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Monday, 10 November 2008
Page: 44

Senator HUTCHINS (4:40 PM) —by leave—I move:

That the Senate take note of the report.

The Senate asked the committee to review the bill, which proposes a number of amendments to the Commonwealth Electoral Act, including: ensuring that claims for public funding are limited to verifiable electoral expenditure; reducing the disclosure threshold from more than $10,000 to $1,000; facilitating the publication of disclosure returns in a more timely manner; making it unlawful to receive foreign or anonymous donations; and strengthening associated penalties and compliance processes. The committee believes that the changes proposed by the bill will significantly improve the transparency of financial support for political parties and candidates as well as the political expenditure and income of other participants in the electoral process.

The committee has made two recommendations to amend the bill. The first is to expand the definition of ‘electoral expenditure’ to allow for reasonable administrative expenses relating to campaigning. This will ensure that minor parties are not disadvantaged by the proposed changes, which are designed to ensure that ‘celebrity’ candidates cannot profiteer from public funding.

The second recommendation to amend the bill relates to the proposal to ban receiving anonymous donations. As currently provided, the bill may create an onerous burden in minor situations such as small-scale raffles and fundraising activities. The amendment proposed by the committee is that a cap of $50 apply, below which anonymous donations can be received.

The committee’s choice of a $50 threshold for accepting anonymous donations was based on a suggestion by the Democratic Audit of Australia. The committee did not receive feedback from the political parties on this issue. Others have argued for the threshold to be set at a higher level. However, the committee considers that a $50 threshold provides the appropriate balance for small-scale fundraising activities to be conducted without the fundraiser needing to identify all contributors.

The committee worked to achieve consensus on the report, with changes made to accommodate concerns over the definition of ‘electoral expenditure’ and the unlikely situation where a donor may be subject to harassment or intimidation. The committee recommended that the existing protections for interference with political liberty in section 327 of the Commonwealth Electoral Act be supported by establishing a dedicated unit within the Australian Electoral Commission that is responsible for promoting awareness of this section of the act and for maintaining a formal complaints register, and is directly contactable by a separate website and an advertised telephone hotline number.

The Australian Electoral Commission told the committee that it estimated that the proposed measures were likely to lead to at least a threefold increase in their workload. It will therefore be important that the government allocates appropriate resources to the commission so that it is able to implement the proposed arrangements in a manner that minimises compliance costs on participants, reduces publication time frames and ensures that compliance processes operate effectively.

Some inquiry participants have argued that the proposals included in the bill should be deferred and considered as part of a broader review process, including a government green paper and a separate inquiry by this committee. The committee does not share this view. The incremental reforms proposed by this bill are based on the overriding principle of openness and transparency in the financial transactions of participants in the electoral system. This principle will remain, notwithstanding any reforms which are progressed into the future. It is also important that the proposed changes are not delayed to close off the disclosure loopholes that currently exist and to give participants greater certainty over the arrangements that apply from 1 July 2008.

Changes to financial disclosure arrangements by the previous government—in particular, the lifting of the disclosure threshold from $1,500 to more than $10,000, indexed to inflation—have allowed significant funding to be provided to political parties and candidates without being disclosed. To give an example of how the lifting of the threshold to more than $10,000 weakened transparency, figures provided by the Electoral Commission revealed that the number of donor returns fell from 1,442 in 2004-05, when the threshold was $1,500, to only 229 in 2006-07, when the threshold was $10,300. The lengthy delay in the publication of disclosures above the threshold has meant that up to one year and three months may elapse after a donation has been made before it is made public. These arrangements clearly do not allow information to be provided to the community in a timely manner about financial support for political parties and candidates. The committee acknowledges that the proposed changes may lead to some additional compliance costs for participants in the political process. However, the committee considers that the proposed changes achieve the appropriate balance between transparency and the freedom to participate in the political process.

I would like to take this opportunity to thank my fellow committee members for their contribution to the inquiry, and those who participated by making submissions or appearing at the public hearings. I would also like to thank the committee secretariat for their assistance. I commend the report to the Senate.