Electoral Funding Bill 2018

23rd May 2018

Mr GREG PIPER ( Lake Macquarie ) ( 12:21 ): I support significant parts of the Electoral Funding Bill 2018. Unfortunately, my support and comments will be heavily qualified. I acknowledge that the bill contains many of the recommendations made by the independent review panel in 2014 headed by Dr Kerry Schott. In that sense this legislation has been a long time coming. I have some history in contributing to electoral donation reform, including to the panel formed by the Government, chaired by Dr Kerry Schott and supported by former Deputy Leader of the Labor Party John Watkins and Mr Andrew Tink. I believe that panel and the Government made an honest attempt to implement significant reforms to the electoral system in New South Wales. We all know they were very greatly needed.

I will support any legislation that reforms the electoral funding system and increases the transparency, accountability and overall integrity of political donations in New South Wales. The system in itself must have integrity and that is what legislation and regulation can, to a significant extent, bring. Unfortunately, no amount of reform can ensure the integrity of individuals who participate in the political process. The truth is that there will always be some people looking for a political advantage and, as we have seen clearly in recent times, much of this involves the gathering of funds. However, it certainly is not confined to funds and we know that a whole range of clever tricks is used when it comes to elections, including some that have been referred to as "black ops".

As I have pointed out previously, as we contemplate necessary changes to provide for integrity in the system, others will contemplate how to get around any new restrictions that might be introduced. That prediction was well and truly borne out with the activity surrounding the and fallout from the 2011 election that subsequently occupied so much of the ICAC's time, damaged the standing of the Government and, indeed, further eroded community confidence in the political system in New South Wales. That is one of the reasons this bill is before the House. Although that matter stands out in debate in the House I do not think it can fairly be said that this type of political shenanigans is the sole domain of the conservative government. It has been going on for a long time—certainly well before Machiavelli wrote The Prince.

As members know I am a proud Independent member. It is not always easy when it comes to elections. As an Independent member, and surrounded by questionable activity over the years, leading up to the 2011 election I took the position to not accept any donations towards my electoral work or the election campaign. My wife and I self-fund those costs. That may sound righteous, but I understand that I am in a good position to do that.

Mr Bruce Notley-Smith: Having married well.

Mr GREG PIPER: Having married well, as the member for Coogee says. Having been elected for a significant period of time I had the benefit of incumbency and the ability to plan for the election. That is not something everybody can do, nor would I expect them to do it. The system has improved and I acknowledge that the Government has improved the situation for candidates, allowing them to receive remuneration from public funding. That has helped many candidates. I would not want to deny members of the public, friends, family and supporters of a person or cause the right to contribute to the political process. I believe it is important not to impinge too far into that space.

Although we should always seek to reform and improve the electoral and political donations system, I do not believe that we should see all donations as being tainted or seeking to buy influence; nor should we pander to the populist perception that all politicians can be bought by political donations. As is in all walks of life, there will be those unfortunate examples where some do the wrong thing. During my Independent political career, which includes 21 years in local government and the past 11 years in the New South Wales Parliament, I do not believe that such a generalisation is fair, and I do not believe it is something that could be ascribed to the majority of people I have dealt with in this place. The community must have trust in its elected representatives—not only does the right thing need to be done, it must be seen to be done in an open and transparent way.

I turn to the contents of this bill. I acknowledge and support the proposed caps on donations. I also support reforms to the time frames in which donations are required to be reported. That is, donations of $1,000 or more that are made within six months of an election must be declared publicly within 14 days of the donation being received. For periods outside of that six-month period, donations must be declared within four weeks of the end of each quarter. These reforms were key parts of submissions I made to a number of reviews during my time in this place. They will, I believe, provide for a more transparent system. [Extension of time]

I have also noted the proposed reforms to small donations from anonymous sources—that a single political donation of $50 or less made by a person at a fundraising dinner does not have to be reported. The member for Gosford referred to this reform, but I have a different opinion. I hold concerns about this process because it still leaves the system open to abuse by those who seek to find loopholes, and there will be plenty of them. I accept that somebody buying 500 raffle tickets for $50 each at a political fundraiser will be required by law to declare the aggregate amount of the donation, but the non-requirement to record all donations under $50 leaves the door open to those who might seek to skirt the rules and donate anonymous or illegally.

I accept the advice of the expert panel, which said that in all practicalities small anonymous donations are onerous to report and provide little benefit. As we have seen before in various circumstances, which were uncovered by the Independent Commission Against Corruption, people are willing to purchase $5,000 worth of raffle tickets. If candidates will take donations, then all donations should be recorded and publicly declared. I note my support for caps on political campaign expenditure, which will be reformed under this bill. Capping expenditure and requiring candidates to declare what they spend removes the need for big money donations and provides clear reconciliation of income and expenditure.

It is important that we limit expenditure and limit the size of donations. However, I have concerns about the inequity of those rules being applied at local government level. It is difficult to have a one-size-fits-all cap at council elections because the size of a council area, and populations can differ enormously. For example, we all know Hunters Hill is one of the greatest councils in New South Wales, but it is also the smallest geographically and in population. If we compare it to the new Central Coast super council or Blacktown or Parramatta councils, we can see the disparity straightaway.

I am also concerned about the capacity of candidates to self-fund their campaign for an upper House or State seat. Some of those issues have been considered by the Government. It may well be examined at a later stage. We need solid reporting and regulatory regimes and open and transparent reporting methods. That is the only way to keep integrity and trust in the system. To a large extent this bill does that. I share the concerns raised by others, particularly the Opposition members, about the impact on third party campaigns and, in particular, the ability of unions to work effectively together on campaigns in this space.

This morning I heard a union representative on radio say that, if this bill proceeds, the union movement will challenge the laws. They expect to see restrictions on their rights to campaign in this way to be struck down. I tend to agree. I am not a lawyer, but I think that this area of legislation is fraught. No doubt the union movement will work hard to ensure it gets its message out at the appropriate time. The provisions in this bill for local government are inconsistent when they are applied to local government areas of varying populations and geographical size. Other variations include whether they have wards or no wards, and popular or council-elected mayors. I understand limited discussion has taken place with local government and Local Government NSW has not had any specific input. With that in mind, I take this opportunity to foreshadow that I will move an amendment that will remove all references in the bill to the electoral provisions for local government and have it referred for consideration by a committee. The amendment will include that that removal be considered in consultation with local government and be subject, if necessary, to a subsequent bill.

The State and local government systems are substantially different in the way the electoral system works, including that there is no provision for any public funding. I do not believe the two jurisdictions should be dealt with in one bill, which is why I have foreshadowed moving an amendment. The local government provision should be excised from the bill and dealt with in a separate and specific bill at a later date which allows for proper consultation with the sector. While the bill has many good elements, I am concerned about those aforementioned matters, and about the system becoming unduly complex, which is perhaps deterring people from participating.

I have raised this issue in this place before and in different forums. In 2010 I said to the Joint Standing Committee on Electoral Matters that any amended system should not be so complicated or difficult that it deters people from participating in the democratic process. Regulation and reporting regimes should not be so difficult that inadvertent mistakes can be made by participants, nor so complicated that an interested member of the public could not easily view and understand contribution and expenditure declarations.

I will give an example of undue complication in the last local government elections resulting from a complex regulatory regime. My wife made a legal contribution of $3,000 to a local government group in Lake Macquarie and received a receipt for $3,000. She also reported the donation within the required time frame. She was surprised to find a letter of demand from the Electoral Commission that she redo her declaration on the basis that it was reported by the group as three separate donations of $1,000. The fact is that she made one donation of $3,000 and properly declared it. Subsequently, the group split it up between three different members and declared it separately. It was an unnecessary and unforeseen complication that had the Electoral Commission ask my wife to change her declaration to fit with something that she was totally unaware of. The Electoral Commission recognised that its demand was improper and subsequently withdrew it. Once again, it shows that we have to be careful about the complications that we create in the system.

Debate adjourned.

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