Election Funding, Expenditure and Disclosures Amendment Bill 2011



About this Item
SpeakersWhan The Hon Steve; Primrose The Hon Peter; Khan The Hon Trevor; Borsak The Hon Robert; President; Kaye Dr John; Phelps The Hon Dr Peter; Buckingham The Hon Jeremy; Fazio The Hon Amanda; Faehrmann The Hon Cate; Ficarra The Hon Marie; Deputy-President (The Hon Jennifer Gardiner); Voltz The Hon Lynda; Shoebridge Mr David; Gardiner The Hon Jennifer; Brown The Hon Robert; Nile Reverend The Hon Fred; Clarke The Hon David; Green The Hon Paul; Searle The Hon Adam; Gallacher The Hon Michael; Cusack The Hon Catherine; Chair (The Hon Jennifer Gardiner)
BusinessBill, Division, Second Reading, Third Reading, In Committee, Motion, Report Adopted



ELECTION FUNDING, EXPENDITURE AND DISCLOSURES AMENDMENT BILL 2011
Page: 8183

Second Reading

Debate resumed from an earlier hour.

The Hon. STEVE WHAN [3.32 p.m.]: Earlier I was referring to the report of the Select Committee on the provisions of the Election Funding, Expenditure and Disclosures Amendment Bill 2011. I note that the committee's report is an item of business on the Notice Paper for tomorrow, which seems slightly ludicrous, given that we are dealing with the bill today. However, I will deal with some of the key issues that came out of the committee's report. The committee carefully considered the evidence it received. As I said earlier, it is clear that when the Premier appeared before the committee he had very little idea of—and frankly did not care about—the impact of this legislation. We have seen evidence of the impact of this bill on restricting the political voice of affiliated organisations, particularly the way in which this bill seeks to aggregate electoral communication expenditure.

That is one of the more outrageously biased parts of this bill. It does not need to be because there is a practical solution to this aspect of the bill that could genuinely ensure that aggregation of electoral communication expenditure comes within the cap. Labor Party amendments will address that issue at the Committee stage. Currently the aggregation means, in effect, that any affiliated organisation to the Labor Party that spends money on any campaign during the election period will have that money taken off the cap. Government members seem incapable of understanding the impact of that provision. In fact, their minority report is disingenuous about that aspect. Affiliated organisations to the Australian Labor Party do not always campaign in support of the Australian Labor Party; they have disagreed with policies of Labor governments on numerous occasions.

Under this Government's legislation, expenditure by an affiliated organisation opposing a Labor Party candidate or opposing a Labor Party policy would be counted in the cap for the Labor Party. For example, a Labor Party candidate runs in a local electorate with a $100,000 cap, as established by the existing legislation, and an affiliated organisation runs a campaign that has nothing to do with the Labor candidate or directly opposes the candidate—an example given to the committee was a union affiliated with the Labor Party runs a campaign on behalf of the Shooters and Fishers Party candidate in Balmain—and spends $40,000 on that campaign. That $40,000 comes off the Labor Party cap for that seat. I am sure that members opposite would think that is a terribly clever idea.

The Hon. Dr Peter Phelps: Terribly improbable I think would be more likely.

The Hon. STEVE WHAN: But most normal people would think that was unfair. The Government's claims that it is improbable are ridiculous because there are examples of it. The Electrical Trades Union's campaign against Labor's proposals on electricity is a classic case. At the Federal level it is likely and possible that building unions would run a campaign that did not agree with Federal Labor Party policy. Even The Greens in New South Wales expressed concern about the ability of affected affiliated organisations to undertake issues-based campaigns. The Greens' submission stated:
      The aggregation of the spending of organisations that are affiliated to a political party into the spending of that party for the purposes of the caps on electoral communication expenditure would undermine the right of those organisations to conduct campaigns on issues of concern to their members … This legislation would directly affect the rights of affiliated unions to run issues-based campaigns during election campaign, such as opposing electricity privatisation and Better Services for a Better State.
The experts who appeared before the committee agreed. Dr Tham said that the amendments in proposed section 95G were unfair in their operation and over-inclusive. Dr Tham indicated that the amendments were likely to infringe on some of the implied rights that the High Court may take into account. The report stated:
      Professor Twomey argued that the intent of 95G amendments could be achieved in a "safer" fashion through simply adding additional words to section 4 (8) of the Act rather than inserting the proposed 95G amendments.
Dr Tham also said:
      A provision should be inserted into the Election Funding, Expenditure and Disclosures Act 1981 (NSW) that aggregates the "electoral communication expenditure" of political parties, candidates and third-party campaigners (whether they be individuals or groups) when there is a co-ordinated campaign for the purposes of New South Wales State elections.

Labor members of the committee and, indeed, the majority of the committee, including The Greens and the Shooters and Fishers Party, believed that this was a flawed piece of legislation and should be changed. The committee recommended that the schedule of the Election Funding, Expenditure and Disclosures Bill be amended so that the electoral communication expenditure of a party and its affiliated organisations is aggregated into the cap of the party only where the expenditure incurred by the affiliated organisation has the effect of directly advocating a vote for or is incurred at the request of or in cooperation with the party to which it is affiliated. That would be a fairer way to deal with this issue and would be less likely to be ruled out by the High Court. It is impossible for any of us to predict a decision of the High Court, but the expert evidence did not support the Government's contentions. In fact, the minority report of the Government has no support based on the evidence—except for the ramblings of the Premier, who clearly did not know what he was talking about in this case.

The Labor Party will put forward an amendment on this issue. The Greens initially circulated an amendment on it. However, I understand from a more recent press release that they have now decided not to move any amendments to this legislation. In fact, The Greens press release, which is an amazing piece of political speak, says that they are very upset that the Premier would not talk to them on this issue. But they obviously love being beaten up by the Premier because they will roll over and agree with him. This is an amazing sellout of people whom The Greens have been saying for months that they will support. I am sure I will come back to that at a later time. I will now turn to affiliation fees, which is obviously a key concern for the Labor Party, not surprisingly. The strong opinion from the experts who appeared at the committee was that the Government's attempt to ban affiliation fees was likely to be problematic when it came to consideration of this matter by the High Court. Dr Tham from Melbourne said:
      A ban on organisational membership fees (including trade union affiliation fees) will have a severe impact upon the trade union-ALP link—

obviously that is what the Government wants—
      by either prohibiting or severely limiting the amount of money that trade unions can contribute ... the question here is whether a ban on organisational membership fees is a legitimate way of dealing with concerns regarding the electability of the Australian Labor Party ... The answer is "surely not": These are matters for the ALP and its members to decide, not one for regulation, let alone contribution limits involving a ban on organisational membership fees.

Dr Orr from the Democratic Order of Australia, whom Government members sought to quote on a number of occasions, felt that a limit on the affiliation fee at a reasonable level was acceptable but anything less than that would be likely to be struck down. Labor members of the committee acknowledged that they were willing to look at a cap in order to ensure that there was a reasonable limit. At the moment the cap in the legislation is theoretically $2,000 but in reality it never goes anywhere near that figure. In fact, it is only a matter of dollars that could be counted on one hand. Dr Tham said:
      Is there a compelling justification for such a severe incursion into the freedom of the ALP to organise itself as it sees fit? It is exceedingly difficult to see one. There is, firstly, the prima facie legitimacy of membership fees—they are payments made as a condition for participating within political parties … Absent is an adequate rationale for limiting freedom of party association, it is hard to escape the conclusion that such a ban represents an unjustified limitation on the freedom of party association.

The Greens NSW again commented that it would be highly inappropriate for legislation to interfere with the internal structure of a party. Barry O'Farrell, who has put this forward, put his name to a Liberal Party submission that was made to a previous inquiry on this issue. He endorsed the submission, which said:
      Our approach is to respect the different traditions of our party and allow affiliation fees to be retained for non-campaign purposes.

When I questioned Mr O'Farrell on this in the hearings and asked him what had changed since then, he said that nothing had changed. Clearly, this is a party that thinks it has the majority and the numbers in Parliament and it has been able to bully The Greens into supporting it to ban affiliation fees, which are a legitimate means for organisations to affiliate. Let us remember that under previous legislation affiliation fees could be used only for administrative purposes. It is completely wrong to suggest that they can be used as a substitute for campaign expenditure. Dr Orr suggested affiliation fees should not be subject to an outright ban but should be set at a reasonable limit, as I mentioned before. He said:
      As a moral principle such membership fees ought not be banned, and as a matter of constitutional law probably cannot be. The bill should be amended to permit organisational membership fees at a reasonable level to cover the administrative cost of servicing members.

This is strong evidence from the experts who appeared before the committee, not the ramblings of a Premier who is more intent on vindictive, get-even politics, as can be seen by the bill before the House. As a result, the majority of committee members recommended that this legislation:
      … be amended to permit fees to be paid by bodies to the party to which they are affiliated, provided the fees are capped to a very modest level, which is equal to or not greater than the administration costs imposed on the party by the affiliation, and the consent of their members to do so has been obtained.

The Labor Party members of the committee substantially agreed with that recommendation, but we believe the consent of the members of any democratic organisation should be left to the organisation to determine rather than imposed by Parliament. Let us look at the important principle that we are about to break. We are about to see a rare example in this House of a Government passing legislation with the support of a minor party that will deliberately change the structure of an opposition party.

The Hon. Dr Peter Phelps: That is nonsense.

The Hon. STEVE WHAN: That is exactly what it does. We have not seen this since Robert Menzies' time. That is the frank comparison because this is a blatant, self-interested attempt by the Government to destroy a political opposition and it is a self-interested attempt now by The Greens to go along with it. The Greens have circulated amendments which we are now informed by press release they do not intend to move. I may help them out later by moving some of their amendments.

The Hon. Melinda Pavey: That is kind of you.

The Hon. STEVE WHAN: It is kind of me. I appreciate the Hon. Melinda Pavey's confidence in me. As I said before, the Premier was completely wrong on a number of things he said about third party campaigners. The issue of third party campaigners is one of the key areas where the Government is wrong and where all the evidence to the committee showed that it was wrong. Again the majority of the committee recommended substantial changes to the legislation to rectify that situation. In his evidence the Premier said:
      … the Government's bill does not prevent third-party campaigners or other peak groups from accepting corporate donations that are used to run genuine issues-based campaigns unconnected to a State or local government election. Such donations are not

      political donations under section 85 of the existing Act and therefore are not subject to the prohibition on political donations from corporations …

The Premier demonstrated a complete misunderstanding of the application of the definitions in the current legislation. His view was immediately challenged by Professor Anne Twomey, Professor of Constitutional Law at the University of Sydney Law School, who said:
      … the dispute in the last session then largely turned on whether that would prevent third-party campaigners running what are described as issues campaigns. Mr O'Farrell was of the view that it did not prevent that. The way I read it and the way some other people, particularly third parties, might read it is that it is just a little bit more uncertain because it talks about promoting or opposing indirectly a party and it also talks about influencing directly or indirectly voting at an election. Any issue that you discuss can be one that might influence the way people vote at an election; that is the whole idea of freedom of political communication, and the High Court has talked about that.

Professor Twomey went on to give examples of issues-based campaigns that she considered may face a problem. She finished by saying:
      On my reading of it, the consequence is that it does potentially affect issues campaigns. If I were an issues campaigning person, be it for the Cancer Council or whoever, I would want to be cautious because I would not want to breach the law. To the extent that there is any doubt, of course I would not.

That view was supported by the vast majority of people who gave evidence, including members of the Last Drinks coalition campaign. The Sydney Alliance also was concerned that this would substantially limit the ability of community organisations to undertake issues-based campaigns. Let us face it: this affects groups such as the Council of Social Service of New South Wales and Unions NSW that have run campaigns such as "Your Rights at Work" and "Better Services for a Better State". It also will affect the public sector unions. The Coalition wants to stop these campaigns because it does not see them as being in its interest. Those campaigns will not happen under this legislation because the member bodies of those groups will not be able to make contributions towards those campaigns. That is the simple truth of this legislation, and it is a truth that the majority of the committee agreed with.

The Greens—despite trotting around the place for the last few months and telling these groups they supported their efforts to continue their campaigning—have sold those groups out in their press release this afternoon. It is embarrassing evidence of the divisions that exist within The Greens—a party that happily accepted a $1.6 million Federal campaign donation to Bob Brown. The New South Wales Greens do not care about that because they do not want anything to do with Bob Brown. He is apparently separate and the money he raises does not infringe on their conscience.

But more importantly, in the context of this discussion, Labor has a number of amendments to this legislation that will improve the bill. It must be in the Government's interest to improve the bill to ensure that the legislation is not struck down by the High Court. Yet despite the bill having been shown to be flawed by a committee of this Parliament, by a majority of representatives of the House and by several constitutional experts, three of whom appeared before the committee, the Premier will proceed with the bill without taking into account the concerns raised by the experts. That shows poor government, but it also shows that this is a Government that is driven by vindictiveness and is not too worried about whether the legislation will be struck down by the High Court. The Government's interest in this legislation is simply that it puts on a show. The Coalition would like to continue to receive corporate donations.

The Government's objectives in relation to this legislation are twofold: to smash the Labor Party's structure and to do so through legislation that is likely to be ruled invalid. If at some stage this legislation is overruled by the High Court because the Government is unwilling to accept expert advice on the flaws in its legislation, the people of New South Wales ineluctably will conclude that this Government is not fit to govern and not capable of governing. Time does not permit me to list the range of areas in which the Government has behaved similarly, but I will have an opportunity to do so during future debate. This Government is simply not capable of doing the job. In this specific instance it is engaging in a vindictive campaign against its political opposition.

Let us be clear about who the victims will be. Members of the Government may giggle and feel it is appropriate for them to attack the Opposition, even though most people who are interested in democracy would assert that a government has an interest in having a strong opposition as an important part of the Westminster democratic process. But the other victims of this process are the not-for-profit peak groups who conduct campaigns, minor parties such as the Christian Democratic Party and the Shooters and Fishers Party, and any other minor political party that may wish to challenge in future elections. The Greens may feel that they are not victims of this legislation, but unless they demonstrate moral certainty and ensure that this legislation will operate similarly to Federal laws, their ability to campaign in future elections will be substantially reduced. This legislation is flawed, but the Government is too pig-headed to acknowledge its flaws.

Amendments that will be moved by the Labor Party in relation to third-party campaigns will rectify the bill's flaws by allowing peak bodies to collect funds from bona fide member bodies and conduct campaigns within the restrictions defined by existing legislation. As I stated earlier, a number of academic experts contributed views to the parliamentary committee's inquiry. It is a real shame that those opinions have been ignored by the Government. Dr Tham suggested that the affiliation fees measure should be deleted. That suggestion is supported by the findings of the 2008 parliamentary committee on political funding, which stated:
      ... the Committee believes that trade union affiliation fees should be permissible, despite the proposed ban on union donations. To ban union affiliation fees would be to place unreasonable restrictions on party structures.
Government members might respond to that by saying, "But you were in government then". According to members who were part of that committee, the Labor Party did not have majority representation on that committee. The recommendation to which I have referred reflects the view of the majority of the committee. Chapter 7 of the report by the select committee, "Inquiry into the provisions of the Election Funding, Expenditure and Disclosures Amendment Bill 2011", also contains a discussion on whether or not the legislation is likely to be challenged in the High Court and the likely success of any such challenge. All the views expressed in the report, which have been derived from evidence given to the committee by Dr Tham, Dr Stewart and Dr Orr, indicate that a successful challenge is a significant danger if the legislation is passed without amendment. In light of that advice, it is arrogant and irresponsible of the Government to proceed without amending the legislation.

As I stated earlier, the Government's introduction of this legislation is a demonstration of its vindictiveness and represents a deliberate attempt by the Government to change the structure of the Australian Labor Party. The Greens would be rightfully upset if any future government attempted to interfere with the party's structure, but they are apparently willing to support this legislation. We know that there has been a split in The Greens party room and that The Greens have rolled over. I am sure that matter will be discussed in more detail during the Committee stage, but it concerns me that while the Premier berated and bagged The Greens during his speech and refused to meet with them or consider their amendments, they have rolled over. That is a sellout of principle by a party that often claims to be a principled political party. We know that the Government is not principled because we know the way in which the Premier works and about his focus on getting even with those who kept him and his party out of government.

The people of New South Wales kept the Liberals and The Nationals out of government for 16 years. This legislative attack on structures of the Labor Party, in an attempt to prevent decent opposition, is the most obvious form ever of neutering political opposition in New South Wales or nationally since the Menzies period. Government members should be ashamed of that. Every single Government member should hang his or her head in shame over destroying the political processes of this House by forcing this legislation through without proper consideration being given to the select committee's report, without having the Government's response to the report, and without an opportunity having been provided to consider the opinions given by expert witnesses before the committee.

Government members also should hang their heads in shame at their efforts to blatantly and in a partisan fashion use their numbers to destroy political opposition. They should be embarrassed that their leader does not give a damn about the collateral impact of this legislation on not-for-profit groups in our community, its effect on peak bodies, and its impact on the ability of people to conduct third-party campaigns. They should be doubly ashamed for still allowing big corporate entities to conduct third-party campaigns. Highly wealthy individuals will still be allowed to run third-party campaigns.

The Hon. Lynda Voltz: The Greens should be ashamed as well.

The Hon. STEVE WHAN: The Greens should be ashamed as well because they are effectively saying to the people of New South Wales, "It's okay for you to run a third-party political campaign if you are wealthy or if you are a corporation—which means you would be more likely to support the Liberal Party—but it is not okay for you to be a collective."

The Hon. Dr Peter Phelps: Or you are an individual union.

The Hon. STEVE WHAN: I acknowledge the interjection made by the Government Whip. The Government will allow individual unions to collect donations from their members, but will not allow collective action or environment peak groups or groups such as the Council of Social Service of New South Wales [NCOSS], which represents people who are least well off in our community, to do so. It is okay for the Hon. Dr Peter Phelps to have his political pointscoring recorded in Hansard, which is all he cares about, but I assure him that Labor members care about a hell of a lot more than that. We care about democratic process in New South Wales, the capacity of not-for-profit and non-government bodies to represent their members in the State's political process, and the undemocratic process proposed by the bill.

During the Committee stage I will move Labor's amendments. The Greens have circulated amendments, and I will move some of their amendments because they have sold out to the Coalition. The Greens' principles are in the dust. We know they do dirty deals. In the short time I have been a member of this House I have seen that occurring. The Greens' attitude to this legislation is a clear example of doing dirty deals. This is one of the biggest sellouts of The Greens' principles I have ever seen. The Greens will claim they are preserving rights for individuals, but peak environmental groups will not thank them for their part in this legislation being passed, especially when they realise that The Greens' interests and environmental interests do not meet anymore. I urge members to support Labor's amendments.

The Hon. PETER PRIMROSE [3.59 p.m.]: Earlier today a 175-page report was tabled on the inquiry conducted by the Select Committee on the provisions of the Election Funding, Expenditure and Disclosures Amendment Bill 2011. Initially I was apprehensive but ultimately I was quite pleased to be part of what I thought was a very good inquiry. It is the sort of thing that the Legislative Council does well. The Legislative Council has a long tradition of establishing committees and those committees examine and consider issues, listen to members of the public and interested groups and usually come down with pretty reasonable reports. I place on the record my thanks to Dr John Kaye who chaired the committee well.

While I do not agree with everything that appeared ultimately in the majority report, as always happens in this place, it is a fair, reasoned and balanced report. However, I am sad that most members of this Chamber will not have an opportunity to read and consider that report prior to giving full consideration to this bill, which is the reason why we conduct these inquiries. Many witnesses who took the time to present their arguments to the committee were questioned on the assumption that this report would inform consideration of the Election Funding, Expenditure and Disclosures Bill 2011. They and every other person who participated in the committee hearings and appeared as witnesses will be fully aware that by the time members in this Chamber read the report and the government response to it the bill will have been considered by the Parliament, which is a retrograde step.

The Hon. Robert Brown: It is disrespectful.

The Hon. PETER PRIMROSE: As the Hon. Robert Brown said, it is disrespectful of all those witnesses, the traditions of this House and its committee system. Regardless of that, I again commend Dr John Kaye not only for chairing the committee but also for reading many submissions and for putting a great deal of work into producing a balanced and reasonable report. I refer members to all the comments that were made in the report. In the weeks ahead when members have an opportunity I hope they will read those comments. I urge them to listen to the voices of the community which we tried to reflect in this report.

I refer members to the comments I made in my dissenting report which reflects some of those matters with which I particularly disagree. It is clear from the minutes that I agree with the overwhelming bulk of the report, but I reiterate I am sad that it will not be adequately considered. As has been mentioned by the Hon. Steve Whan and as outlined in my dissenting report, Associate Professor Graeme Orr from the University of Queensland stated on page 2 of his submission that a complete ban on affiliation fees would be problematic. I urge all members to have a close look at his submission on behalf of the Democratic Audit of Australia in which he states:
      From a constitutional viewpoint, mere donations—especially large scale ones—are not in themselves acts of political communication. But smaller contributions in the form of a reasonable membership fee, set to cover the administrative costs of a membership-based organisation, are intimately tied to the freedom of political association. As a moral principle such membership fees ought not be banned, and as a matter of constitutional law probably cannot be. The Bill should be amended to permit organisational membership fees at a reasonable level to cover the administrative cost of servicing members.
In essence, Professor Orr holds the view that a full ban on affiliation fees would be likely to infringe on freedom of political association—a point emphasised by a number of people who made submissions and who were questioned by the committee, including Professor Tham. Professor Orr introduced the prospect of a restriction on the size of affiliation fees being reasonable and suggested basing them on the administrative costs associated with membership. The Labor members of the committee believed that affiliation fees should remain as they are, given the evidence provided in the report and the fact that they can be used only for administrative purposes. Labor members agreed also with the majority report recommendation that the fees be capped at a level "equal to or not greater than" the administrative costs of the affiliation—a reasonable recommendation and one with which we agree.

Labor members of the committee had concerns about the final part of recommendation No. 3 but again it was acknowledged that that formed part of the majority report. Witnesses from affiliated and non-affiliated unions who gave evidence to the committee were consistent in pointing out that they have democratic structures, that they should be able to make affiliation decisions, and that they should be accountable to their members in the normal way. Labor members oppose any move away from the ability of an affiliated body to control its own decisions democratically. I turn to the comments made by Professor Graeme Orr about this whole aggregation rule concept. His strong argument, which he emphasises in his submission, is that the aggregation rule is wrong and likely to be unconstitutional. He states:
      The Explanatory Memorandum gives no justification for this rule. Presumably its rationale is a sense that the party expenditure cap is undermined if campaigning by a body associated with the party is not included in that cap. That is, its purpose is indirect, as an anti-avoidance measure, rather than directly to restrain third-party expenditure.

      But the aggregation rule is not drafted merely for anti-avoidance: as it would be if it merely "roped-in" expenditure by any front group set up by a party, or entity controlled by the party. It also goes well beyond the approach sometimes taken overseas, namely to have a rule that aggregates "co-ordinated expenditure". The point of that kind of rule is to encourage independence of expenditure and campaign decisions.

      The proposed aggregation rule's motivation seems directed at the Labor Party and affiliated unions. The rule however is neutrally drafted, and will apply to any party with affiliated organisations: [such as] … the Shooters Party …

      The aggregation rule is a blunt instrument. Unions sometimes advertise or campaign against Labor policy—notably unions in the public sector, but also some more militant private sector unions. It would be perverse to include in the Labor party's expenditure cap any expenditure that does anything other than campaign in the Labor cause.
I refer, next, to third-party campaigners. It is clear from all the evidence to what I will call the Kaye committee that an unintended consequence of this legislation would be to prevent peak bodies from collecting contributions from their constituent or member groups to conduct any campaign that fell within the broad definition of a political campaign in the existing Act. As a consequence, Labor members supported the committee's recommendations in that chapter. Chapter 7 deals with constitutional issues. Paragraph 1 (h) of the committee's terms of reference asked for an assessment of the risks of a successful constitutional challenge. While we accepted that the committee cannot prejudge what may or may not happen if the High Court were to consider this legislation, Labor members believe the evidence indicates that if this legislation were passed unamended there would be a strong risk of a successful constitutional challenge.

In reaching this conclusion, we disagree with those parts of the committee comment in that particular chapter that fail to highlight this risk. The evidence supporting our conclusion is largely included in the committee report. In this and previous inquiries legal evidence largely has involved discussing the Lange test. As outlined in the committee report at paragraph 7.45, this has two limbs. First, does the section effectively burden the freedom of political communication? Secondly, if yes, is it reasonably appropriate and adapted to serve a legitimate end in a manner that is compatible with the system of representative and responsible government? Witnesses before the committee who dealt with this aspect of the legislation generally agreed that the answer to the first limb of the test was yes. The debate then rests around what the High Court, if it were to deal with the legislation, might define to meet the second test.

The committee found the views expressed by Dr Tham, Dr Stewart and Dr Orr extremely persuasive. These views are quoted in the committee report at paragraphs 7.49, 7.54, 7.55, 7.65, 7.67, 7.73, 7.76, 7.77 and 7.78. These opinions make it clear that there would be a significant danger of a successful challenge should this legislation proceed unamended. I specifically highlight those points because, again, members who take part in this debate will not have had the opportunity to have read the report and the various comments, let alone the various submissions the committee received. In relation particularly to that reference to the committee about constitutionality, members should read those sections and make up their own minds. Certainly the academics, those professionals and constitutional lawyers who appeared before the committee, were able to express very clear comments.

This risk could be significantly reduced by adopting the recommendations put forward in this report, which would result in more reasonable definitions of aggregated expenditure, reasonable caps on affiliation fees being at a level that reflects the administrative costs of affiliation, and removal of the inequity the Government wishes to create for peak bodies. I should like to refer briefly to the issue of the constitutionality of restrictions on political freedom. I shall conclude my contribution by again quoting Dr Orr. I do so because I am not a constitutional lawyer and that was the reason the committee was established. We asked not only members of the public but also those with particular expertise to give the committee their opinions. Again, I am particularly aggrieved at the fact that most members of this House will not gain from being able to have read the comments in this 175-page report. Dr Orr states:
      Where the Bill falls down constitutionally is in its aggregation rule, particularly as it builds on the ban on organisational donations. This imposes a significant and practical burden on the freedom of political association. (Legally, it does not matter that the burden is indirect and practical). It does so from both a party perspective and, importantly, the perspective of other organisations.

      From the party perspective, a significant disincentive is imposed on one traditional form of party organisation: the mixture of individual and organisational members. From the perspective of other organisations, the Bill effectively tells any body with an affiliation to a political party that it must be silent during an election campaign—it cannot campaign independently of the party, even if their campaign is critical of a policy of that party—or else [it can] disaffiliate from the party. (Although curiously and presumably unintentionally, the Bill appears to leave an organisation free to disaffiliate in an election year and re-affiliate afterwards).

      The aggregation rule is therefore constitutionally unsound—
for two reasons, says Dr Orr—
      (a) The burden on the freedom of political association is heavy.

      (b) The burden is disproportionate to any legitimate aim - such as deterring party controlled front groups, or ensuring independence by capturing co-ordinated expenditure.
      (c)
By establishing this committee and now seeking to debate such an important piece of legislation without members having the opportunity to consider that committee's report goes directly against all the traditions of this House. I have never seen that happen and I certainly hope we never see it again. The committees of this House are important. Members may disagree with reports and may believe that something in a report is wrong, but members of the public take the opportunity we give them to aggregate their views and address the issues we raise. They fully expect that will be taken into account. Frankly, it is impossible to table a report after 11 o'clock and then on the same afternoon debate 175 pages of what is a good report that has been compromised and debated. I commend all members for their time and contribution. I urge all members to think very carefully about going again down the path of voting on such an important piece of legislation without having considered properly all the views expressed by the many members of the public who believed, because we led them to believe, that their views would be taken into account fully.

The Hon. TREVOR KHAN [4.16 p.m.]: Whilst we are debating the Election Funding, Expenditure and Disclosures Amendment Bill 2011, I take this opportunity to acknowledge and to thank Dr John Kaye for the way in which he conducted the inquiry. The courtesy he showed to committee members and to members of the public who appeared before it was exemplary and he is to be commended. I thank also the other committee members. Whilst at times the inquiry was reasonably emotionally charged all members acted in the manner in which one would expect members of this House to behave. It was a worthwhile inquiry that allowed a proper analysis of the bill. I observe first that the whole reason for this bill—indeed, the whole reason for legislation in this area—was demonstrated by the comment of one witness who said:
      Do not forget money is the lifeblood of politics or we would not be here. Our representatives need funding to run a campaign.

Regrettably, that is the perception not only of one witness but, indeed, of the public. That comment demonstrates the baseness to which so many believe politics has descended in New South Wales. It demonstrates the regard with which politics and politicians are held by many members of the public. It behoves each of us to raise the standard of politics in this State and to treat these matters with the consideration and thoughtfulness they truly deserve. When I spoke in the debate on the Election Funding and Disclosures Bill 2010 I emphasised the negative impact of not properly regulating third party campaigners. Indeed, there was an interchange with Dr John Kaye on that occasion. Nevertheless, I said:
      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 purpose of my contribution relates to third party campaigning. Let us look at what the 2011 bill does not do. It does not place caps on donations. It does not define electoral expenditure or electoral communication expenditure. It does not prevent industrial organisations from affiliating with political parties and it does not prevent industrial organisations from affiliating with one another. It does not prevent third party organisations from running campaigns. What is plain from many of the submissions made to the inquiry is that the witnesses believed all those things. They believed that this bill had a wide range of ramifications but it does not.

The reality is that witnesses were talking about donation and expenditure caps. They were talking about the definition of electoral expenditure and they were talking about electoral communication expenditure. They were talking about the complexity of the legislation. Those issues are not issues that arise under the 2011 bill. In many cases they are issues that arose under the 2010 legislation. By way of example, with regard to third party campaigners, donation caps and expenditure caps arose under the 2010 legislation and we all voted for it—we all supported it. One of the difficulties evident as a result of the inquiry was a misunderstanding by some witnesses that that consequence arose from the 2011 bill. It did not. Clearly the Sporting Shooters Association fully understood what had happened. They understood that their capacity to donate to the Shooters and Fishers Party—whatever one might think of that—and to make contributions of $300,000 before the last election was circumvented by the 2010 legislation.

The Hon. Robert Borsak thought I was trying to make a tricky point—I was not—when I asked whether the donations had been made before 1 January. The Hon. Robert Borsak and the Sporting Shooters Association understood that if those donations had not been made by 1 January they would have been illegal. The capacity for the Shooters and Fishers Party to receive the level of donations they had received in the past disappeared as a result of the 2010 legislation. One would have to concede that one of the ramifications of the current legislation is that what is left to donate, a mere couple of thousand dollars, disappears as well because of the ban on corporate donations. The vast bulk of the money that was previously contributed can no longer be contributed because in 2010 the Government agreed to put a cap on donations.

The Hon. Robert Borsak: We did not agree to that.

The Hon. TREVOR KHAN: I take the member's point. I do not think there was even a division on the third reading of the bill. An interrelationship of outcomes arose principally because of the 2010 legislation and not the 2011 bill. I make it plain that the donation and expenditure caps that were imposed by the 2010 legislation were not unintended. They were not a surprise; the deliberate intention was to limit the donation size. Negotiations occurred between The Greens and the former Labor Government—Dr John Kaye and Mr David Shoebridge made no secret of that—to determine an outcome.

Mr David Shoebridge: Banning tobacco, banning full profit alcohol—

The Hon. TREVOR KHAN: I am sure Mr David Shoebridge is right and that that will be the subject of another committee reference. I make the further observation that these expenditure caps were part of The Greens policy. We know that because in Mr David Shoebridge's contribution in January 2010 to the Joint Standing Committee on Electoral Matters he said:
      However, if electoral expenditure caps are to be placed on political parties then some form of reasonable expenditure caps must also be placed on third parties to ensure that no one voice dominates a campaign.

The domination of campaigns is a concern that I held under the 2010 legislation—a concern that must be held by all members. The domination of campaigns can come from a variety of sources—from political parties with undue power due to the money they have, or from third party campaigners with excess money. Caps help to restrain that domination of campaigns. For a perfect example of unrestrained third party activists completely subverting the political process we need go no further than the developing United States presidential campaign. An enormous dislocation of the political process is arising from the super political action committees [PACs] that perform in that environment. On 14 February 2012 Mr Bill Moyers and Mr Michael Winship wrote an article that appeared in the Huffington Post entitled "Money Throws Democracy Overboard." The American experience identifies that some $2 billion will be collected by a variety of super political action committees and applied in the political campaign.

The PRESIDENT: Order! Members will allow the member with the call to be heard in silence.

The Hon. TREVOR KHAN: It is necessary to ensure that expenditure and the accumulation of donations by third party campaigners, as well as political parties, are effectively regulated, which is essential for democracy in New South Wales. It is essential for the restoration of faith in the political process in New South Wales. This bill will assist in restoring that faith.

The Hon. ROBERT BORSAK [4.28 p.m.]: The Election Funding, Expenditure and Disclosures Amendment Bill 2011 will result in the most comprehensive gutting of the democratic process that has ever been seen. It commenced with the previous Labor Government's Election Funding (Amendment) Bill which, far from cleaning up politics in New South Wales, was the first turn of the screw on real democracy in this State. The limiting of electoral expenditure and the capping of donations, with a perceived loophole for the unions, was a grave error of judgement. The Greens cheer squad, which passed those amendments in 2010, is now lining up for the second instalment, this time working with the Coalition Government. This time the coalition of conservatives are setting out to pay back Labor for its wrongs and at the same time are reducing politics in New South Wales to the plaything of the wealthy.

The terrible irony of all this is that The Greens, who have campaigned forever on getting money out of politics in order to make politics more democratic, are now siding with a government that will silence the collective voices of those very people they said needed to be heard. The Greens are setting up New South Wales for United States style group campaigns where those with big wads of money get out there and push partisan positions, without those with countervailing arguments having the money to match. The bill approved and ticked off by The Greens is a can of worms, difficult to interpret and difficult for ordinary voters to understand.

It is also unfortunate that we have to debate a bill an hour or so after the report of the Select Committee on the Provisions of the Election Funding, Expenditure and Disclosures Amendment Bill 2011 has been tabled in the House. I wonder how many members in this place have read the report. How many in the media or the general public understand the deep implications of these amendments to the structures of democracy in New South Wales?

The Shooters and Fishers Party could easily have come to an arrangement with the Premier's office that would have done over every union in New South Wales, but somehow exempted hunting, shooting and fishing clubs and organisations from these artificially set limits on political donations. Members should be in no doubt that we were approached with exactly such an arrangement. However, our party has held a consistent position in regard to political donations. We do not support artificially set levels and limits on unions, community and church-based groups or not-for-profit organisations of all kinds. We also do not support artificial limits and caps on expenditure, while at the same time scrapping the Political Education Fund—a fund that, God forbid, might have been used to educate voters on what the effects of this attack on democracy is really all about.

Unlike The Greens, we have not had the luxury of being in constant communication with the Premier and his office about this bill. We have, however, sat and discussed it with the Opposition in great detail, and with a number of unions which have raised serious concerns pertaining to the bill. In this place, your word means everything, and it is obvious that some people are preparing to sell the moral compass for short-term political gain. I am sorry to say that the voters throughout New South Wales have been sold out by The Greens for short-term political gain. Their crazed need to knock off the Labor Party and their union affiliates lines up with their agenda for the restructuring of the political process in this State, if not eventually Australia—after all, Bob Brown is after a 51 per cent majority in the lower House of the Federal Parliament.

As noted in our party submission to the select committee, the current bill proposes restricting donations to individuals on the electoral roll. It seeks to ban corporate, union, community and other not-for-profit organisations from using or donating funds to support particular candidates or parties. That is undemocratic and undermines the rights of like-minded citizens to band together to participate and engage in the political process. There are already rigorous means to guard against undue influence and to ensure transparency of political donations. Details of political donations are publicly available on the Election Funding Authority's website, where they can be scrutinised in detail.

What does this bill do? It sets the electoral playing field firmly to the advantage of those individuals on the electoral roll who, through hard work, good luck or family bequest, have large monetary resources at their disposal. These people are, as I mentioned earlier in my speech, the real beneficiaries of The Greens' deal with the Government. We now are being set up for a political process in New South Wales that will shut down community groups, church groups, hunters, fishers, greenies, unions and any and all community-based organisations, as they will be so severely limited in fundraising that the competition for ideas in the electoral campaigns we have enjoyed in New South Wales will be permanently impoverished, if not silenced.

These resources can then be turned unfairly toward political advantage for their chosen party or cause. There are numerous examples in our society today of hundreds of personal-wealth-created foundations pushing all sorts of weird political views and positions. To allow these rich individuals the right of third party campaigner registration, whilst not allowing aggregation of the less well off to participate in the political debate, is undemocratic and just plain unfair.

The Sporting Shooters Association of Australia, for example, is one peak body representing 48 branches and approximately 100 affiliated clubs throughout the State and nearly 50,000 individual members. This is an organisation representing a large group of people who have come together for an explicit purpose. They do so conscientiously, and as citizens of this State: they participate and engage in the political process. They have an undeniable right to empower their organisation or association to make political donations to parties they feel will best serve their interests.

The effective banning of union affiliation with Labor will have its echo in community groups which will, though not affiliated with other parties representing their concerns, nonetheless be constrained in financially supporting their desired parties. The inevitable effect of this is that those parties are in dire risk, over a number of electoral cycles, of running out of money and eventually failing in the race for political ideas and representation in this State. This is, I think, the desire of the Government and I suspect also The Greens, who have less than secret desires of replacing the Labor Party as the representative of the working classes. Hundreds of hunting, sporting shooting, fishing and other outdoor-related clubs throughout the State are unashamedly supportive of the Shooters and Fishers Party, and they expect and deserve nothing less than their ability and their democratic right to aggregate funds and donate towards parties or individuals that best serve their interests, and who they feel can best achieve positive outcomes on their behalf.

The whole process of setting up the select committee was a complete farce because, as things stand at the moment, it is as clear as day that the fix is in between the Premier and The Greens. Dr John Kaye, who chaired the committee examination of the bill within the terms of reference, has been rolled by his party room, as far as I can ascertain. I would like to take a moment to echo what the Hon. Trevor Khan said: Dr John Kaye ran an excellent committee. He did a great job, a very fair job, and I commend him for it. This bill, when passed, will result in an appeal to the High Court of Australia. I believe that large parts of what is appealable would likely be successfully appealed, flushing out this law and striking down most of the undemocratic amendments. The Greens are the ones who have indeed advertised "democracy for sale", and now at last have completed the transaction and sold the voters of New South Wales and even their own supporters to the big end of town.

Dr JOHN KAYE [4.35 p.m.]: On behalf of The Greens I address the Election Funding, Expenditure and Disclosures Amendment Bill 2011. I feel I hardly need to do so given that my position and the position of the party have been so eloquently explained by previous speakers. Nonetheless, I will endeavour to cut through the fog created. Before I begin my formal remarks, I want to observe that we have been accused of doing deals with the Government, we have been accused of doing deals with Labor, and we are constantly accused of doing deals with people. I suspect that that shows that we do not do deals with anybody. In fact, I tried to negotiate with the Premier over this matter, and this year he very successfully slammed the door in our face—but more on that later on.

I want to begin by observing that the Election Funding, Expenditure and Disclosures Amendment Bill 2011 is at its core—and I stress at its core—a great victory for those who have campaigned tirelessly, for decades, to clean up the rivers of cash that flow into the Labor Party, the Liberal Party and The Nationals, creating not only the perception of corruption but also the reality of politics for sale. Finally, in 2009, the outrage of the developer donations flowing into the then Government, outrage that had been building up since previous governments, came to a head and caused in the people of New South Wales an irresistible desire to change the system.

In 2010 major advances were made by putting restrictions on donations of cash flowing into political parties from all sources, and ending donations from the tobacco, alcohol and gambling-for-profit organisations, recognising that those industries were particularly pernicious in their influence over the political process. Now, in some senses, we complete that cycle of legislation by saying that no corporation, no union, no organisation can donate to a political party. It is a great victory for the communities that have campaigned tirelessly to achieve this. It is also a great victory for my erstwhile colleague Lee Rhiannon, who worked extremely hard to achieve this kind of outcome.

It is also a great victory for people who stood up time and again and said that the only reason a decision is being made is because there has been a river of cash flowing into political parties. This is an election promise of The Greens, The Nationals and the Liberal Party, and this legislation makes good on that promise. However—and it is a huge "however"—this legislation is far from perfect. It is a great tragedy that there was no time for this House to have a good look at the legislation. As outlined by the committee—despite what I believe was an excellent set of evidence presented to the committee and despite what I believe are very balanced recommendations within that legislation—the bill does good things but it has problems.

When one thinks about it, why would this legislation not have a problem? Maybe there is an overriding problem in politicians writing legislation to regulate donations. Maybe what we are seeing now is the imperfection not just of the O'Farrell legislation but of the political process trying to regulate itself. There may well be an argument that we should move to another form of regulation of the political process that does not involve us making decisions that benefit or disbenefit our own political parties.

It is not surprising that the Premier succumbed to the temptation of turning this legislation away from just its pure intent, which was to restrict donations to individuals, and broadened it out. I say that fully recognising that the regulation of third parties is crucial. I acknowledge the contributions of the Hon. Trevor Khan in 2010 and again in 2012 in this regard. I also acknowledge the contribution of thousands of academics around the world who have been saying that we need to address the issue of third parties because if we do not we create a highly unlevel playing field. One of the great failings of this bill is that it is unbalanced in the way it addresses third parties.

The legislation recognises problems of coordinated campaigning between unions and the Labor Party and it recognises problems of aggregation of capital, but it does not do anything to restrict the $1.166 million that large corporations can continue to spend. One of the problems the report points out and one of the problems that will remain is that once this legislation is passed each of the three large tobacco corporations can spend $1.166 million of their own money advertising for whichever party chooses to have the weakest position on tobacco control, while the Cancer Council cannot take money from Action on Smoking and Health and cannot take money from any other organisation to try to counter those outcomes. The problem of third party pooling of their money remains once this legislation passes.

The Hon. Steve Whan described the problems with affiliated organisations, particularly the rather bizarre impact of this legislation whereby an affiliated union that chooses to campaign in a hostile way to the Labor Party during the capped period will, in fact, have the money it spent deducted from the allowable expenditure of the Labor Party. It is a problem that no doubt will emerge and it is a problem that we will have to come back and fix later. One of the more complex issues regarding affiliation—and my personal opinion is that both the Labor Party and the union movement would be better served by not having affiliation—is what remains in this legislation is a specific ban on affiliation fees—

The Hon. Dr Peter Phelps: But not on affiliation, John.

Dr JOHN KAYE: But not on affiliation. Of course, as the Hon. Dr Peter Phelps—who is a great fan of market economics—knows, if there is no consideration for a service it is unlikely that service will be delivered. If affiliation fees are banned ordinary members of the Labor Party are effectively being asked to cross-subsidise the membership of the affiliated parties. As I said, all of this is exacerbated by the failure to cap the expenditure of large corporations in any reasonable sense. They are corporations, they are each allowed to spend $1.166 million on the 2015 election and they can coordinate that with a political party that chooses to give them what they want.

Make no mistake: This bill has imperfections. This bill will not close the direct rivers of cash but it will leave open a third party problem. I see the Government Whip shaking his head, and I understand he would not want to acknowledge this, but I guarantee that we will be back here again after the 2015 election with legislation—it might not be Government legislation; it might be Greens legislation or Opposition legislation. We will have to keep debating this issue because this flawed legislation will not solve those problems. Even though there remain problems with this legislation we tried to negotiate. A number of Labor members and the Shooters and Fishers Party members said that we had a deal with Barry O'Farrell. We had no deal with Barry O'Farrell. We met with Mr O'Farrell on two occasions at the end of last year and were unable to achieve an outcome.

I met with Mr O'Farrell on 10 February and I wrote him a polite letter asking if Greens members could meet with him in relation to removing some of these aspects of the bill, because we were then, and have been throughout this process, committed to passing legislation that bans donations from corporations and other organisations to political parties. At no point, despite what has been said in the media and in this Chamber, has any Greens member, to my knowledge, resiled from that position. That remains a key objective of The Greens and that is why will be voting for this legislation today. I seek leave to table the letter that I wrote to Mr O'Farrell, dated 10 February 2012, as evidence of our attempt to negotiate important issues with him.

Leave granted.

Document tabled.

I further seek leave to incorporate the letter in Hansard.

Leave not granted.

The point I am making here, disgracefully, is that the Premier refused to respond to that letter and refused to engage with us. Instead the Premier sat back and fired pot shots at us and refused to engage with us. Even though the evidence before the committee identified major problems with this legislation he refused to engage with us. We have produced amendments and I notice that the Labor Party has copied those amendments. I challenge the Minister for Police to say what impact the passage of those amendments would have. We still believe those amendments improve the legislation and remove some of the problems, but we are not prepared to sacrifice this legislation to those amendments because we think this is an important principle.

Before the Deputy Leader of the Government pulls a face, I point out that we were in exactly the same position a year and four months ago when we would not support amendments moved by the Coalition to a 2010 Labor amendment bill. Why we would not do so was for precisely the same reason: Even though we supported the principles behind the Coalition's amendments we did not want to sacrifice the progress that is being made in cleaning up democracy. This is a difficult issue and I do not deny that it has caused debate within The Greens—as it should—and it is good that it has caused debate in the community. It has caused debate because we have two very important sets of principles: a clean and healthy democracy—a democracy that is not subverted and corrupted by money—and the rights of free association and free speech that were outlined in some of the evidence presented to the committee.

This is not a simple, straightforward matter; it remains a difficult and complex issue. The Greens have made the decision that we will not sacrifice this legislation to amendments that the O'Farrell Government will not give us an undertaking will get through. Those few people who are left from the Keneally Government will know that we said the same thing publicly about the 2010 amendments. We would not sacrifice that legislation, which we still stand by and think is good legislation, to amendments that would feel good but that in the end would sacrifice, destroy and undermine the cause of the legislation.

I challenge the Hon. Michael Gallacher, who is seated at the table, and Mr O'Farrell to say clearly what they will do with these amendments. I challenge them to pay the courtesy to The Greens which they did not pay in responding to our letter. As we say, whatever happens now is in their hands. We will pass this legislation and we will support the amendments that we have put forward that the Government tells us will not kill the bill. But if they do not give us that guarantee then the impacts of this legislation are on their heads. I find Mr O'Farrell's behaviour hardly surprising. He has put himself in a win-win situation. If he gets the legislation through he will inflict a blow on his partisan enemies and on his philosophical enemies in the environment movement and in the social justice movement.

The Hon. Robert Brown: And in the red neck movement.

Dr JOHN KAYE: I acknowledge the interjection by the Hon. Robert Brown not because I agree with it but because I think it is clever. If Mr O'Farrell does not get it through because we amend the legislation he then has a whipping boy—he has The Greens to whip. Bearing in mind this is a Premier who referred to me as "purely evil", which is highly offensive, when I worked with Labor to make advances—

The Hon. Michael Gallacher: Wasn't that Dr Evil?

Dr JOHN KAYE: No, I think that was Mini Me. It is not coincidental that we are debating this legislation before the ink is dry or—as my colleague the Hon. Jan Barham pointed out—before the paper is cold on this report. A lot of work went into this report and I appreciate the complimentary things that were said of me. I return those compliments to all members of the committee, as I did in my foreword. I also acknowledge the incredible work of the committee staff in getting this report together in order to not delay this legislation. We all worked hard, including those people who gave evidence, to not delay this legislation and we got a report into Parliament on the second day of sitting. It was a gargantuan effort from the committee staff and from those people who gave up their holidays to give evidence. Mr O'Farrell and the Coalition disrespect that by failing to give the Parliament at least a day to absorb that evidence.

However, I take heart from the following fact: Although Mr O'Farrell is intent on passing this legislation and we will not play political games with what we think is an important principle and will therefore support this legislation, there remains the fact that this legislation—like its predecessors in 2008, 2009 and 2010—is imperfect. Whatever measures we come up with to clean up politics, countermeasures will be developed and we will be back here again. The evidence and the findings of the report will remain as valid and relevant then as they do today.

The challenge of this legislation for The Greens has been to balance those principles. We have always understood the importance of ending corporate, union and other organisational donations but we have tried to balance that and do the best we can to take away the worst aspects of this legislation. That challenge is with us. We have risen to that challenge and agreed to pass this legislation. It was a difficult decision but we are proud of it. The challenge is now with the O'Farrell Government to have the intelligence, wisdom and understanding of the political process to recognise that the bill is flawed and to work with us to get our or their amendments passed to fix the problems. The problems were identified in the committee report. The problems remain and they will be real. If this legislation does go through unamended—as it may—there will be a lot of examination of its impact. One of my greatest fears is that we will end up setting back the cause of campaign donation reform by allowing the O'Farrell Government to play politics with an important principle.

I am proud of the work that my party has done over the past decade and a half to clean up donations. We were a voice in the wilderness when we began this. Shortly after her election my colleague Lee Rhiannon stood in this Chamber and began the conversation. The conversation has spread from this Chamber into other political chambers and, most importantly, into the hearts and minds of the people of New South Wales. There is a real appetite to see politics respond to the community and to see politics as a diverse and living entity that allows a range of voices to be heard and not drowned out by the massive amounts of cash that have traditionally flowed from corporations into political parties.

This legislation will receive The Greens support. We will not vote for those amendments which the Government fails to give us an undertaking will not kill this bill. I note what the Labor Party is doing with its amendments. They will put us in a position where we may potentially be voting against our own amendments. That is an unusual situation but it is a situation we will take on because we are clear about what we are doing and the principles behind it.

The Hon. Dr PETER PHELPS [4.55 p.m.]: As a person with a long interest in electoral matters I have believed for a long time that politics must be a playing field of ideas and not money. Of course such views have not always been well received—even within my own party. However, among the various parties in the Australian political system there have been people who have been willing to stand up and say that genuine reform is required, whether it be in The Greens, the Australian Labor Party or in the Liberal Party and The Nationals. In 2008 Senator John Faulkner took up the calls for electoral reform if not in the same language but at least with the same sentiments. He said:
      In a democracy, where the ultimate accountability is to the public through the ballot box, the fair, open and transparent operation of our electoral system is essential.

Fine words indeed, but talk of electoral reform is cheap. It was especially cheap when the previous State Labor Government sought to deliberately manipulate the electoral funding system to advantage the Australian Labor Party. However, on our side of politics we are committed to genuine and long-lasting reform of the electoral funding system. If there is "too much money in politics" as I often hear it is because it is expensive to win a seat in Parliament. Of course it is not as bad as the United States where an average seat in the House of Representatives apparently costs around $1.3 million. That figure would include the safe seats in the United States too, so the cost of winning a marginal seat would be many times greater.

The point is that the sort of money required to run a campaign is not chickenfeed. Money goes into television, radio, print, magazines, billboards, the Internet, direct mail, local functions, T-shirts, bags, balloons—you name it. If a candidate's name can be put on it we will buy it. Of course the greatest amount goes into electronic media advertising. Although reporters lament the role of big money in the political process, their advertising departments are only too happy to take that money come the election period. This money has to come from somewhere and the "somewhere" is merely a symptom of the real problem.

We often hear about money buying influence but it is not as simple as that. There is undoubtedly a community perception that big money buys big influence. I have a high regard for most of my colleagues—even those who sit on the opposite side of this Chamber. I do not believe that they, or we, can be literally bought, but money undeniably brings with it a subtle form of influence. As anyone with children knows, the threat to dock allowances can have an interesting and occasionally salutary effect on their behaviour, and so it is in the political sphere.

I am sure all members are fully aware of the sex-and-bribes scandal in Wollongong and that developers paid Labor councillors for approval of development applications. Inevitably, complaints arise about how money from big business is corrupting the political process, but there are other actors in the influence business too. It is all right to complain about companies putting money into campaign coffers, but we also should examine the influence that union money buys over the Labor Party. As I explained to this House previously, we know that unions funded the 2007 Australian Labor Party Federal political campaign to the tune of $70 million in the two years prior to the election. Members should just think about that: $70 million in two years through direct or indirect donations and by campaigning.

While I despair of any real reform taking place in the Commonwealth sphere while Prime Minister Gillard and her trade union puppetmasters rule the day, I digress to acknowledge that people such as Kevin Rudd, Senator John Faulkner, Senator Joe Ludwig and even Karl Bitar may well have been interested in conducting real reform of the elections funding system. I am delighted to be part of a Government that is undertaking real reform and not tinkering around the edges. The bill introduced today is not radical—at least not in the broader perspective of the Westminster-tradition nations such as Canada, New Zealand or even Britain. There is also a great deal of academic support for the bill's proposals, even from the Left of academe and politics. I note that I find myself politically aligned with Senator Rhiannon, Democratic Audit and GetUp!—a prospect that I can only describe as filling me with sphincter-tightening terror—but I am equally sure that, if asked, the same type of support would be forthcoming from a bloke in the local pub who is worried that big money, whatever its source, is a corrupting influence on the body politic.

The problem of third parties is why New Zealand, the United Kingdom and Canada all have stringent rules about third-party campaigning. In the United Kingdom and Canada monetary limits are set on campaigning by each organisation. In New Zealand third-party groups can campaign on issues but cannot endorse or reject candidates or parties. In Australia the most significant third-party force is the trade union movement. A cynic may suggest that that goes some way to explaining why none of the previous Labor Government's electoral reforms addressed the third-party contributions issue in any detail. Indeed, in other Westminster systems, such as in the United Kingdom, Canada and New Zealand, there are stringent controls over the limits of campaigning. Robust democracies such as Canada, Great Britain and New Zealand are none the worse for restrictions they impose on third-party expenditure. It is even more interesting that in notoriously litigious Canada—a country that has its own Bill of Rights—nobody has successfully challenged campaigning restrictions through the courts. Why is that?

The impact of an electoral system in which the financial deck is stacked in favour of one party at the expense of others is much more corrosive to democracy than any measures to restrict third-party political advocacy. Personally I like the idea of limiting donations to political parties to individuals, and I am delighted that that has been introduced. There is a spirit of democracy in it that I find appealing. If millions of people genuinely love and support a political party and want to donate money to it, they should be allowed to do so. But they should not be in a position where the size of their donation may have a material effect on policy prescriptions. Politics should be a battle of ideas, not a battle of wallets. I turn now to consider the a priori principles upon which the legislation is based. Almost no-one believes we should return to a laissez faire system of political donations and expenditure. Once we accept that principle, we should then consider what would be the appropriate limitation.

The majority of academics and non-government organisations consider that individual donations are an appropriate way of dealing with the issue. But acceptance of the principle of individual donations involves dealing with two subsidiary matters to avoid collusive activities that have the potential to circumvent individual donation limits. The first is third parties or, as one academic described it, smurfing—the proliferation of front organisations that can be used to channel individual donations into a concerted campaign to produce the same political outcome while undermining individual donation limits. The other is affiliation fees. If individual donations are circumscribed but affiliation fees are not, that places parties in a position to simply charge exorbitant affiliation fees that, in effect, are de facto donations.

The Hon. Amanda Fazio: You are being ridiculous. You think the unions should not make political donations.

The Hon. Dr PETER PHELPS: I acknowledge the interjection made by the Hon. Amanda Fazio that it is ridiculous. Some members may have heard of the McCain-Feingold Act in the United States of America that sought to limit donations to political parties. Basically it sought to organise a donations system into a two-tiered arrangement for the parties. Donations for campaign activity would be substantially curtailed but donors could still provide substantial resources to the parties' general administrative needs. It worked wonderfully well in relation to the latter, but it did not remove money from the campaigning side of politics. On the contrary, it spurred the creation of a whole new subgroup of political entities known as political action committees, or PACs.

The political action committees, of which Swift Boat Veterans for the Truth is probably the most famous, have taken money that otherwise would have gone to the parties and used it in the same or, in some cases, nastier ways. Because the United States Supreme Court ruled that political expenditures are constitutionally protected forms of expression, the activities of such third parties operate under limited legal restraints. We have seen this trend start in Australia. That is why we must deal with third parties by exercising a great deal of caution. The United States experience provides a salutary lesson on what can happen when we mean well but we do not get the details right and do not close loopholes.

I will now deal with some comments that were made earlier in the debate. Accusations were made about the hypocrisy of the Liberals taking money while introducing legislation that will make such donations illegal. I refer members to the organisation GetUp!, which has taken a strong and principled stand in relation to donation limits to both parties and third parties but still, because the political system currently allows it, takes donations above the threshold that it has set. That is not immoral or unprincipled; it is a simple acceptance of the fact that it works within the law as it stands. The law should be changed, and I agree with them in that regard.

Mr David Shoebridge: They have never taken corporate donations, and you know that.

The Hon. Dr PETER PHELPS: But they have taken it above the limit. Allegations have been made that this legislation is designed to "attack the structure of the Labor Party". That is nonsense. The legislation does not provide for the banning of affiliation; rather, it provides for the banning of affiliation fees. Groups can still affiliate. Trade unions will still be permitted to affiliate with the Labor Party, The Greens, The Nationals or the Liberals if they so choose, but they will not be permitted to pay to do so. That has provoked howls of outrage.

The Hon. Steve Whan: Are you giving free membership to the Liberals?

The Hon. Dr PETER PHELPS: I acknowledge the interjection and refer the Hon. Steve Whan to a book by the Hon. Rodney Cavalier, who I believe is a member of the Socialist Left of the New South Wales Labor Party. In his book Power Crisis he notes the contributions of such people as Nathan Rees, Luke Foley, Lynda Voltz and Mick Veitch. I note a reference that the Australian Labor Party's financial membership in 2009 included 451 life members of the Labor Party. Do they pay affiliation fees?

The Hon. Steve Whan: They used to.

The Hon. Dr PETER PHELPS: But they do not anymore. Labor cannot find it in its heart to give 22 unions a freebie but it can find it in its heart to give 451 individual members a freebie.

The Hon. Steve Whan: That is 400 delegates to conference. Who is paying their costs?

The Hon. Dr PETER PHELPS: Labor relies on this principle that it cannot give freebies, yet it managed to give 451 free life memberships. It has 22 affiliated unions, so give them a freebie if they want to affiliate. This is one of the fundamental points the Labor Party seeks to gloss over. Members opposite say that groups will not be able to affiliate. That is nonsense. They can affiliate; they just cannot bring their cheque book with them. The Hon. Steve Whan also raised what I have referred to as the peak group problem. Yes, it is a problem. Peak groups no longer will be able to do what they previously were able to, that is, hide the sources of their donations for many years.

Members speak as though this is an infringement. There is no absolute right, only conditional rights in this regard. There is no absolute right to free speech. A person cannot call "fire" in a theatre, and even Franca Arena found out that the absoluteness of free speech in this Chamber will be dealt with in appropriate circumstances. There are also conditional rights on participation. We do not allow children, incarcerated criminals or foreigners to vote in our political system. So the idea that there is an absolute right to free speech and participation in politics is simply nonsense.

Peak groups are made up of organisations each of which can conduct their own campaign. That is a fundamental point. Each peak group that has constituent organisations can conduct their own campaigns. What is the net result of the legislation? The legislation would require those groups to put their names out into the community so that the community would know who was funding the campaigns. That is a good thing. It provides for transparency, rather than organisations being able to hide behind fictitious groups that are created immediately in the lead-up to an election. These groups may have cute and charming names but they do not disclose where their true funding comes from.

The Hon. Steve Whan: Like smurfs.

The Hon. Dr PETER PHELPS: Like smurfs. Legislation cannot rely on goodwill. We cannot base legislation on the belief that people will be sweet little angels and do everything they possibly can to stay within bounds. We must work on a worst-case scenario. We must work on the basis that people in politics may deliberately try to avoid abiding by the rules that are set. Indeed, overseas experience shows this to be the case, as I mentioned with the growth of political action committees in America. We cannot rely on goodwill. We have to legislate in this case for the worst-case scenario.

I refer to overseas experience, but we need look no further for the failure of goodwill than the inquiry report. As members may be aware, dissenting reports are limited to 1,000 words. The four Coalition members combined their dissent into a single report of 1,000 words. However, the three Labor members expanded into three dissenting reports each of 1,000 words. In effect, they smurfed their own dissenting report. They ask us to take them seriously; yet they smurfed their own dissenting report. They engaged in exactly the sort of activity I was talking about. They knew there was a cap of 1,000 words and they deliberately sought to abrogate that cap by dividing it amongst multiple people. If they are prepared to avoid the rules on small things, they will be prepared to avoid the rules on big things. From little things big things grow.

The Coalition recognises the need for constructive electoral reform in New South Wales. We also recognise it is a complex issue. I have no desire to engage in partisanship on this issue. The Government believes that reforms should be made that are holistic, not just opportunistic. This legislation requires genuine bipartisanship in the true sense of the word, and I am sorry that the Labor Party has not shown any.

The Hon. JEREMY BUCKINGHAM [5.15 p.m.]: I speak briefly in support of the Election Funding, Expenditure and Disclosures Amendment Bill 2011. This important bill is another step towards cleaning up politics in New South Wales. The key feature of the bill is that it will ban political donations from corporations and other organisations and limit political donations to individuals only. This has been a central plank of The Greens' donations policy and has been championed by The Greens and the Democracy for Sale project for the past decade. This important reform is a massive win for grassroots democracy and The Greens.

I acknowledge the work of Lee Rhiannon and her staff, as well as Dr Norman Thompson, in tirelessly pursuing this issue. The Democracy for Sale project has been a critical service to the public and media in exposing the huge amount of money that has been donated from corporations and other organisations to political parties and candidates in New South Wales. This information has been central to building the campaign for donations reform. As the public increasingly learned about the amount of money sloshing around our political system, the perception that donation money was influencing government decisions became widespread. This culminated in the Wollongong City Council corruption scandal that forced the former Labor Government into action to implement a number of reforms. The reforms passed by this House in November 2010 were a big step towards ending the influence of money in our political system. This bill represents another step in this process.

This bill is a direct result of years of campaigning by The Greens and our highlighting the clear connection between corporate donations and political decisions. It is a great credit to the work of many people within our party that the Liberal Party and The Nationals—the Coalition—have now seen it as beneficial to pursue these changes to the law. Working towards a cleaner political system, free of the influence of money, is very much on the public agenda and that has put it front and centre on the political agenda. While I support the bill as an important move forward and an improvement on the current situation, it is just another step on the path of donations and election funding reform. The Greens will continue our campaign to clean up politics and to address the other clear weaknesses in the existing Act. There is no better time than now to deal with the impact of corporate and organisational political donations as we lead up to the local government elections. Even small corporate or organisation donations can have a substantial impact on the result of local government elections, changing the balance of a local council and the direction it takes.

The public expects that laws passed by this Parliament will be enforced, and laws relating to electoral funding and expenditure are no exception. The Electoral Funding Authority must be given adequate resources and a strong direction to investigate breaches of the Act. The public should be kept informed of the activities and results of the Electoral Funding Authority's investigations. In the past few years New South Wales has taken steps towards reducing the influence of money on our democracy. I support the bill as one more important step, but we must all acknowledge that more reforms will be forthcoming.

The Hon. AMANDA FAZIO [5.18 p.m.]: Before I commence my remarks in opposition to this bill, I will briefly comment on the contributions of previous speakers. The Hon. Trevor Khan considers that third-party campaigns should be abolished because they may unduly influence members to vote against their conscience on issues. If he feels threatened by the voice of the public, by the voice of community groups, by the voice of trade unions or by the voice of other groups of concerned individuals who band together to let members of Parliament know about their views on matters that impact on the community, I do not know what he is doing here. I do not believe that he has a good understanding of the role of a member of Parliament. I say shame on him for making those comments. The Hon. Jeremy Buckingham in his contribution claimed that all electoral funding reform is as a result of the pressure applied by The Greens in campaigns. That is a nice take by Jeremy, but it shows how unrelated he is to what goes on in the real world.

The Australian Labor Party supports campaign and donation reform. It always has done. In fact, history will show that election funding and donation control in New South Wales was started by Neville Wran and all major impetus on this issue since then has been initiated by the Australian Labor Party. Let us not be mistaken about the intent of this bill: first, to attack the major political opposition of the Coalition and, second, to attack those meddlesome and troublesome minor parties in the upper House who do not always kowtow to the Government. It must be remembered that Barry O'Farrell has been unrelenting in his criticism of the existence of the Legislative Council. He believes that putting this legislation through will get rid of some of his problems in the Legislative Council by making it difficult for the existing smaller parties already represented in this Chamber to continue to campaign to get support and to be represented, and will make it nearly impossible for new smaller players to enter into the political game in New South Wales. That is the two-pronged agenda of the Premier—one of the most vindictive and antidemocratic people I have encountered. He is an absolute disgrace.

I shall now examine what has happened in the past with issues dealt with in this bill. I was a member of the Legislative Council Select Committee on Electoral and Political Party Funding, which was established in June 2007 and chaired capably by Reverend the Hon. Fred Nile. That committee undertook a thorough and comprehensive review of these issues and made a number of recommendations. But one thing it strongly and unanimously recommended was exempting party membership and affiliation fees, including union affiliation fees up to a reasonable limit, from the ban on all but small individual donations. In the deliberative stage of this committee I asked what had happened since then to require this Government to introduce these changes.

The Hon. Marie Ficarra: Public opinion.

The Hon. AMANDA FAZIO: The Hon. Marie Ficarra says it has resulted from public opinion. It is not public opinion on affiliation fees. No-one else who made a submission or gave evidence to the inquiry supported this proposition: The only person who proposed and supported it was the Premier. I have never heard such bumbling, inept and incompetent evidence given by any witness before a parliamentary committee as that given by the Premier. The Premier introduced this legislation in the other place and when asked a question said, "Oh, I don't know. I suppose I'll have to go and ask a lawyer about that, but I can give you my undertaking that I say that this is going to apply."

When asked about some of the constitutional issues that have been raised or the definitions of parts of the bill—"Are you sure that third party campaigning will still be allowed, issues-based campaigning?"—the answer was, "Yep, sure." But when asked for more detail his answer was, "No, I'll have to go and ask a lawyer about that." That bumbling and inept evidence demonstrates the incompetency and duplicity of the Government in introducing this legislation. There is no justification for this legislation apart from nobbling the Labor Party, smaller parties and those inconvenient community groups who want to band together to campaign against governments. This bill is absolutely appalling.

The Federal Joint Standing Committee on Electoral Matters is inquiring into the system of funding of political parties and election campaigns. It tabled a comprehensive report in November 2011. The Government is yet to respond to that report, but it is worth nothing that no recommendations were made regarding capping either third party expenditure, donations to third parties or banning affiliation fees. So New South Wales is completely on the outer. No other State has done that or raised this issue. Barry O'Farrell is the only Premier intent on attacking the political structures and democracy in New South Wales.

The Hon. Marie Ficarra: Leading the way.

The Hon. AMANDA FAZIO: He is leading the way in the same way people like General Noriega led the way, and like all those other tin-pot dictators who have no regard for democracy. Barry O'Farrell stands along with all of them. This bill provides that any other electoral communication expenditure incurred by an affiliated organisation will go into and can exceed the cap for the party to which it is affiliated. This issue was discussed earlier in the debate. This means that a union campaign against the Australian Labor Party on any issue where there is disagreement between the union and the Labor Party, that campaigning will be included in the Labor Party's expenditure cap. That is a ludicrous proposition, yet that is what the genius Barry O'Farrell has proposed in this bill. It is an absolute disgrace. When introducing the bill the Premier said of the proposed reforms:
      These reforms are a reasonable, measured and fair way to inject more transparency and accessibility into the State's political processes.
The bill does not do that. It does everything he can possibly think of to destroy democracy in New South Wales. That he feels free to say that demonstrates that this man cannot be trusted and what he says cannot be believed. He is vindictive and untrustworthy and has scant regard for the history and traditions of democracy. He simply wants to trample on anybody who does not support him or who gets in his way. Paragraphs 3.6 and 3.7 of the committee report refer to the response of the Leader of the Opposition, the Hon. John Robertson, and particularly to his comments:
      There is no doubt that this bill is designed to fundamentally undermine the Labor Party's structures, decision-making processes and day-to-day operations. It seeks to insert provisions in the electoral funding laws which will not impact on the Liberal Party, The Nationals or even The Greens but which will affect the Labor Party. This bill seeks to stop the union movement from affiliating with the Labor Party—the very union movement that banded together to form the Labor Party 120 years ago.
The Hon. Dr Peter Phelps: That is not true. They are affiliation fees. You should not mislead.

The Hon. AMANDA FAZIO: The Hon. Dr Peter Phelps had his turn so he can just be quiet now. The fact simply is that affiliations cost money. Under the provisions of this bill that money would not be forthcoming. I direct members to the submission by Dr Tham from Melbourne who recommended the complete rejection of clause 96D. I wholeheartedly concur. In respect to this part of the bill the committee report states:
      The Committee notes that the definition of "affiliated organisation" contained in the Bill may constitute a direct attack on the internal structure and organisation of the Australian Labor Party which has many members that fit this definition.

      The Committee accepts the position put by the majority of submission authors and witnesses to this inquiry, and with the position taken in previous inquiries, that to ban affiliation fees capped at a reasonable level is an infringement on the right of organisations to determine their own structures.

      The Committee considers that preventing parties from collecting monies to cover the administrative costs of maintaining its membership would be to prohibit a valid organisational structure for parties to pursue. In this we concur with the findings of the 2008 Select Committee on Electoral and Political Party Funding, which found that to ban affiliation fees would place unreasonable restrictions on party structures.
Additionally, I refer members to the evidence of the Premier when he stated that provisions contained in the bill allow peak organisations to continue to undertake genuine issues-based campaigns. However, as I have said already, he could not explain or answer any of the detailed questions from committee members about that statement. The Premier's view was queried by Professor Anne Twomey, Professor of Constitutional Law, University of Sydney Law School, who articulated an alternate perspective on the potential implications of the bill for third party campaigners. The majority of inquiry participants expressed concern that the bill would have a detrimental impact on the ability of third party campaigners to represent their members' interests. Two key elements provoked the most concern amongst inquiry participants: the ban on donation from all but individuals on the electoral roll and the impact on electoral communication expenditure.

The only people at the inquiry who believed what the Premier said and who supported all the provisions in the bill were the Premier and the Coalition members of the committee. I think that should give members some idea about what a "fix" this bill is. None of the academics supported the proposal; they all had major concerns about it. One thing worthy of note is that members of the Liberal Party were so dismissive of the inquiry process and public consultation on this bill they did not bother to drum up submissions from their own people to back the inquiry; they decided to ram this legislation through.

The Hon. Dr Peter Phelps: The Premier appeared.

The Hon. AMANDA FAZIO: An ill-informed Premier gave a disgraceful performance by pretending ignorance. The majority of inquiry participants expressed concern that the bill, if enacted, would restrict the ability of third party campaigners to advocate on behalf of their members. The example that the committee gave was the Sydney Alliance, which represents a diverse range of community organisations, unions and religious organisations, and which was concerned that the proposed changes would substantially limit its ability to advocate effectively. When the issue was raised concerning small groups coming together to advocate a cause, it was suggested that individual members of organisations could donate up to $1,000. Individual members of church congregations and individual members of seniors groups could get together to make a donation of up to $1,000 and then complete all the disclosure forms. If that proposition were put to most individuals they would say that they would not do that. Those individuals are happy for the organisations to which they belong to make those donations but this bill would stop that.

This bill would make it easy for wealthy individuals, who have accountants to look after their financial matters and do their returns to the Election Funding Authority, to donate up to $1,000. That is the natural constituency of the Liberal and Nationals parties but it is not the natural constituency of the Australian Labor Party, the Christian Democratic Party or the Shooters and Fishers Party. This would skew the funding of the political process to the wealthy and well educated, and those with their own private accountants and financial advisers. It does not serve the ordinary person in the community who belongs to a group or volunteers at an animal rescue shelter and who quite happily buys raffle tickets or items at a stall from that group but who is not able to manage an individual donation of $50. Those persons would be happy for a group to which they belong to donate $500 to a campaign to promote animal welfare causes in the run-up to an election.

The committee recognised the importance of collective action. Collective action through third party organisations traditionally has been considered as a legitimate part of the political process that allows individual citizens to band together to highlight issues of concern. A number of inquiry participants were concerned that the bill would restrict the ability of third party campaigners to undertake such collective action on behalf of their members, resulting in a less vibrant political debate and allowing only the wealthy to participate in that debate. It was explained in one of the submissions that many people lack the time or the ability to identify threats to their interests or articulate their concerns. It is pretty outrageous to expect the homeless and people with disabilities or learning difficulties individually to organise to participate in the political process. It is recognised that organisations that have banded together to advocate on behalf of the interests of those people, or to advocate for better service, have legitimate issues. This bill would stop that, despite what the Premier says, and that is absolutely disgraceful.

The Hon. Peter Phelps made reference to the fact that the four Coalition members got together and put in a short dissenting report and that the three Opposition members individually put in dissenting reports. That is the sort of thing that happens when one appoints a newbie as the Government Whip—we have somebody who is not familiar with government procedures. If the Hon. Peter Phelps had been on a committee previously he might have been aware of the individual rights of each committee member. I refer the House to the three dissenting reports that were lodged by the Opposition members on the committee. We went through the report and proposed amendments, some of which were supported and some of which were not. I stand by every word I put in my dissenting report. I believe that fundamentally this bill is an attack on democracy.

The Hon. Dr Peter Phelps: All 1,000 words of it.

The Hon. AMANDA FAZIO: Obviously the Hon. Peter Phelps does not know how to do a word count. Those who paid attention to the evidence given at the inquiry believe what I say to be true and understand the Government's intention in introducing this bill. Professor Tham stated:
      Is there a compelling justification for such a severe incursion into the freedom of the ALP to organise itself as it sees fit? It is exceedingly difficult to see one. There is firstly, the prima facie legitimacy of membership fees—they are payments made as a condition for participating within political parties … Absent an adequate rationale for limiting freedom of party association, it is hard to escape the conclusion that such a ban represents an unjustified limitation on freedom of party association.

Chapter 7, covering one of the most compelling issues concerning the constitutionality of this legislation, was examined during this inquiry. All the expert constitutional advice that the committee received showed that aspects of this legislation were unconstitutional. Those amendments would make it a little better and perhaps a little less likely to be successfully challenged.

The Hon. Marie Ficarra: Let us see.

The Hon. AMANDA FAZIO: The Hon. Marie Ficarra said, "Let us see." If there were a constitutional challenge to this legislation and, for example, the Australian Labor Party or Unions NSW took it to the High Court, the Australian Labor Party would be responsible for the legal fees for doing that. The taxpayers of New South Wales, not the Liberal Party or The Nationals, would be responsible for defending this dodgy legislation. The Government is moving hard and fast and it is wasting the money of taxpayers in New South Wales. The Government knows very well this legislation will be challenged but it does not care because the taxpayers of New South Wales will be funding the defence of this unconstitutional and undemocratic legislation.

This bill has been introduced for the sole purpose of nobbling the Labor Party and minor parties in the upper House, and to preclude new entrants into the political process. It is aimed at gagging and silencing the community groups and small organisations who band together to campaign for better services for the disadvantaged. They band together to campaign against the draconian action the Government has taken by slashing payments to foster carers and bungling transport for disabled children. The Government wants to silence those people in the political process. The Government does not support democracy and it does not deserve to stay in government.

The Hon. CATE FAEHRMANN [5.38 p.m.]: I speak in debate on the Government's Election Funding, Expenditure and Disclosures Bill 2011. A significant achievement in the Greens decade-long campaign is removing the influence of money from politics. I do not hesitate in joining my Greens colleagues in claiming a Greens achievement in the passage of this bill.

The Hon. Lynda Voltz: You are taking out the unions.

The Hon. CATE FAEHRMANN: We are not taking out the unions. The credit for this bill can be justly claimed by Greens campaigners, including Senator Lee Rhiannon and Greens donations expert Dr Norman Thomson, whose calm advice and incredible expertise in the area of donations reform truly made the Democracy4Sale project the world-class project that it is. It exposed the level of donations from corporations to political parties. The Greens Democracy4sale project began in March 2002. Lee Rhiannon and Norman Thompson began a small research project to classify the top donor companies by industry sector, to see what influence political donations were having on the major parties. They estimated that the project would take about 30 hours.

Several years and thousands of research hours later the project now analyses all political donations made to New South Wales political parties and presents this data to the public in a simple website that sorts donations to political parties by industry category. What an inspiring and revolutionary project Democracy4sale was. We can thank Democracy4sale in large part for the incredible situation we are now in, where the Premier of New South Wales has described the banning of corporate and organisational donations as "a reasonable, measured and equitable way to put in place a system of political participation in New South Wales that is more transparent and more accessible."

This is the Premier of New South Wales adopting Greens policy, and I congratulate him and the Government for this. And so I remind the House that this bill's key feature—a ban on all political donations from corporations and other organisations—is not only core to The Greens policy; it is an absolutely essential step towards ridding New South Wales of money politics, because we know that the influence of money on politics is insidious, to say the least. The reality that organisations and corporations can buy influence with policymakers and legislators is contrary to every democratic ideal and to the Australian mantra of a fair go. No, this bill is not perfect. And, yes, it does impact on affiliated organisations in the way some political parties have been operating. But, as the Hon. Trevor Khan has said today, this bill does not prevent organisations affiliating with political parties and will not prevent unions from affiliating with Labor.

The Hon. Lynda Voltz: Yes, it does.

The Hon. CATE FAEHRMANN: No, it does not. It just gets the money from those organisations out of parties. We all know that as political parties we get funding of $80,000 per upper House member of Parliament to pay for administration for political parties. It is not as though Labor will not have any money if affiliated unions decide not to affiliate as a result of this bill. Of course, there has to be a price paid to get this type of reform through. But the hard fact of the matter is that we have to get money out of politics, and that will hurt. We understand that Labor and the Shooters and Fishers Party are not happy with us about this. Of course they are not. This bill impacts on those parties, and they have spoken at length about that. But, unfortunately, the road to cleaning up politics necessarily involves removing donations from not only corporations but all organisations, including unions.

As members have heard today, The Greens have discussed this matter at length and have prepared various amendments to the bill. But, as we have also heard today, the Government has not met with The Greens this year to discuss any of our amendments. However, I will put on the record that the Premier met with The Greens twice last year to discuss whether the Government would be open to supporting some of The Greens amendments that we believe would improve the bill. The Premier was not willing to agree on amendments at that time, and he has not been willing to meet with us more recently to discuss further amendments. This is unfortunate, as there are some amendments on which we could have found common ground with the Government in seeking to improve this bill, for example, with better enforcement measures.

However, as we have heard, the Government will not be supporting any amendments. So The Greens cannot support amendments that will ultimately lead to the bill being defeated in the lower House because, on balance, The Greens deeply held principle of cleaning up politics and getting money out of politics has to be upheld in this case. Therefore we have no choice other than to support this bill. That means, as my colleague Dr John Kaye has said, not supporting any of the amendments which will kill the bill, and Labor and the Shooters and Fishers Party know that.

I will turn now to one of the main arguments I have heard against this bill, that is, that it would impact on the ability of environmental groups to campaign. I have heard this claim ever since the bill was tabled—in private conversations I have had with members of this place and with members of the community outside it, in the media, and again and again today during this debate. The Hon. Robert Borsak said this bill would kill community groups, including "greenies", to use his language. The Hon. Steve Whan, in his contribution to the debate, said that the online campaigning organisation GetUp! would not be able to run campaigns. That is simply not true. Organisations like the Nature Conservation Council of New South Wales, GetUp!, the Wilderness Society, the Australian Conservation Foundation and Greenpeace, et cetera, receive the vast majority of their donations from individuals, not from other community groups.

The Hon. Lynda Voltz: But not all of them.

The Hon. CATE FAEHRMANN: GetUp! is not a peak body. It has been used in this discussion; every member who has spoken in the debate today has suggested that that organisation's environmental campaigning will be adversely affected. That is simply not true. GetUp! is an environmental group, not a peak body. However, it is a registered third party campaigner in New South Wales which receives most of its donations from individuals. Therefore, it will still be able to spend up to $1.05 million on political campaigning that is related to the State election, as long as that $1.05 million is from individuals.

If this bill was going to impact on the ability of environmental groups to do what they do best—that is, to run environmental campaigns—they would have been making public statements to that effect. And those would have been very loud public statements—as environmentalists know how to do so well. They would also have been making submissions to the inquiry but they did not. No environmental organisations in New South Wales made a submission to the inquiry and nor did GetUp! Further, these groups made no comment, either publicly or to me, that they were worried about the impact of this bill on their work.

The Hon. Lynda Voltz: So it only matters if they talk to you?

The Hon. CATE FAEHRMANN: I am correcting misinformation, which has been spoken about at length in this House by members of the Labor Party, that this bill would affect environmental campaigning. That is simply not true. As for the State's peak environmental body, the Nature Conservation Council, it receives the vast majority of donations from individuals. Nothing in this bill will stop the Nature Conservation Council from using the donations it receives from individuals on electoral expenditure. Under the Act electoral expenditure is defined as:
      … expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election.

However, many not-for-profit organisations have certain restrictions placed on them due to their charitable status, including the Nature Conservation Council and many other environmental groups as well as thousands of other community groups. I am not sure whether all members are aware, but the Australian Taxation Office already restricts what type of campaigning not-for-profit organisations which are registered for deductible gift recipient status are able to do. Deductible gift recipient status means that organisations are able to take tax deductible donations. Many charities have deductible gift recipient status. Any organisation that has deductible gift recipient status is at risk of losing that status if its main purpose is seen as no longer charitable; in other words, if it is seen as a predominantly lobbying organisation.

We saw that happened when the Australian Taxation Office revoked the Aid/Watch organisation's tax deductibility status in 2006. Thankfully, the organisation's deductible gift recipient status was reinstated upon appeal to the High Court. So restrictions are already in place for many non-profit organisations when it comes to how much, and what type of, campaigning they can do during election periods. Let us remember too that third party campaigners will still be able to spend $1.05 million if they were registered before the commencement of the capped expenditure period for the election. That is a fair amount of money. Then there is an additional cap of $20,000 for expenditure incurred by a third party campaigner substantially for the purposes of the election of a candidate in a particular electorate. I will read out part of the contribution of Professor Anne Twomey to the inquiry:
      The most contentious and vulnerable part of section 96D, however, is its application to donations to third-party campaigners. The effect is to prevent lobby groups from acting as third-party campaigners where they raise money for political campaigns from other groups with the same interests. Hence an association that represented the interests of shooters, pubs and clubs, environmentalists, religious bodies, or retail businesses, which would ordinarily receive its funding from rifle clubs, hotels, environment groups, churches or shops, would under section 96D be banned from receiving those donations and would be effectively neutered from running a political campaign during elections. This would leave the third-party campaigning field to big corporations, unless lobby groups were able to raise sufficient funds from individual donations from people on the electoral roll, which would be exceedingly difficult.

While I agree with this statement to some extent—and I thank Professor Anne Twomey for her excellent work in this area and for her contribution to the inquiry—I repeat that because of the way in which environmental groups in New South Wales are funded, section 96D will not impact on environmental groups to any significant degree. We have not sold out non-profit organisations, which The Greens have been accused of doing today. I am sure what environmental groups and most non-profit organisations want to see is the political system cleaned up. They want money out of politics just as The Greens do.

As we heard from my colleagues Dr John Kaye and the Hon. Jeremy Buckingham, this is a very hard decision for The Greens. We have thought and talked long and hard about what position we will take on this bill. Our members have debated our position long and hard because of the tension this bill creates between one more significant step towards cleaning up politics and the impact it will have on affiliated organisations like unions—not environmental groups—and some political parties. The Greens support unions and the right for unions to be able to campaign. Let us remember that this bill will allow unions to campaign. It will still allow each union to spend up to $1.05 million during the election. It is disingenuous to say that The Greens have sold out unions or non-profit organisations by supporting this bill, which is one step closer to removing money from politics. The Greens support the bill.

The Hon. MARIE FICARRA (Parliamentary Secretary) [5.50 p.m.]: I support the Election Funding, Expenditure and Disclosures Amendment Bill 2011. With this bill the O'Farrell Government delivers to the people of New South Wales one of its key election promises and, indeed, as we have heard from other party representatives, one of the key election promises of The Greens. It would never be a key election promise of the Labor Party, which would never want to kill off its main source of funds from the unions. When I talk to the people of New South Wales in supermarkets, in Macquarie Street or on the trains, they say that they are sick to death of the influence that money has brought to this State.

We have all heard about the Wollongong planning scandals. I could use all of my 19-minute speaking time talking about the disgusting corruption in local government and in planning. The people of New South Wales are sick of it and they gave us a resounding mandate—perhaps not as resounding as we would have liked in this House, although it was pretty healthy, but it was certainly resounding in the other place. Many contributions from The Greens are well thought out, well researched and solid. If The Greens had not taken the position that they have on this bill I believe they would have lost face with their membership, with their constituency and with the people who vote for them. They have given it a lot of thought, as we have, which is why we are bringing this legislation before the Parliament as quickly as we can. All members have had long enough to think about this issue; the media has given it long enough exposure.

We are bringing in political funding reform to return accountability and transparency to New South Wales. I believe this State will lead the way for other States and, indeed, for the Federal Parliament at some stage. This legislation will allow appropriate freedom of political communication in keeping with the wishes of our electorate to ensure that political campaigns do not go the same way of other democracies, such as the United States of America where money talks. People are disgusted every time they hear about the amounts of money being poured into the United States elections. It is an anathema to Australians and they do not want to go down that pathway. Campaigns are becoming more and more expensive, they are becoming easier to be manipulated and they are not reflective of mainstream Australian values.

We are sick to death of television and radio advertisements that are repetitive. It has become a fact that if one party spends $80 million the other party has to spend $81 million. People are sick of it; they hate the wastage of expenditure. As a member of Parliament I do not like going to people and asking for big funding; I find it disgusting. We all know that sooner or later we have to pay something back for that big funding. If people give us thousands of dollars they want something back.

The Hon. Dr Peter Phelps: Point of order: Madam Deputy-President, I am trying to listen to the excellent contribution of the Hon. Marie Ficarra. Members opposite should be directed to calm down.

The DEPUTY-PRESIDENT (The Hon. Jennifer Gardiner): Order! The Hon. Marie Ficarra has the call. She will be heard in silence.

The Hon. MARIE FICARRA: During the past 16 years of Labor mismanagement this State saw continued abuse and exploitation of campaign finances by the Australian Labor Party and its union hacks. Time and again calls by the New South Wales Liberals and Nationals to introduce a ban on corporate donations as well as to aggregate the expenditure of parties with that of affiliated organisations were rebuffed by Labor during its tenure in government. So the New South Wales Liberals and Nationals gave a commitment that if a Coalition government was elected they would ensure that only electors would be able to make donations. People wanted that and the media resoundingly supported it. People talked to us when we were at street stalls and when we were knocking on doors and all they could talk about was that they were sick and tired of New South Wales getting such a bad reputation in politics and they wondered where their taxpayer money was going.

This was a major part of our campaign, as it was for The Greens campaign, for the entire term prior to the election. Today members on this side of the House stand proudly in support of this Government's legislation to fulfil yet another electoral promise that will go a long way towards restoring desirable public confidence in our democratic processes. I quote from a contribution to the Sydney Morning Herald on 2 December last year by Bruce Hawker, the managing director of the Campaigns and Communications Group, who has advised the Australian Labor Party on more than 30 campaigns. He stated:
      Fifty per cent of the delegates at this year's ALP national conference will be representatives of affiliated unions.

      Currently, the strongest argument for giving affiliated unions 50 per cent of the votes at the ALP's state and national conferences is the millions of dollars they donate for administrative and political purposes. If the ALP is no longer able to raise from unions the money it needs to survive, it will be forced to cast its net wider to encourage far greater rank and file membership and individual donations. This is because donations by individuals who reside in NSW will still be allowed.
Shock, horror!—the Labor Party will have to get individual donations like the rest of us, which is tragic. For once the Labor Party will have to sell itself instead of just relying on union affiliation fees. Many union members are disgusted with what they get back in return. One has only to look at the Health Services Union—it is disgusting. Members of the Labor Party have lost touch with the people that they are supposed to represent. Bruce Hawker knows what members of the public think and he knows where this issue is going. He probably knew what position The Greens would ultimately take because they also have to keep their constituency. Bruce Hawker also had this to say in the Sydney Morning Herald article:
      So, to make up the shortfall from the ban on union financial support, the party will be forced to encourage individuals to join and donate to it. This will invariably mean giving individuals a far greater say in the decision-making forums of the ALP. Otherwise, why would anyone be prepared to make the donations the unions make?

Oh my goodness. Bruce Hawker realises the Labor Party is going to have to allow people in. If ordinary mums and dads are going to pay the party money—guess what—they want a say in how the party is run and in its policies. But it is not all tragic because he goes on to show the Labor Party the way. He continued:
      If all this seems a little far-fetched, we need only look to the experience in Canada, where a conservative government introduced similar laws about a decade ago. In response to these laws the then-marginal New Democratic Party made huge changes to its structures and processes.

I hope those opposite are listening because this is what is in store for them. He continued:
      The NDP, which is the Canadian equivalent of the ALP, reduced the voting rights of affiliated unions from 50 per cent to 25 per cent and introduced the direct election of its parliamentary leader.

That would be interesting. He continued:
      At the time it had just nine members of Parliament. These simple changes had a dramatic effect on the NDP. The empowerment of the rank and file, the accompanying reduction in union influence and the election of a popular leader led to renewed interest in the party.

God knows Labor needs a renewed interest in its party. I will continue quoting because Bruce Hawker will be influential in helping Labor in its restructure and to cope with all the transparency, accountability and democracy that it is not used to. This will not be the end of the Labor Party. Well, it might diminish that party and increase some of the others. I do not know, but time will tell. He continued:
      In the intervening years it has grown to have 103 MPs and a party membership which is now approaching 100,000. The NDP is financially secure as a result of its big membership and donation drives. For the first time in its history it has supplanted the once mighty Liberal Party as the centre-left party of choice and this year became the official opposition.

So there is hope for Labor. Members opposite should not cry crocodile tears that this is the end of democracy; this is the beginning of democracy in this State. Bruce Hawker's final message for the Labor Party is:
      If, however, these laws have the same effect as the Canadian legislation they will actually force positive changes from outside the party. It would be ironic if legislation intended to irreparably damage the Labor Party ended up being its salvation.

Of course, it is not our intention to damage the Labor Party. If other parties, and groups such as Greenpeace, the Nature Conservation Society and the Cancer Council can rely on individual memberships and donations, that will still go on. We will still be lobbied and we will still get the message. Members opposite should not try to mislead the people of New South Wales or the media that it is going to be the end of the world as we know it and the sky will fall in. Nobody believes that.

This amendment to the Election Funding, Expenditure and Disclosures Act to increase the transparency of the New South Wales political system will be roundly supported by the majority of our electors. This bill will ban political donations other than by individuals on our electoral roll. The measure is intended to prevent donations from corporations, industrial organisations, peak industry groups, religious institutions and community organisations, thereby preventing policies that go against the public interest being pushed on the public by pressure groups with deep pockets. We are willing to forego that. Everyone knows the Liberals and The Nationals have got as good contacts as Labor and the big parties, but we realise that people are getting sick and tired of grubby money buying influence. Somewhere along the line we have to listen to people.

The Hon. Amanda Fazio: Stop taking tobacco money then.

The Hon. MARIE FICARRA: I am the biggest supporter of quit smoking and as an individual I do not like tobacco companies. This is a process that the Liberals and The Nationals are going through and we will consult with our memberships. I am on record as saying I cannot stand tobacco. I am a public health fan and I just cannot stand it. That will come. We are maturing and this is part of the maturation process.

Dr John Kaye: We did that last year. We banned it last year.

The Hon. MARIE FICARRA: That is right. The existing bans on donations by property developers, tobacco, liquor and gambling entities and their close associates, such as a company director or his or her spouse, will remain in place. The electoral communication expenditure of affiliates will be linked to the expenditure of parties to determine whether a party has overspent during the campaign. It does this by aggregating the expenditure of a party with that of its affiliated organisations. An affiliate is an entity under the rules of a party that can appoint delegates to its governing body and/or has a role in candidate preselection. It may be incorporated or unincorporated.

Why is such a change necessary? The answer can best be highlighted by Labor's recent abuse of existing financial laws. Let us recall the reports of the conduct of Labor's Sussex Street headquarters during the last election when it got around the $5,000 cap on political donations by collecting $10,000 and splitting it between New South Wales Labor and Country Labor entities. That was very clever and smart but that has got to come to an end. Even if a party spends less than or equal to the applicable expenditure caps the bill will deem the expenditure to exceed those caps where total party and affiliate expenditure is together higher. It will be an offence under the Act for a party to spend more than the relevant legislation caps and the aggregation will apply for both the overall State cap on party expenditure as well as the $50,000 electoral cap.

Basically, spending by unions during an election campaign will be significantly curtailed and they will now be stopped from paying millions of dollars in affiliation fees to the New South Wales Labor Party under this legislation. Are most of the union members shouting from the rooftops? No. It is just the vested interests sitting in this Chamber who are complaining. There have been recent media expositions on the grubby dealings of senior union officials but we all know that is just the tip of the iceberg. Grubby kickbacks, credit card frauds, gifts, bullying and extortion on worksites and in corporate boardrooms have been going on for years. The public wants us to clean the joint up.

We know it will be a difficult and long road but the recent bravery of the national secretary of the Health Services Union, Cathy Jackson, has restored faith that some people are not motivated by greed or power struggles. God knows the Labor Party is applying a lot of pressure. It has some of those vested union guys out there that love to threaten and bully. She is copping it all but it only makes her stronger. People that read what she says know that she is telling the truth. The Health Services Union fraud saga has come to symbolise many sections of the disease-ridden union movement in this country.

The times and the attitudes are changing and we are reflecting that change with this legislation. Labor's continued desire to put its snout in the trough has been watched with disgust by many. This Government has taken the initiative to prevent future abuse of campaign finances by any party. Individuals should decide which party or member should sit within this Parliament, not third party interest groups and definitely not union hacks. This bill aims to do that by empowering the people and diminishing the power of interest groups in determining who best represents their ideals, hopes and dreams.

I recall that not long ago, when the Coalition was in opposition and was trying to have legislation passed to reform the political donations regime in the State by limiting donations to $5,000 for parties and $2,000 for candidates, we could not get the support we needed. In contrast to that, New South Wales Labor had a cash cow. Labor had $23 million in the form of donations from 22 unions that were affiliated with the Labor Party. Last March all the money that was thrown at Labor's campaign was to no avail. Labor got the message loud and clear. Certainly the Coalition got the message that people want something done. People are sick of the maddening waste of money that is spent on pointless advertising and spin that is repetitive and nauseating and that disrupts their television viewing and their listening to the radio. Hopefully this legislation will go a long way towards implementing reform.

We in the O'Farrell Government believe strongly in maintaining the integrity of government and its electoral processes through reputable and accountable fiscal discipline. This bill will assist in restoring the community's confidence in government in New South Wales. We are proud that by sponsoring and introducing this bill we are leading the way in financial reform, not just in New South Wales but in Australia, and that, by doing so, we will make New South Wales number one again.

The Hon. LYNDA VOLTZ [6.10 p.m.]: I had not intended to participate in debate on the Election Funding, Expenditure and Disclosures Amendment Bill 2011 until I heard the speeches that have been made by other members. I keep a list of very uncool words. I began the list when I heard Richard Glover use the word "chillax" on 2BL. I instantly wrote down the word "chillax" to remind me never to use that very uncool word. "Smurfed" will be added to my list of very uncool words. I probably had not heard that word before today, but I will devise a Peter Phelps indicator so that any word used by Peter Phelps will certainly be added to my list of very uncool words. A number of surprising assertions were made by the Hon. Cate Faehrmann during her speech. The first was that The Greens set up Greens for Democracy in 2002. She also stated that the reason we are in the current situation was largely due to The Greens "Democracy for Sale" website that was set up by Sylvia Hale.

Dr John Kaye: It was Lee Rhiannon.

The Hon. LYNDA VOLTZ: Dr John Kaye is quite right. Lee Rhiannon set it up. The first article I read on the Democracy for Sale website was Damian O'Connor's 2002 article from the Evatt Foundation website when he was then the assistant General Secretary of the Australian Labor Party. He stated:
      To its credit, the Hawke government legislated to substantially cut the cost of election campaigns, but the High Court knocked the law over on technical grounds. British Labour has recently legislated to cap election costs. Gough Whitlam has spoken out recently. Last year, Paul Keating called for developers' donations to be banned because of their eventual effect on the urban environment. Paul Keating knows how the wheels ... turn in politics. Bob Carr said he'd look into it.
Despite the assertions made by The Greens that the Democracy for Sale website in 2002 was the start of the whole green movement, the reality is that political donations reform was led by Labor. The Hon. Amanda Fazio and I were members of Labor's administrative committee and we heard Damian O'Connor talk ad nauseam throughout the nineties about developer donations in the Labor Party.

The Hon. Amanda Fazio: I did not listen to him very much.

The Hon. LYNDA VOLTZ: It became a bit monotonous after a while, but Damian O'Connor certainly deserves the credit for leading the charge on political donations reform within the Australian Labor Party, along with the Hawke Government and other governments that introduced legislation. I was quite surprised when the Hon. Cate Faehrmann commented on how political parties run up administrative costs, and that members are given money by which to run their political parties.

I am sorry to disappoint her, but running the administrative functions of political parties is not why members are given money by Parliament. If the Hon. Cate Faehrmann believes that, she should check the rules. Members in this Chamber and in the other place use their money to deal with their constituencies and with issues concerning Parliament. They do not use those funds to run political parties. I know The Greens have set up a party committee that examines anything The Greens spend or do, particularly any expenditure associated with Parliament, but other members of this Parliament administer their funds through their offices to carry out their representative functions.

Mr David Shoebridge: Do we?

The Hon. LYNDA VOLTZ: Yes, we do. I am sure Dr John Kaye will be able to inform Mr David Shoebridge if he does not already know. Just because the Liberal Party has managed to take liberalism out of the Liberal Party, there is no reason why they should take labour out of the Labor Party, or all the shooters out of the Shooters and Fishers Party. The reality is, in spite of whatever the Coalition thinks, the Labor Party is the political wing of the labour movement and has been for 120 years. We are the oldest continuous political labour movement in the world.

The Hon. Dr Peter Phelps: And you have remained as such.

The Hon. LYNDA VOLTZ: I acknowledge the interjection by the Hon. Dr Peter Phelps. We get so many of them. I am sure he likes to see his name written in Parliament's records.

The Hon. Dr Peter Phelps: I do.

The Hon. LYNDA VOLTZ: The reality is that Coalition members do not understand the way in which the Labor Party runs, our history, how our organisation works, or how our organisation is administered.

The Hon. Dr Peter Phelps: I know all about it.

The Hon. LYNDA VOLTZ: The Hon. Dr Peter Phelps does not know anything about it. He made a big claim that he would quote what Labor members have said about union affiliation fees, but he cited not one assertion from any Labor person about union affiliation fees. I am not sure what he means when he says he knows all about it. The reality is that Labor is the political wing of the labour movement. We have a long history spanning 120 years. Our organisation has grown and it changes over time. We decide how we will run our party. That is what we want to do. It is our party and it has a long history. We are entitled to run our party based on our history and in the image decided by members. It is outrageous for another party to attempt to remove the right of a political organisation, which has the longest history in the world of labour representation, to run its affairs in the way in which it sees fit.

I remind The Greens that the labour movement was the birth of not only the Labor Party. Petra Kelly based The Greens political party on the green bans movement. It may be all well and good for members such as the Hon. Jeremy Buckingham, who wants to be the Barnaby Joyce of The Greens, to self-style himself, but the reality is that The Greens movement comes from a very progressive movement that emerged from the inner city of Sydney. The Hon. Jeremy Buckingham may wish to reflect on the number of inner Sydney seats and inner Melbourne seats held by The Greens, and on the Cunningham by-election. Sure, The Greens might have had the unions turn up on election day to give them a hand, but at the end of the day the unions have always been closely aligned to the labour movement and the Labor Party.

The Hon. Dr Peter Phelps: As they still can be.

The Hon. LYNDA VOLTZ: The Hon. Dr Peter Phelps says, "As they still can be." We will decide how we administer our party. It is our history, and we will decide how we will run it.

The Hon. Dr Peter Phelps: We will decide who comes to our party and the circumstances under which they come.

The Hon. LYNDA VOLTZ: I cannot believe the Hon. Dr Peter Phelps said that. It is no surprise that the Liberals have turned up to this Chamber for a good old bit of union bashing, but I am surprised that it is not a private member's day so that standing orders could be suspended to facilitate that. The history of this Government since its election has been one of attacking the unions and the workers at every single opportunity over public service wages, access to the Industrial Relations Commission, death and disability benefits, or WorkCover.

Now the Government is turning up to have a big fat whack at the Australian Labor Party and how we run it. I am proud to be part of the Labor Party and I always have been. I am proud that my grandfather was a founding member of the Birrong branch and was a union delegate at the Westinghouse factory in Regents Park. I am proud that my mother was a member of the Birrong branch since she was 17 years of age. I am also proud that I have been a member since the age of 15. The history of the Australian Labor Party is one of the strongest traditions in the world. It is outrageous that Coalition members can use this Chamber to fundamentally attack our political party. Dr Tham stated:
      Is there a compelling justification for such a severe incursion into the freedom of the ALP to organise itself as it sees fit?
The reality is, no, there is not.

Mr DAVID SHOEBRIDGE [6.20 p.m.]: I speak in support of the words already spoken by my colleagues Dr John Kaye, the Hon. Jeremy Buckingham and the Hon. Cate Faehrmann. I note also the presence of my colleague the Hon. Jan Barham in the Chamber. On balance, The Greens support the Election Funding, Expenditure and Disclosures Amendment Bill 2011. It does one thing that our members and supporters have been campaigning about for more than a decade, which is to finally ban corporate donations to political parties in New South Wales. That is a genuine generational reform. I pay my respect to the enormously courageous work Lee Rhiannon did in this Chamber, often to howls of derision from the then Opposition and the then Government. She had the temerity to say this Parliament was being bought by corporate interests. She had the temerity to say that government decisions had been purchased by donors to political parties. When she first said it she was treated as a pariah in this Chamber, as a terrible outsider who was breaking the club rules about how politics works in New South Wales.

She and other courageous Greens broke the club rules. She broke the way politics is tied to corporate donations in New South Wales. She worked with a skilled team of Norman Thompson and others. Her work has been carried on in this Chamber by the terrific work of my colleague Dr John Kaye, who runs the donations portfolio for The Greens in New South Wales. It is a breaking of the club rules and the way politics has traditionally run in New South Wales. It is wrong to suggest that it is any politician or any clever person in an office that leads to this kind of widespread social reform such as banning corporate donations. Day after day thousands of Greens members went out on stalls and handed out flyers that had the information from Democracy for Sale. They spoke to their neighbours and friends, raised the issue in council meetings across New South Wales and said how wrong it was that our politics is being bought by corporations. It is wrong and it is because of that generational reform that The Greens, despite concerns with some elements of the bill, will support the bill.

I also must pay tribute to the work of my immediate predecessor, Sylvia Hale. It was one of those moments in New South Wales politics where it all came together, about how money was buying decisions in New South Wales. It was work she did, looking at the donations from property developers to the then Labor Government under part 3A, where she could follow the donation from the developer and then the decision by the planning Minister to deliver a grossly inappropriate development in Killalea State Park.

The Hon. Amanda Fazio: You have never been able to show one occasion where that was the case.

Mr DAVID SHOEBRIDGE: Donation, decision; donation, decision; and it was so obvious to anyone who saw that combination of donations and decisions that this was a system in New South Wales—despite the continued support for that by the Hon. Amanda Fazio that I hear behind me—that was delivering corporate outcomes through donations to political parties. I commend the work of Sylvia Hale and her team who exposed that timeline of donations and brought widespread disgust from the people of New South Wales to the way in which New South Wales was being run. In 2010 we got some major reform. It is funny that a government as it is dying suddenly has a need for donation reforms. But The Greens were willing to support any government that brought forward positive donation reforms, whether it is in its first year or its last year of office.

In Labor's last year of office it introduced a bill that took donation reforms forward and capped all donations, including from corporations, to a maximum of $5,000 to a political party and $2,000 to a candidate. The Greens moved amendments to absolutely ban donations from some of the most insidious elements of corporate Australia—from the tobacco companies, from the for-profit gambling companies and from the for-profit alcohol industry. That came on the back of a ban on developer donations. Of course, those amendments only went so far. At the time the Coalition Opposition moved amendments to absolutely prohibit all corporate donations, all donations other than those from individuals. We were told by the then Labor Government that if we supported those amendments it would kill the bill and it would not proceed. We are faced with the same situation now.

The Hon. Adam Searle: When did the Premier say that?

Mr DAVID SHOEBRIDGE: The Deputy Leader of the Opposition asked when the Premier said that. It was put into Hansard by the then Labor leader of the House that that was the position that would be adopted by Labor if we picked up the amendments. We are in exactly the same situation here. The Greens would like to see a number of amendments to the bill that would improve it, that would get rid of some of the concerns that have been raised about other impacts on democracy in New South Wales. But we know if we support that it will not have the Government's support and the bill will not be supported by the Government at the third reading stage. Even with the amendments, it is likely to not be supported at the third reading by the Labor Opposition. The bill will fail. If the bill fails we will lose that chance to have generational reform. It is not an easy decision for a party that is, as Dr John Kaye said, weighing up those issues about the impacts on broader democracy and a core principle of getting rid of corporate money out of politics. It is a difficult weighing up exercise. We have had discussions within the party about it and it is difficult. But, on balance, getting rid of corporate donations is such a major step forward that The Greens will support this bill.

There has been a great deal of discussion about affiliation fees and whether it is appropriate in donation reform legislation to put in place a prohibition on affiliation fees. The bill does not prohibit affiliation, as has been said by many contributors to the debate; it prohibits a fee being paid for affiliation. There is no doubt that the current amount of money that is paid by affiliated unions to the Australian Labor Party is a donation in large part—more than a million dollars going into the party. It goes into an administration fund, so it is not used for advertising but it displaces other money that the party would have to use for administration and allows the party to use that for campaigning. That is undoubtedly what happens. So, substantial funds are being donated, and no-one could suggest that more than $1 million is required for the additional costs of having unions attend at conferences and those other mechanical and administrative costs. No-one has sought to make the intellectual argument that that amount of money is representative of the real cost of affiliation.

Let us be clear what this bill will not do. The bill will not prevent—because the current law and the current definition of a "gift" and a "political donation" do not prevent this—the invoicing by the party to a union for the costs of delegates to attend a conference. If the Australian Labor Party works out what the costs of attendance at a conference will be, there is nothing to prevent the party from invoicing for those costs provided it is for fair consideration. That is what the law says: Provided it reflects the costs incurred by the party in having the service provided by the party. So, this argument that it will prevent on-costs being added to the balance of the party is not well made. This is not about getting around the law; this is working out what the limits of the law are, and the limits of the law do not prevent cost recovery by a party for the attendance of delegates at a conference. Contributions that say the opposite do not do credit to the argument being put by the Labor Party. They do not do themselves credit by making the argument without understanding how that part of the law will operate. The Greens would support an amendment that allowed for a reasonable cap on affiliation fees, something in the order of $5,000 as an affiliation fee.

[The Deputy-President (The Hon. Jennifer Gardiner) left the chair at 6.30 p.m. The House resumed at 8.00 p.m.]

Mr DAVID SHOEBRIDGE [8.00 p.m.]: The Labor Party treats its affiliation fees as an essential right, which means it would have access to funds that other parties would not once there is a cessation of corporate donations and donations from other organisations. The fact that Labor continues to view affiliation fees as a source of donations is demonstrated by one of its proposed amendments to the bill. As I understand the structure, the Labor Party currently receives an affiliation fee of $3.70 or $3.80 per union member. As I have said, The Greens would fully support a reasonable cap on affiliation fees in the order of $5,000, which would cover the cost of affiliation and prevent it from becoming a donation.

Equally, as I said before, some of the costs of affiliation—attendances at conferences and the like—could be invoiced on a cost-recovery basis to delegates. The amendment circulated by Labor for a so-called cap on affiliation fees increases the fee from the current $3.70 or $3.80 to $5.00. Therefore, far from being a cap, the amendments proposed by Labor would have the effect of increasing the amount of affiliation fees, whereas the balance of political players in New South Wales will be prohibited from accepting donations from third-party organisations, whether or not they are for-profit corporations. That, of course, would result in a skewing of the political system and, given the balance of the provisions in this bill, would not provide a level playing field.

Unfortunately, we were not able to sit down and talk productively with the Government about placing a reasonable cap on affiliation fees. That would be the preferred solution to the dilemma before us. One of the issues that has greatly troubled my colleague Dr John Kaye and many of the people who gave evidence before the committee is the impact of the bill upon third-party campaigners. We want to ensure that any donation reform does not prevent a third party made up of membership-based organisations from running a genuine public interest issues-based campaign that reflects its memberships' interests. We do not want to delve into the type of corruption that we see in the United States system where political action committees—third parties—are effectively running parallel direct political campaigns either attacking one class of politicians or directly promoting another class of politicians. We cannot have that. Third parties must be allowed to run campaigns that are not directly advocating a vote in an election but are raising an issue—for example, the principled campaign against WorkChoices that was run by the union sector in New South Wales.

Campaigns opposing issues such as privatisation are not directly advocating a vote for one party or another but are raising an issue. Such campaigns should be allowed. I am pleased that the Government has circulated an amendment, at late notice, which goes some way, as I understand it, towards allowing issues-based communication to happen. It is unfortunate that it was not done in a more cooperative fashion with the Parliament and its drafting is potentially slightly restrictive, but it is a definite step in the right direction in that it allows for third-party issues-based campaigns to continue without undue restrictions as a result of this bill.

Genuine concern has been raised as to whether this legislation skews the ability to engage in political communication with the corporate sector, which can register as a third party and engage in third-party campaigning. All parties will have to look at this issue over the coming years. Each corporation can spend roughly $1.166 million on direct political campaigning and it is also open for individual groups in the not-for-profit sector to do so. But, as we all know, we live in a society where corporations have a great deal more money than membership-based groups, environment groups, sporting groups or other groups that are not profit motivated and are not based around corporations.

The Government should recognise that close scrutiny of these laws and their impact is necessary because if the effect of these laws is to provide a system whereby corporations are effectively treated as the equal of broad-based membership groups but they have greater access to funds than broad-based membership groups, that could be to the long-term detriment of politics in New South Wales. We will have to review this issue in relation to the upcoming local government election. We must recognise in passing the bill that this is a genuine concern on an issue that will need close scrutiny in the coming years.

We also must recognise that donations and electoral reform laws are a cat and mouse game. Regulations are made and then money finds a way to avoid the existing regime of regulations. No system is ever finalised. The system must continually engage in this process and continually monitor how money finds a way, which it will, to try to gain influence within the political system. We can be sure that organisations are already examining these laws and looking for ways to circumvent them to allow money to continue to influence. We will have to be vigilant and willing to review these laws on a regular basis in order to ensure that they are not subverted by money politics in the future.

I speak on this bill with a degree of pride in the history of Greens members—Lee Rhiannon and others—in putting this historic reform forward, but I also speak with a degree of trepidation because with this bill we are changing the political system in New South Wales. We will look at aspects of the legislation in the cold light of day over the coming months and years and we will have to review and continually reform the legislation. However, prohibiting all corporate donations in New South Wales is a major reform. The previous Labor Government could have introduced it in 2010 and we would have supported it. The previous Labor Government could have introduced it with a reasonable cap on affiliation fees in 2010 and we would have supported it.

We would like to see the Government adopt a raft of amendments. I am glad to see one amendment that is being adopted which relates to issues-based campaigning. That is a positive outcome of tonight's debate and the exchange of ideas that is occurring in this Chamber. We must ensure that the exchange of ideas continues in the community so that membership-based associations can continue to play a significant and real part in New South Wales politics. We must ensure that we are vigilant about the effects of this change to the law over the coming months and years. The Greens support the bill.

The Hon. JENNIFER GARDINER [8.09 p.m.]: I was one of the sponsors of a motion at The Nationals annual general conference several years ago to adopt as party policy what was, in effect, the guts of this bill—that is, to restrict donations to political parties to individuals on the electoral roll and to eliminate donations from corporations, trade unions and other entities. That motion was carried by the membership of the party that I belong to. Therefore, it gives me great pleasure that this bill, which passed the Legislative Assembly last year, is being debated in this House. The Nationals adopted it as party policy at our conference, it was agreed to by the State parliamentary Nationals and the Liberal Party adopted it as its policy completely separately to us. The case for this reform was prosecuted in the lead-up to the 2011 general election by the then Leader of the Opposition, the Hon. Barry O'Farrell, and the Leader of the Nationals, the Hon. Andrew Stoner. We now have the bill before the House.

In the last session the Legislative Council moved that the bill be referred for examination and report by a select committee, which was due to report by today. The select committee laboured over the adjournment and it reported today as it was meant to. As a member of the select committee I thank the Hon. Dr John Kaye for his chairmanship of the committee and I thank the committee members for their work. I also commend the secretariat staff who delivered their usual excellent level of professionalism. The bill proposes to amend the Act in two main areas: by providing for the aggregation of the electoral communication expenditure of parties and their affiliated organisations through inserting new provisions into section 95G of the 2010 Act; and by limiting the ability to make political donations to individuals only by replacing section 96D of the Act.

With respect to the aggregation of electoral communication expenditure, under the proposed amendments to section 95G electoral communication expenditure incurred by a party would be aggregated by the electoral communication expenditure incurred by an affiliated organisation within the applicable cap for the party. That is a matter we flagged during debate last year. We believed that the weighting of the legislation that eventually went through the Parliament was out of whack. With respect to the prohibition on donations other than by individuals, new section 96D provides that it would be unlawful for a party, elected member, group, candidate or third-party campaigner to accept a political donation unless the donor is an individual and is enrolled on the roll of electors for local, State or Federal elections.

During the course of the select committee's inquiry it became clear that there was some confusion about what is provided for in the bill and in the 2010 legislation. The focus of the bill restricting donations to those from individuals was a recommendation of the Legislative Council Select Committee on Electoral and Political Party Funding in 2008. After the 2008 report a considerable number of reforms were implemented by this Parliament. I will not go through all of them, but later further amendments were made to the legislation after the Joint Standing Committee on Electoral Matters also examined the topic of campaign and political party finance reform. After that major inquiry into public funding and political funding models for political parties, it recommended the capping of donations from individuals at $2,000 per political party, group or independent candidate per financial year. That committee also recommended restricting donations from individuals to individuals on the electoral roll—a provision that has similar elements to the one before the House.

In 2010 many of the recommendations of the Joint Standing Committee on Electoral Matters formed the basis of the Election Funding and Disclosures Amendment Act. The 2010 Act was then further amended to prohibit donations from tobacco industry business entities or liquor and gambling business entities. The 2010 amendments also introduced the regulation of third party campaigners into the electoral funding and disclosure regime. Those rules were introduced at that time; they are not new or simply an advent from the bill before the House. During the debate before the general election the Liberal and Nationals Opposition made it clear that the bill at the time did not satisfy the terms of our policy and it was unbalanced in its applicability across the political spectrum. Of course, in 2011 there was a change of government. In keeping with its election commitments and its rather healthy mandate, the Liberal-Nationals Government introduced this bill.

In some key respects it adopts provisions from the Canadian electoral funding model. It is worth looking at the Canadian model. In Canada in the Federal jurisdiction political parties and third parties are all subject to controls under the Canada Elections Act, which came into effect in 2000. A citizen or a permanent resident of Canada can donate up to $1,100 per year to a political entity, which is a registered political party, a registered electoral association, nomination contestants and candidates of a registered party, leadership contestants of a registered party, and independent candidates in an election. But corporations and trade unions may not make any contributions to political entities. That principle is more than a decade old in terms of its life on the statue books of a jurisdiction that has many similarities to Australia and New South Wales.

It is important to note as part of the equation built into the 2010 legislation that capped expenditure in election campaigns, public funding of election campaigns and political parties was increased by the Keneally Government. That included the creation of a separate pool of money which registered political parties with parliamentarians could access for the administration of the political party. This bill is the remaining piece in the campaign finance reform jigsaw. The Keneally Government left a great deal of unfinished business across many portfolios and this bill is part of the election funding and disclosure reform project that was unfinished business. The O'Farrell-Stoner Government is filling in that missing link. That is the purpose of this bill.

It is true that some of the witnesses at the 2012 select committee inquiry seemed confused by some of the provisions of the bill, as I mentioned earlier. Today's debate has confirmed that confusion, especially on the part of some members of the Labor Party. For example, the Hon. Lynda Voltz tried to refute an assertion made by the Hon. Cate Faehrmann that as a result of the legislation registered parties with members of Parliament will not be able to access an administration fund. Of course, that is simply untrue. The fact is that as part of the quid pro quo for tightening up corporate and other donations the Keneally Government introduced provisions which meant that political parties with members of this Parliament can access the administration fund.

The Hon. Lynda Voltz: No, she was using parliamentary funds to fund the administration of the party. You might want to go back and check.

The Hon. JENNIFER GARDINER: No, she was talking about the administration fund.

The Hon. Adam Searle: Hansard will solve all.

The Hon. JENNIFER GARDINER: I do not agree with the Hon. Lynda Voltz. The Hon. Cate Faehrmann got it right and Labor members got it wrong. The Administration Fund and Policy Development Fund fact sheet on the Election Funding Authority's website states:
      Political parties, groups, candidates and elected members may be entitled to apply to the Election Funding Authority for payments from one of the following funds …

The funds were set up by legislation that was passed by the previous Parliament. The fact sheet states:
      The Election Campaigns Fund

      The Administration Fund—for operation and administration costs of State parties who have members of Parliament and for Independent Members of Parliament

      The Policy Development Fund—for all other State parties who are not entitled to the Administration Fund
We all know that the Australian Labor Party does not have as many members of Parliament as it had a year ago and that its reputation is at a very low ebb, but it is eligible for administration funding. It is also eligible for annual payments on a calendar-year basis from the administration fund. If it was a registered party at the previous State election at which it endorsed candidates who were elected as a result of that election and it continued to be a registered party in the calendar year to which payment relates, the annual amount payable to it as an eligible party is the amount of administrative expenditure incurred during the calendar year up to a maximum amount. The fact sheet also states:
      The maximum amount is either $83,000 for each elected member endorsed by the party, or $2,073,100, whichever is less.
That is double the amount the Labor Party receives from affiliation fees per annum. So the administration fund is a significant part of the 29 recommendations made by the Joint Standing Committee on Electoral Matters that were absorbed into the 2010 legislation introduced by the Keneally Government. The taxpayers' burden was extended by that legislation as part of a balancing act in having a strong party system, which is accepted as being important to our system of parliamentary democracy: decreasing access by political parties to funds they need for campaigns but accepting that the funding may be tainted because of its source. As pointed out by the Hon. Cate Faehrmann, there are prices to be paid for facilitating reforms to be passed by Parliament, and that is probably one of them.

I commend the Hon. Cate Faehrmann for pointing out in plain language that this bill does not stop the affiliation of trade unions with, for example, a registered political party. She said, "It just gets money out of politics." She noted that, on balance, the provision of public funding for administrative purposes cleans up politics and that that is a principle worth pursuing. The Nationals, like the Labor Party used to be, is a membership-based political party. I look forward to seeing the impact of this legislation because it has the potential to nurture stronger membership bases of political parties in New South Wales rather than an increased reliance by all major political parties on corporate and other outside donations. A political party is healthier as a result of the funds raised from individuals who are committed to that party's particular political cause than it would be as a result of being subject to funds from outside interests that may have the perception, even if it is not the reality, that they are calling the shots once they donate the funds. That is one of the reasons why we need to push ahead with reforms such as those provided by the bill.

The Hon. Cate Faehrmann pointed out that bodies such as the Nature Conservation Council, GetUp! and the Wilderness Society receive large sums of money that are broken down into small amounts because they are donated by individuals. She also pointed out that nothing in the bill stops the flow of donations from individuals. Registered third parties will still be able to spend more than $1 million on political party campaigns. No environmental body made submissions to the select committee to complain about the provisions of this bill. For example, GetUp! did not complain about the provisions of the bill; nor did anybody from that particular constituency approach the Hon. Cate Faehrmann, who is a member of The Greens, to complain about it. The Hon. Cate Faehrmann also helpfully provided some information about restrictions on being designated as a charitable body for tax deduction purposes, and pointed out that if the principal purpose of the body is changed from being a charitable body to a political lobbying group taxation laws will threaten the tax deductibility of that organisation's contributions. Those considerations add balance to the debate.

If the bill is supported by The Greens, as they have indicated, their assistance will be appreciated. The Hon. Lynda Voltz attempted to convince members that the bill takes the labour out of the Labor Party, but some people think that labour was taken out of the Labor Party years ago. Unfortunately for the Labor Party and, in the end, for its survivability in government in the recent past, there was a perception of a donations-for-decisions culture. If I were a member of the Labor Party I would want to cleanse myself of that imagery, which attached itself to the Labor Party over so many years.

The Hon. Dr Peter Phelps: Decontamination.

The Hon. JENNIFER GARDINER: It is a decontamination process, and the Labor Party probably needs to go through that. It is a very long and painful process.

The Hon. Dr Peter Phelps: Sheep dip them.

The Hon. JENNIFER GARDINER: Sheep dip is very handy. Similarly, the Hon. Robert Borsak was agitated by what he described as the gutting of politics by this bill. He was concerned about the effect that it might have in relation to large organisations donating large slabs of money to any political party and the possible deterrent effect upon individuals who would otherwise contribute. I genuinely believe that this legislation provides all political parties with further impetus to recruit across a wider range of potential supporters of their cause but in smaller amounts, rather than having lopsided financial contributions that create the perception of political parties being partly or wholly owned subsidiaries of, on the one hand, trade unions and, on the other hand, large corporate donors. This is extraordinarily important legislation. The passing of the bill tonight will be an historic moment in the long debate on campaign finance law reform. It is with very great pleasure that I support the bill.

The Hon. ROBERT BROWN [8.29 p.m.]: My dissertation will be brief. My colleague the Hon. Robert Borsak made it clear that the Shooters and Fishers Party will not support the Election Funding, Expenditure and Disclosures Bill 2011. In the same vein, we did not support the Labor Party's legislation in 2010.

The Hon. Adam Searle: At least you are even-handed.

The Hon. ROBERT BROWN: We are very even-handed. I am pleased to say that governments of both persuasions are even-handed. They will come sneaking around to our office wanting to offer us a deal to carve other parties out of the deal. We are resolute in our principles and we say no. Tonight I foreshadow that we will support the amendment to be moved by Reverend the Hon. Fred Nile. We think it is a pretty cute amendment. By doing so it will give us an opportunity to test the waters and to see how people really feel.

The only other comment I make is that although I was not on the committee, I attended one public hearing in Sydney. I add to the chorus of congratulations to Dr John Kaye on his chairmanship of that committee; he did an excellent job. The Greens have now seen the cold hard light of day. They now know what it is like to deal with the new Government. Dealing with the new Government is no different from dealing with the old Government. That is our current assessment of the situation. When one is dealt a losing hand one does not whinge or cry; one plays the hand or folds and waits until one gets a better hand. In the next three years I am sure some better hands will be dealt to us and we will play those hands even if we have jokers in them. Listening to both major parties—The Greens are a separate matter—and trying to convince the people of New South Wales that they have the best interests of the democratic process at heart is fingers down the throat stuff. Being inside the tent and knowing just how easily those principles can be thrown out the door—

The Hon. Adam Searle: Trampled.

The Hon. ROBERT BROWN: "Trammelled" is a better word. We know what a lot of people in voter land do not know: It is all about the maintenance of the political system and the power of the major parties. This legislation is like trying to make a silk purse out of a sow's ear, but it was the Labor Party that delivered the pig in the first place. The 2010 legislation was no good and this legislation is no good. I stand by the comments made earlier by my colleague the Hon. Robert Borsak: This is an attack on democracy, not an attempt to provide better democracy.

Reverend the Hon. FRED NILE [8.33 p.m.]: On behalf of the Christian Democratic Party I am pleased to speak in debate on the important Election Funding, Expenditure and Disclosures Amendment Bill 2011. I see this bill as part of a staged reform in New South Wales that started in 2008 with the inquiry I chaired into this whole area of electoral funding and donations. In 2010 we had a bill from the former Labor Government which I believe incorporated many of the recommendations of that inquiry and we conducted another inquiry in 2011. It is difficult for the Government to pick up recommendations from that inquiry and include them in this bill as the report was tabled only today—one of the major criticisms that has been raised during this debate. Should debate on the bill be adjourned for a week to give members time to read the report? According to normal practices, that should be a consideration of the House.

These reforms are an ongoing process. For that reason I know there are concerns about the current bill but I do not believe it will be the final bill on electoral funding reform and disclosures. There will almost certainly be a need for a further bill at a future date—perhaps in another 12 months—to tidy up this bill. I believe both governments—the Australian Labor Party when it was in government, and the Liberal-Nationals Coalition—should be congratulated on attempting to bring in this electoral reform. That is why The Greens, even though they have reservations and they planned to move a large number of amendments, see this as I do—as part of a staged development. We do not want to halt that process by seeing this bill defeated; we simply see this as one step in the right direction. We have not achieved perfection but it is a step in the right direction. Perhaps from the Opposition's point of view it is not a step in the right direction because of the effect that this legislation will have on its funding and donations and other support it receives from the trade union movement.

This bill deals with what I call a culture of corruption that threatens all governments. When governments are elected they have a great deal of power, certainly over development decisions and so on. I notice that even the current Government faces those same temptations with some of its major projects because of the repeal of part 3A of the planning laws. The Minister for Planning can now make the decisions and we will get back into the danger area where the Minister comes under pressure to approve particular projects. It might not happen but large donations could be made to the Liberal Party which could then have an indirect influence on those planning decisions. I pray that does not happen but when governments are elected they all come within this area of temptation and people seek to exploit them. That occurred when the Labor Party was in office for 16 years. A number of investigations were conducted by the Independent Commission Against Corruption particularly in relation to Wollongong. Investigations are continuing into former Minister Macdonald and others. There is always a sense of what I call a culture of corruption. I hope that this legislation, earlier legislation and any future legislation will keep dealing with that issue.

Sadly, it is part of human nature. Many members would be aware of quotes in the Bible, which we call God's Word, such as, "What shall it profit a man if he gains the whole world and loses his own soul?" which implies that people sometimes do bad things to gain wealth and power and in doing so lose their own soul and destroy their integrity. Other quotes are, "Whatever you sew so shall you reap" and "No man can serve two masters, either God or Mammon"—that is, the god of money. All individuals face temptations in a modern society, in particular, those in positions of power and influence.

There was controversy also over the donation made to The Greens by Graeme Wood, the director and founder of the travel booking website Wotif, who had an estimated worth of $372 million and who made a donation of $1.6 million to The Greens. In spite of all the attempts by Lee Rhiannon to attack donations and corruption, when people questioned The Greens leader, Senator Bob Brown, he said he was grateful as that was the party's single biggest donation. The previous largest donation was only $200,000 and the party had never received a six-figure donation. People asked how that fitted in with The Greens' policy against large donations. Senator Bob Brown conceded that many in The Greens, particularly at the State level—he was referring in particular to the New South Wales Greens—would oppose donations from business people such as Wood. He said that the party was pushing to end corporate and union donations and moving to full public funding of elections. Bob Brown is pragmatic about accepting donations in the meantime. He said:
      [It] doesn't mean you don't live within the prescribed law of the time, or unnecessarily trammel yourself.

He is saying that morally the Greens should not have accepted that donation, but being pragmatic he will accept it. That demonstrates that all parties can succumb to temptation when large donations are in the wind. The Election Funding, Expenditure and Disclosures Amendment Bill 2011 deals with a number of practical matters. As I said earlier, I chaired the 2008 inquiry of the select committee that comprised representatives of all parties except The Greens. That committee made a number of positive recommendations that were picked up by the Labor Government in the 2010 Election Funding and Disclosures Bill. The inquiry was strong on having a cap on donations and that principle was followed through to a degree. Now this 2011 bill will amend the Election Funding, Expenditure and Disclosures Act to increase the transparency of the New South Wales political system by banning political donations other than by individuals. This ban will prevent donations from industrial organisations, peak industry groups, religious institutions and community organisations. It will be unlawful to give or receive a political donation other than by an individual who is on a Commonwealth, State or local government electoral roll.

That one area has caused concern obviously to the Labor Opposition because of its impact on peak industry groups, but from the Christian Democratic Party point of view it impacts on donations from religious institutions. The Christian Democratic Party does not get many large donations from churches. Most donations usually are of small amounts from individuals. Of course, this proposal will have a major impact on the financial support of the Shooters and Fishers Party. Obviously, the Shooters and Fishers Party represents all shooting organisations and it has developed a custom where donations are fed through those organisations rather than from the 50,000 or 100,000 licensed shooter members.

Donations from some shooters' organisations are of quite large amounts up to $300,000. This bill will stop that donation process, which means it will stop funding of the Shooters and Fishers Party completely. For that reason I have drafted the amendment to at least make that point in this debate. Existing bans remain in place on donations by property developers and tobacco, liquor and gambling entities and their close associates, such as a company director and his or her spouse. I remind members that the original proposal was simply to ban donations from property developers and tobacco organisations. I moved the amendments on behalf of the Christian Democratic Party.

Dr John Kaye: That is not correct. It was not property; it was just tobacco. You proposed all of them. We just proposed tobacco.

Reverend the Hon. FRED NILE: That is right. I proposed banning donations from the liquor and gambling industries, and the sex industry. We had support for liquor and gambling, but I was surprised that the House was negative about prohibiting donations from the sex, pornography or brothel industry. That opposition to the proposal to ban donations from the sex industry was opposed strongly by the Coalition, the Labor Party and The Greens. I still do not fathom completely why those parties were so sensitive to protect donations from that industry.

The bill also will ensure that electoral communication expenditure of affiliates will be linked to the expenditure of parties to determine whether a party has overspent during a campaign or spends less than or equal to the applicable expenditure caps. The bill also will deem the expenditure to exceed those caps where total party and affiliate expenditure together is higher. It will be an offence for a party to spend more than the relevant legislative caps. The aggregation will apply for both the overall State cap on party expenditure as well as the $50,000 electorate cap. They are the main aspects of this legislation. It is not perfect legislation, but it is a step in the right direction. For that reason we will support it. Hopefully, there will be some support for our amendment.

The Hon. DAVID CLARKE (Parliamentary Secretary) [8.45 p.m.]: The purpose of the Election Funding, Expenditure and Disclosures Amendment Bill 2011 is to restore integrity, honesty and transparency to the election funding and political donation process. This is what the people of New South Wales have wanted for years under Labor. They did not get it and never would have. The people of New South Wales could have waited forever and a day. Labor was never going to do anything other than tinker here and there with the process. However, under the Coalition that will change. This bill amends the Election Funding, Expenditure and Disclosures Act so as to ban corporate donations and to link certain expenditure of parties and their affiliates. The people of New South Wales want the whole area of political donations to be cleaned up.
    Before the last election the Coalition promised to introduce legislation to clean up this whole murky area. The Coalition promised to clean up 16 years of Labor rorts in this area. We will honour the commitment we gave to the electors of New South Wales. During the last election campaign we said that political donations should be made only by individuals, and the people of New South Wales agree. We said that only those on the electoral roll should be able to make donations to political parties, and the people of New South Wales agree with us. Over the past 16 years the scandals surrounding political donations in this State gave New South Wales the reputation of being the Tammany Hall of the Pacific.
      To try to placate the New South Wales electorate, previous Labor governments tried to get away with bandaid solutions. Labor fiddled with the process without making any substantial changes. The truth is that it did not want any substantial changes except, of course, to tighten the screws against the Coalition parties. Political donations were an uneven playing field legally tilted against the Coalition parties, which Labor sought through legislation to tilt even further. Robert Mugabe would have looked with admiration upon the handiwork of Labor in this area. In fact, New South Wales Labor could have taught Robert Mugabe a lesson or two.
        The Election Funding, Expenditure and Disclosures Amendment Bill makes clear that in respect to political donations in New South Wales it will no longer be business as usual. Under this bill political donations will be banned other than by individuals. Political donations will be unlawful unless made by an individual registered on a Commonwealth, State or local government electoral roll. No further donations will be able to be made from industrial organisations, peak industry groups or community organisations. This bill is fair and equitable in its application. The existing ban on donations by developers and tobacco, liquor and gambling entities, and their close associates, will remain in place.
          Affiliate electoral communication expenditure will be linked to the expenditure of parties to determine whether a party has overspent during a campaign. That provision will close down a whole underworld of rorts. Even if a party spends less than or equal to the applicable expenditure caps, the bill will deem the expenditure to exceed those caps where total party and affiliate expenditure is higher when added together. The era of the O'Farrell Government will be one of clean, honest and transparent government. The era of the O'Farrell Government will be one where the sleaze, corruption and rorts of Labor governments will be a distant memory. This bill will go a long way towards cutting out from the process of election funding and donation the dodgy practices that have become so common over the past 16 years of Labor rule in New South Wales.

          The Hon. PAUL GREEN [8.50 p.m.]: On behalf of the Christian Democratic Party I echo the words of our Leader, Reverend the Hon. Fred Nile, and speak briefly in debate on the Election Funding, Expenditure and Disclosures Amendment Bill 2011.
            Dr John Kaye: What about Manildra's donations? They are your constituents.

            The Hon. PAUL GREEN: I have had no donations from Manildra. I acknowledge the 300 to 400 jobs that they provide to our city—jobs for young parents that enable them to pay their bills.

            Dr John Kaye: They pay the Liberal Party's bills.

            The Hon. PAUL GREEN: And we like ethanol blended fuels as well. The object of this bill is to amend the Election Funding, Expenditure and Disclosures Act 1981 to close an existing loophole where expenditures incurred by campaigning organisations affiliated with political parties are not subject to existing political party expenditure caps, as mentioned by the Hon. David Clarke. This bill will prevent third party interest groups, such as industrial organisations, peak industry groups, religious institutions and community organisations, from making political donations and prevent the undermining of campaign finance rules. I note that only individuals who are listed on electoral rolls will be able to donate to political parties. Transparency of donations should minimise the possibility of corruption by making it publicly known who has been giving donations to parties and candidates. We are pleased to know that the existing bans on donations by property developers, tobacco, liquor and gambling entities, and their close associates, will remain in place. Shoalhaven council was one of the first councils to place its expenditure and political donations on line.

            Dr John Kaye: Yes, very good.

            The Hon. PAUL GREEN: Of particular interest is the new section 95G (6) which addresses the scenario that even if a political party spends less than its allocated expenditure caps, its expenditure will be regarded as exceeding those caps if the combined party and third party affiliate expenditure exceeds those caps. Dr Anne Twomey in her 2008 paper entitled "The Reform of Political Donations, Expenditure and Funding" makes an important point regarding the possible divvying up of interest group donations. She states:
                Large donations previously given by interest groups might instead be broken up and donated directly by individuals who participate in those groups. Donations by wealthy people might be broken up and donated by a number of different family members. Donations by partnerships might be instead made by a number of partners.

            New section 96D (3) will ensure that these new amendments cannot be evaded by third party groups channelling donations through individuals. The recent inquiry by the Select Committee on the provisions of the Election Funding, Expenditure and Disclosures Amendment Bill 2011 found:
                This proposal received mixed support from inquiry participants. It was argued that the ban would vest the power to make political donations solely in the hands of those able to vote, thus reducing the risk and perception of undue influence or corruption. Conversely, it was argued that the ban would eliminate the ability of citizens to engage in collective political action, and skew the political system towards individuals who could afford to make an individual donation. It was further suggested that the ban may disadvantage both smaller political parties and individuals not on the electoral roll ...

            I thank the Hon. Steve Whan for acknowledging the Christian Democratic Party and the Shooters and Fishers Party as being parties that could be caught out in a reduction of opportunities for political donations. The committee went on to state:
                On balance, the Committee considers that the principles of fairness and transparency, together with a reduced risk of corruption and undue influence, will be best served by banning political donations from all but individuals on the electoral roll …

            The committee has recommended that not-for-profit membership-based third party campaigners be allowed to pool their funds for the purposes of conducting an issues-based campaign, subject to the existing provisions of the Act that restrict third party campaigner donations and expenditure. We believe that the proposed ban should apply only when a third party campaigner is either a for-profit entity, or the funds are to be spent on promoting the interests of a particular political party, candidate or group of candidates. The Premier's response to this statement was:
                The Government's bill does not prevent third-party campaigners or other peak groups from accepting corporate donations that are used to run a genuine issues-based campaign unconnected to a State or local government election ... Donation caps only apply for third-party campaigners who incur electoral expenditure, and electoral expenditure relates to opposing directly or indirectly a party or the election of a candidate or candidates for the purpose of influencing directly or indirectly a vote at an election.

            In conclusion, I believe this bill represents a goal towards achieving transparency in political donations. As noted, the Christian Democratic Party will be moving an amendment to the bill to guarantee that smaller parties will not be compromised and to ensure that they have a chance to participate in a roundtable of democracy as the people of New South Wales may elect them. At the end of the day we want to see transparency in this Chamber and an opportunity for the Christian Democratic Party to fundraise in the same manner as the bigger parties. If we are to achieve fairness we must ensure that the rules provide all parties with an equal opportunity to have their constituents vote for them.

            The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [8.56 p.m.]: The Election Funding, Expenditure and Disclosures Amendment Bill 2011 is one of the most undemocratic pieces of legislation to see the light of day in this State. One fairly short bill attacks the right of ordinary citizens to collaborate in political dialogue and action. It blatantly favours one side of politics and seeks to rewrite the internal organisational rules of the major opposition party. I suppose we cannot blame Coalition members for this. After all, this is their stock in trade—attacking people's rights and taking them away. The community will blame the political party currently trading under the name of The Greens for selling out trade unions, other community groups and for attacking those who are high net worth individuals in our community. In the past The Greens have sought to portray themselves as friends and supporters of trade unions.

            Ultimately, the community will hold The Greens accountable for putting democracy in New South Wales up for sale because, contrary to a number of contributions made in this debate, this bill does not clean up politics, it does not promote grass roots participation in political activity and it does nothing to stop—to use the phrase used by Dr Kaye—the "rivers of gold", in particular, the corporate rivers of gold. This bill does nothing to deal with the activities of third party campaigners—an important part of this legislation. The legislation continues to commit corporations and wealthy individuals to fund and run third party political campaigns but it prevents regular working people, often low paid and vulnerable, from acting together through membership of a trade union to have their voices heard in political debate if that union is affiliated to a political party.

            The last time I checked I found that only one political party in this State has trade union affiliates. This legislation is clearly aimed at damaging the Australian Labor Party. It is unprecedented for a piece of government legislation to squarely target an opposition party and its internal structures, seeking to take away from that party and its members the right to determine how they govern themselves. The legislation ultimately aims to weaken our democracy by weakening the major opposition party. This cannot be in the public interest. Some in the political party trading under the name of The Greens may say that on balance the legislation can be supported because it advances the cause of donation reform by banning donations from companies and other vehicles and limiting donations to natural persons on the electoral roll.

            This is an extremely idealistic, if not hopelessly naïve, view of the world. Just to take the first point, I think made by the Hon. Trevor Khan, New South Wales is not like the United States of America, which has an enormous population of some 300 million people, so that the participation of even a small percentage of its people can raise millions of dollars. New South Wales has only a few million people. This House should also very carefully consider the fact that comparatively few people in the New South Wales community have the discretionary resources necessary to enable them to donate to political parties. One does not have to be much of a student of history to reflect on what sections of our society, individuals or kinds of individuals have done with their resources, and which side of politics they have chosen to invest in.

            Overwhelmingly, these changes favour the Coalition parties—that is, the Liberal Party and The Nationals. I cannot, for the life of me, understand how it is that The Greens political party would consider, let alone support, such a profoundly undemocratic set of proposals aimed at skewing significantly the rules of people engagement in this State to the wealthy and to corporations, and against ordinary working people. I just cannot believe that members of The Greens have found themselves in a situation where the only course of action on which they can agree is to vote entirely for this Government bill. I think we see being played out here the psychodrama that is gripping The Greens political party, so eloquently disclosed in the recent pages of the monthly magazine.

            The bill will prevent peak organisations, such as Unions NSW, from receiving money from its affiliates to run political campaigns, because those affiliates are not natural persons; they are trades unions. The Government Whip, the Hon. Dr Peter Phelps, let the cat out of the bag—not that it was much of a secret—that the clear target is to prevent—not inhibit or discourage but actually prevent—a campaign like the trade unions campaign against the Howard Government's WorkChoices industrial laws. This bill says that in future, unless those peak organisations can raise the money directly from individuals, they will not be able to run campaigns of that nature. Of course, the idea of political campaigns of that nature, even if not for a particular party, is to be against a political party—because, otherwise, there is no purpose in that form of activity.

            We have heard tonight that the bill does not actually seek to rewrite the internal rules of the Labor Party, and that it does not really prevent trade unions from running third party campaigns. What it does is create a clear double disincentive for unions to become or to remain affiliated to the Australian Labor Party, and in turn for the Australian Labor Party to have union affiliates. Unions, of course, can affiliate to the party under this legislation.

            The Hon. Dr Peter Phelps: That is correct.

            The Hon. ADAM SEARLE: But they cannot pay any affiliation fees to the party.

            The Hon. Dr Peter Phelps: That is correct—just like your 451 life members.

            The Hon. ADAM SEARLE: Just pause there for a moment. Natural members who are members of the Labor Party pay a membership fee to the Labor Party, but a member of the Labor Party that is a trade union no longer will be able to pay any fee whatsoever. Trade unions can still engage in third party campaigning, we are told. But if they are affiliated to the party, they come within the electoral spending cap of that party, and that will severely limit the ability of those trade unions—representing ordinary, hard-working, often vulnerable and low-paid workers—from meaningfully engaging in the political party if they remain affiliated to the Labor Party. This law will also affect peak environmental organisations, despite what we have heard here tonight, as well as peak community groups, such as the Council of Social Service of New South Wales, again because its members are not natural persons; they are affiliates with other organisations joining that organisation. So, unless those organisations can go straight to the community and raise money directly from people, they will not have the resources to run third party campaigns.

            This debate has been remarkable for a number of reasons, not the least of which is that Dr John Kaye, in a very clear-minded way, has identified many of the legislation's problems relating to third party campaigns, which the legislation continues to permit. Yet tonight we have heard the extraordinary statement, uttered by speaker after speaker from that party, that they will vote for the bill unchanged—that is, they will vote against any attempt by the Opposition to address the very concerns that they raise. In fact, they probably will vote against the amendments which originally were their own. What an extraordinary situation. They have said: We do not want to kill the bill; we are very worried that if we load it up with amendments that the Government will not accept, it will kill the bill and the cause of electoral funding reform will be set back.

            Ultimately, what The Greens are saying is: If the Government tells us it will not accept an amendment, we will not put it forward. Obviously, that is an abdication of their responsibility as legislators, and as members of this House, to scrutinise and indeed try to improve legislation. Even assuming that that is the genuine position of members of The Greens political party, why not try the amendments and send them to the other place to see what the Government has to say about them? I listened carefully when Mr David Shoebridge said that the previous Government effectively gave his party an ultimatum: if they put up certain amendments, the bill would be killed; and, in order to accept the on-balance good things in that legislation, they accepted everything. But we did not hear from Mr David Shoebridge or anyone else that the current Government had given such an ultimatum in connection with any particular amendment or amendments to this legislation generally. In fact, The Greens have said that the Government would not even engage with them. So how would they know that that is the Government's position—if in fact it is the Government's position?

            Dr John Kaye also said that The Greens do not do deals. That may well be so because, in a deal, both sides get something. I can see what the Government is getting out of this. Beyond some idea that maybe The Greens may one day replace the Labor Party as the major left-of-centre political party, I do not see what The Greens get out of this, or will try to get out of this. What will members of The Greens get out of this? Their members, the people that they claim to represent—the social justice part of the political spectrum, including many environmental groups—will feel that the actions of The Greens have let them down. In fact, they will feel that The Greens have meaningfully assisted the conservative side of politics—affecting not just the Labor Party, the Opposition, and who we represent, but progressive politics generally. This will be a big setback for progressive politics, and a big leg-up for the conservative side of politics. It is an extraordinary course of action that a party takes when its members say they will not even try to vote for amendments in which the party believes—amendments, in fact, which they drafted.

            We have also heard a critique about trade union affiliation fees. It is true that the Labor Party annual conference is on one weekend of the year, but the affiliation fees, like all membership fees, go to not just one purpose but to many. The fees assist the party not just for the conference but for many of the day-to-day operations of the party, the work of its policy committees, research functions and other necessary functions necessary to make a political organisation work. They assist in maintaining the essential infrastructure of the Opposition party between elections. That is the target of this bill. The Greens have complained about the Government's lack of engagement with them over the legislation. The Greens themselves of course have failed to engage meaningfully as well. So that seems to be a common complaint made in this debate.

            It is clear that this legislation is not a step forward towards transparency, because it does not take money out of politics. Corporations may no longer be able to donate directly to political parties, but they certainly can spend money in a way that assists them or not. That spend is not being regulated because the Coalition parties know that in this town corporations mostly assist them, and that is exactly why they have not targeted corporations, and that is exactly why they have targeted only the Australian Labor Party and its internal structures. When the dust settles on this legislation, everyone will know, in a very clear-minded way, that this is the real agenda of this legislation.

            Ordinary fair-minded people in this State, including many who voted for them in the election, will see that this is just a pretty shoddy attempt to rig the rules that will govern political activity from this point until the next State election. The Government will be judged according to those attempts, and I believe it will be judged harshly, as will all those who have actively participated in aiding and abetting the enactment of this legislation—very few of whom seem to have stuck around for the balance of this debate. I guess the truth can hurt.

            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [9.10 p.m.], in reply: I thank all honourable members who have contributed to this debate, particularly those who recognise that the Election Funding, Expenditure and Disclosures Amendment Bill 2011 is about accountability and transparency in relation to political donations. It comes about as the result of a community perception that for far too long the political donation schemes that have existed in the past have been the pathway to outcomes that have not necessarily been in the community's best interest. Be that the case it is another argument, but the perception was there and it has been there for some considerable time.

            The Opposition suggests that somehow this is the death of democracy, but there can be nothing further from the truth, because this piece of legislation will strengthen democracy. This piece of legislation will enshrine in the decisions that pass through this House a belief that there have not been some sinister dealings going on behind the scenes of which the public is unaware. This piece of legislation will almost certainly be a considerable step forward in restoring community confidence that legislation that passes through the House will be untainted. It does not matter which portfolio, the former Government understands that. You have to make tough decisions in government, as you also have to make tough decisions in opposition. If there is a suggestion that donations are clouding your decision-making, whether it is right or wrong it is a taint. If you remove that taint it gives political parties a much stronger platform on which to argue the position that they take in relation to an issue.

            Sadly, of course, the Labor Party has embarked on a debate this evening that simply misses the point. It misses the point that the Labor Party has been tainted by a perception in the community that if the price was right you could get what you wanted under Labor. This legislation will give the Labor Party an opportunity to expunge that taint from its party, its brand and its credibility by saying that from 2012 onwards it will not allow that stain over it to cloud the perception the community has of the Labor Party in relation to its decisions. Whether you like this legislation or you do not, this legislation is the best possible legislation for all political parties into the future. The community is watching very closely the decisions that this Government and the Parliament make so that their confidence can be restored. I commend the Leader of the Government in the Legislative Assembly, the Premier, for bringing forward this long-overdue piece of legislation that will again take a significant step in returning community confidence to this Parliament and to the Legislative Assembly. I commend the bill to the House.

            Question—That this bill be now read a second time—put.

            The House divided.
            Ayes, 24
            Mr Ajaka
            Ms Barham
            Mr Blair
            Mr Buckingham
            Mr Clarke
            Ms Faehrmann
            Ms Ficarra
            Mr Gallacher
            Miss Gardiner
            Mr Gay
            Mr Green
            Dr Kaye
            Mr Khan
            Mr Lynn
            Mr MacDonald
            Mrs Maclaren-Jones
            Mr Mason-Cox
            Mrs Mitchell
            Reverend Nile
            Mrs Pavey
            Mr Pearce
            Mr Shoebridge


            Tellers,
            Mr Colless
            Dr Phelps

            Noes, 15
            Mr Borsak
            Mr Brown
            Ms Cotsis
            Mr Donnelly
            Mr Foley
            Mr Moselmane
            Mr Primrose
            Mr Roozendaal
            Mr Searle
            Mr Secord
            Ms Sharpe
            Ms Westwood
            Mr Whan


            Tellers,
            Ms Fazio
            Ms Voltz

            Pair

            Ms CusackMr Veitch

            Question resolved in the affirmative.

            Motion agreed to.

            Bill read a second time.

            Suspension of Standing Orders: Instruction to Committee of the Whole

            The Hon. STEVE WHAN [9.22 p.m.]: I move:
                That standing orders be suspended to allow the moving of a motion forthwith that it be an instruction to the Committee of the Whole that it has the power to consider amendments relating to the disclosure of political advertisements and enforcement.

            The aim of this motion is to allow the Opposition to move an amendment that was originally circulated by The Greens which is to include in this legislation the disclosure of political advertisements. This section would require a report to the authorities from media organisations about political advertisements which have been broadcast or published during a State election campaign. It contains a number of interesting provisions. However, we are advised that it is not within the current bounds of this bill and therefore this motion is required in order to consider this amendment. Given that The Greens have indicated that they do not intend to move their amendments, the Labor Party will move this motion instead.

            Question—That the motion for an instruction to the Committee of the Whole be agreed to—put.

            The House divided.
            Ayes, 15
            Mr Borsak
            Mr Brown
            Ms Cotsis
            Mr Donnelly
            Mr Foley
            Mr Moselmane
            Mr Primrose
            Mr Roozendaal
            Mr Searle
            Mr Secord
            Ms Sharpe
            Ms Westwood
            Mr Whan


            Tellers,
            Ms Fazio
            Ms Voltz

            Noes, 24
            Mr Ajaka
            Ms Barham
            Mr Blair
            Mr Buckingham
            Mr Clarke
            Ms Faehrmann
            Ms Ficarra
            Mr Gallacher
            Miss Gardiner
            Mr Gay
            Mr Green
            Dr Kaye
            Mr Khan
            Mr Lynn
            Mr MacDonald
            Mrs Maclaren-Jones
            Mr Mason-Cox
            Mrs Mitchell
            Reverend Nile
            Mrs Pavey
            Mr Pearce
            Mr Shoebridge


            Tellers,
            Mr Colless
            Dr Phelps

            Pair

            Mr VeitchMs Cusack
            Question resolved in the negative.

            Motion negatived.

            In Committee

            CHAIR (The Hon. Jennifer Gardiner): For the information of the Committee, I indicate that none of the circulated Greens amendments will be moved and that Opposition amendments on sheet C2012-013 will not be moved.

            Clauses 1 and 2 agreed to.

            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [9.37 p.m.]: I move Government amendment No. 1 on sheet C2012-007B:
                No. 1 Page 3, schedule 1. Insert after line 3:
                    [1] Section 87 Meaning of "electoral expenditure" and "electoral communication expenditure"

                      Insert after section 87 (3) (before the note):
                      (4) Electoral expenditure (and electoral communication expenditure) does not include expenditure incurred by an entity or other person (not being a registered party, elected member, group or candidate) if the expenditure is not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election.

            The Government has always said that any third party, including unions and peak bodies, should and will have the freedom to undertake issues-based campaigns that are not being undertaken for the purpose of supporting a party or candidate, or influencing the voting at an election. The Government's bill does not change the existing definition of electoral expenditure and therefore does not impact on genuine issues-based campaigns. However, the Government has carefully considered the evidence given to the select committee regarding the inevitable constitutional uncertainty that attaches to reforms in this area of law. To ensure that there can be absolutely no doubt about the bill's policy intention in this regard, the Government will amend the bill to make it clear that issues-based campaigns are outside the scope of the rules.

            The amendments make it clear that electoral expenditure and electoral communication expenditure do not include expenditure incurred by a third-party campaigner as the expenditure is not incurred for the dominant purpose of promoting or opposing a party, or the election of a candidate or candidates, or influencing the voting at an election. In other words, if the dominant purpose of a third-party campaign is simply to raise public awareness, contribute to public debate or advocate a particular position on a public issue, this bill will not affect those campaigns.

            This bill always has been about campaigns that in substance are directed towards supporting or opposing a particular party or candidate or advocate for a particular election outcome. This amendment will flow through to the definition of political donations in section 85 of the Act and will clarify that peak bodies are not prohibited from accepting donations from their member bodies to fund issues-based campaigns. This amendment is consistent with and simply restates the Government's position on the bill. The amendment supports the policy position by removing any doubt about the impact on genuine issues-based campaigning by third parties. I commend the amendment.

            The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [9.39 p.m.]: The Opposition opposes this amendment. I think we can agree the policy is clear: the bill and this amendment are designed to cripple third-party campaigns, issues-based campaigns, other than by big corporates. It looks as though the Government is attempting to be reasonable to ensure that genuine third-party campaigns are not adversely affected so that they can accept money to raise public awareness or engage in a public debate, but the crucial words that give away the game are, "or influencing the voting at an election."

            In the hurly-burly of political debate and the raising of issues or a particular view, some parties or candidates will embrace a view that has been put forward by a third party; others will not. The whole purpose of attempts by third parties to raise issues and public awareness or to advance a particular proposition in public debate is to have that viewpoint accepted. At some level the entire purpose must be to influence in some way the vote at an election so that the Parliament elected will embrace that viewpoint. It may not be recommending or advancing a vote for a particular party. It may not even explicitly be advocating against a particular party, but on some level it is suggesting how people should vote if they want to see a particular policy perspective become public policy.

            The Government's amendment would do what the Minister suggested if those words, "or influencing the voting at an election" were deleted. Their inclusion shows that this is a clever amendment to ensure that those genuine third-party campaigns are not permitted to take place. This is another attempt by the Government to obfuscate—on the one hand attempting to look reasonable whilst ensuring the ultimate policy purpose of the bill remains intact. This is a clever amendment and we do not support it.

            Dr JOHN KAYE [9.42 p.m.]: I listened with interest to the Deputy Leader of the Opposition. I suspect I have a different interpretation of the intention of the amendment and a slightly different interpretation of the impact of the amendment, but I would be interested in his comments on what I have to say. The amendment comes out of concerns raised in the committee inquiry, in particular Anne Twomey, and by The Greens. I direct members to clause 6.6 of the committee's report which quotes in detail the evidence of Anne Twomey, who is probably Australia's leading expert on constitutional law as it applies to elections. I will not read all of it but in part she said:
                Any issue that you discuss can be one that might influence the way people vote at an election; that is the whole idea of freedom of political communication, and the High Court has talked about that.
            She went on to say:
                It could be issues such as animal liberation or drinking or road safety or any of those sorts of things, if any party, for example, might be proposing policies one way or another and if you are advocating in your issues supporting measures of road safety or harm minimisation to animals or whatever it is, potentially then you are either directly or indirectly supporting the party that has a policy similar to the issues you are raising or you are doing your advertising and raising your issues for the purposes of directly or indirectly influencing the way people vote.
            Anne Twomey is saying that as the bill was drafted prior to this amendment there was a risk that issues-based campaigning would be captured by the ban. We had another way of solving this problem, which was to remove the issue of influencing the voting in an election. That was our approach. That approach was not fully and warmly accepted by the evidence of Anne Twomey during the inquiry. The Government says that if an issue is raised for the dominant purpose of promoting or opposing a party or influencing the voting in an election—so the reason it is raised is to influence how people vote—it is an electoral expenditure and therefore is caught by the provisions in this bill and by other provisions within the Act.

            However, if the dominant reason is to raise the issue and get people to talk about it and put pressure on politicians then, if this amendment goes through, the dominant purpose would not be to influence the voting in an election. The dominant purpose would be to change the debate. Along the way the voting would be influenced, but it would not be the primary objective. The primary objective would be to change a policy outcome. If the primary objective is to make people vote a certain way, then it is caught. If the primary objective is to change the policy outcome, as I read it, it is not caught by the limits on donations.

            That goes to the heart of one of the three concerns raised by The Greens and one of the concerns raised by Professor Anne Twomey, Professor Joo-Cheong Tham, Dr Graeme Orr, the Cancer Council and the Asbestos Diseases Foundation. The experts and the organisations said if we take money from a third party we cannot then spend it on issues-based campaigning during the election. The reason the Cancer Council would spend money during an election is not to help the Coalition—and I very much doubt that would be the case given its track record in this area—nor the Labor Party with its track record, and probably not even to help The Greens. The dominant purpose in the actions of the Cancer Council is to get better tobacco control laws. The dominant purpose of the Asbestos Diseases Foundation's communications during the election is to get better regulations on asbestos and better outcomes for the victims of asbestos disease. They are two things, I might say parenthetically, that my party and I personally strongly support.

            On my reading of this, because the dominant purpose is not to help the Coalition or the Labor Party or The Greens, the organisations are campaigning during elections to achieve another outcome, which is to put pressure on the Coalition, the Labor Party, The Greens, the Shooters and Fishers Party and the Christian Democrats to do a better job on smoking control, asbestos and the other issues that have been raised. Therefore, a reasonable reading of this amendment is that it achieves what The Greens were trying to achieve with their amendment.

            I appreciate the Government has listened to the evidence that came before the inquiry. I appreciate that it has listened to the concerns The Greens have raised with it, even though it failed to talk to us about it. The first we knew about it was at 11.54 a.m. today. The important outcome is that if this amendment is passed it will give some chance to the Asbestos Diseases Foundation, the Council of Social Service of New South Wales and other third-party peak bodies to take money from their constituent bodies and use it for campaigning. I am surprised to hear that the Labor Party is voting against this amendment. Maybe I have misunderstood something; maybe it has misunderstood something.

            The Hon. Steve Whan: It doesn't fix the problem though.

            Dr JOHN KAYE: It does fix the problem because it says that if the expenditure is incurred for the dominant purpose of doing these things then it is caught. If it is not incurred for the dominant purpose but for another purpose, that is, achieving a better policy outcome, then it would not be captured by this section. As far as I can see, that would go a long way towards solving the problem. Therefore The Greens support the amendment.

            The Hon. STEVE WHAN [9.48 p.m.]: I feel some sympathy for Dr John Kaye. He worked so hard on this committee report and put a lot into it.

            Dr John Kaye: I don't need your patronising.

            The Hon. STEVE WHAN: Dr John Kaye needs something because he is not doing too well in his party room at the moment. The Greens are making an attempt at self-justification for backing down on their amendments. They are now trying to claim some sort of victory out of a wishy-washy government amendment that does not resolve the problem that was highlighted to the committee. The wording of the amendment remains broad. Any manner of campaigns will be caught. I do not accept that the campaigns about which the member spoke—such as the Heart Foundation campaigning in relation to heart disease—could not be caught. This amendment does not define or narrow the definition to any great extent. More than likely what most people in the community would consider to be issues-based campaigns will be caught by this legislation and be subject to its provisions. I find no comfort in this amendment. The Greens are simply grasping at straws to cover the backdown and backflips on positions they had put previously.

            Reverend the Hon. FRED NILE [9.50 p.m.]: I understand the objective of the amendment, but in discussions our party was concerned with who would be the great judge to work out the subjective words "dominant purpose", "promoting" and "influencing"? Will this fall on the shoulders of the New South Wales Electoral Commission? Making those judgements seems to be very subjective.

            Mr DAVID SHOEBRIDGE [9.51 p.m.]: I support my colleague Dr John Kaye and I support the amendment. The amendment picks up a key issue raised in the evidence and in the report of the upper House inquiry on the matter. Let us say that the Maritime Union wants to run a campaign opposing the privatisation of ferries. That might be considered to be a campaign that has at one level a secondary purpose of getting people to vote for political parties that are against the privatisation of ferries. But the dominant purpose of that kind of campaign would be to stop the privatisation of ferries. Therefore, the dominant purpose would be addressing the issue at hand: retaining ferries in public hands. One can think of many similar examples where the dominant purpose of campaigning is to get the issue on the agenda and the subject of political debate.

            Of course, once something is the subject of political debate, seized and spoken about by political parties, which then form a position on it, there comes the secondary element. Once those positions have been crystallised around an issue, they may influence how people vote. However, the dominant purpose for these kinds of issues-based campaigning is to have the issue debated publicly. That is the intent of the amendment and is very much the intent behind this Government amendment. Once the issue is crystallised and political parties form a view and campaign on the issue, it may have that secondary element of influencing voting. Provided that the dominant purpose is to get the issue discussed publicly, that kind of electoral expenditure and electoral communication expenditure will not be prohibited by the provisions of this legislation.

            Reverend the Hon. Fred Nile asked who would be the ultimate judge. It will be either a District Court or Supreme Court judge, depending on where the prosecution is taken. The appropriate prosecuting body that will form an initial view as to whether a charge should be laid will be the Electoral Commission, but the ultimate decision will be made by a District Court or Supreme Court judge. I assume that the test will be objective. My question to the Government is whether the test will be subjective. Is it the intent of the person making the communication that is to be tested or is it an objective test? When it is examined in the cold light of day, regardless of the motivations of the organisation, what objectively was the dominant purpose? I assume that the test is objective and that the intent of this bill is to have an objective test as the dominant purpose. I seek the Government's clarification on that matter.

            The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [9.54 p.m.]: I am not sure that it is the intention of the Government to permit the efficacy of third party campaigns. If it were, this provision would be more clearly drafted. As Mr David Shoebridge says, I believe the test must be objective. Of course, that means not only the intention of the organisation or the third party running the campaign, but also the context in which the campaign would occur. This bill will regulate activities that occur in the election period from October preceding the State election until polling day. For example, a campaign that takes place well away from an election period could easily be seen as simply raising an issue to advance a particular point of view to try to persuade politicians to take a particular course of action. However, once that is translated into an election period, it is more readily able to have a complexion put on it that the dominant purpose is in fact to influence an election outcome.

            I will use another example. Suppose a campaign in the lead-up to a State election is designed to repeal the Government's wages cap and it is run very strongly. Some candidates will embrace that and others will not. The organisation running such a campaign may say, hand on heart, it is only to raise the issue and to promote a point of view. But because it occurs in an election period its dominant purpose, in my view, must be to influence at some level people's voting intentions. Therefore, it will fall foul of this legislation. Again, we will not know until a third party campaign group that has invested money in good faith is carted off to a court of law. If it is an organisation with deep pockets, that may be fine to try to test it. But it is a pretty rough way to find out if that is how the legislation will work. I accept that The Greens are desperately looking for some fig leaf of respectability in this debate so that they can say that some of their concerns at least have been addressed. But if they accept this fraud they will have been had.

            Dr JOHN KAYE [9.57 p.m.]: The best way to resolve this is to recall the campaign run by what was then known as the Public Education Alliance: the Teachers Federation, which involved a number of principals' groups and parents' groups in the lead-up to the 2003 State election. It was abundantly clear that that campaign was not designed to do anything other than achieve a reduction in class sizes for the first three school years. Even though The Greens had said early that it supported it absolutely, even though Labor sat on its hands until the last moment for strategic reasons, and even though the Coalition came out with a half-hearted policy, it was clear that that was the dominant purpose of that campaign.

            Nonetheless, it was very deliberately run and in the context of an election campaign. It was run with election campaign candidates being invited to sign off on those issues. That is an easy one. The next level was the Better Services for a Better State campaign, which also was run through Unions NSW using individual union money. Was the dominant purpose of that campaign to assist Labor and possibly The Greens and to hurt the Coalition? It probably would have had that effect. It does not take much to look, for example, at the fact that Coalition members of Parliament signed the Better Services for a Better State charter and the Better TAFE for a Better State charter.

            The Hon. Lynda Voltz: Yes, TAFE, which they ratted on.

            Dr JOHN KAYE: They ratted on both, but that is neither here nor there. It was abundantly clear that the dominant purpose of that campaign was to promote public ownership and public services. If we drill down to each of those campaigns, it is not difficult to determine objectively the dominant purpose. The term "dominant purpose" is a way forward. I note that the member says we are casting around to rescue our reputation. If the member wishes to say those things it is certainly open to him to do so.

            I urge all members to think carefully about the impact of this legislation on groups and to ask the question:Where third parties are campaigning through peak organisations on issues, will this assist those organisations to overcome the barriers identified by Anne Twomey, the Asbestos Diseases Foundation, and other organisations that appeared before the committee? I think the answer is that it is not perfect. I would prefer to see the deletion of the words, "or influencing the voting in an election", which would make that abundantly clear. However, this is a step forward and it should be supported.

            The Hon. ROBERT BROWN [10.00 p.m.]: Members of the House are clear on the position of the Shooters and Fishers Party, but on this amendment how would a court of law or the Electoral Commissioner decide whether an issue was dominant or not dominant? The only way they can do that is to look at the words—the language of any campaign. Unfortunately for the Shooters and Fishers Party, and probably also for the Christian Democratic Party, our party names contain words that are likely to be used over and again in issues-based campaigns. The Greens will probably run to the Electoral Commissioner to complain about this. I wager that the Shooters and Fishers Party will cop it in the neck with this loose definition of what is and what is not a campaign under this bill.

            Mr DAVID SHOEBRIDGE [10.01 p.m.]: The exact same argument can be used to describe the Australian Labor Party, the Liberal Party or The Greens. To a degree all parties have names that are slightly descriptive—apart from the Liberal Party—of their political identity. I will address the proposition put by the Hon. Adam Searle about the dominant purpose or a dominant purpose: The test is whether it is the dominant purpose and not a dominant purpose. It is difficult to see how one could have a series of dominant purposes. There is only one dominant purpose, which will be determined, if disputed, by the court. I will be glad to hear the Government confirm that the intent of the dominant purpose is to raise an issue. It has the ancillary effect of promoting or influencing. That kind of communication is protected by this amendment. There can only be one dominant purpose.

            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [10.02 p.m.]: Mr David Shoebridge asked earlier about the objective test versus the subjective test. It is the objective test.

            Question—That Government amendment No. 1 [C2012-007B] be agreed to—put and resolved in the affirmative.

            Government amendment No. 1 [C2012-007B] agreed to.

            The Hon. STEVE WHAN [10.03 p.m.]: I move Opposition amendment No. 1 on sheet C2012-014:
                No. 1 Page 3, schedule 1. Insert after line 3:
                    [1] Section 93 Electoral expenditure required to be disclosed
                      Insert after section 93 (2):
                      (3) Without limiting subsection (1), the following is required to be disclosed under this Part for electoral communication expenditure incurred substantially for the purposes of an election in a particular electorate (as referred to in section 95F (12)):
                          (a) each electorate in respect of which such expenditure is incurred,

                          (b) the amount of any such expenditure in a capped expenditure period during the relevant disclosure period.
            This amendment was originally put forward by The Greens. I will not be moving amendments Nos 2, 3, 4 and 5 on sheet C2012-014 as the Labor Party amendments deal adequately with these issues. Amendment No. 1 will amend page 3, schedule 1 and introduce a requirement to disclose, as part of a party's returns, what expenditure has been incurred in each electorate. Under the expenditure caps put in place by the previous Government in theory there is a limit that the head office can spend on each electorate. Anyone looking through the returns will notice that it is impossible to differentiate where the head office returns allocate expenditure for electorates. Therefore, it is impossible to see whether the limit has been overspent. This Greens amendment as originally put forward is a worthy amendment and I urge all members to support it.

            Dr JOHN KAYE [10.05 p.m.]: This good amendment was crafted by The Greens. I am having difficulty being clearly understood by the Opposition, which is a great shame. I will try one more time and I will use smaller words and speak slowly. We will not do anything that will undermine the ability of this legislation to pass through the Chamber this evening. The Greens have said this clearly and raised our concerns about this legislation. The Greens attempted to negotiate with the Government to take off some of the rough edges but we have failed. This amendment is not a rough edge on the bill; it is a rough edge on the Act. I note that the Hon. Steve Whan, who moved this amendment, would have specific reasons for wanting its passage through this Chamber as he, along with the former members for Tamworth and Port Macquarie, was the victim of a fairly outrageous rort at the hands of The Nationals. The Nationals clearly transferred television expenditure in the case of Eden-Monaro and certainly in the case of Port Macquarie.

            The Hon. Dr Peter Phelps: Not Eden-Monaro, just Monaro.

            Dr JOHN KAYE: Just in the case of Monaro. Certainly in the case of Port Macquarie direct candidate specific advertising was run probably to the tune of $300,000 to $400,000. That was over the expenditure cap in the seat of Port Macquarie, but it was never reported. The Port Macquarie return for the successful candidate, Mrs Leslie Williams, does not refer to a single cent in advertising. My own people in the electorate of Port Macquarie said very clearly—

            The Hon. Catherine Cusack: She won on the issues in a landslide.

            Dr JOHN KAYE: I note the Hon. Catherine Cusack's response. There could not be any comment less relevant to what I am saying. It is not about who wins and who loses; it is about a fair election outcome. What is relevant is that the law is being rorted specifically because candidates can hide their expenditure. The Nationals are champions at hiding candidate-specific local expenditure in the party's return. This amendment was designed to overcome that rort. It is clear that the Government will not support the legislation if The Greens support this amendment. That is a tragedy because we are losing an opportunity for improved transparency. We will introduce private member's legislation with these amendments built into them and it will be a challenge for the Government to see how they stand up.

            Does the Government seriously believe in accountability? The Premier put his hand on his heart and said, "This is about transparency." If the Government wants transparency, the Minister for Police and Emergency Services, who is at the table, will say right now, "Yes, we support this amendment", and it will be passed. In the absence of that, The Greens are not prepared to gamble—the Labor Party struggles with this concept even though 14 months ago it held The Greens over the same barrel—or to sacrifice the outcome for this amendment. However, if the Government does not have the ticker to support this amendment now, we will be bringing it back and will continue to prosecute this case all the way through to 2015. And we will be naming more and more members of The Nationals who badly rorted the system, and bringing forward evidence that they did so.

            The Hon. TREVOR KHAN [10.09 p.m.]: The Government does not support the amendment. If the Opposition believes there would be some benefit in changing the current requirements for the disclosure of electoral expenditure, or the caps that apply, those views should be made known to the Joint Standing Committee on Electoral Matters, which is about to commence a review of the State's electoral legislation.

            Dr John Kaye: That's a copout, Trevor.

            The Hon. TREVOR KHAN: Indeed, one knows what the inquiry dealt with and the matters that were circulated, and one knows what the bill deals with. This does not fall strictly within those matters. It is plainly a matter which, on the basis of what Dr John Kaye says, requires investigation. The inquiry of the Joint Standing Committee on Electoral Matters will provide that opportunity. The Government also has concerns about the way the proposed amendment will work in light of section 92 of the Act. This section provides that a party's obligations to disclose expenditure can be complied with by lodging with the Electoral Funding Authority a copy of a return furnished by the Australian Electoral Commission under the Commonwealth Electoral Act. As I say, the Government will not support the amendment, but invites the making of appropriate submissions to the joint standing committee in due course.

            Mr DAVID SHOEBRIDGE [10.11 p.m.]: This is an excellent amendment. If there are caps on the amount that one can spend per electorate, obviously political parties should have to detail and certify how much they spent per electorate. It is as simple as that. We have a system that puts caps on the expenditure per electorate, but we also have a system that allows political parties not to tell anyone how much they spent per electorate. The amendment would fix that anomaly and would be a major step forward. If the Government genuinely believes in a system of scrutinised and properly capped expenditure, there is no rational argument not to support this amendment. In fact, no rational argument has been put forward to oppose the amendment, other than let us put it off to another day. The problem can be fixed today by this amendment.

            The Hon. Dr Peter Phelps: It is ultra vires the main bill.

            Mr DAVID SHOEBRIDGE: I note the Government Whip has some strange idea that the amendment is ultra vires. The amendment is well within the leave of the bill. It is able to be put, and it is able to be voted on. The Clerks have so agreed, and the amendment is up for debate. It can be adopted now. In the absence of the Government adopting it, The Greens will not prejudice the successful passage of this bill.

            The Hon. Robert Brown: No ticker.

            Mr DAVID SHOEBRIDGE: I hear the comments from the Shooters and Fishers Party about having no ticker, and from the Opposition about not having the strength to stand up for some perfected principles. The Greens are often criticised for standing up for absolute purity: that, unless we get absolute purity in what we do, we are said to vote down things as totally ridiculous as carbon taxes and the like. Yet now, when we are trying to get through the Parliament a proposal that we think is 80 per cent good, the criticism is that we are making some kind of rational assessment of whether or not the bill advances matters in New South Wales. It is a rational assessment; on balance, it advances matters. We know that if we support these amendments and they are opposed by the Government, we will not get that advance. We are not willing to risk the advance.

            The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [10.13 p.m.]: The fact that the Government has indicated it is not willing to support this excellent amendment reveals that it does not have any genuine support for transparency or openness in the electoral process, and so much should now be clear to our learned friends opposite. But the point is this: At no stage in this debate have I heard any representative of the Government say that if this amendment or any amendment is passed it will reject the whole bill. That has not been said, to my knowledge, by any representative of this Government in the context of debating this bill. The stated reason for The Greens not supporting their own amendment simply does not apply. It is simply a manufactured excuse to walk away from their own position.

            The Hon. Cate Faehrmann: No, it's not. We don't want the bill killed. Have we not made that clear?

            The Hon. ADAM SEARLE: I take the interjection of the Hon. Cate Faehrmann. I have not heard the current Premier or indeed the Minister responsible in this place say to anyone, "If this amendment is carried, or if any amendment is carried, we will kill the bill." They have not said that. The Greens have just made that up.

            The Hon. STEVE WHAN [10.14 p.m.]: The original drafters of this amendment have put a cogent case as to why it should be supported. In fact, Dr John Kaye relieved me of the need to raise my own experience in this area, and for that I am most grateful. But, really, if the amendment is so important, why are The Greens not willing to put the principle on the line? It is not a negotiating position to say to the Premier, "Look, we're really concerned about this matter, we think it is really important, but if you say the amendment is not acceptable we will not go ahead with it." That is a weak position to adopt. It is a show position; it is saying something without being willing to step up to the mark. The Greens are no more than a road hump in the way of the Premier in this matter. He is just bowling along and saying, "Don't worry about that; I don't need to meet with them again or negotiate again with them in the future because I know they're just going to roll over." That is what we are seeing here.

            An eloquent case was put in favour of the amendment. It is to address a provision that The Nationals in particular clearly rorted at the last election. As I did in a number of areas, I kept tallies of what was being spent in the electorate, and I know exactly how far they went over the cap, and I will be more than willing, if The Greens eventually bring this amendment back, to contribute that. The Government has said that this proposal should be the subject of a submission to the Joint Standing Committee on Electoral Matters. The entire bill has been taken out of the context of ongoing reviews about the operation of electoral laws in New South Wales during the last election. The bill has been plucked from the air because the Government wanted it passed quickly so that it could say it had delivered on its election commitment. It did not need to be plucked out. The Government did not meet its 100-day deadline in the first place. This could have been part of that overall review. But, no, it was plucked out. So there is no reason at all why this amendment should not be plucked out as well and dealt with here and now, because it is an issue.

            The Hon. Jeremy Buckingham: Why didn't you pluck it out in 2010?

            The Hon. STEVE WHAN: I was about to resume my seat. The reality is that this is an unexpected problem that has arisen from the 2010 legislation. We probably thought that The Nationals would not report the system in the way that they did. As with any legislation, one needs to be willing to make adjustments to it. In this case, why do The Greens not stand on their principles? They are always happy to lecture us about their principles. Put them up now and vote for the amendment.

            Question—That Opposition amendment No. 1 [C2012-014] be agreed to—put.

            The Committee divided.
            Ayes, 15
            Mr Borsak
            Mr Brown
            Ms Cotsis
            Mr Donnelly
            Mr Foley
            Mr Moselmane
            Mr Primrose
            Mr Roozendaal
            Mr Searle
            Mr Secord
            Ms Sharpe
            Ms Westwood
            Mr Whan


            Tellers,
            Ms Fazio
            Ms Voltz

            Noes, 24
            Mr Ajaka
            Ms Barham
            Mr Blair
            Mr Buckingham
            Mr Clarke
            Ms Cusack
            Ms Faehrmann
            Ms Ficarra
            Mr Gallacher
            Mr Gay
            Mr Green
            Mr Harwin
            Dr Kaye
            Mr Khan
            Mr Lynn
            Mr MacDonald
            Mrs Maclaren-Jones
            Mr Mason-Cox
            Mrs Mitchell
            Reverend Nile
            Mrs Pavey
            Mr Shoebridge


            Tellers,
            Mr Colless
            Dr Phelps

            Pair

            Mr VeitchMr Pearce
            Question resolved in the negative.

            Opposition amendment No. 1 [C2012-014] negatived.

            The Hon. STEVE WHAN [10.25 p.m.], by leave: I move Opposition amendments Nos 1 to 3 on sheet C2011-088H in globo:
                No. 1 Page 3, schedule 1. Insert after line 3:
                    [1] Section 95D Exemption from donation cap for party subscriptions and party levies
                      Omit "$2,000" from section 95D (3) (b) (ii). Insert instead "$5".
                    [2] Section 95D (5)
                      Insert after section 95D (4):
                      (5) Each of the amounts referred to in subsection (3) is an adjustable amount that is to be adjusted for inflation as provided by schedule 1.
                No. 2 Pages 3 and 4, schedule 1 [2], line 36 on page 3 to line 3 on page 4. Omit all the words on those lines. Insert instead:
                      (4) Annual or other subscriptions paid to a party by a person or entity (including an industrial organisation) for affiliation with the party that are, by the operation of section 85 (3), taken to be gifts (and political donations to the party) are not subject to this section.
                No. 3 Page 4, schedule 1. Insert after line 7:
                      Schedule 1 Adjustment for inflation of monetary caps

                      Insert "and party subscriptions" after "caps" in the heading to clause 2.
            These amendments go to the crux of one issue with this legislation for the Labor Party and to the principles of equity. They relate to the Government's proposal to ban subscription fees for affiliation. The amendments will set a maximum affiliation fee of $5, which is reasonable. They acknowledge the concern raised by people about the $2,000 cap, although that has never been reached. An affiliation fee of $5 reflects the administrative costs for a party, and it provides an adjustment for inflation in the future. It will also ensure that the Labor Party can continue to receive affiliation fees. This goes to the heart of the issues I raised during my contribution to the second reading debate about democracy in this legislation. I said that this legislation is the Premier's vindictive attempt to target the structure of the Australian Labor Party.

            It was clear from the contributions of members opposite to the second reading debate that they simply do not understand. They lectured us about the Labor Party's structure, about union links with the Labor Party and about how equity is best served by severing those links. They told us how the Labor Party should change. However, they do not understand that in a democratic society like Australia—this was acknowledged in the evidence in this report and by all participants in this process, other than Government members—one's political opponents should not dictate the structure of one's party. The Liberal Party should not be able to pass legislation that tells the Labor Party how it should be structured. That is a fundamental denial, through the measures in this legislation, of the freedom of political affiliation in Australia.

            A number of witnesses at the inquiry, many of whom were expert witnesses, attested to that. Not only union representatives gave evidence, although all union representatives, affiliated and non-affiliated, who appeared strongly defended their right to make a democratic decision about whether they should be affiliated with the Australian Labor Party. That included the unions that were not affiliated to the Labor Party. The Greens should acknowledge that in their pious comments. Dr John Kaye acknowledged it in his press release today, which obviously the honourable member who was just interjecting did not read. Dr John Kaye said:
                Disgracefully the Premier refused to meet with The Greens to discuss ways of limiting the impacts on environment organisations and unions. He has made his partisan agenda quite clear.
            That shows that some members of The Greens obviously recognise the partisan agenda put forward by this Government. Earlier today The Greens spoke about affiliation fees and suggested that a lot of this legislation was okay because environment groups were not going to be affected. It is lucky for The Greens that they think their own bodies will not be affected and that their own sources of funds will not be affected. That prompted me to look at the Nature Conservation Council's website. The council has affiliated bodies and it charges affiliation fees of $1.50 per member for the first 100 or $1 per member for more than 100, with no cap on full membership. Apparently, according to The Greens, that sort of membership structure will be okay for a body such as the Nature Conservation Council but it will not be okay for the Labor Party, even though members of the Labor Party on the select committee on election funding supported amendments to the legislation.

            Evidence from a number of expert witnesses, including the constitutional experts who appeared before the committee, suggested two things. First, Dr Tham suggested that this legislation would have an unjustified impact on the structure of the Labor Party, and others, including Dr Orr from Queensland, suggested that making the affiliation fee zero could mean that the High Court would strike out this bill on the basis that it is unfair. I will not go into the detail of that evidence again because I spoke about it at the second reading stage. However, it is clear that both the constitutional experts believe there are problems with this legislation, but, more importantly from my point of view, those who have the democratic right to make the decision to affiliate with the Labor Party also believe there are problems. In a submission to a previous electoral inquiry before the election—and the submission had a covering letter from Barry O'Farrell endorsing the contents of the submission—the Liberal Party said:
                Our approach is to respect the different traditions of our parties and allow affiliation fees to be retained for non-campaign purposes.
            The reality is that the Liberal Party has now seen the opportunity to do over its political opposition. We heard a pompous speech from a member opposite who compared the Labor Party to the Mugabe regime. That member should look in his own backyard because we are seeing an attempt by the Liberal Party to destroy political opposition. This amendment by the Labor Party will reintroduce into this legislation the right of unions to choose to affiliate with the Labor Party or any other organisation at a reasonable level. Dr Orr from Queensland suggested that as long as a cap was set at a reasonable level he did not believe there would be a constitutional problem, but that if it was not set at a reasonable level he believed there would be problems.

            In evidence to the committee The Greens' State representative acknowledged that this was a problem and we know that in the amendments The Greens circulated they acknowledge there is a problem. They sought to set a fee level that was quite ridiculous, but at least they acknowledge that a zero affiliation fee is wrong. I compliment those in The Greens who acknowledge that and I urge them to support this amendment, which would bring some equity into this legislation and ensure that, first, it does not have an undue impact on the structure of a political party to suit the political purposes of this vindictive Premier and, secondly, that the risk of it being struck out in the High Court is reduced—an action that has already been foreshadowed today.

            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [10.34 p.m.]: The Government does not support the amendments, which would remove affiliation fees from the ban on corporate donations. The ban on affiliation fees to parties is an important pillar of the Government's reforms. It will remove once and for all the perception that corporations, including unions, have an undue influence over government decision-making and it will create a level playing field for all participants in the electoral processes. In my concluding comments in the address-in- reply I said that this legislation is about returning the public perception of integrity in the decisions that this and the other House make in relation to legislation.
              The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [10.35 p.m.]: The Minister referred to corporations, including unions. Unions are not-for-profit organisations, although they may have a corporate status for other legal purposes. I think the Government and other people in this debate have lost sight of the fact that unions that are affiliated to the Labor Party are not third parties in the true sense, they are members of our party; they have paid to affiliate to become members, and this legislation seeks to adversely affect their ability to become or remain members of the organisation that they have chosen to belong to. This legislation seeks to impede their right of political association and in so doing impinge on the freedom of association of the members of trade unions who choose to belong to unions affiliated to the Labor Party for the purposes of joining together and engaging in collective political action.

              Historically, Conservative parties do not like ordinary people clubbing together to advance their collective interests through political parties. For 120 years the Australian Labor Party has been the political arm of organised labour—

              The Hon. Dr Peter Phelps: And can remain so.

              The Hon. ADAM SEARLE: I note the interjection of the Hon. Dr Peter Phelps who says they can remain so. On paper they can, but they cannot pay any membership fees. Even though a person who chooses to join the Labor Party can pay fees set by the party, a trade union cannot pay any fees—it is just clearly ridiculous. As I indicated earlier, it is just an attempt to try to rig the rules of political engagement for the big end of town and those who support the Coalition parties, and unfortunately, one way or another, they have conned others into supporting this reactionary agenda.

              Dr JOHN KAYE [10.37 p.m.]: What Labor's amendments Nos 1, 2 and 3 invite the House to do is to allow a union with, say, 55,000 members—roughly speaking the size of the largest affiliated union to the Labor Party, the Shop, Distributive and Allied Employees Association—to pay $275,000 a year to the Labor Party in administration fees. The question that has not been answered at any stage in the debate is what happens with that $275,000. It seems reasonable to The Greens that there be a payment from an organisation that affiliates to a party but the question is how much. If it is allowed at that level—and I note that when the legislation went through in 2010 it was capped at $2,000 per member, which was a fairly large amount of money, and the market would obviously go bust before you got anywhere near that—no union would contemplate paying that.

              But at $225,000 a year, $1 million from that union every election cycle seems to us to be an awful lot of money without justification as to how that services the membership. When we have asked, the answer has come back, "Well, we have sent members to the annual conference." I was told 16 members went to the annual conference. Then there was a suggestion of a mail out from the Labor Party to the members. I have asked a number of my friends who are in affiliated unions and they say they have not received anything from the Labor Party in the time they have been members. My problem is that there is no justification for the amendment. It is a substantial increase over the current $3.78 that is paid per member.

              The Hon. Adam Searle: That's a cap.

              Dr JOHN KAYE: You say it is a cap, but we have had this debate. We put our position on the record. We were disappointed that the Government did not wait for our position to be on the record before it rushed the legislation into the Chamber. It should have waited. The legislation would then be more robust to a challenge, which I think is now inevitable. It is unfortunate that the New South Wales donations policy will be written by the High Court—that is, by seven people in Canberra. Perhaps that is better than it being written by 42 members of this Chamber. Nonetheless, this is an unjustifiable amount of money and it looks perilously like a donation to the party. We have said time and again that we need to stop organisational donations to political parties.

              I conclude by commenting on the observation about the Nature Conservation Council and the fact that it has affiliated members, as does the Council of Social Services of New South Wales [NCOSS], the Asbestos Diseases Foundation and The Greens NSW in respect of our local members, our local groups. I think The Greens are affected by this legislation and we will have to restructure our party as a result. However, we have not argued on that basis; we have argued on the basis of principle.

              I go back to the comment about the Nature Conservation Council having affiliated members. It probably does—I am not sure what the relationship is between the Nature Conservation Council and what I have always referred to as the constituent bodies. The Nature Conservation Council is not a political party and it does not seek to have representatives in the Chamber. It is profoundly apolitical, despite the smear that the Minister for Police and Emergency Services hurls at the environment movement from time to time, as is his wont. The Minister for Police and Emergency Services was once a member of the Police Association.

              The Hon. Michael Gallacher: Once.

              Dr JOHN KAYE: I acknowledge the Minister's interjection. My point is that it is not a political organisation; it is not engaged in party politics; it is not seeking to get people into Parliament. It should be governed by different rules. We have said from the outset that one of the weaknesses of this legislation and the 2010 legislation was not recognising that third parties pose a set of new challenges. I suspect that this legislation will have to be redrafted in accordance with the recommendations of the select committee inquiry into it. Third parties need to be dealt with separately. We need to recognise that there are different kinds of third parties.

              The Hon. Steve Whan: It is in the report.

              Dr JOHN KAYE: It is in the report. The Hon. Steve Whan has read the report, as have I. However, I doubt whether other members have had time to read it. We need to deal with these issues separately. I advise the Hon. Steve Whan that the Nature Conservation Council is not a political party. To talk about its affiliates in the same way as one talks about affiliates of the Labor Party is not adding any substance to the debate.

              The Hon. CATHERINE CUSACK [10.43 p.m.]: Further to the comments of Dr John Kaye, I ask the Hon. Steve Whan to clarify his remarks in relation to the Nature Conservation Council. I have always regarded it as an outstanding and independent organisation that works with all political parties. I am not familiar with any political donations it has sought to raise money for or that it has made donations to any political parties. The member likens the Nature Conservation Council to a trade union that is affiliated to the Labor Party—that is, it levies its members, irrespective of their political convictions, fundraisers and then donates that money to the Labor Party. Under the previous Government it was described as a third party but, according to the Deputy Leader of the Opposition, it sounds like it is not necessarily a third party. Putting that confusion aside, the Hon. Steve Whan has cast a disgusting slur on the New South Wales Nature Conservation Council. I ask him to explain his rationale for likening the Nature Conservation Council to a trade union affiliated to the Labor Party.

              The Hon. STEVE WHAN [10.45 p.m.]: I have not heard anything quite so ridiculous for some time in a debate like this. I suggest that people should start listening. Let me talk about the Nature Conservation Council. During the second reading debate the Hon. Cate Faehrmann used the Nature Conservation Council as an example of an organisation that was not going to be affected by the third parties because it got its money from individuals. The fact is, it has member bodies and they pay an affiliation fee. Before The Greens rolled over on this, they had suggested a compromise position where they would set a low level of affiliation fees and they acknowledged in their public policy positions—

              The Hon. Catherine Cusack: Are you talking about The Greens or the Nature Conservation Council?

              The Hon. STEVE WHAN: I am talking about The Greens—just listen. The Greens circulated an amendment in which they suggested that the Labor Party, or any party, should be able to get affiliation fees capped at 50¢ per member or a maximum of $5,000 or $7,500, depending on which version they put out. I said that the Nature Conservation Council's affiliated members are paying $1.50 per member for the first 100 and $1 per member over 100. It is ridiculous for The Greens to suggest that 50¢ per member for affiliation with the Labor Party—which brings a whole host of costs—is an adequate amount to cover costs for administration. I gave an illustration of another organisation with a similar structure to the Labor Party, where it has affiliated organisations who are part of it. It is the structure that counts.

              The Hon. Dr Peter Phelps: All those Chinese meals in Sussex Street.

              The Hon. STEVE WHAN: The Whip—a very clever Whip—is dying to be invited to a Chinese meal in Sussex Street one day. The point has been made about the actual amount and The Greens have made the point about the amount of the affiliation fee. At the moment the maximum fee that any union pays to the Labor Party is reported in the committee's report—I invite members to read the report before they vote tonight, although that will be difficult.

              The Hon. Dr Peter Phelps: Not for me.

              The Hon. STEVE WHAN: The Hon. Dr Peter Phelps has been sitting in the Chamber all day, so I hope he knows what is in it. At the moment the maximum is $3.70 from the union and $5 is a reasonable amount as a cap. It does not mean everybody would be paying that amount, and is an attempt to respond to some of the points that people had been raising about this. The Greens, rather than simply attacking the amount, could have negotiated. They were offered evidence of what goes in to make up the amounts in this. Instead, they have rolled over to the Government and sold out the principles that they were talking about.

              [Interruption]

              The Hon. Jeremy Buckingham has interjected. Sorry, I mean Jeremy Buckingham. It is difficult to remember which members of The Greens are "honourable" and which are not. The Hon. Jeremy Buckingham has had a lot to say today, although he made a very brief contribution to the bill. He also had a lot to say to the media attacking his party's position as this process went through.

              The Hon. Dr Peter Phelps: That is nonsense.

              The Hon. STEVE WHAN: The Government Whip says it is nonsense, but I saw the Hon. Jeremy Buckingham's staffers publicly criticising the position that was put by The Greens State representatives to our committee. That is a sad state of affairs. Let me return to the basic point, which is that all the experts who appeared before the committee suggested that this proposal from the Government to eliminate affiliation fees was likely to face constitutional problems and that it constituted an unfair infringement on the structure of the Labor Party. There was no contradictory evidence given to the committee except for the unfounded allegations of the Premier.

              The Hon. Jeremy Buckingham: Where's Luke?

              The Hon. STEVE WHAN: I say to the Hon. Jeremy Buckingham, who keeps interjecting, that The Greens on the committee agreed and voted for a recommendation in this report which indicated that reasonable levels of affiliation fees should be allowed to continue. The Labor Party is now moving an amendment that is consistent with the majority report of a committee that included The Greens representative.

              The Greens members can sort out their internal problems later, but if the Hon. Jeremy Buckingham does not vote for this amendment, his record of defending democracy will show that he has joined with the Coalition in intervening to change the structure of an opposing political party. The Hon. Jeremy Buckingham will join in passing legislation that he knows is about damaging his political opponents. I know that will not worry him because damaging his political opponents is all he cares about. He does not have principles in this place, otherwise he would stand up for the principles that he previously claimed to have.

              [Interruption]

              Judging by the vacuous contributions made by some people opposite I expect those sorts of interjections, but the Hon. Jeremy Buckingham is dabbling in an undemocratic process in moving this amendment. He will be condemned for it in the longer term.

              The Hon. CATHERINE CUSACK [10.53 p.m.]: I thank the Hon. Steve Whan for his lengthy answer to my question asking him to provide evidence for his disgraceful assertion that the New South Wales Nature Conservation Council can be likened to a trade union providing levies on members and political donations. That is unfair and incorrect. I do not believe there was any evidence or substance in his response to my question.

              The CHAIR (The Hon. Jennifer Gardiner): Order! I will put Opposition amendments Nos 1 to 3 seriatim.

              Question—That Opposition amendment No. 1 [C2011-088H] be agreed to—put.

              The Committee divided.
              Ayes, 15
              Mr Borsak
              Mr Brown
              Ms Cotsis
              Mr Donnelly
              Mr Foley
              Mr Moselmane
              Mr Primrose
              Mr Roozendaal
              Mr Searle
              Mr Secord
              Ms Sharpe
              Ms Westwood
              Mr Whan


              Tellers,
              Ms Fazio
              Ms Voltz

              Noes, 24
              Mr Ajaka
              Ms Barham
              Mr Blair
              Mr Buckingham
              Mr Clarke
              Ms Cusack
              Ms Faehrmann
              Ms Ficarra
              Mr Gallacher
              Mr Gay
              Mr Green
              Mr Harwin
              Dr Kaye
              Mr Khan
              Mr Lynn
              Mr MacDonald
              Mrs Maclaren-Jones
              Mr Mason-Cox
              Mrs Mitchell
              Reverend Nile
              Mrs Pavey
              Mr Shoebridge


              Tellers,
              Mr Colless
              Dr Phelps

              Pair

              Mr VeitchMr Pearce
              Question resolved in the negative.

              Opposition amendment No. 1 [C2011-088H] negatived.

              Question—That Opposition amendment No. 3 [C2011-088H] be agreed to—put.

              Division called for and Standing Order 114 (4) applied.

              The Committee divided.
              Ayes, 15
              Mr Borsak
              Mr Brown
              Ms Cotsis
              Mr Donnelly
              Mr Foley
              Mr Moselmane
              Mr Primrose
              Mr Roozendaal
              Mr Searle
              Mr Secord
              Ms Sharpe
              Ms Westwood
              Mr Whan


              Tellers,
              Ms Fazio
              Ms Voltz

              Noes, 24
              Mr Ajaka
              Ms Barham
              Mr Blair
              Mr Buckingham
              Mr Clarke
              Ms Cusack
              Ms Faehrmann
              Ms Ficarra
              Mr Gallacher
              Mr Gay
              Mr Green
              Mr Harwin
              Dr Kaye
              Mr Khan
              Mr Lynn
              Mr MacDonald
              Mrs Maclaren-Jones
              Mr Mason-Cox
              Mrs Mitchell
              Reverend Nile
              Mrs Pavey
              Mr Shoebridge


              Tellers,
              Mr Colless
              Dr Phelps

              Pair

              Mr VeitchMr Pearce
              Question resolved in the negative.

              Opposition amendment No. 3 [C2011-088H] negatived.

              The Hon. STEVE WHAN [11.04 p.m.], by leave: I move Opposition amendments Nos 1 and 2 on sheet C2012-004A in globo:

                  No. 1 Page 3, schedule 1. Insert after line 3:
                      [1] Section 95DA

                        95DA Exemption from donation cap for donations to peak bodies that are third-party campaigners
                            (1) A donation made by a member of a peak body to the peak body (being a peak body that is a third-party campaigner) is to be disregarded for the purposes of this Division.

                            (2) In this section, peak body means an entity that represents and advocates for the common interests of its members.
                  No. 2 Page 4 schedule 1 [2]. Insert after line 7:
                            (6) Donations made by a member of a peak body to the peak body (being a peak body that is a third-party campaigner), as referred to in section 95DA, are not subject to this section.
              Opposition amendment No. 1 on sheet C2012-004A is aimed at rectifying the problem that has been acknowledged in the committee's report regarding peak bodies, the third party campaigners. We have talked about this problem at length. Indeed, the Chair of the committee and I referred to it during our contributions to the second reading debate. Despite a little reluctance from the Government, it is generally acknowledged that it is a problem that members of peak bodies cannot contribute funds to joint campaigns run by peak bodies. It is one of the key areas where the community will take issue with this legislation.

              The amendment seeks to rectify the provision that would prevent campaigns such as Your Rights at Work and Better Services. These are campaigns where different constituent member bodies contribute funds to a political campaign. The Government amendment that was passed earlier does not rectify the situation and the Opposition objected to the wording of that amendment at the time. Simply putting in place a new definition of election expenditure does not remove the problem with respect to peak bodies. If we are genuinely to ensure that peak bodies can conduct third party campaigns, this or a similar amendment is necessary to make sure that members of peak bodies can transfer money to fund campaigns. As caps still apply to the overall expenditure, peak bodies are bound by the cap of more than $1 million applying to all other third party campaigners. However, the amendment will allow them to continue to collect money, and that is critical.

              I refer to earlier comments about peak environment groups such as the Council of Social Service of New South Wales whose members are other bodies and who conduct election time campaigns on matters that many members would agree are important, such as benefits and assistance to people who are less well off. This would include groups that gather to talk about public education. The groups campaign during election times and they will certainly fall foul of the Government's definition; they will be captured by it. I do not accept the point made by the Hon. Cate Faehrmann that environment groups generally will not be affected. A number of groups have structures whose constituent bodies are not natural individuals. Therefore, they will be restricted in the amount of funds they can collect from those bodies to run campaigns. I do not accept the attitude that "groups that support us are all right so don't worry about it." That is not the case.

              The Hon. Cate Faehrmann: You said that environment groups won't be able to campaign.

              The Hon. STEVE WHAN: We have said they will be restricted in their ability to raise funds to run campaigns.

              The Hon. Jeremy Buckingham: No, they won't. They are not political parties.

              The Hon. STEVE WHAN: The Hon. Jeremy Buckingham is demonstrating a fundamental misunderstanding of this legislation. I urge him to read the report because it would make the situation much clearer. It does not need to be a political party to be caught by the provision that the Government has put in place, which, first, caps expenditure but, most importantly, restricts the contributions. It restricts the contributions to any third party campaigner who is undertaking electoral communication expenditure. This is where we come back to the definition of electoral communication expenditure, which is very broad. Frankly, it is the definition that some members of The Greens clearly believe, in their innocence, will be narrowly implemented by the authorities and they will not be caught by any of these provisions. We must face the fact that if any organisation runs a campaign that advocates a vote, or even comes near advocating a vote—which can include ticks and crosses on the various who-is-better-at-this sheets that we see so often during election campaigns—they will fall foul of this legislation.

              The Hon. Cate Faehrmann: Not if it is from individual donors. You are misleading the Committee.

              The Hon. STEVE WHAN: The Greens members obviously are welcome to comment on this provision.

              The Hon. Michael Gallacher: But they would like to be able to do that before dawn.
                  The Hon. STEVE WHAN: I keep being encouraged by the Minister's interjections. The problem with this legislation was acknowledged by The Greens in their submissions to the inquiry. Why The Greens will not now vote for an amendment that will fix this legislation is completely beyond my comprehension.

              The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [11.10 p.m.]: The Government does not support the amendments, which would undermine the spirit and purpose of the bill by creating a significant loophole through which large donations could be channelled.

              Dr JOHN KAYE [11.11 p.m.]: The division referred to in the amendments is division 2A of part 6 of the Act, which relates to caps on political donations for State elections. The effect of the amendments could be that, as a business, a hotel could make a donation to the Australian Hotels Association of an unlimited amount, which could then be spent on an election. I am concerned that the amendment of section 95DA will create a river of cash that currently does not exist. The Opposition is not just messing with the Government's bill, but with the Act.

              The Hon. Steve Whan: They could not give it to a party.

              Dr JOHN KAYE: I did not say that. I am saying that because there are caps on donations by the Australian Hotels Association, the amendments are not limited to not-for-profit organisations. The amendments will allow unlimited donations.

              The Hon. Steve Whan: Feel free to move an amendment.

              Dr JOHN KAYE: I ask the Hon. Steve Whan to comment on the scope of the impact. It seems to me that the scope of the impact of the Opposition's amendment of section 95DA is quite broad. I am sympathetic to the intent of the amendments, which is to allow a not-for-profit membership-based organisation not only to do what it does on its own, but also to get together with similar organisations and do things collectively through its peak body. But my reading of the Government's amendment to section 87—and I think the Labor Party and The Greens disagree on the reading of the amendment that creates new section 87 (4)—is that it covers the problem by saying that it is not electoral expenditure.

              If I am reading the amendment correctly, it is saying that issues-based campaigning is not election expenditure, so the legislation will allow these things to happen anyway and the amendment is therefore unnecessary. That it is unnecessary does not really bother me very much; what really bothers me is that, because of its location in the Act, the amended provision may well have some fairly substantial unintended consequences. That generally reflects the complexity of the Election Funding, Expenditure and Disclosures Act itself.

              The Hon. Steve Whan: Barry said it was simple legislation.

              Dr JOHN KAYE: I know the Premier said it is simple legislation, but he then got his own amendments completely wrong and had to endure the humiliation of being substantially corrected by Professor Anne Twomey. What the Premier said is not true: this is complex legislation. The Opposition's amendment may result in unintended consequences. I ask the Hon. Steve Whan to address that issue.

              The Hon. STEVE WHAN [11.14 p.m.]: There is no doubt that this is complex legislation. The Government has consistently said that it is simple, but the Government is simply wrong. The legislation was drafted on the basis of instructions that we provided. Interestingly, those instructions came from an original discussion between Dr John Kaye and me. We had the idea that a member body and a peak body should be able to have the same rights. At that time we spoke about limiting the amendments potentially to not-for-profit bodies. If The Greens had been interested in continuing negotiations, the Opposition probably would have continued. But we need to acknowledge that it would have cut out some peak bodies that represent some professional profit-making organisations, such as the Australian Hotels Association.

              The legislation introduced by the Government will impact upon the Australian Hotels Association and ClubsNSW. ClubsNSW simply will not be able to run the campaigns we have seen in the past. Some members of this Chamber probably think that is great, but I do not. ClubsNSW should be able to continue to run those campaigns, but under the Government's legislation in future it will not be able to run a State-based campaign similar to the one it has been running in relation to the Federal Government because it will not be able to collect money from member bodies. The Opposition's amendments are designed to fix that. Dr John Kaye mentioned his concerns about the amendments' unintended consequences that could result in a flow-on of money to political campaigns. Certainly it is aimed at saying that peak bodies, within the million-dollar limits, should be able to collect money from their members to conduct those campaigns. That is exactly what it is intended to do.

              The Hon. Michael Gallacher: But it does not do that.

              The Hon. STEVE WHAN: It is intended to say that the expenditure caps stay, but that internal transfers between member bodies should be allowed. I am assured by those who drafted the amendment that that is what they believe it will do. I urge members to support the amendments because they address the issue of peak bodies and third party campaigns. Despite frequent acknowledgement that the problem exists, unfortunately we are still seeing a reluctance to tackle the problem. As the Opposition stated when dealing with the Government's first amendment, it is our view that that amendment does not resolve this problem. Many legitimate campaigns will experience problems. They will be covered by the provisions but will find that they are not able to collect funds for campaigns that many people would regard as issues-based campaigns because of the wording of that provision. The Opposition simply does not accept The Greens' assertion that the Government's amendment fixed the problem. It did not.

              Question—That Opposition amendments Nos 1 and 2 [C2012-004A] be agreed to—put and resolved in the negative.

              Opposition amendments Nos 1 and 2 [C2012-004A] negatived.

              The Hon. STEVE WHAN [11.20 p.m.], by leave: I move Opposition amendments Nos 1 to 3 on sheet C2011-085C and the Opposition amendment on sheet C2011-091A in globo:

                  No. 1 Page 3, schedule 1 [1], lines 4–19. Omit all words on those lines.

                  No. 2 Page 6, schedule 2 [12], lines 26–28. Omit all words on those lines.

                  No. 3 Long title. Omit "caps on electoral communication expenditure and".

                  Page 3 schedule 1 [1], lines 6–19. Omit all words on those lines. Insert instead:
                      (6) Aggregation of co-ordinated expenditure of parties etc and third-party campaigners
                        Electoral communication expenditure incurred by a party, group or candidate that is of or less than the amount specified in section 95F for the party, group or candidate (as modified by subsection (2) in the case of associated parties) is to be treated as expenditure that exceeds the applicable cap if that expenditure and any other co-ordinated electoral communication expenditure incurred by a third-party campaigner exceed the applicable cap so specified for the party, group or candidate.
                      (7) For the purposes of subsection (6), electoral communication expenditure incurred by a third-party campaigner is co-ordinated electoral communication expenditure with a party, group or candidate if the expenditure is incurred at the request of, or in co-operation with, the party, group or candidate. If the expenditure is incurred at the request of, or in co-operation with, more than one party, group or candidate, the amount of the expenditure is to be divided equally between the parties, groups or candidates for the purposes of subsection (6).

              These amendments deal with the aggregation of expenditure by parties and third-party campaigners. The first three amendments delete parts of the bill relating to similar issues. As the Opposition said during the second reading debate, one of the key problems with this legislation is the way in which it seeks to aggregate the expenditure of affiliated bodies. A number of the experts who appeared before the committee pointed out that the bill contains a flawed methodology that would result in expenditure that does not support the party to which the organisation is affiliated being applied to that party's cap. Dr Orr and Dr Tham both raised concerns about that part of the legislation and they were correct to do so.

              As I said in my second reading contribution, the application of the aggregation provisions would mean that if an organisation affiliated to the Australian Labor Party were to conduct a campaign in an electorate, its expenditure would be applied to the cap for the Labor candidate holding that seat regardless of whether the organisation supported or opposed the candidate. I know that Government members glibly respond to that concern by chuckling and saying that that will never happen because if they are affiliated to the Labor Party they will not campaign against its candidates. Those of us who have had 120 years of association with our union colleagues—

              The Hon. Dr Peter Phelps: I want to know what moisturiser you are using.

              The Hon. STEVE WHAN: I am well preserved.

              The Hon. Michael Gallacher: You are looking good for your age.

              The Hon. STEVE WHAN: I was referring to the collective Labor Party. We are a family. Despite the hilarity that this issue creates in the Coalition ranks, there have been cases in which affiliated organisations have run campaigns that have not been helpful to or have opposed Labor Party candidates. Affiliated organisations have run campaigns against Labor governments. The campaign against the electricity privatisation legislation introduced by the Iemma Government—which this Government is now emulating even though members opposite voted against it—is a good example of such a campaign.

              The Opposition's amendments are a genuine attempt to address concerns about coordinated electoral communication expenditure. They seek to ensure that the expenditure is incurred only at the request of or in cooperation with the party, group or candidate concerned. The amendments ensure that there is a test of whether it is genuinely coordinated campaign expenditure. The majority of the members of the committee, apart from the Coalition members, agreed that this is a problem and they recommended that the legislation be amended accordingly. I urge members who are interested in the democratic processes of upper House committees—and I am reminded of the lectures of Government members when they were in opposition about that topic—to vote for these amendments. If they do so, they will be supporting the committee structure and doing the right thing.

              The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [11.25 p.m.]: The Government opposes these amendments. The aggregation provisions are the crux of the legislation in that they close a loophole that undermines the purpose of existing caps on electoral communication expenditure. It would be virtually impossible to enforce the last amendment because any prosecution for a breach of the provision would require evidence of collusion between parties and third party campaigners and it would reduce transparency and create ample opportunities for avoidance of the aggregation provisions. The amendment is unworkable and unprincipled and the Government does not support it.

              The Hon. STEVE WHAN [11.27 p.m.]: The Minister's response misses a couple of key points. As for being unprincipled, we have seen plenty of that in the way that this legislation has been introduced. I refer members to the issue of fairness or lack thereof. Under this legislation, an unaffiliated union could run a campaign supporting the Labor Party but an affiliated union would be effectively prohibited from doing so. It is reasonable to say that if it is a genuine coordinated campaign it should be included in the cap, and that is what the Opposition is proposing. It has never been the case as the Government suggests that this is a loophole that would allow 22 separate campaigns costing $1 million to be run. That is ridiculous and it does not happen. Nevertheless, the Opposition has said that it is willing to examine the concerns raised about coordinated campaigns. We should ensure that they are genuine coordinated campaigns.

              If the legislation is passed as it stands, an affiliated union and a non-affiliated union will be treated differently and will be able to campaign differently. That does not deal with the various business groups that might run what are effectively coordinated campaigns in support of the Coalition. They will not be impacted by this provision, and that is the key equity issue. The Government is putting in place a measure which targets groups that it sees as Labor Party supporters but which will allow its wealthy supporters to run coordinated campaigns. The committee discussed the possibility of a wealthy individual supporting a Liberal candidate to the tune of $1 million. That will not be prevented by this aggregation provision and it highlights its fundamental inequity and the Government's motivation in introducing it.

              Mr DAVID SHOEBRIDGE [11.28 p.m.]: The Hon. Steve Whan's contribution fails to take on board the fact that the Government has proposed an amendment. The evil that the Opposition is seeking to address relates to the electoral expenditure of an affiliated association being aggregated with the electoral expenditure of the party. Members of the Opposition say quite rightly that affiliated organisations sometimes run campaigns that are totally unrelated to what the party is doing and sometimes very critical of it, and that that expenditure should not be aggregated. To the extent that the affiliated association is running a campaign on those kinds of issues, not seeking to advocate a vote for the party but running the issue in the area, it will not be political communication expenditure and therefore it will not be aggregated for the purpose of the cap. If the dominant purpose is raising issues, it will not be aggregated for the purpose of the cap.

              The Hon. STEVE WHAN [11.30 p.m.]: I point out the flaw in what Mr David Shoebridge just said. If an affiliated organisation advocates for another party or to influence the outcome of an election, not in support of the Labor Party, it is by definition captured.

              Mr DAVID SHOEBRIDGE [11.30 p.m.]: The intent is not for people to directly advocate a vote for a party. If they directly advocate a vote for a party, that is a part of what the bill is trying to deal with. Having associated third parties directly advocate a vote for a party is what is sought to be trapped by this bill.

              Dr JOHN KAYE [11.31 p.m.]: Problems remain even after the amendment to section 87 to insert subsection 87 (4) into the Act. When that comes into force there will still be problems. The problem arises where a Labor affiliated union advocates a vote for another party because that will still come off Labor's cap. We think subsection 87 (4) works and Labor thinks it does not. The amendment to section 87 will mean that where a Labor affiliated union, for example, the Finance Sector Union, runs a campaign to raise awareness about gun control issues, globalisation issues or the impact on employment in the finance sector, the dominant purpose is not to promote or oppose a party or to influence voting and, therefore, the unfair aggregation would not happen. So part of the problem has been resolved.

              The other issue in relation to the Opposition's amendment is that it would have far wider scope than the provisions in proposed section 95G (6) and (7). It would capture not just affiliated unions but any third party that engages in coordinated campaigning with a political party. To that extent, there is a lot to be said for the amendment and it is certainly worth examining. However, again, we are not prepared to compromise the outcome of this bill. As the Government is clearly opposed to it and as it would risk the future of the bill, we will not support the amendment.

              Question—That Opposition amendment [C2012-091A] be agreed to—put and resolved in the negative.

              Opposition amendment [C2012-091A] negatived.

              Question—That Opposition amendments Nos 1 to 3 [C2012-085C] be agreed to—put and resolved in the negative.

              Opposition amendments Nos 1 to 3 [C2012-085C] negatived.

              The Hon. STEVE WHAN [11.34 p.m.], by leave: I move Opposition amendments Nos 1 to 3 on sheet 2012-090C in globo:
                  No. 1 Pages 3 and 4, schedule 1 [2], line 22 on page 3 to line 7 on page 4. Omit all words on those lines. Insert instead:
                      96D Prohibition on political donations other than by individuals on the electoral roll or by not-for-profit entities
                        (1) It is unlawful for a political donation to a party, elected member, group, candidate or third-party campaigner to be made or accepted unless the donor is:

                            (a) 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, or

                            (b) a not-for-profit entity that has a relevant business number.
                            Any such individual or entity is referred to in this section as a permitted donor.
                        (2) It is unlawful for a permitted donor to make a political donation to a party, elected member, group, candidate or third-party campaigner on behalf of a person who is not a permitted donor.

                        (3) It is unlawful for a person to make a gift to a permitted donor for the purpose of the permitted donor making a political donation to a party, elected member, group, candidate or third-party campaigner.

                        (4) Annual or other subscriptions paid to a party by a person or entity (including an industrial organisation) for affiliation with the party that are, by the operation of section 85 (3), taken to be gifts (and political donations to the parties) are not subject to this section.

                        (5) Dispositions of property between branches of parties or between associated parties that are, by the operation of section 85 (3A), taken to be gifts (and political donations to the parties) are not subject to this section.

                        (6) In this section:
                        not-for-profit entity means an entity that is an industrial organisation, a peak industry body, a religious organisation, a community organisation or other entity whose business or activity is not carried on for the ultimate purpose of making a profit.

                        relevant business number means an Australian Business Number (ABN) or any other number allocated or recognised by ASIC for the purposes of identifying the entity.

                  No. 2 Pages 5 and 6, schedule 2 [1]–[9], line 4 on page 5 to line 2 on page 6. Omit all words on those lines.

                  No. 3 Page 6, schedule 2 [10], line 9. Insert "or not-for-profit entity" after "individual".
              Amendment No. 1 is designed to reintroduce in this legislation the ability of a not-for-profit entity to make a donation. That is consistent with the minority report of the Labor Party members of the committee. We believe it is reasonable for not-for-profit bodies to continue to be able to make donations. That would open the way for a number of bodies that would then be able to continue to support political parties within the caps imposed by the previous legislation.

              The Hon. TREVOR KHAN [11.36 p.m.]: The Government does not support this amendment. The Government firmly believes that the right to donate should rest only with those who have the right to vote. Accordingly, the Government's bill will ensure that only individuals on the electoral roll can make a political donation. To exempt any organisation—not-for-profit or otherwise—from the ban on corporate donations would create a gaping hole through which corporate donations will be channelled. As I said during the second reading debate, it would no doubt spur the creation of groups similar to the political action committees, or PACs, which are essentially fronts for political parties in the United States. This would be a huge step backwards in the transparency and accountability sought to be created by the bill.

              Dr JOHN KAYE [11.38 p.m.]: It is now 20 minutes to 12 o'clock and we have finally reached the philosophical issue about whether not-for-profit entities should be allowed to donate. It is an interesting and important philosophical debate. My party comes down on the side that they should not donate and individuals only should donate. Others argue, as the Labor Party has argued consistently and before the committee, that the rights of individuals to act collectively—which I strongly support—necessitates the right to make a collective donation to a political party. It is the second part that The Greens do not agree with. We certainly support the rights of individuals to act collectively, to spend their money to advertise and do other things. That is an essential ingredient of a civil society. Every member of this Chamber belongs to a political party, which is an expression of collective will, in some cases more collective than others.

              Nonetheless, the question of the right to make a donation is another step. The concern we still have about not-for-profit entities—although it is certainly less than our concern about corporate entities—is that we lose the transparency associated with individual donations and create layers that can inevitably lead to the corruption of the political process. Therefore, we will not support the amendment.

              The Hon. STEVE WHAN [11.40 p.m.]: I refer to the point made by Hon. Trevor Khan in his contribution to the second reading debate in relation to the position in America. I agree wholeheartedly with most of his comments, but the bill does not address the problem. This provision to allow not-for-profit entities to continue to make donations, given that they will have a cap of $5,000 and $2,000 which was introduced previously, is nothing like the situation in the United States. The closest we are likely to come to that is what the Government is putting into place with this legislation. This legislation will enable wealthy individuals to conduct campaigns that could support particular candidates or parties. It will reduce the ability of not-for-profit groups and peak bodies to counter that.

              I agree with a lot of what the Hon. Trevor Khan said earlier but this bill does not fix it. His comments do not fix the situation either. This is a philosophical issue. The Labor Party and I agree with a number of witnesses who appeared and suggested that collective action and the ability to combine their money was vital and that not allowing them to do that was skewing politics to those more wealthy in New South Wales. A number of people who support the Shooters and Fishers Party as well as a number of the union groups and the people who support the Christian Democratic Party raised that point. It is a relevant and very important issue.

              The Hon. Jeremy Buckingham: It is relevant. How many individuals are third party campaigners? How many? None. Zero.

              The Hon. STEVE WHAN: The honourable member cannot stop. How many individuals are third party campaigners? Zero? I think that is a brave assumption. We know that the Hon. Jeremy Buckingham is about to vote for legislation that allows wealthy individuals to be third party campaigners and to spend more than $1 million to support a political candidate if they so desire.

              Question—That Opposition amendments Nos 1 to 3 [C2011-090C] be agreed to—put and resolved in the negative.

              Opposition amendments Nos 1 to 3 [C2011-090C] negatived.

              The CHAIR (The Hon. Jennifer Gardiner): Order! I will now put the question on Opposition amendment No. 2 on sheet C2011-088H.

              Question—That Opposition amendment No. 2 [C0211-088H] be agreed to—put.

              Opposition amendment No. 2 [C0211-088H] negatived.

              Reverend the Hon. FRED NILE [11.44 p.m.], by leave: I move Christian Democratic Party amendments Nos 1 and 2 on sheet C2011-008B:
                  No. 1 Page 3, schedule 1 [2], line 22 to 31. Omit all words on those lines. Insert instead:
                      96D Prohibition on political donations other than by individuals on the electoral roll and certain not-for-profit entities
                        (1) 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 one of the following kinds of donors (referred to in this section as a permitted donor):

                            (a) 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,

                            (b) a not-for-profit entity (that is, an entity whose business or activity is not carried on for the profit or gain of its individual members) that is a Christian church organisation or an organisation engaged in activities relating to hunting, shooting, fishing or related outdoor activities.

                        (2) It is unlawful for a permitted donor to make a political donation to a party, elected member, group, candidate or third-party campaigner on behalf of a person who is not a permitted donor.

                  No. 2 Page 4, schedule 1 [2], line 3. Insert "(unless the entity is a permitted donor)" after "section".
              In my contribution to the second reading debate I spoke about the impact of this legislation on the donations received by the Shooters and Fishers Party and the Christian Democratic Party. The Hon. Robert Brown and the Hon. Robert Borsak also spoke on this point. The legislation discriminates between those two minor parties that rely on donations from not-for-profit organisations. We hope that members of the House will agree with these amendments that will take away that discrimination and make the legislation more just and fairer. There is no danger of corruption with donations to our organisations as both are minor parties and are not in a position to approve property developments. There is no fear of donations corrupting those parties or the planning and development process in this State, as could occur with the major parties. I seek the support of all fair-minded members to these amendments.

              The Hon. ROBERT BROWN [11.46 p.m.]: These are what are called "test" amendments and I will be interested to see whether they are supported. The Government approached the Shooters and Fishers Party to skunk the other organisations by offering us a special deal, which we refused in order to stick with our principles. We will support the amendments moved by Reverend the Hon. Fred Nile but we will vote against the legislation. We will demonstrate our principles whereas the sell-out lot opposite will not.

              Dr JOHN KAYE [11.47 p.m.]: I think unintentionally, but very nicely, Reverend the Hon. Fred Nile has illustrated a point I made earlier about the dangers of politicians writing laws that regulate political parties. These amendments are clearly written to advantage his own party. Some argue the entire legislation is written to advantage one particular political party. I will not do so, but I could take offence at the idea that it is only Christian churches that can be not-for-profit organisations. Other religious and non-religious organisations can be not-for-profit organisations. For example, I could take offence at the fact that the clubs to which I belong—including the Woollahra Sailing Club—are excluded because they are not a hunting, shooting, fishing or related outdoor activity. I am sure that other members, for example, those who belong to the Dragons, would be offended because that is a sporting club that would not be—

              Reverend the Hon. Fred Nile: Point of order: The member is misrepresenting the amendments. We are simply referring to people who normally make donations to the Shooters and Fishers Party and the Christian Democratic Party. We know there are many other not-for-profit organisations but they do not make donations to those parties.

              Dr JOHN KAYE: To the point of order: That is a debating point; even I know that.

              The CHAIR (The Hon. Jennifer Gardiner): Order! There is no point of order. Reverend the Hon. Fred Nile can make that point during the Committee stage if he wishes to do so.

              Dr JOHN KAYE: For example, in the past the Leader of the Government might have taken offence at the fact that the Police Association was not included; he does not take offence now because he is no longer a member of the association. These amendments contain a certain amount of irony. It is extraordinary that we are considering amendments that privilege a particular religion. I wonder whether the Constitution would make this amendment unconstitutional. If not, then perhaps we should talk about amending the Constitution. A reading of section 116 of the Constitution, which refers to not writing law to establish a religion, may determine that this amendment is entirely wrong. Nonetheless, as has been debated, the principle of not-for-profit entities making donations has a philosophical issue underlying it that is worthy of debate, but I will not repeat it.

              Mr DAVID SHOEBRIDGE [11.50 p.m.]: The Hon. Robert Brown said that the Government offered the Shooters and Fishers Party a deal that if they agreed to this amendment they would get their amendments through and the deal would be done—a fairly substantial allegation to be made by any member of this House. The Government must answer that allegation directly. Its failure to do so effectively will leave uncontradicted on the Hansard that such an offer was made. That would be an extraordinary proposition but it could be answered readily simply by saying that that allegation is untrue and telling us why it is untrue. These amendments to the bill are perhaps the most barefaced and self-serving amendments that I have seen. It is quite extraordinary that they have been moved and supported by two parties that would want to privilege these groups against all others. It is remarkable to suggest that Christian churches and those who hunt, shoot and kill things should have some privileged position with political donations. The failure of the Government to answer the aforementioned allegation leaves hanging over this whole debate a quite unpleasant stench. The allegation should be responded to.

              Reverend the Hon. FRED NILE [11.52 p.m.]: I sought to clarify this point earlier during the contribution of Dr John Kaye. Christian churches and other organisations were included only because they make donations to the Christian Democratic Party. We do not expect donations from witches groups or the Police Association and others. We accept that there are many non-profit organisations.

              Question—That Christian Democratic Party amendments Nos 1 and 2 [C2012-008B] be agreed to—put.

              The Committee divided.
              Ayes, 4
              Mr Brown
              Reverend Nile
              Tellers,
              Mr Borsak
              Mr Green
              Noes, 35
              Mr Ajaka
              Ms Barham
              Mr Blair
              Mr Buckingham
              Mr Clarke
              Mr Colless
              Ms Cotsis
              Ms Cusack
              Mr Donnelly
              Ms Faehrmann
              Ms Ficarra
              Mr Foley
              Mr Gallacher
              Mr Gay
              Mr Harwin
              Dr Kaye
              Mr Khan
              Mr Lynn
              Mr MacDonald
              Mrs Maclaren-Jones
              Mr Mason-Cox
              Mrs Mitchell
              Mr Moselmane
              Mrs Pavey
              Mr Primrose
              Mr Roozendaal
              Mr Searle
              Mr Secord
              Ms Sharpe
              Mr Shoebridge
              Ms Voltz
              Ms Westwood
              Mr Whan
              Tellers,
              Ms Fazio
              Dr Phelps

              Question resolved in the negative.

              Christian Democratic Party amendments Nos 1 and 2 [C2012-008B] negatived.

              The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [12.01 a.m.], by leave: I move Opposition amendments Nos 1 and 2 on sheet C2012-012 in globo:

                  No. 1 Page 4, schedule 1. Insert after line 7:
                      [3] Section 96FA
                        Insert after section 96F:
                        96FA Prohibition on incurring electoral expenditure
                            (1) It is unlawful for an entity or other person, other than a permitted campaigner, to incur electoral expenditure at any time.

                            (2) In this section, permitted campaigner means:
                              (a) a registered party, elected member, group or candidate, or

                              (b) an entity whose business or activity is not carried on for the profit or gain of its individual members, other than a peak or other body that represents entities whose business or activity is carried on for profit or gain.

                  No. 2 Long title. Insert "and electoral expenditure" after donations".
              These amendments get to the heart of the matters that are being debated tonight. The Government's stated intention in proposing the bill was to remove the pernicious influence of money in New South Wales politics, or at least the perception of it. But in proposing this bill it has left unchanged the ability of high net worth individuals to be third party campaign funders and, perhaps more realistically, it has enabled corporate moneyed interests to fund third party campaigns supporting candidates or opposing others that they do not like. A number of contributions in other parts of the procedure tonight recognised that this significant concern has been left completely unaddressed in the legislation proposed by the Government.

              This amendment, which I believe began life as The Greens proposal, would cut to the chase and remove the ability of corporate moneyed interests to influence elections in one easy step. The Opposition supports that and puts it forward in the absence of others willing to do so. It will be interesting to see how this proposal pans out because it gets to the heart of matters that people such as Dr John Kaye acknowledged as a continuing problem in the electoral funding laws, and it addresses them clearly, simply and comprehensively. One is either for removing moneyed interests in politics or one is not.

              Mr DAVID SHOEBRIDGE [12.04 a.m.]: This amendment is appallingly drafted because it would prohibit any individual from incurring electoral expenditure—any individual at all would be prohibited. It is a remarkable proposition that nobody could incur electoral expenditure. That is what this would mean. The only people who could incur electoral expenditure would be permitted campaigners. Political parties of elected members could incur electoral expenditure but someone down the street could not put out a flyer and letterbox his or her neighbours before a local council election that Councillor Shoebridge was a ratbag. That would be a terrible injustice, but people should be allowed to do so if they wish. It is a deeply flawed proposition to suggest that individuals could not even run a letterbox campaign in their local area. Does the Opposition really want an absolute prohibition on people incurring electoral expenditure?

              The Hon. TREVOR KHAN [12.05 a.m.]: The policy rationale behind the amendment is unclear and the legal validity is, to say the least, questionable. Under the Government's bill, all people and organisations will maintain the right to incur electoral expenditure within existing caps and subject to the rules regarding aggregation of expenditure. This protects the quality and diversity of political communications in New South Wales. Frankly, it is unclear why the Opposition wants to silence electors and organisations and stop them from participating in the political process.

              Question—That Opposition amendments Nos 1 and 2 [C2012-012] be agreed to—put and resolved in the negative.

              Opposition amendments Nos 1 and 2 [C2012-012] negatived.

              Schedule 1 as amended agreed to.

              Schedule 2 agreed to.

              Title agreed to.

              Bill reported from Committee with an amendment.

              Adoption of Report

              Motion by the Hon. Michael Gallacher agreed to:
                  That the report be adopted.

              Report adopted.

              Third Reading

              The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [12.08 a.m.]: I move:
                  That this bill be now read a third time.

              Question put.

              The House divided.
              Ayes, 24
              Mr Ajaka
              Ms Barham
              Mr Blair
              Mr Buckingham
              Mr Clarke
              Ms Cusack
              Ms Faehrmann
              Ms Ficarra
              Mr Gallacher
              Miss Gardiner
              Mr Gay
              Mr Green
              Dr Kaye
              Mr Khan
              Mr Lynn
              Mr MacDonald
              Mrs Maclaren-Jones
              Mr Mason-Cox
              Mrs Mitchell
              Reverend Nile
              Mrs Pavey
              Mr Shoebridge

              Tellers,
              Mr Colless
              Dr Phelps

              Noes, 15
              Mr Borsak
              Mr Brown
              Ms Cotsis
              Mr Donnelly
              Mr Foley
              Mr Moselmane
              Mr Primrose
              Mr Roozendaal
              Mr Searle
              Mr Secord
              Ms Sharpe
              Ms Westwood
              Mr Whan


              Tellers,
              Ms Fazio
              Ms Voltz

              Pair

              Mr PearceMr Veitch
              Question resolved in the affirmative.

              Motion agreed to.

              Bill read a third time.