourable regulation and the subsidies they receive did not exist. If there were ever a better example of an industry which uses political donations to curry favour with governments, oppositions and, yes, even minor parties, you could look much further than the renewable energy industry.

4:56 pm

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party) Share this | | Hansard source

I thank the Greens for asking us to commit to comprehensive and immediate political donation reform. I just want to run through that proposition. I start by referring the Greens to the electoral reform green paper on donations funding and expenditure that was released in 2008, which contemplated serious reform to the funding of elections in this country.

Senator Rhiannon interjecting

I would then refer the Greens, responding to Senator Rhiannon's interjection, to the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2010, which Labor introduced into parliament. That bill would have done a great deal. It would have capped donations and it would have introduced much higher thresholds for transparency. It would have made parties accountable for public funding by linking the funding to actual expenditure and prohibiting the practice that we have witnessed in other parties, where they take the public funding and pocket it. The leaders of those parties pocket it rather than spend it for campaign purposes. And it would have limited the scope for rorts, like donation splitting.

I would also refer the Greens to the comprehensive donations reforms introduced and undertaken by a Labor government in New South Wales. Amongst other things, those reforms limited the ability of property developers and others to subvert democratic outcomes. We must note that it turns out that the Liberal Party have been doing their very best to get around these laws in the intervening period. They have been doing their best to get around that scheme through the use of the Free Enterprise Foundation, a process that was undertaken under the watchful eye of the then Finance Director of the New South Wales Liberal Party, Senator Sinodinos.

I would refer the Greens to the policies on donations that we have taken to the last two elections. Those policies reduce the threshold for disclosure of donations by organisations from $13,200 to just $1,000, reduce the threshold for disclosure of personal donations to just $50, ban foreign donations and introduce real-time disclosure. I do not say all of this to try to make a cheap point.

The point I want to make is that the Labor Party is onto this. We are committed to donations reform and we have been advocating for it for a long time. Labor as a party and as a movement is firmly committed to transparency. It is why, for instance, we hold our conference in public—a position that I know some in the New South Wales Greens are now starting to contemplate. It is why we disclose all of our corporate donations over $1,000, despite the fact that this is not required by law. We do that because we think it is important. That stands in stark contrast to the Liberals, who not only do not obey the spirit of the law but, in New South Wales, seem to make concerted efforts to skirt the letter of it. We now know that the Liberal Party has engaged in a long-running campaign to obscure the names of some of its most generous donors through donation splitting, by allowing people to donate below the cap to each of the state and federal branches, and by the use of corporations to anonymise donations, through the use of the Free Enterprise Foundation and the various other fundraising forums that are used in this way.

It took an ICAC inquiry to find out the details of these schemes, and it turned out that it implicated a number of senior New South Wales Liberals.

We have talked a lot in the last weeks about the potential influence of foreign donations. Businessmen with links to Foreign Minister Julie Bishop have donated half a million dollars to the Western Australian division of the Liberal Party during the last two years. This has been disclosed through the disclosure process. All of those donors have links to the Chinese government, and the vast bulk of that money was given by companies with no apparent interests—no business interests—in Western Australia. The Herald reports that several of the donations have been obscured by the channelling of funds via executives or related companies, or by the donor's failure to disclose to the Electoral Commission, in apparent breach of Commonwealth law.

I say this: if we are serious about protecting the integrity of our politics, we have to get serious about donations reform. The Liberal Party has spent more than a decade fighting Labor proposals for a better system, and it is time to stop.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

It being just past 5 pm, pursuant to order, we will now move to first speeches.