Senator FAULKNER (Leader of the Opposition in the Senate) (5:04 PM) —I focus my remarks in this debate on the two groups of Senate amendments that the government has cynically decided not to support. Of course, the opposition has been consistent with its position on these important issues of Senate amendments 8, 11, 12 and 13, which provided that environmental gifts to approved environmental bodies, either by absolute donation of land or by entering into an environmental covenant over the land, will obtain tax deductible status.

The environmental amendments extend the government's proposals for increased tax concessions for philanthropy to, if you like, environmental philanthropy. The amendments propose to create a new type of philanthropy where land-holders donate land which has significant conservation value to approved environmental bodies or, if they enter into environmental covenants over land that they continue to own, the land-holders will be able to claim as a tax deduction the economic loss that they incur.

This will, of course, be a significant incentive for land-holders, many of whom will be farmers, to conserve remnant ecosystems. At the moment, these land-holders generally face the economic imperative to clear the land of its natural habitat and put it into production, either with crops or by grazing. This proposal had the support of the Senate. I think it had the support of the entire environmental movement, as I understood it. I think it had the support of the CSIRO. I think Senator Hill actually supports it as well. Senator Hill, of course, came into the Senate to oppose the amendments but he indicated that he actually agreed with the principles that stood behind the amendments. Frankly, I think that demonstrated that Senator Hill supported the proposals but, pretty cynically, wanted to announce them himself some time next year with a little bit of fanfare, perhaps even in the lead-up to an election, and perhaps to claim these sorts of proposals as his own.

This legislation is bringing in a new regime of taxation for philanthropy, and I think it is an appropriate place to deal with measures that go to the issue of environmental philanthropy. We have had the extraordinary step of the Australian environment minister, Senator Hill, writing to environment groups trying to get them to lobby the Australian Democrats against their own amendments. The policy is actually a good policy. It is supported by the CSIRO. I hope on this that the Senate will stick to its guns and insist upon the amendments, and it is hoped that the government will see the merit of them. But, having said that, the question of rorting of the philanthropic provisions of this legislation is something that has exercised the opposition to an even greater extent than the environmental philanthropy provisions, and we have Senate amendments 14, 17 and 18 which propose that tax deductibility would be denied for contributions to private funds where those private funds are engaged in providing moneys or other benefits to political parties. These amendments are very important because they address the shonky, shadowy area of Liberal Party fundraising.

The government's strategy with regards to getting this legislation through the parliament was to falsely claim that Labor was holding up the bill. The fact is that the government has been so badly damaged by the impact of the GST on the charitable sector—something you would hope that Senator Kemp would know something about, but something that Senator Kemp proves question time after question time is a matter of which he is entirely ignorant—and the debacle of the government's mismanagement of its goods and service tax that, eventually, the government, through Senator Newman, found an issue for a diversion. And wasn't a diversion important for government spokespersons like poor old Senator Kemp! Unfortunately for Senator Newman, when the charitable organisations contacted the opposition about these amendments they were told the truth, as you would expect from the opposition—namely, that Labor has always supported the legislation but that a devious loophole was found in the legislation. There was an attempt, of course, by Senator Kemp—and Senator Hill on the environmental philanthropy—to be deliberately evasive on this issue. You never know whether it is intentional or not with Senator Kemp, but he was exposed. Each person who rang us and who had the Greenfields amendments explained to them accepted the merits of ensuring that there should be no rorting by charitable organisations—and I use those words advisedly—that were actually Liberal Party fronts.

Reputable charitable organisations—the fair dinkum charities—do not want to get lumped in with the Liberal Party shonks. And you can understand why: they do not want to be tarnished by the rorters in the Liberal Party. They do not want to have their philanthropic provisions misused by the Liberal Party to rort and manipulate the limit on donations to political parties, and they did not appreciate being misled by Senator Newman. Mind you, I suppose that is something that you get used to, and I imagine the charities are used to that by now. The charities accepted that Labor is not trying to slow down this legislation at all, and they had absolutely no problem with the opposition putting forward amendments to stop the Greenfields Foundations style rort. So the government strategy backfired. Senator Newman had egg on her face again. Senator Kemp was exposed again.

By refusing to give a guarantee that Greenfields and other suspect entities would not be granted tax deductibility for donations which could be used to provide benefit to political parties, Senator Kemp has effectively admitted that the Liberal Party is planning to rort the system. The Greenfields Foundations has been found by the Australian Electoral Commission to be an associated entity of the Liberal Party. I hope that Senator Bartlett takes a little bit of notice of this, because I gather that the Australian Democrats have `courageously' caved in to the government on this issue. I am a little surprised that you did not put up a bit of a battle on this one, Senator Bartlett, and I will be interested to hear your explanation on this issue. The Greenfields Foundation is an associated entity of the Liberal Party.

Let me remind the chamber what the Greenfields Foundation describes its own activities as:

That is what the trustees say on their own letterhead in a letter dated 15 January 1998 and sent to the Electoral Commissioner, and I am not surprised that Senator Herron is very embarrassed by this legislation.

Senator Herron —It is the noise that I am embarrassed by.

Senator FAULKNER —The trustees, Senator Herron, say that they are charitable but the AEC says that they are an associated entity of the Liberal Party. Any reasonable person looking at this would immediately want to make sure that such an organisation is not then able to provide financial support to the Liberal Party on the back of taxpayer funded gifts from the likes of John Elliott or Ron Walker or to some sort of bogus Greenfields Foundation type of fund.

Senator Conroy —They would never do that, John, you cynic!

Senator FAULKNER —It may be, Mr Temporary Chairman, that I know a little more about this than Senator Conroy.

Senator Sherry —A lot more, I suspect, Senator Faulkner.

Senator FAULKNER —I suspect you are right, Senator Sherry. If it is the case, let us hope Senator Conroy does not make any further comment on—

Senator Jacinta Collins —Maybe he is not listening to Senator Kemp.

Senator FAULKNER —He would be misled if he is. But we know that there is now a capacity, if this bill is passed unamended, for a private fund to be prescribed by the income tax assessment regulations. This will mean that there will be tax deductibility for donations and gifts for such organisations. In other words, you set up a shonky vehicle like the Greenfields Foundation, you call it a charitable trust and, as a result of this bill, anyone donating to it when it is an associated entity of the Liberal Party actually gets a tax benefit. That is how simple it is. That is what a rort we are dealing with in this legislation. That is what a rort this element of the legislation is. The opposition do not want to knock over the legislation but want to knock over the dodge. We do not want the Liberal Party to be able to put the fix in again in relation to electoral donations.

Of course, I think this offends a great number of important principles. I had sought earlier in the debate a categorical commitment from Senator Kemp to try to get over the problems that we have. I tried to get a commitment that the Greenfields Foundation would not be a prescribed fund for the purposes of this act. He would not give that. I tried to ask for a commitment that the Treasurer would declare in writing that a fund like the Greenfields Foundation could not be a prescribed fund for the purposes of the act. He would not give that commitment. I tried to get a commitment that we actually have a separate regulation for the Greenfields Foundation so that, if it were regulated under the Income Tax Assessment Acts regulations, then it individually could be disallowed by the Senate—again, no such commitment was forthcoming. The Assistant Treasurer was not willing to give any of those commitments, and you have to ask why. I think the opposition has provided the answer to that question, because they want to put the fix in through the Greenfields Foundation to launder donations under the guise of donations to charities.