Political donation reform: watered down, and with a price tag

Crikey

Labor’s new political donations bill waters down its previous commitment to disclosure requirements and now comes with a big price tag. Naturally, the parties agreed on the increase.

The federal government’s backdown on political donation reform has endured a torrid reception from caucus, with party elder John Faulkner leading criticism of a new bill that will hand $60 million to political parties and leave donation disclosure thresholds at five times the level originally proposed by the Rudd government.

The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill replaces the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2010, which was itself a replacement for a previous bill that lapsed with the 2010 election after the Coalition and Steve Fielding refused to support it (Brian Loughnane outrageously today tried to blame Labor for failing to bring forward donations reform).

The 2010 bill passed the House of Representatives and was then introduced into the Senate after the Labor-Greens deal following the 2010 election, which required the parties to work towards reform of political donations that broadly matched the 2010 bill except for a “truth in advertising” amendment, which Bob Brown proposed to add in the Senate.

But despite the Greens taking the balance of power in the Senate from July in 2011, Labor never returned to the bill, and now blames Brown moving an amendment for it “stalling” in the Senate. Instead, Faulkner’s replacement as Special Minister of State, Gary Gray, a former ALP national secretary, appears to have preferred to negotiate with the Coalition. As we now know, instead, it set about trying to do a deal with the Coalition. The government’s own summary of the bill states that:

“… [i]n order to obtain a broader consensus across the Parliament and enable legislation to pass with bipartisan support, the Government has agreed to introduce this Bill, which represents a compromise with the Coalition.”

In that process, the bill has been watered down …

– The original $1000 reporting threshold – which is where it was before the Howard government lifted it to over $10,000 – would instead be $5000.

– It appears that donation splitting between branches of parties would not be prohibited, potentially allowing donations significantly above the reporting threshold to be provided without disclosure by being given to several state branches.

– Allowing donors more time – 90 days compared to eight weeks – to report donations.

– Allowing all anonymous donations up to $1000 rather than $50 at public events.

On the other hand, the bill does create a new “special reporting event” for donations over $100,000 that must be reported within 28 days. It still bans foreign donations. And it would still address one of the most glaring faults of the current reporting system, that we have to wait up to 18 months after an election to find out who has donated to whom; under the bill, the longest we’ll have to wait is eight to nine months if an election is held early in the financial year.

It’s not ideal, of course – there’s no reason why parties and donors can’t report donations online within 24 hours of receipt – but it’s a damn sight better than currently.

But the biggest change was to pick up the Joint Select Committee on Electoral Affairs 2011 recommendation that parties be given “administrative funding” to enable them to meet the increased compliance burden for reporting. You won’t believe this, but there was unanimity across Labor, the Coalition and the Greens on the need for more funding of their parties. Said the committee:

“Administrative funding is one way to provide assistance to political parties to ensure that they are appropriately resourced to develop an understanding of and can meet the increased demands that come with greater disclosure.”

So how much “administrative funding” is required for reporting twice yearly instead of once yearly? The government thinks $58 million over four years, a little of which is to go to the AEC to help it better monitor compliance, but the bulk of which will flow to political parties.

Fancy that: $50 million-plus to do a report twice a year and keep better track of small donations that the parties used to have to keep track of before the Howard government lifted the threshold.

This article was first published on Crikey on May 28. Reproduced with permission.