Chapter 4 Options for private funding reform
The current Australian funding and disclosure scheme relies on a
disclosure based approach to regulation. An examination of the issues with the
current political financing regime as discussed in Chapter 3 raises the
question of whether moves to increase limitations on the sources of funding for
political parties are warranted.
There are two key proposals that have arisen regarding a move to a broader
funding and disclosure scheme: the implementation of caps on contributions to
political parties, and bans on contributions from particular sectors of the
community, such as corporations or particular industry groups. This chapter contains
a discussion of options for limiting donation amounts and types of donors.
The concept of a cap on donations to political parties involves the
implementation of a legislative limit on the amount that a single contributor,
whether an individual or organisation, can make to a single political party,
associated entity, candidate or Senate group. Such proposals generally provide
that associated entities are considered ‘part of’ a political party for the
purposes of the cap otherwise a clear opportunity for circumvention arises.
At the federal level, there is currently no limitation on the amount
that an individual, corporation or other organisation is able to donate to a
political party or associated entity. Similarly, there is no limit on the
amount of contributions a political party or associated entity may receive.
The only proviso is that donors that give amounts totalling above the
applicable threshold must meet their disclosure obligations under Part XX of
the Commonwealth Electoral Act 1918 (Electoral Act), as do all
registered political parties and their branches, as well as associated entities.
Political financing regulatory schemes involving caps on donations to
political parties have recently been implemented at the state level in New
South Wales and Queensland. Canada also currently has a regime in operation
that includes donation caps of an indexed figure of $1 000.
In NSW, donations to registered political parties are capped at $5 000,
while donations to unregistered political parties are capped at $2 000.
In Queensland, contributions to political parties were initially capped at the
same level as NSW, but from 1 July 2011, the applicable cap on donations is
calculated according to a legislated formula.
While donations to political parties have a legitimate place in the
Australian political system, some submitters advocated that capping the amount
that a political party and its associated entities can receive from a single
source could go some way to addressing concerns about the perception of undue
influence as a result of political donations.
The Australian Greens also support the introduction of donation caps,
...efforts that we can take to improve the standing in the
eyes of the voters is the goal. To put caps on donations to remove the ability
for organisations and corporations to make donations to political parties will
go a significant way towards improving that perception of voters.
The particular model proposed by the Australian Greens involved a strict
cap on donations from individuals (operating against a backdrop of a complete
ban on all other donations to political parties and candidates apart from those
from bequests) with two key features:
n Tithes imposed on a
parliamentarian’s salary or parliamentary pension should be exempt from the
donations cap applying to parties; and
n Political parties
should not be restricted from donating to their own candidates.
The reason for the exception regarding political parties donating to
candidates is the Australian Greens’ view that if a party receives all the
donations then its candidates may have little to spend unless the party can
donate to its candidates.
It was noted during a public hearing for the inquiry that the Australian
Greens had received a significant donation of $1.6 million from a single donor
in the lead up to the 2010 federal election. The ensuing discussion revealed
that despite the Australian Greens’ current policy to ‘[m]aintain transparency
in donor identity by making public at the end of each three month period all
donors and the cumulative total of their donations...over the previous twelve
month period, where those cumulative totals amount to $1 500’,
it had delayed the disclosure of this donation until after the election ‘out of
respect to the donor’.
The Australian Greens indicated that their disclosure of the donation had
still been in advance of the date at which political party returns covering the
period of the 2010 federal election were due. Mr Maltby stressed the
Australian Greens support for donation caps and stated that the donation from
Mr Woods had been much discussed within the party.
A number of submitters raised concerns regarding the potential for
circumvention of laws imposing caps. For example, Emeritus Professor Colin
Hughes commented in his submission that ‘options which are usually mentioned
are flawed, seriously so and sometimes fundamentally’.
Further, the Australian Electoral Commission (AEC) raised a number of
issues relating to donation caps and their effectiveness in practice, including
the potential for circumvention that exists and the need to design a scheme
that minimises that potential. The potential for these
to cause difficulties depends on the precise design of the cap model in place.
The issues highlighted by the AEC were:
n The need to
effectively and appropriately regulate third parties to prevent them from
overwhelming the political sphere in a system of donation or expenditure caps;
-> The difficulties
with regulating third parties, including devising a registration scheme were
n The existence of
overseas third parties and internet and social media – these make enforcement
of all caps difficult;
n The ability to
self-fund campaign expenditure – this complicates the issue of determining the
true source of funds;
n The potential for the
enactment of coordinated campaigns to circumvent caps between political
parties, candidates and third parties. These were said to be difficult to
prove, even where they were suspected to exist; and
n The need for a more
timely disclosure system to ensure electors are aware of any breaches of caps
before election day.
In relation to circumvention of applicable caps, the Australian Greens
identified the potential for party membership fees to be used as a mechanism to
avoid donation caps. To address this issue, the Australian Greens recommended
that political party membership fees be capped at a strict level, with $500 the
The Australian Greens also stressed the need for organisation
affiliation fees paid to political parties to be capped at approximately $2 000
for a similar reason. The Australian Greens argued that this was a fair amount
in light of the fact that organisations could still campaign as third parties.
The Australian Greens believe that individual donations should be
subject to caps for donations to each political party, including that party’s
candidates. This will prevent a donor from circumventing caps by donating to
many candidates from a single party.
The AEC stressed the importance of any donation cap scheme being
accompanied by an effective enforcement scheme.
Other submitters focused on the effect that the implied freedom of
political communication that exists in the Australian Constitution would have
on proposals for caps on donations made by individuals to political parties. Professor
Anne Twomey observed that:
When it comes to individuals, there are issues about putting
your money where your mouth is – your use of money as a form of political
In contrast, the United States has an explicit right to free speech,
which has affected its ability at the federal level to impose limits on
campaign expenditure. However, strict
donations caps are in place, with bans on donations from corporations, banks,
unions and federal government contractors. The political circumstances in the
United States appear to mean that the expenditure for the expression of views
bears a greater relationship with free speech than the making of donations,
which is seen in Australia as a method of free speech itself.
In addition to the complex question of whether the Commonwealth
possesses sufficient constitutional power to legislate to implement bans on
donations from particular sectors, Professor Anne Twomey raised federalism
issues in the context of both donation caps and bans on donations from
particular sources. She stated:
I note that in the tobacco bill the proposal does not require
particular Commonwealth political campaigns to be set up. So the ban in this
proposed [tobacco] bill would apply to all the states and state political party
branches with respect to their funding of state campaigns. That is when you
start getting into trouble when your Commonwealth legislation is impinging on
Accordingly there are a number of pertinent issues that require detailed
consideration when assessing the necessity, feasibility and possibility of capping
donations as part of wider reforms.
Any move to a system of donation caps must follow a holistic
consideration of options for public funding and caps on expenditure.
The use of donations as a form of political expression is an essential
element of participatory democracy.
A system of donation caps must be accompanied by changes to the timing
of disclosure, effective penalties that will act as a deterrent to breach of
the laws, increased investigative powers for the AEC, and consideration of a
move to a proactive enforcement scheme (as discussed in detail in Chapter 8).
The committee does not believe that the difficulties associated with
implementing and monitoring donation caps are insurmountable. The level of caps
can be appropriately set to effectively maintain the freedom of political communication
and act as a measure to curtail election spending (in concert with caps on
expenditure discussed in Chapter 5).
However, the committee does not support caps on donations to political
parties at the current time, given the potential that exists for circumvention.
A disclosure scheme—with a lower disclosure threshold and detailed disclosure—
provides an effective forum through which information about the movement of
funds in the political system can be made public.
Bans on types of donations
The introduction of bans as part of a disclosure scheme is not a matter
to be taken lightly. A key consideration is whether it is a necessary and
effective means by which the integrity of the democratic process can be
The Electoral Act already places limited financing restrictions on
political parties, candidates and Senate groups, in that they are not permitted
to receive anonymous donations above the applicable disclosure threshold.
Aside from this, individuals and corporations are able to freely make political
donations in Australia. However, once they do, they must meet their disclosure
obligations under Part XX of the Electoral Act. For administrative purposes,
the AEC provides separate approved forms for organisational and individual donors
but there is no legislative distinction between the two. Organisational
(including corporate) and individual donors are both subject to the same
disclosure rules and both corporations and individuals from all industries and
sectors of the community are able to freely make political donations.
Some jurisdictions have much stricter controls on individuals. For
example, under the Canada Elections Act individuals must be Canadian
citizens or permanent residents to make donations to political parties. The
NSW Election Funding, Expenditure and Disclosures Act 1981 also states
that people that wish to make political donations must appear on the state or
federal electoral roll and prevents certain sectors such as the tobacco
industry and property developers from making political donations. The Victorian
Electoral Act 2002 bans donations above a prescribed amount from the
for-profit alcohol industry.
A number of countries have banned categories of donations. The Canadian
Elections Act bans all corporations (and anyone apart from individuals that
are citizens or permanent residents of Canada) from donating to political
parties. The United States banned anonymous and overseas donations and
donations from corporations, banks and unions. The United Kingdom bans
anonymous donations. The Australian Greens expressed support for the
implementation of this measure in Australia.
In her appearance before the committee, constitutional lawyer Professor
Anne Twomey explained the test that must be satisfied to prevent a successful
constitutional challenge of legislation to ban donations from particular
sectors. The questions to be asked are:
...is there a legitimate interest involved and is the law
reasonably appropriate and adapted to achieve that legitimate interest in a
manner that is consistent with the system of representative and responsible
Any attempts to legislate in this area must take the constitutional
validity test into account as a prime consideration.
The issue of donations to political parties and associated entities from
corporations has historically been at the centre of discussions regarding undue
influence on the political process and actors in the process.
The Electoral Reform Green Paper – Donations, Funding and Expenditure
(first Green Paper) made reference to a study conducted in 2001 that claimed
that during the period it was conducted approximately ten years ago, the total
corporate donations were $29 million. The study found that:
...although the figure of $29 million over three years seems
relatively small in contrast to the value of the corporate sector, it would be
considered a much more significant sum when compared to the budget of the
The concern underlying the issues raised with corporations donating to
political parties appears to relate to their motivations for doing so. The
first Green Paper also made reference to comments in the study identifying a
gap in evidence on the issue.
Associate Professor Ken Coghill from the Accountability Round Table
queried the link between the well-being of corporations and the making of
political donations, thus raising the question of the precise motivations for corporations
making political donations. He stated that:
My understanding of how directors’ duties operate is that
they must take action which is in the best interests of the corporation of
which they are directors. To my mind, it is drawing an extraordinarily long bow
to suggest that the welfare of an individual corporation is a product of the
financial wellbeing of a political party, in terms of its campaign funding.
A further complication is that many measures to address the issue of perceived
or actual undue influence by corporations on political parties can potentially
give rise to complex issues in relation to individual rights. The reason for
this is that effectively regulating in relation to corporations and their role
in the democratic process can impact on individuals.
There are three proposals that arose in relation to corporations in the
context of discussions regarding bans and each is addressed separately:
n complete bans on corporations;
n bans on ‘foreign’
corporations making political donations; and
n bans on particular
industry groups making political donations.
Complete ban on corporate donations
In its submission to the first Green Paper, the Australian Greens drew
on the figures cited therein to express support for a complete ban on donations
from corporations to political parties. The Australian Greens concluded that:
There is general acknowledgement of the serious problems of
corruption and undue influence caused to the Australian electoral process by
the current system of reliance on private funding through donations and other
measures. The evidence provided in the Green paper illustrates clearly the
extensive amount of corporate donations received by the major parties, and note
that this accounts for 20 per cent of the private funding they receive. To
address this in part, the Australian Greens support a ban on donations from
As above, this may present even further issues at the Commonwealth level
in relation to impinging on individual rights which are likely to be afforded
significance by Australian courts.
Professor Anne Twomey highlighted the fact that while implied
constitutional freedoms such as the freedom of political communication and the
freedom of expression are likely to be afforded less value by courts where
participation by corporations in the political process was concerned, the
‘rights’ of individuals were still likely to be treated with great importance.
Professor Twomey concluded that:
You would be far more vulnerable to a successful
constitutional challenge if you took away the rights of individuals, especially
if they were Australian people who were on the electoral roll, people who have
a right to vote. If you removed their right to donate to political parties, I
think you would have real problems. If it is... removing the capacity of
corporations, unions or associations to [donate], I think it would be a much
more diminished risk.
In a context where bans on donations from corporations are in place, the
potential for circumvention through the use of individuals and setting up third
party interest groups is evident. This situation is said to have occurred in
the US. The practice, commonly referred to as ‘smurfing’, involves the set-up
of third party groups to make donations in order to avert a ban or circumvent a
An additional area that would need to be considered to prevent
circumvention of any bans, including those on corporations, is loans from non
financial institutions. Primarily these are loans made mostly to small and medium
sized parties and the usual arrangement is the provision of funds that they
then do not charge interest on and do not demand repayment of either until
election funding comes through or when the party is in a strong enough
financial position to repay.
While, strictly speaking, only the interest foregone is a donation
under the current scheme (unless and until the loan is forgiven), as these
‘loans’ can remain unpaid for many years, consideration should be given to
whether these should be treated as donations to close a potential loophole in a
system that involves bans on particular donations. In the context of caps,
perhaps such arrangements would need to be considered as being subject to a
Section 96GC of the NSW Election Funding, Expenditure and Disclosures
Act 1981 attempts to overcome this potential loophole by providing that
loans other than those from a financial institution that would have been
‘political donations’ if they were gifts, are to be treated as political
donations for the purposes of the legislation and thus must be disclosed in
accordance with the legislation. The potential for circumvention remains
to be seen as the legislation has only recently come into operation.
In the United Kingdom when revised political financing laws were passed,
the major parties took out loans to circumvent the new disclosure obligations
for the 2005 election. Accordingly, an amendment was passed so that the same
reporting obligations apply to loans as to donations.
Similarly, attempts to ban corporate donations in the United States have
resulted in an uprising of Political Action Committees funded and run by
corporations as a means of exerting influence on the political process.
The task of comprehensively legislating to minimise and eliminate the
potential for loopholes and opportunities for circumvention of bans in the area
of political financing is challenging, with possible constitutional issues and
the need to minimise opportunities to circumvent any laws being prime
Ban on donations from ‘foreign’ corporations
There are currently no limitations in the Electoral Act that prevent
corporations or individuals located overseas or whose primary business location
is overseas from making donations to political parties in Australia. Some
jurisdictions, such as Queensland, have already implemented a ban on gifts of
The Commonwealth Electoral Amendment (Political Donations and Other
Measures) Bill 2010 (the Bill) which is currently before Parliament defines
‘foreign property’ as:
(a) Money standing to the
credit of an account kept outside Australia; or
(b) Other money (for
example cash) that is located outside Australia; or
(c) Property, other
than money, that is located outside Australia.
The appropriateness of foreign corporations making donations to
Australian political parties was raised by the Democratic Audit of Australia as
an area of concern and in need of further regulation. However, the
difficulties of legislating to implement such a ban were also acknowledged,
with the Democratic Audit stating that:
Consideration could be given, on sovereignty grounds, to
banning donations from foreign ‘state-owned’ corporations, though problems of
definition would need to be carefully addressed.
The Australian Greens also expressed support for this measure.
The Democratic Audit indicated that devising an appropriate definition of
‘foreign’ posed a significant difficulty when attempting to legislate in this
area. The definition of
‘foreign property’ that is used in the Bill is able to be circumvented by
corporations with primary business overseas having Australian bank accounts and
The counter argument to this position is that there is no benefit to a
corporation maintaining an Australian bank account if it does not have legitimate
interests in Australia. Thus, the aims of the legislation seem to be met by
defining foreign property in the manner attempted in the Bill.
Some members of the committee expressed concerns in this regard that
businesses with legitimate interests in Australia and its political processes
would effectively be prevented from participating in the democratic process by
giving political donations.
Bans on donations from particular industries
The implementation of bans on donations from particular industries is
geared towards minimising the capacity of specified industries to exert
influence or appear to exert influence over the political process and its key
actors. A number of jurisdictions have taken this step, with NSW banning
donations from the tobacco industry and property developers. Victoria also has
bans in place on donations from the ‘for-profit’ alcohol industry.
Discourse surrounding bans on donations from particular industry sectors
generally involved significant focus on the tobacco industry. Some political
parties have already implemented self-imposed bans on receiving funding from,
specifically, the tobacco industry.
The Australian Labor Party has had a policy in place since 2004 not to
accept donations from the tobacco industry. The ALP Constitution provides
Under no circumstances will the Labor Party or any of its
endorsed candidates accept donations from the tobacco industry.
Similarly, the Australian Greens do not accept donations from the
tobacco industry. However, the Australian Greens are now seeking to go further,
with the introduction by Greens Senator Bob Brown on 15 June 2011, of the
Commonwealth Electoral Amendment (Tobacco Industry Donations) Bill 2011. This
bill proposes to amend the Electoral Act to create offences to prohibit
political parties or candidates from receiving donations from manufacturers or
wholesalers of tobacco products.
The issue of industry bans, focussing on banning the tobacco industry
from making political donations, was addressed in a number of submissions to
the inquiry. Major arguments in this respect were premised on three elements:
n Tobacco has negative
effects on public health and is responsible for a significant number of deaths,
even when used as directed;
n Due to this negative
societal effect, tobacco companies are held in low esteem among Australians;
n The negative impact
tobacco has had on society coupled with its low regard by electors renders any
attempts by tobacco companies to gain influence in the political spectrum
‘inappropriate’ and detrimental to the integrity of the democratic process.
The primary arguments that arose against imposing bans on particular
industries related to potential problems with banning companies conducting
activities that are currently legal from participating in the political
process. Issues also arose regarding the implied constitutional freedoms to
political communication that have been found to exist in the Australian
Constitution, particularly the scope for a resulting impingement on individual
In addition to the federalism issues discussed in Chapter 9, Professor
Twomey pointed out that the current bill proposing to ban donations from
tobacco companies does not apply to Independent members of parliament. The
terminology of ‘candidate’ that is used does not cover the situation because
‘candidacy’ is only for a defined period of time.
The AEC indicated in its fourth supplementary submission to the inquiry
that administrative issues may arise regarding the definitional issues in the
tobacco bill that were also raised by Professor Twomey. It stated:
...the AEC anticipates that there may be some administrative
issues in establishing how far the term ‘agent of a manufacturer or wholesaler of
tobacco products’ would extend...The AEC is of the view that it would be much
clearer if a definition of ‘agent of a manufacturer or wholesaler of tobacco
products’ was included in the bill.
During hearings, the committee queried whether laws imposing bans would
extend to preventing members of Parliament from speaking to representatives of
a tobacco company, highlighting the difficulties with legislating clearly and
appropriately in the area.
Professor Twomey identified the overlap between the regulation of
corporations and individuals in the context of legislating to implement bans on
tobacco companies, stating that:
If [legislation] goes so far as to mean that a director of a
tobacco company using his or her own money cannot then pay money to attend a
fundraiser or something, then potentially you are heading into that land of
The NSW Election Funding, Expenditure and Disclosures Act 1981
contains provisions stating that ‘close associates’ of corporations banned from
making political donations. A ‘close associate’ is defined to include a
director or officer of the corporation, or the spouse of a director of officer.
To date, there has not been a constitutional challenge to these
provisions, but the potential issues were noted by some constitutional lawyers,
as above. It has also been stated that bans on corporations only are less
likely to be constitutionally invalid, given that implied constitutional
freedoms are afforded less value in this context.
In Australia individuals donating to political parties is seen to be a
genuine expression of freedom of political communication, expression and
Banning certain categories of donors or donations could potentially be
an infringement of individual rights to use political donations as a means of
participating in the democratic process, as it may affect the rights of individuals
working for corporations.
Legislating to implement bans on donations from particular sources and
adequately addressing the potential for circumvention of any laws presents
There may be a number of factors motivating corporations to make
political donations. Corporations may not necessarily only donate to political
parties to obtain an ‘advantage’. It can be in their interests to more
generally support democracy that provides for a safe and profitable trading
environment. Accordingly, the committee does not believe there is enough
evidence to warrant the implementation of a blanket ban on donations from
However, corporations that are primarily located overseas being
permitted to make political donations is likely to add to the perception of
undue influence and negatively impact on the integrity of the Australian
electoral and democratic system.
||The committee recommends that the Commonwealth Electoral
Act 1918 be amended to ban political parties, Independent candidates,
associated entities and third parties from receiving ‘gifts of foreign
A number of arguments were made regarding the negative effect tobacco
has had on society. Some political parties already have policies and practices
in place that prohibit the acceptance of any donations from the tobacco
However, legislative attempts to ban political parties from receiving
donations from the tobacco industry may also impact on individuals that work
for tobacco companies. There is a risk that such laws may be interpreted by
Australian courts as an unwarranted encroachment on individual rights.
The committee does not support imposing bans on donations from the
tobacco industry. Concerns regarding the acceptance of political donations
from the tobacco industry can be addressed through the self-regulation mechanisms
currently employed by political parties. However, if such a ban is to be
pursued, appropriate legal advice should be sought on how best to frame the
legislation to minimise potential constitutional issues.
Sections 306 and 306B of the Electoral Act ban anonymous donations and
loans that exceed the applicable disclosure threshold to political parties,
candidates, Senate groups, or persons acting on their behalf.
The Commonwealth Electoral Amendment (Political Donations and Other
Measures) Bill 2010 (2010 bill) proposes to prohibit all anonymous donations of
more than $50 to political parties, candidates and Senate groups, as well as to
prevent the use of anonymous donations to incur political expenditure.
Where an anonymous donation is returned, or paid to the Commonwealth
within six weeks where return is not possible or practicable, the provisions
seeking to govern anonymous donations will not apply. This is the approach
taken in the 2010 bill in relation to foreign donations.
Anonymous donations of $50 or less made are allowed if they were
received at a ‘general public activity’ or ‘private event’. Political
expenditure that has been enabled by permitted anonymous donations is
allowable. Disclosure obligations are imposed regarding permitted anonymous
donations received during the disclosure period and the associated activities
GetUp expressed its support for the notion of banning anonymous
donations in certain circumstances. The group envisaged a scheme for donation
n Small anonymous
n Donations above the
anonymous threshold but below the transparency threshold (transparency
threshold is the normally applicable disclosure threshold for that financial
n Donations above the
transparency threshold up to the top of the donations cap.
GetUp argued that it should be unlawful for anonymous donations to be
made or received above the low threshold of $50. Recipients should keep
records of the number of donations received and the amount collected by
anonymous donations. GetUp stated that these figures must be regularly
reported to the national campaign finance authority.
GetUp proposed that where donations are received between the anonymous
donations threshold ($50) and the transparency threshold (which GetUp believes
should be set at $500 or $1000), recipients should be forced to collect and
retain donor details to ensure the integrity of the donations cap is not
breached, and for audit purposes.
GetUp argued that donations at this level should be reported
individually by value to the national campaign finance authority, but donor
names need not be disclosed.
The NSW Election Funding, Expenditure and Disclosures Act 1981 prohibits
‘reportable political donations’ being received from an unknown source.
Reportable political donations are donations about the $1000 threshold to
political parties, members, groups, candidates or third party campaigners. In
Queensland, under section 271 of the Electoral Act 1992, anonymous
donations of $200 or more are prohibited. The prohibition of anonymous
donations, including for third parties incurring political expenditure, is thus
an emerging trend in political financing.
It is important to pursue transparency and accountability in the
political financing regime by ensuring details of donors are retained, and that
political parties and third parties themselves are aware of their sources of
The measures proposed in the Commonwealth Electoral Amendment (Political
Donations and Other Measures) Bill 2010 and those employed in NSW and
Queensland are reasonably clear and straightforward. The approach proposed by
GetUp, while containing certain merits, adds an additional level of complexity,
which may impact on the capacity of people affected to comply.
The committee supports the implementation of a ban on anonymous
donations above $50, except in the circumstances at general public activities
or private events as outlined in the Commonwealth Electoral Amendment
(Political Donations and Other Measures) Bill 2010.
||The committee recommends that a ban be imposed on anonymous
donations above $50 to political parties, associated entities, third parties,
Independent candidates and Senate groups.
Limits on donations from individuals
There are currently no limits on individuals making political
donations. The only legal requirement is that where the donations made reaches
the disclosure threshold the individual must meet their disclosure obligation.
A number of other jurisdictions do impose limits on the individuals that
are able to make political donations. The Canadian scheme bans donations from
all sources apart from Canadian citizens and permanent residents. Under the NSW
scheme, individuals must appear on the federal, state or local government electoral
rolls to be able to make donations.
Calls for changes to the disclosure scheme where individuals making
political donations are concerned generally focus on banning those that are
outside the country from participating through the financing regime. This is
based on a view that those outside the country could not have a legitimate
interest in participating in the Australian political process and thus should
not be afforded any degree of the Australian Constitution’s freedom of
There are three ways in which a ban on donations from individuals that
are not resident in Australia could operate:
n a ban on donations
from non-citizens, such as permanent residents, of Australia that are located
n a ban on donations
from Australian citizens living abroad; or
n a ban on donations
from both these sources.
Professor George Williams suggested that individuals also should be
resident in Australia to be able to make donations to political parties.
This means that Australians living overseas would be prohibited from making
political donations. He wrote:
When it comes to donations, non-residents should not be
entitled to make monetary contributions to Australian political parties. Their
involvement in this way has the capacity to distort the Australian electoral
system and to provide an inappropriate outside influence on democratic decision
making in Australia.
The Commonwealth Electoral Amendment (Political Donations and Other
Measures) Bill 2010 proposes to ban all gifts of foreign property, which would
impact on non-residents donating to Australian political parties, unless they
had an Australian bank account from which they could continue to donate.
The Democratic Audit of Australia identified this clear loophole in laws
purporting to ban donations from non-residents to Australian political parties,
There appears to be public support for not allowing
non-citizens who are resident abroad to make campaign donations (as is the case
in the US), but it should be recognised that any such prohibition could be
easily circumvented by the use of local agents.
As above, there is an argument that the potential for circumvention of
the ban through use of a ‘local agent’ or Australian bank account still ensures
the aims of maintaining the integrity of the system are achieved because only
those with legitimate ‘links’ to Australia would maintain a bank account within
In Australia individuals donating to political parties is seen to be a
genuine expression of freedom of political communication, expression and
association. However, donations from individuals outside of Australia have the
capacity to negatively impact on the integrity of the Australian political
As indicated by Professor Anne Twomey, legislation that may potentially
infringe the implied constitutional freedoms is likely to be afforded less
significance where non-residents of Australia are concerned.
The committee supports the measure in the Commonwealth Electoral
Amendment (Political Donations and Other Measures) Bill 2010 to impose a
blanket prohibition on gifts of foreign property. Further, because such a ban
can be circumvented consideration should be given to administrative and/or
legislative measures to curtail the potential for this to occur.
||The committee recommends that in addition to the measure to
prohibit gifts of foreign property being implemented, methods to curb the
potential for circumvention be examined and solutions devised.