1. Introduction

1.1
Since 1983, each Parliament has created a Joint Committee on Electoral Matters (the Committee) to review the previous election. This Committee was similarly created in September 2016, following the election for the 45th Parliament on 2 July 2016.
1.2
Traditionally, the terms of reference for the Committee’s election inquiries allow the Committee to inquire into any aspect of the previous election. This inquiry is different because the Terms of Reference provided by the Special Minister of State include a range of specific, additional topics, including: authorisation of voter communication, the donations and disclosure regime, and regulation of third parties.
1.3
The Committee has also been asked to provide interim reports on two topics which were the subject of substantial media coverage and community debate in 2016:
authorisation of voter communication, by 1 December 2016; and
foreign donations, by 3 March 2017.
1.4
On 30 November 2016, the Special Minister of State agreed to an extension for the report on authorisation of voter communication. The unanimous report was tabled on 9 December 2016.
1.5
This report considers foreign donations, consistent with the request by the Special Minister of State for an early report on this topic. On 1 March 2017, the Special Minister of State agreed to an extension for this report to Friday 10 March 2017.

Context

1.6
In 2016, the issue of foreign donations was subject to substantial media coverage and community debate.
1.7
The Committee identified ongoing community concern that there is potential for foreign actors to use donations to influence domestic policy decision making and electoral outcomes.
1.8
For example, Mr Paul Erickson from the Australian Labor Party (ALP) commented:
We would see it simply as a question of whether the source of the funds is someone who has a direct interest or standing to participate in Australian democracy. We think that that is in one sense a community standard, if you will, which we have seen fairly forcefully articulated in some of the debates about the role of foreign money in Australian politics that have flared up over the last decade. It is the ALP’s view that is a community standard and a sentiment that the parliament needs to be mindful of in establishing electoral law and regulating the role of money in elections in a manner that maintains the confidence of the public in our political system.1
1.9
Mr Erickson went on to indicate that people have an expectation that the right to influence Australian domestic policy does not extend to foreign players:
That standard, in my view, is that people have an expectation that, for foreign money from foreign actors—large foreign bodies, as Mr Buchholz described them earlier—that is not connected to an individual or an organisation, that is a participant in public life in Australia or has an interest in the operations of Australian law, the law essentially should not facilitate a role for that money in influencing public affairs.2
1.10
Similarly, Mr Tony Nutt from the Liberal Party (LP) commented:
I think that that is a very important issue, and I think a lot of Australians would be very uncomfortable about the idea that, if you have a lazy $20 million and you happen to be a resident in New York, you can pump that into Australia through some force or another and very significantly affect public policy in Australia or very significantly affect elections.
At the very least we need to know, have it disclosed and be able to quantify and deal with that, but, as a general principle, people would be concerned about the level of resources that people now have to run for issues which may reflect the desires of foreigners in some foreign countries who have some perspectives—religious perspectives, political perspectives or whatever it may be—to very significantly affect decisions in Australia.3
1.11
This concern, that foreign players may influence Australian elections and political decision making, is at the heart of the Committee’s report on the issue of foreign political donations. It suggests a significant unease in the community about foreign donations, and the potential for the community to lose trust in our political system through the interference of foreign actors in Australian democratic processes.
1.12
Evidence provided to the Committee indicated that Australia lags behind other established democracies in regulating foreign political donations.
1.13
The Commonwealth Electoral Act 1918 (the Act) regulates gifts to political parties, candidates and third parties in Australia. However, the Act does not distinguish between donors who are in Australia or overseas, or between donors who are Australian citizens, dual citizens or non-citizens. Nor does the Act distinguish between legal or natural persons, except in the case of a donation made by a corporation that subsequently becomes insolvent.4

Definitions

1.14
Discussion of political parties, associated entities, third parties and other political actors occurs throughout this report. Definitions for these organisations are provided by the Australian Electoral Commission (AEC) and the Act.
1.15
Political Party means an organisation, the object or activity, or one of the objects or activities, of which is the promotion of the election to the Senate or to the House of Representatives of a candidate or candidates endorsed by it.5
1.16
An Associated Entity under the Act (s287) means an entity:
that is controlled by one or more registered political parties; or
that operates wholly or to a significant extent for the benefit of one or more registered political parties; or
that is a financial member of a registered political party; or
on whose behalf another person is a financial member of a registered political party; or
that has voting rights in a registered political party; or
on whose behalf another person has voting rights in a registered political party.
1.17
Examples of associated entities include '500 clubs', 'think tanks', registered clubs, service companies, trade unions and corporate party members.
1.18
Associated entities are required to lodge an Associated Entity Disclosure Return by 20 October each year.6
1.19
Third Parties are people or organisations (other than registered political parties, candidates and Federal government agencies) who incur political expenditure as defined in the Act. Political expenditure is expenditure incurred by a person or organisation, or with their authority, on:
public expression of views on a political party, candidate in an election or member of the Commonwealth Parliament by any means;
public expression of views on an issue in an election by any means;
printing, production, publication, or distribution of any material that is required under s328, s328A or s328B of the Act to include a name, address or place of business;
broadcast of political matter in relation to which particulars are required to be announced under sub-clause 4(2) of schedule 2 to the Broadcasting Services Act 1992; and
opinion polling and other research relating to an election or the voting intention of electors.
1.20
Other expenditure (for example, on administration or travel) is not political expenditure for reporting purposes.
1.21
Where political expenditure reaches the disclosure threshold third parties are required to lodge an annual Third Party Return of political expenditure by 17 November each year.7
1.22
Other Political Actors are individuals or organisations who engage in political campaigning but are not regulated by the Act.

Acknowledgement

1.23
To date, the Committee has accepted over 140 submissions and conducted 12 public hearings as part of its inquiry into the conduct of the last election.
1.24
All transcripts and submissions are available on the Committee website. A full list of submissions and public hearings will be included in the final report of the Committee.
1.25
The Committee wishes to sincerely thank all submitters and witnesses who have provided evidence for its consideration as part of this inquiry.

  • 1
    Mr Paul Erickson, Acting National Secretary, Australian Labor Party, Committee Hansard, Canberra, 15 February 2017, p. 5.
  • 2
    Mr Paul Erickson, Acting National Secretary, Australian Labor Party, Committee Hansard, Canberra, 15 February 2017, p. 5.
  • 3
    Mr Tony Nutt, Federal Director, Liberal Party of Australia, Committee Hansard, Canberra, 15 February 2017, p. 29.
  • 4
    Section 306B of the Commonwealth Electoral Act (1918)
  • 5
    Commonwealth Electoral Act (1918), Section 4, Number 4, ‘Interpretation’.
  • 6
    AEC, ‘Associated entities’ website, <http://www.aec.gov.au/parties_and_representatives/financial_disclosure/guides/associated-entities/index.htm> viewed 27 February 2017.
  • 7
    AEC, ‘Third parties incurring political expenditure’ website, <http://www.aec.gov.au/Parties_and_Representatives/financial_disclosure/guides/third-parties/index.htm>, viewed 27 February 2017.

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