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Democrats Attack Howard Amendments To Electoral Laws

In this speech, Australian Democrats Senator Andrew Murray lashed the Howard government over its changes to the electoral system.

Second Reading : Electoral & Referendum Amendment (Electoral Integrity & Other Measures) Bill 2006

Senator MURRAY (Western Australia) (9.21 a.m.) – In making my remarks on the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2006, I would like to be on the record as stating that this bill represents yet another appalling outcome of coalition control of the Senate. It is a bill that in many respects blatantly seeks to advantage the coalition. From the words electoral integrity in the title of this bill, one would assume its provisions are motivated by an intention to improve our representative democracy, to improve the democratic and electoral rights of Australians.

Historically, these are rights to be proud of and surely worth building on. David Farrell and Ian McAllister, in their 2006 publication The Australian Electoral System: Origins, Variations and Consequences, certainly note this. They write with approval of our electoral history:

In the pantheon of representative democracy, Australia has its name stamped on many of the major advances in electoral system design as well as steps towards democratising electoral laws.

Most of this bill runs contrary to this high regard. It is simply a bad bill, apart from one or two items. It does little to improve the integrity of our electoral system. In fact, it mounts an assault on it.

The Democrats feared this would happen when the Howard government took control of the Senate. We feared that part of its ideological agenda would be to bias Australias electoral system towards its own political advantage. We know that the government will have its way with this bill. It is pointless hoping that a few coalition senators will hold out for the integrity and betterment of our system rather than be captive to partisan political advantage. The Democrats will again be opposing contentious proposals of the bill. I say again, because they have been previously rejected by the Senate because of their untenability.

The content of the bill is as follows. Schedule 1 repeals existing voting rights for prisoners serving less than a three-year sentence. This is replaced with a universal voting exclusion for all persons serving a sentence of imprisonment. It reduces the present seven-day period after the writs for the closing of the rolls. The bill proposes that the rolls be closed on the day the election writs are issued. It increases nomination deposits for election candidates for both houses of parliament to $500 for House of Representatives candidates and $1,000 for Senate candidates. It introduces new identification requirements for enrolling to vote.

Additionally, provisional enrolment is enabled for noncitizens who will be granted citizenship between the issue of the election writs and the date of the election. It allows access to the electoral roll to individuals and organisations that verify the identity of persons for the purposes of the Financial Transaction Reports Act 1988 and excludes such organisations or individuals from the commercial use prohibition clause in the Commonwealth Electoral Act 1918.

The bill inserts a new definition for associated entities. It broadens the extant definition of associated entitywhich I suspect is aimed at the unions to include an entity that is a financial member of a registered political party, an entity on whose behalf another person is a financial member of a registered political party, an entity that has voting rights in a registered political party and an entity on whose behalf another persona has voting rights in a registered political party. It removes the requirements for broadcasters to lodge returns. It increases the disclosure threshold from $1,500 to $10,000. It introduces a new section which requires third parties to provide annual returns related to gifts received and expenditure incurred in amounts above $10,000. The disclosure of sponsor details for internet based political advertisements is governed, and the intention is to bring new media into line with old media disclosure requirements. It creates amendments to the Referendum (Machinery Provisions) Act 1984 consequential to the above amendments.

Schedule 2 makes changes to implement the $10,000 threshold, including indexation rules in line with inflation. Schedule 3 proposes the deregistration of all currently registered political parties six months after royal assent, except parties with federal parliamentary representation and/or past federal parliamentary representation. Schedule 4 introduces yet another new subdivision into the Income Tax Assessment Act 1997 to increase the tax deductibility for political donations from $100 to $1,500 for an income year.

The Senate Finance and Public Administration Legislation Committee reported on the provisions of the bill on 27 March 2006. The report was split into government versus non-government. Political analysts and academics support the Democrats approach. For instance, Joo-Cheong Tham from the University of Melbourne law school is concerned at the reduced transparency that will result from the changes to disclosure thresholds. He advocates a strengthening of reporting measures instead. Marian Sawyer, a well-known expert in the area, calls this bill the hard to vote and easy to donate bill. The Investment and Financial Services Association supports the proposed changes to accessing the electoral roll.

Professor Williams from the Gilbert and Tobin Centre of Public Law at the University of New South Wales says that increasing the disclosure threshold will be harmful for our democracy. Reform is needed in greater transparency and not in less disclosure. He also indicates that, among other things, electoral law should be judged on its ability to enable the greatest number of people to partake in the voting process. The amendments contained in this bill fail in this regard. He also questions whether the disenfranchisement of prisoners is constitutionally valid, but I cannot see them marshalling up the money necessary to go to the High Court. The media is negative on this bill. But the coalition will power through in its determination to serve its electoral self-interest.

Apart from the worrying proposals for the early closure of the electoral roll and prisoner disenfranchisement, some of the most controversial elements of this bill relate to political finance. First is the bills proposal to boost the disclosure threshold from $1,500 to $10,000. The main rationale behind this increase is that the current threshold introduced two decades ago has been eroded by inflation and was originally too low anyway. Try advancing that argument with respect to indexing the tax thresholds, for instance. The government will not do it.

The Democrats will oppose this provision, as we are of the strong opinion that the current threshold of $1,500 is already a generous sumand, I might add, it is regarded as a generous sum internationallyand it should remain. Given the regulatory gaps that already plague political finance disclosure, to raise the disclosure threshold can only exacerbate them. It cannot make our democracy fairer for all, something our parliament should be striving towards.

One of these gaps or loopholes is the financial gain achieved from the cumulative benefit of multiple donations. Presently, donors are able to write separate cheques of just under the threshold of $1,500 to each of the federal, state and territory divisions of the same political party. For instance, a donor who makes a donation of $1,499 to each of the nine branches of the Australian Labor Party can give a total of $13,491 without disclosure. Similarly, multiple donations to the eight branches of the Liberal Party allow for $11,992 to be donated without disclosure.

Should the level be raised to $10,000, as it will be when this bill passes, this would facilitate multiple donations amounting to close on $90,000 for Labor and $80,000 for the Liberals without triggering the disclosure requirements. What is more, there is nothing to stop those donations being made every year. The Nationals could expect just on $60,000, undisclosed, flowing into their coffers from their six branches.

We will be moving an amendment that will make it an offence to make multiple donations to one or more branches or divisions of a party that exceed in total the disclosure level. Labor must vote for this Democrat amendment or have their critical remarks shown to be posture, not principle. I say to the Labor members present: go back to your caucus and say you are going to vote for the Democrat amendment, because, if you are not going to, you are out here making critical remarks without any real intent to take action.

We will also be opposing the proposal to index the disclosure threshold to the CPI as that would allow for an approximate increase of two per cent to three per cent annually. Raising the threshold to $10,000 will also have the effect of further worsening the current lack of transparency in the categorisation of receipts.

Research shows that, under the proposed increase, the average proportion of total receipts the coalition and Labor would disclose details of would actually decline. They would drop from three-quarters, or just over 74 per cent, to about two-thirds, or just over 64 per cent. Of course, I pick on those two groups because they are the largest receivers in the nation.

Mr Joo-Cheong Tham, a law lecturer and prominent academic in the area of political finance, rightly states that the present law already is:

… a leaky sieve that permits evasion of adequate disclosure.

Already, multimillions in political donations from overseas, clubs, trusts, foundations, fundraising dinners and private meetings with the Prime Minister and his ministers swell party coffers. These generic secret donations are already hard to track and they are set to become even harder. The already worrying perception of the link between money and politics is set to further marginalise ordinary Australians. Unless an individual or group has the money to buy influence, there is little hope of policy input. Recently in the Age Richard Baker posed the question, Are our politicians for sale? He wrote:

Privately, MPs on both sides are increasingly worried about the pressure to raise funds. The capacity to generate money is being viewed as a greater quality than fresh ideas or policy acumen, they say.

He then goes on to cite the ruminations of a senior Victorian Liberal MP who spoke of how MPs are constantly told to attend functions with key business supporters because it just might lead to another $15,000 cheque. So the answer to the question of the journalist Mr Baker is about to become a resounding yes, especially with the new $10,000 threshold level. It is nothing more than a rort that will ensure greater secrecy and corruption around political donations and fundraising.

At least annual returns do survive, but they are not as well designed as they could be, so the Democrats will move amendments that will seek to achieve more transparency in the disclosure regime without altering the basic intent of the annual returns. Once again, if Labor do not support this integrity measure they will be shown as just critics and not reformers.

Additionally, the Democrats will be moving amendments to ban donations from foreign sources unless they are made by Australians living overseas. Our unequivocal position is that there should be no foreign influence in our domestic politics. Again, Labors stance on this amendment is a critical test. Why do I keep picking on Labor? Because they are the alternative government and if they are going to replace the Howard government they have to do so more than just on the back of opposing the IR changes. They have to be a party of greater integrity, greater accountability, better and higher standards and they have to show it by their legislative actions in this place

Another worrying proposal of this bill is the plan to increase the tax deductibility of individual donations. At present, the Income Tax Assessment Act allows an individual who contributes $2 or more to a registered political party in any one income year to deduct up to $100 from their taxable income in that year.

Companies or entities do not presently get this concession. The coalition propose to raise this amount to $1,500 and extend deductibility to companies. The argument is that the deductibility threshold cut-off amount is too low and that the increase reflects community expectations and standards. I know it reflects the Liberal community expectations and standards, but what community are they talking about? Is it the community of ordinary Australians? I think not. The Democrats agree that tax relief can encourage people to make contributions to not-for-profit organisations, which include political parties; however, as a general rule, tax concessions should operate to general principles, not for special interests. We will be opposing this proposal.

Another controversial issue of this bill are the proposals that will in effect disenfranchise many voters. First is the provision to deny the vote to any persons serving a term of imprisonment. Persons released on parole and other similar release schemes will be entitled to vote, which makes it a little better than the American system where once you have been in prison you are disenfranchised forever. This proposal will repeal the current provision that allows prisoners serving sentences of less than three years to vote. The Democrats oppose this. We continue to hold our position that the Electoral Act should be amended to give all those imprisonedexcept those convicted of treason or those who are of unsound mindthe right to vote. It is an essential right of citizenship. We will be moving an amendment to reflect this point of view. Although prisoners are deprived of their liberty while they serve their time, they do remain citizens. To disenfranchise them by removing their citizenship rights is to add an extra judicial penalty.

To complicate this further, there is no uniformity amongst the states, or between the states and the Commonwealth, as to what constitutes an offence punishable by imprisonment. For example, in my state of Western Australia, there is a scheme whereby defaulters lose their drivers licence rather than be imprisoned. In other states, they go to prison. So we would have a situation where a citizen in Western Australia who does not pay a fine and is not jailed retains the right to vote; however, a citizen elsewhere in Australia could be jailed for the same offence and lose the right to vote. Where is the equity in that? There is none. On this ground alone, this provision is on very shaky ground and therefore untenable.

Another provision of this bill that will result in the disenfranchisement of voters is the early closure of the electoral rolls. Currently, those who wish to register to voteespecially those who have turned 18 or need to change their addresshave seven days to either enrol or update their details. These provisions are to be scrapped under this bill. Instead, rolls will close the day the election writs are issued. Shamefully, this will end 66 years of convention in this country whereby people were able to enrol in the first few days of an election campaign. The Democrats will oppose this amendment. We could only consider supporting such an amendment if federal elections were based on fixed terms. If they were, voters would know the election and cut-off dates in advance and be reasonably able to finalise their enrolment details.

Another reason to oppose this change is the potential for confusion. Different regimes for the closure of electoral rolls in the states and territories will lead to uncertainty. The Democrats do not agree with the argument posed by the former Special Minister of State, Senator Abetz, that the early closure of rolls would minimise electoral fraud. As Professor Colin Hughes argues, it is implausible to suggest that there is any more potential for fraud in the seven-day period than in the weeks or months before an election.

There is no evidence of electoral fraud. I have sat on the Joint Standing Committee on Electoral Matters for 10 years. No evidence of systemic, widespread, influential or material electoral fraud has ever been put to the committee, including by the AEC. There have been occasional isolated instances of fraud. If there is no evidence of electoral fraud, what does the Australian National Audit Office say? In 2002 it concluded that:
… overall, the Australian electoral roll is one of high integrity, and … can be relied on for electoral purposes.

So why attempt to find fault where there is none? Professor Brian Costar of Swinburne University wrote in the Canberra Times last December:

If there is a fault in the current Australian electoral procedures it is not rampant enrolment fraud but the very real perception of secretive influence peddling produced by the excessively free flow of political money.

Ultimately, early closure of the electoral rolls will make it more difficult for our young to register for the first time. Early closure could also result in registered voters being removed from the rolls before they are actually able to update their details. In fact, early closure could result in the disenfranchisement of hundreds of thousands of voters, and it is believed that the majority affected are expected to be Labor votersbecause they are young, because they are disadvantaged. The figures bear this out. For instance, in the seven days after the writ was issued for the 2004 election, 78,000 people enrolled for the first time and 345,000 updated their details. After the seven-day grace period, a further 150,000 attempted to enrol. This surely suggests the period of grace should not be shortened.

There are, however, a few amendments in this bill worthy of support. These include the extension of the associated entity definition. Under the new definition, an associated entity will include entities with financial membership and with voting rights in political parties. It will also extend to those whose financial membership or voting rights are held on their behalf by others. This is a step in the right direction, but there is still some way to go, as indicated in my extensive dissenting reports to the inquiry into this bill and the report of the Joint Standing Committee on Electoral Matters on the 2004 election. The inquiry into this bill was tabled in March of this year by the Senate Finance and Public Administration Legislation Committee.

Another step in the right direction is the bills proposal to strengthen the disclosure provisions for third parties by requiring they provide annual returns to the Australian Electoral Commission. Again, though, our view is that the regulatory system for third parties should be further strengthened. There needs to be a more coherent and principled framework and it also needs to be aligned with what exists for other entities under the Electoral Act.

Another not so controversial proposal of the bill is an elaborate scheme of deregistration and reregistration of political parties. It proposes that all current registered parties, with the exception of federal parliamentary parties and those with past federal representation, will need to reapply for registration. Primarily, this provision is to give effect to government concern over misleading party names or, more specifically, the name of the party liberals for forests. Referred to as passing off in commercial law, this has long been an issue of concern to a number of Australian political parties and many members of the community, including the Democrats. However, the Democrats consider that such behaviour should be prohibited rather than changed by law because of the possible loss of presently valid party status by some parties.

In a similar way, while the Democrats support the proposal for more stringent proof of identity requirements on enrolment, our position is the same as it has always been: agreement from the states and territories is essential. This will ensure that the joint roll arrangements remain effective and integrated. Should the states and territories disagree, then further consultation would be required. Regarding the proposal to increase nomination deposits for both houses of parliament to $500 for the House of Representatives and $1,000 for Senate candidates, the Democrats do not support this. There is no evidence to suggest that the current amounts are inappropriate. Nor do we consider them too low to deter frivolous candidates or so high that they deter the serious ones.

In no way does this bill measure up to its title of electoral integrity. The bill weakens funding and disclosure rules, disenfranchises disadvantaged voters and reduces accountability. We will oppose it.

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Malcolm Farnsworth
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