Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2018

Tuesday, 27 November 2018

Mr HAWKE (Mitchell—Special Minister of State) (12:32): I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

I am pleased today to present this bill, that will significantly reform the electoral funding and disclosure regime in the Commonwealth Electoral Act 1918. Reform is necessary to support the integrity of Australia's electoral system, and Australia's sovereignty, by ensuring that only those with a meaningful connection to Australia are able to influence Australian politics and elections through political donations. It will also ensure that the Commonwealth's electoral funding and disclosure regime keeps pace with international and domestic developments and provides transparency for Australian voters.

The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 will improve the consistency of the regulatory treatment of all political actors. This includes political actors that have emerged in the Australian political landscape, who neither endorse candidates nor seek to form government, yet actively seek to influence the outcome of elections through their campaigning activities. While this is a positive indicator of the strength of Australian civil society and civic engagement, it is important that these actors are subject to the public accountability of more traditional actors, such as registered political parties or candidates.

The Electoral Act has long recognised that there are a range of political actors who participate in Australian elections. These include political parties and their associated entities (which include unions and fundraising entities), candidates, and third-party campaign groups. This bill makes several changes to the regulation of political actors, which are necessary to keep pace with modern campaigning and to assist the implementation of restrictions on foreign interference.

Firstly, a registration regime will be introduced for all third party campaigners who incur political expenditure above the disclosure threshold. Political expenditure includes the production of material that is 'intended or likely to affect voting in an election'. These groups are already required to report annually to the Australian Electoral Commission on this expenditure. A registration scheme will improve transparency for voters and complement this government's reforms to the authorisation of electoral matters—enabling voters who receive material attempting to influence their vote to look up an entity on the register. Registration will also assist the AEC's compliance and education activities by identifying political actors and providing a contact person for AEC communications. Registration of third party campaigners reflects current practices in other jurisdictions, including the United Kingdom, Canada and New Zealand.

In the 2015-16 financial year, which included the last election, third party campaign groups spent almost $40 million on election advertising, polling and campaigning. It is clear that elections are no longer just fought between political parties and candidates, and it is appropriate all participants who choose to expend significant amounts of political expenditure are subject to transparency.

In recognition of the prominent role that third party campaign groups play in public debate and their growing influence in elections, a new category of political campaigners who incur significant political expenditure, such as those who spend more than $100,000 in a financial year, will have disclosure obligations in line with other prominent political actors, such as political parties. The creation of this new 'political campaigner' category enables significant political actors to be subject to greater transparency befitting their significant expenditure while providing less onerous compliance measures for smaller third party campaigners.

The relevant disclosure obligations applicable to all political actors will also be expanded to require reporting of directors' names, political memberships and the details of government grants and contracts received.

Additionally, the bill will clarify the current definition of 'associated entity' to include the activities of groups who operate to the benefit of political parties. The requirement to register and disclose will not curtail in any way the freedom to participate in political activity. Instead, it will provide transparency, allowing Australian electors to access better information when evaluating the efforts of those who seek to influence Australians' voting decisions and the outcomes of Australian elections.

There has been growing concern amongst the community about foreign interference within our domestic political landscape. Media reports of foreign donations to parties, candidates and third parties have affected the perceived integrity of elections which is critical to our peaceful and democratic government. The need to address this concern was highlighted by the Joint Standing Committee on Electoral Matters in its second interim report on the inquiry into the conduct of the 2016 federal election, which recommended that legislative action be taken to prohibit foreign donations.

To keep foreign money out of Australian elections, political parties, candidates, Senate groups and significant political campaigners will be banned from receiving foreign gifts over $250 or any money transferred from foreign accounts.

Because many third party campaigners, such as charities, also carry out non-political activities, they will not be prevented from receiving foreign gifts. Instead, third parties will be prevented from using foreign money for political expenditure. It is important that third party campaigners are covered by the measures in the bill to level the playing field. Banning foreign gifts to political parties but allowing third parties to use foreign gifts to incur political expenditure would have the same effect of allowing foreign interests to fund political campaigning by some entities but not by others.

A special exemption has been provided for significant political campaigners where they are registered charities or registered organisations under the Fair Work legislation to afford these entities the less onerous compliance burdens required of third party campaigners. This reduces the regulatory burden on such organisations while maintaining the integrity of the foreign donations ban.

As a consequence, the bill does not restrict the ability of charities to receive foreign gifts for non-political purposes. Nor does it restrict the political activities that charities can engage in with contributions from Australians.

To maintain the integrity of the foreign donations ban, no entity will be permitted to use foreign money for their political expenditure. Foreign interests do not have a legitimate role in Australian elections, so they should not be funding things like election advertising or handing out how-to-vote material at polling booths—regardless of whether these activities are carried out by a political party or any other entity. This approach is consistent with foreign donation bans in other jurisdictions.

Appropriate anti-avoidance measures are included in the bill so that the funnelling of foreign donations through an intermediary, setting up a shell company in Australia or splitting donations to avoid these thresholds are banned.

The bill also contains improvements to the public election funding regime. Public election funding is payable in relation to any candidate who receives more than four per cent of the total first-preference votes cast in an election. While this qualification requirement remains unchanged, the bill will limit public funding to demonstrated electoral spending, which will prevent political actors from profiteering and achieving private gain by standing candidates.

The bill introduces reforms to one of the oldest pieces of legislation in our country—the 99-year-old Commonwealth Electoral Act 1918—to improve the funding and disclosure regime for the benefit of the Australian public and Australian voters. This will improve public confidence in Australia's political process by increasing the accountability of those involved in political finance and election campaigns. It will also restrict foreign influence on Australian political actors, including campaigners, through restrictions on foreign donations. I commend the bill.