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Thursday, 26 August 1999
Page: 9190


Mr ALBANESE (11:03 AM) —I am very pleased to make a contribution to this debate, which will of course be in opposition to the Taxation Laws Amendment (Political Donations) Bill 1999 . There are a number of issues I would like to raise with regard to this bill. Firstly, the government's motives should be made quite clear. They are about filling the Liberal Party coffers to the brim.

I am surprised that the National Party minister, the Minister for Trade, who is sitting at the table, is supporting this bill because we all know that the big city spivs support the Liberal Party rather than the National Party, although there are some spivs who support the National Party as well in the rural aristocracy. Clearly, the proposed legislation is designed to benefit these big political parties of the government. Whilst I acknowledge that the Labor Party would benefit from this legislation, it is designed so that the conservative parties will gain maximum advantage.

I want to make something clear from the outset—that is, Labor does not have a problem with political donations being tax deductible. That is why we were happy to support the amendment moved by the once respected Senator Parer back in 1991 which allowed for donations of up to $100 to be tax deductible. Often political donations are a way for ordinary citizens to feel that they are involved in the democratic process. By consciously donating money to the political party that they believe best represents their interests and beliefs, they feel they have helped that party's message be heard. It can also be that first important step towards an active participation in the political process. This must be applauded because, the more people who are actively involved in the political debate and processes of this nation, the more vigorous and vibrant our democracy.

In 1991, the Liberal Party pushed for no cap on the amount. The Labor Party, of course, rejected this for very similar reasons as to why we object to this bill today, because eight years later not much has changed. The motives behind this bill are very clear. The bill is designed as a first step towards removing any limit. For evidence of this, you do not have to go much further than the recommendations of the Joint Standing Committee on Electoral Matters in its report on the 1996 federal election.

The Liberal Party had submitted that the annual maximum deduction be increased to $10,000. There are not many ordinary Australians out there who are about to donate $10,000 of their hard-earned salaries to a political party, given the median yearly income in this country is $31,500. It is, indeed, an extraordinary position for the Liberal Party to put forward. That is why the Australian Labor Party and the government divide on this issue.

There is a big difference between providing the incentive for ordinary Australians to become involved in the political debate and processes and helping out the big end of town—helping them out to the tune of $15 million a year. This is not just some figure we have conjured up out of thin air; this is the estimated cost to the Australian taxpayer as outlined in the explanatory memorandum, circulated with the authority of the Treasurer, Peter Costello.

I will come back to this later, but first I want to point out the gall of the government in backdating this legislation to 1 July 1998. This is a blatant attempt to thank the big end of town and the blue bloods in the bush for their contribution to the Liberal-National Party slush funds prior to the 1998 federal election.

The government talks about the need for transparency; the motives behind this bill are certainly transparent if the processes have not been. The government tried to rush this bill through this House just before the 1998 election. Having failed once, it now wants to try its luck a second time. It will be of great interest to see just how cosy the newfound friendship is with the Australian Democrats, to see whether the new government coalition of the Liberals-Nationals-Democrats extends this far. You only have to say, `Boo,' to the Democrats and they crumple. They are so grateful to get a seat at any negotiating table that they lead with their fall-back position, fall back to the government's position, then hold a press conference and call it a victory. This is very clearly not in the interests of Australians.

As I mentioned before, if this bill is passed, the government stands to lose up to $15 million a year in revenue. It is happy to give up this revenue in fact—a government introducing legislation saying, `Please, take $15 million out of consolidated revenue'—in a similar way that it is happy to rip the heart out of the Commonwealth's public sector funding. When this government came to office, its first budget slashed and burned its way through funding for public hospitals, universities, education, public housing, nursing homes, the Commonwealth Dental Program, community based child care and the Adult Migrant English Service—the list is almost endless. All the while, the government chants the mantra of the need to achieve a surplus. Possibly, as with its core and non-core promises, the government has core and non-core revenue. In this case, tax deductions on political donations must be seen as non-core revenue, revenue the government can do without.

The principle behind tax deductibility is certainly a sound one. It is particularly important for community organisations that put something back into the community and, in doing so, complement the services provided by the government. Given the massive slash and burn by this government, more and more people in need right across Australia are being forced to seek assistance from charitable organisations because the social welfare safety net has developed huge holes since this government came to office—holes that grow with each successive budget.

Tax deductibility is a survival mechanism for charities across Australia. Given the parlous state of our social welfare safety net, we need these charities—the Salvation Army, Anglicare, these national organisations—more than we have ever before.


Mr Vaile —St Vincent de Paul.


Mr ALBANESE —But there is also a local aspect to this, such as charities in my electorate—the Exodus Foundation, run by Reverend Bill Crewes, runs a daily soup kitchen dispensing meals to hundreds of people every week of the year; the Trimingham Foundation is a leading voice in the debate on drug law reform and is made up of parents of victims of drug abuse; and Vinnies for Youth, run by St Vincent de Paul which has a house down the road from my electorate office and provides shelter and assistance to homeless young people.

All of these charitable organisations provide vital support to the most vulnerable members of our community. But this government is not interested in the most vulnerable members of the community because those people do not have a spare $1,500 to throw at Liberal Party election campaigns. Why put an extra $15 million into services for the poor when you can hand it back to the rich in the form of massive tax deductions? It is Robin Hood in reverse—take from the poor and give to the rich.

It is hardly surprising that the government calls this handout to its benefactors a tax reform; after all, it is the same government that believes that a GST—an inequitable, unfair GST—is tax reform. Nothing about this bill contributes anything to a genuine tax reform process. In fact, it just makes it easier for high income earners with lots of disposable income to minimise the tax that they pay.

I said earlier that the idea of tax deductibility for small political donations has positive benefits—they can make people feel like they are part of the political debate—but big donations do not equate to bigger input by individuals into the political debate and they must be accompanied by transparent disclosure mechanisms. Such transparency would give the Australian people the opportunity to see once and for all, for instance, whether the Greenfields Foundation has something to hide.

It is not the size of political donations that is at issue here; it is the fact that such donations do not deserve tax deductibility status. I have got no problem if people want to donate whatever amount to a political party of their choice. That is something that should be encouraged; it is something that is canvassed by all political parties in Australia. But why is it that, effectively, half of that contribution should be matched by a contribution by the Australian taxpayer? Taxpayers are forced to make involuntary contributions to the political parties in proportion to the percentage that the different political parties can access this mechanism of tax deductibility.

This has, in effect, forced donations through the back door by all Australian people, but the fact is that all ordinary Australian wage and salary earners in this country—or most, because there are a lot of Liberal Party supporters, including donors to the campaign coffers, who pay only one per cent or two per cent tax even though they are billionaires—are being forced to make a contribution through the back door by the fact of tax deductibility.

I am also concerned about the quite extraordinary provision in this bill which allows for tax deductibility for corporate donations. At the moment, there is a campaign on in Sydney over who the Lord Mayor should be—whether Frank Sartor should continue or whether Kathryn Greiner should become the Lord Mayor of Sydney. Robert Ho is the Australian Labor Party candidate for mayor in that ballot. This provides a good example of the extent to which corporations become involved in backing their preferred candidate. In the last mayoral election, Kathryn Greiner raised over $600,000, mainly from corporate donations. Frank Sartor raised $335,000. This time around, the stakes are higher and so the donations are likely to reflect this.

As Chris Brown from the Tourism Task Force pointed out in the Sydney Morning Herald on 26 June:

Political donations are specifically targeted for their political benefit.

Unlike individuals who donate money largely because of their political beliefs, corporate donors are only interested in benefiting their corporate aspirations. Why should these corporations have the added advantage of writing these donations off on their tax? This legislation is designed to give even greater incentive to the big end of town to dig into the petty cash tin. Corporations that supported Kathryn Greiner in the last lord mayoral elections included Mercantile Mutual, Meriton Apartments, Star Casino, Dick Smith, James Hardie and Lady Mary Fairfax—as if all of those needed a little tax relief by saying, `We just need a bit of tax reform here.'

This bill is certainly not in the public interest. It is the Australian Labor Party's belief that all tax legislation should be designed to consider the public interest, because the whole purpose of the tax system is to achieve an equitable way for the government to raise revenue so it can then use that through expenditure to service the needs of the community. I fail to see how providing wealthy individuals and corporations with a tax break can be viewed as a fair and equitable use of government revenue. It is not in the national interest. In fact, there is nothing in this bill that is in the national interest.

This is the first step. We have already had $1,500 flagged in this bill. The real agenda was $10,000, which is a step towards the government's real agenda of no limit whatsoever on tax deductibility for political donations. This is a disgrace because it distorts the political system. It means that there is already the situation where the more money you have the ability to donate the more influence and access you can have to a political party. Surely that is bad enough without adding to it the Australian taxpayer subsidising this influence. I urge the House to reject this bill.