Mr ANTHONY SMITH (10:40 AM) —This is not the first time this House has seen this proposal from the government to abolish tax deductibility for political contributions and gifts. At present, as members opposite will know, the limit is $1,500. It was proposed earlier in the year in a tax law amendment bill—the first tax law amendment bill of this year, back in February—that tax deductibility for contributions up to $1,500 be abolished in entirety and that there be no lower limit. We at that point expressed our opposition. That has not changed; we oppose the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008. This proposal by the government highlights its hypocrisy on issues of campaign finance reform. The position consistently articulated by the opposition is that all of these issues should be considered through the Joint Standing Committee on Electoral Matters, and that is precisely what is happening at present. The government itself has commissioned a green paper, which the public has yet to see and which is due sometime before the end of the year, and the comprehensive report of the Joint Standing Committee on Electoral Matters will arrive sometime after that and will do so with the committee having considered all of the issues relating to political donations, elections and campaign finance in a holistic way. A proposal to cherry pick one item at the start of the year, before that process has occurred, highlights the true intent of those opposite.

I will take just a small amount of the time of the House to go through the history of the issue of tax deductibility for political contributions or donations, because that history highlights very strongly the hypocrisy of those opposite. If we listen to the Assistant Treasurer and other ministers responsible for this measure, we would think that the Labor Party has always opposed tax deductibility for political donations. Tax deductibility itself was introduced not during the term of the Howard government but rather during the Labor government of Bob Hawke and/or Paul Keating—because it was in December 1991 that tax deductibility first came into existence in this country. The level then was $100, and the reason for that introduction was to promote public involvement in the political process, to promote and broaden involvement in our democracy. All parties thought that was a good thing as a matter of principle.

In 1996, in its consideration of our electoral laws and the election that had just passed, the Joint Standing Committee on Electoral Matters had another close look at this issue and, having looked at the operation of tax deductibility for what would then have been about five years—I think my colleague will know—the Joint Standing Committee on Electoral Matters thought that this was operating so well that tax deductibility should be extended. It would have considered a whole range of levels in its deliberations. The Joint Standing Committee on Electoral Matters normally takes about a year to conduct a comprehensive review of our electoral laws. It does so every three years. It is the primary inquiry into the operation of our electoral laws in this country. So in 1996, after five years or so of the operation of tax deductibility, the committee had a close look. And what did that committee find? It found that the level of tax deductibility, far from being abolished, should in fact be increased—not to $200 or $300 but to $1,500, which is precisely the amount it is today. This was not a year or two ago; this was in 1996, just after the election of the Howard government. The committee stated its reasons for that proposed increase as being to encourage small to medium donations, thereby increasing the number of Australians involved in the democratic process, and decreasing parties’ reliance on a smaller number of large donations.

What was most compelling about this report from the Joint Standing Committee on Electoral Matters with respect to tax deductibility for political donations was that that recommendation was unanimous—that is, with a change of government back in 1996 all of the members of the Joint Standing Committee on Electoral Matters considered the electoral landscape, considered the operation of tax deductibility, which had been in for just a few years, and determined unanimously that the level should be increased to $1,500. It is quite insightful that those members of that committee who are now part of the government recommended in the cold light of day, without any politics involved, that $1,500 was the sensible measure that ought to be introduced. They included the deputy chair of the committee, Senator Stephen Conroy, now the Minister for Broadband, Communications and the Digital Economy, Mr Laurie Ferguson, now a parliamentary secretary, and the Hon. Robert McClelland MP, now the Attorney-General. The Attorney-General, the communications minister and a parliamentary secretary in this government were the first people to recommend the tax deductibility threshold be increased to $1,500, and now they hold the view that the tax deductible limit should not be $100, as it was back then, but should be zero. That sums it all up. That reveals the motive of those opposite. That highlights their utter hypocrisy on this issue.

The level of $1,500 was introduced in 2006, precisely 10 years after the recommendation was first put forward. At that time those opposite opposed this, although years before, as I have just outlined, they had strongly advocated it. They opposed it for political reasons. They opposed it because, in my view, they came to the view that encouraging members of the public to be involved in our democracy was not something that suited the Australian Labor Party. They are more than happy with tax deductibility for trade unions. There is no problem with that; there is no rush to deal with that issue. In 1996, the now Attorney-General, the now Parliamentary Secretary for Multicultural Affairs and Settlement Services and the now communications minister might have considered what was best for Australian democracy, but now they are in government they are considering what is best for the Australian Labor Party—that is the difference. And so what we have here is a partisan measure.

There is a wide-ranging review going on into all aspects of campaign finance. As the new opposition, we have said we are happy to look at everything but everything should be looked at together. The Joint Standing Committee on Electoral Matters has a comprehensive review underway. There is a green paper that no-one has seen as yet, and what we now have is this measure—

Mr Kerr —He said he was only going to go for 5 minutes. We are getting the full lecture!

Mr ANTHONY SMITH —The honourable member opposite has motivated me to explain the history to him in great detail. It is fine for the government to seek to ignore the opposition members on that committee, but what is really revealing is they are ignoring their own members of the Joint Standing Committee on Electoral Matters and bringing in this legislation without allowing them to have a say on it. Why would they do that? They are fearful that the members on the committee might do what they did back in 1996—they might do the right thing.

We opposed this bill in a different form back in February. We are going to oppose it again. The history of this episode highlights utterly the hypocrisy of those opposite. This bill should not be before this House. We will oppose it. The measures in it should be considered as part of a wider review.