Calls for reform
Submitters and witnesses highlighted the urgent need for holistic reform of federal political finance laws, citing the broad lack of transparency of the current political donations system. As discussed in Chapter 3, the consequences of a continuation of the current system are significant.
Dr Livingstone and Ms Johnson described the current donations system as having 'numerous flaws from the perspective of transparency and support for policy that acts in the genuine interest of the public'. Dr Livingstone reiterated this point at a public hearing, commenting that:
…the process of political donations at the moment, which, as we try to point out in our submission, is lacking transparency to a very significant extent, allows decisions to be made without any awareness by the public of the forces that might be at work on some of the decision-makers and clearly gives the impression, if not the substance, of favouritism in terms of those with the resources to make significant decisions.
The Australian Conservation Foundation (ACF) argued that the 'opacity of the system is clearly a barrier to political accountability, especially when trying to map the direct influence of specific industries to specific policy makers'.
Similarly, Dr Yee-Fui Ng submitted that '[t]he current political donations disclosure regime at the federal level is inadequate and riddled with loopholes'.
Mr Paul Oosting, National Director of GetUp, characterised the political influence of donations as a 'crucial issue that goes to the heart of our democracy', further contending that:
It's no secret that Australia's system of political donations is broken. Corporations and wealthy individuals are able to pump millions of dollars into political party coffers. Yet there is no oversight and no accountability and the transparency provisions are becoming beyond a joke.
The Hon Anthony Whealy QC, Chair of Transparency International Australia (TIA), summarised the organisation's position as 'one of concern about the way our political donation system has evolved' and expressed the view that 'there is an urgent imperative to make changes'.
Professor George Williams AO submitted that it 'is widely accepted among experts and others that Australia's system of political finance law is broken, and open to exploitation and undue influence'. Professor Williams also noted that:
The many problems with the current system have given rise to a large number of reports and recommendations. My view is that it is time now to act by way of bringing about holistic reform to federal campaign finance law.
Dr Belinda Edwards, a politics academic, conceded to being 'a little disheartened' by the lack of progress with regard to political donations reform.
In the same vein, Adjunct Professor Colleen Lewis argued that the 'time has come for action, not more words', also submitting that the 'public has repeatedly made its displeasure with the system and the conduct of some parliamentarians very clear'.
Professor Tham expressed similar sentiments, pointing out to the committee that the 'need for fundamental reform has been apparent for a long time':
It was apparent in 2008 when Senator John Faulkner, then Special Minister of State, released a green paper emphasising the need for reform of political finance laws. It was apparent the next year when the present Prime Minister, Malcolm Turnbull, called for root-and-branch reform of the laws. And it's even more apparent now when there's open talk of a crisis of representation in developed democracies with deep public disaffection with our representative system, including strong perceptions and beliefs that government is no longer oriented towards a public interest and is hostage to vested interests, particularly money interests.
Inquiry participants emphasised the need for a holistic approach to effectively address the current flaws in the federal political finance regime. Participants argued that changes that only target particular parts of the system will simply result in the evasion of regulations through the use of loopholes and re-channelling of funds.
Professor Williams clearly summarised this point:
One thing that is true here, as with overseas, is that money will find a way to evade any system unless it's holistic and comprehensive in dealing with the myriad of opportunities to influence a political process, whether it's through parties, associated entities or the like.
I think if we are serious about removing the problem here, then we need reform of this kind. If we don't have all the pieces, then it's too easy to evade.
Barriers to transparency
The committee heard strong evidence during the inquiry regarding the significant barriers to transparency of the current federal political finance system. Issues consistently highlighted by inquiry participants included:
high levels of non-disclosure that is facilitated by the high disclosure threshold and use of donation splitting;
the inconsistent and inappropriate use of the 'other receipts' category for categorising income on annual disclosure returns;
the operation of associated entities such that the ultimate source of donations is obscured; and
poor data accessibility resulting from delayed disclosure of donations and the presentation of Australian Electoral Commission (AEC) political finance data.
Witness and submitters argued that these issues create numerous means through which political actors can circumvent disclosure provisions and, in doing so, seriously impede the ability of the public to scrutinise political funding and the potential undue influence of donations on the political process.
High levels of non-disclosure
As previously noted, political party and associated entity annual disclosure returns lodged with the AEC must show the total value of receipts, payments and debts, as well as details of any donations received (monetary and non-monetary) that exceed the disclosure threshold. The disclosure threshold, indexed annually to the Consumer Price Index (CPI), is currently $13,500 (2017–18).
While donations above the prescribed disclosure threshold are required to be fully accounted for in political parties' annual returns, specific details of private funding below the threshold, either from donations or other sources, is not required to be disclosed. Consequently, it is not currently possible to determine the total annual figure of donations to political parties that are below the disclosure threshold.
Dr Belinda Edwards' 2016 report—Dark Money: The Hidden Millions in Australia's Political Finance System (Dark Money report)—commissioned by GetUp found that, in the 2013–14 election year, 63 percent of the Liberal Party of Australia's (Liberal Party) private income and 50 percent of the Australian Labor Party's (ALP) private income was entirely undisclosed. Similar levels of non-disclosure have been reported for the 2015–16 election year.
There was a general consensus among participants that the present disclosure threshold is too high and undoubtedly compromises transparency by allowing for significant levels of non-disclosure.
Professor Tham characterised the disclosure threshold as 'perhaps the most serious loophole of the federal disclosure scheme', noting that it permits an 'astonishing level of non-disclosure'. In discussing the 2006 amendments to the Commonwealth Electoral Act 1918 (Electoral Act) that gave effect to the current indexed threshold, Professor Tham contended that:
This change is less about public disclosure of donations and loans and more about the records kept by parties: it will mean that parties can legally accept larger sums without recording details of the donor. This potentially renders the old notion of disclosure thresholds meaningless.
At best, this change is an invitation to poor record keeping; at worst, it is a recipe for wholesale circumvention of the disclosure scheme.
The Australian Greens submitted that '[t]he current indexed $13,500 disclosure level encourages substantial anonymous donations and hides from the public who is buying political influence'.
ACF expressed similar concerns, noting that '[s]ources of political donations to political parties and their associated entities are made opaque by the relatively high disclosure threshold'.
The AEC observed that there is considerable debate concerning whether the current disclosure threshold is appropriate and commented that some political parties choose to disclose amounts below the current threshold 'to reflect a public expectation about the required level of disclosure'. The AEC also noted that there are differing disclosure requirements across jurisdictions.
Most states and territories in Australia currently have disclosure thresholds in place (Table 5.1), excluding Tasmania and Victoria. The operation and amount of the threshold varies across the relevant jurisdictions, however the applicable threshold in all cases is substantially lower than the federal disclosure threshold.
Table 5.1: Disclosure threshold in Australian states and territories
Figures compiled by the Parliamentary Library
Suggested disclosure threshold
Submitters and witnesses were broadly supportive of a significant reduction to the disclosure threshold to improve transparency and reduce the risk of undue influence. Participants recommended that the threshold be reduced to $1,000 or lower.
For example, the Synod of Victoria and Tasmania, Uniting Church in Australia (the Synod) contended that:
Public disclosure of any donations of $1,000 and above and denial of anonymous donations over $50 would tackle the issues of undue influence and policy capture that swirl around the current donations regime.
Dr Ng submitted that the current disclosure threshold at the federal level is 'too high' and 'should be reduced to $1,000 to increase the transparency of the system'.
Associate Professor Luke Beck was also supportive of a reduction of the disclosure threshold to a value of $500 to $1,000. Professor Beck considered that a threshold at this level represents an appropriate balance in terms of avoiding administrative burden while ensuring that donations of a value with the potential to influence a recipient are publically disclosed:
You don't want to disclose $2 raffle tickets, because that would be an administrative nightmare, and there's no real reason; $2 is not going to influence any particular outcome. But you don't want a $13,000 threshold, because $10,000 speaks. If somebody puts $10,000 in your campaign account, you notice that. So you would want a limit that is sufficiently low but not so low as to capture raffle tickets—so something like $500 or perhaps $1,000. But with any threshold above $1,000 you're simply setting up a way to circumvent disclosure.
The current funding and disclosure regime prevents the receipt of anonymous donations above the disclosure threshold. Some participants argued that the amount above which anonymous donations are prohibited should also be significantly reduced.
GetUp contended that all donations above an aggregated value of $500, including those made to associated entities, should be publically disclosed.
The Synod endorsed a lower threshold on anonymous donations, recommending that anonymous donations over a value of $50 be prohibited. In subsequent evidence to the committee, the Synod noted that '[w]e have been cautious about saying no anonymous donations at all' due to the increased administrative burden that would place on political parties:
…for every tiny donation there would have to be records kept, which potentially could be quite an administrative struggle for some political parties.
In addition to the high disclosure threshold, several participants highlighted the practice of 'donation splitting' as further facilitating non-disclosure and a means of circumventing disclosure requirements.
The AEC broadly defined donation splitting as:
…where the sum of donations disclosed by a donor in a particular year, is over the disclosure threshold, but the party named by the donor does not disclose the same or any amount.
Mr Tom Rogers, Electoral Commissioner of the AEC, informed the committee that there can be more than one reason for donation splitting to occur:
Under the current legislation there are many different contributors to donation splitting, and we've spoken about that at length. It can be as simple as, for example, a donor, out of an abundance of caution, declaring matters that they are not required to declare and then a party not declaring those matters, so it looks like donation splitting. It could be, under the current legislation, that a donor might provide something to an associated entity, the associated entity then provides something to a party, and the party might not even be aware that a donor had given that money to an associated entity.
Under the Electoral Act, registered political parties are not currently required to provide details or a disaggregation of donations received that are under the disclosure threshold. Donations of a value below the threshold are included in a party's total receipts on their annual disclosure return. Donors are required to disclose donations ('gifts') made to the same political party or candidate where the sum of those donations totals more than the disclosure threshold.
Mr Paul Pirani, Chief Legal Officer at the AEC, highlighted this difference in the present application of the disclosure threshold between political parties and donors as another reason for donation splitting to occur:
The other particular issue that we've got at the moment is the application of the threshold. At the moment the recipient political party only has to report where a single gift is above the threshold, while the donor has to accumulate all the small gifts et cetera they may make that may be underneath the threshold and then do a disclosure return once they hit the threshold. So, again, the current legislation is able to operate in such a way that donation splitting occurs, and you get a mismatch between what a donor might declare and what a recipient political party might declare.
Several participants pointed to the fact that, under the existing legislation, the disclosure threshold applies separately to each registered political party. The Electoral Act treats the national and each state and territory branch of the major political parties as a registered political party. As explained by Professor Tham, 'this means that a major party constituted by nine branches has the cumulative benefit of nine thresholds'.
Some submitters and witnesses asserted that donors can use this separate application of the threshold in order to circumvent disclosure and conceal their identity, effectively hiding the potential influence of their donation from public scrutiny.
For example, ACF submitted that:
Furthermore, there is no requirement to disclose aggregated donations from a single entity in a single reporting period. A donor can effectively hide their political influence through ‘splitting’ donations; giving multiple amounts under the threshold, to multiple party-affiliated AEs and party branches, at different times in the reporting cycle.
Mr Django Merope-Synge, Acting Economic Campaign Director at GetUp, argued that the capacity for corporate donors to 'split large donations between different branches of the same political party and then not disclose the fact that those donations have been made' is unacceptable. Mr Merope-Synge, further commented that '[e]ffectively, donors can easily circumvent the disclosure threshold and make large donations without any oversight'.
Dr Edwards characterised the ability for donors to use this form of donation splitting as 'an enormous hole' in the current political finance regime, and summarised for the committee what it can look like in practice:
Dr Edwards: …At the moment, under the rules as they stand, somebody could give one of the major parties $10,000, five days a week, 52 weeks a year, and the major parties don't need to disclose those payments at all. It is up to the donor to do the aggregation, to disclose. If the donor doesn't do that, there is actually nothing to flag to the AEC that wrongdoing has occurred; there is no indication of where to even look.
CHAIR: I wasn't aware of that. It's just the responsibility of the donor, and the party has no responsibility?
Dr Edwards: No, the party is not required to aggregate. And as you are probably aware if you've looked at the enormity of the discrepancies between what the parties declare and what the donors declare, it is pretty clear that donors are laissez-faire about whether they put in their disclosures. So that seems like an enormous hole.
As many witnesses pointed out, there have been repeated calls over the years for substantial reform of the federal political finance regime. Many specific suggestions have been proposed in numerous policy papers, committee reports, and legislation. The committee is strongly of the view that the time has come for these changes to be implemented.
One of the cornerstones to a new regime is a substantial lowering of the disclosure threshold. The current donations threshold is high. It allows for the non-disclosure of significant amounts of donations, thus limiting the transparency of those who play a currently unrecognised role in the political process. The potential of donation splitting to further reduce visibility of donations is also an obvious concern.
Legislative changes in other jurisdictions in Australia have reduced the disclosure thresholds significantly. The committee heard evidence from a number of experts who sought to balance the administrative burden of disclosing donations, while ensuring that those donations that on paper have the potential to influence decision-making are fully disclosed. The broadly agreed figure was a threshold of $1,000.
The committee recommends that the Australian Government amend the Commonwealth Electoral Act 1918 to introduce a fixed disclosure threshold of $1,000, to be calculated cumulatively over a whole party group.
Inconsistent and inappropriate use of 'other receipts'
Under the current AEC framework for annual disclosure returns, income is classified as either a 'donation' or an 'other receipt'. Income required to be classified as a 'donation' is that which meets the legislative definition of a 'gift' under the Electoral Act. Theoretically, 'other receipts' do not meet the legislative definition of a gift and include revenue such as payments of public funding, interest on investments, income from real estate, union subscriptions, and fee-for-service payments.
Mr Pirani from the AEC explained the reasoning behind this reporting framework for annual disclosure returns:
In essence, when we get returns at the moment the actual approved form enables people to do it as a 'donation' or as 'other'. There are no requirements at law for them to be reporting that way, other than it is on the approved form. The reason it was put in there was that there were payments, for example, the payment of public funding that the AEC makes to political parties after an election, and people were seeing that appearing on these forms, the annual returns, and getting confused: 'Why is the AEC making a donation to a political party?' So what has developed over time is the political parties and candidates fill out the form. They put the gifts—which is what the definition is that they are required to disclose; gifts are required to be disclosed—and then they put these other amounts that come in, which might be interest, income from real estate that they might own or fee for services and other things like that.
Dr Edwards' Dark Money report noted that receipts classified as 'donations' make up a 'small and declining proportion of the major parties' incomes'.
Of the Liberal Party's total income of $78.6 million in the 2013–14 election year, only 25 percent ($19.3 million) was declared to the AEC as 'donations', including payments received from associated entities and known third parties. Income classified as 'other receipts' made up 11 per cent of the Liberal Party's total income.
Declared 'donations' also made up only 25 per cent ($11.6 million) of the ALP's total income of $46.3 million for 2013–14. 'Other receipts' made up a further 26 per cent of the ALP's total income in the same year.
The AEC provided the committee with the following information (Table 5.2) relating to the 2016–17 annual disclosure returns of the major political parties. Consistent with the analysis outlined above, the data shows that a notably small proportion of total receipts of major parties are disclosed as a 'donation'.
Table 5.2: Total receipts of major political parties and proportion disclosed as a 'donation' in 2016–17
Liberals (including LNP)
Some submitters and witnesses argued that the current framework for categorising income as either a 'donation' or 'other receipt' is a significant barrier to transparency. Participants noted that there are currently no legislative provisions to ensure political parties and associated entities accurately categorise their income and that, in practice, this results in under-reporting and inconsistency in how categories are applied.
The categorisation of income with the AEC system is an obstacle to analysing the relationships between the private sector, AEs [associated entities] and political parties.
In practice the distinctions between the two [donations and other receipts] are blurred and there is a lack of consistency as to how the two categories are applied.
Similarly, Professor Tham argued that the 'voluntary system of self-declaration' that results from political parties and associated not being legally required to accurately categorise receipts 'is a recipe for errors and under-reporting'.
Dr Edwards suggested that a significant proportion of income categorised on annual disclosure returns as 'other receipts' should rightly be declared as 'donations', and that this framework for reporting therefore restricts capacity to effectively scrutinise political donations data:
Dr Edwards: The 'other receipts' category looks exactly like a collection of political donations.
CHAIR: So do you feel that that is just 'donations' by another name?
Dr Edwards: Unfortunately it is probably about 80 per cent that. Then there are some other payments in the mix.
CHAIR: How can you say that? I am just interested in where that comes from.
Dr Edwards: That's my instinctive sense of it. Occasionally you get, for example, things like the moneys out of the Cormack Foundation, which are returns on shares. You get big property sales. You get the occasional thing which is a legitimate other receipt. That confuses the data and makes it difficult to work out the trends. It's actually the mixing of fundraising in with other receipts that actually makes those trends so difficult to unpick. But certainly previous research by other scholars has concluded that, for analytical purposes, most other receipts should be considered donations.
The committee accepts that there are some legitimate sources of income that are not donations, and that a category for these is required. However, the current regime allows for items to be included in the 'other receipts' category which for all intents and purposes are donations. The committee is therefore of the view that a comprehensive examination of how all income is classified is required.
The committee recommends that the annual return reporting for political parties and associated entities require much more detailed reporting with specific classifications for each type of income currently listed under ‘other receipts’ to ensure that income is categorised transparently.
Operation of associated entities
Participants highlighted the operation of associated entities—that is, entities that are controlled by, or that operate wholly or to a significant extent for the benefit of one or more registered political parties (see paragraph 1.13)—as a contributing to the opacity of the current federal political finance regime.
In 2016–17, there were 192 associated entities registered with the AEC. Associated entities include a diverse range of organisations including trade unions, party investment vehicles, and state and local fundraising forums.
Dr Edwards' Dark Money report noted that for the 2014–15 financial year, payments from associated entities accounted for $6.01 million of the Liberal Party's $10.3 million declared 'donations'. For the same year, $5.4 million of the ALP's declared donations of $7.3 million were from associated entities.
A number of submitters expressed concern that associated entities, by functioning as an intermediary between donors and political party recipients, are used by major political parties as a means of obscuring the original source of political donations. In this way, the relationships between donors and elected representatives, as well as the intent behind political donations, is effectively hidden from public scrutiny.
The Synod argued that the transparency of political donations is frustrated by the use of associated entities, and observed that '[m]any of these arm's length organisations do not disclose the payments that are made to them, effectively concealing the origins of the money coming into the parties'.
ACF also raised concerns regarding 'substantial sums' being funnelled to political parties through associated entities, submitting that:
Donations are effectively laundered as money flows between different entities in each party’s fundraising ecosystem, making tracing donations from source to ultimate beneficiary effectively impossible.
The Foundation for Alcohol Research and Education (FARE) expressed frustration at the ability of political parties to use associated entities:
The use of associated entities is unconscionable, and a clear indication that political parties are aware of apparent or real political influence associated with such donations. The use of associated entities also represents a deliberate attempt to obfuscate the source of donations, denying the public the ability to scrutinise relationships between corporations and their elected representatives.
The use of associated entities to deliberately obscure the ultimate source of political donations has been clearly demonstrated at a state level. In August 2016, the NSW Independent Commission Against Corruption (ICAC) published its report on its investigation into NSW Liberal Party electoral funding for the 2011 state election campaign (Operation Spicer). The report found that, during November and December 2010, the Free Enterprise Foundation (an associated entity of the Liberal Party) was used to channel donations from prohibited donors—in this case, property developers—to the NSW Liberal Party for its 2011 NSW state election campaign so that the identity of the true donors was disguised.
ACF pointed to discrepancies in disclosures between donors, political parties and associated entities as an illustration of the opacity of donations made via associated entities. For example, ACF provided the example of disclosures relating to Wesfarmers:
In the 2015-16 cycle Wesfarmers declared $43,000 of political donations. In the same period it was listed as a source of an additional $5m worth of income by political parties and associated entities.
Such discrepancies were notable in other evidence received by the committee. For example, as observed by ACF in its submission, in 2015–16, Woodside Energy Ltd (Woodside) was named a source of $16,462 of income by Labor Holdings Pty Ltd, an associated entity of the ALP. However, when asked to provide details on any donations made to Labor Holdings or any other associated entities, Woodside told the committee that:
To the best of its knowledge Woodside has not made any payments directly to associated entities (such as Labor Holdings). As reported by Woodside to the AEC, any donations or payments which Woodside has made has been to political parties (for example, the Liberal Party or National Party or the Labor Party) at State and/or Federal levels. Woodside is not privy to how these political parties remit or account for payments received from Woodside, including whether any amounts are remitted by political parties to associated entities.
The committee understands the concern held by some around the utilisation of associated entities as fundraising vehicles by political parties. Under the current regime there is certainly the capacity for the albeit limited transparency of the source of donations to be further diluted. However, if the changes recommended throughout this report, and the principles underlying them are equally applied to associated entities, then the committee is satisfied that sufficient protections would be in place, while preserving the rights of organisations to play an active role in the political process.
Poor data accessibility
Inquiry participants highlighted poor data accessibility as being a further barrier to transparency of political donations and the potential undue influence that affords. In particular, participants drew the committee's attention to the delayed disclosure of donations and the presentation of political finance data on the AEC's online database.
Currently under the Electoral Act, annual disclosure returns for the previous financial year are required to be lodged by 20 October (political parties and associated entities) or 17 November (donors and third parties) each year. Annual returns are made available for public inspection on the AEC website on the first working day in February the following financial year.
As explained by the AEC:
This means some donations disclosed may have been received up to 18 months prior to publication. In an election year, financial disclosure by parties and other participants may not be published until months after the event.
Participants shared the view that the delayed disclosure of political donations data frustrates the aim of avoiding of undue influence. Submitters and witnesses also noted that the inability of the public to access disclosure information in a timely manner greatly restricts their ability to make informed voting decisions come election day.
Dr Livingstone and Ms Johnson described the once-yearly publication of disclosure returns as an 'annual dumping' of donations information, and commented that this 'has been heavily criticised as a method that enables donations to be effectively hidden'.
Professor Tham contended that 'the dated nature of the returns means that voters do not have access to the relevant information when determining their voting choices'.
Similarly, Mr Lewis Rangott, Executive Director, Corruption Prevention at ICAC, commented that:
Obviously it is desirable that when electors go to the polling booth they at least have an opportunity to understand who is funding whom. If donations are made on the eve of an election, you can only find out the identity and the amount of those donations afterwards, and that's not desirable.
Professor Beck argued that prompt disclosure is necessary if transparency of political donations is to be achieved. Underscoring this point, Professor Beck told the committee:
We need to see who's giving money and where that money's going. This requires not only full disclosure of sources of revenue for political parties and other political actors but also prompt disclosure and hopefully in as close to real time as possible. It's no good having disclosure handed down 12 months or 18 months after the money has been received. That's not very useful. That's a lot of time where things can happen and the public don't get to make an informed decision if they go to the polls.
International IDEA was of the view that timely public disclosure of donations maximises transparency and accountability. It also incentivises adherence to the rules by exposing and deterring efforts to unduly influence the political process. International IDEA also expressed surprise that more timely disclosure processes for political finance data has not yet been implemented in Australia given that similar technological capacity has been introduced in other areas through online disclosure platforms:
The current rules in Australia whereby political parties submit annual reports, which are then published roughly seven months after the end of the financial year does not allow for timely disclosure. The lengthy period of time between when transactions take place and their disclosure to the public (seven and a half months after elections for candidates and third parties and seven to eighteen months for political parties and their endorsed candidates) stands out all the more considering that Australia already has the technology in place through its eReturns online reporting platform to enable real-time disclosure.
Dr Edwards expressed a similar view:
I think in this day and age, where the ATO can give me an app on my phone which says, 'Every time you get a taxi receipt, put it on your tax deductions,' there is absolutely no issue that we shouldn't have that.
The Australian Greens argued that the current delay in disclosure of political donations is 'inexcusable', submitting that '[m]odern technologies allow for the prompt disclosure of donations given and received'. The Australian Greens also reflected on the importance of timely disclosure during election campaigns, 'when policy announcements and stakeholder pressure is at its greatest'.
Unsurprisingly, given the objections to delayed disclosure, there was a general consensus among inquiry participants that an online, continuous system for disclosure of political donations should be introduced. The information should then be made available for public scrutiny in as close to real time as technologically feasible.
The Synod endorsed real-time disclosure of all donations above $1,000, submitting that:
It is highly desirable that there be continuous ‘real-time’ disclosure of all donations above $1,000 accepted by candidates, political parties and third parties. This is important so voters know as they are deciding between political parties and candidates who those parties and candidates are taking money from as this may be relevant to their decision making on who to vote for.
Professor Williams, Professor Beck and GetUp recommended real-time disclosure of all donations with a value $500 and above. Professor Williams also suggested the 'possibility of such donations being made to the eventual recipient via the Australian Electoral Commission or other body'.
'Real-time' disclosure has recently been implemented at a state level, with the Electoral Commission Queensland (ECQ) launching an Electronic Disclosure System (EDS) for political donations in February 2017. The EDS allows for gifts and loans to political entities to be reported to the ECQ within seven business days. This information is made public within 24 hours of it being reported. The ECQ outlined the far reaching benefits of the EDS:
The EDS has not only replaced labour-intensive paper-based practices, it has increased transparency around political donations to minimise the influence, or the perception of influence, of donors on the political process and decision making of elected officials at both the State and local level.
The impact has been far reaching and the Commission acknowledges the importance of voters being able to make informed decisions and having confidence in the knowledge about the financial arrangements of their candidates.
AEC data presentation
In addition to the accessibility issues caused by delayed disclosure, the current presentation of information on the AEC's database for disclosing political donations was highlighted by some participants as a significant obstacle to transparency of the current political finance system.
Dr Edwards expressed concern that 'the AEC data is adding a further barrier to transparency in an already opaque political donations landscape', and cautioned that the provision of disclosure data in a way that hampers public scrutiny of donations and their potential influence 'can be an effective form of concealment'.
Dr Edwards summarised the challenges posed by the AEC data as it is currently presented:
The AEC data presents a number of challenges that can make it difficult to get a grasp of what is occurring the political donations landscape. There are thousands of lines of data, with limited means to sort or categorize the data. The aggregates that can be easily calculated are not meaningful. The AEC does not make any attempt to analyse aggregates and trends in the data. This means that journalists and those seeking to report on political donations matters struggle to piece together meaningful perspectives within the resources available to them.
In support of this view, Mr Merope-Synge from Getup told the committee:
All of it is stored in PDF documents, not in a searchable database format. Many of these PDFs are filled out by hand, and some of the handwriting is terrible, so that makes it harder for them to be scanned and read by computers. In general, with the state of the data, it almost feels as though it's been set up to make it difficult to search and to get accurate information easily for voters.
Mr Rogers, AEC Electoral Commissioner, acknowledged that the presentation of data in PDF format is 'probably not optimal', but noted that any change to the way in which disclosures data is presented would require a redevelopment of the IT systems currently in place. Mr Rogers also stressed to the committee that the AEC is 'complying absolutely with the legislation that is in place at the moment', which requires relevant stakeholders to submit a specified return. Any upgrades to the data systems would require legislative change and would have financial implications for the AEC.
Modern technological advances afford opportunities previously unavailable. The timeliness of donations and their subsequent disclosure are key elements in a transparent political finance regime. The current system, whereby donations can potentially be undisclosed for up to 18 months, is unacceptable. The committee strongly agrees with ICAC who said that voters deserve to know who is funding the parties or candidates when they walk into the polling booth.
On a similar technological theme, the ability for anyone to search through data to establish the sources of donations is a relatively small, but very important issue. The current useability of the AEC website to access data is poor, and requires significant upgrading.
The committee recommends that the Australian Government amend the Commonwealth Electoral Act 1918 to require online, continuous real-time disclosure to the Australian Electoral Commission of donations to political parties, candidates and associated entities.
The committee recommends that the Australian Electoral Commission ensures that the presentation of political finance data on their website provides greater accessibility and functionality of files to facilitate public research and investigation.