Mr ANDREN (11:19 AM) —In order to comment on the Taxation Laws Amendment (Political Donations) Bill 1999 , it is important to put it into context. The bill will implement the taxation related recommendations of the Joint Standing Committee on Electoral Matters following its inquiry into the conduct of the 1996 election. The bill complements other legislation including the Electoral and Referendum Amendment Bill, which was debated in this place late last year and returned with amendments and subsequently passed earlier this year.

In that debate I pointed out my concern at changes to the disclosure provisions in the bill which lifted from $1,500 to $10,000 the amount above which the identity of a donor, private or corporate, had to be disclosed. The government amended these figures with very detailed specifications which now say that the requirement for information on all gifts received totalling $1,500 or more should be disclosed. As well, the government amendments tightened up the provisions regarding loans with similar disclosure mechanisms.

I ask: why those amendments? I would suggest that they were largely because of the notorious Greenfields Foundation scandal whereby $4½ million was channelled into the Liberal Party's coffers and disguised as a loan to bypass the then laws—a scam, I might say, that would have gone on unnoticed had it not been for questions raised and raised again by members, individuals and journalists outside the big business, big union party political loop.

Currently, the income tax laws allow a non-business taxpayer to deduct a contribution of up to $100 to a correctly registered political party. The Joint Standing Committee on Electoral Matters recommended, and the government has agreed, that this threshold should be lifted from $100 to $1,500 and that companies be allowed access to this tax deductibility. The government has also accepted recommendations that equivalent treatment be given to donations to Independent candidates and members. This latter move is not only welcome but long overdue—not the amount, as I will point out, but the principle.

The public is not so naive as to believe there will still be loopholes in the system that enable political campaigning to be even more subsidised by the taxpayer and for corporations to find ways around the funding limits. I note the comments by the opposition spokesman and am most concerned to see that the provisions of this bill are already included in the Tax Pack in anticipation of this bill being passed by both houses. That is not only improper but, I would suggest, very premature. The backdating provisions I have grave problems with. It does suggest that those who are able to make substantial donations from largely the top end of town will be able to bundle such donations and the taxpayer is being asked to pay out even more than it already does for the establishment parties, particularly the Liberal Party.

It has been estimated these tax subsidies will be in the order of $45 million per election or per three-year period, on top of the reimbursement already available for candidates, on top of the use of public funds through the allowance and entitlements system for staff—which I will elaborate on in a moment—on top of all those staffing provisions that are there for sitting members and on top of the other subsidy by taxpayers of the entire political process. My calculations suggest that, if this is going to cost the taxpayer $45 million over three years, we are talking about donations in excess of $100 million. This extra tax incentive will do nothing more than entice further individual donations from those able to afford $1,500 and further the cause of the major parties with wealthy contacts and interests.

I want to draw the attention of the House to an article by Marian Wilkinson in last Saturday's Sydney Morning Herald entitled `Buying Power'. It relates to the American election funding process. I argue that unless caps are placed on donations here and all loopholes are closed down, then we risk going down the path of the United States, which has the best democracy money can buy. In her article Marian Wilkinson quotes one of American politics greatest bagmen, Mark Hanna. He said:

. . . there are only two important things in politics. The first is money and I can't really remember the second.

Those words were not uttered in 1996. I notice the minister at the table, the Minister for Trade, has a wry smile on his face. Hanna was not a bagman for Bill Clinton or Bob Dole. Those words were stated in 1896 during which year Hanna raised a then staggering $10 million from America's business tycoons to put Republican candidate William McKinley into the White House.

Several years ago, I quoted in this place how it takes $600,000 per congressman to get elected into the US equivalent of our House of Representatives. Full-time fundraisers are part of the candidates' and members' staffs, no doubt paid for in turn by the well connected and well moneyed friends of the political system. Not only independent candidates and the general public are alarmed at the increasing divide between the dream of political representation and the financial reality in America. Republican presidential candidate Senator John McCain last week described America's system of financing elections as:

. . . nothing more than an elaborate influence-peddling scheme where both political parties conspire to stay in office by selling the country to special interests.

That seems relevant to other countries, I might say. Democrat Senator Ross Feingold goes so far as to describe the American system as `legalised bribery'. The farce of the recent Iowa straw poll convention where republican candidates spent millions of dollars buying up $35 tickets for their supporters to cast votes is but the first round of a spending frenzy that makes it absolutely impossible for anyone of modest or lower means to even contemplate political representation. After an estimated $400 was spent by candidates to obtain each and every vote at the Iowa straw poll, republican candidate George Bush Jr described the poll as a `great festival for democracy'. Senator John McCain, who stayed away from it all, described it as `an undemocratic sham'. I wonder which version the public of America would accept.

There is a chilling parallel between the American system that is evolving here despite these, and maybe because of these, amendments before us. In the US, direct corporate donations are technically illegal and individual donors are supposed to give a maximum of $1,000 per election. But individuals within corporations can bundle individual donations to bypass that law. The same can happen in this country. A bit of organisation, perhaps subsidised by the resources of party funds, could take care of that little item. There is also the soft money loopholes in the United States where large donations can go to parties from corporations but not to individuals. What the heck, it is all honey in the pot.

We are told that bipartisan attempts by Senators Feingold and McCain to progress reform of campaign finance laws are stalled in the US Senate because key powerbrokers in Congress depend on their fundraising ability for their positions. Pray that executive positions are never awarded nor promotions sought and granted in our political system by virtue of the fundraising ability of senators or members. Heaven forbid we ever have bagmen at our dispatch box. Pray we never hear one of our latter day re-founding fathers of our attempted constitutional reforms in their all power to the executive republican model repeat the words of US founding father John Jay, who said, `The people who own the country ought to run it.'

So we turn to the Taxation Laws Amendment (Political Donations) Bill 1999 in the Australian parliament. The numbers of dollars we mentioned here and the cost of election campaigns pale somewhat compared with the US but the inclinations are definitely there. Only a public uproar and the Greenfields scandal pulled back the provisions of a $10,000 rather than a $1,500 threshold above which disclosure was necessary. We have seen this parliament argue over the merits of federation grants in recent days as we saw a similar political stoush several years ago on the sports rorts. The so-called guidelines to prevent a recurrence are all too easily flouted when there is a vote to be bought.

I have released in this place figures on the gross overspending of travel allowances and overtime during election campaigns by staff of members not up for re-election. Again taxpayers' funds are used to top up a system that already provides for public funding of election campaigns. Even without these amendments there is grave concern among ordinary people at the level of big business, and in former times big union, influence over government in this and other so-called democracies.

Small business and individuals are right to feel they have little, if any, political clout. This bill represents a transfer of taxpayer funds to the benefit of the political establishment at a time that establishment is attracting fewer and fewer votes. The member for Grayndler calls it Robin Hood in reverse. It is good to see him sensing the public mood.

We have taxpayer funded processes to bail out stevedores to settle political accounts, but we have to drag the government kicking and screaming at the behest of a media campaign to allow sacked workers to access adequate retirement rights. Before we continue down the path towards a democracy only money can buy, before we reach the point where only those of means, favours and inside influence can run for parliament, before we reach the point where only those with the correct political and social connections are nominated for President of the Establishment's republic—pray it never gets up—we should stand back and ask why the public is so cynical about the political process and why the Minister for Foreign Affairs described his shadow in this place this week as `just about as low as a politician gets'. Yet I have been accused of smearing my colleagues.

If we are to lift the standards and the public estimation of our job, we should all ensure absolute transparency in the use of public moneys and in the funding of our political processes and, most importantly, campaigns. I have suggested a legislated cap on individual campaign spending, donations and the entitlements of MPs after the dissolution of parliament. That would need a far more independent auditing process than we have at the moment, which we have seen in recent days can so easily be overridden if that is the wish of the government of the day. Any amount of donations over and above the cap should be subject to personal income tax. In fact, that is what now occurs in my own case with anything left over from very modest campaign donations fully accountable as income—no trusts, no hidden accounts, no think tanks and none of the other things subsidised indirectly by the taxpayer. Fifty thousand dollars per individual candidate or sitting member would be very adequate for any federal campaign.

We have in this bill the amendments required to account for the changes to donation limits before disclosure included in earlier legislation, but those changes did not include any cap on upper limits for donations. While speaking on this issue at another time, I pointed out how the major banks in this country made donations to the major political parties in 1996-97 of $1.2 million. I said then that in the public's mind, and particularly for small rural communities, the major parties seemed to be more interested in helping the banks become bigger and more profitable than they were in ensuring that they provided an affordable and accessible banking service to the Australian people.

Thankfully, these taxation provisions no longer include the outrageous and excessive amounts before which disclosure was required, as included in the original political donations bill brought into this House. But it is still unacceptable and would receive the deserved condemnation of the ordinary taxpayer if passed. It certainly has not been for want of trying that those amounts were reduced. I welcome the inclusion of Independents in the legislation, but the legislation is flawed. I welcome it only as a matter of principle. I do not support any increase in the tax deductible amount. One hundred dollars is a substantial donation for the average person interested in the political process and, as I have pointed out, there are far ranging and wide processes for the taxpayer topping up this process through other means, transparent and otherwise.

The vast majority out there would much rather see this $45 million tax concession granted by way of job generating programs in the bush. If a political candidate cannot win the support of an electorate through hard yakka, the media, personal representations and a modest election budget—already subsidised by the taxpayer to the tune of $34 million last election—he or she does not deserve to be in the race in the first place. The will for transparency and accountability for not dipping into the public's back pocket is not in this bill. It never is among major political parties when it comes to winning and holding on to power. I give credit to the opposition for showing signs in this debate of waking up to the fact that the public is absolutely fed up with self-serving deals and the lurks and perks that have been part of our political process for too long, now running the risk of aping the worst of the American system that I have outlined. The motto, as it was with Mark Hanna back in 1896, is `Whatever it takes, whatever it costs'. I condemn this bill.