Election Funding Amendment (Political Donations and Expenditure) Bill 2008
Local Government and Planning Legislation Amendment (Political Donations) Bill 2008

Debate resumed from an earlier hour.

Mr ANDREW STONER (Oxley—Leader of The Nationals) [4.22 p.m.]: In contributing to the debate on these cognate bills concerning reform of political donations, election funding and the role of the Election Funding Authority the thought springs to mind of the epitaph that might be written on Morris Iemma's political career: Too little too late. These bills have been introduced too late: too late to have prevented the Wollongong scandal, which was essentially about cash for development approvals. Of course, the Australian Labor Party was up to its neck in the muck and crime associated with Wollongong. These bills are too late to prevent the extraordinary revelations delivered on the ABC television program Four Corners, particularly the revelation that developers in New South Wales generally understand that in order to have anything approved at either State or local government level they must give generously to the Australian Labor Party. Another revelation was when the member for Wollongong revealed on that program the mindset in the New South Wales Labor Party that career progression was all about raising money and not about performance. That mindset was reinforced when the spineless Premier retained the member for Wollongong as a Parliamentary Secretary despite her failure to declare donations—

Mr Steve Whan: Point of order: The Leader of The Nationals is casting aspersions against a member of this place, not by way of substantive motion but during debate on this bill. He is casting aspersions that have no foundation in fact and he should withdraw his remarks.

Mr ANDREW STONER: On the point of order: These matters have been raised in the House before. They are not disputed. In fact, the member made those admissions during the program.

The DEPUTY-SPEAKER: Order! The point of order relates to a particular term being used.

Mr ANDREW STONER: This legislation is too late also to deal with the serious questions concerning the member's behaviour and actions, including work carried out on her residence by a developer in the Wollongong area.

Mr Michael Daley: Point of order. I will take points of order all afternoon if the Leader of The Nationals continues to embark on a cowardly attack upon a member of this place. Standing Order 73 is quite clear. It states that personal reflections on members of this House are not permitted other than by substantive motion. The member is not speaking to a substantive motion.

The DEPUTY-SPEAKER: Order! The Leader of The Nationals will confine his remarks to the bills.

Mr ANDREW STONER: Of course, the member concerned has the opportunity to respond during this debate. Government members do not want to hear about the issue I raised so I will proceed. We are debating a substantive motion in relation to the bills. The member has the opportunity to contribute to the debate and respond, which is not what Government members do when they come into this place and dump a bucket on an Opposition member.

Mr Steve Whan: Point of order. The Leader of The Nationals, who seems to be engaging in a direct debate with another member, is suggesting that this debate provides an opportunity for members to make accusations about each other. This debate is about two bills, and I ask you to draw him back to the bills.

The DEPUTY-SPEAKER: Order! The Leader of The Nationals is experienced enough to know what is required. He will return to the leave of the bills.

Mr ANDREW STONER: Government members do not want to hear these criticisms, so I will move on. I was referring to the possible epitaph on Morris Iemma's career: Too little and too late. Again the Government has introduced legislation that is too late to deal with the management of a climate conducive to corruption: a climate in which the Minister for Planning approved major developments in the Hunter against the recommendation of his planning officials; and a climate in which the Minister for Industrial Relations granted $750,000 of taxpayers' money to the Transport Workers Union, which then donated the same amount of money back to Labor Party candidates. This climate has given rise to the practice of that old Labor rort known as the magic roundabout. On the other side of the coin, this legislation is too little because it fails to implement the recommendations of the Select Committee on Electoral and Political Party Funding. This bipartisan committee of the Legislative Council recently tabled its report. One of the committee's recommendations, which has widespread support, has not been adopted anywhere in the legislation being debated. Recommendation 7 reads:

That the Premier ban all but small political donations by individuals, to be capped at $1,000 per political party per year, and $1,000 per independent candidate per electoral cycle.

Further, the Premier should investigate all relevant legal and constitutional issues arising from such a ban, and liaise with the Federal Government to ensure national consistency on electoral donation and disclosure laws.

This legislation is too little also in that it falls well short of the policy announced at a press conference by a desperate Premier in the wake of the Wollongong scandals—that is, to ban donations to political parties and candidates in toto. I support that proposal and spoke to the Premier's Office in an attempt to determine if a total ban of donations was feasible. Public funding could provide 100 per cent of campaign expenditure by candidates if it were capped, for example, at $30,000 to $40,000. That is not a huge price to pay for a pure form of democracy in this State, and it could be achieved. The Premier had a unique opportunity of bipartisan cooperation to achieve world-class leading reform but, as usual, he has dithered and ultimately squibbed on this crucial reform. The legislation is too little also because the reforms do not stop donations from developers or other vested interests who expect preferential treatment from the Labor Party.

It is too little because it does not address the benefits that Labor receives from union and membership fees, which are, of course, well under the reportable limits per individual. It is too little also because candidates for this year's local government elections, including those in Wollongong, will have a 10-week window between 1 July and 25 August when they do not have to disclose donations received prior to those elections. These reforms are also too little because of the rort whereby the Labor Party approaches so-called Independents to run in electorates that Labor has no hope of winning with offers to assist with cash money, and that device is still open to abuse.

The final test of this legislation must be responses to questions posed by a wider community that is right to be concerned about Labor's dodgy dealings. Does the legislation put an end to the climate that is conducive to corruption? No. Does it put a stop to parties buying access to and influence with Government, which most members of the public could never hope to achieve? No. Is it a genuine attempt to improve transparency and accountability of political parties and candidates, or is it the product of an announcement that is designed to get the Wollongong scandal out of the headlines? Methinks it is the latter. The Nationals will not oppose these bills, but it is with a sense of regret I point out that so much more could have been achieved by a Premier who invariably promises much but delivers little.

Mrs DAWN FARDELL (Dubbo) [4.31 p.m.]: I briefly join in debate on the Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 to highlight some important points. I support the bills because I believe they are based on good intent, but the legislation to my mind is a knee-jerk reaction. We could all be considered victims of the Wollongong affair and have to pay the price. I have great concerns about this legislation in the light of local government elections that will be held later this year. I fear this legislation will limit some outstanding individuals who do not belong to political parties or show any particular political allegiance, or whose allegiance is not public knowledge, because they may be prevented from nominating for candidacy as a result of restrictions that will operate against individual independent candidates. I am concerned that there are many provisions of these bills that have not been examined carefully and may disadvantage independent candidates in the forthcoming local government elections.

One of the problems with the bills is that they do not define in-kind donations, including the use of vehicles. The effect of the bill will be to ban certain in-kind donations valued at $1,000 or more, and in-kind donations include the provision of offices, cars and other equipment for no consideration. However, I note that volunteer labour and the incidental use of equipment belonging to volunteers are excluded from the ban. What would be the effect of the ban on a candidate who is in a relationship with a person who owns a business that the candidate is not involved in and who offers the candidate the use of a motor vehicle that is appropriate for moving gear around and for use throughout the whole campaign? Many independent candidates have been placed in that position. That in-kind donation would be worth more than $1,000, so will the effect of the bill be to stop that kind of support? Will independent candidates be expected to run their campaigns from the boot of a vehicle? If that is the case, the life of an independent candidate could become very difficult in particular areas. When volunteers read the restrictions applying under the legislation they will be nervous about whether they are doing the right thing or the wrong thing.

Funds raised by independent candidates have to be placed under the control of authorised agents. A different set of rules applies to political party candidates: their funds will be administered by their political party. I can state from personal experience that it is fairly expensive to have an accountant do all the campaign bookwork. I had an accountant working for me when I was campaigning, and it was a significant election expense. I trust the accountant I employ to do my campaign bookkeeping. The bill also allows individuals to be trained to be authorised agents. I have been informed that courses will be provided so that people can be trained, or training and authorisation can be acquired from a website. It really concerns me that someone could be authorised by a training program from a website. I am very sceptical of the Internet as an appropriate means by which an authorised agent conducts campaign affairs.

Aside from support from my family, I received very small political donations to assist with my campaign, and all my campaign funds are a matter of public record. Any savings or retirement funds I have are disclosed. In some cases, although this does not apply to me, candidates have mortgaged their property to raise funds for their campaign. If personal funds to the value of $100,000 are put into an account over which an independent candidate has no control, the independent candidate will have to find someone they trust to take control of those funds. That is a very significant consideration in the context of debate on these bills. Experience as a member of Parliament shows that there are people who can be trusted and people who cannot, and $100,000 may represent a big temptation for somebody who may be having financial difficulties. I have grave concerns about provisions in the legislation that put an authorised agent in control of somebody else's $100,000. How could misappropriation be prevented in such circumstances?

Surely an independent candidate should also be a signatory to the campaign funds account so that both the candidate and the authorised officer will have to sign when funds need to be accessed. I am eager to ensure that a candidate also will be a signatory to the account. Control of the funds by an authorised officer may result in delays and that could prevent the early payment of accounts from occurring. During my election campaign I paid my expenses as I went along. I have a good repayment record and I would like that to continue to be the case in any future campaigns I am involved in. I adopted that practice because the people in my electorate rely on regular income and prefer not to wait while somebody decides whether accounts will be paid or not.

Businesses have tight operating budgets. In my electorate I contracted with local business people to do the printing associated with my campaign and make T-shirts for the campaign, et cetera. Local businesses rely on accounts being paid promptly. If an authorised person, such as an accountant, is running an independent candidate's campaign account that will increase expense incurred by individual candidates. As I said earlier, the authorised person being the only signatory to the campaign account concerns me greatly.

I understood that the bill would have more credibility, but from what I can see there are still many loopholes that will allow corruption to continue. I realise that Independent members of Parliament are not always the flavour of the month, and that the life of an Independent can be very difficult. From my point of view, this legislation will do little to change the political culture of accepting donations, and political party candidates will still have open slather in peddling influence. The legislation is not tight enough.

I refer now to some of the comments I made recently in a submission to the Legislative Council Select Committee on Electoral and Political Party Funding. While I agree with some of the points addressed by the bill, when it comes to political donations full disclosure must be enforced to ensure that members of Parliament are above suspicion and are not unduly influenced when undertaking representative duties. My submission states:

Compulsory disclosure of [all] political donations must be full and complete. Currently it is possible to attribute donations to party branches without disclosing where the money has originated.

Candidates should be required to disclose political contributions a week before the election to ensure that the public is fully informed as to the candidates funding sources.

It is often the case that after an election we find out where the money has come from, but it is too late at that stage, and no-one seems to lose their position. I also stated in my submission:

The current system does not work. In the 2004 Dubbo by-election, for instance, the Nationals candidate had, despite the distribution of copious amounts of election material, apparently spent $0 on postage.

It was a known fact that the material was certainly sent from a post office or through the postal system. My submission also states:

Similar anomalies are often found in matters of fuel, printing etc. Candidates can out spend their opponents 2:1 in radio and print advertising and yet there is no discernible difference when expenditure reports are released

The upshot is that election expenditure reports are virtually worthless

[Time expired.]

Mr JONATHAN O'DEA (Davidson) [4.37 p.m.]: I support the Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008, which implement significant changes to campaign finance laws. While I welcome these reforms, they do not come close to fulfilling the promises made by the Premier, nor do they implement enough of the recommendations of the report on "Electoral and Political Party Funding in New South Wales" of the Select Committee on Electoral and Political Party Funding. The Election Funding Amendment (Political Donations and Expenditure) Bill 2008 introduces a system of bi-annual disclosure, a uniform disclosure limit of $1,000, mandatory disclosure of loans, new rules for managing campaign finances, a ban on in-kind donations, and new offences and investigatory powers for the Election Funding Authority. The Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 places requirements on the general manager of each local council regarding voting records and conflicts of interests. It also requires greater disclosure of donations by those with an interest in relevant planning applications.

There have been numerous papers, reports and calls in the media and elsewhere for major reform, yet the Government is slow to act. It has now acted. However, the bills before us fall short. In 2001 when Paul Keating said that Sydney was caught in the "downdraft of development" and urged the New South Wales Government to place a total ban on donations by property developers Premier Bob Carr responded by saying, "It is an interesting proposal. We will seriously consider it." Yet no action was taken. When the media started asking some hard questions following the Labor victory in 2007, the Premier refused to support a ban on donations from developers unless it was a national ban. On 10 May 2007 the Sydney Morning Herald editorial stated:

No government genuinely interested in transparency will have any trouble establishing a system in which all donations can be tracked. Loopholes can readily be closed if there is a will to close them If Mr Iemma is indeed so suddenly and sincerely concerned, the answer is straightforward. Lead by example, and start the reforms in NSW.

Concerns regarding local government donations were also appropriately raised by Michael Duffy in the Sydney Morning Herald on 19 May 2007. He wrote:

donations rarely buy a developer a decision, they just buy him consideration when a decision is being made. They are, if you like, an unofficial tax imposed by the NSW political class on the development industry.

This legislation does not offer fundamental or adequate reform. Greater integrity, honesty, transparency and accountability are needed to fix a fundamentally defective system. We need good government in New South Wales, operating in the public interest and engendering public confidence. Following the uncovering of corruption within Wollongong City Council, the Premier raised community hopes of real reform only to disappoint with dithering and by delaying consideration of more meaningful reform regarding political donations.

The Government has failed to address the issues in the ICAC report "Corruption Risks in NSW Development Approval Processes", which was released in December 2005. The ICAC identified part 3A applications determined by the Minister for Planning as involving a corruption risk. That issue has not been addressed properly by a hypocritical Labor Government that readily recognises perceived faults or shortcomings in local government but not in itself. There should be a publicly accessible register to see who has donated to the political party in power in New South Wales when the Minister for Planning, on behalf of the Government, is considering development applications from those donors. The report of the Legislative Council's Select Committee on Electoral and Political Party Funding on electoral and political party funding in New South Wales recommends wholesale reform in this area, including the capping of election spending. It recommends:

That the Premier ban all but small political donations by individuals, to be capped at $1,000 per political party per year, and $1,000 per independent candidate per electoral cycle.

Instead of acting decisively on an issue that is undermining public confidence in the New South Wales Parliament, the Government has introduced these half-baked reforms. While the Election Funding Amendment (Political Donations and Expenditure) Bill 2008 requires the disclosure of details of membership fees of or above $1,000 payable to a party by individuals, industrial organisations or other entities, Labor will still be able to reap the benefits of union membership or affiliation fees. It is no wonder union membership continues to fall and disillusionment levels rise as union bosses, and in turn the Labor Party, take union dues—which are donated to Labor—from hardworking people who have little say in where that money is directed. The only reason the Premier has taken the limited action in these bills is that he was forced to respond to pressure from the New South Wales Coalition—led by the people's preferred leader of this State—and the Greens and because corruption was uncovered within the Australian Labor Party controlled Wollongong City Council. Although these reforms are significant, they are also overdue and incomplete. I urge the Premier to stop dithering and implement wholesale reform.

Ms SONIA HORNERY (Wallsend—Parliamentary Secretary) [4.44 p.m.]: At this point it is relevant to consider the aims of the Election Funding Amendment (Political Donations and Expenditure) Bill 2008. The bill will strengthen the laws governing political donations, and provide more regular and accurate disclosure and transparency. The bill is about universal disclosure and limiting political donations to $1,000. I was listening to the debate earlier today and I heard the Leader of the Opposition assert that the Government is not fair dinkum about achieving reform in this area. Au contraire: We have introduced this bill because we are fair dinkum. The Parliamentary Secretary, the member for Monaro, agrees. The Leader of the Opposition argued that fundamental reform is necessary. We agree, and that is why we introduced the bill, which is about taking the burden off volunteers. We agree with the Leader of the Opposition that the bill is also about closing loopholes and protecting volunteers and making it easier for them to work safely and effectively.

Earlier today the member for Pittwater suggested that the bill is mere puppetry. Yet he conceded that the reforms are sensible. All Opposition members who have contributed to the debate so far have offered hearty praise for the bill, which suggests that they support it. The member also claimed that the Government is out of touch with the community. I beg to differ. We have introduced the bill because we are listening to the community and taking account of its needs with regard to political donations. The member for Pittwater foreshadowed that the Liberal Party will move an amendment during the consideration in detail stage regarding the Minister for Planning. The bill provides that all donations made to the Minister or his party must be disclosed by persons lodging certain planning applications. Third party appeal rights are not the appropriate mechanism for dealing with conflicts of interest. It would be unduly onerous for people seeking review and would increase the workload of the already busy Land and Environment Court. The planning reforms introduced by the Government will ensure that the Minister can refer matters involving a political donation to an independent planning and assessment commission for advice. The ICAC acknowledged in its report that it is not feasible to expect the Minister to stand aside from every decision involving donations. The disclosure obligations in the bill, coupled with the planning reforms, will strike a workable balance between transparency and efficiency.

The member for Sydney referred to political donations as being part of the democratic process. I agree. She also supported reducing disclosure limits from $1,500 to $1,000. Of course Labor supports that change. The member said that there should be high ethical standards, and we are certainly endeavouring to deliver them. The member for Manly described the bill as a fondue without cheese. I would describe the bill as a supreme pizza with loads of pepperoni—it has more guts than a fondue without cheese. The member and I prefer different metaphors. The member for Manly also discussed the cost of television advertisements. I recall during the Federal election campaign seeing the Liberal candidate for the Federal electorate of Paterson on the television every time I turned it on. I wonder how much that cost.

The member for Tweed said that the bill increased transparency regarding the nature of donations. We certainly agree with that; the Government has a responsibility to operate transparently. The member also mentioned the role of volunteers and trade unions. We believe they are important. If trade union members wish to volunteer their time to the Labor Party, we are happy to accept their help. The bill limits donations to $1,000—and that limitation is key. On Friday 14 March an article appeared in the Daily Telegraph entitled "Destitute Liberals host $1 million fundraiser". The first paragraph of the article states:

The cash-strapped NSW Liberal Party will host a $1 million dinner tonight in Sydney in a desperate bid to raise money after two election losses in one year which have dried up their campaign pot.

But the event has already been mired in controversy, with the discovery that several Liberal MPs have been ringing developers spruiking $10,000 tables to the event being attended by Brendan Nelson and Malcolm Turnbull

Questions of political fundraising and election donations, however, have also been raised over the campaigns run by the party's four star recruits last March.

It can now be revealed that the party spent almost $750,000 to get Pru Goward Mike Baird Greg Smith and Rob Stokes elected to State Parliament.

That is a lot more than $1,000! Another question that has been posed is, "Why doesn't the Government ban private donations altogether?" The answer is that any kind of ban or limitation on donations raises complex jurisdictional and constitutional challenges. Those challenges must be overcome before any ban on private donations is implemented in New South Wales. To do otherwise would be a half-baked strategy. Restrictions on private funding also raise difficult policy questions, which warrant further consideration and debate within the Government and in the broader community. Any ban on donations will need to be accompanied by a fair system of public funding which encourages democratic participation but is not wasteful.

The reform of political funding in Australia, including bans, caps and other restrictions on donations and expenditure, is being examined as part of the Federal Government's green paper process. The New South Wales Government has also commissioned Associate Professor Anne Twomey to prepare a paper on the constitutional and policy issues that will need to be resolved for the next stage of donations reform. In the meantime the proposed legislation will give New South Wales the most robust funding and disclosure regime in Australia.

Mr ANDREW FRASER (Coffs Harbour—Deputy Leader of The Nationals) [4.52 p.m.]: I am disappointed with the Election Funding Amendment (Political Donations and Expenditure) Bill 2008. This legislation is a result of the rorts that occurred in Wollongong. The disclosures referred to the Independent Commission Against Corruption involved improper actions by members of Parliament, councillors and developers to get development applications through council. This legislation is different to what was promised by the Premier at Easter time. The member for Wallsend, who is leaving the Chamber, referred to fundraisers for the Liberal Party. That is hypocrisy, considering the dinners to which a number of developers were invited by the Minister for Planning. These days the Minister has great planning powers and can approve developments over and above any council in New South Wales. It is also hypocrisy when one compares the amount of money spent by the Australian Labor Party with the amount spent by the Coalition in the past State and Federal election campaigns. The hypocrisy of the member for Wallsend draws no comparison.

I have always been a great believer in public funding for election campaigns—open and accountable funding that is put forward and paid after an election on the number of votes received. The present system returns some money to political parties in relation to votes gained, but the reality is that those in government have always had a great opportunity to hold fundraisers, as we have seen with the Labor Party. To paraphrase an article by Michael Duffy in the Sydney Morning Herald, there is an implicit threat by government to developers: "No, you don't get your development approved because of donations, but it can facilitate a development being considered favourably". That has occurred far too much in this State, especially in the past 13 years under this Government. I am also concerned that the legislation does not go far enough in relation to councils. In country areas I have heard the expression that councillors can be bought for the price of a dinner. Often if councillors receive a pat on the back and are told what good blokes they are by a Sydney developer who wants a development approved in their area, they approve the development. In reality, nothing more than a meal and a good bottle of wine has been given to them.

Mr Geoff Corrigan: Lobster!

Mr ANDREW FRASER: Up on the coast we cannot afford lobster. We are not in an affluent Sydney electorate like Camden. We just catch the lobster and send it to Sydney. The legislation will improve the situation—the provision limiting donations to $5,000 is a mirror image of the Federal legislation, and the reporting requirements now provide for reporting biannually rather than every four years. Some people who have donated to campaigns are, according to the media, now being prosecuted because they did not understand the difference between donating to the Liberal Party, the Labor Party or The Nationals on a Federal versus State basis. This legislation, which clears up that confusion, places an obligation on the parties to ensure that returns are submitted. Out of bad, good does come, and I believe this legislation will result in better understanding across the board.

I was surprised when the member for Dubbo said that she thought candidates should be signatories to campaign accounts because an official agent could not be trusted. She needs to have someone at arm's length to ensure that what comes in and what goes out is within the terms of the Act. We must also ensure that people are not tempted to misuse funds. In the past Independents have had huge amounts of money left over from campaigns but it was not declared and we do not know where it went. In the Dubbo by-election the message was that the member was paying bills with cash. We need accountability. We need to know where the money came from and how it was expended. In third party campaigns the unions—the Teachers Federation and others across the State—

Mr Steve Whan: What about the nurses?

Mr ANDREW FRASER: The member for Monaro rightly asks about nurses. The Nurses Association and other unions interfere too much by using members' union dues to push the Labor Party side of politics. Legislation needs to be put in place that defines what third parties can do in campaigns, how they can spend their money and whether certain advertising is legitimate. This legislation does not cover those matters; it is a knee-jerk reaction by the Premier to public statements he made about the Wollongong affair. The Premier conveniently forgot what went on at Strathfield council for years with bribes, et cetera. He should look at the donations to campaigns in Strathfield over the years. All the matters that blow up always seem to occur in Labor electorates, Labor councils and Labor councillors and the deals they do with developers. New South Wales deserves better than the sleazy backroom deals done by the Labor Party for years.

I welcome these reforms, which will provide for a more transparent process. However, I challenge the Premier and others to look at the 47 recommendations of the select committee, all of which have been ignored in this legislation. The recommendations measured the adoption in New South Wales of a local version of the campaign and finance laws that apply in the Federal jurisdiction in Canada. Those recommendations received cross-party support from members of six registered parties in this Parliament.

If they have been put forward by a select committee and have received the support of six parliamentary parties represented on that committee, why on earth has the Premier not embraced them? One must say that altering the electoral laws obviously holds more grave concerns for the Labor Party than for any other political party in New South Wales. I challenge the Premier to adopt those 47 recommendations. During the parliamentary recess he should consult people about the recommendations and bring back legislation that is truly transparent and that can be received with some confidence by the voters of this State. They want fair elections.

I could go into electoral fraud and some other things that I have had on my agenda for many years and about which I have moved a number of bills. The rorts that have gone on in this State with developer donations to the Labor Party and electoral fraud are still being hidden in the murk. I challenge the Premier to bring legislation to this House that will shed some light on these issues and make sure that we are operating on a level playing field.

Mr RICHARD AMERY (Mount Druitt) [5.01 p.m.]: I support the Election Funding Amendment (Political Donations and Expenditure) Bill 2008, and I commend the Government for introducing legislation that has been the subject of much public debate. I have been involved with election funding since 1981, when I was the election funding agent for my predecessor, Anthony Valentine Patrick Johnson, otherwise known as Tony Johnson, a former member for Riverstone, and my involvement has continued since I was elected to Parliament in 1983. First, I put it on the record that all the reforms to public disclosure, election funding, and pecuniary interests requirements are reforms of Labor Governments. Today we are amending laws that were brought in by previous Labor Governments.

There is one thing I do not like: I do not like to come into the House on duty, minding my own business and reading some serious government policy documents, and be confronted by members of The Nationals preaching to Government members about the virtues of probity, public disclosure and honesty in election funding. I should make a comic about this! Like me, the member for Coffs Harbour has been here a long time and I thought he would be a better student of history than to attack the Labor Government over developers' money, local government favours, rorts and—I love the word he used—hypocrisy. I am glad that will be in Hansard: The Nationals attacking the Government on hypocrisy!

When the Coalition was in government it had a season ticket at the Independent Commission Against Corruption [ICAC]. Members of The Nationals did not go down to the ICAC one at a time; they had a season ticket. I understand their box was called "climate conducive to corruption". They were there every week. It is absolutely outrageous that members of The Nationals, particularly those representing the North Coast of New South Wales, should be criticising us. One could not buy a pair of black or brown shoes on the North Coast when the Coalition was in government; all the shoes were white. Someone was doing very well because they were manufactured in Queensland. Who could forget Joh Bjelke-Petersen? One could not buy a packet of cigarettes in Queensland unless one paid the Government something. It is a joke that members of the Labor Government must come into this House and then be lectured by Coalition members on matters of probity, public disclosure and so on.

It is a great credit to the Wran Labor Government that it introduced legislation relating to election funding and the requirement to declare where the money came from. Who opposed that legislation? No prizes—no! There will be no free lunches, lobsters or oysters for picking that one. It was the Coalition. Why did Coalition members oppose the legislation? For decades the Liberal Party had been able to outspend Labor in election campaigns. We always knew it. The Coalition always seemed to have a lot of money and could outspend the Labor Party during election campaigns. Where did it get that money? Of course, as highlighted by the member for Coffs Harbour, the Labor Party had its chook raffles and fundraising dinners. We got money from the trade union movement, and a lot of small businesses supported the Labor Party over the years. We could never find out where the Liberal Party got its money. Coalition members opposed legislation dealing with election funding because for once they had to declare where the money was coming from. The Liberal Party and The Nationals, and previously the Country Party, fought one election after another with backdoor donations from big business. We all knew it; it was on the landscape. When Premier Wran outrageously decided to bring in election funding and declarations of where the funding had come from, who squealed the loudest? It was those who are now pointing the finger at us for hypocrisy, scams, rorts and so on. It is more than a poor humble member can take when he is sitting on the Government bench on duty and he must listen to such a diatribe.

It does not matter what sort of laws we have and whether this bill is adequate or should go further. The main thing is to ensure that the rules are enforced. I will explain how my system works—I am sure it is in accordance with party rules and the legislation. It is very simple. Prior to an election I would open a Richard Amery campaign account with my electorate agent as a signatory. It would be completely disclosed through my State electorate council. Any money received, plus a donation from the State electorate council, would go into the Richard Amery campaign account. During the lead-up to the election and for some weeks afterwards the money that came in went into that account. All the bills were paid and at a time after the election the residue of the money went straight back to my State electorate council. It was completely disclosed and the details went to the Election Funding Authority and the party machine. There is nothing wrong with that. The problem is that if those regulations are not enforced, whether by way of State law or party rules, there will be abuse. That is why we probably have to throw the baby out with the bathwater in a lot of the legislation we are dealing with at the moment.

Another aspect that puts a lot of pressure on political parties is the fact that election campaigns are getting very expensive. This is putting pressure on not just the major political parties but also the smaller parties and independents who are trying to raise money and compete in what is a very expensive and competitive process. Although it is not in accordance with this legislation, perhaps some arrangement might be made in future at a national level in relation to television and radio advertising to ensure that during an election campaign every political party will get a certain amount of advertising time of an evening. If there was no cost to the political parties it would take the pressure off them having to raise such large amounts of money. To some extent, the ABC does that by giving every party an opportunity to state their case. Perhaps there could be a requirement on television broadcast licences to do something along those lines during an election campaign. That would be one way of taking away the financial pressure of election campaigns.

I applaud the Premier and the Government for bringing in legislation that will tidy up legislation passed by previous Labor Governments. Please let us not have any more comments from members of The Nationals along the lines that I have described. Can members imagine inviting President Mugabe here to talk to us about human rights or democracy? How would we react to that? It is the same when members of The Nationals preach to us about public disclosure, rorts and development.

Mr Steve Whan: What about Bob Askin!

Mr RICHARD AMERY: We will not go into that. We would need a whole piece of legislation to cover his activities.

Mr Geoff Corrigan: What about Wal Murray?

Mr RICHARD AMERY: Wal Murray was a decent man, but members of The Nationals were dragged to the Independent Commission Against Corruption and described as operating in a climate conducive to corruption. Minister Singleton was one of the first scalps of the Labor Opposition when the Coalition was in office. It was a scandal on the North Coast of New South Wales, as it was in Queensland.

It gets up the noses of Labor members when members of The Nationals preach to us about the need to disclose where we get the money from and the connection between donations and development. I suppose we should take notice—they are experts in the field. I suggest that if we wanted to bring an expert witness into a court or tribunal to ask what we really need to do, the Premier and the Government should invite The Nationals. They will be declared expert witnesses in relation to development approvals and everything we are trying to address here today. This is great legislation from the Government and it should be strongly supported. I urge Government members to disregard the nonsense coming from the Opposition. The member for Coffs Harbour used the word "hypocrisy" so eloquently. The cup of members opposite runneth over with hypocrisy when it comes to the speeches they have made this afternoon. I commend the bill to the House.

Mr GREG PIPER (Lake Macquarie) [5.09 p.m.]: May I say how interesting it is to be an Independent member in this Assembly and also an Independent mayor in local government. It is an interesting perspective that I hold, sitting between the two major political institutions in New South Wales and their involvement in political process, political fundraising and expenditure. The Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 are supportable, but are in effect interim measures to accord with the Premier's commitment earlier this year to address electoral funding reform and be able to bring forward changes prior to the local government elections in September this year. As an interim measure I will be supporting the bills, but in so doing I am hopeful of more appropriate and considered measures in due course.

These bills should perhaps include reference in their title to Wollongong City Council, the straw that broke the camel's back in regard to confidence in our electoral system and politicians in New South Wales. Wollongong City Council is, of course, only one example of inappropriate and/or corrupt processes within our decision-making systems. The weakest link in our system is, and always will be, people. The bottom line is that the system should be honest and ethical; however, this is not something that can be legislated into individuals. Wherever there are people involved there will always be the likelihood that someone will try to find a way around the rules.

One area of concern that could provide such an opportunity is in relation to declarations of non-pecuniary interest where, for example, large donations are made to a political party. In this instance there is some notion that individual councillors from the party would not be required to declare a non-pecuniary interest as they are notionally distant from the donation and may not be aware of the donation. The Minister, in the second reading in the upper House, stated:

At present, unless the donation is made directly to the decision maker—as opposed to his or her political party—the decision maker may not know that a donation has been made. In light of that, the legislation has been drafted so that only donations made to individual councillors, rather than donations made to political parties, are required to be disclosed at the time a relevant planning application is lodged with a local council.

I believe that any concession in this regard provides plenty of scope for a nod and a wink to councillors of the beneficiary party—an understanding that a particular applicant is a friend of the party, if nothing else. It is not unreasonable to expect party-aligned councillors to examine a contributions register for their party and to make an appropriate declaration, as would be expected or required for Independents, for example. After all, members of a party are clearly beneficiaries of the party's overall marketing and activities.

The proposed provision of the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 that would require a record of respective councillors' votes either for or against each planning decision can also be supported. In effect this would achieve the same as a division being called on each matter and should not add any undue burden on councils. That brings me to my support for the amendment proposed by the Opposition via the member for Pittwater. The proposed amendment would widen the disclosures and therefore improve transparency of consideration where a donation is made to the Minister or to the party of which the Minister is a member. Major planning decisions have the high likelihood of being very contentious and they often elicit many claims, well founded or not, of undue influence or corruption. This amendment would assist to remove such perceptions.

The reduction in reporting threshold from $1,500 to $1,000 is supported, and measures to ensure that donations are transparent in nature by requiring donations of $1,000 or over, other than by an individual, to be unlawful unless the donor entity has an ABN are also appropriate. At this stage there are no changes that would restrict or prevent an individual from funding his or her election campaign. My reading of the recommendations of the upper House inquiry into electoral and political funding indicates that this may be on the agenda, or at least a significant cap of $1,000 as for other donations. I would not support such a proposition as I have substantially funded and intend to continue to substantially fund my own election campaigns. An eventual cap of $1,000 in donations per candidate—other than from the candidate—from any one donor in an electoral cycle would be sensible. However, any decision to self-fund should be transparent to the extent that it should be a personal liability and not a backdoor arrangement through shonky loans. In this regard I support the bill in clarifying what loan sources would be considered legitimate.

The system should not be so complicated or difficult that it deters people from participating in the democratic process. It 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. Income and expenditure for each election should be fully reconciled in the public domain and there should be no doubt as to where funds were derived and expended.

With so many avenues for political assistance it would be naive in the extreme to think that there will not continue to be loopholes within the system. Loopholes can be reduced, but the system will always rely on integrity. Integrity cannot be legislated. Let us be careful not to construct a system to deal with the lowest common denominator at the expense of driving good people away from serving their communities through politics. Minor parties and independents are an important part of democracy and no changes to the electoral system should be made that unreasonably or unjustly disadvantage their ability to participate.

There has been a lot of talk and at times fingers have been pointed across the House. In my time in local government and now in State Government I find that most participants, regardless of their day-to-day behaviour and the passion that they bring to the House, are honest people and are trying to serve their community as honestly as possible. The problems come from very few people within the system and I would not lightly accuse anybody of improper or corrupt conduct. It is in my experience very much the exception to the rule and I think we should be very mindful of that and be careful that we do not impugn motives to people or assign some kind of black mark to their name that cannot be defended.

I support the bill as an interim measure to improve governance of the election process, but look forward to further measures, as long as they are fair and equitable not just for the major parties but also for minor parties and particularly Independents—I declare an interest. I refer to a book that should be very dear to most people, Animal Farm, which states words to this effect: All animals are created equal, but some are more equal than others. Let us make sure that the system works so that we do not enshrine that sentiment within the legislation.

Mr CRAIG BAUMANN (Port Stephens) [5.18 p.m.]: I wish to make some brief comments regarding the Local Government and Planning Legislation Amendment (Political Donations) Bill, which I understand is being passed in cognate. I specifically address my comments to those provisions in the bill relating to local government. I have said on numerous occasions in this place that I am an unashamed supporter of local government in New South Wales. I believe it plays a vital role in the direct representation of our communities.

Local government is a very convenient whipping boy for this Government. Its few failures are highlighted at every turn, while its successes are swept under the carpet and claimed by the same Government that has, over successive terms in office, made the job of councils and councillors increasingly difficult. When I was elected in 1987 we had no Independent Commission Against Corruption and we had no code of conduct. We knew what was right and what was wrong, and we acted in line with our consciences. I was on four councils and sat with honest, hardworking councillors. This House knew one of them very well—John Bartlett—and although we were often on opposite sides in debate we respected each other's opinion and integrity.

Any improper allegations were reported to the mayor and to the shire clerk, who would investigate them and take appropriate action, through the Department of Local Government, if required. When I was first elected mayor in 1994 I was bemused to find that officers from the Department of Local Government and the Independent Commission Against Corruption [ICAC] had established offices in the council building to pursue fruitless investigations on unfounded allegations. I was not successful in 1995 election but I continued as mayor until council elected a new mayor.

Some months later I was tipped off that I was under investigation by the Department of Local Government, which still showed me as a councillor on its web page. I rang the department and advised it that Port Stephens council had 12 and not 13 councillors, and I offered to help it with its investigation. Port Stephens Council adopted a code of conduct in the late 1990s—around the time that John Bartlett was mayor. In 2004 this Government produced yet another code of conduct that was to be adopted by all New South Wales councils, which ran to about 30 pages. Imagine my surprise, on being elected to this place, when I found that our parliamentary code of conduct did not fill two pages!

Whilst I support any bill that might restore the public's confidence in the political process—a confidence that has been eroded by this Government—I would like to make three points that relate to specific sections in this bill. Firstly, the bill does nothing to prevent the kind of corruption that we have seen in recent years. The ICAC identified significant corruption risks in the New South Wales development approval process, but those recommendations have not been acted on in this legislation. The bill makes it difficult for corrupt developers and the infinitesimal minority of dishonest councillors to accept donations in return for their support for development applications. That is difficult but not impossible. Ninety-eight per cent of development applications never come before council.

Individual council planners make those decisions under delegated authority. I have always maintained that it would be easy to coerce a council officer to produce a favourable report on a development application and then to get six or seven people to vote for it at a council meeting. This bill does nothing to stop this kind of corruption—the kind of corruption we have seen recently in cases such as the one in Wollongong council. My second point relates to election funding. Whilst this bill requires the disclosure of details of membership fees of or above $1,000 payable to a party by individuals, industrial organisations, or other entities, this bill does not preclude the Labor Party from being able to use the benefits of its affiliation with the trade union movement.

If members had driven around Port Stephens during the 2007 March election they would have noticed many hundreds of posters advertising Liberal-Nationals Coalition policies stuck to power poles in the region—illegally but in too dangerous a position to be removed safely. A closer inspection of those posters revealed that they were not authorised by the Labor Party or by any Labor candidate; rather they were authorised by the Electrical Trades Union. This bill does nothing to ensure that these kinds of political transactions are transparent. Finally, I have grave concerns about the effect that this bill will have on the representation of rural and regional councils such as Port Stephens. It might come as a surprise to Sydney-based members that their obsession with party politics in local government is not as pronounced in rural and regional areas.

It might come as a shock that most councils in my region are more concerned with representing their ratepayers effectively and diligently than they are with the political machinations of Sussex Street or Williams Street respectively. By enforcing a requirement for dedicated campaign accounts and approved campaign agents we might turn away some of the excellent locally focused community representatives that we have on councils. It should be remembered that being a councillor is not a position of profit under the Crown. These people are volunteers and we are making it harder for them to volunteer. I have always funded my own local government campaign and I have always advised candidates to be careful in the way in which they raise funds.

This Government has made it mandatory for candidates to run grouped in local government ward elections. If one is to have a chance at being elected one has to have enough running mates to fill all positions in the ward. Experience shows that only the candidate at the top of the ticket has any chance of success. In fiddling with local government and its processes this Government has trebled or quadrupled the number of candidates and appointed its own State Elections Office to gouge ridiculous charges from hard-pressed councils, with most councils being quoted a 125 per cent increase from 2004 to 2008. If a council behaved in the way in which this Government has behaved it rightly would be sacked.

Mr PETER DRAPER (Tamworth) [5.20 p.m.]: I wish to make a brief contribution to debate on the Election Funding Amendment (Political Donations and Expenditure) Bill 2008. It was fantastic to hear the passionate and eloquent contribution of the member for Mount Druitt to debate on this bill. He made many good points, which was in stark contrast to the contribution of the member for Coffs Harbour, whose rambling diatribe still leaves me wondering whether or not he supports or opposes the bill. The Act must be updated to prevent rorts but, in my opinion, the changes seem to favour parties over independence. I agree with the aims of the bill but I have some concerns about its details.

Undoubtedly there is a great deal of public concern about the possibility of influence deriving from large political donations and ramifications for the democratic process. Unfortunately, the proposals that we are debating today seem to be a bit of a knee-jerk reaction to recent events in Wollongong. There is a need for legislation that prohibits donations from high-risk areas, improves transparency and accountability while allowing for change to exist in State electoral funding, and allows for public funding. We must encourage a system that enables everyone to contest elections fairly. We should strive to introduce transparency and accountability into a funding system that will restore the confidence of the public and, as a result, strengthen the political process. It must not be allowed simply to cement support for parties at the expense of Independent candidates.

As an Independent candidate and a local member my election campaigns have been partially reliant on donations from members of the local community who believe in me and in my contribution to the democratic process. I have increased my mortgage to pay for the remainder of my campaign and to fund the balance of that campaign. As I pointed out to the Attorney General yesterday, during my first election campaign in 2003 I was driving a bright red 1970 Dodge truck, which was highly visible and very memorable, but it was not the most reliable vehicle on the road. A supporter of mine lent me a car for the last few weeks of the campaign so that I could get around on time, reliably, and in a lot more comfort. However, under the new laws apparently that will now be prohibited.

A member of a political party who decides not to contest the next election may have funds remaining from past campaigns. Those funds can be returned to head office for use by the member's successor in future campaigns. Independents are prevented from doing that. Apparently, we have to donate any remaining funds to a charity, or we have to go, one by one, to individual donors with their percentage of the remaining funds to hand it back in the hope that they will then hand it over to the next candidate. It is cumbersome, very clunky, and it seems to be almost forcing candidates into joining a party rather than being disadvantaged. It discriminates against Independents and reinforces the two-party system. While current Independents may cope which such a system it will make it difficult for new people seeking election in the future—people who are not associated with the party.

In my opinion, anybody should be able to contest an election without having barriers put in his or her way by parties wanting to shore up their support base. If the reporting of donations is to be improved there must also be increased accountability for the details of each return. At the last 2007 election The Nationals claimed virtually the same expenditure as I did, yet they had hats, shirts, balloons, wristbands and life-size colour Corflute plastic signs. They hired all the available roadside flashing signs from the Roads and Traffic Authority, ran heaps more television and radio advertisements and advertised more in the press, yet we spent the same amount of money. I cannot quite understand that; it does not add up to me. We certainly require accountability but not at the cost of discouraging good candidates from contesting elections.

In my opinion the State political process would be much worse off if the system encouraged party people to apply, to the detriment of community-minded individuals. How do we protect the rights of individual Independent candidates while at the same time ensuring a transparent and accountable system? I am aware that the member for Sydney, in her submission to the Select Committee on Electoral and Political Party Funding, recommended a revised system of public electoral funding that accurately reflects the nature of political representation in the State Parliament by ensuring equitable access to a public fund. Such an approach would enable the Premier to implement his commitment to strengthen the laws governing donations and expenditure, but on an equal playing field.

It is obvious that donations from developers, from the gaming, racing, liquor and tobacco industries, and from government contractors all have the potential of influencing policy outcomes that are or could be in conflict with the greater public interest. As legislators, it is our duty to remove such possible conflicts of interest. Many countries already impose various bans on such political donations to deal with corruption. It is time we did also.

The member for Mount Druitt pointed out that around the nation we see huge blowouts in campaign costs as candidates spend more on advertising in attempting to attract the voter's attention. This vicious cycle could get totally out of hand. The last thing New South Wales needs is a move towards American presidential-style campaigns with their resulting obscene spending levels. I also share the same concerns of the member for Lake Macquarie that at council level an Independent councillor will be excluded from making decisions on proposals if he or she has received a donation from anybody associated with that project. However, the same proponent could make substantial donations to another councillor's political party's head office. That process would not affect that councillor's right to participate in the decision-making process. However, the individual councillor may receive pressure to support the project from the councillor's head office and not directly from the developer. I support any changes that will clean up the funding of political campaigns. I am not sure that this bill will fix all the problems. Any changes must not be at the cost of Independents relative to those in political parties.

Mr ADRIAN PICCOLI (Murrumbidgee) [5.30 p.m.]: I make a contribution to the debate on the Election Funding Amendment (Political Donations and Expenditures) Bill 2008. I appreciate that the Local Government and Planning Legislation Amendment (Political Donations) Bill is a cognate bill, but I shall focus my comments on the principal bill. It is appropriate also that I respond to the contribution of the member for Mount Druitt. He has been in this place for a long time—many would say for too long—but he took the opportunity, as Labor members continue to do, to defame current members of The Nationals and those no longer in this place by reflecting on Independent Commission Against Corruption inquiries held many years ago.

I remind the House that all of those members of Parliament who were implicated and interviewed by the Independent Commission Against Corruption were cleared of any wrongdoing. The Labor Party continues to defame members of The Nationals, but I take this opportunity to defend them vigorously. I defend also the actions of the Coalition Government after 1988 in taking the very important step of establishing the Independent Commission Against Corruption. The member for Mount Druitt said that the Labor Party introduced donation reform legislation, disclosures and the like, but it took a Coalition Government to establish this important investigative body.

The Independent Commission Against Corruption inquires into and recommends the laying of charges if members of Parliament, public servants or anyone does the wrong thing: that is how the process works. A number of members of Parliament who gave evidence to the commission were cleared of any wrongdoing. It is deplorable that the member for Mount Druitt should continue to defame those members. Interestingly, he neglected to mention Labor Party members who appeared before the Independent Commission Against Corruption and subsequently were forced to resign from the public office they held. I remind the House of Brian Langton, who was a former Minister for Transport for a short time. In approximately 1994 he was found guilty of misusing his allowances. During that same period the soon-to-be Speaker of this House, John Murray, was found essentially to be doing the same thing, but the Labor Party took no action.

The Labor Party has elevated the reasons for reforms associated with political donations to a new level. Labor has turned political donations into an art form by denying lobby groups and individuals access unless they contribute financially to the Labor Party. Donations used to centre around political dinner functions, fundraisers and contributions to political parties—Liberals, The Nationals, Labor, Independents, the Greens or whomever. Donors used to contribute to a political party in whose philosophy they believed. The Labor Party, particularly through its head office, has taken donations to a new level because people are being denied access to government services. Donors and developers even say that making a donation to the Labor Party is part of doing business in New South Wales. The only other place I have heard a phrase like that is in Italy when people talk about paying bribes to the mafia. In Italy they say it is part of doing business with the mafia.

I first heard that expression on a Four Corners episode about political donations and I was reminded of Italy. Has the stage been reached where the only way to get things done through the Government is by making a donation? The system of political donations desperately needs to be cleaned up. Members of Parliament, Ministers and shadow Ministers spend so much of their time raising funds for election campaigns. That time could be better spent with their families, firstly, but also in dealing with policies, problems and many other issues. I sympathise with all members of Parliament for having to go through this process. Political campaigns in New South Wales and Australia are expensive: newspapers, radio stations and television stations charge full rack rate for advertisements, but that is part of the process. Members of Parliament, particularly the Premier, Ministers, Leader of the Opposition, and shadow Ministers, spend so much of their time raising funds—time that could be better spent dealing with problems in New South Wales.

New South Wales seems to be the flashpoint for political donations. We have seen what happened in Wollongong, particularly concerning the member for Wollongong, who raised $200,000 prior to the last State election and forgot to declare $65,000 of that amount. I could understand an amount of $65 being forgotten, but not forgetting to declare $65,000. The Premier's response is that everybody is entitled to forget something every now and then. The problem with the Labor Party is that it makes excuses for its members and Ministers. The member for Wollongong failed to declare $65,000 and was named by the Independent Commission Against Corruption after being taped in secret recordings talking to developers about lobbying Labor Party councils in Wollongong. What happened to Noreen? She was stood down for less than 24 hours. What a devastating blow!

Ms Sonia Hornery: Point of order. First, members should refer to other members by their correct title and not by their first name. I ask that the member return to the leave of the bill and not make personal accusations.

ACTING-SPEAKER (Ms Diane Beamer): Order! The member for Murrumbidgee will return to the leave of the bill. He understands that making attacks on members should be done by way of substantive motion.

Mr ADRIAN PICCOLI: This legislation introduces only a small part of the requisite reform concerning political donations. I have highlighted the problems associated with political donations because New South Wales does not have tight electoral funding laws. Those laws got the member for Wollongong and the member for Kiama into trouble and they brought Wollongong into disrepute.

Mr Barry Collier: Point of order: again the member's remarks reflect on the member for Wollongong. She was cleared by the Independent Commission Against Corruption. Again, the member is suggesting—

ACTING-SPEAKER (Ms Diane Beamer): Order! What is the point of order?

Mr Barry Collier: The member is suggesting improper conduct by the member for Wollongong. He should do that by way of substantive motion. I ask you to direct him to return to the leave of the bill.

ACTING-SPEAKER (Ms Diane Beamer): Order! I again ask the member for Murrumbidgee to return to the leave of the bill. As I pointed out, if he wants to make an attack he must do so by way of substantive motion.

Mr ADRIAN PICCOLI: When the member for Mount Druitt was attacking and imputing improper motives to members of The Nationals the member for Miranda remained silent. All Labor members were very silent.

Mr Barry Collier: Stop misleading the House.

Mr ADRIAN PICCOLI: I am simply assisting the Parliament.

Mr Barry Collier: You are not.

Mr ADRIAN PICCOLI: I am simply saying it is important to implement reforms to protect members of Parliament. The whole of Wollongong and the Illawarra have been brought into disrepute because of events that occurred earlier this year. People who live in the Illawarra have been saying to me, "Gee, we've copped the worst publicity in half a century", as a result of the scandal that revolved around Wollongong, and that scandal involved donations. If there had been donation reform and tighter rules and restrictions the reputation of Wollongong and its hardworking people would not have been tarnished. The issue raises consideration of one of the failings of the legislation. It is a matter of public record that prior to the 2007 State election the member for Wollongong raised $200,000 and spent $65,000. What happened to the other $135,000? That has gone into the mists of the Labor Party.

Mr Chris Hartcher: Yes, that and the $65,000 too.

Mr ADRIAN PICCOLI: That is the sneaky $65,000 that she forgot. This serious issue needs to be addressed because it is important for the public, particularly the people who donated the money, to know where that $135,000 is. It was meant for the political campaign of the member for Wollongong, but where has it gone?

Mr Gerard Martin: Tell us about the $30,000 you forgot to declare.

ACTING-SPEAKER (Ms Diane Beamer): Order! I am sure all members would like to hear what the member for Murrumbidgee has to say.

Mr ADRIAN PICCOLI: Now that the member for Bathurst has come into the Chamber I realise what a shame it is that I left my folder upstairs. The member for Bathurst may be assured that I will not forget it next time. I intended to raise the Bathurst hospital, but for the sake of making the best use of the time available for my speech I simply state that while some of the reforms are very welcome a lot more needs to be done with respect to the reporting of donations.

Mr BARRY COLLIER (Miranda—Parliamentary Secretary) [5.42 p.m.]: It is pleasing to see so many members of the Opposition in the Chamber who wish to listen to my speech. They have come to the Chamber in droves, and I really appreciate that. As soon as I begin to speak the member for Cronulla comes into the Chamber because he is worried that he might miss something. The member for Murrumbidgee draws the longbow in suggesting that I did not respond to what was said by the member for Mount Druitt. At the time I was on the twelfth floor. I would have to yell a fair distance—from the twelfth floor to the Chamber—for Hansard to write down what I was saying.

The Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 are all about transparency and accountability, and I welcome the legislation. Some of the main measures in the bills include banning members of Parliament, councillors and candidates from controlling personal campaign accounts; limiting the involvement of members of Parliament, councillors and candidates in the fundraising process; ensuring that donations are organised, received, handled and administered by a central party officer or a trained official agent; having twice yearly disclosure of political donations and expenditure for parties, members of Parliament, councillors and candidates; having a new single disclosure limit of $1,000 above which all donations must be disclosed; having a prohibition on in-kind donations, such as the provision of offices, cars and phones to political candidates; and prohibiting payment by a third party of costs incurred by candidates, with all invoices to be paid through a head office.

The bills are most welcome. They highlight the need for reform. Judging from the contributions made by all members who spoke during the debate, relevant reform is clearly required, and the Government has taken steps to enact appropriate reform. It is very easy for opposing political parties to throw mud, make accusations and besmirch a person's character under the protection of parliamentary privilege but, as the member for Murrumbidgee has acknowledged, the Government's legislation is fixing the problem. The problem was highlighted in an article published in the St George and Sutherland Shire Leader on 4 March this year under the page 1 headline, "Election money—It's a cause for concern: mayor". The mayor was referring to donations made to candidates in the most recent Sutherland Shire Council election. I am sure the member for Cronulla has read the article, which reads:

Sutherland Mayor David Redmond said the Election Funding Authority figures were "cause for concern".

Cr Redmond, now an Independent, also revealed that, while representing the Liberal party about 10 years ago, he was advised by a senior party figure to refrain from criticising overdevelopment in the shire because the party relied on donations from developers

Cr Redmond said the level of donations in the shire was a matter of concern, and residents should be asking where the money came from and who received it

Cr Redmond said that during the 1995-99 council term, when he was a Liberal, he had spoken out publicly about "the enormous number of development applications that were being approved, many outside our planning codes".

Subsequently, he had been invited by a senior party figure, whom he declined to name, for a cup of coffee and a chat.

"I was told to be careful about what I was saying because the party relied on donations from developers," he said.

"It was also made clear to me that if I wanted a future in the Liberal Party, I shouldn't upset the applecart."

I do not know who Councillor Redmond was speaking about. I do not need to know, nor do I particularly want to know, but the report highlights the problem alluded to by the member for Murrumbidgee. We can all cite instances of people we suspect of being up to no good. I agree with the member for Lake Macquarie that the vast majority of councillors and the vast majority of State and Federal members of Parliament are decent and honest people who are doing their job for the community and not engaging in improper conduct. The essential point is that a problem exists. The Government recognised the potential of the problem and is fixing the problem. The reforms introduced by the Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 will go a long way towards remedying systemic deficiencies. As I have already said, it is easy for opposing political parties to throw mud, but what we must do now is to move on and go forward.

Mr Chris Hartcher: No, no. You are the ones who were caught out in Wollongong council.

Mr BARRY COLLIER: Let us move on.

Mr Chris Hartcher: Don't you talk about moving on. You have been caught out.

Mr BARRY COLLIER: The Swamp Fox should realise that anyone can dig up the past and that finding fault cuts both ways. But the point I make is that the reforms are positive and we should get on with the job of implementing them. We should look forward to increased accountability and transparency in the public funding of elections. I commend both bills to the House.

Mr DONALD PAGE (Ballina) [5.48 p.m.]: My contribution to the debate on the legislation will be brief. I indicate that while I support the legislation before the House and the amendment foreshadowed by the member for Pittwater I believe the legislation is totally inadequate in the context of addressing the big picture of political donations and the political decision-making process. I remind the House that last Easter, in the wake of the Wollongong scandal, the Premier indicated that major reform would be introduced. The legislation before the House could not in any way, shape or form be described as major reform. We support the legislation but it is totally inadequate and fails to address the big issue.

The people of New South Wales, and of Australia as a whole, are most concerned about the connection between political donations and political decision making. They want the current arrangements at both State and Federal levels cleaned up. The people want transparency and integrity restored to our democratic system. We realise that the current arrangements are not satisfactory from anyone's perspective, and this legislation is a small step in the right direction. The political donations issue is quite complex. On the one hand, people want the right to support the candidate of their choice and, on the other hand, there is the potential for corruption in the decision-making process if people seek to make donations in exchange for some sort of outcome that is beneficial to them. When considering complex issues it is sometimes helpful to return to fundamental principles. What is the ideal system? What should we do to make the current system work appropriately? I suggest that we could start with the principle that only those who have the right to vote have the right to determine election outcomes. If we agree with that fundamental principle, those who do not have that right—in other words, corporations, unions or associations—should not be able to influence the outcome of elections. I believe that argument can be sustained.

By extension, we should not accept donations from corporations, unions or associations that seek to influence the outcome of elections. That is my personal opinion. Only those who have the right to vote should be allowed to donate to the candidate of their choice. I support the idea of capped personal donations—I think $1,000 is a good limit—not just because people have the right to support the candidate of their choice but because if we are to eliminate corporations, unions and associations from the system we must also remove their ability to make de facto donations via individuals. If we cap individual donations at $1,000 we will have a chance of keeping a handle on the situation. If there are no limits on individual donations it will be simple for a corporation, union or association to approach an individual and say, "Look, I can't make a donation in my own right but I can give you the money and you can make it for me". It is important to cap individual donations to prevent de facto donations from those who, in my opinion, should not have the right to donate and influence the outcome of elections.

The case for public election funding is strong. The public funding arrangements in New South Wales work pretty well. However, if we are to deliver the ideal system public funding must also be capped. If there are no limits we run the risk of parties that are seeking re-election putting their nose in the public funding trough to boost their chances of winning. The level of public funding allocated at the last election should be distributed again at the next election, with the addition of some sort of consumer price index component, so that we keep control over the amount of public money that is allocated for the running of election campaigns. I put those thoughts on the table. At The Nationals recent conference I moved a motion along those lines, and I was pleasantly surprised when it was passed almost unanimously. The motion reads:

The conference acknowledges the need to improve public confidence at all levels of Government and accordingly:

(a) supports the principle that in a democracy only those who have the right to vote should determine election outcomes;

(b) agrees that those who do not have the right to vote, including unions, associations and corporations, should not be allowed to influence election outcomes by political donations or indirect advertising campaigns; and

(c) supports the principle that elections should be funded by a combination of capped public funding and capped individual donations.

As I said, that motion was carried overwhelmingly. I think that reveals that there is a lot of public support for this approach. I should add that a similar motion was not passed at The Nationals conference about three years ago. That indicates that the mood of the electorate has changed. People want to clean up the political donation and decision-making processes. As I said at the outset, this legislation is piecemeal and totally inadequate in terms of the big picture. It is not what the Premier promised: the substantial reform he promised at Easter has not been delivered to the people of New South Wales in this legislation.

I also observe that many corporations donate to both sides of politics. They are not particularly happy about it—and they would probably rather not do it at all—but they donate because they feel they have to in order to get access to Ministers. Under our democratic system people should not have to make political donations in order to get access to Ministers. People should be able to access Ministers regardless of whether they donate to political parties provided they offer some reasonable reason for wanting to see them. In my experience, many people who make political donations make them to both sides. Members of Parliament, and certainly many Ministers, are most unhappy about those donations because they want to be free to make decisions in isolation. Cleaning up the system is in everyone's interest. The model I suggested should be put on the table. I examined the report of the upper House inquiry and I was interested to see that it endorses many of the measures that I have outlined. The Coalition supports the legislation, but it is totally inadequate.

Mr CHRIS HARTCHER (Terrigal) [5.56 p.m.]: The Election Funding Amendment (Political Donations and Expenditure) Bill 2008 and the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008 arise from undertakings given to Parliament and to the people of New South Wales by the Premier as a result of the Wollongong City Council fiasco. The Labor Party was exposed as being corrupt in local government through its councillors on Wollongong City Council. The corruption was endemic, and there was even a salacious element, with sex being traded for development approvals. In response, the Premier made a number of public pledges in relation to political donations, which he repeated in this place. The tenor of his remarks was that the Australian Labor Party, through the Iemma Government, was going to clean up the political and planning processes in New South Wales to ensure that political donations no longer affected planning decisions.

This legislation is the supposed outcome of those undertakings. In the words of the Greek proverb: The mountain has conceived and brought forth a mouse. That is exactly what this legislation is. It does not address the issue of development, as major development consents are determined not by councillors who are covered by the legislation but by the State Government through its Minister for Planning. Through its Minister, the State Government now makes the major decisions involving planning applications in New South Wales under part 3A of the Environmental Planning and Assessment Act, and this legislation in no way catches the Minister for Planning. As a consequence, the Leader of the Opposition and the member for Pittwater will move appropriate amendments during the consideration in detail stage so that the people of New South Wales can test the bona fides of the Iemma Government in relation to cleaning up the planning and political processes.

The bill also purports to incorporate the recommendations of the Legislative Council Select Committee on Electoral and Political Party Funding, but it fails to address several issues raised in that report. Two principal points of the legislation are that it reduces the level of donations that must be reported to $1,000 and requires disclosure by local government over a longer report back period than previously when a development consent was granted. That does not clean up the political donation process in this State because all major decisions involving development applications rest with the Minister. The Australian Labor Party, as always, has depended heavily on being able to lean on the development industry for its major funding.

Ms Sonia Hornery: Point of order: I ask that the member for Terrigal return to the leave of the bills, which are not about leaning heavily.

Mr CHRIS HARTCHER: To the point of order: The bills are about political donations.

ACTING-SPEAKER (Mr Matthew Morris): Order! The member for Terrigal will keep his remarks within the leave of the bills.

Mr CHRIS HARTCHER: For the benefit of the member for Wallsend, one of the bills is the Local Government and Planning Legislation Amendment (Political Donations) Bill. Political donations are made to political parties, and to candidates for political parties, and, to my surprise, the Australian Labor Party is a political party! The penny has dropped. If the member for Wallsend seeks to distance herself from the Australian Labor Party she will have the opportunity when the electricity legislation is introduced in September. I will not talk any more about the member for Wallsend or the Minister for Small Business, although I am tempted, but I will talk about the Village Building Company and the political donations that came to the member for Monaro.

The Australian Labor Party has depended heavily on political donations from developers, and the system has been rorted by Labor council after Labor council over a long time. But it came to a head with Wollongong City Council. The emphasis on major planning has moved from councils to the Minister for Planning, which is a cause for concern because councillors are no longer accountable to their constituency for planning decisions. The Australian Labor Party supported and introduced legislation that will provide an ongoing source of funding for it. The Minister for Planning, the Hon. Frank Sartor, consents to the applications under part 3A. The Greens in the Legislative Council produced a statistical table last month that showed that developers who contributed to the Australian Labor Party received a far faster approval process than developers who did not contribute. I know that comes as a surprise to members opposite that do not believe that their political party was involved, through their Minister for Planning and head office in Sussex Street, in extensive rorting with the development industry, but it did happen.

Mr Steve Whan: Point of order: The member for Terrigal is making accusations of improper behaviour by members of the Government. That is outside the leave of the bills and should be addressed by substantive motion. I ask you to draw the member for Terrigal back to the leave of the bills. If he continues along the line he has adopted I will continue to raise points of order.

ACTING-SPEAKER (Mr Matthew Morris): Order! I uphold the point of order. The member for Terrigal has enough experience in this place to be aware of his obligation to keep his remarks within the leave of the bills.

Mr CHRIS HARTCHER: I am talking about the bill and I am somewhat intimidated by the overwhelming threat of the member for Monaro! I want the member for Monaro to address his donations from the Village Building Company, his involvement in the airport scandal near Queanbeyan and his failure to account for all of his activities with Queanbeyan council and the airport development.

Mr Steve Whan: Point of order: The member for Terrigal is clearly flouting your ruling. He knows from my public declarations about the donations that I received, unlike some members opposite. I ask you to draw the member for Terrigal back to speaking within the leave of bills rather than allowing him to go on a trashy little fishing expedition to try to get responses from members on this side of the House.

ACTING-SPEAKER (Mr Matthew Morris): Order! I uphold the point of order. I ask the member for Terrigal not to single out individual members in his speech.

Mr CHRIS HARTCHER: Far be it from me to single anybody out! I was talking about the Government and the Local Government and Planning Legislation Amendment (Political Donations) Bill, which relates to donations to political candidates, including those from the Australian Labor Party. The bills now provide that councillors, and candidates for councils who are involved in development applications, must show donation disclosures going back two years prior to the development application being lodged with the council. It also requires that donations be disclosed if they exceed $1,000. The disclosures do not apply to the State Government, Sussex Street or the Minister for Planning, yet that is where the planning powers lie. It is an extraordinary sleight of hand by the Premier to say to this House and in press conferences that he is cleaning up the political donation process when his legislation does not achieve that objective.

While the Coalition does not oppose the legislation, which is somewhat of a toothless tiger, on behalf of the Coalition the member for Pittwater will move an amendment to make sure that members of the Australian Labor Party have the right to say they will put some teeth into the Premier's pledge—or vote down the legislation in their usual way and then walk out of this Chamber and say they have achieved something when they have not. For many years the Australian Labor Party has stood candidates in councils in New South Wales. Many of those councils have now been sacked because of corruption and maladministration, for example, the Labor-dominated Liverpool City Council with the Oasis crisis, and Wollongong City Council—

Ms Sonia Hornery: Point of order: I ask that the member for Terrigal be required to return to the leave of the bills. Supposition about other councils is not appropriate.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! I uphold the point of order. The member for Terrigal will speak specifically to the bills.

Mr CHRIS HARTCHER: I am talking about Australian Labor Party held councils and the planning process in which those councils are involved. In the past councils—it happens to have involved Australian Labor Party councils and councillors—have corrupted the planning process for political and financial gain.

Mr Steve Whan: Point of order: The member for Terrigal has contravened standing orders in relation to this matter. He has made accusations so many times that he should be asked to sit down if he will not abide by the standing orders. I think this is the fifth time he has been called to order on the same point.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! If the member for Terrigal does not obey the Chair I will ask him to sit down.

Mr CHRIS HARTCHER: To the point of order: To what standing order is the member for Monaro referring? Is that an appropriate request?

Mr Steve Whan: To the point of order: I am happy to enlighten the member for Terrigal. I refer to Standing Order 73 relating to relevance. He has made accusations about groups that cannot defend themselves in this place, and not by way of substantive motion.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! I uphold that point of order. The member will speak to the bill.

Mr CHRIS HARTCHER: Standing Order 73 relates to members of the House, not to the Australian Labor Party.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! The member will confine his comments to the bill.

Mr CHRIS HARTCHER: I am happy to respect your ruling. I make the point that this legislation does not address the issues. Members opposite know that it does not address the issues. They know that the stream of money into the Australian Labor Party and into Sussex Street will continue because the planning process is now handled by the Minister for Planning through Sussex Street. This legislation does not address those issues. It is yet another sleight of hand by this Government and by the corrupt members opposite.

Mr Steve Whan: Point of order: The member has made an offensive comment in saying that members on this side are corrupt. I ask you to ask him to withdraw that offensive remark.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! The member will withdraw the remark relating to corruption.

Mr Chris Hartcher: I withdraw.

Mr ANDREW CONSTANCE (Bega) [6.11 p.m.]: At the outset I indicate that I strongly support the amendments foreshadowed by the member for Pittwater. There has certainly been pressure from the Independent Commission Against Corruption to change the way in which corruption issues are handled following its report into corruption risks in New South Wales development approval proposals, which was released in December 2005. Without going into the specifics of the bills, it is disappointing that, although time and again over the past few months the Premier indicated the need for comprehensive reform, he has failed to deliver the appropriate legislation. Much systemic corruption in this State goes unchecked because the Independent Commission Against Corruption does not have the resources to effectively police it.

It is crucial that there be a tightening of some of the legislative provisions, particularly those relating to local government and planning. I shall give a local example in the Bega electorate. Last night a councillor walked into the Bega Valley Shire Council chambers with a bottle of champagne and a couple of glasses to celebrate the lifting of the retail floor space cap in Merimbula by the Minister for Planning. This councillor, David Hede, has contested a previous State election and is obviously looking to contest the next local government election.

Mr Steve Whan: He's a former member of the Liberal Party.

Mr ANDREW CONSTANCE: Yes, he is a former member of the Liberal Party but, interestingly, he is now seeking to become a member of the Labor Party. Having contested the 2007 State election, this candidate was given support by one development company, Spungrow Pty Ltd, which provided him with an office. It is unclear whether he outlaid money to pay rent for that office; needless to say he then spent the past 12 months campaigning for the retail floor space cap to be lifted in Merimbula, which would enable Spungrow to proceed with its development. The fact that he walked into council chambers last night with a bottle of champagne and two champagne flutes to stick it up the other councillors is interesting.

Ms Sonia Hornery: Point of order: The member should return to the leave of the bill and not talk about champagne glasses and what people did at council last night.

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! I uphold the point of order. The member will confine his remarks to the leave of the bills.

Mr ANDREW CONSTANCE: To the point of order: I make the point—

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! I have ruled on the point of order. The member will continue his remarks.

Mr ANDREW CONSTANCE: It is strange. Basically, I am talking about political donations in local government, and I referred to what happened last night at Bega council. One councillor has obviously benefited from this developer. He has spent the past 12 months campaigning hard for the retail floor space cap to be lifted. That brings into question the transparency of the process. Ultimately, the community is entitled to know what benefits, whether in the form of gifts or donations, can be derived by councillors, particularly if they intend to contest a State election and then, if elected, make decisions at a local council level. The Government has expressed an intent to act by saying, "Let us look at developer donations. Let us ban developer donations." Yet this legislation does not do that. It does not go anywhere near the Premier's stated objectives over the past few months.

Mr Steve Whan: Weren't you listening to the debate?

Mr ANDREW CONSTANCE: If the member for Monaro wants to interrupt, I can refer to a statement I made in this House about the member and donations.

Mr Steve Whan: Go on. What about Robin Savage's donation?

Mr ANDREW CONSTANCE: Who?

Mr Steve Whan: The person you didn't declare.

Mr ANDREW CONSTANCE: Robert Savage?

ASSISTANT-SPEAKER (Ms Alison Megarrity): Order! Members will direct their remarks through the Chair.

Mr ANDREW CONSTANCE: Robin Savage is a name I have never heard. The member for Monaro is starting to make accusations against me in the House. Terrific! When there are instances in local government such as the one I have outlined tonight the community is entitled to know what has gone on and in a timely manner. The fact that the Opposition has to bring forward an amendment to try to give this legislation some teeth typifies the Australian Labor Party's attitude towards this matter. I look forward to supporting the amendments foreshadowed by the member for Pittwater.

Ms PRU GOWARD (Goulburn) [6.16 p.m.]: I support the intentions of the Election Funding Amendment (Political Donations and Expenditure) Bill and welcome its arrival in the Parliament. I regret that it has taken so long and that, as many of my colleagues have observed, it does not go far enough. Of course it is important to begin this process but clearly there are ways in which we could have taken the legislation much further this evening. As for my electorate, there are so many planning decisions that involve my communities that the constant refrain I hear is that they do not feel they can have confidence in how the process is being decided at either the State or local government level because nobody quite knows who is paying money to whom. This is often an unfair assumption, but the point of this bill is that we now live in a climate where, whether it is warranted or not, this is an assumption that people often make.

There are two reasons that we need to be absolutely meticulous about the declaration of donations and, ideally, their reduction. That applies not just to business but to all quarters. The first is because of the reflection it has on the democratic process. I have often observed in this House that if one does not have confidence in democracy one fairly quickly ends up without a democracy worth having and one is then forced to defend one's laws with armies and guns instead of public confidence. There is a very strong moral reason for ensuring that our political donations and expenditure legislation is as strong and as transparent as possible and that politicians at all levels should want that to be the case and should want to observe it, because the confidence that people have in them as individuals relies upon it. We observe that politicians are pretty low on the pecking order; indeed, we are near the bottom of the list with used car salesmen. One cannot be surprised when there seems to be so much reluctance to act on these matters. Indeed, it has taken the extraordinary scandals of the past six months to get the Government to take these modest baby steps to deal with political donations and expenditure reform.

The second reason I believe it is so important—I think my electorate shares this view—is that it is a matter of economic efficiency. There are enormous costs associated with uncertainty. It is not unsurprising that investment levels in New South Wales continue to moulder and there continues to be a reluctance to invest in a State where people are not quite sure where the rules are, who is applying them and which ways around them there might be. I have seen in other countries the enormous cost of uncertainty about process. It is a form of sovereign risk and it applies no less in the States of Australia where, for investment to occur with confidence, for businesses to conduct themselves with confidence, to employ and to take risks, they must be sure that the rules governing their behaviour will not change on the basis of political donations. Sovereign risk, economic efficiency and the economic dividend that derives from that, as well as the moral certainty and importance of supporting the vibrant Australian democracy that we are all so proud of, are fundamental reasons why this bill is to be supported and should really only be seen as a beginning, not an end, of the reform process. I support the amendment foreshadowed by the member for Pittwater.

[Business interrupted.]