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Election Funding, Expenditure and Disclosures Amendment Bill 2014

(Contribution to debate, 15 October 2014, Legislative Assembly, NSW Parliament)

I join Madam Acting-Speaker in welcoming the many young leaders seated in the gallery to this Parliament. I encourage each one to consider a career in politics because more women in Parliament will only further improve community confidence in our Parliament.

Public confidence is currently at an all-time low not because of the funding expenditure disclosures situation but because of the conduct of people associated with the major parties. Recent Independent Commission Against Corruption [ICAC] operations have exposed members of Parliament soliciting donations from illegal donors—

Recent ICAC operations have exposed members of Parliament soliciting donations from illegal donors, funnelling donations through hidden means to avoid disclosure, creating sham businesses to conceal illegal donations and receiving cash gifts from illegal donors. The Government is right to respond and I welcome the expert panel on political donations review, which is developing recommendations for long-term reform.

The Election Funding, Expenditure and Disclosures Amendment Bill will implement some of the panel's interim recommendations and introduce new public funding rules for the 2015 State election. I thank the Premier's office for the briefing that the member for Lake Macquarie and I received on the bill yesterday. For weeks now we have been asking to be consulted while unelected party officials have negotiated these provisions behind closed doors. We have had little time to digest the provisions and assess their effect. The aim of any reform should be to ensure a fair and transparent system that discourages donations in exchange for political influence, prevents rorting, does not place an unnecessary burden on the public purse and ensures that anyone, regardless of wealth or party affiliation, can stand for election.

Under this bill penalties for breaches will be doubled, a new disclosure date for donations received up to 1 February next year will be introduced, the 2011 donation and expenditure cap levels will be reinstated, spending caps for third party campaigners and non-registered third parties will be reduced and public funding rules will change. New South Wales already has one of the toughest electoral funding systems due to reforms introduced over the past five years. We have caps on donations and expenditure and limits on who can donate and public funding has been increased. Illegal activity can occur under any system, so we need to strengthen accountability and transparency.

The increased penalties proposed in this bill have widespread support. They are in line with the seriousness of evading funding rules. A maximum penalty of 10 years imprisonment will ensure that the worst offenders who breach the trust of their electorate and could be seen as engaging in corruption will no longer be able to represent their community. As we have seen in the ICAC hearings, it can often take more than three years to investigate and gather sufficient evidence about breaches. The existing three-year limit on initiating proceedings is completely inadequate. I support extending this period to 10 years; however, I agree with the Opposition's concerns that this should be made retrospective so that those who made serious breaches at the last election can be prosecuted. I support the new disclosure date of 15 February for donations made between 1 July and 1 February. This will provide the community with more information on who is funding candidates before they cast their vote.

Currently there is a six-month delay before donations must be disclosed. That means most are not revealed until after an election. However, it is well known that it is in the final weeks before an election that most donations are made. Donations may also be purposely postponed to the period between 1 February and polling day to avoid pre-election disclosure. I understand there may not be enough time to set up an interim method for real-time reporting; however, the bill could require candidates to maintain up-to-date records of donations and donors available on their website or upon request by a member of the public if they do not have a website. I hope the bill is amended accordingly. This is a commitment I make and I call on all candidates and parties contesting the next election to make their records of declarable donations in the final two months of the campaign available to the public before polling day. If I can do it, the parties can too.

The bill also should increase disclosure thresholds. Currently, only donations of more than $1,000 in a financial year must be disclosed. This means the vast majority go unreported. Sources of campaign funding are in the public interest and disclosure thresholds should be reduced to $200 per year. The bill reinstates caps on political donations and campaign expenditure for the 2015 State election to 2011 levels. It removes the consumer price index increases since then. I do not oppose this amendment but a greater reduction would be more appropriate. These caps allow a candidate to receive $8,000 and a party to receive $20,000 from one donor in a four-year electoral cycle. Such a large amount could be seen to create a sense of debt between the donor and a candidate or party. Most community-based donations are much smaller than $2,000. Donations to my campaign rarely exceed $200 and in-kind donations are already capped at $1,000. The bill should have introduced a more significant cut.

Public funding amendments are the significant changes in this bill. I am concerned that they could have serious impacts on minor parties and new Independents while doing little to prevent corruption and undue influence. The Government has argued that increased public funding will decrease candidates' reliance on donors. It is true that more public funding will reduce the need to raise funds but this does not translate to breaking the relationship between candidates and specific donors. It is the smaller grassroots donations that require the most amount of work to obtain. Sending email call-outs and organising events, auctions and raffles take substantial effort for not great returns. Those who have been appearing at ICAC for illegal electoral funding activity are more likely to cease raising funds through these methods than rejecting larger donations. The ICAC operations have shown that those who stand to gain from government decisions are desperate to donate, whether it is legal or not.

Even if we accept that more public funding will reduce opportunities for corruption and undue influence, does the bill actually achieve that? I understand that under the proposed model, public funding to the Liberal and Nationals parties will increase and this will reduce their need to raise funds. I understand also that fundraising has been tough for the Liberal Party following the revelations at ICAC about fundraising practices. I have not had the opportunity to ascertain how these changes will impact Labor Party funding. The member for Lake Macquarie and I, in the little time we have been given to examine the bill, believe that public funding is likely to stay around the same for us as incumbent Independents. But it is unclear why a vote for me is worth $4 yet a vote for the Shooters and Fishers Party is worth $4.50. Perhaps the Government does not need my vote to get a bill through.

For new Independents, it will depend on how many votes they get. Most candidates know if their community support is strong enough to obtain 4 per cent of votes, which will allow them to know how much public funding they will receive under the existing system. It will be very difficult for new Independents to know approximately how many votes they will receive, so they will have to raise more funds based on conservative estimates. This increased risk for Independents compared to the current system may be a deterrent for new Independents to run. That is particularly concerning given the role that Independents have played in exposing corruption in this place. Disturbingly, candidates in smaller parties who run in lower House seats will get no funding even if they exceed the 4 per cent vote threshold if that party does not win a lower House seat.

The Greens, for example, run a candidate in the vast majority of seats. The Greens have a strong community support base, which results in significant votes in many of those seats. If in 2015 The Greens do not win a Lower House seat then no Greens Lower House candidates will receive public funding. The Greens have community support and should not be disadvantaged. Any candidate who gets 4 per cent of the vote should be eligible for public funding. It appears that under this bill the Independents and smaller parties will receive the same or less public funding while the Coalition will receive more. That is unfair and bad for our democracy; I do not support it.

Interestingly, minor parties who do not run candidates in the lower House or run candidates only to raise the party's profile will get more funding per vote than Independent candidates who have difficult campaigns to run without the backing of a statewide campaign and without the economies of scale buying power of the parties. I do not support full public funding of elections; I think a person's right to donate is very important. Such a model would divert funds from services and infrastructure and it would be difficult to establish a system that is fair to all candidates while not encouraging rogue candidates running for financial benefit. Small donations from individuals provide an opportunity for people to participate in the political process without attempting to gain private benefit and are not a concern for the community.

A good electoral funding model ensures that any person, regardless of party or political affiliation and wealth, can run for office on a level playing field. A good electoral funding model helps encourage a wide pool of members who want to represent their communities and make decisions based on the broader public good. I do not believe this bill achieves that. Our democracy depends on getting the balance right and this bill should not be rushed. All members need time to properly assess its impacts, as does the community. We have at least six weeks before the House rises. Proposed changes should be referred urgently to the expert panel on political donations for its independent assessment and advice.


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