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Thursday, 9 May 1991
Page: 3477


Mr BEAZLEY (Minister for Transport and Communications)(9.44 p.m.) —I move:

That the Bill be now read a second time.

There is no greater duty upon the representatives of the people in a democratic society than the duty to ensure that they serve all members of that society equally. This duty requires government which is free of corruption and undue influence. It requires standards of integrity and honesty from its representatives, and it requires that the system itself does not engender a diminution of those standards. The integrity of the electoral process is central to the maintenance of these standards and the honouring of this duty.

In our own society the pursuit of government office at all levels is far more complicated today than it was when the first elections were held for this Federal Parliament. The development of modern election campaigning and communication techniques has impacted greatly upon the electoral process. This has been no more so evident than in the area of campaign financing. The vast sums required to fund modern political campaigns have added substantially to the pressures upon the electoral system.

With these changes in mind the Joint Standing Committee on Electoral Matters, as part of its inquiry into the 1987 Federal election, produced a report titled Who Pays the Piper Calls the Tune-Minimising the Risks of Funding Political Campaigns. This Parliament is indebted to the Committee for its report. The concerns raised in the Committee's report have been the subject of separate State corruption inquiries. Both Queensland Commissioner Fitzgerald and Assistant Commissioner Roden of the New South Wales Independent Commission Against Corruption dealt with the problems of political campaign finances in their reports. Related concerns are now the subject of inquiries in Western Australia and Tasmania.

The risk to which the title of the Joint Standing Committee's report refers is a real and dangerous one. As Commissioner Roden said in his report on his investigation into north coast development:

With the mounting cost of campaign advertising, parties must be increasingly vulnerable to attempts by substantial donors to exert influence. It appears that the parties are themselves aware of this, and various proposals for increased public funding, limits on allowable spending, free television time, and bans on television advertising, have all been mooted.

This risk applies throughout Australia. No political party or government is quarantined from that risk. Steps must be taken to protect the integrity of our systems of government. The Bill before the House today will take such steps. It will contain measures designed to repel the threat of corruption to public order in Australia.

The Government will not wait until the problem becomes unmanageable. Action must be taken now to sanitise the electoral system. Nor will the Government take action which only partially addresses the problem. The Joint Standing Committee identified the need to expose the system of electoral funding by enhanced disclosure provisions, but equally identified the need to control the burgeoning cost of political campaigning. As Commissioner Roden has stated:

. . . as increasingly vast sums of money become necessary for successful political campaigns, the problem will grow. It must be faced and dealt with firmly and openly . . .

The majority report of the Joint Standing Committee considered a number of options for addressing the risks of funding political campaigns.

The Committee reviewed the present disclosure provisions of the Commonwealth Electoral Act. These provisions and those of similar effect in the New South Wales Act are the only laws requiring disclosure of political donations throughout Australia. The lack of a national uniform legislative scheme which comprehensively covers all political donations in respect of all levels of government is lamentable. The Government will propose to the State and Territory governments that the lack of such a system be remedied as quickly as possible. In doing so, the Government will put forward the comprehensive disclosure laws proposed in this Bill as the basis for uniform legislation. The Government welcomes the commitment to such laws already made by the West Australian and Victorian governments and sees this as a positive start to this process.

The need for full disclosure laws is universally accepted. Disclosure will remove the taint of suspicion from legitimate campaign donations which are at present not required to be disclosed. As Commissioner Roden said in his report:

To allow large secret donations to political parties or candidates is but one step removed from allowing large secret deals with political parties or candidates.

The Committee considered a number of options for dealing with the problem of potential corruption stemming from campaign costs. The Committee recommended that a system of free time for party political broadcasts be offered to registered parties and candidates by broadcasters who would provide air time free of charge. The proposal was strongly criticised at the time it was released. Many of the criticisms had more to do with the protection of self-interest than a fair assessment of the proposal. The Government has rejected the proposal because it believes that the allocation of time to parties would be inequitable and administratively impracticable. Free time would unfairly advantage the major political and incumbent parties.

The Government has also rejected the proposal for a limitation on advertising expenditure by political parties. Experience, both overseas, particularly in the United States with so-called political action committees, and domestically, through such notorious examples as the community polling organisation in New South Wales, has shown how easy it is for political parties to conduct campaigns through front organisations.

The Government's preferred course for dealing with the problems associated with campaign costs is to prohibit the broadcasting of political advertisements. The Government has not taken this step lightly. The competing claims of the various options were considered. The Government opted for a ban on political advertising because it is the fairest and most effective means of addressing the problem of burgeoning campaign costs.

The proposed ban is aimed directly at the single greatest factor in campaign costs. The exorbitant cost of broadcast advertising precludes the majority of the community and all but the major political parties and large corporate interests from paid access to the airwaves. The Government carefully considered the implications of the proposals on the right to freedom of speech, both as it is generally accepted and specifically under international law. In respect of the latter, article 19 (2) of the International Covenant on Civil and Political Rights, to which Australia is a party, requires parties to guarantee the right of freedom of expression. This right is not absolute.

Article 19 (3) of the covenant provides that the right may be limited in the interests of public order. The prohibition of the broadcasting of political advertising is directed squarely at preventing potential corruption and undue influence of the political process. The Government is satisfied that the proposals are a necessary and proportionate response to this threat and do not constitute a breach of our international obligations. Of course the ban will not affect the expression of opinion or information through broadcasting of material other than advertising.

Mr Speaker, I turn now to the text of the Bill. The Bill inserts a new part III into the Broadcasting Act 1942. The part contains a framework for the proposed ban on the broadcasting of political advertising. Part III is structured in a way which makes it clear that the several provisions of the amendments are to operate to the extent that the Constitution allows. The present Government of New South Wales has indicated that it will challenge the proposed ban to the extent of its application to State governments and elections.

The Bill has been drafted with the possibility of such a challenge in mind. It also reflects the different nature of election and non-election periods. During the former, when the heightened attention given to political issues creates more intense pressure on broadcasters to give access to politicians and parties, the Bill prohibits certain government advertising and does not provide for the same exemptions from the ban as those which operate in non-election periods.

The ban will prohibit broadcasters from carrying paid or unpaid advertising which includes political matter. It will extend to such advertisements, whether run by broadcasters on their own behalf or on behalf of others. The latter step is designed to ensure that broadcasters do not flout the ban. The ban extends to elections for all levels of Government, including by-elections and Commonwealth referendums to alter the Constitution. Were the ban to apply only to Federal elections, the problems created by the need of political parties to raise huge sums necessary to advertise during an election campaign would be only partially addressed. As the Joint Standing Committee report concluded, parties would merely transfer funds to exempt campaigns.

In the Bill, political advertising means advertising containing political matter. This definition of political matter is used throughout the Bill and is based upon that of electoral matter in the Commonwealth Electoral Act 1918. The provision has been modified slightly to fit the context of the Bill. Fundamentally, political matter is defined to include matter which is likely, or intended, to affect voting at an election or matter which includes an implied or explicit reference to an issue in an election. It would not include, for example, the ordinary fundraising activities of a charity.

Under section 95 of the Bill the ban is to operate at all times and includes the prohibition of advertisements containing matter likely to affect voters at, or matter before voters in, any election whensoever held. Sections 95b, 95c and 95d operate during specific Commonwealth, Territory, State and local government elections. Under these sections, the ban prohibits the broadcasting of advertisements containing political matter in respect of the relevant election period. The Government has been particularly vigilant to ensure that under the Bill incumbent governments do not enjoy an advantage over their opponents through the use of government advertising.

Firstly, government advertising which falls within the general prohibition on political advertising will be banned. Secondly, during a Commonwealth election period, the broadcast of all Commonwealth government departmental or authority advertising other than that containing exempt matter will be prohibited. A similar ban upon Territory government advertising will be imposed during Territory elections. The extended ban is designed to ensure that Government advertisements which arguably may marginally fall outside the definition of political matter cannot be screened during election periods. Whilst it is currently Commonwealth government practice to administratively apply such a ban, the Bill will ensure that the ban has the force of law in the future. The ban is confined to political advertisements, as commonly understood.

The broadcast of bona fide news reports, current affairs programs and documentaries which contain or relate to political issues will not be affected by the legislation. Broadcasters and members of the public will continue to be free to use these forums and others, such as talkback radio, to express views on political issues. Editorial comment by broadcasters will not be impeded by the ban on advertising. The delivery of information to the public, including the print handicapped, by such means will be unimpeded.

The airwaves of Australia belong to all Australians. Currently, access to those airwaves by means of paid advertising through commercially licensed operators is restricted to those few in the community who can afford to pay the prohibitively high cost. In respect of the broadcast of political advertisements, the chief users of the airwaves are the major political parties who at the 1990 Federal election expended over $15m on broadcasting advertisements. During the same election period, all other non-political party expenditure on such advertisements amounted to $1.7m. Of that figure, over $1.1m was expended by the logging industry, while the Australian Conservation Foundation spent just over $25,000 on broadcasting activity. These figures illustrate the inherent inequity in the presentation of political debate through electronic advertising. The reality is that only the rich can get their message across by such means.

As one political commentator has described the current situation, `A system in which money decides who is and who isn't heard renders meaningless the right of free speech'. The ban will thus remove the privileged status of those few in the community who can afford to pay the high costs of broadcast advertising to express their political views, at the exclusion of the vast majority who cannot afford to do so. It will place all in the community on an equal footing so far as the use of the public airwaves is concerned. It must also be remembered that television advertising leads to packaging of important political debates and information into 30-second or even 15-second messages, widely criticised for their trivialising of content and concentration on image making.

Whilst the bulk of expenditure by political parties on advertising occurs during elections, the proposed ban will operate at all times. If the ban were restricted to election periods, parties and others who buy political advertising would run campaigns outside the ban period. The problems associated with a need to raise the huge sums necessary to fund campaigns would remain but apply to mid-term and pre-election period campaigns which could be expected to take on the importance presently attached to election campaigns.

The Bill provides for certain matter to be exempted from the effect of the ban. This is primarily non-contentious matter and includes announcements concerning civil or military disorder, information relating to the conduct of and promoting participation in an election or referendum, the promotion of services and programs of the ABC and SBS, certain non-contentious Government administrative announcements and advertisements for goods and services which do not contain any political matter and which are run on behalf of Government departments or authorities.

A further exemption which applies in all but election periods is made for advertisements which concern matters of public health. This would include AIDS prevention and anti-drug abuse advertisements, but not advertisements which refer to public health systems. The voluntary broadcast of party policy launches during election periods will not be prevented by the ban. Such launches will be restricted to no more than half an hour in length and may be broadcast on only one occasion. The provisions of the Act requiring equal treatment of political parties will continue to apply to the broadcast of launches.

The use by politicians of `free broadcast time' for party political broadcasts will be prevented by the ban. This will ensure that politicians do not enjoy access to the airwaves which is not available to other members of the community. This will include the provision of `free time' by the ABC.

The Bill ensures that all broadcasters, whether public or private, are treated in the same way. Apart from applying the ban to the ABC, the Bill will not affect the ABC's power to determine to what extent and in what manner it shall broadcast political or controversial matter.

The Australian Broadcasting Tribunal will be able to receive complaints regarding alleged breaches of the ban provisions.

In recognition of the urgent nature of complaints of alleged breaches of the ban, for example during election periods, the Tribunal will be required to deal with complaints or information about alleged breaches forthwith.

Both the Tribunal and any individual with legal standing will be empowered to seek an order from the Federal Court to enforce or prevent a likely breach of the provisions of the new part.

The ban is expected in practice to operate chiefly as a deterrent. It will be an offence under the Broadcasting Act for a broadcaster to broadcast an advertisement contrary to the ban. Compliance with the ban will also be a condition of every licence granted under the Act.

The provisions of the part will also be conditions of licences and permits issued under the Radio Communications Act 1983 thus extending the ban to video and audio entertainment and information services, such as Sky channel.

I turn now to the amendments to the Commonwealth Electoral Act. I have already referred to the inadequacies of the current disclosure requirements in the Electoral Act. These were perhaps best summarised metaphorically by the former Commonwealth Electoral Commissioner, Dr Colin Hughes, in his evidence before the Joint Standing Committee:

What happens under the present arrangements would be that the recipients of donations stand to one side of the table with three walnut shells, only one of which is transparent if it is labelled `a donation to the next Federal election'. There are two other walnut shells which are completely opaque and it is up to us to guess which walnut shell the pea is under. If it is not under the transparent one, they merely say, `wrong', and that is the end of the matter . . .

The majority report of the Joint Standing Committee accepted that the matter referred to by Dr Hughes should not end there and made sweeping recommendations to overcome the deficiencies in the present law.

The Government agrees with the Committee that these changes must be made and electoral financing in Australia should be open and transparent.

The reforms proposed in the amendments to the funding and disclosure provisions of the Electoral Act will bring that transparency to the electoral process. It will enable the Electoral Commission to investigate and expose any avoidance of the disclosure obligations.

The public is entitled to be assured that the parties and candidates which make up the government or opposition of the day are free of undue or improper outside influence. The present system of disclosure cannot and does not engender complete confidence. The Government will restore confidence to the system by exposing who pays the piper.

The Electoral Act will be amended to require political parties to fully disclose all income, expenditure and debts. Parties will be required to lodge annual returns with the Australian Electoral Commission within four weeks of the end of each financial year in addition to the existing requirement for the lodging of returns in respect of electoral expenditure following elections.

Where a party is required to disclose a gift as income in an annual return, details of the identity of the donor will not be required where the donation or total of all of the donations given to the party by the donor is less than $1,000. The sum total of such gifts will need to be disclosed.

While the Government had earlier announced that the limits of gifts of $1,000 for political parties and $200 for gifts to candidates under which full details of the identity of the donor would be increased to $1,500 and $300, in finalising the legislation the Government has chosen to retain the present limits to ensure the disclosure requirements are not relaxed under the new proposals.

Tougher disclosure requirements will also be placed upon third parties who participate in the political process.

Third parties include persons or organisations other than registered political parties or candidates who incur electoral expenditure, including the making of a gift to a political party or candidate.

Currently third parties are required to disclose such expenditure but need not do so where the expenditure relates to an election which does not occur during the specific reporting period. This has enabled third parties to avoid the reporting requirements. The Joint Standing Committee identified this problem and recommended that the loophole be removed. The Bill removes this loophole by requiring disclosure of electoral expenditure in respect of any election.

Third parties will also be required to disclose any gift made to a political party or part thereof, regardless of whether the gift is for electoral or other purposes.

The Commission will also be required to publish a list of all third parties in its reports on the operation of the funding and disclosure sections of the Act. This will ensure that the identity of those participating in the political process will be publicly available in keeping with the commitment to full disclosure.

The Government is determined that the Electoral Commission should be armed with the powers necessary to enforce the disclosure requirements of the Act. The Commission has for some time had the power to conduct investigations where it has reasonable grounds to believe that an offence relating to the disclosure provisions of the Act has been committed. The provisions amount to the ability to conduct a spot audit of a political party or a candidate's financial affairs to ensure the Act has not been breached.

While the Commission retains confidence in the efficacy of such compliance audits as an enforcement tool, the current provisions require the Commission to have reasonable grounds to believe that a breach of the Act may have occurred in order to activate an audit. This has prevented the Commission from conducting random audits.

The Government's amendments will remove the deficiencies in the Act and provide the Electoral Commission with the power to subject political and third parties to random audits to ensure compliance with the disclosure requirements of the Act. The Commission will be able to do so at any time and will not be required to have a reasonable ground to suspect an offence under the Act has been committed. Political and third parties will be subject to a random audit at any time.

Furthermore, the Commission will be required to publish a record of all spot audits in the reports on the funding and disclosure provision of the Act which it is currently required to publish following each election. The Commission will also be empowered to issue such supplementary reports as it considers necessary to comply with its obligation to report all spot audits.

As some third parties are not established solely for political purposes and their financial affairs may only relate in a marginal way to their involvement in the political process, the Commission will be prevented from publishing any details obtained during a third party spot audit other than details of an offence under the Act.

The Government has moved, through the Bill, to recognise and protect the rights of donors. The Bill will make it an offence under section 327 to interfere or hinder with the free exercise by a person of his or her right to make a gift to a political party.

The Bill amends the Act to provide that registered political parties and candidates are entitled to the same level of public funding per Senate vote as is provided for a vote for the House of Representatives. Under the public funding provisions inserted in the Act in 1984 a Senate vote is currently valued at one half or two-thirds of a vote for the House of Representatives depending upon the type of Senate election held. These provisions discriminate against smaller parties who concentrate upon Senate campaigns and fail to sufficiently acknowledge the costs of such campaigns. The Bill will place all votes on the same footing.

Amendments are also made to the Electoral Act and the Referendum (Machinery Provisions) Act to ensure that the result of an election or referendum cannot be overturned by the Court of Disputed Returns by reason only of a breach of the Broadcasting Act or the Radiocommunications Act.

Mr Speaker, the Bill represents a comprehensive response to the threat of corruption and undue influence which hangs over the political process. In the terms of the Joint Standing Committee report these proposals minimise the risks created by the need to fund political campaigns. The importance of sanitising our electoral process and of restoring public confidence in it has never been more paramount. The potential risk in not doing so will not diminish in the future. I commend the Bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Smith) adjourned.