Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Finance and Public Administration Legislation Committee
18/10/2011
Estimates
FINANCE AND DEREGULATION PORTFOLIO
Australian Electoral Commission

Australian Electoral Commission

[16:53]

CHAIR: I welcome Mr Killesteyn, Electoral Commissioner, and officers. Mr Killesteyn, would you like to make an opening statement?

Mr Killesteyn : I have no opening statement.

Senator RYAN: I address my questions to Mr Pirani. Mr Pirani, you were quoted—or comments were attributed to you—in an article in the Age on 4 October about funding disclosures with groups associated with the Victorian division. Are you familiar with your discussions with Mr Miller on that occasion?

Mr Pirani : Yes, I am.

Senator RYAN: You are attributed to have said:

The commission's c hief l egal o fficer, Paul Pirani, said the audit was likely to include visits by AEC investigators to Liberal headquarters in Exhibition Street.

The report also states:

Mr Pirani said that while the commission would have audited the party at some time , the probe had been made a priority in direct response to the revelation of previously unknown fund - raising groups.

Are those statements accurate?

Mr Pirani : Yes, they are.

Senator RYAN: You at no time have spoken to the state director of the Victorian division before that article was published, have you?

Mr Pirani : No, Senator.

Senator RYAN: Do you think it appropriate that you provided comments to a newspaper journalist about an activity of the AEC without necessarily disclosing it to an organisation that has good standing with the commission or that they should find out about those comments via the Age?

Mr Pirani : My understanding at that date was that my authorised officer in the AEC had already written to the state branch secretary of the Liberal Party and we already had a date when we were going to do the audit. We had already issued the section 13(2A) notices and the compliance review notice had already been given to the Victorian branch of the Liberal Party.

Senator RYAN: Did you do this in response to the various articles in the Age?

Mr Pirani : No, not just the articles in the Age. The article in the Age you may recall involved an organisation called Business First. Then we had five further returns from associated entities over a period of time which included the Chinese Liberal Association, Scoresby City Club, Berwick Rangers 500 Club, Bulleen Supporters Group and the Yarra Plenty Women's Group. They were over a number of financial years. Then we indicated we were going to bring forward the compliance review that we were going to do in the Victorian branch of the Liberal Party.

Senator RYAN: The Victorian division—we are a bit fussy about that terminology, Mr Pirani.

Mr Pirani : I am sorry.

Senator RYAN: The point here is that we have had numerous discussions at this committee and others about—and I know Senator Ronaldson will go into these issues later, so I do not wish to canvass them now—whether you were aware of various high-profile issues in the media. For example, you said at another committee that you were not aware of documents published by the Sydney Morning Herald relating to very substantial amounts of money involved in politics but on the other side of politics. Now we find that the first comment that the Victorian division of the Liberal Party heard from you was actually in the Age.

Mr Pirani : My role in the AEC is as the branch head and the chief legal officer of the legal compliance division. I am not the authorised officer for conducting the compliance reviews. An approach came through our media unit. I was asked to reply to that approach. We held off doing any reply until after we had sent the letter to the Victorian division of the Liberal Party, so they were aware that it was coming. They were aware that this was going on. We had various returns that came in. My staff had had a number of discussions with the financial officer in the Victorian division of the Liberal Party, Mr McKenna. Therefore, it was a matter that I understood, particularly from the article that was first put in the Age on 26 July 2011, was likely to be a matter of public record.

Senator RYAN: I do not often see your name in the press. Do you respond to all requests that come through your media unit for comment?

Mr Pirani : I responded to this request because it was complex in relation to whether there was actually a reporting obligation on these bodies in the first place. Then when we started getting the returns, they were put up on our website and it was a matter of public record that these associated entities of the Liberal Party had not put in prior returns.

Senator RYAN: You stand by your comment that the probe had been made a priority in direct response to what you outlined earlier?

Mr Pirani : That is correct.

Senator RYAN: When you determine which media queries you will respond to, is it simply based on whether it is a matter of complexity? Surely some issues are of high-public interest but are in fact quite simple.

Mr Pirani : This particular one got referred to me from the media unit because it was complex.

Senator RYAN: Who in the media unit referred it to you?

Mr Pirani : I would have to take that on notice.

Senator RYAN: What other issues has the media unit referred to you of recent times for your public comment as opposed to the relevant officer for public comment?

Mr Pirani : My recollection is that this one was referred to me by Bernadette O'Meara, who is the deputy director in our media unit. There have been no other ones in recent times that have been referred directly to me. Sorry, I'll change that. When Mr Steve Lewis, in relation to his article that appeared in the News Ltd media, contacted the AEC for response he was referred to me.

Senator RYAN: That is the only other example in recent times?

Mr Pirani : In recent times, yes.

Senator RYAN: Do you get, from Ms O'Meara or from other people who might be responsible for the AEC's media, other recommendations that you do not follow up, or do you simply act on their advice to respond?\

Mr Pirani : I normally act on their advice, but I do make a decision as to whether it is appropriate for me to make a comment, because I do have issues about the AEC's independence and impartiality. I don't want to be seen to be compromising that.

Senator RYAN: Do you consult with Mr Killesteyn or anyone else in the commission about whether you should comment on media articles?

Mr Pirani : On some occasions, yes. On this occasion, no, I didn't.

Mr Killesteyn : I was aware that Mr Pirani was providing the advice to this particular journalist at the time.

Senator RYAN: You were?

Mr Killesteyn : I was.

Senator RYAN: How did you find out, if Mr Pirani didn't consult with you?

Mr Pirani : There were copies of emails.

Mr Killesteyn : He cc'd me.

Senator RYAN: I might come back to this matter later.

Senator RONALDSON: Mr Killesteyn or Mr Pirani: on 30 August and 1 September this year there were various media reports about the lodgement by the HSU East of its associated entity disclosure forms. Are you aware of the issues surrounding this?

Mr Killesteyn : Yes, we are.

Senator RONALDSON: I will go through this. The original 2009-10 financial year return showed gross debts, I gather, of over $17 million and payments for the whole year of $22,225, but the receipt of no income at all for that year.

Mr Pirani : That's correct.

Senator RONALDSON: Did that disclosure raise any suspicions with the AEC, given that in the previous year the HSU had total receipts of almost $30 million and had made payments of over $31 million?

Mr Pirani : The receipt of that document, on 19 October 2010, has highlighted an issue that is of concern to the AEC: that no-one picked up the major difference between what was put in the return for the previous financial year and what was in the return that came in for that financial year. It is an issue that we are looking at, but, yes, you are correct. The first return had zero receipts and amounts of just over $22,000 in payments.

Senator RONALDSON: Did you write a 'please explain' letter after that was received, before the amended disclosure letters were put in?

Mr Pirani : One of my staff members had contact with Mr Barry Gibson, who is the HSU East financial controller, on the Friday before the article appeared in the Australian. So we were aware that an amended return was going to be coming in—

Senator RONALDSON: But nothing had happened between the date of the original lodgement and just prior to the amended forms going in?

Mr Pirani : You are correct.

Senator RONALDSON: What processes have you put in place to ensure that doesn't happen in the future?

Mr Pirani : At the present time, we are looking at doing some work on our IT system, so that we can have something that has parameters that will flag a return that comes in if there is more than a certain percentage difference from the previous financial year. That will immediately raise a follow-up process.

Senator FAULKNER: Wouldn't that also happen in an election year?

Mr Pirani : This wasn't an election year, but you are right.

Senator FAULKNER: I understand that, but the point I'm making is: would you have to make an exception if you had a percentage increase, because this is an extremely common thing in an election year? Would you take account of that?

Mr Pirani : That would be one of the factors we would—

Senator FAULKNER: I am not saying for any particular organisation or individual or whatever, but obviously election years—maybe 'election years' is not a good way of describing it—or proximity to an election means there are significant differences, which I am sure you appreciate.

Mr Pirani : That is right. It is one of the factors we have to look for.

Senator RONALDSON: Have you actually written to HSU East seeking any explanation of what has happened?

Mr Pirani : Yes. We wrote to HSU East on 31 August 2011.

Senator RONALDSON: What happened the day after the letter was written? There was another amended return lodged, wasn't there?

Mr Pirani : That is correct.

Senator RONALDSON: My understanding is that there were three amended returns.

Mr Pirani : Yes.

Senator RONALDSON: Remarkably, just after the press broke in relation to this matter—but others will form their own view on that. The first was on 30 August, the second was on 31 August and the third amended return was on 1 September. Is that right?

Mr Pirani : That is correct.

Senator RONALDSON: Will you table a copy of the letter to HSU East for the committee?

Mr Pirani : Yes. I see no reason not to.

Senator RONALDSON: Have you had a response that letter?

Mr Pirani : Yes, we have.

Senator RONALDSON: And you will table that as well?

Mr Pirani : Yes. I do not have them with me, but they will be tabled.

Senator RONALDSON: Given what has happened, have you considered referring the matter to the DPP seeking an opinion as to whether a criminal offence has occurred here by making a false or misleading statement?

Mr Pirani : At this stage, the response that we have had from the financial controller on HSU East leads us to believe that it was an administrative oversight in relation to the first return, and in relation to the next two returns it was a problem with their system that they took information out of MYOB system that had depreciation of various amounts in, and that is not what the act requires; it refers to gross amounts of revenue expenditure and liabilities. Therefore at this stage it appears to have been just a genuine oversight and mistake.

Senator RONALDSON: So there are three genuine oversights. Can you just go through what those amended figures were, because it is not $20 here and $20 there, is it?

Mr Pirani : The first receipts jump from $0 to $17,935,800, and then the receipts jump again to $24,989,315.

Senator RONALDSON: That is in 24 hours, is it?

Mr Pirani : That is correct. Then the payments went from $22,255 to $16,284,546, and then up to $24,894,014.

Senator RONALDSON: Once might be careless. The second time might be really careless. But surely by the time you get to the third occasion when you have had these returns lodged and you are seeing this rise exponentially, by millions of dollars at a time, at what stage does the AEC say: 'Hang on. This is no longer administrative oversight. There are some real issues there'?

Mr Killesteyn : I wonder if I might make a general point. I accept your point before about the comparisons between the previous year return and the large adjustments that happened. Indeed, I asked the same question that you did about what is the process for making these comparisons and ensuring that such alarming differences are acted on. As a consequence, as Mr Pirani has said, we will look at our systems. Essentially the process is that that information is keyed into our systems but the systems do not support those sorts of comparisons. Beyond that, I would make the general point that it is relatively common for returns to be amended.

Senator RONALDSON: Three times in 72 hours?

Mr Killesteyn : I can give you statistics of amended returns that have happened over the last three years. Some of these are large adjustments. They are certainly not as large as what has happened with HSU East, but they are large adjustments. So it is relatively common for amended returns to take place. If I were to take action against all of them, as you are suggesting, then I suspect the DPP might not have enough resources to actually deal with them.

Senator RONALDSON: I am following up Senator Ryan's comments before. There seem to be some views taken about action in some quarters but not in others. Anyway the answer is that you will not be referring these to the DPP, Mr Pirani; is that right?

Mr Pirani : At this stage a decision has not been made one way or the other, but our current thinking is that it will not be referred to the DPP.

Senator RONALDSON: And the receipt of what information would potentially change your mind in relation to that?

Mr Pirani : If I had some material that suggested there was a deliberate attempt to mislead and deceive the AEC and which would put it into the more serious offence in section 315(4), which has the heavier penalty, so then I would give some consideration about referring it to the DPP.

Senator RONALDSON: I assume you have got the power to require associated entities to substantiate the gross total payments if you believe that is appropriate. Have you?

Mr Pirani : There is a power in section 316(2A) for us to get information from an associated entity on the same basis that we do from a political party.

Senator RONALDSON: Now, this matter having been raised, will you initiate that power in relation to this particular disclosure form, given particularly that the Australian Labor Party, in its original disclosure form, quite correctly alerted to a $79,000 in-kind donation from HSU East, which was in their disclosure form? It certainly was not in the HSU one because, as we know, the figure there was $22,225 for the whole year. So will you now, in light of these matters, seek from HSU East information in relation to substantiating their gross payment figure for the original and the three amended returns? Indeed, in light of that will you seek that information in relation to the returns for the previous three years?

Mr Killesteyn : The matter will be put under consideration. I am not going to make any commitments at this stage.

Senator RONALDSON: Well, Mr Killesteyn, Mr Pirani said to me that he would want to see some evidence of impropriety in relation to this matter. Now I would assume that part of that would include seeing those payments and receipts and expenditure which formed the gross figure which, as you know, is just put into the form without any reference to particular figures. Would it not be appropriate to look at what do form the gross payments, to then make a view about whether indeed there had been an illegality?

Mr Pirani : In the letter that we received from Mr Gibson he provided an extract from their MYOB system which showed how at least one of the errors occurred and then there was an explanation as to how a second error occurred. We already do have some information that has been freely given to us by HSU East without the need for us to exercise coercive powers. If there were some further material that was being pointed to from that and that would lead me to look at other documents and other material that was in their possession, then I would consider doing that. But at this stage I do not have anything. I have had full cooperation from HSU East. Yes, they have been careless in relation to their return, but whether it is sufficient to disclose criminality is a matter that I am not yet convinced about. This is a matter that is still under consideration, as I said previously, within the AEC.

Senator RONALDSON: But one of those matters, Mr Pirani, which would enable you to make that decision surely would be to use your coercive power for them to provide the detailed breakdown of the gross payment figure. Would it not? That would be one potential method for you to ascertain whether it met that threshold test, would it not?

Mr Pirani : But, Senator, the gross—

Senator RONALDSON: Please just answer the question. Would that be one of those things which might lead you to form that view?

Mr Pirani : The gross payment issue will not disclose the gift in kind to the ALP in relation to the rent in the premises, so that is not a matter that will be able to be disclosed from us doing an exercise in—

Senator RONALDSON: But I was not just talking about the—

Senator Wong: Senator, he is entitled to answer the question.

CHAIR: The witness had not completed his answer. Just allow him to finish and then you will have the opportunity to put further questions.

Mr Pirani : If there were some documents or other information that would be in the possession of particular persons within HSU East that would be capable of disclosing criminal conduct in relation to the deliberate provision of false or misleading information then I would give some consideration to that. But as presently advised, on the material we have obtained at the moment, I do not have that. We have had a reasonable explanation as to what has occurred but, as I said, we are still under consideration of what further action we may take.

Mr Killesteyn : And that is my point, Senator, just to emphasise. You have put a number of questions to us about possible action. We have not yet concluded the action that we think we ought to take. I do not want to make any rash statements at this point before we have had a chance to go through all of these issues.

Senator RONALDSON: If you were to move to require coercive powers in relation to the 2009-10 disclosure, would you then use your coercive powers for those previous years?

Mr Pirani : If there were an issue that was raised in 2009-10 that led us to believe that there may be some systemic criminality in relation to disclosure then we may well give consideration. But, again, as presently advised and with the assistance we have received from HSU East, we believe that this was a one-off that was due to an oversight with the financial controller not being there at the time when the return was lodged.

Senator RONALDSON: Can I move on to the advice from the DPP in relation to the member for Dobell. I am sure you are aware of the angst of the committee in relation to the lodgement of an answer to a question on notice after the last Senate estimates in May. I will not go over old ground again with that, but I think you are both aware of that issue. Minister, I want to go through the variety of reasons—

CHAIR: Just a moment, Senator Ronaldson. The minister is not in the room. Please start that question again.

Senator RONALDSON: These are questions to the minister and indeed to Mr Pirani and Mr Killesteyn. I want to go through the variety of methods that have been used to ensure that the Australian community does not get to see what the advice of the DPP was in relation to whether Mr Thomson should or should not be charged. The first of course was the Fair Work investigation. That was used as an excuse. I want an acknowledgement that, as in the answer given, there is still the opportunity that, if there is evidence that the financial resources of HSU were unlawfully used by Mr Thomson, this may need to be considered by the DPP in due course. Is that correct?

Senator Wong: Are you talking to me?

Senator RONALDSON: Well, to anyone—whoever feels they can answer the question.

Senator Wong: If you are referring to an answer to a question on notice, I will need to have a copy of that, if the committee could provide it. I do not seem to have all answers to questions on notice in this area.

Mr Pirani : I might be able to assist. At this stage our understanding is that the Fair Work investigation is still on foot. The evidence that was previously given by Fair Work at the last estimates hearing was that they hoped to have the investigation concluded by the end of this year. I had contact with Fair Work Australia yesterday and was advised that the investigation is still on foot.

Senator RONALDSON: There will be some questions about that elsewhere. The second reason for the community not having access to the DPP's advice was the legal professional privilege. Indeed the privilege lies—

Senator Wong: Senator, could I stop you. Chair, I do not know what he is reading from.

Senator RONALDSON: Who is 'he'?

Senator Wong: Well I am called 'she' all the time in the Senate so I would not get too sensitive, Senator Ronaldson.

Senator RONALDSON: I am not being sensitive about it at all, I did not know who you were referring to.

Senator Wong: 'He' is you. You are reading from an answer. I do not have a copy of it. If you are reading from a question on notice answer, I would be obliged if the committee secretariat could provide me with it. I do not think Mr Killesteyn has copies of it either.

Senator FAULKNER: Perhaps Senator Ronaldson could assist by giving the number of it.

Senator Wong: If you could give us the number of the answer, then I will get a copy of it.

Senator RONALDSON: Given that it happened in May, I am a bit surprised no-one has a copy of it. Anyway, if you have not, that is fine.

CHAIR: If you give us the number of it, they can look it up.

Senator RONALDSON: It is F39.

CHAIR: We will organise a copy.

Senator RONALDSON: Just so that we do not get bogged down time wise, which is the last thing that any of us want, one of the reasons given in that answer was that there was a legal professional privilege. I just want to confirm that indeed the privilege lies with the client, does it not, and not with the lawyer. So the privilege presumably being claimed is being claimed by the AEC; is that right?

Senator Wong: I am not responding until I have a copy—

Senator RONALDSON: I am asking Mr Killesteyn. Mr Pirani most certainly could tell us.

Mr Pirani : Senator the answer is yes, according to normal legal professional privilege rules, the privilege lies with the client. However, in relation to government legal advice that is provided by such bodies as the Australian Government Solicitor and DPP there is a protocol that exists in relation to its disclosure. We go back and consult the lawyers in relation to it as well as consulting the minister before—and it was the minister who made the claim on public interest immunity to which LPP formed a part.

Senator RONALDSON: So you are the client but the minister made the decision.

Mr Pirani : Which is the requirement under the Senate rules.

Senator RONALDSON: Did you make any submissions to the minister, given that you are the client in relation to this matter, about whether you thought that was appropriate or inappropriate; or were you asked?

Mr Pirani : I did not make submissions.

Senator RONALDSON: Were you asked?

Mr Pirani : But I did prepare a draft answer, yes.

Senator RONALDSON: Were you asked?

Mr Pirani : No, Senator—sorry, can I just correct the record. I was not asked but I did prepare the draft answer that did have the claim of public interest immunity which did include legal professional privilege.

Senator RONALDSON: You were requested to give an answer when the answer was that it would be denied on the back of that, weren't you? You were not asked for an opinion as to whether that was an appropriate course of action. You were given the fait accompli brief, weren't you?

Senator Wong: That is not the evidence he just gave.

Senator RONALDSON: It most certainly is.

Senator WONG: Senator, it is your want to make a whole range of outlandish claims.

Senator RONALDSON: That is a really silly comment, Minister. If you are going to intervene like that, can we please have some sensible discussion.

Senator WONG: It did not take you very long to call me silly.

CHAIR: Can we allow the witness to complete the answer.

Senator RONALDSON: What was outrageous about what I have said? Do you think it is appropriate that unions are not—

Senator Wong: I said 'outlandish'.

Senator Ronaldson interjecting

Senator Wong interjecting

CHAIR: I ask the minister and Senator Ronaldson if you can both come to order. It is not helpful for Hansard or for me.

Senator RONALDSON: No, it is not. I agree. It is very unhelpful.

Senator FAULKNER: At least you are agreeing on something.

CHAIR: You have, Senator Ronaldson, put a question forward—

Senator Wong: And I am saying the question is unfair.

CHAIR: Minister, if you would allow me to finish. A question was put to the witness and they were in the process of answering. I know it is of great interest to all of us to hear this evidence but if we can not talk over the top of one another it would be most helpful. Please continue, Mr Pirani.

Mr Pirani : The AEC, whether we like it or not, is part of the executive arm of government and we were therefore required to comply with that advice that was issued by the Department of Prime Minister and Cabinet in May 2008 that was drawn to our attention in relation to this matter.

Senator RONALDSON: So I can just confirm in plain English that you prepared the response that the government wanted in relation to this, but your advice was not sought as to whether it was appropriate for legal privilege to be claimed in this situation; is that right?

Mr Killesteyn : Senator, we followed the normal process that has been established in this place for many other precedents. The call was with the minister. He made that decision. We followed normal process; nothing more.

Senator RONALDSON: I take it that you were not also asked for an opinion in relation to whether there was or was not an identifiable public interest served in disclosing the matter? That is one of the other grounds the government has used to deny access to this document.

Senator Wong: Minister Gray has furnished, I think, quite a comprehensive answer, to which I am grateful that you referred me, where he has outlined the basis of the public interest immunity claim. That includes, amongst other things, the status of the investigation, the fact of the provision of legal advice, the limitation period having expired—that is, there therefore being no clear public interest that would be served in publishing the advice in these circumstances—and the Senate having been provided with a range of information. That is the answer that has been provided.

Senator RONALDSON: Minister, the government's view would be, surely, that it would be in the public interest and that the public interest would be served by the community knowing why Mr Thomson apparently had no case to answer. For example, if it was on a technicality, surely the public is entitled to know why. If it was on the back of other reasons such as the statute of limitations et cetera, why would not the government just provide this information to the community so they knew why Mr Thomson had no case to answer? Why go to these extraordinary lengths to deny the community information it quite rightly deserves to have?

Senator Wong: I suppose one could turn the question around and ask why you are persisting in trying to get information where the appropriate authorities have made decisions. I for one believe that these sorts of matters—just as with the prosecution of another member of this parliament that is, I think, still underway or just finalised—should be handled by the appropriate authorities. That is not the approach you wish to take. You wish to come into this committee, estimate after estimate, to seek to badger—if I may say—the officers at the table in this committee and make statements, some of which do not appear to have a very substantial factual basis.

Senator RONALDSON: Minister, I will just take up that point. It is not the appropriate body that is the main decision maker. Your government is the main decision maker, not the appropriate body—

Senator Wong: The DPP has made a decision.

Senator RONALDSON: because the AEC was actually not consulted in relation to this matter, so please do not run the line to me that the appropriate body has made the decision. Mr Pirani was not asked for his advice as to whether it was or was not appropriate or was or was not in the public interest to release the DPP advice. It was not the appropriate decision-making body; it was your government that made that decision.

Senator Wong: See, this is the problem. You make a whole range of statements which are not correct, and I will just explain why. What you have sought is, as I understand it, looking at this, the advice of the DPP. There is a very important principle, which is the independence of the activities and decisions made by the DPP. Effectively, Senator, that is what you are seeking to undermine. Minister Gray has made a decision. He has set out the reasons for that decision. I do not know that there is anything further we can add to this.

Senator RONALDSON: Minister, I put it to you that at every turn since this matter first came to the attention of this committee and others, this government has made every endeavour and at every turn has frustrated the process to protect its wafer-thin majority.

Senator Wong: I think the way in which you phrase the question, Senator, demonstrates your motivation. For you this is political. You do not believe that the various bodies that have some carriage of these matters, which include Fair Work Australia and the DPP, ought to be left to undertake their consideration independently. You believe it is appropriate to come in here and make political comment about that. I disagree with you.

Senator RONALDSON: The only political decisions and commentary, Minister, with the greatest respect, are from the Gillard Labor government in relation to their ongoing attempt to ensure that the community does not get to know what happened with the DPP advice, along with a whole range of other matters in relation to Mr Thomson. If people getting information is political, well, I suppose then I am being political. But I do not know whether the community actually thinks it is political to find out what happened here.

Mr Pirani, just so I am clear and it is on the public record: when did the AEC first start investigating Mr Thomson?

Mr Pirani : We became aware of the first allegation on 8 April 2009. We had contact—I did not; the media unit of the AEC had contact—with a Sydney Morning Herald reporter on 8 April 2009. On 19 May 2009, I approached Mr Williamson of the HSU in relation to one of the returns, and we have been going forward—

Senator RONALDSON: That is Mr Michael Williamson?

Mr Pirani : That is correct.

Senator RONALDSON: Is he the gentleman who has stood down from his position, Minister?

Senator Wong: Actually—

Mr Pirani : Then on 20 May 2009 I formally wrote to the president of the HSU national office, Ms Kathy Jackson, and we continued contact either with her or with her lawyers after that date.

Senator RONALDSON: I cannot remember; did you ever speak to any of the journalists at the Sydney Morning Herald? I do not think you did, did you?

Mr Pirani : No, I did not.

Senator RONALDSON: But I think there were some discussions earlier about the fact that there was media contact in relation to the Victorian division.

Mr Pirani : That is correct.

Senator RONALDSON: How would you rate the allegations against Mr Thomson, compared to the allegations allegedly made against the Victorian division of the Liberal Party, I wonder.

Mr Pirani : I am just not sure I am competent to respond to that.

Senator FAULKNER: But it is quite common, isn't it, Mr Pirani, for matters to be drawn to the AEC's attention as a result of media stories? This is often the way these matters are initiated—in fact, more often than not, I think it is fair to say, isn't it, historically?

Mr Pirani : That is correct. We have two processes. One process is the compliance review, when we go through and have a look for compliance with the returns. The second process is what we call the special circumstances, which are the cases that we report the outcome of on the internet. Certainly there have been numbers of those.

Senator FAULKNER: It no longer appears to be a practice, but on this committee we used to go through these matters proactively. In fact, the AEC would come prepared to work through what matters were live or current matters—call it what you will—and so many of them had come to the attention of the AEC via media stories, as opposed to necessarily third-party contact with the AEC. I think that is fair to say, isn't it?

Mr Pirani : That is correct.

Mr Killesteyn : And we continue to report them both in our funding statements delivered to parliament and on our website.

Senator FAULKNER: But it does appear that the committee has evolved. That is nothing to do with me.

Senator RONALDSON: The committee has evolved to the extent that I think we are trying to make sure that the facts are known and are known widely. So it has been a good evolution, I would think.

Senator FAULKNER: I am not saying it is good or bad, but it is just a change of practice. I thought you would be interested in that.

Senator RONALDSON: So it started on 8 April 2009?

Mr Pirani : Yes.

Senator RONALDSON: When did you first write to the DPP seeking their advice?

Mr Pirani : It was on 7 May 2010.

Senator RONALDSON: When was that advice received again?

Mr Pirani : The letter was dated 1 June 2010. So it was received shortly after that.

Senator RONALDSON: I will turn now to Coastal Voice. I assume that you have revisited this matter.

Mr Pirani : Following our discussion at last estimates, yes, I have.

Senator RONALDSON: I presume you are now happy to admit that you were wrong in relation to your previous comments about Coastal Voice: that it no longer existed and other comments such as the fact that it was merely a business name.

Mr Pirani : I accept that I was incorrect in relation to saying that it wasn't an entity. I accept that the evidence from New South Wales Fair Trading, in relation to its registration under their legislation, establishes that it is an entity. What I haven't changed on, though, is whether it is an associated entity of the Liberal Party.

Senator RONALDSON: Of the what, sorry?

Mr Pirani : Of the Labor Party, sorry. I apologise.

Senator RONALDSON: An entity is an incorporated or unincorporated body, isn't it?

Mr Pirani : That's correct.

Senator RONALDSON: You are suggesting that this group is not?

Mr Pirani : No, I have accepted that I was incorrect in the response that I gave you at the last estimates hearing and that it is an entity in terms of the definition in section 287(1).

Senator RONALDSON: You are saying to me that you remain unconvinced that it was an associated entity.

Mr Pirani : That's correct.

Senator RONALDSON: When you were seeking information about this matter, you said you did various searches, including company searches, ABN searches et cetera. Why did you not do a search with New South Wales Fair Trading?

Mr Pirani : Because we had the search from ABN Lookup that showed that, while it wasn't registered for GST purposes, it was an incorporated body active from 3 May 2006. So we had the ABN search and we had the domain register search.

Senator RONALDSON: What did the domain register search say?

Mr Pirani : It was not currently registered at the time we did the search, which was 21 September 2010.

Senator RONALDSON: You see, the domain name registrant was the Health Services Union of Australia, National Office. Mr Pirani, you said that you—

Senator Wong: Before we proceed to take questions on that document, can we have a copy of it, please?

Mr Pirani : I am certainly aware from the newspaper articles—

CHAIR: Sorry, we need to have the committee accept the tabling of that document. It's a very poor copy; have you got a better copy?

Senator RONALDSON: It is a poor copy.

CHAIR: Is there any date on it?

Senator RONALDSON: No, not on that document.

Senator FAULKNER: I move that we accept it as a tabled document—poor copy or not.

CHAIR: So resolved.

Mr Pirani : I am aware that the reports in the media were that the website and the domain name were run through the Health Services Union.

Senator RONALDSON: You were aware of that?

Mr Pirani : I was aware that was one of the allegations that were run in the media, yes.

Senator RONALDSON: So when you are looking at an 'associated entity' discussion, you've got a website—could I just go back: you said that you did get an extract from NSW Fair Trading, did you?

Mr Pirani : No. We did the business/government look up on ABN Lookup.

Senator RONALDSON: But that's all?

Mr Pirani : That had the entity, showed that it had an ABN number and showed that it was created on 3 May 2006. It had the entity's name, said that it was not currently registered for GST and that its main business location was in New South Wales.

Senator RONALDSON: So that indicated to you that this was an incorporated association?

Mr Pirani : Indeed. The reasons that I gave you in the letter that I wrote in response to your letter in 2010 indicated that we accepted it because it had an 'I', which suggested that it was registered under the Voluntary Associations Act of New South Wales.

Senator RONALDSON: When did the statute of limitations run out in relation to this matter?

Mr Pirani : In relation to an associated entity lodging a return?

Senator RONALDSON: Yes.

Mr Pirani : It depends which financial year you are referring to. I understand, and I read the Hansardfrom the New South Wales parliament when a question was raised about the status of this organisation, that it had been originally approved as a telephone service for the aged and that action was being taken by New South Wales to deregister it which, as an entity, means that it still existed prior to the New South Wales body taking some action.

Senator RONALDSON: You have acknowledged now that it was an incorporated body and therefore it came under the associated entity test. It met that part of the test.

Mr Pirani : It was an entity, yes. I acknowledge that.

Senator RONALDSON: Had you or your office bothered to do a Fair Trading search—and I find it quite remarkable that this was not done—it would have indicated to you that the public officer was a Mr Craig Robert Thomson. I will seek to table that as well; this document is a little clearer than the other one.

Senator ABETZ: That is a similar name to the member for Dobell!

Senator RONALDSON: You have evidence before you that the domain registration name was the HSU. In fact, I will go back further. I will take you through—

CHAIR: Just before you move on, you have asked for a document to be tabled. Is it the wish of the committee to have receipt of that document? It is so resolved.

Senator RONALDSON: Thank you. If you had gone onto the website of Coastal Voice, Mr Pirani, you would have seen a number of people who had said, 'Why I joined Coastal Voice.' Interestingly, one name at the bottom, I am sure everyone around this table is acutely aware of, is one Criselee Stevens: 'My name is Criselee and I have lived most of my life on the Central Coast.' This is the same Criselee Stevens who acknowledged that the union had put money into Coastal Voice for printing et cetera. I want to take you through other names. They are Kerry Stratford, Brian Kirk and Matt Burke. Out of interest, Mr Kirk was mentioned by Mr Thomson in his maiden speech. These all appear on the Coastal Voice website. One of the other people who was talking about the great enthusiasm for Coastal Voice was one Matt Burke, who happened to be a New South Wales Young Labor convenor. Criselee Stevens, as we know, authorised Labor Party material for Mr Thomson. I ask you this question, Mr Pirani: did you gather this information or do the investigation on Coastal Voice, or did someone in your office do it?

Mr Pirani : I was part of the team that collected this information.

Senator RONALDSON: How can you miss a NSW Fair Trading search, how can you miss a domain registration to the HSU, how can you miss from the website the names of all these Labor Party members, who are part of this organisation, and come to the decision that this was not an associated entity? What has gone wrong in your office?

Mr Pirani : There is no information for the AEC or any other evidence or material that points to this being an entity that operates wholly or to a significant extent for the benefit of one or more registered political parties. Indeed the actual evidence that you sent me—and I thank you for that, Senator—in relation to the December 2006 newsletter showed that the primary purpose of this organisation was the newsletters that are put out for the aged in the community. That was the purpose it was established under New South Wales law. The fact that it had prominent people associated it who were with the Health Services Union—and Mr Burke and Ms Stevens were both part of the Health Services Union at various times and Mr Thomson was the president of this organisation—does not mean that the entity itself is an associated entity. We have to look at how it operated, and the material that was before the AEC did not disclose that it operated wholly or to a significant extent for the benefit of a political party. There were no political party advertisements in the pamphlets that were handed out. I have no doubt it raised the profile of the president of Coastal Voice but it did not refer to the ALP or in relation to matters involving political issues.

Senator RONALDSON: Mr Pirani, where—

CHAIR: Senator Ronaldson, you have already had your time—

Senator RONALDSON: I have got one question left.

CHAIR: This your final question, then I intend to go to Senator Abetz.

Senator RONALDSON: Mr Pirani, on that information and the material that I gave you, was there any mention at all about this aged-care telephone line?

Mr Pirani : Not in that material.

Senator RONALDSON: So at that stage, Mr Pirani, when you knew that the reasons ostensibly for this organisation being established was an aged-care hotline and in the material that you were provided with there was absolutely no mention of an aged-care hotline and, given the fact that the domain was registered to the Health Services Union and everything else I have put before you, I ask you again: what has gone wrong in your office in relation to the investigation of this matter?

CHAIR: That was your final question, Senator Ronaldson.

Senator Wong: This is really repetitive.

Mr Killesteyn : We have been through on a number of occasions the question of the interpretation of the associated entity test. I think we have explained again on a number of occasions that it is a very high bar that has been set. Mr Pirani has been through that. We are operating in accordance with the legislation the way it is set. There will be differences of interpretation, but I believe the interpretation that we have put on it which is supported by precedent from a number of High Court cases is correct.

CHAIR: We are now going to go to Senator Abetz, but I will just advise people that I will be going to Senator Rhiannon at 6.10, so Senator Abetz and then I intend to go to Senator Ryan.

Senator ABETZ: Last time round, Mr Pirani, we discussed the $200,000 worth of donations to the Australian Labor Party from certain Chinese donors which had not been disclosed by those donors. Is my understanding correct that they have now been disclosed?

Mr Pirani : Yes, your understanding is correct. New Matilda reported on—sorry, I do not have the actual dates with me—

Mr Killesteyn : 12 April.

Mr Pirani : Thank you, and we have responses from the two people associated with the company.

Senator ABETZ: Can you advise us how this occurred? How were these ALP donors tracked down? Did they come forward voluntarily? Where you able to find out, or did the Labor Party assist?

Mr Pirani : We actually wrote to the Labor Party seeking details of the addresses and the documents that had been lodged with them. We also did a company search in relation to the company and that gave us the addresses that were on the asset register in relation to the directors who were the two people who were the donors.

Senator ABETZ: I am no expert in this area, but have you seen the donor returns?

Mr Pirani : I have not seen them personally.

Senator ABETZ: Who would have seen those within the AEC?

Mr Pirani : One of my staff, but they are up on the website.

Senator ABETZ: I am not an expert but all three of them seem to be in the same handwriting, but if you are not able to comment on what you have observed then I cannot take that—

Mr Pirani : I understand there was a media report in which the son was quoted as indicating that his mother had a poor grasp of English. I think it was his mother. I believe that is how there was some assistance given in relation to that return.

Senator ABETZ: Not a poor grasp of money, by the sounds of it. I see, from an article by Lenore Taylor in the Sydney Morning Heraldentitled 'Politics a hobby for Labor donors', that—I trust I am pronouncing the name correctly—Mr Shangjin Lin, who appears to have given the Labor Party $50,000, is a 22-year-old student. Does the AEC record confirm that?

Mr Pirani : We have no record of the person's age.

Senator ABETZ: What about their occupation? This person is a student.

Mr Pirani : Again, we went to the company register, and he was listed as one of the directors.

Senator ABETZ: According to Mr Lin, each year Shenglong (Australia) Investments Group exports two or three containers of fruity shiraz wines from the Canberra region to China. But I note that an online business directory describes its activities as 'auxiliary finance and investment services and personal loan brokers'. Did the AEC undertake any enquiry as to the nature of the business that this company may have been involved in?

Mr Pirani : No, Senator.

Senator ABETZ: Did the AEC form any views on the bona fides of these political donors?

Mr Pirani : They were people associated with the company and those donations were reported on the ALP return to us. We went through the ASIC records; we got confirmations of the identities and the localities; we contacted them; and they responded. We have what we believe to be prima facie, valid returns.

Senator ABETZ: On the face of it, it seems that a company that exports only two or three containers of fruity shiraz wines made fairly substantial donations, but I accept that you do not look behind that. I quickly place on the record your decision, Mr Pirani, in relation to the complaint by the Liberal Party of Australia, Tasmanian division, about an advertisement headed 'Truth in Advertising', which states 'Ta Ann has accused the Greens of not telling the truth in advertising'. I think you said that, because it had come from overseas et cetera, you were not able to make a decision. For the benefit of the committee it was a non-authorised advertisement. Does that mean that, in future, if somebody were to make an allegation—let us say that a political party was not telling the truth in a matter—we could get an overseas donor to head it: 'Truth in Advertising? Joe Bloggs has accused'—whatever political party—'of not telling the truth in advertising,' and then have a whole stack of information underneath it and not be required to authorise that advertisement?

Mr Pirani : I have two comments: firstly, it is acknowledged that that is a loophole in the extra-territorial operation of the Electoral Act; secondly, action could be taken against the newspaper. I suppose I should write to the Mercuryreminding them of their obligations because it is the publisher as well—

Senator ABETZ: That was going to be my next question.

Mr Pirani : I have not done that but I will undertake to do that.

Senator RYAN: In your report Analysis of informal voting, House of Representatives, 2010 federal election, the AEC provided a breakdown, by electorate, of informal voting, looking at those voters who voted with just one tick or a cross. Is it possible for you to provide the committee with a breakdown by electorate—in a similar fashion—of informal votes where a 1, a tick or a cross was used by candidate?

Senator Wong: By?

Senator RYAN: By candidate. Group together all the 1s, ticks and crosses, saying that there were so many per electorate. Is it possible to look at those by candidate?

Mr Killesteyn : We will take that on notice. We collect a lot of information for purposes of the informality report. I do not know whether we have collected the information down to that level. If we did, I will have a look at it; however, if we did not, it is unlikely as we will not go back through all the ballot papers.

Senator RYAN: Sure. Would the ballot papers have been destroyed?

Mr Killesteyn : I am not sure whether they would have been destroyed or not.

Senator RYAN: They would have been destroyed by now, wouldn't they?

Mr Pirani : The House of Representatives ones have; the Senate ones have not.

Senator RYAN: We are only interested in the House. Obviously it is whether you have it or you do not. Will you consider doing so at subsequent elections? I say this given that informal voting has been and will probably continue to be an issue that provokes some debate in this place in the coming years. Could you consider doing that for future elections?

Mr Killesteyn : I will take it on notice.

Senator RYAN: I would like to turn to the issue of enrolment. You would be aware that the Victorian Electoral Commission undertook a process of pursuing people for failure to enrol, including up to the point of prosecution and issuing notices of prosecution.

Mr Killesteyn : Yes, we are aware of that trial.

Senator RYAN: Given the discussions we have had at this committee and others and your concern about the lack of enrolment and the concern of members of his place, why have you chosen to not follow a similar course of action?

Mr Killesteyn : Most of our strategies have been designed around trying to facilitate or make it easier for people to enrol. I am on the public record as saying that my preferred model, and I think one that is more appropriate for Australia, is around encouraging voluntary compliance. Through that strategy we have been doing some interesting things like working with Australia Post. We now have a facility with Australia Post which was only introduced last week to allow people to update their enrolment through their change of address facility they have with Australia Post. Some 700,000 people use that facility every year.

We have another strategy with the Australian Taxation Office for people completing their e-tax return online. The system has been built in cooperation with the tax office. If they show a change of address through that e-tax return they get a reminder that they should also change their address with the AEC, and they are then given a direction to the AEC's website. That is building on the legislative change that came in last year to allow online update.

I am certainly aware of the trial the Victorian Electoral Commission has done. But I would also point to some of the evidence that the Victorian Electoral Commission made to its parliamentary inquiry in relation to that matter. At the end of their evidence they conclude as follows:

Based on the result of the trial the VEC sees merit in taking a firmer line on compulsory enrolment. However, as under the current arrangements further action must be taken through the courts, the process is expensive and ties up the resources of the VEC, the VGSO—

obviously their department of prosecutions—

and in the courts. To make the process less expensive and avoid wasting the resources of the courts, the VGSO and the VEC will recommend that legislation be introduced so that failure to enrol or failure to update enrolment details is made and infringable offence.

That is the same issue that I put before the joint standing committee for consideration as well.

Senator RYAN: So it is your view that we should make failure to enrol an infringement offence rather than—

Mr Killesteyn : I am suggesting that there would be value in having an administrative penalty for failure to enrol rather than the current process which requires us to take these matters through the courts for what at the moment is a relatively small penalty.

Senator RYAN: We have had long debates about a third possible step, which we do not need to recount today.

If I could turn to the issue of multiple voting. In your submission to the Joint Standing on Electoral Matters you outlined effectively five bullet points:

At this stage a warning letter may be sent to some electors informing them of the correct procedures and penalties for voting more than once. In those cases the matter is taken no further. Some common examples of responses where an elector may have voted more than once but no further action is taken include:

I am sorry, I do not have the page number. I am hoping you might be familiar with that. I know it has been an issue of some discussion. From the figures you have provided, 85 per cent of multiple voters in 2010 were subject to no further action. Was that just because one of those five standard excuses or reasons were given? Is that something that upon that point you then just move on and do not take any further action? Is that an automatic reply and you classify it as okay?

Mr Killesteyn : Just let me go through the figures again, at the risk of repeating it. We had some 29,920 electors that were originally identified as potential multiple voters. We then go through a process of eliminating what we call official errors—that is polling official errors—including lists that are not marked or scanned correctly. Out of that we then brought the number down to 16,210 electors who remained to be investigated by the divisional officers. We wrote to 16,189 electors, artist discovering that the other 21 were deceased, and we sought further information from each of those 16,189. Of that number, 13,775 required no further action. The breakdown of that is: 6,265 voters were matched to an apparent non-voter record of a similar name; 5,211 voters denied multiple voting; 1,660 replies indicated official error; and the remaining 639 voters were either deceased or were considered to require no further follow-up. Out of that number—if I just finish for the sake of completeness, and I think I might get to the answer to your question—2,414 cases were then further investigated. Of that number, 1,458 voters admitted multiple voting, with over 80 per cent being aged, new voters with limited understanding of the voting process, or those with language difficulties. That is an assessment that is made by the divisional returning officer.

Senator RYAN: Sure.

Mr Killesteyn : The remaining 956 cases were predominantly nonresponses which were referred to the relevant Australian electoral officer in each state for decision. The AEO then decided what follow-up action would be taken. Out of that, we looked at what the potentially most egregious cases of multiple voting were. Essentially we looked at any cases where there appeared to be three or more multiple votes, and 19 cases were referred to the AFP for further investigation.

After discussion with the AFP we agreed on what we termed a 'day of action'. Essentially, the AFP committed resources to make contact with each of those 19 cases and make inquiries of those individuals about the allegation of multiple voting. The outcome of that was that 11 of those denied voting more than once, and in the absence of any further corroborating evidence, the AFP decided to take no further action—that they could not. In one case the AFP could not contact the voter after multiple attempts and so no further action was taken in that case. Four voters admitted voting more than once. In those cases one had related disabilities and the AFP decided not to pursue the matter—it was inappropriate to do so. The three remaining voters who admitted to voting more than once were issued with a formal police caution. No further action is being taken.

Senator RYAN: When you looked at the number of people, was one of the factors taken into account—in fact all of them—whether any those people had multiple voted previously?

Mr Killesteyn : There was one particular instance, I recall, where the person had allegedly voted multiple times in a previous election. I just need to confirm with Mr Pirani, I think that was one of the 19 cases that were referred to the AFP.

Mr Pirani : Yes, it was.

Senator RYAN: So that would be a standard part of the investigation undertaken by the AEC?

Mr Killesteyn : It is a standard part of determining what cases we would then refer to the AFP.

Senator RYAN: Of the five-odd per cent of letters not responded to or returned undelivered, I think those were the ones you said were referred back to the divisional returning officer?

Mr Killesteyn : Sorry, this is the—?

Senator RYAN: The 760-odd multiple voter letters that were sent out that were not responded to or they were returned undelivered. Are they the ones referred to the divisional returning officer?

Mr Killesteyn : Generally, and then we will then take action to see if we can further trace those individuals. If we cannot find them then ultimately objection action will be taken to remove them from the roll.

Senator RYAN: Can you take on notice for the 2010 election how many of those people have been removed from the roll subsequently?

Mr Killesteyn : Yes.

Senator RYAN: The resource limitations have been previously discussed. This is a resource-intensive program investigating issues of multiple voting. We go down from 16,000-odd names being marked off more than once—that is probably the best way to describe it—to 19 referred to the AFP, and then a requirement for you to agree with AFP on a day of action. Do you need the agreement of the AFP to pursue this?

Mr Killesteyn : It is the AFP's decision as to whether they will commit resources for further investigation. We will refer the cases and that is why we take a fairly careful view as to those cases that we think are the most egregious, but ultimately it is the AFP's decision.

Senator RYAN: Has the AFP refused to pursue or investigate any issues that you have requested them to?

Mr Killesteyn : In the 2010 election, the 19 cases that were referred were, in a sense, negotiated with the AFP.

Senator RYAN: How many did you start with? That was the outcome by negotiation. It always moves in from two points. How many did you initially suggest that the AFP should pursue?

Mr Killesteyn : I will not put a figure on it because I just cannot recall. I just make the point again—and I am sorry to repeat this—that we were looking to take action against those cases that were the most egregious, and we defined that essentially as three or more, where you would broadly make a conclusion that two might be an error, but with three or more you would start to question whether there was some intent involved. That was the basis upon which—

Senator RYAN: The problem is that a few hundred people voting twice has more impact than 10 people voting three times. I put my question again: was 19 the number that, internally within the AEC, you thought warranted further investigation by the AFP? You said it was a negotiated outcome, so—

Mr Pirani : My recollection was that it was 19. There were originally more than that that were referred to my team in Canberra. I had two lawyers go through it, to have a look at whether there was some prima facie evidence that would assist the AFP, because they have some issues with the numbers of cases that get referred to them. But my recollection is that about 52—

Mr Killesteyn : Fifty-five.

Mr Pirani : Fifty-five came to me in Canberra, but it was only 19 that went to the AFP.

Senator RYAN: I think you know where I am going. It is clear that you are making a judgment on what you think the AFP will accept. You made the point that it is a negotiation; you made the point that it is up to them what they investigate. It is of interest to me and others whether or not the AEC thought any more than 19 warranted further investigation. If you think only 19 warranted further investigation, then that is fine. We will probably end up pursuing this again in February; I am pretty certain that we will.

Mr Killesteyn : The 19 cases were ones where we thought that there was at least further information that was available that suggested to us that there may have been some intent on the basis of the multiple voting. As the AFP will tell you, the difficulty in all of these cases is around whether there is appropriate evidence that there was an intent and, indeed, a practice of multiple voting. That has always been the issue for us.

Senator RYAN: I understand that. Part of the action of the AFP is gathering evidence. It does become part of a self-fulfilling circle—a virtual circle. I move on to the issue of authorisations. Am I correct in saying that an insert in a newspaper by a member of parliament which is of the nature of 'standing up for our community' does not just require their name, the phone number at their office, their email address and their website; it actually requires a printed and authorised bio?

Mr Pirani : There are two provisions in the Electoral Act. Section 328 is the provision that requires the name and street address of the person who authorised it and, when it is printed in a newspaper, under section 331 it is supposed to have the word 'advertisement' in 10-point font at the top.

Senator RYAN: I have an insert here from Mr Danby. I am sure Senator Rhiannon will be interested; she seems to star in it. It describes it as a supplement from Michael Danby MHR, federal member for Melbourne Ports; it gives the phone number for, I assume, the office, an email address, a website, and there is no further information. That would be something that you would be interested in, in terms of a breach?

Mr Pirani : Thank you, Senator.

Senator RYAN: I will forward a copy of that to you later in the week. Are you receiving increasing numbers of complaints regarding the lack of correct authorisation of electoral material? I understand that it has been increasing. And what action are you taking against multiple infringers?

Mr Pirani : I have had several letters from the national office of the Liberal Party pointing out a number of breaches of section 328 of the Electoral Act.

Senator RYAN: Not from our side, I presume.

Mr Pirani : No. I have also had complaints in relation to some advertising in relation to the Australian Greens. We do our normal process which is that we write to the person, we point out what the correct process is, we seek an undertaking that there will not be any further breaches and we trust that they will take action to prevent it occurring again. Last week I had a letter that pointed out issues in relation to some advertising in Tasmania, and on Friday I wrote to both Senator Brown and Senator Milne seeking their assistance to resolve those issues.

Senator RHIANNON: I notice that the AEC website now has a function allowing donors, parties and candidates to lodge their returns online directly. Do you envisage this is the first step towards some form of continuous disclosure?

Mr Killesteyn : I think we have had this conversation before. Certainly if we move to a system of continuous disclosure then the AEC could not envisage that this would be done without some form of electronic assistance. Whether it is a first step is really up to the parliament to pass legislation to require it. As I said, we see that the technology is there to assist that if parliament so wishes.

Senator RHIANNON: Are there any increased costs associated with what you are doing, or do you feel that because it is online it could actually reduce costs?

Mr Killesteyn : There is certainly an implementation cost. This system that has been designed so far is fairly minimalist, and if we are going to a continuous disclosure system then we would have to increase the capacity of the system. There is probably some complexity as well in the nature of the detail that is required. So the cost would not only be on the AEC; it would also be on those people who are obligated to make the disclosure. So those costs in a sense would shift. Each organisation would need to establish its own internal processes by which it could identify which of the myriad transactions that they are no doubt conducting on a day-to-day basis would need to be disclosed to the AEC.

Senator RHIANNON: Has there been any research conducted into the ease of use of the AEC's donation disclosure website? Has there been any user acceptance testing?

Mr Killesteyn : We have not done any post-implementation evaluation as such but there was considerable consultation with the political parties during the design of the system. It is a relatively new system. Unless Mr Pirani has other advice, I do not think we have received any negative commentary about the system; in fact, I think it has been well received.

Senator RHIANNON: I want to move on to automatic enrolment. If automatic enrolment for federal elections is not legislated in time for the AEC to complete a thorough automatic enrolment program prior to the close of rolls for the next election, what steps will you take to contact those voters who have been automatically enrolled at a state level in New South Wales or Victorian elections and how would you encourage them to enrol for the federal elections?

Mr Killesteyn : We are already taking steps to make contact with all of those electors that have been directly involved by both the New South Wales Electoral Commission and the Victorian Electoral Commission. My officers will have the statistics but I think in relation to both New South Wales and Victoria we sent out something in the order of 60,000 letters to those people for whom we have advice from their respective electoral commissions that they have been enrolled. I might point out too that, at the time that both the New South Wales and Victorian electoral commissions directly enrol individuals, they are given information about not only their state enrolment but also the requirements to complete their federal enrolment. So by the time we contact them they will have had at least one letter from their state electoral commission plus our reminder. It is worth noting too, however, that the response rate to our letters to these individuals is relatively low. I think the number of people who are then taking action to complete their enrolment form with the AEC is about 12 per cent.

Senator RHIANNON: That is quite worrying. Do you have a follow-up step?

Mr Killesteyn : We will continue, as we have available under the legislation, to remind those individuals. Unfortunately, at some stage, if we do not get a response, then ultimately the other obligations under the act kick in, and they may have to be objected off the federal roll. We have pointed to the dangers that can arise in relation to divergence of both the Commonwealth roll and the state rolls.

Senator RHIANNON: So you have written to them. There are other measures that you have talked about. Could you outline them? Is it an education campaign, an advertising campaign—what are you looking at?

Mr Killesteyn : We are constantly looking for ways in which we can make it easier for people to meet their obligations. That was my point earlier to Senator Ryan—we think an appropriate strategy, given that the research essentially tells us that the stimulus for most new electors and existing electors who have an obligation to update their roll details is the calling of an election, is to try to move the stimulus away from the election to an earlier point. We think that things like the partnership we have with Australia Post and the Australian Taxation Office essentially make it easier for people—there is an inbuilt stimulus there—and, while they are changing their address for another process which they apparently attach more priority to, we are there reminding them at the same time. If it is easier—they can do it online—then we think there would be some value in that.

Senator RHIANNON: If there was a change to House of Representatives voting to allow the lodging of preference tickets so that votes which would otherwise be determined as informal were counted, what changes would the AEC have to make in the lead-up to the election and in the actual counting of the votes?

Mr Killesteyn : At this stage we only have the recommendation from the joint standing committee for those savings provisions. We are looking at the implications of that. Clearly there are some immediate implications of the potential to reintroduce into the count some 230,000-odd ballots. So there is an extra counting process there, and there is obviously a process of training our polling officials in how that count would be conducted and in the importance of ensuring that the particular group voting ticket matched the ballot that was not completed fully. As I said, we are still exploring all of those implications.

Senator RHIANNON: Could you outline how you see advantages or disadvantages that would be created in reporting of election results and conducting a preference count in this way?

Mr Killesteyn : I think these sorts of issues have been discussed in the joint standing committee. The primary advantage of these systems is that they potentially reduce the level of informality, and if you ascribe and attach a importance to the level of informality—which I think most people do—and think that there is value in the objective of as many people as possible not having their vote wasted, then—

Senator RYAN: But they do count votes that were not made, don't they?

Mr Killesteyn : Yes, but I am trying to balance the argument. I am saying that, on one side, if you believe in the notion that high rates of informality is not a worthwhile outcome in Australia's system, then this is one way of dealing with informality. On the other side, however, there are arguments which militate against these sorts of systems, and I think the primary argument that we laid out in our submission was the potential for a group voting ticket to determine the outcome of a person's ballot rather than the person themselves. How you balance that and how parliament balances that is, I guess, a matter for some continuing debate. I make the point that the Australian Electoral Commission is not taking a view here; we are simply putting the counterarguments for consideration.

Senator RHIANNON: Could you provide comment on the amount of additional resources that would be required? Is it within how you already manage an election, or would it change things substantially?

Mr Killesteyn : I have not done, and my people have not done, any estimates of that at this stage. If the legislation moves ahead then, obviously, we will examine the issue of costs. An election currently is costing around $110 million, most of which is spent on polling officials. I could imagine, simply because of additional ballots being included in the count and the need to distribute preferences, that there would be additional counting costs. There is also some education about the way in which the system is designed, which would require some different or additional advertising from what we already put out, but we have not made any estimates at this stage.

Senator RHIANNON: I would like to ask you about what appears to be a loophole with regard to the disclosure threshold. I want to set this out for your comment. If a donor donates $11,500 or more in one amount then the party must disclose the details of the donor. If, however, a donor makes multiple donations of, say, $10,000 on many different days then the party is not required to disclose the donor's details, as each amount is under the $11,500 disclosure threshold. The party is only required to include the amounts as part of total receipts by the party. You could take an extreme example: a donor donating $10,000 on each of 300 days in a financial year would have donated $3 million, but the party is not required to provide the AEC with the donor's details. That example could be any amount. The donor in such circumstances is required to disclose the cumulative donations in November—a month after the party's return—however, from my experience, many donors fail, at least initially, to lodge a return. If the party accounts are not audited by the AEC or the cumulative amounts of donations are not picked up in a compliance audit, then the cumulative donations that are above the threshold may never come to light. Is that an explanation of how it works, and do you see that as a loophole?

Mr Pirani : Senator, the only things on record indicating that there are issues in relation to the reporting by political parties and reporting by donors is that it is confusing for people often to understand the different reporting requirements and why we do not, on some occasions, have a match between an amount reported by a political party and an amount that is reported by a donor and vice versa. It is an issue, and it is an issue about which there was legislation which, to my understanding, is still before the Senate to partially address.

Senator RHIANNON: There was a question I forgot to ask earlier when I was asking some questions about the website. Are there any plans for the AEC to improve the functionality of the website, in particular the ability to cross-reference donations from the same donor over a number of years?

Mr Pirani : We have done as much work as we feel we can with our current resources on the current e-FAD and super-FAD return systems that we have on the website. We are hoping to do more development work as resources become available.

Senator RHIANNON: I want to ask about the issue of compliance. I am aware that it has come up a number of times before, but it continues to be something that is often queried when this work is looked at. If penalties for failure to comply with reporting requirements were strengthened, would this result in more cases, where the electoral funding law had been broken, ending up before the court? Would you then see that this could result in greater compliance?

Mr Killesteyn : I think we are in the land of speculation. Clearly there is an issue about the extent to which the DPP and the AFP make judgments about the value of mounting investigations based upon the relative size of the penalties, and if they are adjusted significantly then that may change their view. That is really a question that you need to pose to them. We have, however, put on record a consideration that—at least in relation to those offences which are objective offences such as late lodgement of disclosure returns—there would be value in consideration being given to an administrative penalty, which we believe might assist in compliance. But that is for strict objective penalties, such as late lodgement. There are other areas of offences such as misleading statements and so forth—incomplete statements where we do not believe that administrative penalties would necessarily be appropriate.

Senator RHIANNON: And on associated entities, should the definition of associated entities be rewritten to make them clearer and to include all organisations that operate totally or to some extent for the benefit of political parties?

Mr Pirani : Senator, we have raised issues about paragraph (b) of the definition, because it appears to be somewhat confusing. We have made some recommendations about an amendment to section 287, subsection (1). But of course part of that will depend on whether the current JSCEM inquiry has a result which is similar to the Canada model, then associated entities will be meaningless.

Senator RYAN: Mr Pirani, given the disclosures, discussions and public interest around the member for Dobell and various fundraising issues associated with that, have you put any extra procedures in place to capture things like credit cards that may be disclosable but not disclosed at the moment under the current regime? For example, credit cards provided by one organisation that someone can use during a campaign or for disclosable expenses but that are not at the moment?

Mr Pirani : No, we have not. Part of the issue would be how we would identify the credit cards, particularly given some of the more recent allegations that I understand are before the New South Wales police involving credit cards from a third party. I think one of the issues that JSCEM would be looking at would be: should it be illegal for money to be spent in any way in an election campaign that does not go through a campaign account? And if we were going to use something like what occurs in the US or Canada, then you would have to have a specified account, and only money sourced from that account would be able to be used in an election campaign. That would assist at least in alleviating the issue about if the money came from some other account and some other credit card then it would automatically be outside the scope and therefore be unlawful. But, again, that is a major change.

Senator RYAN: The problem with that, you would expect me to say, is that it poses quite an extra administrative burden on people who are doing everything right at the moment—particularly those that might not be supported by significant parties, but even parties have devolved arrangements. Do you have the authority to request further information from candidates so that at least you have on file and on record their statements with respect to issues like this? Could you ask them whether any expenses have gone through a credit card that have not otherwise been disclosed? I imagine some people might make innocent mistakes in that regard.

Mr Pirani : Senator, my understanding of the current process is that, when we go out and do a compliance review, we look at the appointment of the candidate agents and at the money that came from the campaign accounts which most of the party agents are responsible for. So we currently get some information from doing our audits of the parties themselves, but I do not believe currently in the act we have any power to require such additional information about credit cards that may have been issued.

Senator RYAN: You think it is a limitation of the act in not capturing effectively different mechanisms by which money can flow?

Mr Pirani : That is right. Of course that is one of the issues, as you well know, that in the current review by the joint standing committee we will be looking at. But it is an issue that is clearly there.

Mr Killesteyn : If I might beg the indulgence of the committee for a very short moment, I want simply to record that Paul Dacey, the Deputy Electoral Commissioner, who has been here with us for some time, is attending his last estimates hearing. Mr Dacey is retiring at the end of this calendar year. I certainly want to record his service to me and the rest of the AEC, but also to note that obviously he has given good service to the Senate estimates committee processes as well.

CHAIR: I thank you very much for putting that on the public record, and I am sure I speak on behalf of the entire committee. Since I have been on this committee and its chair I appreciate his contribution to the development of democracy in this country. Mr Killesteyn, I thank you and your officers for coming before us and we look forward to seeing you at the next estimates. When we resume the hearing after dinner we will move to the Department of Regional Australia, Regional Development and Local Government. And thank you, Minister.

Senator Wong: Thank you, Chair.

Proceedings suspended from 18:30 to 19:46