Executive Summary

This report explicitly reviews foreign political donations. This is an interim report which is part of a broader inquiry by the Committee into the conduct of 2016 Federal Election and matters related thereto.
Underpinning all Committee deliberations on foreign donations is the principle of national sovereignty – that only those with a direct standing interest participate in Australian democracy.
The Committee received evidence that the current political donations regime and, in particular, the ability for foreigners to donate to Australian political actors, does not reflect community expectations. The Committee identified the following four principles as fundamental to a trusted system for political donations:
Transparency, via visible, timely disclosure of donations and donors;
Clarity, about what is required and by whom;
Consistency of regulations, so that they capture all participants and support a level playing field; and
Compliance, through enforceable regulations with minimal, practicable compliance burdens.
In accordance with these principles of a trusted political donation regime, the Committee’s recommendations are as follows:
Recommendation 1
The Joint Standing Committee on Electoral Matters recommends that any donation reform of the Commonwealth Electoral Act 1918 be in accordance with Australia’s sovereign interests.
Recommendation 2
The Joint Standing Committee on Electoral Matters recommends that any donation reform of the Commonwealth Electoral Act 1918 be consistent with the four principles of transparency, clarity, consistency and compliance as identified by the Committee in this interim report.
Recommendation 3
The Joint Standing Committee on Electoral Matters recommends a prohibition on donations from foreign citizens and foreign entities to Australian registered political parties, associated entities and third parties. This ban would not apply to dual Australian citizens either in Australia or overseas, or to non-Australian permanent residents in Australia.
Recommendation 4
The committee recommends that the Joint Standing Committee on Electoral Matters, in its wider inquiry into donations and disclosure, further examines the requirement to extend a foreign donations ban to all other political actors. The key issue to be considered is how to prevent foreign funds being channelled through organisations engaging in political activities and who are not subject to regulation under the Commonwealth Electoral Act 1918. This new inquiry would also examine related issues that have arisen in this inquiry which are outside the current terms of reference, including tax deductibility for gifts.
Recommendation 5
The Joint Standing Committee on Electoral Matters recommends that the penalties in relation to offences in the Commonwealth Electoral Act 1918 are significantly strengthened to include stricter penalties for non-compliance.

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