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Thursday, 15 November 2018
Page: 8300

Senator BROCKMAN (Western Australia) (13:37): I rise to contribute to the consideration of the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill today, to make a few points about the importance of the law keeping pace with a very much changing international global environment in political communications and political influence. We have to recognise the fact that as times change the law has to change. It was not too many years ago, when I first started to get involved in politics, that people who were out campaigning in Australia were 99 per cent funded by people putting their hands in their pockets and by Australian businesses contributing to political campaigns that influence their daily lives. But now you're seeing an increasingly globalised world, where the money trails are complex. They are very long and they are very obscure indeed.

Integrity in our political systems, in our electoral systems, is absolutely critical to the good functioning of government and civil society in this country. I think it is clear, from the discussions over the last couple of years and from the work done by JSCEM, that Australia's regulatory approach has not kept pace with international developments nor with some domestic developments. Internationally, there is an increasing incidence of foreign attempts to influence elections around the world. There are some high-profile cases involving government-to-government hacking of systems and so on, but there is a lot more prosaic funnelling of money through various institutions, various environmental groups, various social organisations, various channels that are, as I said earlier, very hard to track. It is very hard to extract the level of influence they are having within our system.

This is a concern not only in the real sense but also in the perception sense, because perceptions in politics are very important. We need to make sure we have a strong system of integrity and fairness, but we also need people to have confidence in that system of integrity and fairness—that it is actually working and that the accountability and the transparency of all those involved in political finance is utmost in our minds. Again, going back to the global nature, both of money flows and of political influence, we need to always keep that in mind when we are thinking about changes to our electoral legislation.

It's also important that we provide consistency in regulation so that, where large sums of money are involved, we seek to reduce foreign influence on Australian political actors by restricting the ability of that foreign money to finance domestic election campaigns. This is vitally important. One thing that has slightly puzzled me is some of the reactions to the initial tranche of legislation that the government put forward in this respect. Obviously, there was a very good JSCEM process—the Joint Standing Committee on Electoral Matters—which looked thoroughly into this bill, but, on the original tranche of legislation, there was another committee called the Select Committee into the Political Influence of Donations. I was on that committee at that time, and I asked the head of GetUp!, Mr Oosting, a pretty simple question, I thought. I asked: 'I know it's fully legal, but does a body like GetUp! accept foreign donations?' Mr Oosting's response was: 'Over time, we've received a very small number of foreign donations—roughly 0.5 per cent of our total income has come from forces overseas. That has included environmental foundations who have supported our work and one of our sister organisations, which is a global body called Avaaz. The maximum it's ever been is about 1.4 per cent of our income. I believe that was three years ago.'

That was at a time when GetUp! was launching a vociferous campaign against the government's approach to restricting foreign donations, and it does beg the question: if GetUp!'s income from foreign donations is so small, why was there a vociferous campaign launched against this government? It does make one think that perhaps it's because GetUp! is opposed to anything this side of politics does, as opposed to the contents of the actual laws themselves. I won't dare impugn the words Mr Oosting said. I take them at face value and assume that their source of funding wasn't coming from overseas. But, given that, why else attack the government so strongly over this legislation?

As I said, there was a very good process through the Joint Standing Committee on Electoral Matters looking at that original tranche of that legislation. As is good process in this place, that committee, looking at things from a number of different perspectives, came up with a set of recommendations, and the government took notice of those recommendations and has amended the legislation to take into account some of those recommendations in a constructive way. The government has always been on the record as being appreciative of the constructive approach and the goodwill demonstrated by all sides in that Joint Standing Committee on Electoral Matters. The government absolutely welcomes the cross-party support in the committee's report, which proposed that a foreign-political-donations ban should apply to all relevant electoral expenditure. The government has been back to the joint standing committee twice to ensure the bill aligns with the JSCEM's intentions in its recommendations.

So, again, we've seen with this bill a willingness to listen to voices on the other side, to alter the position, to make sure that we are getting these laws correct. This is a very contested space where we have to get the balance right to make sure we are not going to damage civil society. But, at the same time, we are going to cut off those potentially dangerous layers of money from outside actors seeking to influence the results of Australian elections. It is something that has happened everywhere else around the world. My understanding is that we are one of very few Western democracies that does not specifically ban foreign donations from playing a role in domestic election campaigns. So, in a sense, we are catching up, but it is still important to take those steps and make sure that we close the door.

So what does this bill actually do? It bans foreign donations from financing Australian politics. It does this by prohibiting the giving, and the knowing receipt of, all gifts from foreign donors where the donor intends the gift to be used for electoral expenditure. It penalises donors who make prohibited gifts or false or misleading statements to recipients. It requires donors to affirm to political campaigners, political parties and candidates that they are not foreign for gifts between $1,000 and the disclosure threshold—for instance, that may be a checkbox on a donation form—and it requires political campaigners, political parties, candidates and third parties to verify that donors are not foreign for gifts above the disclosure threshold, which is $13,800 this financial year, and that of course will go up over time.

A menu of alternative forms of proof is listed to help recipients check a donor's status. Recipients may use a listed approved form or undertake other reasonable steps to ascertain that a donor is not foreign. Anti-avoidance rules are included to, for example, adjust the movement of foreign funds between organisations. As part of the anti-avoidance rules the Electoral Commissioner can require an organisation that is part of an avoidance scheme to stop a scheme or not participate in it.

There is a transparency register as part of this bill. Again, that has perhaps caused some confusion. I think it is important to understand that the integrity of Australia's political process can be safeguarded through this increased accountability and transparency but, without the transparency part, there is no accountability. The registration and, more importantly, the publication of data on the transparency register in real time build on the authorisation reforms already introduced by this government by providing further transparency. This greater transparency will provide voters with unprecedented access to information about the political actors shaping political debate. It will also facilitate a more modern enforcement approach to the electoral funding and disclosure regime. By identifying those who comply with the reporting requirements early, the AEC can focus on education and assistance for regulated entities before deadlines have passed so the law is not broken.

Why aren't third parties required to register? In its advisory report, the JSCEM recommended that obligation should be commensurate with the level of expenditure. The government has actioned this recommendation while ensuring third parties are subject to a lesser regulatory burden than political campaigners, those organisations that spend significant amounts on elections. So who must register? The significant political campaigners and associated entities will need to register with the AEC. Following the submission of an annual return, third parties will be automatically added to the transparency register by the Australian Electoral Commission.

There has been significant consultation on this bill. Obviously the JSCEM process itself has been a very important part of that, bringing the major parties in this place together and giving all those who are interested the chance to look at this bill and contribute to its formulation and contribute to the amendments that I have discussed.

The bill was developed in response to growing concerns about foreign donations and the Joint Standing Committee on Electoral Matters' second interim report on its inquiry into the 2016 election. The committee then invited submissions from interested parties. In fact, the JSCEM received over 200 submissions. So you can see that this was an area that elicited great interest, particularly from organisations, community groups and people involved directly or on the periphery of the political process. The committee held nine public hearings in all capital cities except Darwin. Submitters and witnesses to the inquiry included academic citizens, interest groups and, of course, political parties. We do have a legitimate interest in making sure the system is correct and the system works. There was widespread consensus among those submissions that foreign donations should be banned for the reasons I talked about earlier. In view of the extensive consultation undertaken by the committee and its initial report and the high level of public engagement with the committee, the government, in effect, used the committee as a channel for the public consultation and revisions to the draft bill, and that is further demonstrated by the fact that the government went back to the joint standing committee on two occasions for further input into the legislation. Of course, the other party that was significantly consulted during this process was the Australian Electoral Commission, which has to oversee the implementation of this legislation. Obviously, the Attorney-General also played a significant role in the drafting of this legislation.

In the relatively short time I have available to me I want to run through the amendments from the initial bill that came out of the JSCEM process and were reflected back to JSCEM for their endorsement. Firstly, the proposed amendments do three things. They ensure key political actors who spend significant amounts of money on electoral expenditure are subject to appropriate disclosure obligations, with those obligations being commensurate with their level of electoral expenditure. Obviously, we don't want the same level of disclosure from a very small, very local community organisation as we expect from the large national players.

Secondly, the amendments clarify that spending solely on the issue advocacy is not treated as electoral expenditure when that spending is not aimed at influencing voting in a federal election. This has been one of the main concerns of charities and other organisations that spend a lot of effort lobbying on particular laws but do not necessarily go on to seek to influence votes at elections. Obviously, it's a very important part of civil society that groups feel that they can freely contribute to the development of legislation, the development of government policy, without being impacted by these changes.

Thirdly, they override state laws to the extent that they would prevent donations or compel the reporting of donations that were made for Commonwealth electoral purposes or are available for Commonwealth purposes—that is, not pledged or reserved for use in a state or a territory jurisdiction. You have a situation—particularly on that last point, I think it is important to say—where there is some inconsistency between state and federal laws. These amendments make sure that federal laws apply to federal elections and that state laws apply to state elections. It's very important that we keep that distinction, we don't confuse the two levels of government and we don't make it more difficult for people to be able to participate in our democracy at the two respective levels of government.

The government's amendments specifically address recommendations from JSCEM following its first inquiry into the bill. As I stated earlier, most of the recommendations address concerns raised by the charitable and not-for-profit sector. The amendments address these concerns by establishing a single transparency register on which key political actors are required to report their federal electoral expenditure and large gifts that are used to fund election campaigning. The amendments also ensure that pure issue advocacy is not treated the same as campaigning activity. It replaces the original definitions of 'political matters' and 'political expenditure' and replaces those with new terms, 'electoral matter' and 'electoral expenditure'. So, in that way, we are only seeking to capture the activity that is directly aimed at influencing how people vote in federal elections. We are not seeking to in any way restrict people from advocating for a particular position in regard to, for example, a government's policy position or a particular piece of legislation that is going to be before the parliament.

The draft amendments also seek to provide appropriate exemptions to recognising that 'electoral matter' does not include news reports, material created for a dominant artistic or academic purpose, private communications or private lobbying of Commonwealth officials, parliamentarians or political parties. We don't want to stop the flow of communication to politicians or parliamentarians; however, we want to make sure that people feel free to be able to communicate. Obviously free and open communication is one of the central tenants of our society. There are changes to the monetary threshold for rules that regulate gifts and expenditure above which more stringent requirements apply. When an organisation spends a significant amount of money on elections, it will be categorised as a political campaigner and will not be able to receive any gifts from foreigners for any purpose. This treatment applies where electoral expenditure exceeds $500,000. There are significantly more recommendations from the JSCEM report which I'm not going to have time to go through, but I do commend the bill.