Electoral funding reform at the federal level is long overdue. Below, the Greens set out our vision for how the federal government should restore public confidence in the democratic process. Our suggested reforms are far reaching. They include strict caps or bans on donations and expenditure. We recognise that such reforms will most likely be introduced gradually. Changes should address greater transparency of political donations and election expenditure.
While we welcome the ban on political parties and their associated entities from accepting overseas donations, a concerning aspect of the Second Interim Report of JSCEM is the recommendation that this should also apply permanently to organisations which are not registered political parties or their associated entities.
If such a law was enacted it would drastically curtail the role of civil society in Australia. This is a highly partisan approach by the Liberal-National parties that would disadvantage some community groups working for the social good while not capturing groups such as the Minerals Council of Australia which is funded by large membership fees, which are not technically donations, from companies that are completely or largely foreign owned.
A more responsible approach would be to ban political parties and their associated entities from accepting donations from overseas citizens and overseas entities, and banning third parties from using donations from overseas citizens and overseas entities for election campaigning once the writs for an election are issued.
While a ban on foreign donations to political parties is welcome, it is minor in comparison to the excessive donations from domestic sources which damage the credibility of our democracy.
The Greens vision for electoral funding
(The issue of overseas donations is dealt with in the final section of this report.)
The Australian Greens believe that changes to the rules governing overseas property or money from overseas sources donated for the purpose of election campaigning in Australia should be part of a suite of changes to Australia’s electoral funding laws. These reforms should include caps on election expenditure, caps and bans on political donations and speedy and transparent public disclosure of donations to allow voters to have access to full information about the source of funding of political parties.
A ban on donations from for profit organisations.
A low cap on the amount of money individuals and not-for-profit organisations can donate each year to a political party or candidates.
Modest caps on election expenditure by political parties, candidates and third parties.
Adequate public funding for political parties and independents including both funding for election campaigning and for administrative work of the party.
Continuous disclosure of all political donations above $500, within two weeks of all donations being made.
Interim steps towards full reform
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 system.
Common funding rules for Commonwealth, State and territory elections
Electoral funding rules vary enormously between the Commonwealth and the various states and territories. This is a 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.
The federal government to initiate discussions between states and the Commonwealth in regard to political donation disclosure thresholds, time periods for disclosures, and the definitions of donations and other incomes that must be disclosed with a view to developing uniform laws within two years.
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 details on how parties spend their campaign funds. More information will assist the assessment of appropriate levels of expenditure caps.
Political parties be required to disclose how much was spent during the election period on each type of expenditure, such as wages, polling, advertising and printing.
Transparency of the political process was set back enormously when the disclosure threshold was raised to $10,000 indexed to the Consumer Price Index. A much lower threshold is needed and the loopholes that allow donation splitting between related political parties removed. These measures will help restore public confidence in the political process.
Reduce the threshold for the disclosure of political donations to $500 with no indexation and all related political parties to be treated as one body for the purpose of the disclosure level.
Third parties and elections
The Second Interim Report of JSCEM recommends that the proposed ban on overseas donations be extended beyond registered political parties. The analysis presented in paragraphs 2.26 to 2.34 on pages 13-15 of the Report make a number of assumptions about third parties that are not supported by the evidence presented to the Inquiry. Paragraph 2.26 states that “particular groups are not operating on a level playing field”.
This assertion is not explained and it is not acknowledged that responsibility for “the playing field” lies with the federal government and not with the third parties that engage in election activities.
The partisan nature of the Report is revealed in relying on evidence from the Minerals Council of Australia that sets out a number of examples that the Report labels as “partisan political advocacy”. The Report fails to analyse the MCA’s own reliance on funding from overseas sources. As of February 2017 the MCA had 47 full members. Of these:
20 are foreign owned (43 per cent)
Three are at least partially foreign owned (e.g. Rio Tinto and BHP)
24 are Australia-based companies (51per cent). Of the Australia-based companies, three quarters (18) are ASX listed and therefore may be owned by shareholders from anywhere in the world.
It is reasonable to conclude that a significant proportion of the MCA’s revenue is sourced and probably controlled from overseas.
Despite the fact that the MCA is an active political third party none of its overseas sourced funds would be curtailed under the JSCEM recommendations if adopted.
A ban on overseas donations to third parties would drastically curtail the role of civil society in Australia and would make the playing field less rather than more equal.
International philanthropy should not be blocked from funding projects or campaigns in Australia or projects run by Australian organisations.
Political campaigning takes many forms and completely blocking the receipt and use of overseas donations by third parties is anti-democratic. Australian non-government organisations using overseas funding make a huge contribution to our society through a range of programs including projects for Aboriginal and Torres Strait Islander peoples, health services, marine conservation and other environmental issues.
Third parties should not be subjected to the same laws that apply to political parties. It is only the latter that can have representatives elected to parliament and therefore be in a position to directly influence the workings and decisions of government. A ban on third parties using overseas donations for election campaigning during an election period would be an appropriate compromise.
Political parties and their associated entities should be banned from accepting donations from overseas citizens and overseas entities. Organisations which are not registered political parties or associated entities to be banned from using donations from overseas citizens and overseas entities for election campaigning once the writs for an election are issued.