Select Committee on Electoral and Political Party Funding

Debate resumed from 12 November 2008.

Ms SYLVIA HALE [2.30 p.m.]: I first acknowledge the outstanding work of committee staff who played a major role in the preparation of this comprehensive and insightful report. I also commend the members of the committee for their contributions to what I think is an important examination of the potentially corrosive effects of political donations and how those effects can be addressed. I have a particular interest in this report of course, because on 3 April 2008, on behalf of the Greens, I introduced into the House a private member's bill, the Environmental Planning and Assessment Amendment (Restoration of Community Participation) Bill 2008. One of the principal objects of that bill is to make it an offence for any property developer to make a donation to an elected officeholder, candidate for election, political party or party official or for such donation to be accepted.

During the brief debate on the Greens bill, no members of the House opposed the bill, although it should be noted that the Government did not deign to participate in the debate and subsequently attempted to prevent it being restored to the notice paper. The Greens bill was referred to the Select Committee on Electoral and Political Party Funding for inquiry and report. It is dealt with in some detail in chapters 3 and 7 of the report, and recommendation 8 of the report states:

That the Legislative Council not support schedule 1[8] of the Bill inserting a new section 148A banning developer donations into the Environmental Planning and Assessment Act 1979.

Before turning more broadly to the matters covered in the report I will respond to the sections dealing with the bill. First, the report refers to issues raised by the Legislation Review Committee relating to retrospectivity, absolute liability and ill-defined administrative powers. I consider those to be issues of substance, although I do not believe they are fatal to the overall objective of this provision in the bill. I believe that those issues can be addressed satisfactorily through summary drafting of schedule 1 [8] when the Greens seek to reintroduce the bill. The report goes on to discuss the difficulties of defining a property developer. Obviously, I am aware of those issues because I was grappling with them during the process of drafting the bill. In the end I came to the conclusion that the only way to remove the conflicts of interest that have undermined the faith of the public in the planning system is to ban political donations by developers entirely.

The bill was therefore drafted broadly with the term "property developer" to apply to anyone involved in the property development process other than home renovators. The bill also addresses the issue of third parties by making it an offence to solicit a third party to make a donation or to accept such a donation. I said at the time I introduced the bill that this approach makes the legislative framework clearer and easier to understand, enforce, and comply with. In chapter 7 of the report there is an extensive discussion of the issue of banning donations from certain categories of donors, including a discussion of a ban on donations from property developers. It is worth taking particular note of the committee's comments in paragraphs 7.108 to 7.110, which state in part:

7.108 The Committee is of the view that there are valid arguments in favour of capping or banning donations from each of the sources discussed in this chapter. In particular, the Committee acknowledges community unease about developer donations. Another area of unease related to fundraising events with prohibitive entry costs where attendees could gain access to decision makers, including Ministers.

7.109 The problem of arriving at a workable definition of even one source of donations, namely a property developer, demonstrates the complexity of devising a system of targeted restrictions

7.110 The Committee believes that due to the myriad sources of donations that could be singled out for higher standards of regulation, and the impediments to implementing targeted restrictions, the only workable solution is to impose a ban on political donations

The committee's reasoning for opposing schedule 1 [8] of the Greens bill is not that the object is invalid but that it would be better to ban all corporate donations than to have to overcome the complexities involved with singling out property developers. I agree with the committee. The Greens have been campaigning for many years for a complete ban on corporate donations and we have backed up that campaign by refusing to accept corporate donations. If the Government proceeds with implementing the committee's recommendations for a ban on all corporate donations, the Greens bill will no longer be required. Unfortunately, the Government has recently shown some very disturbing signs of a disappearing spine when it comes to implementing its commitment to electoral funding reform. The Premier recently released a report by Dr Anne Twomey into the reform of political donations, expenditure and funding. In his comments at the time the Premier said:

This issue is difficult and complex and any lasting reforms must be addressed at a national level to be effective.

With those comments the Premier put the brakes on political funding reform. He is effectively saying it is all too hard and it is up to the Federal Government. The Premier is taking a very narrow interpretation of what Dr Twomey had to say on this matter. His analysis of her report is disappointing and shallow. While Dr Twomey raised the complexity of reforming political funding and suggested there could be constitutional problems, she very much outlined the need for reform. The Premier should be putting New South Wales centre stage in leading the public debate on political reform. I urge the Premier to implement the recommendations of this report, rather than give up on initiating political funding reform in New South Wales.

If the Premier gives up on reform in this area the chances of far-reaching changes in political funding look dire. The Federal green paper on political funding has been delayed for about four or five months and there are regular reports that the delay is caused by deep divisions within Labor over when it should proceed to bring in any limits on donations. The decision by Federal Labor to go ahead with the $15,000-a-table fundraiser certainly suggests that those divisions are real and possibly that those who want to keep a business-as-usual approach to pocketing donations are in the ascendancy. On 9 November 2008 an article in the Sydney Morning Herald titled "Rudd plans $1m anniversary party" stated:

Hundreds of lobbyists, business figures and true believers have been sent invitations offering the chance to secure a 10-seat table, with a federal minister in attendance, for $15,000. Tables with no minister are going for $5000. Sources say that, assuming most Labor ministers attend, and the convention centre's Bayside Grand Hall is filled to capacity with 1550 guests, the event could gross more than $1 million, making it one of the biggest political fundraising dinners in Australia.

It comes after a warning from Mr Rudd this year: "You don't want democracy for sale."

I was struck by the comments of the Hon. Amanda Fazio when responding to the report. She accused those who have campaigned against developer donations of taking a holier-than-thou attitude. The problem that the New South Wales Australian Labor Party has is that when it comes to the corrupting influence of corporate donations everyone else is holier than thou. Labor must get its house in order and that means there must be reform in this area. Of course, it is not only Labor that takes corporate donations. The Premier has a clear responsibility to the public and to his party to act. So too does the Leader of the Opposition, representatives of other parties and the Independents who sit in this Parliament.

All parties in this Parliament could take an immediate step to overcome the problem and restore public faith in the State's democracy by following the Greens lead and announcing immediately that they will no longer solicit or accept corporate donations. The Greens took the step of banning corporate donations years ago and we have not suffered for it. We may not have had as much money as others to spend on advertising, but our membership and our vote has continued to grow strongly because the public has respected our stand.

It is unacceptable that we allow this reform process to be strangled by concerns about complexity. We need to take a bold step to show that there is genuine commitment in this Parliament to reform, not just a mouthing of platitudes about reform whose purpose is to limit the political damage until the storm blows over. That step can be taken by all of us immediately. It does not need legislation; it does not need Federal coordination. It just needs a genuine commitment to fix a system that is in disrepute and that threatens to undermine public faith in our democracy. This report marks the first step. We have all recognised that we have a problem. I urge all members to take the next step, to take the pledge, and give up those corporate donations.

Reverend the Hon. FRED NILE [2.40 p.m.], in reply: I am pleased to speak in reply to the debate on the report of the Select Committee on Electoral and Political Party Funding. I thank the speakers who have taken part in the debate, many of whom served on the committee that produced the report, that is, the Hon. Don Harwin, the Hon. Amanda Fazio, the Hon. Jennifer Gardiner, Ms Lee Rhiannon and the Hon. Michael Veitch. I thank them for their thoughtful contributions to this debate.

As members know, following the report the Government commissioned a report by Dr Anne Twomey, Associate Professor of the University of Sydney Law School. The paper was prepared for the Department of Premier and Cabinet of New South Wales and was presented in November 2008. It is headed, "The reform of political donations, expenditure and funding". When a number of the committee's recommendations were adopted, words to the following effect were added to the recommendations: "Subject to not in any way impinging on the Commonwealth or State Constitutions". At that stage the committee had no knowledge of whether the recommendations would clash with those Constitutions. The Government authorised the inquiry, which unfortunately from our point of view has upheld a number of matters, claiming that there would be potential danger that if matters went to the High Court the court would rule that the legislation passed by the Parliament of New South Wales was invalid.

I have looked at the professor's report. In my view, a lot of it is speculation with wording such as, "This might happen" or "This could happen". I do not believe that the Government should be bound by this paper to overthrow the parliamentary committee's report and recommendations. If it were, there would be no reform of the electoral funding donations process in New South Wales at all, and I believe the obligation is on New South Wales. It has recognised that there is a problem with donations and there has been corruption, for example in relation to Wollongong council and possibly other areas of the State.

It is important that there be reforms and the report of Dr Twomey should not stop those reforms from going ahead. New South Wales has taken the lead in the past; it should take the lead now and in the future—particularly as the leaders of the Labor Party, the Liberal Party and The Nationals have supported reform. There is unanimous support across the Parliament that something should be done. As members know, the key recommendation was that all donations be banned, except those of up to $1,000. In her report, the professor said that it would be impossible to have an outright ban on all political donations as it would be struck down as constitutionally invalid. That was never proposed or recommended by the Committee. There would always be donations; it was a question of capping donations. The committee recommended $1,000, which may be varied in future legislation, but the point was that the amount should be small enough that it would not constitute corruption. There would not be donations of $20,000, $50,000 or $100,000 by individuals or corporations. I believe that the professor has put up a straw man argument as one of her objections.

Dr Twomey also raised confusion between Federal and State elections. I know that that is a factor, but I do not believe it is enough to say, "Let's stop and do nothing". It would take skill to separate donations made to political parties for a State election as distinct from a Federal election. We would simply need a system where donations must be clearly identified by the donor to be for a State election, and those donations would be capped through the legislation. If they wished to make a donation to a Federal election they would have to designate that it was for a Federal election, and it may not be capped at that point. I do not believe that is sufficient reason not to proceed with the recommended legislation and the recommended cap. It must be possible for intelligent people to work out how this could be legislated. I believe it can be done.

In relation to the cap, the professor raised the fear that someone will go to the High Court. Who is going to go to the High Court? Is some corporation going to say, "We want to donate hundreds of thousands of dollars and you are stopping us"? All the corporations and big businesses have agreed that they want a cap. They want to get off the hook. They want to get out of the area of criticism. They do not want to give large donations. As I understand it, they have accepted the premise of a cap, so who would be going to the High Court? No citizen would go to the High Court because citizens—and this was proved during our inquiry—want a cap. As far as I can see, it is a straw man argument that there is going to be great controversy in the High Court with companies or political parties that will challenge it. The political parties agree with the cap, corporations agree with the cap and citizens agree with the cap. Who is going to take it to the High Court? Even if the High Court upheld an objection, and I believe that the High Court would support our proposition of a cap, that would not ban all donations or affect the freedom of citizens. Citizens may give, but only up to that amount of money.

I plead with Premier Nathan Rees not to be deterred by the professor's report but to pursue the preparation of legislation and let New South Wales take the lead. If it is challenged in the High Court, so be it, but let us at least attempt to fulfil the wishes of the citizens of this State as well as all political parties. We have unanimous support. Let us move ahead and let New South Wales take the lead. I thank the committee members and the secretariat for their work, and those who have participated in the debate in this House. I commend the report for immediate action by the Government.

Question—That the House take note of the report—put and resolved in the affirmative.

Motion agreed to.