Dissenting report – Senator Lee Rhiannon, The Australian Greens
The inquiry has been a missed opportunity to make key
advances in federal election funding reform. New South Wales and Queensland
have introduced recent legislative reforms to restrict donations and campaign
expenditure which must be undertaken at a federal level as a move toward
national uniform reform to enhance and protect our democratic system of
It is disappointing that the inquiry rejected the
opportunity to place caps on election expenditure, to place a total ban on
corporate donations, or to support a ban on all donations from the tobacco,
gambling, alcohol and property development industries. These four industries
have all made large donations to political parties and there is substantial
evidence that such donations influence government policies that affect those
industries. Prohibiting these industries from making political donations would
be a first step in combating the corrupting influence of donations in
In particular, the inquiry missed the opportunity to support
the Australian Greens’ Commonwealth Electoral Amendment (Tobacco Industry
Donations) Bill 2011 that will ban donations from manufacturers or wholesalers
of tobacco products by political parties, to end the culture of Big Tobacco
buying influence in Parliament.
The inquiry report recommends some small though significant
changes to the electoral funding system, which the Australian Greens support.
By lowering the donation disclosure threshold to $1000, and counting all
donations to related political parties when determining if a donor has exceeded
this threshold, a much larger proportion of donations to parties will be
disclosed, enhancing the transparency of the donations disclosure process.
It is encouraging that the inquiry recommends that any
donation of over $100,000 must be disclosed within fourteen days. However, the
decision that this rule will not apply cumulatively to multiple donations from
the same donor has created a massive loophole. It will not be difficult for a
donor to avoid the $100,000 donation disclosure threshold by making a series of
smaller donations over a few days.
The Greens vision for electoral funding
The Australian Greens aim to see elections in Australia
funded through a combination of public funding and small donations from individuals,
with speedy and transparent public disclosure of donations to allow voters to
have access to full information about the source of funding of political
To this end, the Australian Greens recommend:
A ban on all donations from all entities other than individuals.
A cap on the amount of money that can be donated in a year from a
single individual to a political party or candidates.
Caps on expenditure by political parties, candidates and third
Adequate public funding for political parties, including both
funding for election campaigning and for other administrative work of the
party, with funding based on the percentage of the vote received by each party.
Continuous disclosure of all political donations above $100,
within two weeks of all donations being made.
Over the last three decades the scale of spending in
Australian elections has sky-rocketed, with both major parties engaging in a
funding arms race that has seen a rapid increase in the amount of money spent
in Australian federal and state elections. The spending increase has
outstripped the availability of public funding, and thus private donations to
major political parties have increased markedly, particularly from business and
lobby groups who are most affected by government legislation.
This growth in donations has seen a culture develop where
large donors have gained privileged access to ministers and MPs, and policy
decisions have benefited large donors such as property developers. This has
contributed to a perception that corporate donors are buying influence. In
some cases there is evidence that this perception accurately reflects the real
relationship between politicians and donors.
In some states, such as New South Wales and Western
Australia, these issues have resulted in a series of scandals where ministers
have been exposed making decisions to benefit key donors. Property developers
have particularly developed inappropriate relationships with local councillors
and state politicians who make decisions about property development. While this
poisonous culture has been most obvious in states like New South Wales and
Queensland, donations continue to buy influence in federal politics and in
every state in the country.
Current electoral funding laws not only allow these large
donations, but they make it difficult for most people to identify who is
donating to whom. High disclosure thresholds and loopholes allow many tens of
thousands of dollars to be donated to a political party from a single company
without being disclosed. Lengthy disclosure periods mean that donations made
in the lead up to an election are kept secret until well after the election is
held. While it is easy to dismiss concern about the corrupting influence of
donations as a mere perception of corruption, it is impossible to have
definitive answers as long as large political donations can remain a secret.
The Greens NSW launched the Democracy for Sale research
project’s website in 2002 in order to shine a light on the influence of
donations on the political process. This website has compiled information from
donations returns to the Australian Electoral Commission and the NSW Electoral
Funding Authority, classified donations by donor industry and provided them in
a transparent and easily accessible format that allows the public to view at a
glance where political parties are sourcing their funding. Official disclosure
websites have often failed to do this.
We have now begun to see some movement in the states. New
South Wales passed new laws in late 2010 that placed caps on donations, put
limits on campaign expenditure, and banned donations from certain industries.
Following the 2011 state election, the new government in New South Wales has
proposed legislation to impose further restrictions on campaign donations. The
Queensland government has also begun to make moves in the direction of
restricting donations and campaign expenditure.
Federal legislation is central to tackling the issue of
reforming the culture of political donations. Australia’s political parties are
mostly national organisations and money regularly flows from one state to
another. It is impossible for states to effectively reform the electoral
funding system without reform on the federal level. For example, the new laws
in NSW can still be effectively circumvented by donating to a federal election
campaign. These donations can still have a corrupting influence on state
Internationally there is a trend towards electoral funding
reform. The Australian government is falling out of step with other western
democracies that are strengthening their democratic processes.
Short term measures
While the Australian Greens support comprehensive reforms to
the electoral funding system there are a number of interim steps that should be
implemented to increase transparency and public trust in the electoral funding
1. Common funding rules for Commonwealth and State elections
Electoral funding rules vary enormously between the
Commonwealth and the various states. This is a most serious issue when it comes
to the disclosure of donations and expenditure. Efforts at a state level to
regulate money in politics have been undermined by the ability of donors to
funnel money into party federal election accounts which are not under the
jurisdiction of state election funding laws.
While it may be difficult to reach agreement about a
standard for caps on expenditure and bans on some types of donations, there are
other areas where gaps and loopholes could more easily be closed.
Different jurisdictions vary in
terms of how large a donation can be without being disclosed and in terms of
what time period is covered by each return. In addition, different
jurisdictions vary in terms of the definition of a ‘donation’, and how much
detail must be covered. All of these variations make it hard to compare like
with like, and reduce transparency in the system.
Efforts are made to reach agreement with state governments to ensure there is
uniformity between states and the Commonwealth in regard to donations
disclosure thresholds, time periods for disclosures, and the definitions of
donations and other incomes that must be disclosed.
2. Detailed disclosure of electoral expenditure
Political parties are now
required to provide an overall amount of expenditure by the party in their
annual return to the Australian Electoral Commission, yet there is no
requirement for any more detail. If we are serious about having a strong
disclosure regime, it is important to know how parties spend their campaign funds.
More information will assist the assessment of appropriate levels of
Political parties are required to disclose how much was spent during the
election period on each type of expenditure, such as wages, advertising and
3. Ban on donations from certain key industries
There is a pressing need to ban donations from certain
industries with a record of using political donations to try and influence
policy. In particular the property development, tobacco, alcohol and gambling
industries are all dependent on government policy and have funnelled large
amounts of money to both political parties.
The Australian Greens and the
Australian Labor Party do not take donations from the tobacco industry, but
other parties continue to take these donations. These industries are now banned
from giving donations for NSW state elections under NSW legislation.
Recommendation 3: Ban
donations from the property development, tobacco, alcohol and gambling
Long term solutions
4. Public funding of elections
The Australian Greens support a system of full public
funding for elections. The Canadian electoral funding system serves as a good
model as it includes:
a ban on corporate donations and caps individual donations;
caps on election campaign expenditure;
reimbursement for election expenditure based on percentage of
payment of an annual allowance (adjusted for inflation) to
political parties for operational and administrative costs.
Recommendation 4: A move
towards the full public funding of elections campaigns.
5. A ban on all donations except from individuals and bequests
There is widespread cynicism in the community about the
influence of donations over political parties and politicians.
There is a common perception that the payment of donations
is a form of corruption, and that corporate donors are buying access to
decision makers which is not available to the average person.
The best way to restore trust in the democratic process is
to restrict political donations to only those made by individuals and bequests.
This would ban businesses and lobby groups from using donations to push an
agenda while allowing individuals on the electoral roll to give a limited
amount of money.
While there is no doubt that individuals may also have a
political agenda, the sense of corruption is much less in the case of
individuals. It is also important that there is still room for modest donations
from individuals to help fund new parties.
It is also legitimate for
parties to gain funds from many individuals giving small amounts of money, and
this can be a way to raise money without effectively selling influence.
Recommendation 5: Ban all
forms of donations and fundraising payments except those received from
individuals on the electoral roll and from bequests.
6. Caps on donations by individuals
While individuals should be
permitted to donate to candidates and parties, it is necessary that these
donations are restricted to smaller amounts that do not have the danger of
corruptly influencing parties or members of Parliament.
Restrict donations by individuals to a maximum of $1000 in any one year to any
political party, with donations to different branches of the same political
party counting towards a single cap of $1000.
Restrict donations by individuals to a maximum of $1000 in any one year to
candidates from the same political party, with donations to different
candidates of the same political party counting towards a single cap of $1000.
7. Continuous disclosure of donations
At the moment, donations are not revealed to the public
until the regular cycle of electoral returns and party annual returns are
usually months after the federal election. This time lag dramatically reduces
the accountability of parties and candidates. Voters have the right to know
about donations before they go to the polls.
This committee has taken a small step in the right direction
by recommending that any single donation of over $100,000 is disclosed within
14 days of receipt. This requirement can be easily avoided by spreading a
donation out over a number of occasions, possibly in a very short period of
time. This loophole should be immediately closed. Moves should be made now to
ensure continuous disclosure of all significant donations.
Recommendation 8: If at
any point a donor has given over $100,000 to a political party or candidate the
party or candidate is then required to disclose all donations from that donor
within fourteen days of the cumulative donations exceeding $100,000.
Recommendation 9: All
donations from donors whose cumulative donations over the course of a year
exceed $1000 be disclosed.
Recommendation 10: The
government provide sufficient funding to the Australian Electoral Commission to
develop a system to allow for immediate submission of returns for all donations
of $1000 or more within seven days of the donation being given.
Recommendation 11: Once
it is technically feasible, parties and candidates are required to disclose all
donations from donors who have donated $1000 or more in that financial year
within fourteen days of the donation being received.
8. Limits on spending during election campaigns
In the fiercely competitive environment of electoral
politics, there will always be the temptation for parties and candidates to try
to attract greater amounts of donations than their rivals, regardless of what
rules are imposed restricting their ability to receive donations.
Restricting the level of
expenditure is an effective way to bring fairness to the electoral system and
stop the election funding arms race that has engulfed Australian politics.
12: A cap is imposed on election expenditure for each state for political
parties and for each House of Representatives electorate for candidates for the
three months prior to election day.
Penalties are imposed for violation of election expenditure caps, including
loss of public funding, large fines, and in extreme cases disqualification as a
candidate or as a Member of Parliament.
Senator Lee Rhiannon