Address to Fabians Political Donations Reform

**Check against delivery**

Good evening. I think the institutions of our democracy are in need of an overhaul. This is not based on a dishonest proposition that once upon a time it was all good, but now things have gone bad.

After all, it would have been impossible for Don Chip to have founded a political party with the slogan “keeping the bastards honest” if he was unable to convince at least some of the voters, that there were plenty of bastards that needed to be kept, indeed, honest.

I think there is a malaise in the electorate – people are tired of politics as usual.

I also don’t think it is, necessarily, the role of the electorate to articulate what a better politics might look like. I think, in most respects, that is our job as elected representatives – to paint that picture. It is also something which I believe we are falling short on. 

I come from a regional city and I spend a lot of time in regional areas.

I can tell you that there is a general disenfranchisement with elected governments and the ability for the everyday punter to raise concern.

Now, corruption or the perception of corruption does more than fuel the fire of this discontent. It turns it into a deadly blaze.

Put simply: if people don’t think that a government is tackling the issues of concern to them, it’s a big problem for the government. If they don’t think that government is capable of solving the social and economic problems that matter to them then it’s a problem for the system. And if they think that one of the reasons that governments are unable or unwilling to solve these problems is that they are beholden to interests, to big money, to some unspecific others; then, frankly, it is a short walk from dissatisfaction to dysfunction.

I am deeply concerned that we must respond to these concerns with a raft of openness, disclosure and integrity measures that will not only strengthen our democracy, but that will obviously do so.


Campaign funding disclosure 

The topic of tonight’s discussion is campaign funding disclosure.

Political parties have two major sources of funding for political campaigns:

  • Public funding – currently set at $265.675 cents per vote when over 4 per cent of the primary vote in the electorate is received and;
  • Donations – where all political parties, candidates, donors, third party campaigners and associated entities must submit returns declaring donations above the disclosure threshold, currently set at $13,200.

The provision of public funding to political parties for election campaigns was explicitly linked to the requirement for a disclosure regime in 1983 when it was introduced by the Hawke Government.

The Howard Government increased the threshold to $10,000 in 2006, indexed to CPI.

Now, there haven’t been any changes to this law since then.

Reform has been an ongoing battle between Labor and the Coalition, principally over the level of funding disclosure.

Labor’s long-standing position has been that the funding disclosure threshold should be set at $1,000.

Labor has made several attempts to lower the threshold, namely, in 2009 and 2010. 

Labor also attempted to amend the Commonwealth Electoral Amendment Bill 2016 to deliver these commitments in the 44th Parliament. These amendments were blocked when the Greens joined with the Coalition to defeat them in the Senate.

As a matter of principle, consistent with Labor’s long-standing commitment to transparency and accountability, the ALP National Secretariat voluntarily discloses all donations over $1,000 to the AEC through its annual returns.

In the most recent return for the financial year 1 July 2015 to 30 June 2016, the ALP declared receipts of $15 million. Of those receipts, 76.5 per cent were over $1,000 and 23.5 per cent fell below it.


Campaign funding and terms of government 

I have said at the outset that I believe there are a raft of reforms needed to improve the state of our democracy. Let me address two simultaneously: how we fund our campaigns and the length of a term of government.

Now, there is a simple connection: the shorter the duration of an electoral cycle, the more money and time we spend on election campaigns.

Let me take you through some quick statistics.

The Australian Electoral Commission estimates that the overall costs of the 2010, 2013 and 2016 elections were as follows:

  • 2016: $286.350m (estimated)
  • 2013: $197.646m
  • 2010: $161.343m

These figures include both public and private funding.

Over the same period the parties expended the following amounts:

  • Australian Labor Party $372,421,988
  • Liberal Party $490,868,780
  • National Party $62,486,939
  • Greens Party $77,375,736

In addition, television advertising, which is a major source of expenditure, totalled more than $12 by political parties alone in 2016:

  • Liberal Party spent $6 million
  • ALP $4.7 million;
  • Greens $480,000.

And finally, how much taxpayers provided in public funding for candidates and parties on a per vote basis since 2010:

  • 2010: $53 163 385
  • 2013: $58 076 456
  • 2016: $62,778,275

Now if we were to extend the term of government from three years to four then over a 12-year period, where in the ordinary course of events we would then have three elections rather than four, we would save the taxpayer a conservative $60 million in current value.

The greater benefit however to Australian taxpayers, and to our democracy, would be the fact that Governments would be able dedicate more time to governing rather than preparing to contest an election.

For reformist Governments, this is critical – so much of what we do takes time to be bedded in.

Quite frankly, a three-year cycle is not long enough.

Moving to a four-year term would not only save the taxpayer money but also reduce political parties’ need to fundraise quite so readily and rely more on their achievements in government.


Donation reform

I believe that donation reform must be based on a clearly articulated set of principles:

  1. To protect our democracy – the assumption that our election process should be free from corruption, that candidates are clear about their values, priorities and policies and that people who vote for them know what they are going to get.

  2. The second is a belief that in a free society people should be able to combine their energy, their money to promote a cause they believe in. This should not be a freedom which is restricted to political parties, newspaper proprietors, businesses or Church organisations. It should be open to all.

    This is a belief that collectivism should be encouraged and nurtured – even if this means that, at times, I have to hear certain loud voices that I don’t like or agree with. There have been many who argue that the answer to this lies in banning donations completely, or banning them from certain individuals or organisations but these calls have been largely self-serving.

    If we start from the proposition, as the High Court has, that the ability to make a financial contribution to a party or individual is part and parcel of our Constitutionally protected freedom of political communication then the idea that we can ban certain Australians or Australian entities is going to be problematic.

    Banning Overseas donations, properly defined, may have some legs.

Foreign donations

This is a proposal which has been, in effect, before the Parliament for nearly eight years.

The case for this change has long been made out, and recent examples of interference in other electoral systems make action urgent.

The Joint Standing Committee on Electoral Matters (JSCEM) is currently conducting a review of political donations as part of is inquiry into the conduct of the 2016 Federal Election.

Labor believes that foreign citizens and foreign entities should be banned from making donations to Australian registered political parties and that this ban should be extended to the associated entities of registered political parties, within the meaning of section 287(1) of the Commonwealth Electoral Act (Electoral Act).

Although no argument has been advanced in opposition to this proposal, bi-partisan support is effectively at a stalemate due to the Coalition proposal to extend the fundraising and financial disclosure obligations imposed by the Electoral Act to capture all third parties, such as Get Up!, that are in any way involved in public campaigning.

3. The third, which could be construed as entirely partisan but is in no way so, is accepting and enshrining political parties as an important part of our democracy. 

I believe that political parties play an important role in our democracy. They are the place were ideas and activists get turned into candidates and policies. They are the furnace and forge of our representative democracy. However, as much they may be criticised from time to time – the alternative is much scarier.

For the most part – the alternative to a robust healthy party system is the public elevation of a billionaire or military strongman who uses his money, influence or military power to elevate himself to high office.

The way we fund our political process -  through public and private means – has a direct influence on the way our parties operate. A party that is financially dependent or viable due to large corporate donations and Government remittances is not only less reliant on its membership for financial and organisational support. It becomes more separated from them in values, policy and campaigning.

I see this as a grave danger for my Party – but for others as well.


Squeezing a Balloon

Now, we have seen from past efforts that electoral donation reform is a little bit like squeezing a balloon. We place restrictions in one area and it pops out in another.

We have every reason to believe this will continue unless we have a greater degree of harmony between state and federal laws. If parties are able to defeat the effect of a law in one jurisdiction by funnelling money through part of the federation then we will fall short of what the public expects.


Electoral finance reform needs to go hand in hand with other integrity measures.

Finally, I want to touch on integrity matters.

There is also a strong public interest in establishing a federal anti-corruption body - a Federal ICAC.

It is naive to think that the tendency for corruption stops at the boarder of one state or that the Commonwealth is immune is fanciful. There are a string of cases; including the AWB, the former Reserve Bank entity, Securency, to name a prominent couple.

We can also look to other jurisdictions to see how they have strengthened their Parliamentary processes in ways that may have saved the political careers of several Abbott and Turnbull Government Ministers.

A Parliamentary Code of Conduct may have assisted the former Minister Stuart Roberts who had travelled to China on business affairs to assist a friend, donor and business associate while still a Minister.

My colleague Senator Katy Gallagher established an Ethics Adviser when she was Chief Minister of the ACT. I’m sure that an Ethics Adviser may have assisted the former Health Minister, Sussan Ley, in resolving the issues about her claiming travel allowance for trips to the Gold Coast while purchasing an investment property.

Some may argue that these are all isolated examples. There may be some truth in that. But I can assure you these are the ones that the public remember and unless we address their concerns and put in place new integrity measures, there will be a reaction – a strong political reaction.