Critical test for electoral law reform

22 Sep 2008

Will the government have the courage of John Faulkner's convictions, asks GEOFFREY BARKER

MONEY is the lifeblood of modern election campaigns. It fuels the expensive electronic advertising as well as the interminable polling surveys that shape political messages. Political parties therefore struggle remorselessly to extract dollars from every possible source by any possible means. This state of affairs has potentially grave implications for the integrity of Australian democracy, particularly when the sources and amounts of political donations, and the conditions on which they are made, are unclear or undisclosed. Political parties risk being seen to be auctioning access and influence to those with the deepest pockets, effectively giving them the best government that money can buy. Last March the special minister for state, Senator John Faulkner, announced that the federal government would introduce legislation to immediately close loopholes in political donation disclosure and public funding laws. He also announced the government would produce a green paper on wider and longer term electoral reform. It is proving an extraordinarily challenging initiative. The federal opposition has moved to delay and to derail the process. Within the Labor Party there are marked differences between electoral reformers like Faulkner and federal and state party administrators and leaders who are resisting reforms that might compromise their easy access to dollars. In June, the Liberals used their majority in the Senate to refer Faulkner’s bill to the Joint Standing Committee on Electoral Matters (JSCEM) for inquiry and report by 30 June next year. The green paper, which was to have been released in two parts in July and next month, has yet to be seen, although it is now said likely to released within weeks. Meanwhile the Labor chair of JSCEM, Daryl Melham, is pushing to conclude the committee’s report on the political donations aspect of its inquiry by next month - nearly a year early. Now that the Liberals no longer control the Senate, he should be able to do so with support from minor party senators who tend to support campaign finance reform. But it remains deeply uncertain when or to what extent Faulkner is likely to achieve substantial reform of electoral donation laws and eventually reform of broader electoral processes. The politics of the issue are byzantine, cross-cutting and massively coloured by political self-interest on all sides. Faulkner’s bill to amend the Commonwealth Electoral Act has five main purposes. First, it would reduce the donations disclosure threshold to $1000, reversing the Howard government’s huge increase in 2007 which took the disclosure limit from $1500 to more than $10,000. Second, it would ban foreign and anonymous donations to registered political parties, candidates and members of Senate groups and prevent the use of foreign and anonymous donations for political spending. Third, it would limit the potential for “donation splitting” to prevent separate divisions of a political party from being treated as separate entities and enabling large donations to be hidden by dividing them between state branches of parties. Fourth, it would introduce a claims system for electoral funding and tie funding to electoral expenditure to stop candidates from gaining from the funding system. Fifth, it would introduce twice-yearly disclosure of donations to increase public scrutiny and transparency. The shadow minister for state, Liberal Senator Michael Ronaldson, has accused Labor of “cherry-picking” and pre-empting its green paper by introducing its first electoral reform legislation before the green paper is published. Senator Ronaldson has justified the opposition’s move to send the proposals to JSCEM until next year on the ground that the opposition wants a broad and bipartisan approach. He has said Labor is trying to stack the deck and has not consulted. “What we see in this bill is 100 per cent of what Labor head office wants,” he has said. He has also has reflected Coalition scepticism about the Faulkner proposals, especially the proposal to reduce the Howard government’s $10,000 disclosure threshold to $1000. “The ALP has not shown that the current system of disclosure of donations is broken,” he has said. What Senator Ronaldson has not said is what disclosure threshold the opposition would support. Various former and current Liberal MPs have also suggested that lowering the disclosure threshold would disproportionately disadvantage the Liberals whose individual and business donors might be reluctant to be identified. They have also suggested that large trade union donations to Labor should be scrutinised as part of campaign finance reform. Senator Faulkner has sought to confront the opposition’s delaying tactics by pledging to include trade union affiliation fees to Labor in the examination of electoral finance issues. He has also flagged possible caps on overall expenditure by parties and increases in taxpayer funding of political parties. But Senator Faulkner’s problems are not restricted to Coalition tactics. Victorian Premier John Brumby has opposed moves to ban political donations, saying that “providing there is proper scrutiny and proper reporting of donations I think it is a good thing if the community and business and unions are more involved in political and public life.” What Brumby means by “proper” is not canvassed, but his remarks reflect a deeper concern with dollars than with reform of a secretive and potentially shonky system. And Labor National Secretary Tim Gartrell has reacted with self-righteous indignation to criticism by Senator Ronaldson of a Labor proposal that seemed suspiciously like an access-for-cash scheme offering business representatives the chance to pay $15,000, $25,000 or $50,000 to attend meetings with ministers. Gartrell told the Australian’s Glenn Milne (18 August) that Ronaldson was at ease with Coalition business membership schemes such as the Liberals’ Millenium Forum and the Nationals’ Business Observer program. He accused Ronaldson of hypocrisy and said only Labor supported scrapping Howard’s $10,000 disclosure threshold. But he was silent on the Labor paid-access offer to business, observing merely that “all the major parties have business membership schemes”. Clearly there is plenty of hypocrisy to go around in this area of policy. The reason is not hard to find. In Political Finance in Australia: A Skewed and Secret System, a 2006 report for the Democratic Audit of Australia, Sally Young and Joo-Cheong Tham observed that there were two central problems with the funding of Australian political parties. The first was that a lack of transparency was a hallmark of private funding, political spending and the use of parliamentary entitlements and government resources. Second, and more important, was the political inequality maintained and perpetuated by Australian political finance. “The distribution of private funds favors the Coalition and the ALP and so do election funding, parliamentary entitlements and state resources like government advertising”, the Audit said. Confronted by these realities it is not surprising that Senator Faulkner is facing an uphill battle. While he is a sincere and determined reformer, the final result of his efforts may be less than he hoped to achieve given the resistance within his the Labor Party - although he will find a willing ally in JSCEM’s Daryl Melham, who has supported passage of the Electoral Act financial disclosure reforms and undelayed consideration of the green paper. Much will depend on what the green paper proposes. It is being drawn up jointly by the Department of the Prime Minister and Cabinet, the Australian Electoral Commission and the Department of Finance and Deregulation. How far the green paper goes towards matching the courage of Faulkner’s convictions will be a critical test of the eventual extent of electoral reform in Australia. So, of course, will be what the Senate minor parties are prepared to accept.

Geoffrey Barker is a visiting fellow at the Strategic and Defence Studies Centre at the Australian National University. 

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