The Bill proposes amendments to the Commonwealth Electoral Act 1918 (Cth) to prohibit political donations from certain industries, and impose a cap on all other donations.
The purpose of the amendments is to strengthen the integrity and accountability framework underpinning Australia’s electoral system by preventing certain industries that have used, or have a strong public perception of using, political donations to influence policy decisions. Specifically, amendments are proposed to ban donations from:
- property developers;
- the tobacco industry;
- the banking industry;
- liquor and gambling businesses;
- pharmaceuticals companies;
- the mining industry; and
Waters claims
- representative organisations for these industries.
These amendments will improve the electoral system by strengthening the independence of parliament and increasing public confidence that politicians are guided by the public interest when making decisions, rather than the interests of donors. The amendments seek to remove undue influence by powerful industries on policy and funding decisions and enhance individuals’ capacity to take part in public life without those influences compromising their decision making capacity.
The Bill also recognises the potentially corrupting influence of large donations, irrespective of their source, and imposes a cumulative limit on donations from any source (individual, organisation or business) of $3,000 per election term. The amendments extend the definition of “gift” to include subscription and membership fees and attendance at fundraising events to close the loophole that has allowed these significant sources of campaign income to remain undisclosed and unaccounted for.An amended definition of ‘gift’ encompasses:
- a gift of money or property;
- provision of a service for free or less than market-value;
- tickets or entry fees for fundraising events;
- membership fees for political parties, associated entities and political campaigners over $1,000; and
- interest-free loans.
The amended Act would make it unlawful for any prohibited donor proxy to make a political donation. It is also unlawful for a person to accept a political donation made by or on behalf of a prohibited donor. To avoid any collusive schemes to circumvent the ban a prohibited donor or proxy must not solicit another person to make a political donation. Where an unlawful political donation is accepted, an amount equal to the donation can be recovered by the Commonwealth as a debt against the body that received the donation.
Waters states
The industries included as prohibited donors were identified by the Senate Select Committee on the Political Influence of Donations as key industries exhibiting donation patterns that suggest undue influence over policy decisions and project approvals. The inquiry report of the Select Committee sets out various examples and recommends that these industries be banned from making political donations. This Bill implements that recommendation.Less contentiously, the Bill seeks to cap donations per se, with a $3,000 cap within a single election term and aggregation of donations. ( Donations to individual members, candidates, endorsed groups or State branches are treated as a donation to the relevant political party. Similarly, a political donation to a candidate or a member of a group will be treated as a donation to the group for the purpose of aggregating donations.)
Capping is intended to prevent
political donations made to, or for the benefit of a political party (including a State or local branch), a member of the Commonwealth parliament, a candidate, associated entity or political campaigner where the cumulative total of the donations exceeds the donation cap in the donation period. This provision recognises that unfettered freedom to donate significantly increases the risk of corruption through undue influence. Restricting the amount donors can contribute minimises the risk that large political donations will be used to exert disproportionate influence on the political process. ... For the purposes of aggregated caps, the intention of the Act is not to capture all donations made to political campaigners that undertake a range of non-electoral work. For example, a large environmental organisation may engage in a wide range of conservation activities as well as some activities characterised as political campaign activities. Only donations or gifts received for the purpose of electoral expenditure will be counted towards the aggregate donations cap for associated entities and political campaigners.Waters comments that 'implementation of these provisions relies to an extent on the introduction of a comprehensive disclosure regime, which the Greens have long proposed and will introduce separate legislation to establish'.
In discussing the Bill the Explanatory Statement argues
A Bill to cap or prohibit political donations will ultimately limit the ability of political parties to engage in activities like electoral advertising and promotion, to express their policy positions to the public. Some argue that this could limit the right of prohibited donors to engage in the political process. However, the right to donate to a political party is not equivalent to the right to freedom of speech or political communication. Prohibited donors retain the right to campaign publicly, to advertise, and to articulate their political views on any issues they wish – they are simply prohibited from donating monies to political parties.
The sectors identified as prohibited donors have demonstrated a frequent nexus between their operations and public policy, and the strong public perception of impropriety associated with political donations and decision making. The Select Senate Committee on the Political Influence of Donations sets out clear examples of this nexus and the extent to which the proximity of donations from key industries to policy or project determinations that advantage that industry suggest undue influence. Consistent with the majority judgment in McCloy v NSW, any burden on the implied freedom of political communication will be acceptable if it is for a legitimate purpose and a proportionate response to the corruption risks presented by the prohibited donors. The nature of the business activities undertaken by the prohibited industries identified in the Bill make it very likely that they will seek to influence policy outcomes in their collective self-interest. Banning political donations from these industries is a proportionate response to achieve the legitimate aim of more representative democracy. ...
The Bill only restricts the ability of prohibited donors to participate in political debate in one way – by restricting their ability to donate to political parties. Individuals will still be able to vote and corporations will still be able to publicly engage in the debate in every way possible, aside from making donations to political parties. The decision in McCloy v NSW supports the view that capping donations seeks to achieve the legitimate end of preventing and reducing corruption and undue influence by preventing the payments of large sums of money through political donations. The majority judgment notes (at [45] – [47]):
[t]he risk to equal participation posed by the uncontrolled use of wealth may warrant legislative action to ensure, or even enhance, the practical enjoyment of popular sovereignty”.
