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Joint Standing Committee on Electoral Matters
Funding of political parties and election campaigns
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Joint Standing Committee on Electoral Matters
Melham, Daryl, MP
Bishop, Bronwyn, MP
Somlyay, Alexander, MP
Ryan, Sen Scott
Rhiannon, Sen Lee
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Joint Standing Committee on Electoral Matters
(Joint-Tuesday, 9 August 2011)
Mrs BRONWYN BISHOP
CHAIR (Mr Melham)
Mrs BRONWYN BISHOP
Mrs BRONWYN BISHOP
Mrs BRONWYN BISHOP
- Mrs BRONWYN BISHOP
Content WindowJoint Standing Committee on Electoral Matters - 09/08/2011 - Funding of political parties and election campaigns
MALTBY, Mr Chris, Registered Officer, The Greens NSW
THOMPSON, Dr Norman, Director, NSW Greens Political Donation Research Project
Committee met at 09:14
CHAIR ( Mr Melham ): I declare open the second public hearing of the inquiry by the Joint Standing Committee on Electoral Matters into the funding of political parties and election campaigns. The evidence today will be recorded by Hansard and will be covered by parliamentary privilege. I remind members of the media who may be present at this hearing of the need to fairly and accurately report the proceedings of the committee. I welcome representatives of the Greens New South Wales and the New South Wales Greens Political Donation Research Project. Although the committee does not require you to give evidence on oath, I should advise you that these hearings are legal proceedings of the parliament and therefore have the same standing as proceedings of the respective houses. The committee has received a submission from each of you, and I offer you the opportunity to make an opening statement.
Dr Thompson : I think we both do, and I will start if I may. Thank you for the opportunity to appear before this committee today. As you know, my submission focuses entirely on two important issues. The first is transparency in the disclosure of campaign contributions and expenditure; the second is the need for adequate systems to be in place to ensure compliance with disclosure laws. I believe that transparency is crucial for any electoral funding system that the federal government puts in place—any system, whether it is capped, or what you currently have.
Millions of dollars flow through the coffers of political parties around Australia every year. The public has a right to know where this money is coming from—I believe this very strongly—and how it is being spent. I have worked with donations and expenditure data supplied by the Australian Electoral Commission and the New South Wales Election Funding Authority for over nine years as the director of the Greens' Democracy For Sale Research Project. I have seen the federal system become increasingly less transparent over the years, especially since December 2005. Currently, the federal data is almost useless. Owing to several developments, the New South Wales disclosure regime has been changed and has become much more transparent in the last four years. Journalists from the print and electronic media often ask us for help with their investigative work. We use New South Wales rather than AEC data whenever possible while helping these journalists. I am currently working for a Fairfax journalist, who asked for help. I am also using the Western Australian and Queensland disclosure systems, and find them to be good as well, particularly Queensland's, which is really excellent. I wish that the Federal system were one-tenth as good.
CHAIR: Can you tell us what the difference is and what makes it excellent?
Dr Thompson : One is the disclosure threshold.
CHAIR: Which is?
Dr Thompson : Which is $1,000 in both Queensland and New South Wales—it is now, I think, $11,900 under the federal system. Queensland is so good because it is every six months and if there is a donation of $100,000, or over, it has to be reported almost immediately. It is really an excellent system.
Transparency is even more important if the government follows the recommendation of many of the organisations and people who have made submissions to this inquiry and imposes donation and expenditure caps. Limits on donations and expenditure would require careful monitoring by officials and the public. Without transparency this will be impossible. As you know, caps on both donations and expenditure during election campaigns were introduced in New South Wales from the beginning of this year. While I was at a workshop on electoral matters at the University of Melbourne Law School recently, I discovered that there were at least two major loopholes in the new New South Wales law. It appears that this means that these caps cannot be adequately monitored in New South Wales. This is far too complicated to go into today, but I am happy to make a supplementary submission to explain what has happened in New South Wales. Senator Rhiannon has been briefed on this and can discuss it with you in your deliberations if you wish.
Since I have worked closely with donations and expenditure data over the years, I have given concrete examples to illustrate points I have made in my submission to your committee. I have done this because I think it is important to move from the abstract to the concrete, so you can see exactly what is happening. I have used Malcolm Turnbull as one example. Some people may think I am being negative. I am not. He is my local member; I live in Wentworth. I greatly respect him. I think he is excellent. He is just a good example to use for some of this. I hope you will consider my eight recommendations carefully in your deliberations. Again, thank you for letting me appear today.
CHAIR: Thank you, Dr Thompson. Mr Maltby?
Mr Maltby : Thank you for the chance to appear today. For the committee's information, our very short submission relates to the experience with the new New South Wales laws primarily in the running of the last state election here. We also included as an attachment our earlier submission to the green paper process of Senator Faulkner from some years ago—2008, I believe.
There are a couple of things I would like to highlight in my opening address. The points we raise about complexity and other things are I think matters of fine tuning. Our experience with the situation in New South Wales is that it is a major step forward. It has had some teething difficulties I suppose as people have come to terms with it. Perhaps it is the structure of the Greens or maybe it is just a general problem with it but how the candidate funds and the state-wide funds all play into a cap on expenditure in an electorate and across the state takes a little bit of getting around, especially when combined with a donation limit to individual candidates. That produces a sort of a loan arrangement, which is a new way of thinking about funding particular campaigns. We have had some trouble within our branches. People have said, 'How do I handle all of this stuff?'
I think the combination of all of those things adds up to a better system in the end because we do have much lower donation caps. There was no issue at all during the last state campaign about who was funding political parties and how that money was being expended. As far as we can tell, any breaches of the system have been very minor, although I guess that will not become visible until the full disclosures are in. It did not look like there were any issues of that kind. It is a workable model.
Part of the difficulty was that it applies only to New South Wales state elections. The combination of that with local government elections and federal elections expands the requirement of people actually doing campaigning to understand three systems. I think a uniform national system is probably the best way to resolve that and obviously would have many of the benefits that flow from the system in New South Wales.
I note that the New South Wales system does allow corporations to make donations. That was not Greens policy going into the negotiations to form that legislation. We thought it was a significant advance in spite of the fact that corporate donations were included. We noted that the incoming government had promised to restrict the New South Wales funding model to just donations from individuals. We are looking forward to them meeting that promise. They are somewhat delayed.
Finally, the other point—and we did not cover this in the submission; we will put in a supplementary if that is okay—is to propose a model for administrative funding of political parties. I think the New South Wales model, which is based on the number of MPs that a party may have, is reasonably fair across the parties because of the relatively low quota for representation in the upper house in New South Wales. Parties can have an MP often with less than four per cent of the vote. Whereas, in Queensland, where a similar system applies, parties like the Greens, who may poll 10, 15 or 20 per cent in some seats, will get no entitlement to administrative funding because it is extremely hard to win a seat in the lower house, which is the only chamber of parliament there.
The Senate sort of falls in between those two in that the quota is quite substantial still, but it is nevertheless very difficult for emerging parties, who still have to run state-wide or nation-wide campaigns to have a chance of winning a seat in the Senate, to organise themselves. So I think an administrative party funding system for the national level would need to be either a hybrid of the number of members of a parliamentary party or some vote based mechanism. We have some ideas on that and I can explain them in more detail if you would like. We will put it in as a supplementary submission because we noticed amongst the other submissions that no-one had made any specific recommendations in that area and we think that would be valuable for the committee.
CHAIR: In your submission what is the threshold for administrative funding?
Mr Maltby : We have not made that. I am thinking that the four per cent threshold would apply to attract some sort of administrative funding. If it was vote linked, the four per cent would provide a certain minimum amount. There are other issues to consider such as how it would interact with state administrative funding arrangements because you—
CHAIR: In other words, if One Nation get four per cent of the vote they are entitled to administrative funding?
Mr Maltby : That would be right. I am glad you mentioned that point. How it works in New South Wales, and I think it would be a model for national administrative funding, is on a reimbursement basis. The administrative funding would need to be properly audited and transparent, so that it was in fact for the administration of the party. We would be looking for a fairly broad definition of that because a lot of what party officers do out of an election period is organisational work and things which build the strength of the party. Some of that would be hard to separate from campaigning; it would not necessarily be electoral campaigning, but you need to engage with members and the public about the activities of the party.
CHAIR: Why should administrative funding not have a higher threshold—something in the order of 10 per cent rather than four per cent, which is really about campaigning?
Mr Maltby : I guess a case could be made for it being higher like that.
CHAIR: We are talking about administrative funding here; we are not talking about campaigns.
Mr Maltby : The issue can be summed up by asking: how do you provide a mechanism for parties to emerge in the system?
Mrs BRONWYN BISHOP: Go out and garner support.
Mr Maltby : All parties start somewhere—
Mrs BRONWYN BISHOP: We all started small.
Mr Maltby : That is correct. If you are bringing in new restrictions on donations and other things like that, it is going to be harder for parties to progress, get their message out there and do all the sorts of organisational work that is necessary to get into a fairly centralised political system. That is the mechanism: it is a way to not cut off the arrival of new parties.
CHAIR: How would you then treat Independents in the system of administrative funding, such as people like Senator Xenophon or Mr Windsor in his seat?
Mr Maltby : I am not sure I have an answer to that.
CHAIR: That is why I am asking the question.
Mr Maltby : I think you could make the case either way. Those people are campaigning as individuals. Particularly in a House of Representatives seat, for example, an Independent campaign is much more tightly focused; there are not the organisational things—
CHAIR: What about the Senate? You have an accident out of Victoria as a result of preferential deals, where the DLP now has representation in Victoria. Some might argue that that was a one-off accident. You have someone like Senator Xenophon who has been elected to the state parliament and transferred that support to the federal level, and there is an argument that he is someone who will get reelected.
Mr Maltby : We have not sorted through all those issues completely, but I think there is a case to be made for some level of funding because those people obviously do have the same kinds of administrative overheads that political parties would have in order to keep their supporters organised and all that sort of stuff.
CHAIR: I raise it so that in your supplementary submission you could consider it.
Mr Maltby : Yes, absolutely.
CHAIR: I would appreciate that.
Mr SOMLYAY: May I say that Independents get one additional staff member.
Mrs BRONWYN BISHOP: Some get more. Some of those Independents have as many staff as a minister—it is outrageous!
CHAIR: And you are suggesting they would not have if there were a different government? Give us a break!
Mr SOMLYAY: They have always had at least one additional staff member.
CHAIR: I know you said it is complex but you said there are two glaring inadequacies in the New South Wales legislation—'loopholes' I think was the word you used. Are you able to at least verbalise for the committee at this stage, before you do a supplementary submission, what those loopholes are?
Dr Thompson : They both are very complex. The first one was expenditure caps. The law was written in such a way that not all the information spent on a campaign will show up as having been spent on that campaign. There is a concern. I know that Mr Tony Windsor has flagged that two National Party candidates may have won seats by spending four times—this was on the ABC website—the cap expenditure.
Mrs BRONWYN BISHOP: Does that make it right, if it is on the ABC?
CHAIR: Mrs Bishop, we would appreciate you not making gratuitous comments while the witness is giving evidence. He is giving evidence; you are making gratuitous comments.
Dr Thompson : The second loophole shows a way to hide donations, including donations that are banned in New South Wales.
CHAIR: Will you be able to expand on that in your supplement submission and suggest ways, if the committee were to look at that, and make recommendations with which those loopholes could be closed?
Dr Thompson : I would be glad to do that.
CHAIR: Thank you.
Mrs BRONWYN BISHOP: Would you like to go a little further on what you are calling 'deficiencies'? Not all money spent on campaign is identified—would you like to say more about that?
Dr Thompson : This is in New South Wales. I would prefer to put it in the submission because it is really very complex.
Mrs BRONWYN BISHOP: We can understand what you say.
Dr Thompson : Yes, I know, but it would take me a very long time and I really prefer to put it in the submission.
Mrs BRONWYN BISHOP: But you just put out there the statement Windsor is right, that there are four National Parties under a cloud because the ABC said so. I would like to hear what your substantiation is.
Mr MELHAM: He only said two, Mrs Bishop.
Dr Thompson : There are ways that the parties can spend money that goes into the electorate but they do not indicate that it has been spent in that electorate—
Mrs BRONWYN BISHOP: How?
Dr Thompson : They put it in as money that generally they spend themselves overall as part of the—
Mrs BRONWYN BISHOP: You have an example?
Dr Thompson : We will go to the ALP now. You have Jeffries Printing print all these—
CHAIR: Can I declare that Jeffries Printing Service is my printer.
Dr Thompson : I think he is the printer for most of the ALP.
CHAIR: That is because he is a good printer. I just wanted that on the record.
Dr Thompson : It is possible that the ALP—and this is a hypothetical example—could spend a great deal of money having Jeffries Printing make flyers for the campaign in general but just use those flyers in targeted seats.
CHAIR: Hang on—I want to examine that. You concede that is a hypothetical. You have no evidence that that has occurred in relation to Jeffries Printing or the Labor Party.
Dr Thompson : No.
Mrs BRONWYN BISHOP: Or anybody else—the National Party or the Greens.
CHAIR: So it is a hypothetical.
Dr Thompson : It is a hypothetical.
CHAIR: Are you saying that if the printer did that and the Labor Party did that it would be in breach of the electoral laws as they currently exist?
Dr Thompson : No.
CHAIR: You are saying that the electoral laws allow that to happen, it is legal and it is a hypothetical. You have no evidence to that—
Mrs BRONWYN BISHOP: Let us just examine what you are trying to say. The electoral laws of New South Wales, as I understand it, do not apply federally.
Dr Thompson : That is right.
Mrs BRONWYN BISHOP: I think that it would be very difficult to apply federally because I think they could be in breach of the implied freedom of political communication. But, as I understand the New South Wales laws, there is $20,000 expenditure allowed per seat by third parties, which I find an extraordinary loophole. That means a trade union can spend $20,000 in each seat out of its million-dollar spend each.
Mr Maltby : Or a tobacco company.
Mrs BRONWYN BISHOP: Oh, gosh! Could you find me one that has spent that amount of money?
Mr Maltby : I do not know—
Mrs BRONWYN BISHOP: I would love to see some figures.
Mr Maltby : It is not just trade unions that might participate in such a thing.
Mrs BRONWYN BISHOP: I have not seen any other group that has had the capacity to spend $1 million each.
Mr Maltby : We did see the mining companies spend a very large amount of money defeating certain tax proposals.
Mrs BRONWYN BISHOP: In each seat is what we are talking about here. $20,000 in each seat is what you are entitled to spend.
Mr Maltby : I am sure mining companies—
Mrs BRONWYN BISHOP: Let us get back to the point we are talking about. Then there is an overall expenditure that is permitted to be spent. You are saying that if someone like Jeffries Printing Service prints a brochure to be distributed by and large and only uses it in some seats it is in breach.
Dr Thompson : Yes, because they are using that money that they are claiming to have spent for their campaign over all the state to target a particular electorate where they have already spent their cap and this is an additional—
Mrs BRONWYN BISHOP: So you are saying they only printed enough to put into those seats?
Dr Thompson : Yes.
CHAIR: Sorry, but is this a hypothetical?
Dr Thompson : Yes.
CHAIR: I just want that clear.
Senator RYAN: I have a quick follow-up question. I am not as familiar with New South Wales laws but presumably the only way around that would be some sort of reporting on where the leaflets were distributed.
Mrs BRONWYN BISHOP: Yes.
Senator RYAN: Are you actually proposing, Dr Thompson, that as well as the enormous compliance burden that this system and the Canadian system imposes that if I was a volunteer in a political party I would have to keep track of where boxes of leaflets were going to be letterboxed by volunteers?
Dr Thompson : No. You would only have to keep track of how many leaflets were sent to your electorate to be distributed.
Senator RYAN: But am I going to be in breach if all of a sudden the president of the Essendon West branch gets a phone call from the president of the Brunswick West branch—those are two separate seats, mind you—and asks, 'I know you guys have trouble distributing, so can I grab those 5,000 leaflets that you are not going to use because we are actually letterboxing a hell of a lot over here?' Would I have to keep track of that sort of movement of material?
Dr Thompson : Yes.
Senator RYAN: You think that is a reasonable burden to place upon volunteers in a civil society and a democracy?
Dr Thompson : I think that in a professionally run campaign they could keep track of that.
Senator RYAN: But, Dr Thompson, I think one of the great flaws of this whole approach is the assumption—in fact, I consider it to be a curse—of the complete professionalisation of politics. My division of the Liberal Party still has 14,000 members. My ability and the ability of the party to keep track of the paperwork currently is difficult without actually keeping track of the hypothetical I put to you there of one branch calling another branch for 2,000 hard printed DL leaflets, which might be worth 600 bucks or $1000 if they are glossy, that have been letterboxed by volunteers. I do not have invoices for that. For Australia Post and all that stuff I understand it. I just want to clarify that you think that is a reasonable burden to place on volunteers in a democracy.
Dr Thompson : If you have a campaign manager, your campaign manager surely could be—
Mrs BRONWYN BISHOP: No, it is a volunteer.
Dr Thompson : But surely you have campaign managers—
Senator RYAN: I do have campaign managers, but I am thinking here of a different situation. In a marginal seat I think you are probably quite right that there is a lot more focus on what goes in and what goes out because you want to make sure that you are getting the stuff out.
Dr Thompson : You find the marginal seats are the problem.
Senator RYAN: They are not. The problem is that you pass these laws and inevitably the people who get tripped up are those with the least capacity to comply. To make volunteers fill out reams of paper to make sure the party's public official is not going to be caught up in some sort of technical breach because several thousand leaflets have been transferred from one electorate to another strikes me as a slightly unreasonable burden upon volunteers in the pursuit of what you call transparency and accountability. It is not just the big money being spent in marginal seats that is captured by these proposals; it is the activities of volunteers.
Mrs BRONWYN BISHOP: You see, it is becoming so onerous for volunteers that they are now frightened that government is going to get them. That is no way to run a participatory democracy, where we want individuals who are volunteering their services because they care and they believe in a cause to do so. It is becoming more and more complex, and the more of this stuff we impose on people the more we will shut down the political parties as being able to carry out that very broad function where they are people who are busy in their communities—who do lots of things in their communities—and therefore are adding to the breadth of knowledge that comes in. One of the things that anger me so much about the Greens—and we dealt with this yesterday, but I think we have to say it to you as well—is that you stand up there and say, 'We stand for higher transparency and for higher standards, and we are better than the rest of you—we don't get many votes, but we're better than the rest of you—but, because we don't get many votes, we want more taxpayers' money,' but, at the same time, you took $1.6 million from the Wotif founder and did not disclose it, despite all your protestations about how much better you are. Your national manager yesterday admitted that the reason it was not disclosed was to accommodate the donor. In an article that the donor gave in one of those nice puff pieces fairly recently, I understand he said he did it to protect his investments. I really reject that idea.
Dr Thompson : Was that in the Financial Review article?
Mrs BRONWYN BISHOP: It was in a puff piece.
Dr Thompson : If that was the Financial Review article, I think you are wrong.
Mrs BRONWYN BISHOP: It was a puff piece, and he thought it was just a puff piece.
Dr Thompson : I do not think the Financial Review article was a puff piece.
Mrs BRONWYN BISHOP: I do not know whether it was the Financial Review article or a puff piece.
Dr Thompson : You should check your sources.
Mrs BRONWYN BISHOP: I will do so.
Dr Thompson : That would be good.
Mrs BRONWYN BISHOP: But leave that part alone. He said yesterday that it was to accommodate the donor that the disclosure was not made, quote unquote—check the Hansard.
Mr Maltby : It is worth observing at this point—without making any comment on any of that stuff—that that donation, under the laws that prevail at the present time, need not have been disclosed until February next year.
Mrs BRONWYN BISHOP: Yes, but you go around saying that you are better than everybody else, and you have quarterly—
Mr Maltby : I am just pointing out that we do not know whether any other party may have received similar donations, because that will not be disclosed until that time.
Mrs BRONWYN BISHOP: That is not the point.
Mr Maltby : I am not excusing the thing; I think that within the New South Wales Greens we have a different view about that stuff, and we have consistently argued that within the forums of the Greens. We support a much more rigorous policy on donations, and we have argued that in our submissions and we are arguing it here today. We will continue to argue it. We support it in New South Wales and we believe it has been a success in New South Wales. In future, if the laws of the kind that we are proposing are adopted, it would be illegal for such a donation to be made and received, and we support that.
Mrs BRONWYN BISHOP: That is not my point. My point is very simply this: that you hold yourselves out to be better than other people.
Mr Maltby : I am not sure that we do that.
Mrs BRONWYN BISHOP: You have a policy of quarterly disclosure, and you suspended the policy that you have imposed upon yourselves in order not to disclose that donation, and that was admitted yesterday. You say all this stuff about how you want this and you want that. If you are so strong and so powerful, go out there and get a higher vote.
Mr Maltby : I believe we are doing that.
Mrs BRONWYN BISHOP: Greater scrutiny is what we want on your policies. You want to shut down New South Wales. You want to shut down the coalmining industry.
CHAIR: Is this a speech or is it asking a question? There comes a point where, in fairness to the witness, you should ask him the question.
Mrs BRONWYN BISHOP: He has had a good rant.
CHAIR: It is a good rant from your perspective.
Mrs BRONWYN BISHOP: Yes, it was.
CHAIR: If you could ask him a question, I would appreciate it.
Mrs BRONWYN BISHOP: The bottom line is that you are flexible. Just to finish the point I am making, I find these submissions very interesting. I am very pleased that there is now a greater focus on what you stand for—closing down the coalmines and the coal industry and putting in place death duties. I think it is very important that we have these things—
Senator RHIANNON: Point of order, Mr Chair. She has made an inaccurate statement about the Greens. That is not our position.
Mrs BRONWYN BISHOP: Yes—
CHAIR: Bronwyn, it is an inquiry into funding and disclosure. If you want to have a go at the Greens, do it in the parliament. This is a committee. I would appreciate it if you would ask a question.
Mrs BRONWYN BISHOP: Fortunately, we have only got one in our house.
CHAIR: You have the opportunity that others don't have of going into the House of Representatives and making a speech. We are here to elicit evidence.
Mrs BRONWYN BISHOP: I am just making the point on transparency—that transparency needs to be across all things.
Mr Maltby : We're totally in agreement with that, I might say. What we are on about here is getting full transparency. The point I made about the declaration by the Greens of that donation was that we had no obligation under these laws that have been in existence for a while. And we have no way of knowing—
Mrs BRONWYN BISHOP: I am not disagreeing with that, just that you hold yourself up as better than anyone else.
CHAIR: Mrs Bishop, can you just let the witness speak.
Mr Maltby : That is a matter of opinion. I don't believe that the Greens do that. We do attempt to stick within the policy frameworks we propose for other parties. We don't always succeed at it—we are human like everybody else. But we have no idea that there aren't similar donations waiting in the wings to be disclosed in February next year, which will show significant donations from mining concerns, tobacco companies, whatever, that have gone to different political parties—
Mrs BRONWYN BISHOP: Humph!
CHAIR: He is entitled to make the point without interruption.
Mr Maltby : and that we will be sitting here in six months time making the same sorts of statements.
Mrs BRONWYN BISHOP: I have no problem at all with whatever is disclosed and whatever is shown. The point is that you people made the point that you are better than everybody else. You had this disclosure policy and you did not disclose a donation.
CHAIR: You have made that point, there is no need to repeat it.
Dr Thompson : Could I just make a comment in passing?
Dr Thompson : At least we reported these $1.6 million far before the $1 million from Lord Ashcroft.
Mrs BRONWYN BISHOP: Only because somebody else was going to announce it for you.
Senator RHIANNON: Dr Thompson, when you were giving your opening statement, you spoke about the work of Malcolm Turnbull. Could you expand on his fundraising activities and explain how the Wentworth Forum works, please?
Dr Thompson : I would be glad too. The Wentworth Forum, and I will table this if you like. I believe the signature is not shown on it, now.
CHAIR: Yes. Could I have a motion to receive it as an exhibit?
Senator RHIANNON: Happy to move that.
CHAIR: The motion is carried unopposed.
Dr Thompson : The Wentworth Forum is a group that was set up in 2007 to support Mr Turnbull. It was his main fundraising arm, I understand. We know that that year he got at least $1.1 million. We did not find this out from the AEC, because you do not have to disclose to the AEC individual donations to individual candidates. We found this through the EFA. He set it up. It was supposed to be opened at the home of Malcolm and Lucy Turnbull with John Howard officiating, then Greenpeace found out about it and they had to go somewhere else. We don't know where it actually opened. You could join this forum for a minimum of $5,500, and you would get a number of invitations to events to meet with Liberal Party MPs. There were five steps, up to the governor level. For $55,000 you received, as you will see on the invitation, a great deal of access to many people in the Liberal Party.
Mr SOMLYAY: $55,000?
Dr Thompson : $55,000 per year.
Senator RHIANNON: That is for a minister—and a lesser amount to see a backbencher, is it?
Dr Thompson : No, there were more events.
Mr Maltby : These are gradations in the forum membership.
Senator RYAN: It is membership based, not access based.
Mr Maltby : That's right. Members of the forum were promised certain access.
Dr Thompson : It is membership based, which then gave you access to board meetings and parties.
Mrs BRONWYN BISHOP: So you can talk to members—amazing!
Dr Thompson : There is a Warringah Forum, but we cannot find any information on that. Tony Abbott's office refuses to give information to people, though we do know of various functions that they have. There is a North Sydney Forum for Joe Hockey. If you would like, I will see if I can find my copy of the invitation. I believe the top membership there was $20,000 a year, but I am not sure of that.
CHAIR: Can I just come in. You are not saying that any of these forums are illegally formed.
Dr Thompson : No.
CHAIR: They are legally formed within the current guidelines.
Dr Thompson : Correct.
CHAIR: Your point, in summary, is that you see these as usurping the existing disclosure laws. Is that fair to say or is that verballing you? For the amounts involved, on the face of it.
Dr Thompson : For the amounts involved, yes. Because all the money, at least to the AEC under that scheme is funnelled through the head office of the Liberal Party.
CHAIR: Have you got a recommendation in relation to how that could be overcome in the future?
Dr Thompson : I do—recommendation 5.
Senator RHIANNON: Can you explain to the committee, Dr Thompson, why you were able to find out the information from the Election Funding Authority for the Wentworth Forum but not for the Warringah Forum or the North Sydney Forum?
Dr Thompson : There were two reasons. Part of it was probably accidental—this is federal, again. New South Wales requires all money that comes in—whether for federal or state—to be reported, but it does not have to be broken down by federal candidates, only by New South Wales candidates and by local government. As for the Wentworth Forum, I guess it was just easier to put all their receipts in. Every person who paid between $5,500 and $55,000 was given a receipt for that particular year and then for the next year. Now they have stopped giving these to the EFA—they do not have to give them to the EFA.
Senator RHIANNON: You have not been able to track it since then?
Dr Thompson : No. Once in a while we will find a donor who says, 'I contributed $11,000 to the Wentworth Forum'.
Senator RHIANNON: In terms of the federal law, is the main point here the disclosure threshold?
Dr Thompson : The disclosure threshold, plus all money can be funnelled through the head office for all MPs and other candidates running for the lower house in federal parliament. There are a few who do not. A Western Australian MP, Mr Washer, does disclose, but he is unusual.
Senator RHIANNON: Does that mean if the scandals that we saw in Wollongong, where there was a clear paper trail linking a certain MP with certain developers, were to occur now with Liberal MPs that there would be no paper trail because it would all be funnelled through head office?
Dr Thompson : There would be no paper trail. This can be to the disadvantage—
CHAIR: That is not quite accurate. What they do is notify head office in relation to certain threshold donations and that gets incorporated by the head office. There would be a paper trail, because my understanding is that whilst they do a nil return to the Electoral Commission, if donations are received beyond a particular amount, those are notified to head office, which then picks up the obligation and with a higher threshold—
Dr Thompson : That is true.
CHAIR: So is it a limited paper trail; I am not saying it is a full paper trail?
Dr Thompson : It is my understanding it is not directed back to that particular MP. You do not know that that—
CHAIR: Not from the lodgement to the Australian Electoral Commission, but there is a limited paper trail from the MP to the head office, which could be picked up in an audit?
Dr Thompson : If there were an audit, yes. But it is something the public does not see.
CHAIR: I accept that.
Senator RHIANNON: That is what I mean. A paper trail in terms of trying to understand how this is true.
Dr Thompson : That is true. But it can be a disadvantage. I was approached in January of this year by Philip Dorling from Fairfax because there had been a wikileak about one of the federal MPs. It looked like he had not broken the law but he would be terribly embarrassed if this story came out. So I was asked to go through all this. Western Australia, Queensland, New South Wales and the AEC data and I could find nothing that supported what the American diplomat was telling Washington, to which the reporter said, It looks like it was secret then; this MP was able to hide it. Fortunately, he is a very good reporter—very honourable. He researched very carefully and his conclusion was that the American diplomat had made a mistake—he had exaggerated.
CHAIR: Why am I not surprised?
Dr Thompson : However, had he not been careful, this MP could have been greatly embarrassed because of your disclosure law.
Senator RHIANNON: Mr Maltby, you have spoken about the changes in New South Wales, which clearly have provided examples of what we are looking to do federally or may not look to do federally. Because we have only had it there for a short time—we have had one election—could you expand on the on-the-ground experience of managing the scheme weighed up against ensuring that there is greater transparency and a fairer, more even playing field? What has the experience been so far?
Mr Maltby : To be frank, the experience is a little bit confused at the moment. As Mrs Bishop was saying, we have a lot of volunteers who run campaigns and are not experts on electoral law, so with all the goodwill in the world they sometimes find it hard to work out what exactly it is that they need to do to comply. Obviously, minimising the number of systems and making each of those systems as simple as it can reasonably be, while still preventing the perception of politics for sale, is the key. I think the biggest issue for the Greens has been finding ways for the party to, out of its own funds, fund campaigns. That has involved the requirement to have smaller donations and make loans which have interest payments, and all these things are extra calculations that have to be made, and candidates have not found that easy to get their heads around. But I think most of that could be written off as teething problems with a new system. From my own point of view, I do not think it is particularly onerous, and, when the state office has sent out to individual campaigns and candidates the information that is required for them to disclose, nobody has said, 'We've done something that has turned out to be wrong.' It is just a matter of making sure that their reporting obligations are made as clear as they can reasonably be.
CHAIR: I think part of the problem is that, at a branch level, at a grassroots level, you are just getting volunteers, and you do get a turnover of volunteers, so there needs to be something in place from the Electoral Commission so there is ongoing education. I am not worried necessarily about the head offices of the party, but I do know that these things have become more onerous and people are not volunteering to be treasurers of the federal electorate association. My FEA has been audited maybe for the last five elections. We know how to do things—we had the same treasurer—but I have now got a new treasurer, who is petrified.
Mr Maltby : One of the slightly unexpected strengths of the system in New South Wales is the requirement for agents to pass a qualification test, so at least people who take on that job are aware of their obligations and are exposed to the requirements before they take it on. I think that is a good feature.
Senator RYAN: I just want to chase up a few issues that we raised yesterday. I appreciate you are different bodies within the same organisation—I am a federalist, so I understand that—but I just want to get your views, because you do have some different views on these issues. One of the issues that has concerned me for a while is the tax treatment of money in politics. The reason I say this is that a donation to the Liberal Party, the Labor Party or the Greens is not tax deductable, whereas a donation to a third party that is tax exempt that runs a political campaign can be tax deductable. For example, the ACF and the WWF, I think, were involved in the Vote Climate campaign. Because that tax treatment then leads to a very different financial cost of making that donation, do you have a view on whether or not there should be consistent treatment through the tax system of donations made for political activity, for campaigns, regardless of the body they go through?
Mr Maltby : It is the case that donations up to $1,500 to political parties are tax exempt at the moment, and that would include the very large bulk of individual contributions to either community groups or lobbying groups like the ones you mentioned or the political parties. So we are only talking about—
Senator RYAN: Let us use Mr Wood's donation. That, I think was $1.6 million. I am happy to be corrected if it was different.
Mr Maltby : I understand that is the amount, yes.
Senator RYAN: That money was not tax deductable for him. For the purposes of having $1.6 million spent on a political campaign, he could have given that money to a tax-exempt body that would run a campaign, like the Vote Climate campaign, that was pretty consistent with the campaign that was being run by the Greens. But the cost of that donation to his wallet would be substantially less because it would be tax deductable and therefore deductable against other income. The net cost to him of that donation would have been very different. Do the New South Wales Greens, or you, Dr Thompson, through your research, have a view on whether or not donations should be treated equally through the tax system regardless of the vehicle through which they are given?
Mr Maltby : Our position is that those sorts of donations should not be being made and accepted, so the tax treatment does not really arise. The other question that really is important in this sphere is that all donations made by corporations to political parties, or to whatever they choose, are perceived by the tax office to be legitimate business expenses and deductible against company tax.
CHAIR: Company ones are removed; individuals are—
Senator RYAN: Donations are not.
Mr Maltby : I am sorry. I have not been keeping up. It is not an issue which arises much.
Dr Thompson : What about fundraising? If you go to a dinner and you think that you—
Senator RYAN: That can be.
Mrs BRONWYN BISHOP: But only part of it.
Senator RYAN: Yes, and there are rules about how much of it can be counted, but it is disclosed to the AEC as another receipt or—
Dr Thompson : Correct, but in New South Wales it is reported as a donation.
Senator RYAN: I appreciate that. Being from Victoria, I am familiar with our rules and the federal rules. I think you said that you accept the New South Wales legislation is a step forward although not the ideal.
Dr Thompson : Yes.
Senator RYAN: Would you consider a proposal that tried to unify and make equal the effective financial cost of making a donation to a political campaign? Do you think that is an aspiration? I understand you do not want corporate donations or donations this large, but just like the New South Wales laws you may be confronted with a situation which you do not think is ideal. I am trying to find out whether you think this is something which should be addressed.
Mr Maltby : I still struggling with whether there is an issue here, that there is actually a problem.
Senator RYAN: I give a million dollars to the Vote Climate campaign. It is run by the ACF. It is tax deductible. The cost to me for making that donation is substantially less than giving a million dollars to you as the Greens to run a campaign that has the same colours, similar logos and the same issues on every leaflet.
Mr Maltby : That is where my problem occurs because one of the things about a plural democracy is that people are entitled to contribute to organisations which will push particular messages out into the public sphere.
Senator RYAN: Correct. I am not the one who is proposing laws to stop that.
Mr Maltby : No, I understand that. To then say that that was a campaign on behalf of another political party enters a whole new world of possible regulation.
Senator RYAN: Mr Maltby, I did not say it was run on behalf of—I made a point about it raising similar issues, as someone who might care about those issues. If you do not want to say that you think that is a priority, that is fine.
Mr Maltby : No.
Senator RYAN: My point is that there is a huge financial difference in this.
Mr Maltby : I am aware of the difference. The point I am trying to make is, if you are saying that to make the link if I donate a certain amount of money to an organisation which is promoting an issue I am concerned about and they advertise in an election campaign saying, 'Political parties have the following position on that issue and that people who care about this issue should vote for the Greens or the Liberals,' that is an entirely different question from whether or not I donate money to a political party which is then going out to campaign for the election of individuals. But within that, to the extent that those third parties are entering the political discussion, there is a need for regulation of the amounts that they spend.
Senator RYAN: We are pressed for time. I have given you time here. I am going to say to you: if presented with a situation that unifies the tax treatment of donations for funding that contribute to political campaigning—because you yourself are making the argument that these very areas need regulation because they contribute to the political debate and that the Vote Climate campaign was more aligned to a political campaign than many others, and you, I am sure, will have your own—if you are saying that those donations need to be regulated but you do not think they should be treated the same through the tax system to ensure the financial cost of making those donations to support those campaigns, do you think that should be addressed as a priority? You are arguing for the regulation but you seem to be avoiding the issue of whether the tax treatment is important.
Mr Maltby : I am not avoiding it; I am trying to understand precisely what the concern is so that I can put—
Senator RYAN: Because I give a million dollar to the ACF campaign saying 'Vote Green' or 'Vote for people with climate in mind'.
Mr Maltby : But I think you are making a step too far by saying, 'That is the same as donating to the Greens.' I think they are entirely different—
Senator RYAN: I have not said that at all!
Mr Maltby : I am sensing that that is the implication—
Senator RYAN: I have a point of order, Chair. I have let Mr Maltby answer. I am not going to be told what I am saying. I have gone to a great deal of trouble to specifically outline what I am saying.
Mr Maltby : I am not trying to avoid the question, but I will say—
Mrs BRONWYN BISHOP: You are doing a good job, though.
CHAIR: Bronwyn, that is not helpful. Senator Ryan sticking up for himself is well enough.
Mr Maltby : The short answer is yes, I think they should be uniform, but there is not a proposal that says, 'We should therefore remove the tax deductibility for this or create tax deductibility for that.'
Senator RYAN: There is a proposal. Senator Brown, before Senator Rhiannon took office, in the previous Senate proposed that the tax deductibility for corporate campaigns, like the mining tax campaign, be removed, but not to ensure that money that goes through tax-exempt bodies is addressed. So there is such a proposal. That just sets up another system.
Mr Maltby : There are regulations on those tax-exempt bodies, as you know. The High Court has made rulings on whether or not those are the kinds of things that they can participate in as charitable activities—
Senator RYAN: We are not talking about that.
Mr Maltby : If you made a donation to ACF, for example—
Senator RYAN: No, Mr Maltby, we are talking about your argument that third-party activity needs to be regulated. I am not proposing that. I have not proposed it; I think it is a terrible idea. You are the one who is mounting the case that third parties need to be regulated and they need to go through all these disclosure thresholds and have spending caps.
Mr Maltby : Yes.
Senator RYAN: Yet you are also saying that it is okay for third parties to be treated differently to political parties when it comes to the tax treatment of moneys they are given and it is okay for different third parties to theoretically be treated differently on the tax treatment of that money—unless you are differing with Senator Brown's view that the corporates should have their tax exemption removed but not the NGOs?
Mr Maltby : I am not sure I have enough information to answer this question.
CHAIR: When you get the transcript, can you consider the dialogue between yourself and Senator Ryan and if you want to make a supplementary submission if there is anything left unanswered or you want to put a point of view, can you please do that?
Mr Maltby : In summary, I think the introduction of appropriate donations caps would eliminate the problem. I think whatever confusion may exist there now could be resolved by that method.
Senator RYAN: I understand there are spending limit caps on third parties in New South Wales, which would include groups like the ACF. They do include them?
Mr Maltby : For entities which are participating in the electoral process, yes.
Senator RYAN: And the state equivalent of the Vote Climate campaign would be considered as participating?
Mr Maltby : Correct.
Senator RYAN: Yesterday the national Greens also mentioned that there should be a review conducted by the ACCC:
… into the political activities of industry and corporate lobbyists to assess whether their activities constitute those of a Ê¹third partyÊ¹ with recommendations to address this situation …
This was about things like tobacco and the mining tax campaign. Upon being questioned about the example I have used previously, which was the Vote Climate campaign run by various environmental groups, the Australian Greens gentleman, Mr Constable, agreed that an investigation into those groups was also warranted, applying the same test that he had established into the allegations against industry and corporate lobbyists. Do you agree that there should also be an investigation into that if there is going to be an investigation of corporate and industry lobbyists?
Mr Maltby : You are talking about the lobbyists on behalf of charitable—
Senator RYAN: I am happy to be corrected by my colleagues, but I think we were referring to the mining and tobacco tax issues when Mr Constable raised this. I raised the Vote Climate campaign and suggested that if he was going to propose such an investigation into corporate lobbyists would he propose an investigation into those particular NGOs in that campaign.
Mr Maltby : I think this is an area which has received some coverage in the press generally. It is one of the challenges of this sort of legislation in a democracy like ours that you need to balance the right of individuals and their organisations to make political speech with the—
Senator RYAN: Mr Maltby, we are very pressed for time. If you prefer not to say, I am not going to pursue it. I am just literally trying to understand: you said yourself there are differences.
Mr Maltby : I am not—
Senator RHIANNON: Let him answer it.
Mr Maltby : When it comes down to individual cases a framework needs to be put in place that has a reasonable way of identifying people who intend to influence the outcome of elections from people who have a view about particular policy matters which may be separate from that.
At some level it is hard to identify who a third party is—I agree with that. That is why the proposal is to have an inquiry of something that would help us to identify—
Senator RYAN: The proposal is specifically to investigate industry and corporate lobbyists. I can read the words to you again.
Mr Maltby : Okay—I have it here, yes.
Senator RYAN: That is the specific proposal. It was not a criteria, it was not a framework: it was a specific proposal to use the ACCC—which I pointed out is the wrong body for it, I think—to look into these groups. Do you believe that such an investigation—
Mr Maltby : I would support such an inquiry, indeed. I believe that corporate lobbyists and other things are—
Mrs BRONWYN BISHOP: NGO lobbyists?
Senator RYAN: And do you think the same should be applied to the groups that ran the Vote Climate campaign? That was the question I asked Mr Constable and I am simply asking you as well.
Mr Maltby : The question is whether the—
Mrs BRONWYN BISHOP: He does not need it reinterpreted.
CHAIR: Hang on, Bronwyn.
Mr Maltby : The question would be whether these groups are employing professional lobbyists, perhaps with political party connections, to go and lobby on their behalf.
Senator RYAN: So bumper stickers, billboards and TV ads are not a problem: it is the lobbyist, the person you employ? I will take that.
Mr Maltby : I believe that is what the submission relates to, yes. It does relate to corporate lobbyists.
Mrs BRONWYN BISHOP: I think you get a degree in obscuration.
Senator RYAN: Dr Thompson, you mentioned think tanks in your recommendation 7. I just want to clarify: were you talking about think tanks that are associated with parties like the Menzies Research Centre or the Page Foundation or the Evatt, or are you trying to go further and include groups like the Institute of Public Affairs and the Centre for Independent Studies?
Dr Thompson : I do not know much about the Centre for Independent Studies—I know a little bit. My point here is that associated entities—and I understand the AEC has had many recommendations about fixing the law—are defined so badly that we do not really know what associated entities are any more.
Senator RYAN: No, I appreciate the point you made earlier.
Dr Thompson : That is my point, so I think they have to be very clearly defined so that they do cover those organisations that are set up for the benefit of a particular party, whether it be the Greens, the Liberals—whatever.
Senator RYAN: I was not sure whether it was meant to cast a wider net to groups that are older than some of our political parties.
Dr Thompson : Not at all.
Senator RYAN: I will put further questions on notice.
CHAIR: Can I just thank you for your attendance today. You will be sent a copy of the transcript. If you want to put a supplementary submission in—and can I urge you to consider that?—and if there are some matters that you may want to add to those you were asked questions about today, feel free to do so.
Dr Thompson : What would the deadline be?
CHAIR: A couple of weeks would be appreciated. Thank you very much.
Proceedings suspended from 10:13 to 10:21