Commonwealth Electoral Amendment (Foreign Political Donations) Bill 2016

Commonwealth Electoral Amendment (Foreign Political Donations) Bill 2016

Text of Bill

Explanatory memorandum

This bill would, in effect, ban foreign donations to political parties and candidates. It is a very simple reform—nothing more than an amendment to the Commonwealth Electoral Act. It is a necessary reform, as evidenced in recent weeks by the controversy over foreign donations. And it would be a popular reform—one the public overwhelmingly want.

In drafting this bill, I have looked at best practice around the world and largely resorted to the United Kingdom’s model. In essence it would make it unlawful for any federal political party or candidate to accept a donation from what the Foreign Acquisitions and Takeovers Act defines as a ‘foreign person’. What this means is any individual not ordinarily resident in Australia, which effectively means anyone who is not a citizen or a permanent resident, or any corporation in which a substantial interest is held by a foreign individual, corporation or government.

Importantly, the bill has a threshold of $1,000, which allows for small donations, such as guests’ attendance at fundraising events, and does not impose an excessive burden on parties and candidates to establish the identity and background of every single small donor. The bill also includes a provision for parties or candidates to pay the money back within 30 days so as to prevent them from being instantly in breach of the law when they receive a donation from a foreign person if they had not been aware of the donation’s source. The bill also includes a provision that ensures that it does not limit the constitutional right to freedom of political communication.

The spotlight was obviously thrown on foreign donations when Senator Sam Dastyari had a private debt paid by a donor linked to the Chinese government and then immediately afterwards came out with a pro-Chinese government stance on the South China Sea, a view at odds with his party. Clearly this was unacceptable and Senator Dastyari did the right thing by stepping down. But what often gets missed in this whole episode is the broader problem with foreign donations in this country. Senator Dastyari’s resignation is not the end of things by any means, and in some ways it is a distraction. But it has shone a light on the issue, and what we learned from the Dastyari episode is that, overwhelmingly, the Australian people do not want foreign corporations or governments wielding an undue influence on our political processes. Certainly the view of the great many people who have contacted my office just want the government to do something about foreign donations.

Of course it undermines confidence in our political system when campaigns are effectively paid for by big money coming in from overseas. So, of course, to allow it to continue is entirely at odds with the public interest, and in some cases, where foreign governments are involved, it could even be a serious threat to our national security.

The two major political parties receive between them an enormous amount of money from overseas interests. We are not talking small change here. We are dealing, in fact, with millions of dollars—and that is just based on the figures that are publicly available. Let us not forget that every donation under $13,200 effectively remains secret forever. Who knows how much money is being donated to political parties and candidates that falls under that threshold? And let us not kid ourselves. No-one—be it an individual, corporation or government—gives enormous sums of money to a political party or candidate without expecting something in return.

This is an issue where Australia is severely lagging behind the rest of the world. Indeed 114 out of 180 countries have placed bans on foreign donations. So no wonder expert after expert is telling us our political donations framework is one of the weakest and least transparent in the Western world.

In fact pretty much every country you can think of is doing better than us. The United Kingdom, for example, restricts donations to a category of permissible donors which includes individuals on the electoral roll and companies carrying out business in the UK. The USA and Canada ban donations from corporations and unions altogether, and further restrict donations to citizens and permanent residents. Russia, India, Brazil, France—you name it—have all placed some sort of ban on donations from foreign interests. Even the countries who do allow foreign donations—which are few and far between—have restrictions, for instance New Zealand, Germany, Spain and Switzerland. By comparison, the Australian government has done absolutely nothing. And that is to our shame.

Of course it varies by jurisdiction to jurisdiction and the exact solution that works in one country might not work here. For example, we know that there are constitutional limitations in Australia, and the High Court struck down a ban on donations from permanent residents when the New South Wales government tried. What we know for certain though, is that the federal parliament has within its power to amend the Commonwealth Electoral Act to fix this issue. Let us talk about the specifics of how to achieve reform and let us open that discussion by all means. But above all, let us just do something. I make the point again that most other countries have managed to do something about the issue of foreign donations, so why can’t we?

Virtually everyone in this chamber and the other place has at least said that they think foreign donations reform is a good idea. Indeed over the last few weeks we have heard a lot of talk from all sides of politics about the issue. The Prime Minister and the Leader of the House no less have both said they favour limiting donations to people on the electoral roll. The Leader of the Opposition and the member for Grayndler have also said that they support reform. Members of the Senate crossbench have called for a ban on foreign donations as have the Greens, who have to their credit tried to progress their own legislation on this issue. You would think then that foreign donations reform is a no brainer.

So why hasn’t it happened yet? It is because the major parties receive millions of dollars from these foreign sources and they do not want to do anything to jeopardise that. It is all about self-interest. It is the same thing we see with gambling reform, where the parties are terrified to do anything because they are on the take from the industry. It is one of the reasons why we cannot get meaningful action on climate change in Australia, because the coal and gas industries tip enormous buckets of money into political campaigns. Time and time again in politics we see self-interest being put above the public interest.

We also need to look at this issue in the broader context of political donation reform. As I mentioned earlier we have one of the weakest donation frameworks in the Western world. And that is not my opinion—that is the opinion of experts, of academics and of respected organisations like the International Institute for Democracy and Electoral Assistance.

Let us look at a few examples. The disclosure threshold—currently $13,200—is far too high and allows people or organisations who donate significant amounts to remain secret. What we need instead is a much more sensible threshold, like $1,000. The current reporting requirements for parties and candidates is also far too relaxed, and currently we have a situation where, when we do manage to find out who is bankrolling these campaigns, it is not disclosed until months after an election. What we should be doing instead is forcing parties and candidates to disclose this information much more quickly, and if not in real time it should be done in a matter of weeks rather than months.

Moreover we need a cap on donations, rather than the ludicrous situation at the moment where big business can essentially buy a party or a candidate by tipping in hundreds of thousands of dollars. And we need to do something about the hotchpotch of state and federal laws on donations to avoid rich individuals or big companies flouting the laws in one jurisdiction by donating to a party in another jurisdiction.

Once again it is left to us on the crossbench to listen to the Australian people and to stand up for sensible reform. I thank the member for Indi for seconding this bill. I have also reached out to the Prime Minister and to the Leader of the Opposition to support the bill, and I am more than happy to work with them to fine-tune it if it means that we will then see genuine reform. So it is my hope that the government and the opposition will put their political self-interest aside and focus on the public interest, and get behind the bill before the parliament today.

The alternative is for the Dastyari episode to be just another example of politicians mouthing a whole lot of hollow nonsense to placate the community until the heat goes out of an issue. And then they do nothing. And then they wonder why people ridicule and even despise them.


Posted on

October 10, 2016

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