(Debate, 21 June 2016, Legislative Assembly, NSW Parliament)

I support the Local Government Elections Legislation Amendment (Integrity) Bill 2016 to place caps on the amount a person can donate to local government parties, groups and candidates in a year, in line with caps for State elections. I have previously called for this much-needed reform, particularly in the context of this Government's council amalgamation agenda. I wrote to the Premier about it over a year ago, yet changes are being rushed through in one day without the Government offering members adequate opportunity to look at the bill, let alone consult with their communities or councils.

Local government is like any other tier of government; it makes decisions that can both impact on the community and benefit private individuals. Planning, development and zoning decisions in particular have the potential to deliver significant financial profits while producing permanent negative community impacts. Unique to local government, additional risks exist because council legislative and executive functions are merged. The corruption risks in local government decisions have long been identified by the Independent Commission Against Corruption, including in its 2002 Taking the Devil out of Development report and in recent operations.

There is significant community concern about the influence large donors have on government decisions. While donations provide an opportunity for people to participate in the political process and express their support, there is potential for very large donations to be delivered to influence policies or decision-making for private benefit. Large donations create an imbalance because the wealthy have influence that is not available to the general public. Local government political donations are currently not capped, allowing for massive donations that could conceivably fund an entire campaign. The ban on donations from property developers does not, in itself, prevent actual or perceived corruption or undue influence as a range of individuals not covered by the ban may have an interest in planning and in other council decisions.

While a significant number of changes have been introduced to make State election funding more transparent and reduce opportunities for corruption, few reforms have been made to local government election funding despite the risks. I welcome this bill, which will help restore public confidence in the political process at the local level. Under the bill, parties and groups will only be able to receive $5,800, and candidates and third party campaigners will only be able to receive $2,500 from any donor in each year. These changes are in line with existing caps on donations at the State level, which have been working well; however, I believe at both levels they should be lowered to reduce the potential for conflicts of interest.

If donor caps were reduced from $5,800 to $2,500 per year for parties and groups, it would cut the amount received in a four-year electoral cycle from one donor from $23,200 to $10,000, and if they were reduced from $2,500 to $1,000 per year for candidates, it would cut the amount received in a four-year electoral cycle from one donor from $10,000 to $4,000. While reducing the influence of individual donors, such drops would have few impacts on grassroots participation because most community-based donations are much smaller—donations to my campaign rarely exceed $200. I understand the bill also closes a loophole which currently allows councillors to vote on a change in development standards without making a pecuniary interests disclosure.

A number of other concerns appear not to be addressed. Councillors do not have to disclose donations over $1,000 made to a political party they belong to, and disclosure returns submitted by candidates, political parties and groups do not have to distinguish between funding and expenditure or separate accounts between State and local government elections. Most disclosures will not occur prior to polling day, preventing public scrutiny and accountability until long after an election. The bill fails to impose caps on expenditure: expenditure caps can help level the playing field and reduce the extent to which candidates and parties can attempt to outdo each other's budgets through private donations. There is no public funding for campaigns even though an increase in public funding was the focus of the Government's recent attempt to address corruption in State politics exposed at ICAC.

In 2014 the Government appointed the Expert Panel on Political Donations to look at donation reform in State elections and this process should have been extended to local government campaigns so that we would have a comprehensive package of reforms ahead of the September elections. I acknowledge the Minister's commitment to review local government reform as soon as the Joint Standing Committee on Electoral Matters reports on its Schott report review. The 2017 elections will create much larger councils, leading to bigger and more expensive campaigns, and the Government must also commit to further reform before the 2017 campaigns begin. This bill is a first step in ensuring that future elected councils operate with integrity and for public benefit.

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