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Tuesday, 3 February 2009
Page: 2


Senator RONALDSON (12:34 PM) —I suppose I am pleased to be speaking on the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 today, and there are a number of matters that I would like to go through. The first thing I would like to do is to put to bed, once and for all, the notion that this effectively resubmitted bill has anything to do with campaign finance reform. It should have, but it does not, and I will elaborate on that now. This actually had its origins in 2004 at the ALP national conference when it was a platform to do away with tax deductibility for donations. It lapsed for some reason at that stage. It then came back into being some time later, on 2 March 2007, when it formed part of Labor’s $3 billion savings plan. In 2004 at the national conference—you may well have been there, Mr Acting Deputy President Marshall—there was no mention, on my understanding, about this being part of campaign finance reform. There were no figures done in relation to revenue savings; there was no mention of campaign finance reform. Then we fast-forward to March 2007, when it reared its head under the banner of what was called Labor’s $3 billion savings plan. Again, there was not one word about this being premised on the back of campaign finance reform.

So in 2004 there was no reference to campaign finance reform. In 2007 there was no mention of campaign finance reform under the $3 billion so-called savings plan. If we fast-forward to the second reading speech of the Assistant Treasurer, Mr Bowen, we see no word about this being premised on the back of campaign finance reform. I am sure honourable senators would be interested to know what Mr Bowen actually said when talking about this bill, acknowledging that it is not about campaign finance reform. Had it been about that, one would think he would have made some mention of it. He said in his second reading speech:

I strongly urge the opposition to reconsider their approach to this measure which forms part of the government’s response to inflationary pressures in the economy and our savings plan. This measure and other savings measures are an important component of our effort to put downward pressure on inflation and interest rates.

There was not a word about campaign finance reform. Of course, that was when the inflation genie was apparently out of the bottle. That was at the time when the Australian Labor Party were still running the cheap political stunt about inflation, knowing full well—or they should have known full well—that the inflation genie was well and truly in the bottle. Their goading of the Reserve Bank to put up interest rates again after February of last year has in no small part contributed to the situation we are in at the moment. Mr Bowen knew the inflation genie was well and truly in the bottle at that stage. But I will get back to the point: there was no mention at all of campaign finance reform—no mention at all.

I hope some in the gallery—all of whom I have enormous admiration for, as they all well know—will actually see this for the cheap stunt that it is. It is a cheap stunt. As my colleague in the other place Mr Morrison said in his speech on this matter, this is only, if you like, to reinforce an advantage. That is how the Australian Labor Party see this matter. I am not going to go in great depth into the minority report of the Joint Standing Committee on Electoral Matters on the first incarnation of this bill, because my colleagues Senator Birmingham and Senator Ryan will be doing that, but I will go back to what Mr Morrison said in the other place. He said:

… it was all about trying to entrench an advantage.

And I want to refer to one or two matters in that report.

I pose this question to the chamber and to those listening: how is it that an Australian who wants to participate in the Australian political process by making a donation to a political party or an Independent will under this bill no longer be able to get a tax deduction for that but if one of those opposite in the Australian Labor Party or Australian Labor Party members in the other place want to provide a donation to the Australian Labor Party to entrench their re-nomination they are able to get a tax deduction for that? How is it that an ordinary Australian who wants to participate in the political process is unable to do so as a result of this bill that abolishes tax deductibility but those sitting opposite are able to provide their own political party with as much money as is required to make sure they get re-endorsed and are able to get a deduction for that? How can that possibly be equitable? I will be interested to hear from the parliamentary secretary what the explanation is for that.

I want to turn now to the joint standing committee inquiry. This is as much for the benefit of Senator Bob Brown. The coalition and Senator Brown wanted the inquiry into this bill’s initial incarnation deferred because Senator Brown and the coalition members viewed this as being part of campaign finance reform and thought it should not be treated in isolation. On the casting vote of the ALP chairman that very strong, realistic and sound view was defeated. The minority report states:

In fact two thirds of the submissions received by the Inquiry either opposed the removal of tax deductibility or required such changes to be counterbalanced by other measures. In evidence before the Committee this position was well summarised by Associate Professor Graeme Orr from the Democratic Audit of Australia who said:

… it is very premature to do away with a form of encouraging small scale donating at the same time as seriously considering, in a few months time, the banning of large corporate and organisational donations. That is going to lead to serious questions as to where parties get the money from and deductibility, or matching funds, is something that needs to be kept in the mix.

In other words, you cannot treat these measures in isolation.

There is a green paper process that most honourable senators would be aware of. Our very strong view is that we should do this properly. The coalition emphatically endorses campaign finance reform taking place. It is long overdue. It is worth reflecting that we actually started this process in early March last year when a reference went from this Senate to the Joint Standing Committee on Electoral Matters. It was a very detailed reference with 10 points, I think from recollection. We said that every single aspect of this debate needed to be put on the table. It was supported by the opposition, the Greens, the then Democrats and Family First. Which political party refused to send off a comprehensive reform proposal to the Joint Standing Committee on Electoral Matters? The Australian Labor Party—the same party that are now alleging that this bill is part of campaign finance reform when clearly they have done and said nothing which would indicate that. As I said, it is; but if you look at what they have said and done, there is no indication of that at all.

The most interesting aspect of the figures of those who had donated to all political parties in the 2007-08 year in the announcement yesterday by the AEC—and I released some figures in relation to this yesterday—was the massive contribution of the union movement to Labor Party coffers. I want to go through those figures because they are breathtaking. Unions donated directly $9.2 million and $26.8 million in direct campaign finance. The interesting part about that is that those funds were, in the main, raised by union subscriptions and passed on to the Australian Labor Party. When those funds were donated, when they were given to their respective unions as subscriptions, they were tax deductible in the hand of the union member who made them. So they have gone via subscriptions, which are tax deductible to those individuals, through to the Australian Labor Party. But if someone sitting in the gallery today who did not pay a union subscription that went through the Australian Labor Party just wanted to make a straight donation to the Australian Labor Party, the Liberal Party of Australia, the Nationals, Family First, the Greens or Senator Xenophon they would not get a tax deduction. So you have got the tax deduction here siphoned through the union movement into the ALP. This argument about equity which we constantly hear from those on the other side is completely and utterly farcical.

I will briefly go through some of these figures. The Shop, Distributive and Allied Employees Association donated $1.5 million; CFMEU, $1.3 million; Communications, Electrical and Plumbing Union, $1 million; Liquor, Hospitality and Miscellaneous Workers Union, $765,000; Electrical Trades Union, $674,000—and it goes on and on. The Australian Workers Union, the Health Services Union, the Transport Workers Union, the ASU and the National Union of Workers are also listed. The Australian Labor Party is utterly beholden to the union movement. As I said yesterday, whoever pays the piper still calls the tune. There are some 35 million reasons why the Australian Labor Party is totally beholden to the trade union movement. When it says jump, this government will jump. We have started to see it already—and hang on for the ride because we have only just seen the start of it.

The other interesting aspect of this deal is that we believe—and I will repeat it ad nauseam—it should be part of comprehensive campaign finance reform and not cherry-picked for cheap political purposes. It should be part of real reform. The question I want to ask today is: what in this bill would stop another Wollongong sex and bribery scandal? How does this bill address the nefarious and appalling behaviour of ALP members in New South Wales, not just in Wollongong, involved in that fundraising? The clear answer to that is that it does not at all. This bill does not address the fundamental issues of comprehensive campaign finance reform. It is long overdue. As I said before, we started this process, we support the green paper process, but if the government is serious about this it will pull this bill—clearly that is too late—and make it part of the process. But the government refuses to acknowledge that it is part of campaign finance reform. Minister Bowen did not mention it, the $3 billion Labor savings plan did not mention it and the 2004 national conference policy platform did not mention it, but it is interesting that in 2004 the ALP actually realised that it had a great opportunity to entrench an advantage. It is very interesting to see who supported the current levels of tax deductibility back in 1996 in a majority report of the Joint Standing Committee on Electoral Matters. Its membership included Senator Stephen Conroy as deputy chair, now a cabinet minister, Mr Robert McClelland MP, now Attorney-General, and Mr Laurie Ferguson MP, now a parliamentary secretary—the utter hypocrisy of those opposite.

Someone told you it was a great idea to entrench an advantage, and that is why you are trying to disenfranchise ordinary Australians from participating in the political process by ensuring that their contributions are not tax-deductible, but others, via the union movement and elsewhere, are able to obtain a tax advantage. Those who want to re-elect the ALP can put as much as they want into the Labor Party. It is deductible for them but no-one else.

The reality is that the Australian community is expecting us to act in relation to this matter. I put on the public record again that the coalition is determined to participate in the overhaul of campaign financing, but we are not prepared to sit back and let the Australian Labor Party cherry-pick aspects of what should be comprehensive campaign finance reform for their own cheap political purposes. I hope the Greens will stick to their guns in relation to this matter and insist that it be part of a comprehensive campaign finance reform. I hope that Senator Xenophon and Senator Fielding will also defeat this bill today to ensure that we put some pressure on the government to make all these issues part of this overdue reform.