Election Funding and Disclosures Amendment Bill 2010

About this Item
Speakers	Veitch The Hon Michael; Harwin The Hon Don; Nile Reverend The Hon Fred; Deputy-President (The Hon Kayee Griffin); Brown The Hon Robert; Moyes Reverend The Hon Dr Gordon; Khan The Hon Trevor; Borsak The Hon Robert; President; Foley The Hon Luke; Shoebridge Mr David; Kaye Dr John; Gardiner The Hon Jennifer; Hatzistergos The Hon John; Fazio The Hon Amanda; Chair (The Hon Kayee Griffin); Gay The Hon Duncan
Business	Bill, Division, Message, First Reading, Second Reading, Third Reading, In Committee, Motion, Report Adopted

ELECTION FUNDING AND DISCLOSURES AMENDMENT BILL 2010

Page: 27458

Bill received from the Legislative Assembly, and read a first time and ordered to be printed on motion by the Hon. Michael Veitch, on behalf of the Hon. John Hatzistergos.

Motion by the Hon. Michael Veitch agreed to:

Second Reading

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [4.58 p.m.], on behalf of the Hon. John Hatzistergos: I move:

The Government is pleased to introduce a bill that implements groundbreaking reforms to political donations including bans, caps and other restrictions on political donations, and increased public funding of election campaigns. This is yet another area in relation to which New South Wales is leading the way. For many years New South Wales has been pressing the Commonwealth to lead national reforms relating to political donations. To be fully effective, there is a clear need for reforms at all levels of government across Australia. In 2009 the Government decided that New South Wales should take practical action to start a national reform process. We announced that New South Wales would proceed with reform of election funding laws to provide certainty and confidence in the electorate of the impartiality of government decision-making and of the transparency of process in government.

Importantly, these reforms are also directed at reducing the advantages of money in dominating political debate. They provide for a more level playing field for candidates seeking election, as well as for third parties who wish to participate in political debate. These reforms are about putting a limit on the political "arms race", under which those with the most money have the loudest voice and can simply drown out the voices of all others.

The reforms will help to give voters a better opportunity to be fully and fairly informed of the policies of all political parties, candidates and interested third parties. As a first step, we introduced legislation banning donations by developers. Those reforms prohibited political donations by professional corporate property developers and their close associates.

At around the same time we announced that the 2011 State election would be conducted under a public funding model, rather than a system in which the cost of election campaigns is significantly met by political donations to parties. To that end, the Government made a reference to the parliamentary Joint Standing Committee on Electoral Matters for it to "inquire into a public funding model for political parties and candidates to apply at the State and local government levels". On 26 March 2010 the committee published its report, which makes numerous recommendations that propose fundamental reform in the area of political donations. The report recommended that the Government reform New South Wales election funding laws before the next State election, independent of any action taken by the Commonwealth. I am pleased to say that there was genuine bilateral cooperation during this committee inquiry, and that there was broad agreement from all parties that something needed to be done to take action in this area.

In drafting this bill the Government has been acutely aware that any New South Wales law that interferes with Commonwealth elections, or burdens the implied freedom of communication about Commonwealth political matters, may be subject to constitutional challenge. Any New South Wales reforms must take into account the elements of the test set down by the High Court in the Lange case—that is, the reforms must be reasonably and appropriately adapted to serving a legitimate end in a manner that is compatible with the system of representative and responsible government. The Government is satisfied that the right balance has been struck in this bill. However, for comprehensive and effective regulation of this area the Commonwealth must introduce similar laws to regulate Federal donations and campaign expenditure. Without Commonwealth action in this area, our laws may fall prey to unscrupulous people who use the lack of Commonwealth regulation to attempt to circumvent the spirit of the law. So now is the time for the Commonwealth to follow New South Wales' lead in the interests of achieving a more transparent democratic system of government in this country.

In the other place a number of Government amendments were made to the original bill to deal with certain minor drafting matters that were brought to the Government's attention after the introduction of the bill. The effect of these amendments includes ensuring that parties, members and candidates must disclose donations made as well as donations received; defining a "bequest" as something that can be paid into the State campaign account; correcting drafting oversights; and clarifying the intention of the bill. I seek leave to incorporate the remainder of my second reading speech in Hansard.

Leave granted.

Donation caps

Membership and Affiliation Fees

Express inclusions

Electoral Expenditure cap

Caps for Candidates

Parties

Third parties

Definition of "Electoral Expenditure"

Management of donations and expenditure

Public Funding of Election Expenditure

Eligibility

Administration Fund

Policy Development Fund

Revised disclosure rules

Powers of the EFA

Conclusion

The Hon. DON HARWIN [5.03 p.m.]: Over many years public confidence in the administration of our State has been undermined by the perception that vested interests are using money, given as donations, to buy influence in New South Wales. After years of debate and several committee inquiries, we should be discussing a bill that comprehensively reforms election funding and restores public faith in the integrity of our political system. Frustratingly, however, we are not. Instead, we have before us a half-hearted bill that neglects critical areas of overdue reform and cynically skews the playing field in favour of the current Government.

The Liberal Party and The Nationals have championed comprehensive campaign finance reform for New South Wales throughout the term of this Parliament. Barry O'Farrell has been a strident advocate for a rigorous, transparent and balanced approach to election funding since the moment he became Leader of the Opposition. In contrast, a succession of Labor Premiers have dragged their feet for the past three years, trying to delay reform or limit its scope. Now, at the eleventh hour, the Government has brought in a deeply flawed proposal that falls well short of the standards for which this side of politics has been fighting. Our policy has been clear from the very beginning of this debate. In our 2008 submission to the Legislative Council select committee—the establishment of which was moved by me on behalf of the Opposition and was passed by this House—the Liberal Party and The Nationals made five key recommendations, concerning national reform of political donations; limits on campaign expenditure by parties, candidates and third parties; review and approval powers for the Auditor-General over government advertising; reform of the electorate mail-out allowance; and donation disclosure reform.

Earlier this year, in our submission to the Joint Standing Committee on Electoral Matters inquiry, the Liberal Party and The Nationals again pressed for comprehensive reform. We recommended restricting donations to individuals and placing caps on election spending, with an independent arbiter setting the level of donation and expenditure caps. We called for limitations and transparency with regard to third party spending and government advertising as part of the reforms, as well as a review and adjustment of the electorate mail-out allowance scheme that operates for members of the Legislative Assembly. In between these submissions, the Coalition also released a policy document in which our position was clearly stated for the public record.

The Labor Government, in contrast, has been all over the place on the issue of campaign finance reform. For months it shamefully pleaded that meaningful action could not be taken independent of Commonwealth legislation, and it has made two piecemeal attempts at clearing the air of the donations-for-decisions stench that has become synonymous with New South Wales Labor. And just as clarity has been lacking from this broken Labor Government, so has transparency. The final report of the Joint Standing Committee on Electoral Matters recommended that an exposure draft of the bill be released for public consultation and comment. As is typical of Labor, despite loud rhetoric about consultation there has been no exposure draft of the Election Funding and Disclosures Amendment Bill 2010. The Premier's press release talked about the need for "broad support" and vowed that consideration of this bill would be "an inclusive exercise". But, as Imre Salusinszky notes in last weekend's Australian, "that was always a fiction".

The office of the Leader of the Opposition has sought a ministerial briefing on the bill, but the Premier's office has not returned numerous calls. Communication from the Premier's office to the Opposition regarding the bill has been non-existent—in stark contrast to the closed-door deals that have been done with crossbench members of the Legislative Council. And now we are subject to a sudden last-minute rush to quickly force this flawed bill through the Parliament. The bill was passed by the other place only minutes ago. Members of this House sat here listening to a filibuster, with Government member after Government member speaking on the previous legislation, simply because this bill arrived from Parliamentary Counsel—with the other place's amendments incorporated in it—literally only minutes before it was presented to the Chamber. It is an absolute sham. The people of New South Wales have learned that there is a great deal of difference between what Labor says and what it actually does. And the limited, flawed reforms provided in this bill are no exception.

The Premier claims that her reforms will end the so-called "arms race" in campaign spending—that appears in her agreement in principle speech delivered in the other place. That is simply not true. Under the provisions of this legislation, the New South Wales Labor Party will be entitled to spend $18.6 million in the 2011 State election. That is more than the $16.7 million it spent on declared electoral expenditure at the last election, in 2007. Despite the spin and talk from the Premier, more money will be spent during the upcoming election in a shorter, regulated three-month period than in the history of our State. That is a long way from what former Premier Nathan Rees claimed would be the outcome when he sent the reference to the Joint Standing Committee on Electoral Matters—in fact, it is unrecognisable.

There is no end to the arms race because the expenditure caps in the Premier's proposed scheme have been set by Labor politicians in this Government rather than by an independent authority. The Leader of the Opposition has repeatedly advocated that the Auditor-General determine the appropriate level at which campaign spending ought to be capped. For our State's election funding system to be completely transparent and beyond the influence of politics, it is vital that politicians are not setting the rules by which they are bound and upon which their very existence depends. To restore confidence in the integrity of our political system, such decisions must be made at arm's length from those to whom they will apply—the community expects nothing less.

Missing from this bill, and from the Premier's approach, is the issue of government advertising. The effectiveness of caps on campaign expenditure by political parties and candidates is severely undermined without complementary legislation to stop the misuse of government advertising budgets. Members will see from the Notice Paper that I gave notice of the introduction of such a bill to ensure that, as far as possible, public money was not expended on government publicity for a partisan political purpose by empowering the Auditor-General to scrutinise government publicity and report on its capacity to be used for that purpose. The Leader of the Opposition introduced a similar bill in the other place but regrettably the Government rejected the opportunity to implement such reform and bring transparency and accountability to our system. It remains missing from the Government's flawed reform agenda.

The bill contains nothing about appropriate, consequential changes to the electorate mail-out account. The Parliamentary Remuneration Tribunal explicitly prohibits the use of the electorate mail-out account entitlement for the purpose of "direct electioneering or a political campaigning nature". However, an incumbent member of the Legislative Assembly can spend in excess of $60,000 in the final year of a parliamentary term communicating with constituents. Placing no restrictions on an incumbent's ability to spend their entire electorate mail-out account entitlement in the regulated period, while their opponents are limited to spending $150,000 on their entire campaign, is a subversion of the spirit of capped expenditure arrangements. Above all, this bill is about cheating: Labor wants to cheat its way out of immense electoral trouble. And, sadly, the Greens are complicit in this disgraceful fix. This bill gives unions the green light to run a $22 million campaign before the upcoming State election on behalf of the Labor Party with which they are affiliated. That is $22 million—or more like $23 million—above and beyond the $18.6 million that the Labor Party is entitled to spend under the expenditure cap established in this legislation.

Reverend the Hon. Fred Nile: Over a million dollars each.

The Hon. DON HARWIN: Exactly. It makes a complete and utter mockery of this bill. As former New South Wales Minister Rodney Cavalier canvasses in his new book entitled Power Crisis—which I thoroughly recommend—genuine reform in our State is hamstrung by the very structure of New South Wales Labor, which concentrates power in the hands of a few affiliated trade union secretaries. Labor Premiers find themselves caught between the wishes of the union bosses and the best interests of ordinary electors. In numerous jurisdictions the discussion about campaign finance reform and the public funding of elections has broken down over the issue of union affiliation fees. It appears unlikely that the hurdle can be overcome in New South Wales and that comprehensive reform will be introduced here, while this party is in power and while Labor remains beholden to affiliated union secretaries. With union delegates constituting 50 per cent of Labor conference attendees, control of the conference floor is in the hands of the unions. As Rodney Cavalier explains:

And control of Labor by the unions has increasingly meant control by a professional political clique disconnected from the community. More than 80 per cent of Australian workers do not belong to a union, and more than 90 per cent do not belong to unions affiliated with the Australian Labor Party. As Rodney Cavalier explains:

Declining union membership has enabled a handful of union bosses to wield enormous power over New South Wales Labor. Cavalier explains that "Taking over these moribund institutions provided value for one reason and one reason only ... with them came a controlling parcel of shares in the ALP that delivered the keys to the kingdom of one side of Australian politics." It is indeed a select group.

The fate of New South Wales Labor and its policies is increasingly decided by what Rodney Cavalier terms "a gathering sufficiently intimate that all could be seated around the one circular table" at the Golden Century Chinese restaurant in Sussex Street. The power of the union bosses and their vested interest in being able to control New South Wales Labor has been repeatedly on display, year after year, under this Government. It was most notable in the debate on electricity privatisation but was also clearly evident in Premier Keneally's sham donation reforms. This bill enables those union bosses, one of whom is Mr Bernie Riordan, who is the head of the Electrical Trades Union and also happens to be the State President of the Australian Labor Party.

Each union boss can run a $1.05 million proxy campaign to try to secure the re-election of this incompetent Labor Government. It is no accident that the announcement of this bill came hot on the heels of the craven capitulation by the Premier to the trade unions' demands over the national occupational health and safety agreement. Even though her Government had signed up to the agreement—a reform process supported by every other State—the Premier made a stunning reversal and turned her back on Prime Minister Gillard in order to placate the unions. She has left herself open to the accusation that she has tried to secure millions of dollars in campaign expenditure. She hopes that this money will provide her side of politics with sufficient funds to gain re-election, all under the auspices of this bill.

The Premier has placed millions of dollars of Federal funding for our State in jeopardy by backing away from the national occupational health and safety agreement in a blatant attempt to secure union support for her party at the next State election. It is a disgraceful example of the Premier putting her party's political self-interests ahead of the interests of the people of this State. Through their support of this role, the Greens have demonstrated that the Federal Labor-Green alliance has come to Macquarie Street. Their reputation on this issue has been tarnished and their credibility dented. While the Greens proudly trumpet the fact that they accept donations only from individuals, they have given their support to the Government's flawed legislation, including the provision for unions to fund proxy campaigns. Why? The Greens will have a chance to explain to the Chamber, and I will be interested to hear what they have to say. Others have speculated on this issue.

In order to secure the Greens support for this bill, it seems the Government has dropped the tiered system of public funding, where a vote of between 4 per cent and 8 per cent qualified for a 50 per cent refund of campaign costs and a vote of above 8 per cent qualified for a full reimbursement. That was the proposal put to the Joint Standing Committee on Electoral Matters by the Electoral Commissioner. That is now gone. In its place the Government has proposed in this bill a single reimbursement threshold of 4 per cent. I was interested to read an article on Saturday by Imre Salusinszky about this change. Unsurprisingly, at the last election the Greens received between 4 per cent and 8 per cent of the vote in 45 electorates and consequently are in line to receive substantially more public funding under the new system as a result of this change. As Imre Salusinszky noted in the Australian on the weekend, the Greens spent an average of $2,407 in those seats in 2007. Now they will be able to spend $10,000 and get every cent back under the new public funding guidelines. They will get every cent back rather than dollar for dollar.

The Premier's refusal to take on board the concerns we have raised about the oversight of government advertising, the operation of the electorate mail-out account [EMA] entitlement and third party campaign spending by unions confirms that these reforms are a con job. They are flawed and unbalanced. The New South Wales Liberal Party and The Nationals have argued for effective, comprehensive and meaningful reform that will restore confidence, integrity and transparency to our State's maligned political system. The Government has not met the challenge and has not put the interests of the people of New South Wales first. This is an opportunity lost. I speak now also on behalf of my colleague the Hon. Jennifer Gardiner, with whom I have worked on both committees that have dealt with this issue during this parliamentary session. I know that she will contribute later in the debate. For those of us who have put so much time into working for reform, this is a very disappointing result. I foreshadow that the Opposition will move a series of amendments in Committee to try to incorporate some integrity into this legislation.

Reverend the Hon. FRED NILE [5.24 p.m.]: The Government claims that the Election Funding and Disclosures Amendment Bill 2010 is a response to the report of the Joint Standing Committee on Electoral Matters into the public funding of election campaigns. That claim has been challenged by committee members who do not believe the bill reflects all the recommendations of the joint standing committee. This bill is radical in its design. Some aspects of the bill will not be fully understood until the Electoral Commission and Election Funding Authority implement the legislation at the next election because some of the procedures outlined in the bill are so complicated. I asked government advisers whether the Electoral Commission and Election Funding Authority were totally supportive of the drafting of this legislation because they have to implement it. I have been involved in elections for many years and I consider that some of the provisions will be difficult to interpret or implement in a practical way.

I am pleased with the intention to cap donations. As previous speakers have said, the bill provides that third parties, including unions, may not spend more than $1.05 million. As the Hon. Don Harwin pointed out, for 20 unions that is more than $20 million, which throws off balance the requirement to restrict or cap donations. The Select Committee on Electoral and Political Party Funding, which I chaired, recommended that the cap on donations be a flat $1,000. I consider that is the appropriate cap to be applied.

DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! Members should show respect to the member with the call and listen to his contribution in silence.

Reverend the Hon. FRED NILE: A limit of $1,000, as recommended by the select committee, would be the most appropriate way to deal with the perception of corruption through the use of donations to members of Parliament, candidates or political parties to influence political decisions. The perception of corruption was readily accepted in developer donations and the House supported the prohibition on donations from developers. Restrictions must also be placed on other bodies, particularly when amounts of $20 million are involved. This bill does not impose any cap at all.

The Greens have indicated that they will move an amendment in Committee to extend the restriction to organisations that manufacture or sell tobacco products. I will support such an amendment. I foreshadow that, as a matter of consistency, I will move amendments to add alcohol and gambling products as tobacco, alcohol and gambling are the three antisocial products. Organisations that manufacture or sell these products—for example, tobacco companies, the Australian Hotels Association and gambling businesses—should not be able to use donations to influence any government, whether Coalition or Labor, to introduce legislation that would favour their activities. I hope that all members of the House will give serious consideration to those amendments in the Committee stage.

The bill provides that political donations in a financial year from individuals, registered political parties and other entities will be capped at $5,000 for registered political parties or groups and $2,000 for candidates or elected members. A candidate's campaign expenditure will be capped at $100,000 per electorate during a regulated period if the candidate is endorsed by a party or $150,000 if the candidate is not endorsed by a party. For the 2011 State election this regulated period will commence on 1 January 2011 and for each election thereafter it will commence on 1 October in the year prior to the election.

Expenditure by political parties will be capped at a total of $100,000 multiplied by the number of electorates they contest. That would mean $1,000,000 if a party contested every electorate, which the major parties do. In recent times the Greens have done that, and the Christian Democratic Party is working towards having 93 candidates—one for each State electorate. But $100,000 multiplied by 93 is a huge amount of money to be expended by political parties. Within this total cap, expenditure by political parties will be capped at $50,000 per electorate for material related to a particular electorate, in addition to each candidate's expenditure cap. That would take the amount to $150,000.

Expenditure by political parties contesting only the Legislative Council will be capped at $1.05 million, which may have some effect on parties. The Shooters and Fishers Party can speak for themselves, but some of these restrictions seem to be targeting that party. I am sure the Hon. Robert Brown will point that out in due course. Membership fees will be capped at $2,000 and registered political parties will be prohibited from using them for campaign purposes. Affiliation fees will be prohibited from use for campaign purposes. A new public funding model will reimburse parties, groups and candidates for actual expenditure on a progressive basis up to their maximum entitlement.

This is the point I made earlier: the Election Funding Authority will have to implement a procedure that is most complicated. It amazes me that someone would spend so much time working out a formula that probably has some traps in it that are not obvious at first. Schedule 2 to the bill contains a table setting out the amount of money to be distributed from the election campaign funds to a party eligible for payment from the fund in respect of a State election. Members will see how confusing this is. The table states:

Eligible Assembly party

Compare that with the current system where the party had to achieve 4 per cent of the first preference votes and received a payment per vote for actual expenditure, which has been about $2.10—it went up each year with the consumer price index increases. The new formula is very complicated. For the eligible Council party the table states:

I am sure most parties will be confused as to exactly what they will get under that complicated formula. I will move an amendment in Committee to reduce the level of eligibility from 4 per cent to 2 per cent of first preference votes. When the Labor Party introduced this legislation for public funding its main argument was that it would help democracy to be more effective and would encourage smaller parties and independent candidates to become involved in the electoral procedure by nominating and standing. This public funding gave them the hope that if they reached a certain percentage they would be reimbursed for actual expenditure. At that stage the Government put the figure at 4 per cent, which the Parliament supported. I have always argued against that.

When we questioned the Electoral Commissioner during a joint standing committee inquiry he said it would not be a problem if there was no required percentage: if you were elected the number of preference votes you got would be multiplied by the allocation per vote—whether it was nil per cent, 2 per cent or 4 per cent. I will move an amendment in Committee to reduce it to 2 per cent in a genuine attempt to encourage democracy in this State; otherwise we are setting up a system that reinforces the superiority of the major political parties— the Labor Party and the Liberal-Nationals Coalition, and now the Greens because of its increased vote. I suppose that is why the Greens have been the only party involved in the negotiations to prepare and approve this legislation. From the Labor Party's point of view it is about numbers—the Greens guarantee it the four votes it needs to have this bill passed if the Opposition opposes the bill, which I assume it will. Because the Greens have become a larger minor party it has a vested interest in this legislation. The Greens have changed from being a voice of democracy, as its members claimed to be in the beginning, to being a true political party in the worst sense of the word: it acts in the same way as the other political parties have been acting over the years.

The bill contains a lot of restrictions in relation to third parties, and this is a grey area that involves the unions and other organisations. The bill provides that third parties may not receive more than $2,000 from each donor in a financial year, third parties may not spend more than $1.05 million when registered by 31 December in the year before an election, and so on. Another confusing aspect of the bill is the reference to an aggregate of restrictions on spending. It is not clear to me how that would apply. Donors will be limited to no more than three donations of up to $2,000 each to a third party in a financial year. To me, that means $2,000 each multiplied by three, which is $6,000. There is no cap of $2,000; it is actually $6,000. The bill is not meeting its objectives of reducing the problem of donations being used to influence political parties.

The select committee had extensive debate about the $1,000 limit on donations and whether a cap could be the subject of a constitutional challenge. That possibility was the reason the committee's recommendation was not adopted. The Government has now decided to implement a cap, although it is not as good as the cap recommended by the committee. I wonder why it is no longer concerned about the possibility of a constitutional challenge.

The bill also amends the provisions relating to advances provided to parties for public education. That is now a flat rate of $80,000 per candidate. The Administration Fund that will replace the Public Education Fund will provide $80,000 for each member of the Legislative Assembly and the Legislative Council up to a maximum of $2 million. That is more than was paid through the Public Education Fund. I am sure that the Independent members of the Legislative Assembly will be pleased to get that $80,000, because I do not believe they have been eligible to apply for funds in the past. That may have increased their enthusiasm in supporting the bill in the other place.

The bill also establishes a Policy Development Fund that will supposedly help new parties. It provides that a new party will be eligible for funding of at least $5,000 for its first eight years. My reading of that suggests that parties will get only $5,000 over eight years rather than $5,000 each year for eight years. That will not be of much help to a new party. A reduction to 4 per cent would help new parties, which is the intention of my amendment. The bill has some positive and negative provisions. As I said, because the Government has had negotiations on this legislation with the Greens it will be passed. However, I hope it will consider the amendments that have been foreshadowed in good faith and will support them in Committee. I am yet to decide whether to support the bill.

The Hon. ROBERT BROWN [5.45 p.m.]: I will step out of character and instead of doing what my predecessor and mentor advised me to do—that is, to be short, sharp and to the point—I will get stuck into this debate. The Shooters and Fishers Party made submissions to the Select Committee on Electoral and Political Party Funding, of which I was a member, and later to the Joint Standing Committee on Electoral Matters putting its view that the Electoral Act needed to be reformed because the public is concerned about rorting of the system. The Rees Government amended the Act to knock out property developers because they were seen to be part of the problem.

Some members have developed a desire to make historic changes to the way in which we do our political business. The voters of this State are not interested in historic change; they simply want to stop the rorts. The easy response would have been to double the Electoral Commissioner's budget and to punish members who do the wrong thing. Instead, the Government has tried to condense a 400-page joint parliamentary committee report into the bill before us. This bill is a complete disgrace. It represents nothing more than political opportunism writ large. I note that the co-conspirators in the deals that have been done do not have the guts to be in the Chamber. I want to see their faces when I present my interpretation of their part in this scenario.

Dr John Kaye: I'm here.

The Hon. ROBERT BROWN: The leader/deputy leader of the Greens, Dr John Kaye-bridge, is here. What I will call the "negotiations" that the Premier's office had with the Shooters and Fishers Party, the Christian Democratic Party, the Independents in the lower House and their mates the Greens turned into a relay race. Someone would get the baton and then up the ante to see if they could score a couple of points. While listening to the detail of this disgraceful series of events members will feel the hair curling on the back of their necks. There is no-one in the press gallery, so my contribution might not be more widely reported. The Premier's office made the Shooters and Fishers Party an offer and we suggested that they read the party's submission to the Select Committee on Electoral and Political Party Funding and the later submission to the Joint Standing Committee on Electoral Matters. They say the same thing: We need proper governance of the current system.

The Hon. Duncan Gay: What was the offer?

The Hon. ROBERT BROWN: I will get to that, and versions Nos 2, 3 and 4. The Premier finally realised that this bunch of rednecks did not intend to move. I apologise, she would not say that about us. She realised that the Greens would be easier to deal with than the Shooters and Fishers Party. At the end of all the argy-bargy I asked the Speaker to host a meeting of the Independent and crossbench members. Only one Independent member showed up and he was as happy as he could be.

Dr John Kaye: That is not true; Richard was there.

The Hon. ROBERT BROWN: Of course, there were two. They were doubly happy. The Government said that it would give them $80,000 each when previously they would have been lucky to get about $20,000 to repay some of the money they had to borrow to run an election campaign. People asked us what we were bitching about because we would be getting $80,000 and we should be happy. Do people think that we can be bought off? The Greens think we can, and we think they can. At the last election we received about $220,000 for attracting 110,000 votes to elect the late the Hon. Roy Smith. We were happy with that. Our donors are very generous, although they are not tobacco companies.

The Hon. Charlie Lynn: And genuine.

The Hon. ROBERT BROWN: And genuine. Our donors do not represent sleazy commerce trying to buy our vote; they are people who expect us to stand in this place and protect their backs. We have to go to them tomorrow and say, "Sorry, we have been done over." One of the proposals put to us by the Premier's office was a complicated arrangement of what reimbursements would be paid for achieving certain benchmarks. What it came down to was this: if we take, say, $100 as the maximum, reimbursement for a small party like the Shooters and Fishers Party was worth $30; reimbursement for The Nationals was probably $50; and reimbursement for the Labor Party and the Liberal Party was $100. I took that proposition and the piece of paper it was written on to a meeting of the Hunter District Hunting Club at Cessnock—Labor heartland. The patron of the Hunter District Hunting Club is none other than Stan Neilly, who was the unfortunate victim of the shooters getting irritated in 1987 or 1988—whenever it was—by the Unsworth Government.

Stan Neilly fully understands what the voters in his electorate thought about that little exercise. When I told him that the Labor Party was proposing that one vote was not worth one vote but a third of a vote for some, two-thirds of a vote for others and a whole vote for others, he was appalled. He talked about how elder Labor Party people who had passed on would be turning in their graves at the sell-out. Then we have this mob here, the Greens. In the meeting organised by the Speaker, Mr Kaye came in late, happy as the proverbial pig, and made the statement, "It's all right, fellows, relax; we looked after you."

Dr John Kaye: Point of order: I think epithets such as calling other members pigs is inappropriate—particularly for a party that likes to shoot them.

The Hon. ROBERT BROWN: If the member refers to the Hansard, he will realise that I did not use the word "pig".

The Hon. Duncan Gay: You did. You said he was as happy as a pig.

The Hon. ROBERT BROWN: Yes. I would not call you a pig, sir. If I did, I would expect you to call me outside. Maybe I am getting a bit overwrought. This member came into that Chamber and the hubris—

DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! I regret interrupting the member but I do so to rule on the point of order. On my understanding, the expression used by the member was "Happy as a pig." When exception is taken to such an expression being directed at another member, it is not unusual that a request is made that the member with the call temper his or her language. Accordingly, I uphold the point of order and ask the member to choose his words more carefully in future if he wishes to direct similar comments at another member.

The Hon. ROBERT BROWN: Thank you, Madam Deputy-President. I will go further than that. I withdraw and I apologise to Dr John Kaye if I offended him. I did not mean to. This is not about individuals, this is about how the Government—

DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! I will not permit a discussion across the Chamber about a matter upon which I have just ruled. Members should treat one another civilly and with respect even when they are addressing a point of view put by another member with which they do not agree.

The Hon. ROBERT BROWN: As I said before, I will restrain myself and try to stick to the matter at hand. On behalf of the Shooters and Fishers Party I express our sheer disappointment at the way this Government has gone about getting this legislation through under these circumstances—a 400-page report from a joint committee of both Houses turned into a fairly substantial bill that goes way beyond the remit of what caused the problem to start with. I would very rarely agree with Lee Rhiannon's philosophies or, indeed, some of her attitudes, but it was Lee Rhiannon who started this process and I do not think she would be all that happy seeing democracy treated so vilely as it is treated in this bill.

The Hon. Duncan Gay: Come on!

The Hon. ROBERT BROWN: Lee Rhiannon was a true hard-nosed Trotskyite, yes, but I know for a fact the order in which the Government did its negotiations. I do not know whether it first came to the Shooters and Fishers Party or went to the Christian Democrats, but this is when the Premier suggested a range of reimbursements depending upon who the voter was voting for. We came back and said, "No, madam, it is definitely not on. We do not accept that. Our people would not accept that and I am surprised some of yours do." We came back with an amended offer, and so it went on. The penultimate part of that negotiation was as I said. We had a meeting in the Speaker's office and it was pointed out to us that it is all over, the deal has been done, but Mr Kaye did point out to us that he had looked after us.

The Shooters and Fishers Party does not necessarily believe that is the case—not that he has not looked after us but that this bill is in the best interests of not just the Shooters and Fishers Party but any small party trying to get there. It is a silly concept to say that your membership fees have to go into an Administrative Fund and you can use this amount of money for that. Our members pay $30 a year to be a member of the Shooters and Fishers Party—we have a pension rate too. They expect those hard-earned dollars to be used to make sure that we do the best we can to give them representation in this place, not for running an office or computers or buying buildings or running cars around this State. In these negotiations we told the Premier we do not need a lot of money to run our party but we do need money to fight campaigns.

The concept, for example, of comparing an independent lower House member with a small party in the upper House is a stretch. The costs of an Independent in a Legislative Assembly electorate are constrained because the boundary in some of them is only 20 or 30 miles in each direction. Upper House members have to travel, if they want to talk to constituents, over the whole of the State. I am not saying we want more than $80,000. I am saying there is nothing wrong with the way the system was before this business; that is, the Government was willing to reimburse the cost of a political party up to a certain amount depending on how many votes it got. That encourages political parties to do the very best they can to get the message to potential constituents to grow the size of the party. The Shooters and Fishers Party does not want to control the country.

Mr David Shoebridge: You have the Game Council.

The Hon. ROBERT BROWN: Wasn't that brilliant? That was a very good bit of legislation, and it is about the one shining light in the history of the Shooters Party and the Labor Government—it did something right, based on good policy.

Mr David Shoebridge: You have your own river of money.

The Hon. ROBERT BROWN: Let us talk about a bit of that, shall we? The Game Council is not handed $90 million a year like some of the member's constituents are. I have a list here of the sneaky little sums of money that go out to branches of the National Parks Association—Armidale branch, $4, 200; Clarence Valley branch, $4,231. What do they do with the money? Do they go out and kill feral animals? Do they build trails? Do they pull weeds? No, they do not. They campaign.

The Hon. Charlie Lynn: For the Greens.

The Hon. ROBERT BROWN: That is exactly right. With the support of this Government bill the Greens has morphed from a party that probably could claim it had some credibility as fighters for freedom and democracy into just another grubby bunch of moneygrubbers—get more power and cut out the other people. It was a tiny little fillip to give the small parties $5,000. As Reverend the Hon. Fred Nile said, it is not clear whether it is $5,000 over eight years or $5,000 a year for eight years. The Shooters and Fishers Party does not support the bill.

We believe the Government has gone well beyond the remit that might have been granted by public disturbance over the funding by certain groups to certain parties. If one were to ask whether the Government needed to go this far for the purposes of showing the taxpayers of this State that it was prepared to fight corruption, one would find that the answer is that the Government has gone far beyond that point. The Shooters Party submission to the select committee stated that it did not believe that the Government should take this action without informing the people of New South Wales how much it will cost. In all probability the one million licensed fishermen and couple of hundred thousand shooters and farmers in this State are unaware that some of their taxes already go towards funding political organisations such as the Greens, the Shooters and Fishers Party and the Christian Democratic Party.

Mr David Shoebridge: Like the Game Council.

The Hon. ROBERT BROWN: No, they get value for money there, mate. I have to go back to my constituents and say, "This will roll out nationally. The major parties will make sure of that." It will then extend to local government elections, and what will be the cost of that? That is a very good question, and I do not know the answer to it. But we all should know the answer to that question before we debate and pass the bill and put an impost on the people of New South Wales greater than what they currently have. As to the unions being able to put in a million bucks each, resulting in the Labor Party receiving more than the Liberal Party, I hate to be callous, but we do not really care? We believe there is a role for organisations such as the unions, the Sporting Shooters Association of Australia and supporting organisations to be able to say to governments, "We think that these ideas are worthwhile and we are prepared to support them, either with voluntary labour or with money." This concept of putting your hand out for $200 to encourage citizens to donate to political causes might be fine but it is not the way the real world works.

Dr John Kaye: It worked for President Obama.

The Hon. ROBERT BROWN: Yes, but that was President Obama, not Dr John Kaye. I have spoken for long enough. I have made the point that the Shooters and Fishers Party agrees with the following Paul Sheehan quote that appeared in the National Times: "This is Keneally democracy. This is Green morality". We will make sure that the taxpayers of this State understand exactly what all that means. We cannot support the bill. I doubt very much whether we will support many of the amendments but we will consider each of them on its merits.

Reverend the Hon. Dr GORDON MOYES [6.03 p.m.]: As parliamentary leader of Family First I speak on the Election Funding and Disclosures Amendment Bill 2010. Ever since the conflict between the New South Wales Corps and Governor Bligh 200 years ago, the Rum Rebellion, the most disgraceful aspect of political life in New South Wales has been the corruption and influence buying on behalf of corporations that are looking for government favours—for example, the right to sell rum—and from individuals who decide to buy positions in Parliament and to gain the ear of decision-makers for their own benefit. One common approach has been through making donations to cover some of the costs of a politician's next election—donations that go towards funding election advertising campaigns of political parties. Donations from trade unions also play a big role, as do, to a lesser extent, donations from individuals.

The Australian Electoral Commission records donations to political parties and publishes a yearly list of major identifiable political donors—although donors can sometimes hide their identities behind associated entities. Corporate political donations have increased dramatically and all major parties employ fundraising staff to gather these donations. Between the years 1995 and 1998 corporations donated $29 million to Australian political parties. The largest corporate donor during this period was Westpac Bank. By the year 2002-03, the amount of corporate funding to Australian political parties had risen to $69.4 million. In 2004-05 the Labor Party raised $64.8 million from the corporate sector, while the Liberal Party raised over $66 million. Most of the large corporate donors conduct business in an area greatly affected by government policy and are likely to benefit from government contracts.

In 1984 the Hawke Government introduced public funding for political parties with the intention that it would reduce the reliance of parties on corporate donations. The scheme failed its stated goal, as political donations from corporations have increased since that time. During the 2004 election the Government paid $41.9 million in public funding to political parties. The Liberal Party received $17.95 million in public funds, while the Labor Party received $16.7 million. The Australian Labor Party is the main beneficiary of trade union donations in Australia, as would be expected. During the year 2004-05 trade unions donated $49.68 million to the Labor Party's head office. Critics have accused the unions of buying seats to Australian Labor Party State conferences. In 2001-02 money from trade unions amounted to 11.85 per cent of the Labor Party's income.

Recently the shooting in cold blood of New South Wales businessman Michael McGurk has intensified allegations of endemic government corruption in New South Wales. Mr McGurk was shot at his Cremorne home in a targeted killing. Before his death he told reporters about a recording he claimed to have made containing revelations that implicated New South Wales and Federal Labor politicians in corruption. The tape is purported to contain conversations about members of Parliament receiving payments from businessmen in return for favours. An Independent Commission Against Corruption investigation found no evidence of actual corruption of politicians.

Mr McGurk apparently owed Ron Medich a large amount of money. Three contract killers have been charged with his murder, as has Mr Medich. Mr Medich recently donated $260,000 in the hope that the New South Wales Labor Government would rezone areas of Badgerys Creek for housing development. If the areas were rezoned, Mr Medich could make hundreds of millions of dollars profit. The Government, in spite of the Australian Labor Party donation, has not rezoned that land. Accusations of political corruption have long been part of political debate in New South Wales and other States. The Independent Commission Against Corruption has been busy hearing charges against individual parliamentarians and a number of councils. The worst of these was the Wollongong City Council. The incarceration of a former Minister of the Queensland Beattie Government for corruptly receiving $360,000 in secret payments from Queensland businessmen reveals a recent example of blatant corrupt behaviour.

Although the Federal Government in Australia raises most of the revenue, the State governments spend it. Education, police, health, roads, transport, housing and justice fall largely under State jurisdiction, presenting potentially large opportunities and rewards for corrupt activity. Both the major political parties in Australia, Labor and the Liberals in coalition with The Nationals, have been accused of succumbing to these opportunities when in power at the State level.

In recent decades corruption accusations surrounded New South Wales governments under Liberal Premiers Robert Askin and Eric Willis, and under their Labor successors, Premiers Neville Wran and Barrie Unsworth. In the 1988 election the Liberal leader Nick Greiner promised to establish an Independent Commission Against Corruption [ICAC] to investigate activities and recommend prosecution against individuals where necessary. Ironically, in 1992 Premier Greiner and one of his Ministers were forced to resign from Parliament following an ICAC investigation into their involvement in appointing a former colleague to a senior bureaucratic position. The courts later cleared both the Premier and his Minister.

Professor Mark Findlay, the Director of the Institute of Criminology at the University of Sydney, has described the success and failures of the ICAC. I will not go into that in any detail. However, Professor Findlay stated that the ICAC has slowly reversed an intensely corrupt local government planning structure; it has radically improved public tendering; and it has challenged the improper use of public information. These are long-lasting betterments of public administration. But when faced with corruption within the police and prison systems, the ICAC prevaricated and failed.

In a paper entitled "Perils of Government Dominance" Professor Scott Prasser argues that parliaments cannot rely on watchdogs alone to guard against bad government. In recent decades we have seen the dominance of the Executive Government over the Legislature, the judiciary, and the public service. This is a threat to democracy and goes against the doctrine of the separation of powers. Sadly, that has long been a common feature in New South Wales politics. Perhaps Professor Findlay rightly encapsulated the mood of the people when he wrote:

Irrespective of the outcome, the community is convinced that corruption remains a feature of public life in New South Wales. After a quarter century of corruption prevention, ICAC has been incapable of stemming high-level political corruption. Neither has it succeeded in overcoming public suspicion that it is business as usual in Macquarie Street.

This week the New South Wales Opposition has staked a claim to the moral high ground in the ongoing State stoush over campaign finance reform, with a proposal to restrict donations to individuals on the electoral roll. The feud over electoral reform continued in the New South Wales Parliament on Tuesday this week with the Greens announcing an amendment to ban tobacco company donations—still accepted by the Opposition but not by the Labor Government. Under pressure to support the ban, New South Wales Opposition Leader Barry O'Farrell announced his own amendment restricting donations to individual voters.

The Government's reforms would introduce annual donation caps of $5,000 to parties and $2,000 to individual candidates or members of Parliament. The Government's campaign finance reforms have been assured passage through the Parliament with the support of the Greens. Apart from the donation caps, there will be tough restrictions on party and candidate campaign expenditure, while third parties would each be able to spend $1.05 million ahead of an election. The inclusion of unions within the third party caps has been a major sticking point for the Opposition—a "rort", as the Opposition calls it, designed to benefit the Labor Government only. I spoke and voted against these changes, which are designed to benefit the Labor and Greens parties. Minor Parties, such as the Christian Democratic Party and Family First, depend upon individual donors. Therefore we support the O'Farrell amendments.

There is still the issue of individuals buying their position by either personal donations or by enabling donations from their union or corporation. Many very generous donors have sought preselection as a party's favourite candidate to allow them to enter Parliament. The most recent example has been this week, with the Liberal Party selecting its candidate for the safe Liberal seat of Castle Hill. According to the press, Ashley Pittard has political ambitions. A great deal has been said about how he has used his wealth. New South Wales Election Funding Authority records show that Mr Pittard has donated more than $360,000 to the Liberal Party since 2007. Mr Pittard's generosity has prompted plenty of discussion about his bid for the seat. Mr Pittard also has a history of donations to the Federal Electoral Council covering the seat of Mitchell. Mr Hawke eventually won that seat.

Donation records show that Mr Pittard contributed $150,000 to the Mitchell Federal Electoral Council in 2007. In April last year Mr Pittard contributed $75,000 to the Mitchell Federal Electoral Council. In July this year, before the Federal election, he gave another $45,000. That is an incredible level of giving, in any sense of the word. Perhaps it is a sign of political maturity, but the Liberal Party selectors eventually gave the preselection to a competitor of Mr Pittard. I remind the House that when Henry Parkes was Premier of this State he regularly sold positions to the Legislative Council, using the money he received to pay off his personal debts or to buy favourable treatment for land development that would result in huge profits for corporations. Public funding for elections is desirable in light of present practices that have led to corruption. We may not want to pay for elections, but so far it is the best way of ending the corruption of political donations.

With regard to the objects of this bill, from the outset I will say that the bill is essentially about creating an even playing field during election campaigns. It aims to promote fairness and integrity by capping the amount of electoral campaign expenditure during an election campaign, therefore limiting the extent to which one party becomes unfairly advantaged because that party has access to greater funds than its opponents. As the Hon. Robert Brown said, this bill came about from recommendations made by the Joint Standing Committee on Election Reform. Under the bill's proposals, from 1 January donations to political parties will be capped at $5,000 and donations to candidates will be capped at $2,000. In the other place, candidates' campaign expenditure will be limited to $100,000 each, while parties will be allowed to spend a further $50,000 in each electorate they contest. Third party campaigners, such as unions or lobby groups, will be required to register as such if they donate more than $2,000 per financial year, and then their donations will be capped at $1.05 million.

One common approach has been through making donations to cover some of the costs of the politicians' next election. The donations go towards the funding of the parties' election advertising campaigns. The Australian Electoral Commission records donations to political parties, and publishes a list of identifiable political donors. I believe the new capping system will address the growing concern in the community that people who donate to political parties enjoy special access or special influence. Indeed, it is openly said that seats at a dinner together with a Minister or a Premier, or a Prime Minister or a Treasurer, can be sold for vast sums of money. The bill will also introduce the disclosure of political donations and electoral expenditure, as well as the creation of separate campaign accounts, to ensure a politician represents all his or her constituents rather than the interests of the few who fund his or her campaign.

Other countries, including New Zealand, Canada, Germany and the United Kingdom, have already acted to reform electoral funding by capping electoral donations and regulating the disclosure of election funding. In the United States of America, current campaign finance law at the federal level requires candidate committees, party committees and political action committees to file periodic reports disclosing the money they raise and spend. Some parts of the United States have even introduced "clean elections", which are a form of campaign finance reform. Unlike traditional campaign finance laws that focus primarily on restricting spending and placing caps on campaign donations, clean elections laws provide a public grant to candidates who agree to limit their spending and private fundraising. Candidates participating in a clean elections system are required to meet certain qualification criteria, which usually include collecting a number of signatures and small contributions—generally determined by statute and set at $5 in both Maine and Arizona—before the candidate can receive public support.

To receive the government campaign grant clean candidates must forgo all other fundraising and accept no other private or personal funds. One might suggest that the introduction of donors being forced to remain anonymous, like our voting system, would result in a system in the United States that simply would not work. Benjamin Hourigan in his publication entitled "Who pays: Political Democracy and Democratic Accountability" says it simply, when he says:

If political campaigns have become too extravagant, causing spending to reach unsustainable levels, our political leaders must simply exercise some restraint, as indeed they must when managing government spending. Public funding for elections would shield the parties from shouldering their own financial obligations, making taxpayers finance their excesses.

Disclosure and capping remains the best regime of campaign finance regulation. All donations should be disclosed, however small, leaving little room to avoid scrutiny. Public funding for elections is desirable in the light of present practices that have led to corruption. The public may not want to pay for elections but it is the best way of ending the corruption. As Parliamentary Leader of Family First, I cannot support the bill because of the mixed methodology of applying funding. However, I will be voting in favour of some of the proposed amendments.

The Hon. TREVOR KHAN [6.20 p.m.]: I am cognisant of time so I will not take too long commenting on two aspects of the bill. The first relates to corporate donations. Let us be clear, this issue has been around for some time. In the past the Greens have called for a ban on corporate donations but they are now walking away from that position. A media release of Ms Lee Rhiannon, a former Greens member in this place, dated 7 August 2009 states:

In August 2009 Ms Rhiannon, on behalf of the Greens, was advocating a ban on corporate donations. It is strange that she was prepared to then go on the attack on behalf of the Greens challenging the Coalition in respect of that position, but now the Greens, at least in media releases, are walking away from that position. What has happened to the Greens? I will not engage in the speculation that others may engage in, but I shall refer briefly to an ABC media report entitled "Wollongong's ICAC Scandal: The sequel". It states in part:

Here we have a commitment from the Liberal-Nationals Coalition for appropriate amendments to this legislation. Those who are showing an unwillingness to commit are the Greens. The Greens are often happy to throw the mud around, but on this occasion they are not prepared to stand by a modicum of their own principles on this matter. I am often accused by various members in this place of not standing by my principles. But I do stand by my principles, even to my own detriment sometimes. Ms Rhiannon and other Greens members have often shouted at me across this Chamber about my conscience and lack of preparedness to stand by my principles. It is so easy for the Greens to fling such remarks at Opposition members but, sadly, on such an important piece of legislation, which is fundamental to the operation of our democracy, they walk away from the required standard of conscience.

[Interruption]

The Hon. Duncan Gay: Point of order: My point of order is that I cannot hear the speaker. There is prattling from a child in the House.

DEPUTY-PRESIDENT (The Hon. Kayee Griffin): Order! All members should show respect to the member with the call and not interrupt his contribution. I find it interesting that the Hon. Duncan Gay took a point of order, given that he was rather vocal earlier in this debate.

The Hon. TREVOR KHAN: Let us be quite clear, this legislation will encourage third party campaigning; placing a cap upon party donations and party expenditure will encourage third party campaigning. It is essential for members to be satisfied that the legislation deals appropriately with third party campaigning because the impact of this legislation can be quite significant and negative. For reasons that are unclear, the Greens will not address the real issue of third party campaigning. As I have said in other places, my concern is not merely about third party campaigning by trade unions; I am concerned about third party campaigning by all groups and the impact that can have. When members have been permitted a conscience vote on specific matters in this House, many have spoken passionately when giving their views, and one of the high points of my time in this place has been listening to the obvious considerable thought that has gone into such contributions.

My concern is, and it should be the concern of every member, that third party campaigning will create a circumstance in which people will be frightened to exercise their will. The amendments sought to be introduced by the Opposition should be given proper and considered judgement by all members and, in so doing, they should also consider what impact this legislation will have beyond its immediate and apparent effect. On occasions the Greens keep members in this place into the wee hours of the morning putting a point of view that they know will be agreed to by only four members in this House. This time they should exercise an appropriate degree of conscience and allow this bill to be returned to the other place, in order that we can see just where the Labor Party stands in respect of any amendments agreed to by this House.

[The Deputy President (The Hon. Kaye Griffin) left the chair at 6.30 p.m. The House resumed at 8.00 p.m.]

The Hon. ROBERT BORSAK [8.00 p.m.]: On behalf of the Shooters and Fishers Party I speak in debate on the Election Funding and Disclosures Amendment Bill 2010. My party is extremely disappointed at the way this Government has gone about having this legislation passed under any circumstances. That would not have been possible without the help of the Trotskyites in the Greens—the same party that has been beating the drum for electoral reform for a number of years. However, as soon as an opportunity presented itself to financially milk the taxpayers of this State it would appear that for the Greens some socialist reform is better than none.

After 16 years of promising and doing nothing about electoral funding reform, this Labor Government has now conveniently found the will to try to take the high moral ground in its dying days in office. Members should forget any rhetoric that this is somehow a bill that implements groundbreaking reforms to political donations. The truth is that it is simply a bill designed to disadvantage the Opposition and minor parties such as the Shooters and Fishers Party and a desperate attempt to minimise the carnage that this Government faces in March next year. What is certain in March of next year is the complete electoral annihilation of this Government, in part because of the Greens. For years the Government has pandered to the extreme Greens and their anti-everything except a socialist agenda, which would be more at home in North Korea and Cuba.

The nearly 400-page joint standing committee report has been reduced to a number of self-serving proposals and is an outright attack on the political processes in general and on minor political parties, such as ours, in particular. The Shooters and Fishers Party is the only party that has consistently held its position on electoral funding reform. Our party lodged submissions with the Select Committee on Electoral and Political Party Funding, which was established by the Legislative Council on 27 June 2007, and with the Standing Committee on Electoral Matters inquiring into public funding of election campaigns, which was established by this House on 3 December 2009. As chairman of the Shooters and Fishers Party I also gave evidence to this committee. Over the past year, the party has also held several discussions with the Premier and had a meeting with the New South Wales Electoral Commissioner. I reiterate what I said earlier: The Shooters and Fishers Party is the only party that has consistently held its position on electoral reform, unlike the Greens—about which I will have a little more to say later.

The Shooters and Fishers Party is philosophically opposed to any change to the existing system, with the exception that it would support a strengthening of audit controls and procedures, including auditing trails, reporting and compliance rules. On the question of public funding and political donations, the party has always supported public funding of political parties and election campaigns provided that the taxpayers of New South Wales are fully informed of the costs associated with a publicly funded election campaign and are given an opportunity to provide comment before any legislative changes can be made. The Shooters and Fishers Party does not support a ban on unions, businesses or other people being able to donate to a party for the running of an election campaign, nor does it support placing any limitations on the amount that unions, businesses or individuals can donate to a party. Likewise, the party does not support limiting campaign expenditure by political parties or candidates in an election campaign. It has insisted that better auditing safeguards be put in place to protect and ensure the integrity and transparency of the use of public funds and donations.

The member for Swansea in the other place made a very interesting observation. While the member is proud to support this Government-sponsored bill, he is not convinced that this new legislation is constitutionally sound. In other words, there is a possibility that the new legislation will leave itself wide open to a class action and could be knocked off in the Federal Court. In relation to this I will to raise two matters pertinent to the Shooters and Fishers Party. As I have said previously, the party objects to placing a limit on what an approved entity can donate to a political party. New South Wales is unique in the world in that it is the only Parliament that has members elected specifically on a charter to defend the rights of licensed firearms owners. Therefore, any limiting of donations from an approved entity impacts more on the Shooters and Fishers Party because of its narrow focus than it does on any other party. If the Shooters and Fishers Party cannot access its financial support, one could suggest that these changes are specifically designed to rid this Parliament of specific-interest groups, such as ours, who are sometimes viewed by the major parties as an irritant.

The other and more significant issue for a party such as ours is the quarantining of membership fees from use for campaign purposes. The quarantining of such funds defeats the primary reason that people join a party. They expect these funds to be used to get their representatives elected to Parliament and not for administrative purposes. The only reason membership fees have been quarantined now is that membership of the Labor Party has collapsed while minor party membership continues to increase at an astronomical rate. I concur with the member for Swansea in the other place and have severe reservations that the bill could stand up in a court of law on constitutional grounds if challenged. I am not a lawyer, but I do know that we have strong democratic conventions in this country.

As for the Greens, what can one say? As the Leader of the Opposition in the other place implied, a bloke called John Kaye has opted to take a lot of pieces of silver—an additional 1,597,414, in fact. That is a hell of a lot of taxpayer coins for a party that allegedly wants to clean up politics in this State. We can now say that, while they dig deeply into the pockets of New South Wales taxpayers, they harvest taxpayers' dollars to subsidise their socialist, job-destroying agenda. With all due credit to Dr John Kaye, he is no Lee Rhiannon. She would have checked and doubled checked their party's submissions and press releases, and even then she would not have locked herself into a deal with the Labor Government, as has Dr John Kaye.

Dr John Kaye: She supports this. Be honest and acknowledge that she supports it.

The Hon. ROBERT BORSAK: I have not heard her say that. How can I acknowledge it when I have not heard it? You know what she has said in the past in this place. You are well out of line with what she has said in the past and what your party has represented. You are well out of line.

The PRESIDENT: Order! Debate will proceed in an orderly fashion. Members will cease interjecting.

The Hon. ROBERT BORSAK: In 2008 the Greens submission to the Select Committee on Electoral and Political Party Funding argued that expenditure for individual lower House candidates in State elections be capped at $30,000 and third party expenditure be capped at $50,000. In 2009 the Greens' submission to the Standing Committee on Electoral Matters again argued that expenditure for individual lower House candidates in State elections be capped at $30,000, but increased their preference for third party expenditure from the modest $50,000 to $100,000. Fast forward to 2010, and we have another position from the Greens—they have more positions than the Kama Sutra. Now it appears that the Greens support a $100,000 cap for individual candidates contesting lower House seats, and a whopping $1,050,000 for third party expenditure—a tenfold increase on their previous position in 2009, and a twentyfold increase on their position in 2008. Why have the Greens so callously hopped into bed with Labor—or, rather, why has Labor allowed the Greens into its bed? As Paul Sheehan, writing in the Sydney Morning Herald on Monday, so eloquently put it:

Not content with their new partners, the Greens appear to be engaged in a practice known as "bed hopping", and again as Paul Sheehan points out:

According to Paul Sheehan:

this is Keneally democracy … and Green morality.

He too would "vote for a green party, if such a party existed, but instead we have the Greens, a bipolar coalition of genuine environmentalists and genuine hard-left, anti-corporate progressives hiding under the flag of convenience of environmentalism." I beg to differ with Paul Sheehan on the last issue. There are no progressives in the hard-left of the Greens, just a bunch of regressive, job-destroying bigots, who display the highest class of social snobbery in this State.

The Hon. LUKE FOLEY [8.11 p.m.]: I support the Election Funding and Disclosures Amendment Bill 2010. For many years I have argued, both in my party and beyond the party, for an end to the arms race when it comes to the funding of election campaigns in this country. I have argued consistently that State Parliaments and the Commonwealth Parliament need to act to curb the big-money politics to ensure that the voices of the many, not the few, are heard in our democracy. I have argued that we need to safeguard our democracy against predatory outside interests. I recall putting many amendments to that effect on the floor of the annual conference of the New South Wales Labor Party. More often than not I was unsuccessful. There is no doubt that the day is overdue for the reforms contained in this bill. I accept that those who argue that the Government has waited a long time before doing this are right. I accept that. But that is not an argument for not doing it today. Because something is overdue is not a valid argument to not do it at all—otherwise we would have never given women or indigenous Australians the vote.

In 2007 I gave a lengthy interview on the Four Corners program, arguing for our Parliaments to act to cap big-money politics and to place caps on campaign spending and donations. Ideally, the Commonwealth would lead in this area and the States and Territories would follow. In an ideal world we would have a harmonisation of Australian laws to cover the field when it comes to the regulation of campaign finance. Of course, that would avoid loopholes. Indeed, my party took a policy to the 2007 Federal election to act on electoral funding reform, and in December 2008 the Rudd Labor Government released a green paper—a discussion paper—on options for election finance reform.

Unfortunately, the Commonwealth Government has not yet acted with a legislative package to reform campaign financing at the Federal level, so New South Wales will lead the way. As I said, I accept that in an ideal world the Commonwealth would lead the way and the States and Territories would follow. But the Commonwealth Government has not got there yet and our Government has said consistently that, while we would prefer that the Commonwealth take the lead, if necessary New South Wales will go it alone, such is our commitment to cleaning up the laws in this area and ensuring that proper safeguards are in place in this State to end the campaign arms race. I predict that within the next few years every jurisdiction in this country will follow after New South Wales leads the way tonight. I predict that no government, once this bill is passed into law, will repeal such laws. No government will be able to get away with repealing laws that place caps on campaign donations and expenditure.

I will talk briefly about the principles that guided the development of the bill. The New South Wales Electoral Commissioner, Colin Barry, made a submission to the Joint Standing Committee on Electoral Matters inquiry. He proposed in his submission that four principles guide the Legislature when looking at reform in this area. The first principle relates to protecting the integrity of representative government. By that, the commissioner meant—in his words—"that elected members of Parliament and local government councillors are accountable to the citizens whom they represent" and "are expected to act in the interests of those citizens." The second principle the Electoral Commissioner raised was promoting fairness in politics. The reference by Colin Barry to fairness in this context was intended in the sense that political freedom should be made formally available to all citizens, who should all have a genuine chance to make a difference. The third principle enunciated by the Electoral Commissioner was that public funding should support parties to perform their functions. In particular, Mr Barry noted:

The fourth and final principle that the Electoral Commissioner advocated was respect for political freedoms. I contend that in drafting this legislation the Government has followed the four principles raised by the New South Wales Electoral Commissioner, Colin Barry, in his submission to the Joint Standing Committee on Electoral Matters inquiry.

The truth is that the Opposition has dealt itself out of playing a constructive role in the development of this reform package. The Premier said that she sought bipartisan support for the bill from across the political parties. The great objections that Opposition members raise here, with their feigned indignation, of banning donations from corporations were never mentioned by their leader when he met with the Premier—not once. Opposition members now say, with their hands on their hearts, that this is a great outrage and corporations should not be able to donate. We had stunts such as the legal advice from Arthur Moses, SC. I came across Arthur Moses in the Industrial Commission 10 years ago—a third-rate industrial barrister for employers and a Liberal Party hack. He has never practised in the area of constitutional law. Yet for the sake of a political stunt, the press secretary of the Leader of the Opposition obtains so-called advice from Arthur Moses, barrister for various employers in industrial matters, and passes it off to the Sydney Morning Herald as some learned and definitive advice on matters to do with the Constitution. I happen to have a memorandum of advice from a fair dinkum constitutional expert, Bruce McClintock, QC, in which he states:

The Hon. Catherine Cusack: Point of order: I request that the member table the full document that he is quoting from.

The Hon. LUKE FOLEY: I am happy to do so.

The PRESIDENT: Order! That is not a point of order. The Hon. Luke Foley may continue.

The Hon. LUKE FOLEY: The advice I have from Bruce McClintock goes to the heart of case law regarding the regulation of campaign expenditure and donations in this country. It looks at the relevant case law and draws conclusions, unlike the political polemic from Arthur Moses. Mr McClintock states:

He goes on to quote Arthur Moses' opinion—

There we have the advice from Arthur Moses—who is not an expert in the area of constitutional law—that the Liberal Party seeks to rely on to make a case that this bill is somehow unconstitutional. His statement that "it may be open to be argued, although it is not by any means clear, that such a law is contrary to section 5 of the NSW Constitution" is hardly definitive or unequivocal advice. Bruce McClintock, an expert in this field, states:

There has been a range of matters before the High Court over the years that deal with issues such as freedom of political expression in this country. Australian Capital Television Pty Ltd v The Commonwealth in 1992 is a leading authority on this matter. Australian Capital Television stands for the proposition that while an absolute ban on political communication is constitutionally invalid, nevertheless some restriction may survive constitutional scrutiny. I will quote what Sir Anthony Mason said in his judgement in the High Court in the Australian Capital Television Pty Ltd case. In part, he stated:

Bruce McClintock, in providing his advice, looks at the test that the learned justices of the High Court set out in not only the Australian Capital Television Pty Ltd case but also the Lange and the Coleman cases. He advises that there are four questions posed by the High Court: first, does the law burden freedom of political communication; secondly, does the law serve a legitimate end; thirdly, is the law reasonably appropriate and adapted to serving a legitimate end; and, fourthly, is the manner in which the law serves that legitimate end compatible with the system of government prescribed by the Commonwealth Constitution? Bruce McClintock continued:

He concluded:

That is fair dinkum advice from a constitutional expert, a silk, not bogus advice from a Liberal Party hack with no expertise in the area of constitutional law. The truth is that the Liberal Party has been desperately searching for any reason to oppose reform in this area because it is addicted to donations and Liberal Party members are looking for any excuse to oppose this legislation. The Liberal Party of Australia New South Wales division's own disclosures to the New South Wales Election Funding Authority reveal donations of $7.6 million in the 2009-10 financial year.

That is the greatest argument upon which to advise the House why the Liberal Party is fighting this legislation tooth and nail. The Liberal Party is doing well at the moment. Many businesses back favourites. They are backing the Liberal Party. The Liberal Party has the bag out; it is hoovering in money left, right and centre, and it wants to keep going. The Liberal Party is dressing up opposition to this legislation to mask what the case really is: that it is on a fundraising roll at the moment. The money is coming in left, right and centre, and the Liberal Party has absolutely no interest in this Parliament passing laws that will restrict its ability to keep raking in money. That is the fact.

If the Liberal Party is so opposed to corporate donations, why does it continue to take them? Self-regulation is possible. The Labor Party has done it with tobacco donations. Self-regulation is always possible. If it is an issue of such high political principle that Liberal Party members say corporate donations should not be allowed, why does the party continue to take them? The Greens self-regulate in this area: they do not take corporate donations. The Liberal Party, despite all its protestations to the contrary, keeps raking in corporate donations and has absolutely zero intention of breaking away from that practice.

I want to address a couple of aspects of the bill. First, spending limits must preserve freedom of political expression and robust campaigning, while also calling a halt to the escalation of electronic political advertising. I will quote from Professor Anne Twomey. Given that the Hon. Don Harwin requested that, I am happy to oblige. Professor Anne Twomey delivered a very considered report to the Government titled "The Reform of Political Donations, Expenditure and Funding". In that report Professor Anne Twomey wrote:

That is exactly what this bill seeks to do. It is, as Professor Twomey advocated for, an entire scheme that seeks to do three things: cap donations, cap spending, and increase public funding. I note that the Liberal Party advocates—and I suspect it will move amendments to this effect—seeking to exclude political donations from all but individuals. That proposition is superficially seductive. But let us consider what it really means. It would leave the highest net wealth individuals in this society free to contribute; it would leave "Twiggy" Forrest free to campaign against a mining tax and donate to the Liberal Party, which opposes the mining tax; and it would leave the flock of millionaires whom Malcolm Turnbull stacked into the Liberal Party branches in Wentworth free to donate. But, at the same time, it would deny those corporations and other entities, such as voluntary associations, the right to participate in the democratic process.

Let us look at some of the voluntary associations that would be excluded from donating to election campaigns if the amendment by Liberal and Nationals members were to pass into law. Not only would employee associations not be able to donate but not-for-profit organisations that are based on citizens banding together to make their voice heard—including disability advocates, carers advocates and conservation groups—would also not be able to donate. Yet, the highest net wealth individuals in our country would be able to donate. Under the Liberal Party's proposition "Twiggy" Forrest could still donate, to try to knock over a mining tax. But a not-for-profit conservation group could not give a brass razoo to support candidates who want to protect the environment or save our wild places. That is the real effect of what the Liberal Party advocates for.

The Liberal Party's millionaire mates, the highest net wealth individuals in the country, would be free to contribute, but not-for-profit voluntary associations—that are excluded from the political debate in this country—would not be allowed to donate to independent candidates, groups of candidates or parties that support their views. The Opposition amendment would restrict political expression to the individuals with the fattest wallets. It would leave the door wide open to the Liberal Party's wealthiest supporters but would close the door to workers, their representatives, and voluntary associations. That is the policy advocated for by Liberal Party members of this place.

Another amendment Opposition members have argued for is that affiliated third party donations be included in the spending cap of the political parties to which they are affiliated. The effect of that amendment, if it were carried, would be that employer associations would be entitled to spend up to the cap, that is, up to $1.05 million. Each and every one of them would be entitled to spend up to that cap. Employer associations who advocate on industrial relations laws, for example, would have that right, but employee associations would not. Employee associations would be excluded. Employee associations that commit the heinous crime of affiliating with the Labor Party would be barred by law from spending under the third party system. Employer associations would be in; employee associations would be out. Does that not tell members about the true motivation of the Liberal Party—the party that seeks to deny workers and their representatives the right to freedom of expression and to campaign for their rights, but seeks to give untrammelled rights to advocates for employers and to the highest net wealth individuals in this country? That is the real motivation of the Opposition when you strip away the feigned indignation of Coalition members as they speak against this bill.

The mantra—just like Tony Abbott's so-called great new tax on everything—has become "22 unions will spend $23 million". That is a blatant lie and those opposite know it. Unions spend nothing like that. I ask any member opposite, minded to go through the records of the 22 unions affiliated with the Australian Labor Party in New South Wales, to name one union that has ever spent anything like $1.05 million at any election in the history of this State. If there were such a union we would hear about it ad infinitum. It would be played over and over again on the tape: 22 unions giving $23 million, but the Opposition cannot find one giving $1.05 million. There is not one union, and there never has been one. It is a piece of rhetoric to cover up the fact that the Opposition does not want reform in this area. Donations are coming in left, right and centre, and the Opposition wants to keep it that way.

I turn to the issue of the third party spending cap. The Joint Standing Committee on Electoral Matters recommended that the third party spending cap be equal to the spending cap for parties contesting only the Legislative Council election. A sound reason exists for that: if the spending cap is lower than for a party contesting only the Legislative Council, then an obvious loophole exists and the third party will form a group to run for the Legislative Council to obtain the benefit of a higher spending cap. That is the proper justification for the third party spending cap being where it is. The third party spending cap is equal to the cap for parties contesting only a Legislative Council election. For example, in the past the Shooters and Fishers Party has contested only the Legislative Council election. Members viewing this bill with an open mind will accept that it follows the recommendation of the Joint Standing Committee on Electoral Matters on the third party spending cap.

The next question to be answered is: Why the amount of $1.05 million? That is a fair question. The Hon. Robert Brown would have a legitimate interest in what the spending cap for a party contesting only a Legislative Council election ought to be. The amount of $1.05 million is based on 21 vacancies at the Legislative Council election held every four years, on the basis of the fair and reasonable expenditure of $50,000—each seat has around 50,000 voters. The mathematics is not a State secret. The amount of $1.05 million is arrived at by calculating 21 vacancies multiplied by an expenditure of $50,000—or $1 for each elector in the seat. That is a sensible method of calculating the cap for parties that contest only a Legislative Council election. It is not a rort. It is sensible. What flows from that is the third party cap, which there is much indignation about. Logic dictates that the third party cap must be equal to and not less than the cap for parties contesting only the Legislative Council election. If the cap for third parties is less, then they will simply form a group—which is not hard to do—to get on a ballot paper and spend up to the limit getting their point of view across.

I turn now to donation limits. Political campaign donations, which are a valuable part of our democracy, provide an opportunity for people to participate in the political process and to express support for particular policies, candidates, groups or parties. Limiting donations, as this bill seeks to do, will reduce the influence of any one donor and will level the playing field between those with access to large funds and those without. A system of donations with no caps or limits, where those with the biggest wallets can donate as they see fit, has been debated in the community in recent years. That would leave our democracy open to predatory outside interests of those who seek to spend big in order to achieve favourable outcomes for themselves or their concerns. Donation limits are long overdue. Despite the heated differences amongst the honourable members of this House, I think a consensus is emerging that donation limits in some way, shape or form are a necessary part of reform in this area.

As I said earlier, if this legislation is passed I do not think that any future government will seek to repeal any law that places limits on donations. We know there will be ongoing reform in this area. I suspect that when the Commonwealth Government finally gets around to a reform package that it will result in this State taking a fresh look at its laws in this area. Reform is long overdue and the Commonwealth Government is yet to deliver on its commitment of comprehensive reform in this area. But it will come, and I hope that will be in this term of the Commonwealth Parliament. The New South Wales Government believes the time is long overdue. My party has a very proud history of electoral reform. It was the first plank in the 1891 fighting platform of the Labor Electoral League. My party has a long and honourable history of electoral reform in the interests of our democracy. This bill is another honourable reform: For the first time in any Australian jurisdiction caps will be placed on spending and donations, and public funding will be increased. I commend the bill to the House.

Mr DAVID SHOEBRIDGE [8.49 p.m.]: On behalf of the Greens I support the Election Funding and Disclosures Amendment Bill 2010 and give our broad support to the achievements in the bill before the House. Hopefully, the bill will be the first step in a generation of laws that will lead to the ultimate banning of corporate influence and the politics of corporate money in New South Wales. For the first time we will see limits on the amount of money that corporations can provide to political parties in this State. It is clear that a case for lower limits could be made. What is the current limit on donations from corporations to the Liberal Party, the Australian Labor Party or The Nationals? The limit is whatever they like; however much they feel they have to give in order to get the outcome they want from their political party of choice. It is utterly unlimited.

The amount of corporate donations that has been received by both major parties in the past few years is staggering. In the past 48 hours the Liberal-Nationals have suddenly decided that they have a passion for donation reform. In the past 48 hours they have developed a passionate argument and for the first time ever they are putting proposals before the Parliament to reduce the flow of corporate donations. We have not heard one prior speech or seen one prior bill or Act from the Liberal-Nationals about reducing corporate donations. Why has the Liberal Party not wanted to limit corporate donations before now? I have a small list of corporate donations in front of me. It is not a list of the top 10 or the top 20; it is a sample of the corporate money that has been going to the Liberal Party over the past four financial years.

In the 2007-08 financial year, Tech Dragon Limited donated $199,982. That is the amount this corporation was able to donate to the Liberal Party under existing laws. If this legislation is passed, the corporation will be able to donate $5,000 to the Liberal Party. That means $194,000 worth of influence that it will not be able to exercise. In the 2007-08 financial year, Chun Yip Trading Company donated $199,980. Again, if this bill is passed, that $199,000 worth of influence that this company has over the Liberal Party will reduce to just $5,000. The reforming zeal we are seeing from the Liberal Party has come so late because to date it has been benefiting by so much. In the 2007-08 financial year Paul Ramsay Holdings Pty Ltd gave the Liberal Party $100,000. In the 2009 financial year Stuka Pty Ltd gave the Liberal Party $75,000. This bill, if successful, will reduce the capacity of Stuka Pty Ltd to influence outcomes from political parties. Rather than having $75,000 worth of influence, it will have only $5,000 worth of influence.

The reforming zeal of the Liberal Party did not stop it from taking $62,500 from M. J. Somers Consulting Pty Ltd in 2007-08 and $62,500 from CBD Energy Limited. The amount of $62,500 seems to be a favourite donation from corporate Australia to the Liberal Party because that amount also came from Hunter Land Pty Ltd in 20070-08. Buildev Development Nsw (MR) Pty Ltd gave $62,500 to the Liberal Party in 2007-08. King Island Marine Research Pty Ltd donated $60,000 in 2007-08. Earlier I heard reference to the Rum Corps being bandied about. The modern Rum Corps is the Australian Hotels Association, one of the more corrupting industries in New South Wales. The Rum Corps gave the Liberal Party $55,000 in the 2009 financial year. From Rico Investments Pty Ltd came another $55,000 in the 2007-08 financial year.

Where was the reforming zeal when these buckets of corporate money were coming to the Coalition? It was not there. Its zeal for reform came when it realised that by politicking it can destroy the chance of actual reform. It thinks that it can wedge the politics of New South Wales and destroy the reforms that would stop the river of corporate donations I just referred to. Its zeal for reform is not based on principle or beliefs. Its principles speak in dollars.

The Hon. Charlie Lynn: It doesn't speak in 30 pieces of silver.

Mr DAVID SHOEBRIDGE: I acknowledge the interjection of the Hon. Charlie Lynn. The Australian Hotels Association donated $55,000. That is 55,000 pieces of silver. Give it back. The challenge I make to the Coalition is that if it is now so offended by the concept of corporate donations, as it says it is—and good luck to the Coalition because so am I—it can give it all back. I can make a commitment on behalf of the New South Wales Greens to give back corporate donations—we will give back every penny—because we have not received a single dollar from this river of corporate donations. The beneficiaries of corporate wealth and munificence have been the major parties. Up to now the Labor Party has been little better in terms of its reputation for taking corporate donations.

The suggestion has been made that by putting a cap on the amount of money that third parties can spend that it is somehow a gift to the unions. Let me be clear about this: As of today, before this bill is passed, what is the limit that unions can spend on any issue that is dear to them in an election campaign? There is no cap. It is totally uncapped. There is no restriction of $1 million or $2 million. They can donate whatever they choose. It is utterly unlimited. The Coalition and the Shooters and Fishers Party have raised a disingenuous argument that by putting a cap on third party campaigning expenses, for the first time ever, is somehow pandering to special interests. How could it possibly be a valid argument that capping the amount for the first time ever that unions can spend on campaigning expenses is pandering to the unions? Not only is this for the first time ever a cap on the amount that unions can spend, it is also for the first time ever a cap on the amount that corporations or any entity can spend in the course of attempting to influence the people of New South Wales in an election outcome.

The Greens are on record as strongly supporting a ban on corporate donations. If there were a genuine belief that as a result of the passage of this bill an amendment to ban corporate donations would survive the lower House and would not lead to the collapse of this donations reform package, it would get support. But such an amendment would not get support and the Opposition knows it. The Opposition is putting up this amendment as the straw man to try to destroy reform and to sink this package so that the river of corporate donations that I spoke of earlier can continue to flow to them coming up to the March election.

The Greens will put forward a series of amendments—and Dr John Kaye will speak to those—which will advance this bill further. I look forward to the debate on those amendments in Committee and to the substantial additional achievement that will be obtained by other proposed amendments. Is this a perfect package? No. Could it be tougher? Yes. Could we ban all corporate donations in a perfect world? Yes. But we do not live in a perfect world, and my observations of this Chamber are that it often produces imperfect results.

I find it rather strange that the criticism often levelled at the Greens is that we are so doggedly stuck on absolute principle that we are willing to sabotage a step forward—that we are willing to sabotage genuine reform. If I thought this legislation was nothing other than a paper package that produced no genuine reform, I would be happy to vote against it on principle. But this package will produce real reforms; it is a very substantial step forward. What a relief it will be to the people of New South Wales to find that corporate influence will no longer stretch to the $199,980 that Chun Yip Trading Company has over the Liberal Party today—that it will be limited to only $5,000. What a relief that will be to the people of New South Wales if this bill is passed.

As I said earlier, this legislation is the first step in what will hopefully be a continuing process of donations reform over the next generation and following generations. Money has a habit of finding a path around obstacles to obtain influence, and I imagine that corporate Australia will be looking at ways of subverting and moving around the limitations that have been put in this bill. Corporations will have their creative corporate lawyers looking at strategies to avoid the restrictions, and this Parliament will have to be willing to continually review the law and to continually improve and amend it to ensure that the loopholes that will be hunted by corporate Australia will be closed over time. If this bill passes and it becomes law and the following day the Coalition throught that it could improve upon it and it puts forward amendments to improve it—having supported this substantial reform—the Coalition would get the strong support of the Greens.

The real test will be when the Coalition has the numbers in the lower House. When Coalition members occupy the seats of government and are in receipt of substantial donations, will their reforming zeal stay? Will all the crocodile tears that we have seen tonight about corporate donations have any substance? If they do, the Coalition will have willing partners in the Greens to further limit the influence of corporate Australia and further limit the influence of money politics here in New South Wales. We look forward to moving the law forward over the coming years.

Dr JOHN KAYE [9.04 p.m.]: I speak on the Election Funding and Disclosures Amendment Bill 2010 and echo the words of my colleague Mr Shoebridge, who very eloquently presented the case for supporting this legislation and using it as a base to stop the rivers of cash that have flowed into New South Wales politics. Let us be clear: Election Funding Authority data shows that since 1999 more than $30 million from the liquor industry, from the clubs, hotels, from developers, tobacco companies, pharmaceutical companies, and the private health and gaming industries has poured into the coffers of the Liberal Party, The Nationals and the Labor Party. Those industries and groups have given more than $30 million to those political parties not for some altruistic reason, and not because they were perceived as charities, but specifically with the expectation of an outcome.

If one has a good look around New South Wales, one can see that that outcome is writ large. It is writ large in gaming machines, in alcohol outlets, in developments, in tobacco consumption and in the private health industry. It is a $30 million distortion of New South Wales politics and it has undermined the best interests of the people of New South Wales. That $30 million has simply showed that this is a State for sale to the highest bidder. The consequences have been appalling. Not only have we seen appalling decisions being made; we have also seen individual citizens being alienated from the political process and from democracy.

For the past one and a half decades the Greens have been saying very loudly that it is time to bring the rivers of cash to an end. A former member of this House, Lee Rhiannon, and Dr Norman Thomson created the Greens' Democracy4Sale website, which was one of the first steps towards exposing what has been going on in New South Wales. Citizens could go to the website, see the amounts of money that were going to the chief political parties and ask where the money was going and what it was doing. Since 1999 those key industries—alcohol, clubs, hotels, developers, property, tobacco, pharmaceutical, health and gaming—donated a huge amount of money: $17.3 million to the Labor Party and $12.8 million to the Coalition.

Throughout that period Labor was on the ascendency. But Labor is no longer on the ascendency—I hope that does not come as too much of a blow to its members. The Coalition is on the ascendancy now and it is about to receive rivers of cash. It is the Coalition parties that are squealing loudest and most vociferously because they are about to be shut out from the money that they thought they were going to get and that they thought was rightfully theirs. It is no wonder that there are more gaming machines per head of population in New South Wales than in any other State and most other jurisdictions around the world. It is no wonder that there has been a complete failure to deal with the alcohol industry, with even schedule 4 of the Licensed Venues Act being continuously undermined by political decisions. It is no wonder that Barry O'Farrell is now the favourite of the clubs and pubs. The most recent edition of Club Life displays a beautiful photograph of Barry O'Farrell and Andrew Stoner. They understand clubs and the clubs understand them. The rivers of cash will flow to them and in return those clubs will get more gaming machines under an O'Farrell government. That means more people addicted to gaming so that the Coalition can get more cash. That is what this is all about.

Let us be absolutely clear: This bill was not borne out of perfection. It was not written with a perfectly pure motive; nor is it a perfect bill. This bill is flawed in many ways. Despite what has been said by the Leader of the Opposition, the Greens do not claim that this is a perfect bill. We recognise that there are problems with it but we ask ourselves these simple questions: Will New South Wales be better off as a result of the passage of legislation or will it not? Will the rivers of cash be staunched? Will democracy be better off? Will democracy be more diverse, more dynamic and more participatory? Will it create a platform for future reforms on donations?

It must be understood that we will not get it right with this first step. Even if this were a superior bill, we would still need to revisit it next year, the year after and so on forever. We are trying to hold back the flood of corporate capital into political parties. Whatever legislation we come up with tonight will be probed; the barriers that we create to stem that flow of cash will be probed and prodded by those who seek to undermine the health of our democracy. They will look for loopholes and weaknesses. This not a task that can be achieved overnight; we will need to revisit it. The pertinent question is whether this legislation is a step forward and whether it builds a platform for future reform.

The proposed legislation is not perfect. It still allows corporate donations, and that must be addressed. It also fails to regulate third parties in a meaningful way and it fails to restrict candidate and party spending in a way that will drive the cash out of politics. However, it does achieve some very important outcomes. For the first time in New South Wales we will have a limit on campaign donations of $2,000 to a candidate and $5,000 to a political party. That is a significant step forward when one considers the corporate donations that have flowed into the coffers of all three major political parties, and it is clear that this legislation will have a substantial impact on that flow. It is therefore hardly surprising that the Coalition is in a state of high blow-back and that it is saying appalling and dishonest things about the Greens. It is doing everything it can to undermine this legislation and to stop its passage. Opposition members know there are corporations that want to give them far more than $5,000. The Greens want to ban all corporate donations. That has been our position from day one; it remains our position, and it will always be our position.

The Greens also believe that a limit of $2,000 on donations from individuals is too high and that $200 would be more appropriate. For the first time, this legislation imposes limits on how much can be spent by political parties. It is the first attempt to put an end to the arms race between political parties that resulted in appalling election campaigns in 2003 and 2007, when both major political parties spent millions of dollars on advertising that conveyed no information. They were a complete waste of money and represented the alienation and corruption of democracy.

The campaign expenditure cap of $9.3 million is much too high, as is the $100,000 cap on candidate expenditure. Those caps should be reduced to, perhaps, $4.5 million or less for parties and $50,000 for individual candidates, but at least the legislation imposes some caps. For the first time we are moving from unregulated expenditure to capped expenditure. Members can scream and shout about this legislation, but it does impose caps. Perhaps the caps should be set by someone else or they should be lower, but we now have a base from which to work.

This legislation also creates a public funding model that allows parties to begin to reduce their addiction to corporate cash. It is not a perfect public funding model, but it is certainly better than the model the Premier initially put on the table. It is fairer and it will allow smaller parties to survive and thrive. I was fascinated to hear the misinterpretations by Robert Brown and Robert Borsak of what I said at the meeting to which they referred. Robert Brown's interpretation of what I said was totally incorrect; he put his spin on it. However, that is not the point we are debating.

This funding model ensures that new and emerging parties and small political parties have an opportunity to thrive and survive. That is important. I believe that the Greens have a good idea of what is right and what is wrong. However, I do not believe that we have a stranglehold on truth; I do not believe that any political party has the final word about what is right and what is wrong and what is best for New South Wales. It is not up to us to determine who should be come into this place; it is for the voters to determine who they want representing what ideas in this Chamber. We should not be making that determination and we certainly should not be locking up politics for the three largest parties, making it just survivable for the Greens and driving out the other small parties.

I have some substantial disagreements with members of the other minor parties represented in this Chamber, but I welcome their presence. It is important that our democracy is diverse and dynamic. If members want to see a democracy that is no longer diverse and dynamic, they should look at a failed democracy in which the big parties have locked the doors against smaller parties and shut out all challengers. The Greens make no apology for having negotiated with the Labor Government to get a better public funding model that will secure a democratic future for New South Wales that encourages new ideas and allows voters to test them and to reject or accept them.

This legislation also imposes some limits on third parties. Those limits are much too high, we accept that, but reforming campaign donations is a very complex issue. I know that the Opposition Whip would accept the argument that achieving regulation of third parties requires a fine balance between two competing objectives. The first is to close loopholes to prevent political parties outsourcing advertising to dodgy third parties. The United States has a group called the Swift Boat Veterans for the Truth—which is hard to say and even harder to believe. We know that the emergence of groups like that is a bad thing and we do not want it to happen here. On the other hand, the worst thing we could do would be to stop the democratic formation of organisations that genuinely represent ideas and to stifle their voice during an election campaign. It is a fundamental right of all citizens of New South Wales, in fact of the citizens of any democracy, to get together and to express a collective point of view. The Opposition Whip said that the most terrible thing about this legislation is that it will encourage third party activity.

The Hon. Don Harwin: I did not say that.

Dr JOHN KAYE: I retract that statement. That is what I thought I heard the member say. Perhaps it was Trevor Khan. I should not foist Trevor Khan's sins on the Opposition Whip; that would be unfair. That this legislation encourages third party activity is not a negative outcome. It is important that we have a democracy with many voices. I must admit that I deeply fear some third parties, but we must have faith in our democracy that other third parties will counter them and make their voices heard.

The passage of this legislation also provides us with the opportunity to ban donations from the tobacco industry, which kills 6,000 people and hospitalises 42,000 people each year. The industry costs this State $6 billion to $8 billion a year in social and health costs. It thrives on the pain of people who are in the clutches of a drug. Driving that industry out of the political domain is very important. The Greens will have much more to say about that industry during the Committee stage.

The acid test is whether we will be better off or worse off if this legislation is passed. The Greens—a party that is committed to a strong democracy and driving money out of politics—believe that this legislation is a step forward. It is not a perfect step, but it is a step in the right direction. We look forward to taking the next step with whoever wins the election next March. We have heard many great things from the Opposition in recent times. Mr O'Farrell has said that he would prefer it if only voters were allowed to make donations to political parties—there should be no donations from unions or corporations. That is terrific, bring it on. We will work with the Coalition to get that through.

The Hon. Don Harwin: We are bringing in on tonight.

Dr JOHN KAYE: You are not bringing it on tonight. You are bringing on amendments that will abort this legislation before it has had a chance to make it through. I will have more to say on that in a moment. We are willing to work with whoever is next in government to fix these problems. We will put our own models on the table. We will continue to campaign for an end to corporate donations to political parties. We will continue to campaign for regulations on third parties that respect democracy but also close the loopholes. We will continue to campaign for restrictions on expenditure that allow people back into politics and to make them decision makers, rather than those from the big money end of town. Public debate on this legislation has been marked by a lot of "Do as I say, not as I do". Mr O'Farrell has been out there putting himself forward as the new, pure mouthpiece for ending donations from corporations.

The Hon. Don Harwin: He has been saying it for four years.

Dr JOHN KAYE: That makes my point even stronger. But he is carrying $12.7 million in his political coffers from corporate donations. If he were serious about this, he would join with the Greens and reject corporate donations. He would reject donations from unions, if they were of a mind to give donations to him, and he would reject donations from corporations, as Greens New South Wales have done and as we will continue to do. We do not take money from corporations. Let me say that again because Mr O'Farrell badly misled listeners to the Ray Hadley radio show this morning: Greens New South Wales do not take donations from unions.

A good place to start, if the Coalition wants campaign reform, is with itself. It should show the way. I say to the Coalition that if it is serious about these issues, it should show the way. It should start rejecting those campaign donations, join with us and show that it can be a clean political party. A good place for the Coalition to start would be to reject the money it takes from the tobacco companies—$607,000 since 2003, which was money it did not need to take, and money that is derived from human misery and the deaths of 6,000 people and the hospitalisation of 42,000 people who are hospitalised each year as a result of smoking tobacco.

Much has been made in this debate, both in this Chamber and outside the Chamber, of the Greens motive. The first allegation that came from Mr O'Farrell and the Coalition was that an alliance has been formed between the Greens and the Labor Party. Let us unpack this. We negotiated with Labor for an outcome that passed our test. If that can be said to be an alliance, then in relation to Tillegra Dam we are in an alliance with the Coalition because we regularly vote with the Coalition on that issue. We welcome that situation and we congratulate the Coalition for its position on that issue, and we particularly congratulate Robyn Parker on taking the Coalition to an anti-Tillegra position. But are we in an alliance with the Coalition? No. We work with the Coalition and we work with Labor. The other night we even voted with all the conservative crossbenchers. This is not about alliances. It is an immature and childish view of politics to say that because one agrees with somebody on a particular issue one is in an alliance with that person. How appalling and how constricting on the future of democracy is it to say that because one agrees with somebody one is in an alliance with that person. There is no alliance here with Labor. If you do not believe me, look at what is going to happen in Balmain, Marrickville, Coogee and the Blue Mountains.

The Hon. Robyn Parker: And Maitland.

Dr JOHN KAYE: I do not know that we are going to win Maitland, but that is another story. The most offensive suggestion is from Mr O'Farrell that this was about 30 pieces of silver. When Mr Brogden used that expression, he was required to retract it. We are not that sensitive; we understand that Mr O'Farrell likes to use colourful language. He is not really concerned about the impact of that language. Let us examine Mr O'Farrell's colourful reference to 30 pieces of silver. Let us start with the idea that this bill will drive corporate money out of the political process. It is a commonly accepted fact—and this is true in Canada, which the Opposition has often quoted as an example—that public funding must be increased if corporate donations are genuinely to be reduced. If we are going to increase public funding, that means all political parties will get more. We rejected the tiered funding model because we saw it as slamming the door on political parties entering the political process and locking up the system for Labor, The Nationals and the Liberals. Maybe the Greens would survive, but certainly the conservative crossbenchers would be shut out and, more importantly, the new and emerging parties that will come behind us to challenge many of us will also be shut out. I hope that we will be challenged because that will be good for democracy.

Is there any truth in Mr O'Farrell's reference to 30 pieces of silver? Who will really gain from the model we negotiated. Yes, the Greens will receive a 103 per cent increase in funding—we will double our funding. We do not resile from that because at the same time that we will get an increase in funding of 103 per cent, Labor will get a 128 per cent increase. So, one of the two parties that negotiated this legislation will get a 103 per cent increase and the other will get a 128 per cent increase. What about the Opposition Whip's party, the Liberal Party? It will get a 200 per cent increase. What about Ms Gardiner's party, The Nationals? They will get a 259 per cent increase. Reverence Nile's Christian Democratic Party will get a 180 per cent increase. The Shooters and Fishers Party will get a 400 per cent increase. So if it is suggested that the Greens negotiated for 30 pieces of silver, then the Labor Party will receive 38 pieces of silver, the Christian Democratic Party will receive 54 pieces of silver, the Liberal Party will receive 60 pieces of silver, The Nationals will receive 78 pieces of silver and the Shooters and Fishers Party will receive 120 pieces of silver.

Let us be absolutely clear: The Greens did not enter into this to feather our own nest. The evidence shows clearly—and I want the Opposition to admit this—that we did not go into this for numbers. If we did, we did better for the Opposition than we did for ourselves. Indeed, we did far better for Labor, the Shooters and Fishers Party and the Christian Democrats than we did for ourselves. The two parties that negotiated over this suffered the worst out of the public funding model. The 30 pieces of silver reference is a libel against the truth. The Opposition will continue to say it and it will continue to damage its credibility by pushing that line.

The third issue is the whisper that this is a preference deal. There is no such thing. Members will have to wait and see, but I assure them here and now that there is no preference deal. Let us be clear what is really happening here; let us get to the bottom of what is going on. We have a coalition of The Nationals and the Liberal Party that has not done so well with campaign donations over the past decade. Over that time it has received only $12.8 million in campaign donations while the Government has received $17.3 million. All of a sudden, as we approach an election that it seems the Coalition will win, and in which the big end of town is more interested in buying the Coalition's influence than that of Labor, the Greens and Labor get together and say "Let us clean up politics." Of course the Opposition squeals because it is missing out on the big bucks. But this is not about the Opposition, Labor or the Greens. This is about the future of democracy. Let us get serious about protecting democracy. Let us not talk about our own patches. I conclude by making some observations about Mr Khan's speech.

The Hon. Michael Veitch: He gave us a lecture.

Dr JOHN KAYE: Yes, he gave us a lecture about morality. He said that he stands up for principle, often to his own detriment, and that the Greens were not standing up for principle because they are not prepared to act to their own detriment. That is a nice set of lawyer words and I congratulate him on his smooth construction. However, like many lawyer words, they happen to be wrong. This is not about doing things in our best interests. It is about doing things in the best interests of New South Wales. Support for the Coalition's amendments would be in the worst interests of New South Wales.

We have a chance to move forward. The Government and the Premier have stated clearly that the Coalition's amendments are unconstitutional and will kill the legislation. When the Coalition has a majority in the lower House—it may happen one day—it will then be in a position to act, but not at the moment. What is relevant is what will pass through the lower House. The Government says that it will kill off the bill in the lower House and not reintroduce it. If this House passes the amendments, we will have killed the bill. Of course we want to vote to end corporate campaign donations so that only individuals eligible to vote can donate. It would feel good to support the Coalition's amendments—we would love to do it—but we would be killing the bill and it would be back to square one. There would be no restrictions on third parties, no restrictions on campaign expenditure and no restrictions on donations.

Mr Khan talked about encouraging third parties, and I spoke about that earlier. I conclude by acknowledging the people who have worked in this area and who have done great things. I acknowledge Damian O'Connor, former Assistant General Secretary of the Australian Labor Party, New South Wales. To my knowledge Mr O'Connor was the first person outside the Greens to stand up and say it was time to staunch the rivers of cash. A number of people from both political parties have made public pronouncements and have taken the debate forward. I acknowledge that four years ago Mr O'Farrell began his belated journey on the road to Damascus. I also acknowledge Carmen Lawrence, Paul Keating and John Faulkner, who in their own way helped us to get to this point. Across the board there are people who want this reform. Let us take the first step tonight. Let us not play the game of destroying the bill by passing nuisance amendments. Let us make this the first step towards cleaning up New South Wales. Let us make this the first step towards ending democracy for sale.

The Hon. JENNIFER GARDINER [9.31 p.m.]: In speaking to the Election Funding and Disclosures Amendment Bill 2010 I reflect upon some of the contributions to the debate. The Hon. Luke Foley claimed that he was a long-term supporter of campaign finance law reform. I remember another Sussex Street operative coming into this place and arguing a similar case for donation reform. That person was the Hon. Eric Roozendaal. In his inaugural speech he said:

He called for a bipartisan approach to reform, and stated:

That is the problem with this bill: it does not achieve a fairer political process. Yet the Hon. Eric Roozendaal is a Cabinet Minister who drafted the bill. He is not interested in genuine bipartisanship, and nor is the Government. He and his colleagues are not interested in a fairer political process, which is one reason that the bill is deeply flawed. During his contribution the Hon. Luke Foley quoted Professor Anne Twomey, who advised the Labor Government and the Premier—and Mr Iemma in the past—about debate on campaign law reform. However, the Hon. Luke Foley did not quote what Professor Twomey has said about the bill. This week she said that the High Court would be likely to look unfavourably on a provision that favoured one type of political entity over another. She said:

The bill treats one side of politics differently from the other, and its Achilles heel is that it does not respect the principle of fairness. It is lopsided with respect to donations by Labor Party affiliated unions. I wonder why the Hon. Luke Foley did not quote Professor Twomey. His analysis of the Opposition's amendments was utter garbage. While I am on the subject of trade union donations, let us not forget that in the run-up to the recent Federal election the Victorian branch of the Electrical Trades Union donated $325,000 to the Greens campaign for the House of Representatives seat of Melbourne.

Ms Cate Faehrmann: In Victoria.

The Hon. JENNIFER GARDINER: Yes, Melbourne is in Victoria. Maybe that is part of the story behind the Green's thinking on this bill. In his contribution Mr David Shoebridge said that in the past 48 hours the Liberal Party and The Nationals have developed a passion for reform. That is patently untrue. Mr Shoebridge was elected only recently to this place. He does not know—Lee Rhiannon would be able to tell him—about the work undertaken by Opposition members, some Government members and Ms Rhiannon during two parliamentary inquiries on this issue, one of which was initiated by my colleague the Hon. Don Harwin and the Coalition. A leading and consistent campaigner for law reform across the entire Australian political framework is the Leader of the Opposition, Barry O'Farrell. He campaigned on this issue from the minute he became the leader of the parliamentary Liberal Party and Leader of the Opposition.

In his contribution to the debate Dr John Kaye stated that the bill is not perfect because it still allows corporate donations. In a few minutes the Greens, including Dr Kaye, will have the chance to wipe out corporate donations. Dr Kaye does not have to wait for a different Parliament to do it, he does not have to wait for a different government to do it—one that is genuinely committed to wholesale reforms—and he does not have to wait beyond midnight. He can do it today. This is the real test for the Greens, particularly with the departure of Lee Rhiannon. Will the Greens step up or will they wimp out? I bet they wimp out.

The Hon. Trevor Khan: No ticker.

The Hon. JENNIFER GARDINER: They have no ticker. This is the Greens' greatest test when it comes to their claimed integrity. They moralise in this place: they talk about morals in politics. This is the night that they are put to the sword. Donation reform and disclosure reform have been part of an ongoing campaign led by the Liberal Party and The Nationals. The foreshadowed Coalition amendments to be moved in this place, as in the other House, would limit donations to those made by individual voters—to Australian citizens enrolled to vote in New South Wales elections. This was resolved as The Nationals policy at its annual general conference three years ago. The membership of the party, which makes general policy, resolved that only individuals enrolled to vote should donate to political parties. Therefore, corporations, unions and other third parties would be ineligible to donate to parties and to candidates. The bill shows that Labor is not fair dinkum about this issue while The Nationals and the Liberal Party have been fair dinkum about this reform for a long time.

Anyone who is interested in this subject should consider what has happened in Canada. Two parliamentary inquiries noted that Canadian statutes have been toughened over a period of years to limit political donations to a capped amount of about $1,000. Since 2006 contributions from corporations, trade unions and associations have been banned altogether. As I have said, that is the policy of the party I represent in this place. The Nationals policy supports a cap on donations, which would be modest, as well as a cap on campaign expenditure.

As you would appreciate, Madam President, there is a desperate need to clean up New South Wales politics—to make a fresh start. But this bill is not the way to do it. Two recent parliamentary inquiries have made recommendations to the Parliament on this issue. The most recent of them was the inquiry of the Joint Standing Committee on Electoral Matters. Mr Nathan Rees, the then Premier, gave the committee its draft terms of reference on 17 November 2009—one year ago next week. In a letter to the committee suggesting amendments to the draft terms of reference, Mr Rees wrote that "the terms of reference make clear that the present inquiry is intended to build upon the earlier work of the Select Committee on Electoral and Political Party Funding", which is the select committee we initiated in this House and which had great multi-party support. Even the Greens supported the committee's recommendations, despite the fact that they were not represented on that committee. Lee Rhiannon went to the media and said, "We support the select committee's recommendations." In his letter to the committee Mr Rees wrote:

That is what the former Premier said one year ago. Of course, Mr Rees was falling on hard times. He was desperate to clean up the Labor Party because that was the only chance it had of retaining government. In an appalling move and as a precursor to the way this bill has evolved under Mr Rees' successor, Kristina Keneally, Mr Rees used the first meeting of the committee that was called to adopt the terms of reference as the backdrop for a media stunt.

I have served on many parliamentary committees but I have not seen a Premier, a Minister, or anyone else, use a parliamentary committee in such a crass fashion. But Mr Rees was trying desperately to get on the front foot on campaign finance law reform. No Labor Premier, whoever it was, could face the people without getting an election finance reform bill through this Parliament. As my colleague the Hon. Don Harwin recalls, Mr Rees marched through the door with the cameras blazing. It was such a rushed episode that the Labor machine had failed to ensure that its members on the Joint Standing Committee on Electoral Matters knew to be there to support their beloved leader. So the Labor Party, in one of the most ironic moments in the history of this debate, had to rely on the goodwill of the Hon. Don Harwin and me, the Hon. Jennifer Gardiner, to allow Mr Rees to continue his stunt because without us the committee did not have a quorum. The Hon. Luke Foley can say that we on this side are not genuine about reforming these laws, but you cannot get more genuine than that. We stayed there because on our side of politics we believe these laws should be comprehensively reformed. We could have walked out—and Nathan Rees would have looked like even more of a goose that he did a few days later—but we stayed because we believe in reform.

The culture of the New South Wales Labor Government obviously has degenerated over the past 15½ years. Labor's reputation has been trashed, and a lot of the damage flows from Labor's donations-for-decisions culture. One might say that this bill is yet another stunt. One of the most striking things about the bill is that it took the best part of a year to make it to Parliament—and that is not counting the false start made by former Premier Morris Iemma. Nathan Rees started the penultimate part of the reform process in November last year. It did not save him: he was dispatched as Premier and parliamentary leader of the Labor Party shortly thereafter. A couple of weeks after Nathan Rees' media stunt the long suffering New South Wales Electoral Commissioner, Mr Colin Barry, warned at a Joint Standing Committee on Electoral Matters hearing that time was slipping away for such significant changes as envisaged in this bill to be implemented. That was a year ago. It is indicative of the degree of dysfunctionality of the New South Wales Labor Government that it has taken until the last sitting days of the last year in the life of this Parliament for the Government to even get the bill to this place. I must say that I sympathise with the Electoral Commissioner and his staff, who will administer this legislation once it is passed by Parliament.

During the discussion by the Joint Standing Committee on Electoral Matters about the best possible framework for these reforms, many references were made to the fact that a draft exposure bill would appear in advance of the debate on the reforms. That was one reason why Mr Rees wanted the committee to report in March. To save about four weeks, the Joint Standing Committee on Electoral Matters kept to Mr Rees's timetable. We respected that timetable. It is now November. The bill was debated only yesterday and today in the Legislative Assembly, and we are now debating it in the Legislative Council. As we know, no exposure bill appeared, and of course any pretence of bipartisanship regarding the bill has fallen away in recent days.

The nub of the need to reform the electoral laws in this State is exposed by the raw data that show that the Labor Party spent $16.7 billion on the 2007 State election campaign, which saw the re-election of the Iemma Government. That was the biggest campaign spend in Australian political history. So if the Hon. Eric Roozendaal started his parliamentary life saying that the arms race in campaign spending was dangerously unsustainable, obviously 2007 would have blown him away. The bill, in its present form, would allow the Labor Party to expend $100,000 per candidate in each of the 93 seats contested—providing Labor can find 93 candidates—or a total of $18.6 million. That is more than was expended in the 2007 State election campaign. A new record may be set, making a mockery of the Labor Party's claim that the bill will act as a dampener on campaign expenditure.

New South Wales Labor has 22 unions affiliated with it. Under third party expenditure provisions those unions collectively will be able to spend up to $23 million. That is $46 million on one side of the election campaign ledger. That is not the "right balance" that the Parliamentary Secretary, on behalf of the Government, spoke about when he introduced the bill in this place. It is a skewed outcome—indeed, it is so skewed that the integrity involved in passing this bill is undermined. This bill delivers no hope that the discredited, dissolving and disgraceful New South Wales Labor Party has seen any light, let alone a light on the hill. The Labor Party still has a long way to go downhill before it can restore any of its reputation. The Joint Standing Committee on Electoral Matters heard a substantial body of evidence from constitutional law experts. In speaking about the goals of a reformed funding scheme, Professor George Williams emphasised the importance of fair and reasonable measures. He said:

I think constitutionally so long as you have a scheme that you have a sound and robust reason for enacting and that you can demonstrate is fair and reasonable and has caps that are appropriate, then I think they are the sorts of goals you need to get to. For me here the issue again is not so much the constitutional impediment, although there is an issue here you need to address, but just how you design it in a way that actually achieves that goal of fairness without building in, as the prior scheme did, a bit of a loading one way or the other.

The Opposition's problem with the bill is that the goal of fairness is absent, which is a sad state of affairs. There is also a bit of loading one way but not the other. Professor Orr, another constitutional lawyer who addressed the standing committee, said that the State Labor Government had been talking about but not acting on law reform. He told the standing committee that in the absence of consistency with other jurisdictions, New South Wales public funding laws would have to apply to State candidates; nevertheless, reform should not be delayed in the interests of uniformity.

One of the reasons we have waited so long for this bill is because successive New South Wales Labor Premiers have been waiting for the Federal Labor Government to act. Because the Federal Labor Government did not act, the New South Wales State Government did not act. Nothing has happened in Canberra since John Faulkner was transferred from the portfolio of Special Minister of State. Professor Orr also said that there is no reason for New South Wales, or any other jurisdiction, to wait years for the Commonwealth to act. Experimentation is a strength of federalism. Indeed, it was New South Wales that led the way in 1981 with public funding and disclosure laws. Further, even if uniformity were achievable in 2010, it will likely unravel in future years as governments of different hues come to power at different levels and as regulators in different jurisdictions react to different experiences. There is no good reason for the Iemma, Rees and Keneally governments to have been such slowcoaches in introducing this bill.

The Hon. Trevor Khan: No legitimate reason.

The Hon. JENNIFER GARDINER: Yes, no legitimate reason. They probably had their nefarious reasons, which will be highlighted later this evening. Dr Twomey told the Joint Standing Committee on Electoral Matters that consideration needed to be given to "swamping" by third parties. She suggested that third party expenditure caps might be set with reference to the cost of running a modest campaign. The bill ignores that advice; obviously the Government does not always take the advice of Dr Twomey. Dr Joo-Cheong Tham told the standing committee that the third party expenditure caps should recognise the privileged position of candidates and parties by virtue of the fact that they are contestants: the ones competing for public office. He said:

He is right. Unions are money funnellers to Sussex Street. The unions call the shots and this Labor Government acts. The bill is further evidence of that. The Greens submission to the Joint Standing Committee on Electoral Matters inquiry expressed the view that restricting third party expenditure as part of comprehensive reform would be a "reasonable and legitimate restriction". It stated "this is especially the case if they are done as part of comprehensive reform as suggested in this submission as the relative voice for such third parties will be significantly increased by reason of the lesser spending power of the registered political parties and their associated entities." The Greens support restricting expenditure in election campaigns, but not too much. The Greens are not prepared to come down heavily on this aspect of the bill in relation to the Australian Labor Party affiliated unions.

In the wake of the recent Federal election I was interested to note that the agreement reached between the House of Representatives Independents, who were elected to the Federal Parliament in August, and the Gillard minority Government included a reference to election campaign reforms. But that reference is weak and it was necessary for this Parliament to go ahead without uniform laws, which are expected any time soon. It is a pity that the New South Wales Labor Government has fallen down on the job so badly. The Parliamentary Secretary mentioned in his second reading speech that he opposed the idea of a framework that would allow the drowning out of competitors in the electoral contest. He also said, when commending the bill to the House, that the bill strikes the right balance. The Liberal-Nationals Coalition does not agree. The bill is unbalanced; it is skewed. It allows for swamping of one side of politics by the other. It adds to the stink of all that is rotten in the State of New South Wales.

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [9.55 p.m.], in reply: I thank all members for their contribution to the debate. The Election Funding and Disclosures Amendment Bill 2010 has several objectives. First, the bill reduces the risk or perception that access to government can be purchased or that donors may be in a position to exercise undue influence. In this way the bill will improve confidence in impartial decision-making. Secondly, the reforms provide for a more level playing field for candidates seeking election, as well as for third parties who participate in the political process and who want their voice to be heard. This ensures that all interested parties are able to engage in political debate. Thirdly, the adoption of expenditure caps places a limit on the political "arms race": a race that has driven the demand for political donations, and in which those with the most money can have the loudest voice and simply drown out the voices of all others. Finally, and perhaps most importantly, the reforms will help to give voters a better opportunity to be fully and fairly informed of the policies and perspectives of all political parties, candidates and interested third parties. It protects the right of the people to hear all sides of the political debate and to form their own informed view about any issues.

The bill is not about stifling or limiting political debate: it is the opposite. The aim of these reforms is to make elections a true battle of ideas and policies, rather than simply who has the deepest pockets, the most generous donors and the largest advertising budget. As was discussed at great length in the evidence given before the Joint Standing Committee on Electoral Matters, there is a clear constitutional limit on the ability of the New South Wales Parliament to legislate in this area. Any New South Wales law that interferes with Commonwealth elections or burdens the implied freedom of communication about political matters could be exposed to constitutional challenge. It is of course appropriate in legislating in this area that similar considerations be applied to State political matters. It is also important to realise that the recognition of this freedom of political communication is ultimately about ensuring that government remains both representative and responsible.

The bill has been carefully drafted to target State elections. It has also been developed to satisfy the test set down by the High Court in the Lange case. The Government believes the reforms in the bill are reasonably and appropriately adapted to serving a legitimate end in a manner that is compatible with our system of representative and responsible government. The bill is not only compatible with our system of representative and responsible government, but protecting and enhancing that system is the very end to which the bill is ultimately directed. To that end, the Government is satisfied that the right balance has been struck. Sensible limits have been set for donations to candidates and parties. The expenditure caps that have been adopted are set at a level that allows for an informative and robust campaign to be run, but at the same time puts an upper limit on spending. Third parties are regulated in such a way as to ensure that genuine third party campaigners can exercise their legitimate right to participate in the electoral process, but not circumvent the parties and candidates. Parties and candidates have been compensated for the loss of donations by an expanded public funding regime based on a reducing sliding scale, designed to discourage candidates and parties from spending up to their limit just because they can. New South Wales has taken the important first step. But, as was made clear by the Premier when introducing this bill in the other place, to effect comprehensive and effective regulation of this area the Commonwealth must introduce complementary laws to regulate Federal donations and campaign expenditure.

A number of minor matters have arisen since this bill was introduced in the other place that I want to address. The first matter relates to electoral expenditure before 1 January 2011. Given that the regulated period will commence on 1 January 2011, it has been pointed out that some candidates and parties will have already started incurring electoral expenditure before that date. This expenditure would not be claimable under the proposed scheme. The Government will develop a transitional arrangement whereby consideration will be given to funding electoral expenditure incurred between 1 July 2010 and 1 January 2011, so long as the additional claim does not exceed the applicable expenditure cap for the regulated period. This will be done by regulation.

In relation to the definition of "administrative expenditure" in section 97B, there is no explicit mention that payments to a party's national organisation come within the definition. The Government is of the view that section 97B is broad enough to encompass the legitimate administrative costs of running a political party in New South Wales, including payments to a party's national organisation for legitimate and substantive administrative services. Of course, it would not be possible for a Federal branch of a party to artificially inflate Federal levies to a New South Wales party in order to take advantage of the public funding that will now be available in New South Wales.

Queries have been raised as to what can and cannot be deposited into the State campaign account, as required under section 96. Section 96 (5) details what may be paid into the account and section 96 (6) provides what may not be paid into the account. It should be noted that these lists are the subject of a regulation-making power. Therefore, it will be possible to add to the list, if necessary. However, the Government amended the bill in the other place to expressly include bequests to a party in section 95 (5) as money that can be deposited into the State campaign account. In conclusion, New South Wales is leading all other Australian jurisdictions in this area. In order for there to be effective regulation and control of this area all other Australian jurisdictions, particularly the Commonwealth, must pass similar complementary laws. I commend the bill to the House.

Question—That this bill be now read a second time—put and resolved in the affirmative.

Motion agreed to.

Bill read a second time.

In Committee

Clause 1 agreed to.

The Hon. DON HARWIN [10.03 p.m.]: I move Opposition amendment No. 1:

3 Amendment of donation and expenditure caps by Auditor-General

Election Funding and Disclosures Act 1981

Amendment No. 1 inserts after line 5 on page 2 an amendment that deals with the commencement of the bill and substitutes an arrangement to give effect to the depoliticisation of the setting of donation caps and expenditure limits, as I foreshadowed in my earlier remarks. With this amendment, the setting of caps and limits will be vested in the Auditor-General. The Opposition believes that this arrangement establishes transparency and enhances integrity. It is consistent with the policy the Opposition released some time ago when it took the view that donation and expenditure caps should be set by the Auditor-General. I commend Opposition amendment No. 1 to the Committee.

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [10.05 p.m.]: As was said in the other place, determining caps on donations and expenditure is a policy decision for the Parliament. This is a genuine opportunity for real reform. The Government does not want to leave it to someone else. These tactics are typical of the Leader of the Opposition, who moved this same amendment in the other place. Once again we see Mr Barry O'Farrell ask, "Can't someone else do it?" He is always ready to pass the buck to someone else when difficult decisions need to be made or action needs to be taken. Not only is Mr O'Farrell seeking to pass the buck, but in doing so this amendment empowers the Auditor-General to amend the Election Funding and Disclosures Act. That is going too far. A body has been elected by the people of New South Wales to be responsible for making laws: the Parliament. It is Parliament's responsibility to make this policy decision. On a separate note, it is also important that candidates considering contesting the election next March have certainty. This requires that they are aware of their donation and expenditure caps as soon as possible. The Government will not support this amendment.

Dr JOHN KAYE [10.06 p.m.]: The Greens do not support this amendment, in part for the reasons outlined by the Parliamentary Secretary, the Hon. Michael Veitch. In addition, we have grave concerns about the further politicisation of the Auditor-General. On a number of occasions we have talked about the importance of independent auditing and the independence of the Auditor-General. Dragging the Auditor-General into the heart of the political process by having him or her set the outcome is, in our opinion, a dangerous step in the removal of the independence of the Auditor-General. For that reason and for the reasons outlined by the Parliamentary Secretary, the Greens will not support this amendment.

The Hon. DON HARWIN [10.07 p.m.]: I hear the argument given by the Government and the Greens. It is a predictable one and we profoundly and respectfully disagree. Nevertheless, I commend amendment No. 1 to the Committee.

Reverend the Hon. FRED NILE [10.07 p.m.]: The Christian Democratic Party supports this amendment, which gives the Auditor-General the power to make any changes he considers appropriate. If he takes the same view as Dr John Kaye and the Parliamentary Secretary, he will consider that the changes are not appropriate and not do anything. This amendment leaves the option open to the Auditor-General. It does not force him to interfere in the legislation. He may make any changes that he considers appropriate. I have confidence in his judgement.

Mr DAVID SHOEBRIDGE [10.08 p.m.]: In the course of the joint standing committee's discussion on electoral reform, the suggestion was made that the Auditor-General take some part in the oversight of electoral funding. I omitted earlier to acknowledge the efforts of the Hon. Jennifer Gardiner, who was a member of the committee, in the committee inquiry. I do so now. The Auditor-General, in submissions to the committee, made it clear that he did not want any part to play in the oversight of electoral matters. He thought it conflicted with the duties of the Auditor-General, which are essentially non-political. That is sufficient reason of itself not to support this amendment.

The Hon. DON HARWIN [10.09 p.m.]: Reverend the Hon. Fred Nile made an excellent point, which I should have made and articulated more clearly myself, but I commend him for it. I have to take issue with what Mr David Shoebridge has just said. It is indeed true that Mr Achterstraat has that view as one individual Auditor-General. But he is the only person to hold that office, that I am aware of, who has that view. It is certainly not the view of the Commonwealth Auditor-General and it is certainly not the view of the Auditor-General of Ontario in relation to being vested with those sorts of roles; for example, in government advertising.

In my view it is not for Mr Achterstraat as an individual to tell the Parliament what the Parliament believes the role of the Auditor-General is. It is for the Parliament to decide what the role of the Auditor-General is. If Mr Shoebridge is being fair dinkum about this debate he should concede that it is the view of just one individual; it is not necessarily the view of a large number of Auditor-Generals who undertake—

Dr John Kaye: Auditors-General.

The Hon. DON HARWIN: Thank you. I acknowledge the interjection of Dr John Kaye.

Dr John Kaye: I am thrilled to have actually done that for you for once.

The Hon. DON HARWIN: Thank you. I think I have done it for you a couple of times. As I said, a number of Auditors-General take the view that it is quite okay for them to exercise a sort of independent oversight role. I believe the amendment should be supported.

Mr DAVID SHOEBRIDGE [10.11 p.m.]: There is one important point about the Auditor-General having an opinion as the Auditor-General: he is the Auditor General who the Opposition is intending to give these powers to. That person does not believe it is appropriate to exercise that power. The Opposition is not giving it to the Auditor-General of Ontario—at least that was not how I read the amendment. Furthermore, the committee did not challenge the Auditor-General on that opinion. Indeed, as I recall the recommendations that came out of the committee, it was not one of the recommendations of the committee to put the Auditor-General in a position of conflict.

The Hon. DON HARWIN [10.12 p.m.]: Putting it as kindly as I possibly can, first, the Hon. David Shoebridge was not a member of the committee and, secondly, he was not there and I assume he has not read the report and its minutes, which show quite clearly that there was an attempt to amend the report. Unfortunately, the Opposition was not successful in persuading Government members to accept that view; we did not have the numbers. But to say it was unchallenged by the committee is simply not true.

Dr JOHN KAYE [10.13 p.m.]: In relation to Reverend the Hon. Fred Nile's point that the Auditor-General may choose not to exercise his powers under new section 3, by not exercising his power the Auditor-General is making a decision which is in and of itself of a political nature, because he is saying he will not adjust the thresholds and caps. That therefore means that he has made a decision. There is no null decision available under this position. If the Auditor-General is put into a location in politics where he or she has control over the amounts and the caps and so on in the bill, if the Auditor-General does not do anything that means that he or she has exercised a political judgement, which I believe is wrong and undermines the Auditor-General. Just as the Greens opposed using the Auditor-General to examine the proposed privatisation of the electricity industry, we would oppose the Auditor-General being put into this position.

Question—That Opposition amendment No. 1 be agreed to—put.

The Committee divided.

Ayes, 17

Mr Ajaka
Mr Borsak
Mr Brown
Mr Clarke
Ms Cusack
Ms Ficarra

Miss Gardiner
Mr Gay
Mr Khan
Mr Mason-Cox
Reverend Dr Moyes
Reverend Nile

Ms Parker
Mrs Pavey
Mr Pearce
Tellers,
Mr Colless
Mr Harwin

Noes, 20

Mr Catanzariti
Mr Cohen
Ms Cotsis
Ms Faehrmann
Ms Fazio
Mr Foley
Dr Kaye

Mr Kelly
Mr Moselmane
Mr Obeid
Mr Primrose
Mr Robertson
Ms Robertson
Ms Sharpe

Mr Shoebridge
Mr Veitch
Mr West
Ms Westwood
Tellers,
Mr Donnelly
Ms Voltz

Pairs

Mr Gallacher	Mr Hatzistergos
Mr Lynn	Mr Roozendaal

Question resolved in the negative.

Opposition amendment No. 1 negatived.

Clause 2 agreed to.

The Hon. DON HARWIN [10.22 p.m.]: I move Opposition amendment No. 2:

Aggregation of expenditure of parties and affiliated organisations

Electoral communication expenditure incurred by a party that is less than the amount specified in section 96F for the party is to be treated as expenditure that exceeds the applicable cap if that expenditure and any other electoral communication expenditure by an affiliated organisation of that party exceed the applicable cap so specified for the party.

affiliated organisation

This key amendment deals with aggregating the campaign expenditure of political parties that are constitutionally affiliated organisations. An affiliated trade union is different from other third parties. Members spoke at length during the second reading debate about third party expenditure and it was alleged that the Coalition opposed such expenditure. No such argument has ever been advanced, nor would it be. The problem is that affiliated trade unions are not independent third parties but are bodies that have a direct and powerful, formal constitutional connection with a particular political party—the Australian Labor Party. This amendment will close the disgraceful loophole in the legislation that allows unions to spend huge amounts of money to assist the Labor Party, with which they are constitutionally connected, without that expenditure falling under the Labor Party's campaign expenditure cap.

This amendment provides that any third party formally affiliated with any political party, whether it be an affiliated Labor Party trade union or any other organisation, is subject to the spending cap of that political party. It defines an affiliated organisation of a political party as a body authorised to appoint delegates to the party's governing body and/or to participate in the preselection of its candidates. The amendment also provides that the combined campaign expenditure of the Australian Labor Party and its affiliated trade unions will be limited to the $18.6 million to which the Labor Party is limited. The fact that that limit has not been applied is the only proposition with regard to third party expenditure to which the Coalition has ever taken exception. We object to the fact that the campaign expenditure of affiliated trade unions that are constitutionally part of the Labor Party is not aggregated under the Australian Labor Party's campaign expenditure cap. Let that be absolutely clear.

In my second reading contribution I made extensive reference to the fact that under this legislation the Labor Party can spend $18.6 million in the regulated period seeking re-election and its constitutionally affiliated trade unions, which are part of the party and which hold 50 per cent of the votes at the State conference, can spend about another $23 million in proxy campaigns. That makes a total mockery of the stated aims of this legislation and shows contempt for the genuine need for reform.

Our colleague the Hon. Luke Foley said that he wished that an affiliated trade union would spend $1 million to help the Labor Party in an election campaign. I can fully understand why next March even an affiliated Labor Party trade union would not want to spend $1 million trying to save this lot. Despite a number of craven back-downs designed to accommodate the union movement, this Government has nevertheless disappointed many of its traditional supporters. I am sure that that disappointment has even seeped into the leadership ranks of some of the party's affiliated trade unions. However, an expectation that a union might spend $1 million is different from the fact that the legislation provides that it can spend $1 million. Of course, that is what the Coalition has been referring to; it has been referring to the limits in the bill.

I will deal with the Hon. Luke Foley's argument about trade unions spending $1 million. He said that no union has spent anywhere near that amount to help the Labor Party in an election campaign. On numerous occasions in recent times affiliated unions have spent very significant amounts of money on Labor Party election campaigns. This bill provides that each third party can spend exactly $2,000 supporting the election of a candidate. I will provide members with trade union campaign expenditure details for just one financial year and I will use the 2007-08 financial year to make my point.

In the year from July 2007 to June 2008 the Amalgamated Metal Workers Union gave $100,108 to the Labor Party. That is funding for campaigns in five marginal seats. The Construction, Forestry, Mining and Energy Union donated $204,093. That is funding for 10 marginal seat campaigns from just one year's donations. The Electrical Trades Union, the union of the party president, Bernie Riordan, gave $109,080. That is funding for nine marginal seat campaigns, each of $20,000. The Maritime Union of Australia gave $71,995. That is funding for three and a half marginal seat campaigns. The Liquor, Hospitality and Miscellaneous Workers Union gave $136,397 in one year. That is six lots of $20,000, plus a bit more. It all starts to add up. And how could I leave out the Shop, Distributive and Allied Employees Association, with my colleague the Government Whip sitting right opposite me? In one year the Shop, Distribution and Allied Employees Association gave $480,000.

The Hon. Luke Foley has the temerity to say that nothing like $1 million has been spent. It might not be the full $1 million, but it is certainly half a million dollars in one year from the union of which the Government Whip is the honorary president. That equates to 24 lots of $20,000 that this member's union can spend on top of the Australian Labor Party's $18.6 million cap. This is what Dr John Kaye is supporting.

Let us take it down to the level of one seat. I will make it nice and easy for Dr John Kaye so that he can tell Fiona Byrne and Jamie Parker what they will be up against. They are just two examples but the same numbers apply to both seats. Jamie Parker and Fiona Byrne can spend an amount of $100,000 in addition to $50,000 from the Greens as a registered political party. Against that, the member for Balmain and the member for Marrickville are entitled to save all their electorate mail-out expenditure until 1 January and spend the whole lot between 1 January and 28 February. Straight away, that is $60,000 each. With 22 affiliated trade unions at $20,000 each, the Labor Party is able to add an extra $440,000 to campaign against Jamie Parker and Fiona Byrne. There is almost $500,000 before a single cent is spent by the Balmain or Marrickville Labor parties or Sussex Street. Before a single cent is spent! If we add the $100,000 that the locals spend and the $50,000 from Sussex Street, the grand total is: Jamie Parker, $150,000; Verity Firth, $660,000. That is what Dr John Kaye is doing to his candidates. That is what he is signing off on. He should explain that to his members in Marrickville and Balmain. That is what he is signing off on here tonight.

Of course, that applies equally to lower House candidates put up by the Christian Democrats, the Shooters and Fishers Party, The Nationals or the Liberal Party. What an absolutely ridiculous sham this bill is. It makes a total mockery of the concept of a level playing field and the idea of ending the arms race. How dare the Hon. Luke Foley, Nathan Rees' numbers man, come waltzing into a hearing of the Joint Select Committee on Electoral Matters one year ago saying that he would end the arms race and end the role of money in politics. This is what he has justified—$150,000 for everyone else versus $660,000 for his party. I hope he is proud of that. How dare he write opinion pieces in newspapers, setting up himself, his party and this bill as paragons of virtue when he is defending a complete rort. How dare he! All the crossbench members have an opportunity right now to say no to this outrageous rort. Expenditure by an affiliated trade union is fine—of course it has the right to spend money—but as they are part of the Labor Party the expenditure should come under the Labor Party cap.

The Hon. LUKE FOLEY [10.36 p.m.]: The best reaction to the Opposition Whip's rhetoric was that displayed by the Hon. Trevor Khan, who burst into hysterics. The Opposition Whip deliberately misleads the Committee about the expenditure of affiliated trade unions. He failed to mention that this bill treats union affiliation fees very differently from the way they have been treated to date. The bill provides that union affiliation fees cannot be spent on election campaigns. It provides that union affiliation fees have to go into a separate account for party administration and it will be forbidden for union affiliation fees—even for one cent of those fees—to be spent for the purposes of election campaigning. Yet, the member quotes figures from 2007-08 that include union affiliation fees.

The Hon. Don Harwin referred to the Shop, Distributive and Allied Employees Association. In both of its incarnations—the New South Wales branch and its northern branch—it is affiliated to the Labor Party through its 70,000 members, who paid over a quarter of a million dollars in affiliation fees that year. The Hon. Don Harwin quotes figures that include those affiliation fees to mount a case that the union will be doling out $20,000 in each of multiple electorates. He then adds up all those amounts and claims that that is what will be spent on campaigning, when he knows full well that this bill forbids such a practice. He misleads the Committee. It will be forbidden for the affiliation fees of all the unions he named to be spent on election campaigning. He should cease misleading the Committee and he should recognise the reality. The member should accept that even with the bogus interpretation he put on the figures, not one of them comes within a bull's roar of the $1.05 million that every member of the Coalition who has spoken in this and the other place claims will be spent by every union affiliate on election campaigning.

It is the great big lie, and members of the Opposition know it. If this amendment is passed to aggregate the expenditure of parties and their affiliates, employee associations affiliated to the Labor Party will be forbidden from engaging in political campaigning in their own right. The Electrical Trades Union in Victoria, an affiliate of the Labor Party that donates to the Greens, will be forbidden from paying any role in its own right. That may be a good thing. The Australian Manufacturing Workers Union, which has donated to Greens Senate campaigns in the past, will be forbidden from playing any further role in that regard.

The truth here is that unions have their own life and they have an existence separate from that of an affiliate of the Labor Party to represent the industrial interests of employees. At times, and I must say to my great regret, they make contributions to candidates other than those endorsed by the Australian Labor Party. But that proves that unions have a life of their own—an independent existence. They are registered under the various industrial laws of this country to represent their members. The amendment moved by the Opposition, if carried, would forbid employee associations from engaging in their legitimate role yet would permit each and every employer association to spend up to the $1.05 million cap. Members should consider that. The amendment, if passed, would preclude employee associations from playing a legitimate role in our democracy yet would permit employer associations, each and every one of them, to spend up to $1.05 million. That is a shameful proposition and ought to be rejected.

The Hon. ROBERT BROWN [10.42 p.m.]: This is a very informative debate. It is one of the best debates I have heard in this Chamber since I became a member in 2006.

The Hon. Duncan Gay: Not what I just heard.

The Hon. ROBERT BROWN: No, this is great; it is really good. And I thought I could bung it on!

The Hon. Ian Cohen: You just like a bit of biffo!

The Hon. ROBERT BROWN: Yes, I do, but that was very good. I will get down to the point because I have learnt my lesson tonight. At first the Shooters and Fishers Party was concerned that the definition of affiliated groups might have been too wide but the Hon. Luke Foley has now demonstrated that it is, in fact, very targeted and narrow. It is actually aimed at the unions. There is no risk there so we have probably been let out of jail. I was fascinated to learn that if the amendment is passed, Jamie Parker might become a member of the lower House whereas if it is rejected Verity Firth will be re-elected. That has made up our minds!

Dr JOHN KAYE [10.44 p.m.]: The Greens cannot possibly support this amendment, which would impose an unreasonable bind on trade unions affiliated to the Labor Party or any other political party as to what they can do. It would take away their rights to represent their members and to fulfil their capacity to advocate for the rights of their members in the context of an election campaign. It is not only immoral it is also highly likely to be unconstitutional. I am advised that the High Court would say that it would fetter the capacity of an organisation to fulfil its duty and, therefore, it would be open to a constitutional challenge. We should not pass legislation that is likely to be struck down in a High Court challenge. The Greens cannot accept this amendment. It is not moral and is not likely to survive a High Court challenge.

The Hon. DON HARWIN [10.45 p.m.]: I was very entertained by the contribution of the Hon. Robert Brown. Despite his conclusion, I will certainly not deprecate it. However, I wish to make one observation about the contribution of Dr John Kaye. In doing so, I will refer to the contribution of the Hon. Luke Foley to the second reading debate on this bill when he referred to the four-part Lange test decided by the High Court, which is relevant to the law in this particular area. The Hon. Luke Foley referred to the elements of the test, including whether the law is reasonably appropriate and has been adapted to serve that legitimate end. He made some unfortunate remarks about Arthur Moses, SC—

The Hon. Duncan Gay: They were pretty ordinary.

The Hon. DON HARWIN: They were very ordinary and I will not dignify them with a response. In terms of the third element of the test, significant doubt has been expressed by Anne Twomey about whether the law is reasonably appropriate. It relates exactly to this point and also to expenditure caps. Dr John Kaye is quite wrong in thinking that the amendment would bring down the bill because it might be ruled as unconstitutional. In fact, quite the opposite is the case. That the playing field is so uneven could well give rise to the argument that it is not reasonably appropriate, given the third element of the test in the Lange case. Therefore, members should not vote this amendment down believing it to be unconstitutional. There is a strong argument that the amendment will in fact help render the bill constitutional.

Question—That Opposition amendment No. 2 be agreed to—put.

The Committee divided.

Ayes, 18

Mr Ajaka
Mr Borsak
Mr Brown
Mr Clarke
Ms Cusack
Ms Ficarra
Miss Gardiner

Mr Gay
Mr Khan
Mr Lynn
Mr Mason-Cox
Reverend Dr Moyes
Reverend Nile
Ms Parker

Mrs Pavey
Mr Pearce

Tellers,
Mr Colless
Mr Harwin

Noes, 21

Mr Catanzariti
Mr Cohen
Ms Cotsis
Ms Faehrmann
Ms Fazio
Mr Foley
Dr Kaye
Mr Kelly

Mr Moselmane
Mr Obeid
Mr Primrose
Mr Robertson
Ms Robertson
Mr Roozendaal
Ms Sharpe
Mr Shoebridge

Mr Veitch
Mr West
Ms Westwood

Tellers,
Mr Donnelly
Ms Voltz

Pair

Mr Gallacher

Mr Hatzistergos

Question resolved in the negative.

Opposition amendment No. 2 negatived.

The Hon. DON HARWIN [10.57 p.m.]: Madam Chair, I apologise for the delay. I have been getting procedural advice about where Opposition amendment No. 3 fits in with the other amendments that are being moved. I move Liberal and Nationals amendment No. 3:

96D Prohibition on political donations other than by individuals on the electoral roll

It is unlawful for a political donation to a party, elected member, group, candidate or third-party campaigner to be accepted unless the donor is an individual who is enrolled on the roll of electors for State elections, the roll of electors for federal elections or the roll of electors for local government elections.

This amendment relates to restricting political donations to individuals on the electoral roll. There has already been considerable debate about this amendment during the speeches of a number of members who participated in the second reading debate. Even though the arguments in favour of the amendment had not been canvassed in my contribution to the second reading debate, there seems to have been a desire nevertheless to deal with the amendment early. Perhaps some of those who referred to the amendment in their contributions to the second reading debate will show some restraint during this debate in Committee, so that we do not hear the same arguments repeated.

Amendment No. 3 is to schedule 1, clause 26, new section 96D, and seeks to omit from line 27 on page 19 to line 3 on page 20 and insert a new section 96D, which is a prohibition on political donations other than by individuals on the electoral roll. Under the amendment that is defined to include the roll of electors for State elections, the roll of electors for Federal elections and the roll of electors for local government elections. The amendment seeks to ban corporate donations and donations from other entities, including trade unions and other organisations. It is a very simple principle, although it seems to be a very controversial principle for many members of this House. The Liberal Party and The Nationals have a very strong view: only enrolled individuals get to vote. Enrolled individuals are the principal actors with a stake. Sure, enrolled individuals might own a corporation or might be a member of a trade union, a voluntary community organisation or a sporting association. Every one of them, whatever their field, is able to vote and they should be able to donate.

There was a lot of conjecture and argy-bargy from the Hon. Luke Foley about the figure of $1,000. He went on about how that suited only wealthy interests. The figure of $1,000 is certainly a significant sum, there is no doubt about that, and would obviously be beyond the capacity of many of the less fortunate in our community to give. The Liberal Party and The Nationals have always consistently said that a donation to a political party should be tax deductible. It is a principle we stood up for when we formed the Federal Government between 1996 and 2007. That tax deductibility massively expands the pool of people who can donate. I suggest that a very large number of people in the Australian community would be able to give $1,000, or a substantial amount of money, with the benefit of tax deductibility.

This is really what the debate is about. It is about increasing participation in politics, political parties and campaigning. It is about giving a much larger number of people a stake in the process. It is about diluting the interests of money and organisations that too many people in New South Wales perceive to be exercising undue influence as a result of everything that has gone on in this State under this Government and, if we are frank about it, even further back under other Labor governments. No doubt there will be discussion around the Chamber about other governments. This amendment tightens the limitations on political donations by restricting them to individuals on the electoral roll. Under this amendment, corporations, unions and other third parties and interest groups will be prohibited from making donations to political parties.

As the Leader of the Opposition has said, corporations and other entities do not get a vote. Only Australian citizens have the right to vote and they should be the only people who can donate. This change will make the system we are bringing in simpler and easier to understand, and will dispel from the public mind any suspicions about shady links with corporate or other entities, links that can be so readily perceived to have influenced policies and decisions about the administration of the governance of our State by this Labor Government. This is not anything radical. It is exactly the law of Canada, where it works very well. I believe it would certainly enhance the integrity of the system that is being put before the Committee tonight in the bill. I commend the amendment to the Committee.

The Hon. ROBERT BROWN [11.05 p.m.]: This amendment could be described as putting in the boot when a man is down. I understand the moral position that the Opposition is taking and I understand the political tactics involved, but it cuts our throats right through. If we supported an amendment such as this we would be saying that society does not organise itself into protective groups such as common interest associations, churches, the Sporting Shooters Association of Australia, the Federation of Hunting Clubs, and various other groups. It assumes that people do not organise themselves into industrially protective organisations such as unions. One could argue that employer associations are the same.

The Shooters and Fishers Party, and I dare say the Christian Democratic Party, relies on our constituent organisations far more than we rely on the will of individual members of those organisations. Not every member of the Sporting Shooters Association agrees that the association should donate to the Shooters and Fishers Party, but the vast majority do. Every church group or community group on the Christian Democratic Party's side of things may not necessarily agree that it is the party of choice. Whilst we would like to vote for anything that will kill the bill, I am sorry that we cannot possibly support this amendment because our constituents would ask, "What the hell are you doing to us?"

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [11.08 p.m.]: The Opposition's proposal to restrict donations only to individuals on the electoral roll will be unworkable, and possibly unconstitutional. The Opposition's proposal will simply open loopholes whereby companies will nominate an individual to donate on their behalf. All the reforms in the Government's bill have been carefully developed to balance the policy aim of reducing reliance on political donations with the need for the reforms to be both constitutional and enforceable. The bill is a complete package of reasonable and measured reforms to donation caps, expenditure limits and public funding for campaigns. It is not a smorgasbord of options from which to pick and choose. The Opposition's blunt proposal to ban all donations by corporate entities could throw the effectiveness of the whole scheme into doubt by crudely upsetting the balance achieved by the bill. The amendment is nothing more than an attempt by the Opposition to destroy the bill. The amendment is unacceptable to the Government and, if passed, will bring the reform process to an end.

Dr JOHN KAYE [11.10 p.m.]: The Greens will not support the amendment, which is clearly designed to bring the reform process to an end. If the amendment is successful, the bill will be stopped from passing the lower House and the caps on corporate donations will be lost.

The Hon. Robert Brown: Yippee!

Dr JOHN KAYE: I acknowledge the interjection of the Hon. Robert Brown. The caps on individual donations will also be lost. The progress this bill represents will be lost. The choice for the Greens is clear: either we support the amendment, feel good and destroy the bill, or we oppose the amendment, cop it from the Opposition and the bill will be passed. The choice for the Greens is: no caps or $5,000? The Greens will take the $5,000 cap and oppose the amendment.

The Hon. DON HARWIN [11.10 p.m.]: In response to the argument about the constitutionality of this amendment, this is the law of Canada. Canada operates under a Charter of Human Rights and has the same common law as Australia. This provision has never been successfully challenged in Canada; it is regarded as the law. I have absolutely no doubt that this amendment would be upheld as constitutional by the High Court of Australia and it would pass each of the four elements of the Lange case. The Joint Standing Committee on Electoral Matters took evidence on this from a panel of distinguished academics. It was put to all of them and they considered that it would be constitutional.

This amendment should also be viewed in the context of the amendments shortly to be moved by the Greens and the Christian Democratic Party regarding a range of sector-specific bans, which have spread in ever-increasing concentric circles since this morning, and continue to grow. If anything is unconstitutional then a sector-specific ban is at the top of the list. I made this point when the House was dealing with the developer donations legislation last year, and there is plenty of advice to that effect. There has been substantial discourse on undue influence by the property sector, but in the view of eminent lawyers that is highly likely to fall over. The range of other industries that will be potentially drawn in will increasingly jeopardise the constitutionality of the bill. If constitutionality is the concern of Dr John Kaye—

Dr John Kaye: I did not mention it.

The Hon. DON HARWIN: I apologise; I have been distracted by the number of contributions. Perhaps the Hon. Michael Veitch mentioned it. The Hon. Michael Veitch was present at the hearings of the Joint Standing Committee on Electoral Matters. He knows what George Williams and Anne Twomey said. If he is worried about unconstitutionality then the far safer option would be to support the Opposition's amendment.

Question—That Opposition amendment No. 3 be agreed to—put.

The Committee divided.

Ayes, 16

Mr Ajaka
Mr Clarke
Ms Cusack
Ms Ficarra
Miss Gardiner
Mr Gay

Mr Khan
Mr Lynn
Mr Mason-Cox
Reverend Dr Moyes
Reverend Nile
Ms Parker

Mrs Pavey
Mr Pearce

Tellers,
Mr Colless
Mr Harwin

Noes, 23

Mr Borsak
Mr Brown
Mr Catanzariti
Mr Cohen
Ms Cotsis
Ms Faehrmann
Ms Fazio
Mr Foley

Mr Hatzistergos
Dr Kaye
Mr Kelly
Mr Moselmane
Mr Obeid
Mr Primrose
Mr Robertson
Ms Robertson

Ms Sharpe
Mr Shoebridge
Mr Veitch
Mr West
Ms Westwood
Tellers,
Mr Donnelly
Ms Voltz

Pair

Mr Gallacher

Mr Roozendaal

Question resolved in the negative.

Opposition amendment No. 3 negatived.

The Hon. DON HARWIN [11.22 p.m.]: I move Opposition amendment No. 4:

96DA Prohibition on political donations to parties by affiliated organisations without approval of members

affiliated organisation

This amendment will amend page 20, schedule 1 item [26], and insert after line 3 a new section 96DA, which is a prohibition on political donations to parties by affiliated organisations without the explicit consent of the membership. This amendment seeks to ensure that any political donations made to a political party by an affiliated organisation are done so only with the express consent of a majority of the membership. The amendment will require the New South Wales Electoral Commission to undertake a vote of all members to ensure that a majority of members consent before an affiliated entity can donate to a political party. As with one of our earlier amendments, an affiliated organisation of a political party is defined as a body authorised to appoint delegates to the party's governing body and/or participate in the preselection of its candidates.

Many working people pay union fees and dues for the betterment of safety and their working conditions, but their money is then funnelled to the Labor Party. Many union members do not want their dues to support this broken New South Wales Labor Government. This amendment will ensure that donations to political parties by affiliated organisations such as unions genuinely reflect the will of the organisation's membership. This will prevent such organisations from being established and/or operated purely as a source of revenue without regard to the wishes of the membership. Once again, this amendment raises the standards of the reform package proposed in this bill. It is about ensuring that this bill truly delivers a scheme for public funded elections in New South Wales that is balanced, transparent and beyond questions of undue influence. I commend the amendment to the Committee.

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [11.24 p.m.]: I can feel the contempt for the union movement across the Chamber—it is unbelievable! This is yet another attempt by the conservative parties to destroy the union movement. Let us not forget that a former Federal Coalition Government implemented the extreme and unfair workplace laws known as WorkChoices, which were repudiated by the Australian people at the 2007 Federal election. Those laws cut penalty and overtime rates, cut annual wage increases, and made it easier for workers to get sacked for no reason at all. Yesterday in the other place the Leader of the Opposition singled out the Nurses Association, a third party stakeholder group that is not affiliated with the Australian Labor Party.

During the last election campaign the Nurses Association spent money because the Opposition wanted to sack 20,000 public servants, which action would have affected front-line services such as nursing—something that is a core concern of its membership. Unions play an important role in representing the rights of workers and they should not be singled out. Indeed, such a restriction may not be constitutional. In many cases it would cost more to conduct such a secret ballot than the value of the intended donation. The Government does not support this amendment.

The Hon. DON HARWIN [11.26 p.m.]: What is the Government scared of? All this amendment will do is enable democracy. It will enable members to decide and it will enable a vote. If 50 per cent of members want to do that, they can do that. I am hearing all this feigned outrage from Labor members around the Chamber. What are they scared of?

Question—That Opposition amendment No. 4 be agreed to—put.

The Committee divided.

Ayes, 15

Mr Ajaka
Mr Clarke
Ms Cusack
Ms Ficarra
Miss Gardiner
Mr Gay

Mr Khan
Mr Lynn
Mr Mason-Cox
Reverend Dr Moyes
Ms Parker
Mrs Pavey

Mr Pearce

Tellers,
Mr Colless
Mr Harwin

Noes, 24

Mr Borsak
Mr Brown
Mr Catanzariti
Mr Cohen
Ms Cotsis
Ms Faehrmann
Ms Fazio
Mr Foley
Mr Hatzistergos

Dr Kaye
Mr Kelly
Mr Moselmane
Reverend Nile
Mr Obeid
Mr Primrose
Mr Robertson
Ms Robertson
Ms Sharpe

Mr Shoebridge
Mr Veitch
Mr West
Ms Westwood

Tellers,
Mr Donnelly
Ms Voltz

Pair

Mr Gallacher

Mr Roozendaal

Question resolved in the negative.

Opposition amendment No. 4 negatived.

Dr JOHN KAYE [11.33 p.m.]: I move the Greens amendment:

[28] Section 96GAA

Insert before section 96GA:

96GAA Meaning of "prohibited donor"

prohibited donor

and includes any industry representative organisation if the majority of its members are such prohibited donors.

[29] Sections 96GA and 96GE

Omit "property developer" wherever occurring.

Insert instead "prohibited donor".

[30] Section 96GB Meaning of "property developer", "tobacco industry business entity" and "liquor or gambling industry business entity"

Insert after section 96GB (2):

tobacco industry business entity

liquor or gambling industry business entity

(b) a person who is a close associate of a corporation referred to in paragraph (a).

The purpose of this amendment is to remove a number of donor categories from being eligible to donate to political parties and candidates. This amendment extends the existing prohibition on property developers to a tobacco industry business entity and a liquor or gambling industry business entity. During debate on the second reading speech we referred to the tobacco industry. Tobacco is responsible for 5,000 deaths every year and 42,000 hospitalisations. The tobacco industry thrives on the basis of addiction. It causes untold damage and it should not be part of the political process.

The next government and following governments face a number of challenges, such as amending the Smoke-free Environment Act to make all outdoor dining and food service areas 100 per cent smoke-free; removing tobacco control activities, such as the exemption in the Smoke-free Environment Act for high-roller gambling areas; banning tobacco vending machines; licensing all retailers that sell tobacco products; enhancing the New South Wales tobacco strategy, including the restoration of former funding levels for mass media campaigns; and, most importantly, setting real targets in smoking rates with the longer-term aim of making New South Wales a tobacco-free State. These important objectives will not be met unless our governments are not addicted to tobacco money.

Similarly, this amendment makes it unlawful for a liquor or gambling industry business to make a donation. Earlier we talked about the large sums of money from liquor and gambling that go into the coffers of New South Wales political parties. Both these industries present major regulatory challenges in terms of minimising the harm inflicted from adverse alcohol consumption, and gambling and gaming machine addiction. These challenges must be dealt with in a complex public debate and such debate cannot be allowed to be perverted by the rivers of cash that come from those industries. This amendment also captures industry representative organisations, if those bodies have a majority of members who come from those prohibited donors.

The amendment in relation to a liquor or gambling industry business entity captures only the for-profit businesses—that is, organisations that engage in activities primarily for the purpose of making a profit. I make it clear that we are not targeting small clubs. We are going after the profit sector. These important changes will enable the next government, in the absence of a complete ban on corporate donations, to make sensible decisions that are in the best interests of the people of New South Wales and are not corrupted in any way by money from these industries. I commend the Greens amendment to the Committee.

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [10.37 p.m.]: The Government supports this amendment. The New South Wales Labor Party does not accept donations from tobacco companies and has not done so for more than six years. The New South Wales Government has legislated to ban indoor smoking in pubs, clubs and cars carrying children, to remove tobacco displays in retail outlets, and to run a number of public education campaigns. The Government supports the Greens amendment to the bill.

Reverend the Hon. FRED NILE [11.38 p.m.], by leave: I move Christian Democratic Party amendments Nos 1 and 2 in globo:

, or

sex industry business entity

(a) a corporation engaged in a business undertaking that is mainly concerned with:

We saw from the previous election the growth of the so-called Australian Sex Party and the mobilisation of the sex industry in the political realm, which is a new development. This multimillion dollar industry would be prepared to work either through its own political party or try to influence major parties with donations. In the same way that the Greens and I support the ban on the tobacco, liquor and gambling industries, we should also include the so-called sex industry. I do not oppose sex; sex is a wonderful thing, but in the pornography business the word "sex" is used to describe the industry or adult material, which we know applies to prostitution, brothels or pornography.

We are forced to use this terminology in the legislation. It really is the anti-sex industry, but that terminology would not make sense. Therefore, I am using society's normal use of the words. It is important to close the door to this particular possibility, which now is a reality. At the Federal election the Australian Sex Party received a high election vote in New South Wales, which is not its most active State. South Australia is its most active State, where it received a high vote and where its headquarters are based. The Australian Sex Party thought it might have won a Senate seat in that State at that election and its aim is to win a Senate seat in each State at a future election. It is important that the Committee supports these amendments.

The Hon. DON HARWIN [11.42 p.m.]: The night is young. As I mentioned earlier in my comments on the Opposition's third amendment, today we have seen an ever-expanding number of industries brought within the ambit of sector-specific bans. If members have others to add to the list, perhaps by the end of this evening the list will be quite extensive and not that different from the Opposition's third amendment to ban all corporations. In respect to these amendments, members need to reflect on the sense of the Coalition's third amendment and the concerns I raised about not going down that route.

I ask Reverend the Hon. Fred Nile to clarify a couple of matters. Subparagraph (ii) of the amendment to section 96GB (2B) (a) refers to the production or sale of pornography and subparagraph (iii) refers to any other sex industry. The bill contains no definition of "pornography" or "sex industry". I ask Reverend the Hon. Fred Nile to clarify what is covered by those terms. In regard to the sale of pornography, will newsagents be included in the ambit of this bill? Does that mean it will include every newsagent and, potentially, every service station that has for sale a copy of Playboy or Penthouse on its shelves?

The Hon. Shaoquett Moselmane: Video shops.

The Hon. DON HARWIN: We will not go there because we know that the sale of videos and DVDs is not legal in New South Wales. Certainly we would not encourage donations from those entities.

Dr John Kaye: What is pornography?

The Hon. Duncan Gay: John, it's pornography; it's R-rated.

Dr John Kaye: It's not X-rated. It could be any pornography.

The Hon. DON HARWIN: This is why I seek clarification. I am not attempting in any way to deprecate the amendments of Reverend the Hon. Fred Nile. I want the Committee to know the extent of coverage of the amendments.

The Hon. JOHN HATZISTERGOS (Attorney General, Minister for Citizenship, Minister for Regulatory Reform, and Vice-President of the Executive Council) [11.45 p.m.]: Reverend the Hon. Fred Nile might explain also the meaning of "any other sex industry". Does it include a lingerie shop? Some of the language in the amendments is broad. What is the meaning of a "close associate" as referred to in paragraph (b)? Irrespective of whether that person is involved in the particular activity, does that mean that somehow they are excluded? I have no brief for the industry the member seems to be targeting in these amendments. I made that point clear during debates on other legislation. It seems that the legislation is so broad and encompasses such a wide range of potential individuals and businesses that these amendments would be highly problematic.

Dr JOHN KAYE [11.46 p.m.]: It would have been remiss of me not to acknowledge that it was Reverend the Hon. Fred Nile who first tabled an amendment in respect to the liquor and gambling industries, which we adopted for the amendment regarding tobacco. The Greens have grave concerns about the amendments moved by Reverend the Hon. Fred Nile. The first concern relates to his comments about the amendments. Clearly, Reverend the Hon. Fred Nile was targeting one particular political party, the Sex Party. One may have different attitudes towards the Sex Party, but an amendment that specifically targets donations to one specific political party is unfair and unconscionable, and should be rejected.

I echo also the remarks of the Attorney General and the Opposition Whip that in the absence of a definition of "pornography" this legislation could become a broad or narrow net. We would be exercising a gamble on its actual meaning. The whole definition of a sex industry is self-referential. A sex business entity includes any other sex industry. That becomes quite an illogical definition and is quite dangerous. For those reasons the Greens cannot support the amendments to the Greens amendment.

The Hon. AMANDA FAZIO [11.48 p.m.]: I support many of the comments of other members who have expressed reservations about the amendments of Reverend the Hon. Fred Nile. It is entirely inappropriate for any amendments to be used to target individual political parties. Apart from the fact that I doubt his amendments would be workable, a bill designed to improve the election funding and disclosures regime in New South Wales should not be used for the purposes of political censorship. They are my severe concerns with the amendments moved by Reverend the Hon. Fred Nile.

Mr DAVID SHOEBRIDGE [11.49 p.m.]: There is one other fundamental reason not to support Reverend the Hon. Fred Nile's amendment: it does not address a known problem in relation to political donations here in New South Wales. We know the scope of the problem in relation to the alcohol, gambling, property development and tobacco industries. In the past 10 years we have seen hundreds of thousands of donations from the alcohol industry, millions from the hotel industry, many millions from the development industry, hundreds of thousands from the tobacco industry, and more than a million from the gaming industry, but donations from what is defined as the sex industry—assuming there is some sort of rational scope to the nature of the business covered by the definition—simply do not feature. It is not one of the industries that is corrupting the public processes here in New South Wales in the same way that the alcohol, property development and tobacco industries are. It does not address an identified problem and therefore it is not a rational stand-alone sector to target, as proposed by the honourable member.

Reverend the Hon. FRED NILE [11.50 p.m.]: I reject completely the assertions of Mr David Shoebridge. One of the most serious areas of activity in the State is the brothel industry—legal and illegal—and the porn industry. It is a billion-dollar business. Just because the Greens may not be aware of it or cannot see it does not mean that it does not exist. The sex industry exists as much as the liquor and gambling industries exist. I am sorry if I misled members by referring to the Australian Sex Party. This amendment does not target the Australian Sex Party. I was only indicating that the industry has moved into the political area and has its own political party, which shows that it believes it needs to have an influence politically. It would suit its business interests to use donations to influence the decisions of political parties. Some large companies in Sydney that have links to the pornography industry—although it is very hard to prove—make donations to political parties. Some are well-known companies with subsidiaries that have printing factories that produce pornography, but they are not clearly linked. The Greens may not be aware of it but these companies are active, influential and wealthy. It is a multi-billion-dollar industry. As I say, the amendment is not intended to target the Australian Sex Party. I was just using it as an example of the sex industry moving into the political arena.

The Hon. John Hatzistergos: What does "pornography" mean?

Reverend the Hon. FRED NILE: It would be up to you. If the Labor Party gets a donation from the main brothel groups in Sydney and this bill is passed, then the Labor Party has to make a decision that it will not accept that donation. If the Labor Party accepts a donation and a complaint is made to the Electoral Commission about the donations it has received, a decision has to be made as to whether it has, in fact, received donations from a sex industry business entity. Everybody would have to be very careful of donations and reject those that came from this particular area of activity. You make your own judgement not to accept donations from them. The Labor Party has made a decision not to accept any donations from anybody associated with the tobacco industry. That has not been very difficult for the Labor Party to do, and the same thing would apply in this area. It is self-regulation: you make your own decision as to whether you accept the donations. If you accept donations then you are open to public criticism and investigation by the Electoral Commission as to whether you have in fact broken the law.

Question—That Christian Democratic Party amendments Nos 1 and 2 to the Greens amendment be agreed to—put.

The Committee divided.

Ayes, 3

Mr Brown

Tellers,
Mr Borsak
Reverend Nile

Noes, 34

Mr Ajaka
Mr Catanzariti
Mr Clarke
Mr Cohen
Mr Colless
Ms Cotsis
Ms Cusack
Ms Faehrmann
Ms Fazio
Ms Ficarra
Mr Foley
Miss Gardiner

Mr Gay
Mr Harwin
Mr Hatzistergos
Dr Kaye
Mr Khan
Mr Lynn
Mr Mason-Cox
Mr Moselmane
Reverend Dr Moyes
Ms Parker
Mrs Pavey
Mr Pearce

Mr Primrose
Ms Robertson
Mr Roozendaal
Ms Sharpe
Mr Shoebridge
Mr Veitch
Mr West
Ms Westwood

Tellers,
Mr Donnelly
Ms Voltz

Question resolved in the negative.

Christian Democratic Party amendments Nos 1 and 2 to the Greens amendment negatived.

Reverend the Hon. FRED NILE

liquor or gambling industry business entity

(a) a corporation engaged in a business undertaking that is mainly concerned with:

(b) a person who is a close associate of a corporation referred to in paragraph (a).

I originally drafted the amendments to schedule 1, as acknowledged by Dr John Kaye. The Greens incorporated my amendments into their amendment of section 96GB (2B) of schedule 1 to the bill, but added words that the amendment I have just moved seeks to omit. Item [30] of the Greens amendment states:

[30] Section 96GB Meaning of "property developer", "tobacco industry business entity" and "liquor or gambling industry business entity"

Insert after section 96GB (2):

tobacco industry business entity

liquor or gambling industry business entity

(b) a person who is a close associate of a corporation referred to in paragraph (a).

The words that Christian Democratic Party amendment No. 3 seeks to omit relate to the element of profit. The effect of my amendment will be to replace the Greens new section 96GB (2B) (a) with the words in (2B) (a) of my amendment. My amendment omits the words in the Greens amendment that relate to profit, particularly "but only if it is for the ultimate purpose of making a profit" in (2B) (a).

The Hon. DON HARWIN [12.04 a.m.]: It would probably assist the Committee at this point if Dr Kaye or Mr Shoebridge could state why those words were included.

Dr JOHN KAYE [12.05 a.m.]: The effect of Reverend the Hon. Fred Nile's amendment would be twofold. First, it will remove from the Greens amendment of section 96GB (2B) (a) (ii) "(including the manufacture of machines used primarily for that purpose)". That will remove the Greens clarification that manufacture of those machines is captured by the provision. Secondly, as Reverend the Hon. Fred Nile pointed out, the provision will apply only if the ultimate purpose is making a profit.

The intent of the Greens amendment was to make clear that the legislation is not intended to capture clubs that are not operating for profit. The big difference between Reverend the Hon. Fred Nile's amendment of section 96GB (2B) (a) and the Greens amendment of section 96GB (2B) (a) is that clubs that do not operate for profit, particularly small community clubs, may be prohibited from making donations whereas the Greens believe that the major concern relating to clubs' donations is with respect to the larger profit end of the clubs sector and hotels.

The CHAIR (The Hon. Kayee Griffin): I ask Reverend the Hon. Fred Nile to clarify his amendment.

Reverend the Hon. FRED NILE [12.07 a.m.]: The effect of my amendment will be to delete from the Greens amendment (2B) the words from "Each of the following persons" down to (ii) "primarily for that purpose) or". In other words, my amendment seeks to replace all of the Greens (2B).

The CHAIR (The Hon. Kayee Griffin): Your amendment will omit all of (2B) (a) down to "primarily for that purpose) or" in (ii) of the Greens amendment, and replace that with a new (2B), which includes (a) (i), (ii) and (iii). Is that correct?

Reverend the Hon. FRED NILE: Yes.

Dr JOHN KAYE [12.08 a.m.]: I seek clarification of whether Reverend the Hon. Fred Nile will also be deleting (2B) (a) (i) and (ii) of the Greens amendment.

The CHAIR (The Hon. Kayee Griffin): Yes. That is what Reverend the Hon. Fred Nile said.

Dr JOHN KAYE: I misunderstood. So the effect of Reverend the Hon. Fred Nile's amendment is replacement of the Greens (2B) (a) (i) and (ii) with the Christian Democratic Party's (2B) (a) (i), (ii) and (iii).

The CHAIR (The Hon. Kayee Griffin): Yes.

Question—That Christian Democratic Party amendment No. 3 of Greens amendment be agreed to—put and resolved in the negative.

Christian Democratic Party amendment No. 3 negatived.

Question—That Greens amendment be agreed to—put and resolved in the affirmative.

Greens amendment agreed to.

Schedule 1 as amended agreed to.

Reverend the Hon. FRED NILE [12.10 a.m.], by leave: I move Christians Democratic Party amendments Nos 1 to 4 in globo:

These amendments have the same purpose. The bill refers to the need to achieve at least 4 per cent of the total number of first preference votes in the electoral district in which the candidate was nominated for election. Traditionally, Legislative Assembly and Legislative Council candidates have had to attract 4 per cent of first preference votes or be elected to obtain funding. My amendment reduces that to 2 per cent to fulfil former Premier Wran's objectives when he introduced public funding of election campaigns. His main argument was that it would support minor parties and Independents. It was never intended to provide a large amount of funding for the major parties, which at that stage were receiving large donations and were spending millions of dollars on election campaigns. The aim was to make the electoral process far more democratic, but the legislation did require that candidates attract 4 per cent of the first preference vote or be elected before they would receive any funding. I believed then that a threshold of 4 per cent was too high.

Members of major parties have suggested to committees on which I have served dealing with electoral reform that the figure should be 8 per cent. That would mean that very few Independent or minor party candidates would obtain funding and it would only exacerbate the bias towards the major parties—the Australian Labor Party, the Liberal Party, The Nationals and now the Greens. I am anxious to support minor party candidates who wish to be involved in the political process. The 2 per cent threshold would mean that they would obtain some funding. It would not be a large amount, but it would be far better than nothing.

The Christian Democratic Party spent $150,000 during the last Senate election campaign and attracted a little more than 2 per cent of the vote. As a result we got not one dollar of public funding. I want to encourage minor party and Independent candidates. It would be fairer if the threshold were 2 per cent. As I said, the Electoral Commissioner told a committee I chaired that he had no objection to there being no threshold. He said that that would not create any problems for the funding authority. I do not want to go that far, but I do believe that a threshold of 2 per cent would be fairer.

The Hon. ROBERT BROWN [12.12 a.m.]: Has Reverend the Hon. Fred Nile foreshadowed an amendment that will clarify the new sections to which this will apply—that is, new sections 57 and 59?

Reverend the Hon. Fred Nile: Yes.

The Hon. ROBERT BROWN: Whilst the Shooters and Fishers Party does not necessarily support the logic behind Reverend the Hon. Fred Nile's amendment—that is, we are happy to strive for that 4 per cent threshold or to be elected—

The Hon. Greg Pearce: But you will be happy to accept 2 per cent.

The Hon. ROBERT BROWN: I did not say that. The Shooters and Fishers Party would be inclined to support an amendment like this if the Government were prepared to support the amendment foreshadowed by Reverend the Hon. Fred Nile to fix what is either a mistake or a deliberate attempt to do over endorsed minor parties in new sections 57 and 59. Hopefully it is a mistake and not a deliberate strategy. If it was a deliberate strategy, the references that have been made throughout this debate to the four pillars as a test of equity would go straight out the window.

The Hon. Matthew Mason-Cox: They already have.

The Hon. ROBERT BROWN: No, this is either very sneaky or an error. Because we are not prescient, we do not know whether the Labor Party and the Opposition will support Reverend the Hon. Fred Nile's foreshadowed amendment, which has not even been circulated. We will probably support the amendment, but not for the reason suggested by members—that is, because of greed. The Shooters and Fishers Party is happy to pump for the 4 per cent threshold. However, if we are to be done over by this sneaky little trick, we probably need to take what we can get.

Dr John Kaye: You are talking about the wrong amendment.

The Hon. ROBERT BROWN: Dr Kaye should do his homework.

The Hon. MICHAEL VEITCH (Parliamentary Secretary) [12.17 a.m.]: I will deal with the amendments moved by Reverend the Hon. Fred Nile and the Attorney General will deal with his foreshadowed amendment. The Government will not support any amendment that reduces the eligibility threshold for public funding from 4 per cent to 2 per cent. The threshold for receiving public funding from the central fund administered by the Election Funding Authority is 4 per cent of first preference votes or the election of a member. The joint standing committee report states:

Reverend the Hon. Fred Nile's amendment also has the potential to greatly increase the cost of the scheme. Therefore, the Government cannot support the amendment.

Question—That Christian Democratic Party amendments Nos 1 to 4 be agreed to—put and resolved in the negative.

Christian Democratic Party amendments Nos 1 to 4 negatived.

Reverend the Hon. FRED NILE [12.20 a.m.]: I move:

Schedule 2, clause 57 (3) (a), line 31. Delete "all electoral districts" and insert "the electoral district(s)".

This amendment relates to a matter to which the Hon. Robert Brown referred. New section 57 (3) sets out the party eligibility criteria, and subsection (3) (a) provides:

The way the bill is worded completely changes how funding has been provided since 1981. Under the current rules, if a candidate received at least 4 per cent or was elected he received funding. New section 57 (3) (a) now provides that it must be the total number of first preference votes in all electoral districts in which the candidates were duly nominated for election. For example, a number of Christian Democratic Party candidates get 4 per cent or more of the vote and they receive funding. However, a much larger number of Christian Democratic Party candidates get 1 per cent or 2 per cent of the vote. If the percentages are averaged—I have averaged the percentages—our average would be at least 2.9 per cent, which would mean that Christian Democratic Party candidates who individually got more than 4 per cent would not receive funding. That is how I read the provision. I know there is a discussion going on about it, but on my reading of the plain English that is what it says. To make it clearer, section 59 (3) (b) states:

The provision in section 59 (3) (a) has been the rule until now, but the wording in new section 57 (3) (a) in this bill is completely new and different and will, I believe, have a different impact on the eligible funding for minor parties whose total vote across the State, if the votes for all their candidates are added up—despite some candidates getting more than 4 per cent—the actual average vote would go below 4 per cent and therefore no candidates would get funding. That is how I read the provision. My amendment would delete the words "in all electoral districts"—the key word is "all"—and insert instead the words "in the electoral district(s)". I seek the cooperation of the Committee as I do not have a printed copy of the amendment.

The Hon. JOHN HATZISTERGOS (Attorney General, Minister for Citizenship, Minister for Regulatory Reform, and Vice-President of the Executive Council) [12.24 a.m.]: I am not sure of the actual text of the amendment now proposed, but I understand it will delete the words "in all electoral districts" from new section 57 (3) (a) and replace them with the words "in electoral district(s)". Frankly, I think the confusion that has arisen is based on the assumption that somehow a candidate who is successful in an election is not eligible for funding. The expenditure requirements are dealt with in new section 59 for an individual candidate even though they may be endorsed by a particular party. New section 57 deals with the position in relation to party expenditure, which is a separate issue altogether. There is no attempt to disadvantage individuals, and I am not quite sure what the honourable member is concerned about. If he is concerned about a sequence of events that might result in a party fielding a number of candidates and one gets elected—

Reverend the Hon. Fred Nile: No, none gets elected although some get 4 per cent.

The Hon. JOHN HATZISTERGOS: I understand that the amendment targets the situation of one person getting elected or getting 4 per cent of the relevant vote. Those issues are dealt with in new section 59, which I believe adequately addresses the concern raised by the honourable member.

Mr DAVID SHOEBRIDGE [12.26 a.m.]: The Greens do not support the amendment not because there is any concern about the intent raised by the honourable member. If there is mischief, which the honourable member thinks is apparent in the bill, the Greens would be happy to support an amendment to remove the mischief. As I understand the situation, the honourable member has misapprehended how new section 59 will operate. He is under the misapprehension that new section 59 refers only to Independent candidates, whereas new section 59 refers to candidates, whether they are Independents or candidates of a registered party. I do not mean to personalise the matter but, for example, if the Christian Democratic Party ran candidates in 50 seats and 30 of them got 1 per cent or 2 per cent of the vote, and 20 of them got 5 per cent of the vote, when the figures are averaged the candidates may fall below 4 per cent of the vote. If the only source of funding for candidates is indirectly through the party via new section 59, which is what Reverend the Hon. Fred Nile is trying to repair, then the average would fall under 4 per cent and there would be no funding for candidates. New section 59 deals with separate funding for candidates. For example, under that section, the 30 candidates who fell below 4 per cent would not get public funding because they fall under the threshold, but the 20 candidates who received more than 4 per cent would be funded under new section 59. In this amendment the honourable member is seeking to defeat a mischief that is not apparent in the legislation.

The Hon. ROBERT BROWN [12.27 a.m.]: I am not a lawyer but I think Mr David Shoebridge is wrong in that assertion. New section 59 states that a candidate is eligible for funding and then lists a number of conditions. I am sorry but I have misread the provision. I think Mr David Shoebridge is correct. I do not think it is an error. I think the Act would probably cover the circumstance that Reverend the Hon. Fred Nile and I are concerned about.

Reverend the Hon. FRED NILE [12.28 a.m.]: I expressed my concern to the advisor; I do not want to verbal the advisor but I got the impression that new section 59 does not refer to candidates of a registered party. It refers to Independents. Indeed, with regard to the Legislative Council, new section 59 (2) (b) states, "none of whose members were endorsed by a party". It appears to make a distinction between registered party candidates and non-registered party candidates who are Independents.

The Hon. Robert Brown: It refers to the council, though.

Reverend the Hon. FRED NILE: I know it refers to the council but it seems to me that whole clause applies to Independents and that new section 57 relates to registered party candidates.

Dr JOHN KAYE [12.29 a.m.]: There is a good reason why that is the case. That is to stop double dipping. Paragraph (b) of new section 59 (2) is indeed for Independent upper House candidates, because Independent upper House candidates would be, in effect, eligible for funding under new section 57 if they were members of the party. Think of new section 57 as the replacement for what is currently the Legislative Council pot of money and think of new sections 59 and 60 as being the replacement for what is currently the lower House pot of money. The reason clause 59 (2) (b), which is specific only to a council election, excludes party candidates is because they will get funding as members of a registered party under clauses 57 and 58.

Reverend the Hon. FRED NILE [12.30 a.m.]: My concern is how the Electoral Commissioner, the funding authority, will interpret the provisions of the bill. On a plain reading of the bill, new section 59 seems to refer to Independent candidates. If I were an outsider and read this clause, I would say that it refers to Independent candidates and that new section 57 refers to candidates of registered parties. If the Minister put on record that new section 59 refers to candidates of registered parties and Independents, I would be satisfied.

The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [12.31 a.m.]: I think Mr David Shoebridge and the Hon. Robert Brown are correct; there is a consensus across the room. It is important that the Attorney General is aware of any comments made about this and I suggest it would be helpful if he put his view on the record.

The Hon. JOHN HATZISTERGOS (Attorney General, Minister for Citizenship, Minister for Regulatory Reform, and Vice-President of the Executive Council) [12.32 a.m.]: There appears to be some confusion and I am happy to clarify the matter for Reverend the Hon. Fred Nile as best as I possibly can. New section 57 deals with parties. New section 59 deals with persons who are not members of parties.

Reverend the Hon. Fred Nile: That is how I read it.

The Hon. JOHN HATZISTERGOS: What is the specific provision on which the member is asking for clarification?

Reverend the Hon. FRED NILE [12.33 a.m.]: New section 57 (3) (a) provides for a method that has never been implemented—that is, counting up the total number of first preference votes in all electoral districts in which candidates were duly nominated for election. That is quite specific and it applies to candidates of registered parties. It seems, on my reading of the bill, that new section 59 refers to Independent candidates, and it appears from what he just said that the Attorney agrees.

The Hon. DON HARWIN [12.33 a.m.]: If it will assist the Committee—and the Attorney General might care to clarify this—I think that is because there is now a cap being placed on the expenditure of registered political parties, and that means that the nature of funding of our campaigns in the lower House is changing. Up to this point, only the candidates in each electoral district have been reimbursed. Now something quite separate is happening. If parties choose to spend their $50,000 expenditure in a seat, they will also be reimbursed. So something new is being added and a rule is being applied in relation to that new thing, not a new rule being imposed on what has happened with candidates. The Minister might clarify that but I think that basically explains the origins of this new rule.

Reverend the Hon. FRED NILE [12.34 a.m.]: All I need the Attorney General to say is that new section 59 (3) (a) refers to candidates of registered parties and Independents, so that the Electoral Commissioner is clear about the provision.

The Hon. JOHN HATZISTERGOS (Attorney General, Minister for Citizenship, Minister for Regulatory Reform, and Vice-President of the Executive Council) [12.35 a.m.]: For the reasons outlined by the Hon. Don Harwin, that is the case.

Question—That Christian Democratic Party amendment be agreed to—put and resolved in the negative.

Christian Democratic Party amendment negatived.

Schedule 2 agreed to.

Schedule 3 agreed to.

Title agreed to.

Bill reported from Committee with an amendment.

Adoption of Report

Motion by the Hon. Mick Veitch agreed to:

That the report be adopted.

Report adopted.

Third Reading

Motion by the Hon. Mick Veitch agreed to:

Bill read a third time and returned to the Legislative Assembly with a message requesting its concurrence in the amendment.

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Election Funding and Disclosures Amendment Bill 2010

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