Mr SLIPPER (4:16 PM) —Initially, I would like to thank the honourable members from Melbourne, Kooyong, Fowler, Grayndler, Calare, Charlton, Lowe and Denison for their contributions to the debate in the chamber. The Taxation Laws Amendment (Political Donations) Bill 1999 implements the government's response to the tax related recommendations contained in the report of the Joint Standing Committee on Electoral Matters on the 1996 federal election.

It ought to be recognised that this was a unanimous report and that Senator Stephen Conroy, the honourable member for Reid and the honourable member for Barton were cosignatories to this unanimous report. They joined members of the Liberal Party and members of the National party in recommending that the level of tax deductible political donations should be increased from $100 to $1,500. It is interesting that, as we listened to the debate, the honourable member for Barton and the honourable member for Reid were nowhere to be seen. Somewhere after they joined in this unanimous recommendation they were rolled—either organisationally or in the parliamentary Labor Party room—because the Labor Party, on both occasions that this legislation has come before the chamber, has opposed what the government is seeking to do. One of the Labor members actually suggested that the $1,500 included in the report was a compromise, but it was a compromise that all members of the committee were prepared to sign off on. It is fairly disturbing and perturbing and rather interesting that the Labor Party now seeks to renege on its joining together with the coalition in a joint report.

The report also noted that increasing the maximum deduction would encourage small to medium donations, increasing the number of Australians involved in the democratic process and decreasing a political party's reliance on a small number of large donations. The second of the tax related recommendations—recommendation 62—provided that the tax law be amended so that donations to an independent candidate in a state or federal election be deductible at the same level as donations to registered political parties. The government welcomes the support of the honourable member for Calare with respect to this aspect of legislation. The bill implements these recommendations in full, and the amendments are proposed to take effect from 1 July 1998.

The honourable members for Melbourne and Charlton suggested that it was in some way a retrospective application of a date and even suggested that the coalition was trying to curry support from those people who backed us prior to the 1998 election. The bill was originally introduced into parliament in May 1998 but lapsed owing to the dissolution of the parliament. The bill ensures that taxpayers who have made donations to any party or independent candidate on or after 1 July 1998, on the basis that the donations will be tax deductible, would not be disadvantaged. In effect, the government is keeping faith with people who acted in accordance with what the government announced would be the situation.

The honourable member for Grayndler referred to what he generally considered to be a lack of attention to social policy by the government. He also claimed that we were effectively heartless by reining in the $10.3 billion deficit which we inherited when we obtained government following the March 1996 election. Had the government not been prepared to grasp the nettle, and had we not been prepared to rein in Labor's debt and remove the $10.3 billion deficit, then this country would not have been firewalled from the impact of the Asian economic crisis and, I must say, our future as a nation would have been very much reduced.

The honourable member for Grayndler also suggested that we were not interested in helping the poor. I want to correct that furphy also. The government has a program of major reform in all areas of social policy, and we have a very great regard to those on lower incomes. We have a balanced approach to raising living standards and responsible economic management. The government, in the 1999-2000 budget, has sought to maintain income security for Australians, including those on low incomes. The creation of the Department of Family and Community Services has presented a strategic opportunity to enable a focused whole of government approach to the development and delivery of social policy, and we are certainly proud of what we have been able to achieve in this area.

The honourable member for Melbourne in his speech suggested that extending deductibility to companies is in some way a bias towards the Liberal Party—nothing could be further from the truth. Large corporations that make substantial donations to political parties are unlikely to be influenced by the fact that a tax deduction is available for a donation of $1,500. Allowing companies to claim a deduction overcomes an anomaly in the existing law where trusts and partnerships, which conduct business activities and have financial resources similar to companies, are allowed a reduction whilst companies are not. It is simply inaccurate to suggest that this is all about filling the Liberal Party's coffers, as I think the honourable member for Grayndler mischievously suggested. This legislation does not provide any special benefits for the Liberal Party at all. It provides all Australians with the opportunity to contribute to the democratic process and make our democracy even more robust and participatory.

The member for Melbourne also queried clubs such as the 500 Club, and he asked whether membership fees paid to such an organisation would be tax deductible. The facts are that donations will be tax deductible if the donation is made to a registered political party. To my knowledge, the 500 Club of the Liberal Party—and I suspect that there is a 500 Club in the Labor Party—is not a registered party. On that basis, no tax deduction would be available for subscriptions to clubs of such a nature.

The Labor Party also claimed through the person of the honourable member for Melbourne that the Tax Pack is in some way misleading in areas of tax deductibility. Tax Pack 1999 informs taxpayers that, under the proposed legislation intended to apply from 1 July 1998, they would be entitled to claim deductions of up to $1,500 for contributions to political parties or independent candidates. Taxpayers are instructed to ring the ATO inquiries help line if this applies to them. Administrative practice is to advise taxpayers that, as the legislation is not yet passed, they should either lodge a late return or lodge an amendment after the legislation has been passed.

The honourable member for Kooyong, in his very capable contribution, pointed out that this legislation was all about making electoral laws more accountable and enhancing the democratic process and transparency. He recognises the contributions of the bill to these very positive outcomes, and the benefits to be gained by broadening the funding base of our democracy. He also referred, in effect, to how this strengthened our democracy.

The honourable member for Fowler made the most incredible claim in her speech. She suggested that the legislation has been brought into the parliament with undue haste. I have a high personal regard for the honourable member for Fowler but, regrettably, on this occasion what she has uttered in the chamber is nothing short of a pathetic suggestion. The proposals before the House have come from a unanimous report of the Joint Standing Committee on Electoral Matters, and this reference went to that committee in June 1996. Here we are in 1999, three years later, and we are still seeking to implement the unanimous views—including the views of the Labor Party members—of that committee.

The honourable member for Grayndler—I see he is still at the table—claims that Labor does not have a problem with the tax deductibility of political contributions. At last someone on the other side has recognised the central point of this debate. But it is interesting to note that underneath Labor's self-righteous opposition to this bill is their preparedness to accept donations from the public purse. I refer in particular to an IPA Backgrounder dated 23 July 1995—admittedly a few years ago—by Des Moore who said:

. Grants by the Federal Government to the union movement of $92 million over the terms of the Hawke and Keating Governments, are now running at around $16 million per year.

He was referring to features of the relationship between the Labor Party, the union movement and the federal government. Obviously, between 1995 and when Labor left office in 1996, many more millions of dollars were paid. But numbers of Labor members have come into the chamber, they have huffed and they have puffed and they have pointed out that the cost to revenue of this legislation over a three-year period would be $45 million. They suggest that this is wrong. They suggest that the taxpayer is in some way being robbed and cheated. But, at the end of the day, during the 13 years of Labor government millions upon millions of taxpayers' money found its way into trade unions as a direct subsidy from the Australian taxpayer.

The honourable member for Calare appears to be under a misapprehension that the bill as originally introduced proposed a $10,000 threshold for tax deductibility. The threshold in this and in the previous bill is $1,500, in accordance with the unanimous recommendation of the Joint Standing Committee on Electoral Matters. I also want to place on record that the government did offer the honourable member for Calare a briefing on the bill but he declined the offer. That is, of course, a matter for him, but we did seek to facilitate the understanding of this legislation by all members of the chamber.

The honourable member for Charlton also opposed the increase in tax deductible political donations to $1,500. I think that she is far off the mark. She obviously disagrees with the publicly expressed views of the honourable members for Reid and Barton. It is regrettable that Labor members will be joining with her to overturn the unanimous recommendations of that particular committee, including those of the Labor members of the committee.

There has also been running through Labor speeches a thread that somehow this legislation is not in the public or the national interest and that it could in some way just be in the interests of the various political parties. By removing a disincentive to donate, the bill spreads donations by the community more widely amongst individuals, groups and corporations. This will level the playing field in terms of participation in the democratic process. The increase in the threshold will encourage small to medium donations and reduce the reliance of a political party on a small number of large donations. This will encourage greater public participation in the democratic process. It will help reduce the reliance on public funding of political parties and independents, and the extension of deductibility for gifts will also benefit independent candidates and members.

This is very positive legislation. It is legislation which is much overdue. It is legislation which a joint standing committee of this parliament has unanimously recommended for implementation. But, regrettably, it is legislation about which the Labor Party have had a complete about face and we now find that they are simply not prepared to support the position taken by the members of the committee in the report.

The honourable member for Denison did in fact suggest that we were heading down the American road for political funding. Nobody wants to head down that road, and it is absolutely ridiculous to suggest in any way, shape or form that raising the tax deductible donations from $100 to $1,500 could in any way be akin to moving down the American road. This is positive legislation. It is much overdue legislation. It is legislation which has broad support in the Australian community, and I am very pleased to commend the bill to the chamber.

Question put: That the bill be now read a second time.

The House divided. [4.35 p.m.]

(Mr Deputy Speaker—Mr H.A. Jenkins)

Ayes . . . . . . . . . . . . . . . . 75

Noes . . . . . . . . . . . . . . . . 60

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Majority . . . . . . . . . . . . 15

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Voting details are recorded in the Votes and Proceedings .

Question so resolved in the affirmative.

Bill read a second time.