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Monday, 13 February 2012
Page: 789


Mr MELHAM (Banks) (10:21): On behalf of the Joint Standing Committee on Electoral Matters, I present the committee's report entitled Report on the funding of political parties and election campaigns, incorporating dissenting reports, together with the minutes of proceedings.

When Australia's funding and disclosure system was introduced in 1984 it was a leader in the field. However, more than a quarter of a century later, Australia's political financing arrangements are in need of review and revitalising. In a democracy like Australia, it is vital to have transparency and accountability as core features of our political financing arrangements, so we can all have confidence in our system. The Australian people have the right to know where their money is coming from and where it goes, so they can make informed decisions when selecting their representatives.

It is important that any changes made in Australia to funding and disclosure arrangements at the Commonwealth level are not merely a reaction to incidents or calls for reform but a considered and carefully designed approach to help ensure transparency and accountability.

It is important to safeguard the integrity of our funding and disclosure system, but it is also vital not to unduly restrict the ability of individuals and groups to engage in the political arena, whether through donating to a candidate, political party or third party, or advocating on a particular issue. Australians' rights to freedom of political expression and participation must also remain a high priority. In making the recommendations in this report, the committee has sought to strike an appropriate balance between these competing concerns.

The committee considered a cross-section of views during the course of this inquiry and developed what it believes is a measured approach, providing practical reforms to improve the current funding and disclosure system.

Key reforms include increasing the level and frequency of disclosure by reducing the disclosure threshold from the current $11,900 (indexed to CPI) to $1,000, without indexation. The reporting requirement for political parties, associated entities and third parties will initially move from annually to six-monthly reporting, with a view to moving to contemporaneous reporting following an investigation of options by the Australian Electoral Commission.

The committee also recommended the introduction of special reporting of single donations over $100,000, which must be disclosed to the AEC within 14 business days of receiving the donation and made publically available soon after on the AEC website.

The committee also supports clarifying the definition of 'gift' to include the receipt of money from fundraising events, to help improve the transparency of money received from attendees at these events.

To improve the overall transparency of the flow of money, the committee also proposes requiring greater disclosure of political expenditure. Currently, expenditure is disclosed as a block sum with no specific details.

These increased disclosure requirements will place additional administrative burdens on those with reporting obligations. To help address this, an additional stream of funding is proposed to assist Independents and political parties in meeting their increased obligations. While the provision of administrative funding does mean additional public money, the increased transparency will leave electors better armed with relevant information about the movement of money.

The committee has also made recommendations to enhance the administrative efficiency of disclosure arrangements, including the AEC enhancing its online lodgement system to assist those with reporting requirements for donations and expenditure.

The committee also proposed reforms to the public funding arrangements, including having a reimbursement scheme to operate alongside the per vote payment system. Eligible candidates and parties will then receive the lesser amount of the two options. This will help ensure that payments received are appropriate and do not provide a windfall to candidates. It was also recommended that winning a seat should serve as a threshold for entitlement to public funding in cases when the member or senator has not attained the four per cent threshold.

The committee also recognised that effective compliance arrangements are essential for a workable funding and disclosure scheme.

Australia's system of compliance and enforcement of its political financing arrangements are based on an ex post facto approach—punishing breaches or noncompliance after the fact. The penalties for offences against the funding and disclosure provisions are relatively weak and have not been updated since the scheme's introduction in 1984. All offences are criminal offences and so must be prosecuted by the Commonwealth DPP before a penalty can be imposed on those who breach the funding and disclosure requirements.

However, the successful prosecution of offences has proven difficult. This has been attributed to the relatively low penalties for some funding and disclosure offences, which, it been suggested, sends a message to the CDPP that these offences are not viewed as serious.

I thank the committee secretariat and members of the committee, in particular our technical adviser, Ms Christine Wickremasinghe. (Time expired)

In accordance with standing order 39(f) the report was made a parliamentary paper.