There’s a bill before the Senate that would make it easier for banks to lend irresponsibly

Neale Cousland/Shutterstock

Andrew Schmulow, University of Wollongong; Elise Bant, University of Western Australia; Nicola Howell, Queensland University of Technology, and Therese Wilson, Griffith University

The Hayne royal commission into misconduct in the banking, superannuation and financial services industry found Australia’s responsible lending requirements were correctly calibrated.

They are set out in the National Consumer Credit Protection Act, which requires lenders to offer credit that is “not unsuitable” for the borrower.

Hayne’s first recommendation (Recommendation 1.1) was that the National Consumer Credit Protection Act “not be amended to alter the obligation to assess unsuitability”.

He saw “no reason to alter” the relevant provision of the banking code.

On releasing the royal commissioner’s report in 2019 Treasurer Josh Frydenberg said he was “taking action on all 76 recommendations” and “going further”.

Until COVID.

COVID the pretext for weakening rules

In September, in the midst of the COVID recession, Frydenberg said he was “reducing the cost and time it takes consumers and businesses to access credit”.

Credit was “the lifeblood of the Australian economy”.

He put forward a plan to remove responsible lending obligations from the Act, with the exception of small amount credit contracts and consumer leases where he would impose heightened obligations.

Allowing lenders to rely on the information provided by borrowers would replace the current practice of “lender beware” with “borrower responsibility”.

‘Borrower responsibility’

Frydenberg introduced the legislation in December. On Friday a Senate committee recommended approving it, finding the current consumer protection framework “potentially overly prescriptive”.

Labor and Greens Senators dissented. The bill faces a Senate vote this week.

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None of the justifications for weakening bank lending standards quite makes sense

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We are members of a consortium of 12 academics who conducted an in-depth analysis of the proposed changes and found they should be rejected. This is why.

Even after Hayne, banks are continuing to fight their obligations and have yet to show they have changed their ways.

The drop in lending since COVID was not caused by overly strict lending laws. Indeed, after a win by Westpac in a court case brought by the Securities and Investments Commission the banks said the laws were set appropriately.

Lending standards protect against crises

Consumer protection in the field of finance is important — it contributes to strengthening financial stability.

Not everyone knows what they are signing.
Jacob Lund/Shutterstock

The abusive, predatory and irresponsible lending practices that led to the US subprime mortgage crisis make this clear.

The government’s suggestion that it is fair for borrowers to take responsibility for their own circumstances doesn’t hold water.

No matter how diligent their inquiries, consumers frequently lack the expertise to understand their circumstances and what financial products will be best for them.

For many, almost all of the expertise lies with the banks.

Since COVID, their need for this expertise has become greater, not less.

The government says mortgage brokers will fill this gap under a change proposed by Hayne that will require brokers to act in the “best interests” of their clients.

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Vital signs. It’s one thing to back down on Hayne’s recommendation about mortgage brokers, it’s another to offer nothing in its place

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But Hayne’s recommendations were based on the responsible lending requirements being in place.

And Hayne wanted mortgage brokers banned from taking conflicted remuneration, under which they get paid by the banks they steer customers to, a recommendation Frydenberg at first accepted, then backed away from.

Brokers continue to be paid by the banks whose products they recommend.

APRA has no history of consumer protection

Hayne also recommended (Recommendation 6.1) that Australia’s “twin peaks” system of regulation continue.

Under twin peaks, the Prudential Regulation Authority (APRA) regulates in order to ensure financial system stability, and the Securities and Investments Commission (ASIC) regulates to protect consumers.

While in his final report Hayne found that ASIC’s appetite for law enforcement had been limited, he found APRA’s had been non-existent.

The upshot is that, not only are the responsible lending requirements to be relaxed, but what’s left of them is to be handed to an agency (APRA) with no track record in the field, at the expense of ASIC.

Until now, APRA hasn’t done consumer regulation.
APRA

The government has argued that the Australian Financial Complaints Authority (AFCA) will step up to protect consumers.

But AFCA has to be guided by the law. Without responsible lending laws and regulations, it is unclear what laws AFCA could apply. Thus far, APRA’s standards have been aimed at protecting financial stability rather than consumers.

The Financial Complaints Authority would rely on APRA for guidance.
Tashatuvango/Shutterstock

In our assessment the proposed changes fail in every respect.

They ignore the key lesson of the global financial crisis: that it was caused by reckless and predatory lending.

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It’s about to become easier to lend irresponsibly, to help the recovery

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They ignore the findings of the Hayne Commission and other inquiries dating back at least a decade.

They will neither properly protect consumers nor create the confidence in the financial industry the post-COVID recovery will need.

The government has named its legislation the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill.

A more apt title might have been the “Reducing Consumer Protection Bill”.

Andrew Schmulow, Senior Lecturer, Faculty of Law, University of Wollongong; Elise Bant, Professor of Law, University of Western Australia; Nicola Howell, Senior lecturer, Queensland University of Technology, and Therese Wilson, Senior Lecturer, Griffith Law School, Griffith University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

View from The Hill: Minister who watches the nation’s credit card overlooks his own

Michelle Grattan, University of Canberra

Mathias Cormann’s 2018 family holiday in Singapore is costing him a good deal more than the $2780.82 he belatedly paid for airfares booked with Helloworld travel company’s CEO who happened to be the Liberal party treasurer and a mate.

Cormann, Government Senate Leader, says he gave his credit card number to Andrew Burnes in July 2017 and assumed – until a media query this week – the transaction had gone through. He received no reminders about the outstanding payments.

He also says he had nothing to do with handling a contract his Finance department awarded a subsidiary of the company around the same time.

In his explanation for not noticing he hadn’t been charged, Cormann told a Senate estimates hearing on Tuesday he travelled a lot and many travel-related expenses went through his card.

It’s reasonable to take Cormann at his word about missing that the charge hadn’t been processed. Even accepting this, however, the affair looks bad for Cormann, who failed the “Caesar’s wife” test.

He should not have booked through the CEO, given the man is a
political and personal associate, and the company has a commercial relationship with Cormann’s department.

If he wanted to use that company, he should have gone to the normal booking service. It would have been more prudent to have used another travel agency.

Helloworld’s chief financial officer Michael Burnett says, in a letter Cormann produced on Tuesday, that the flights were never intended to be free. But Burnett provided an odd explanation for no reminders. “Because we held your credit card details at the time of the booking, payment reminders were not sent to you, even though the amount remained listed as ‘Outstanding’ on our internal system”.

You’d expect the company would have either processed the payment or sent a reminder.

Scott Morrison’s aggressive reaction – accusing Labor of going “to the bottom of the chum bucket” – when the opposition asked if Cormann had any conflict of interest, given the contract, doesn’t help the government. The public’s default position is scepticism when it comes to politicians’ conduct.

Giving Cormann the benefit of all doubt, the matter smacks of cosiness and cronyism – a politician using his connections to smooth his way (just as that famous picture of Joe Hockey and Cormann smoking cigars sent a signal of complacency and came to haunt both of them).

This is one more setback for Cormann, who has seen his reputation badly dented in the last few months.

His decision in August to throw his lot in with Peter Dutton and
declare Malcolm Turnbull had lost the confidence of the Liberal party sealed the fate of the former prime minister, with all that followed, including the Coalition being plunged into minority government.

There were multiple players in Turnbull’s downfall, not least Turnbull himself, but Cormann was a major one.

Cormann’s judgement was also off beam in his belief that he could muster the necessary crossbench votes last year to pass the government’s tax cuts for large companies.

His commitment was a factor in the government’s clinging to this
measure for too long, to the detriment of Turnbull.

Earlier this year it was revealed Cormann used a defence plane, at a cost of $37,000, to fly from Canberra to Perth so he could drop into Adelaide to lobby (unsuccessfully) a couple of Centre Alliance senators to support the cuts.

His spokesperson said at the time: “Use of the special purpose
aircraft was approved in the appropriate way to facilitate official business in Adelaide in transit from Canberra back to Perth in between two parliamentary sitting weeks”.

Cormann, obsessed with trying to rustle up votes, didn’t stop to consider how over-the-top this would look to most people, who would say “find a way to fly commercial” or “have a video call”. After Bronwyn Bishop’s helicopter flight, politicians should automatically hit a pause button before ordering up expensive transport.

It is obvious from Cormann’s demeanour that he is very aware he’s politically diminished. His reputation was as one of the government’s best performers, but he is not out in the media as much these days.

Another cabinet minister, Michaelia Cash, embroiled in the court case about her office leaking an imminent police raid on the AWU, has almost disappeared from public view.

This week’s Senate estimates hearings have been damning for the embattled Cash.

The Australian Federal Police gave evidence on Monday that Cash and former justice minister Michael Keenan had declined, despite at least two requests, to provide “witness statements” about media leaks. Rather, they responded by letter.

Morrison defended the two ministers’ behaviour. “I’m advised that both ministers did, in fact, cooperate with that investigation on a voluntary basis,” he told parliament on Tuesday. “I’m advised that neither minister received any further requests for information after they responded to the AFP’s initial invitation to provide information”.

On Tuesday night, Cash was put through the wringer during a Senate estimates hearing. Amazingly, the minister said she had not read the AFP’s Monday evidence. Asked why, she said, “because I haven’t”.

Taxpayers, incidentally, are currently up for $288,812 for Cash’s legal representation.

Although Cormann’s tickets affair is very different from the issue involving Cash and Keenan, the message from the behaviour of all three is one of elitism – politicians thinking they don’t have to do things the way ordinary people do.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Labor leads 53-47% in Newspoll as Shorten struggles with medical transfer bill

Michelle Grattan, University of Canberra

The government goes into the resumption of parliament this week
trailing Labor 47-53% on the two-party vote in Newspoll, unchanged
from a fortnight ago.

The poll comes as Labor’s stand on the legislation to facilitate
medical evacuations hangs in the balance, with Bill Shorten having
indicated he would like to find a compromise and speculation about a Labor retreat from its earlier support.

Shorten receives a briefing on the implications of the bill from the secretary of the Home Affairs Department, Mike Pezzullo on Monday. Shadow cabinet and caucus will discuss Labor’s position.

The opposition has been under concerted attack from the government
over its backing for the legislation, which passed the Senate last
year with ALP support.

Shorten is worried about Labor being wedged, because border protection is always a politically vulnerable area for the ALP.

Scott Morrison says the government will not shift from outright
opposition to the bill, which is based on a proposal originally coming from independent Kerryn Phelps but subsequently refined.

Newspoll, published in The Australian, has Labor’s primary vote up a point to 39%; the Coalition’s vote remains on 37%. The Greens are on 9%; One Nation is polling 5%, down a point.

Morrison has increased his lead over Shorten as better prime minister by 2 points to 44-35%.

Morrison’s satisfaction rating is up 3 points to 43%; his
dissatisfaction rating has fallen 2 points to 45%. Shorten has a net approval rating of minus 15, a worsening by 2 points.

The tactical battle over the medical transfer amendments will dominate the run up to Tuesday’s first day of the sitting. On another front, the opposition is trying to muster the numbers for extra sitting days to consider measures from the banking royal commission.

In comments on the medical transfer bill Opposition spokesman Shayne Neumann said on Sunday: “Labor has always had two clear objectives – making sure sick people can get medical care, and making sure the minister has final discretion over medical transfers.”

The bill provides that where there a dispute between the two doctors recommending a transfer and the minister, the final say on medical grounds would be in the hands of a medical panel.

The minister could override medical decisions only on security grounds (“security” is as defined in the ASIO act).

Passage of the legislation, which would require support from Labor and all but one of the crossbench, would be a big rebuff for the
Coalition.

But the government has managed to turn the heat onto Labor, claiming the legislation would undermine Australia’s border protection.

The briefing Shorten will receive will put more pressure on the
opposition, because Home Affairs will presumably reinforce the
argument it advanced in advice to the government.

The government has now declassified this advice – which last week it provided more informally to The Australian.

The advice, which has some sections blacked out, says: “The
effect of the Bill will undermine the Australian Government’s regional processing arrangements.

“Conduct which would come within the security exception to transfer
based on the minister’s reasonable belief that the transfer would be prejudicial to security, does not include all criminal conduct”.

“Ultimately, the amendments provide that the approximate 1000
transferees currently located in Papua New Guinea (PNG) and Nauru
could have access to a transfer to Australia within weeks of any Royal Assent,” the advice says.

“It is not expected that the Minister’s ability to refuse transfer on security grounds will significantly reduce the number of potential transfers”.

Neumann said on Sunday: “Labor has great respect for our national
security agencies and we’ve always worked cooperatively with them.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why a government would be mad to advise the refusal of royal assent to a bill passed against its will

With the Morrison government now in minority, it is possible a bill for the transfer of asylum seekers from Nauru could pass against the government’s wishes.
AAP/Mick Tsikas

Anne Twomey, University of Sydney

In both the United Kingdom and Australia there is speculation that controversial bills may be passed against the will of the government. If so, could the government advise that the bill be refused royal assent – the last formal step in turning a bill into a law?

This raises questions about whose advice the Queen or governor-general acts upon when giving royal assent, and whether it is constitutionally permissible or wise for ministers to advise that assent not be given to a bill that has validly passed both houses of parliament.

Could it happen with Brexit and Nauru?

In the UK, internal parliamentary dissent about the management of Brexit has led some cross-party parliamentarians to suggest they might support a bill that would require the deferral of Brexit, rather than allow Britain to crash out of the European Union without an agreement.

This has given rise to speculation in both the British popular press and academic blogs about whether the Queen could refuse assent to such a bill, acting on the advice of government ministers.

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In Australia, the issue has arisen because the Morrison government has slipped into a parliamentary minority. This creates the potential for a bill, such as one concerning the transfer of asylum seekers from Nauru to Australia for medical care, to pass the House of Representatives and the Senate without government support.

In both the UK and Australia, the standing orders of the relevant houses of parliament impose impediments to the passage of bills without government support. This is done by giving the government effective control over parliamentary business. Other parliamentary tactics, such as filibustering, may also be used to prevent the passage of such bills.

But if such impediments are overcome and a bill passes both houses against the wishes of the government, can it advise the Queen or the governor-general (described here collectively as the “head of state”) to refuse royal assent, and what should the head of state do if so advised?

Royal assent

In both the UK and Australia, parliament is defined as having three constituent parts – the lower house, the upper house and the Queen. A bill does not become a law until it has been passed by both houses (subject to special procedures for certain bills that may not need to be passed by the upper house) and has received royal assent. Royal assent is therefore a critical part of the legislative process. It has not been refused in the United Kingdom since 1707.

Royal assent is a critical part of the legislative process.
AAP/EPA/Neil Hall

In practice, in neither country is the head of state given ministerial advice to assent to bills. While there is a common belief that assent is advised in meetings of the Privy Council or the Federal Executive Council as the case may be, this is not so. It is done separately by the head of state as part of his or her normal paperwork, once the houses have passed the bills.

Indeed, in the UK, the formal words of enactment of a bill state that it is:

enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same.

In Australia the more succinct phrase is: “The Parliament of Australia enacts”.

The position is nicely illustrated by the controversy concerning Britain’s entry in 1972 into what later became the European Union. A British subject, Alan McWhirter, argued that the Queen should refuse assent to the European Communities Bill as it would fetter the powers of parliament.

The first draft reply prepared by the British government explained it was a constitutional convention that the Queen cannot refuse assent to bills passed by both houses, and which ministers advise should receive assent.

After legal advice from the Lord Chancellor’s Office that ministerial advice is not tendered in relation to royal assent, the draft letter was corrected to say that it is an established constitutional convention that:

the Royal Assent is not withheld from Bills which have been passed by both Houses of Parliament.

The relevant principles

If ministers were to advise the head of state to refuse assent to a bill that both houses had validly passed, it would potentially raise a clash between the principles of representative and responsible government. The principle of representative government requires the head of state to act in accordance with the will of the democratically elected parliament by giving assent to bills the houses have validly passed.

The principle of responsible government ordinarily requires the head of state to act on the advice of ministers who are responsible to parliament because they hold the confidence of the lower house. The corollary of this principle is that the head of state is not obliged to act on the advice of ministers who have ceased to hold the confidence of the house.

The principle of responsible government serves that of representative government by ensuring that the executive government is responsible to, and derived from, the representatives of the people in parliament. Both principles require that parliament prevails over the executive, and the executive can only function as long as it holds the support of the lower (representative) house.

As Nick Barber has argued, it would therefore be inappropriate to rely on the principle of responsible government to undermine parliamentary representative government by allowing ministers to defeat the will of the houses of parliament.

The consequences of advising refusal of assent

The defeat of a government on a bill, whether it be defeat of a bill proposed by the government or the passage of a bill opposed by the government, will not necessarily indicate a loss of confidence and require the government to resign or seek an election. But it will do so when the bill is one of major importance to the government.

There is therefore a strong argument that if a government regards a bill to be of such critical importance that it is prepared to advise the head of state to refuse assent to it, then the government’s defeat indicated by the passage of that bill amounts to a loss of confidence in the government.

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This is why it would be madness for a government to advise the head of state to refuse assent to a bill that has been passed against its wishes. Such action would not only raise a serious question about whether it can continue governing, but it would place the head of state in an invidious position by forcing him or her to reject either the advice of the houses of parliament or of ministers.

Added to this would be enormous public controversy about the constitutional propriety of the government’s action. This would undoubtedly be damaging for a government in a subsequent election.

There is a reason why there is no precedent of a government in the UK or Australia advising the refusal of assent in such circumstances. It would not only be a constitutionally dubious thing to do, but would also be politically stupid.

Anne Twomey, Professor of Constitutional Law, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

If you need a PhD to read your power bill, buying wisely is all but impossible

Energy bills are becoming to complex to understand.
Shutterstock

Bruce Mountain, Victoria University

A recent survey found that Australia’s power companies are less trusted than media companies, banks and telcos. Customers hate electricity bills – not least because they are so complicated. But we can learn much by analysing them closely.

One feature that deserves close scrutiny is the all-pervasive discount. In electricity retailing, all but 3 of the 28 active retailers use discounts in their retail offers.

In any kind of retailing, discounts give customers the impression that they are making a smart buy. This is often true, particularly in cases where it is easy to see and compare the discounted prices. But if it’s not easy to compare, customers may not realise if they’ve been duped.

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Australian household electricity prices may be 25% higher than official reports

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With electricity bills, it is all but impossible for customers to know whether their discounted price really represents a good deal. This is because the discounts are ludicrously complicated – as are the base prices themselves.

Large businesses do not complain about retail electricity markets. This is because they have the capacity, either in-house or through consultants, to evaluate complex retail price structures. Advances in data science may yet make such expertise available to everyone.

Eye-wateringly complex

To fairly compare your bill, you must be able to adjust for the discount in your current bill, and also in all the alternative competing offers. Having worked with thousands of bills, I know the myriad ways discounts are calculated make this terribly difficult.

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A high price for policy failure: the ten-year story of spiralling electricity bills

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Let us count the ways a discount may be applied:

• some discounts are worked out as a percentage of usage charges while others are on the total bill

• some discounts are before the receipt of concessions, others after

• some discounts are before solar feed-in receipts, others after

• few bills actually clearly state the discount rate, and some don’t state the rate at all

• some discounts are only received on subsequent bills (so that if the customer leaves, the retailer avoids discounting their last bill)

• some retailers offer several discounts in the bill but sometimes some apply after other discounts are taken off first

• some will discount controlled load consumption, others not

• some discounts are payable as rebates when the customer transfers to the retailer; other rebates are paid out over months and even years

• some offer discounted amounts which are contingent on advance purchases of electricity, but the discount is not achieved unless purchases exceed the contingent amounts

• some discounts in bills are not actually calculated in customers’ bills as the retailers say they are calculated

• some retailers take up-front payments from customers and then feed those payments back to customers on each subsequent bill as if they are discounts

• most discounts are conditional on customers doing something (usually paying the bill on time) but some are unconditional. Some bills have both conditional and unconditional discounts; others just one or the other.

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You’re paying too much for electricity, but here’s what the states can do about it

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If that isn’t enough, electricity tariffs in Australia are stunningly complex commercial arrangements. They have daily charges and a wide range of methods for charging for consumption: flat rates; daily, monthly or quarterly block rates; time-of-use rates with two or three bands; combinations of time-of-use and block rates; one or more separate rates for controlled loads of different types; consumption rates that are seasonal; and now some bills with peak demand charges.

Solar feed-in rates offered by retailers often (but not always) vary depending on the receipt of subsidies. Most recently, some retailers have offered block rates for solar feed-in, or different prices for the first tranche of solar power feed-in.

What can you do?

It is no surprise that few customers have the time or skill needed to choose wisely. While this is not a peculiarly Australian phenomenon – evidence from abroad shows that lots of money is left on the table even when customers try to buy well – we think it is worse here. Our research is working to quantify this in Australia.

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Government price comparison sites, like Energy Made Easy, are often advanced as solutions. But a 2017 competition review found that these have had limited success in Australia and elsewhere.

Complexity trips up governments too, and retailers work hard to persuade the regulators and policy makers to their point of view.

Regulating complexity away through standardisation is also suggested. Tight regulation can work well; think of the excellent market for bread and patisserie in France. But standardising the sale of electricity often comes at the expense of incentives for retailers to discover customers’ needs, and may increase rather than reduce average prices.

Policymakers want both customer protection and incentives to innovation. But the desire to have one’s cake and eat it can lead to half-baked solutions that make matters worse.

The solution may be to master the complexity rather than trying to regulate it away. Many existing price comparison websites offer limited coverage of the market of competing offers, or look at only the energy consumption portion of a customer’s existing bill.

However advances in data science now make it cost effective to provide small customers with on-going analysis of their usage and their retailer’s charges in order to ensure that they are always on the best deal for them. Businesses using this approach overseas are well established, and the scope for further innovation is very large.

Overcoming the complexity of the retail market will take away the wool that retailers have a powerful incentive to pull over their customers’ eyes.

Bruce Mountain, Director, Victoria Energy Policy Centre, Victoria University

This article was originally published on The Conversation. Read the original article.

Federal government’s foreign donations bill is flawed and needs to be redrafted

The only effective way of destroying the undue influence of large foreign donations is by placing a cap on all donations.
AAP/Lukas Coch

Anne Twomey, University of Sydney

Preventing foreign influence over Australian elections is important. It is also important that legislation designed to achieve this is effective and does not impose collateral damage or leave itself open to constitutional challenge.

How well does the Turnbull government’s foreign donations bill stack up? Does it achieve its aim of preventing foreign donations from affecting Australian elections?

Not at all. It permits foreign citizens to make as many political donations in as large amounts as they wish, if it is done by a permanent resident or a foreign-owned company that is incorporated in Australia.

To be fair, there are constitutional reasons for this. It is unlikely that a ban on donations from permanent residents or companies incorporated in Australia would survive a constitutional challenge. But it also means any foreign government seeking to influence Australian elections can still easily do so.

The only effective way of destroying the undue influence of large foreign donations is by placing a cap on all donations, as occurs in New South Wales. But the federal government has chosen not to go down this path.

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Ban on foreign political donations is both too broad and too narrow, and won’t fix our system

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It is ironic, then, that Special Minister of State Mathias Cormann says exempting charities from the bill would render the ban on foreign donations “entirely ineffective”. It is ineffective at preventing foreign influence anyway, so excluding charities could hardly make any difference to achieving that aim.

Meanwhile, Prime Minister Malcolm Turnbull argues that only seven out of 55,500 registered charities reported political expenditure last financial year, and that the bill “has no effect on foreign funding for charities’ non-political activity or charities’ political campaigning where it is funded by Australians”.

This is misleading for two reasons.

First, the bill relies on a greatly broadened definition of political expenditure. It now includes any expenditure on the expression of public views on an issue that is “likely to be before electors in an election”, regardless of when the election is held. This could include anything from expenditure on ads supporting same-sex marriage to books on climate change and websites supporting Indigenous constitutional recognition. Given the wide range of issues that may be before electors in an election, the bill is likely to catch a large number of charities, along with universities, corporations and others.

Second, it does not matter whether a charity actually receives any foreign donations or not. It may only receive donations from Australian sources and still be seriously affected by the bill. This is because onerous reporting obligations attach to bodies deemed to be either a “political campaigner” or “third party campaigner”.

For example, spending as little as A$14,000 on the public expression of views on an issue that is likely to be before electors is sufficient to be categorised as a third party campaigner, regardless of whether or not the person or body receives any foreign donations.

A third party campaigner must lodge annual reports detailing:

• its political expenditure
• its senior staff and any membership by them of political parties
• any grants, contracts or payments from Commonwealth, State or Territory governments
• a signed statement by its financial controller that it has complied with the rules about receiving gifts, such as charitable donations.

If a third party campaigner has received gifts that allowed it to engage in political expenditure, and the amount of at least one such gift (or cumulative gifts from the same donor) was above A$13,500, then it also has to provide an annual return that sets out the amounts of such donations, the date they were made and the name and address of each donor.

Most burdensome of all is the requirement to identify the source of every gift it receives. This includes very small donations, as it has to be able to identify whether the gifts from any single donor cumulatively exceed A$250. It then has to obtain a statutory declaration from each donor of more than A$250 that they are an “allowable donor”, such as a citizen, a permanent resident or a body incorporated in Australia. The penalty for breaching these requirements is up to 10 years imprisonment for the financial controller of the third party campaigner.

If you were a charity, which only collected donations from within Australia, and you wished to spend money on advocacy about government policies on homelessness, what would you do? Would you send lawyers out to accompany every door-knocker when you collect donations? Would you risk insulting your donors by requiring them to sign a legal document declaring that they are citizens or permanent residents?

Would you spend a considerable portion of the donations you receive on administering a complex reporting system, with the risk of imprisonment if you breach the rules? Or would you decide that the only rational solution is not to spend any money on advocacy about homelessness?

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Green groups and charities could be collateral damage in government’s foreign donation ban

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If the purpose of this bill is to prevent foreign donations from influencing elections, it manifestly does not achieve that outcome. Foreign citizens can still donate as much as they like to Australian political parties by donating through a company they have incorporated in Australia.

But if the purpose of the bill is to deter charities and other third parties (regardless of whether they have received a single cent of foreign money) from spending money on the public expression of views that might entail criticism of government policies, then it would very effectively achieve that outcome.

This disconnect between the bill’s claimed purpose and likely effect may cause problems for the government if the legislation is passed and then challenged before the High Court. The Court has already held that limiting the sources of political donations imposes a burden on the constitutionally implied freedom of political communication.

Such a law will only be valid if it passes a proportionality test. That is, the law must be reasonably appropriate and adapted to achieve its claimed legitimate purpose. If its effects go far beyond that purpose, are unnecessary to achieve that purpose and disproportionately damage political communication, then the law will be held invalid.

On that basis, this bill is highly vulnerable to a constitutional challenge and needs to be redrafted so that it achieves its aim but does not impose unnecessary collateral damage on charities and other bodies.

Anne Twomey, Professor of Constitutional Law, University of Sydney

This article was originally published on The Conversation. Read the original article.

Family Refutes Police Claims in Death of Christian in India

Bible teacher in Rajasthan state, 20, faced opposition from Hindu nationalists.

NEW DELHI, August 25 (CDN) — The family of a 20-year-old Christian found dead last week in the northern state of Rajasthan suspects he was killed by Hindu nationalists, though police claim he died of cardiac arrest.

Narayan Lal, a farmer from Hameerpura Patar village in Arnod sub-district of Rajasthan’s Pratapgarh district, was found dead the evening of Aug. 17 near a forest where he had gone to tend his goats.

Lal was a volunteer teacher in a 10-day Vacation Bible School organized by indigenous Christian organization Light of the World Service Society (Jagat Jyoti Seva Sansthan) in his village area in May, and a relative who requested anonymity told Compass that some villagers did not approve of the young man “spreading Christianity.”

“It seems his throat was strangulated,” the relative said. “I do not know who did it, but I am sure he was murdered. His family was facing opposition for their Christian work, particularly by some residents of Nadikhera village [near Hameerpura Patar].”

A post-mortem report suggested otherwise, police said.

“The body of Narayan Lal, son of Tola Ram Meena, was found under a tree,” Superintendent of Police of Pratapgarh district Prem Prakash Tak told Compass. “There was some froth formation in his mouth, but no injuries or bruises. The post-mortem was conducted by three doctors, and they suggest that he died of cardio-respiratory failure.”

He added that police had not heard that the family suspected murder. The relative said, however, that Lal’s father told police that his son was seemingly killed by some people from Nadikhera village who had been opposing him and his family. Salamgarh Police Inspector Govardhan Ram Chowdhary was unavailable for comment.

Lal’s relative contested the police version, saying Lal was “absolutely healthy” with “no sign of any ailment.”

“I cannot believe that he died of heart failure – he was very young,” he said. “His shoes were lying near his body, and a piece of cloth was kept on his hands. It seemed that the cloth was used to tie his hands.”

The relative asked why police did not inform the family of their autopsy report’s indication of cardiac arrest.

“We would have taken the body to a private hospital for confirmation,” he said.

The death was reported to Salamgarh police at 10 p.m. on Aug. 17 under Section 174 of the Criminal Procedure Code for “death under suspicious circumstances.” The autopsy was performed on Aug. 18, after which the body was handed over to the family for cremation.

Police Superintendent Tak acknowledged that Lal’s father, an elder in the village church, had been arrested in July 2008 on charges of desecrating an idol of a Hindu deity in the village. He was released after police failed to find evidence against him.

“He [Lal’s father] was falsely accused by those who did not like his missionary work,” the deceased’s relative said. “It was a plot to oppose his work.”

Christian persecution is not new to Rajasthan state, where Christian conversion is a sensitive issue.

The Rajasthan government passed an anti-conversion law in the state assembly in April 2006, when the Hindu nationalist Bharatiya Janata Party (BJP) was in power. The bill is still awaiting the governor’s assent.

The BJP led the government of Rajasthan from March 1990 to November 1998, and again from December 2003 to December 2008, when the Left-of-Center Congress Party won the election.

The incidence of Christian persecution is said to have decreased since the BJP’s defeat in the 2008 state election, with the exception of sporadic incidents.

About 30 suspected Hindu extremists assaulted two Christian workers from Gospel for Asia and chased them into the jungle near Rajasthan’s Banswara city on Sept. 4, 2009. (See “Recent Incidents of Persecution,” Sept. 29, 2009.)

On March 21, 2009, Hindu nationalists from the Vishwa Hindu Parishad (VHP or World Hindu Council) attacked Bible students and staff members of the Believers Church and demanded 10,000 rupees (US$193) from them in Udaipur city. (See “Recent Incidents of Persecution,” March 31, 2009.)

On April 29, 2007, at least 14 Hindu extremists in Jaipur, Rajasthan attacked Pastor Walter Masih with sticks and rods as television cameras recorded the scene, leaving him bleeding profusely. The then-Hindu nationalist government in the state declined to prosecute the more serious charges against the assailants.

BJP leaders harassed leaders of the Emmanuel Mission International (EMI), based in Kota city, in 2006, leading to the arrest of the Christians and the freezing of EMI bank accounts.

Report from Compass Direct News

Buddhist Bhutan Proposes ‘Anti-Conversion’ Law

Already suppressed Christians say bill is designed to control growth.

THIMPHU, Bhutan, July 21 (CDN) — Christians in this Himalayan nation who are still longing to openly practice their faith were disheartened this month when the government proposed the kind of “anti-conversion” law that other nations have used as a pretext for falsely accusing Christians of “coercion.”

The amendment bill would punish “proselytizing” that “uses coercion or other forms of inducement” – vaguely enough worded, Christians fear, that vigilantes could use it to jail them for following the commands of Christ to feed, clothe and otherwise care for the poor.

“Now, under section 463 [of the Penal Code of Bhutan], a defendant shall be guilty of the offense of proselytization if the defendant uses coercion or other forms of inducement to cause the conversion of a person from one religion or faith to another,” reported the government-run Kuensel newspaper on July 9.

“There was always a virtual anti-conversion law in place, but now it is on paper too,” said a senior pastor from Thimphu on condition of anonymity. “Seemingly it is aimed at controlling the growth of Christianity.”

Kuenlay Tshering, a member of Bhutan’s Parliament and the chairperson of its Legislative Council, told Compass that the new section is consonant with Article 7(4) of the Constitution of the Kingdom of Bhutan, which states, “A Bhutanese citizen shall have the right to freedom of thought, conscience and religion. No person shall be compelled to belong to another faith by means of coercion or inducement.”

He said that the National Council had proposed that offenses under the proposal be classified as misdemeanors, punishable by one to less than three years in prison.

Tshering said that the amendment bill “may be passed during the next session of Parliament, after the National Assembly deliberates on it in the winter session.”

Asked if he was aware that similar “anti-conversion” laws in neighboring India had been misused to harass Christians through vague terms of “inducement,” he said he was not.

Authorities usually act on complaints by local residents against Christian workers, so frivolous complaints can lead to their arrest, said another pastor who requested anonymity.

Of the 683,407 people in Bhutan, over 75 percent are Buddhist, mainly from the west and the east. Hindus, mostly ethnic Nepalese from southern Bhutan, are estimated to be around 22 percent of the population.

There are around 6,000 Christians, mostly ethnic Nepalese, but there is neither a church building nor a registered Christian institution. The Bible, however, has been translated into the national language, Dzongkha, as well as into Nepali.

The constitution guarantees freedom of religion, but the government has not officially recognized the presence of Christians, whose practice of faith remains confined to their homes.

The Drukpa Kagyue school of Mahayana Buddhism is the state religion, with Hinduism dominant in the south, according to Bhutan’s official website, which adds, “Some residues of Bon, animism and shamanism still exist in some pockets of the country,” but makes no mention of Christianity.

Still, since Bhutan became a democracy in 2008 after its first-ever elections – following more than 100 years of absolute monarchy – people have increasingly exercised their freedom, including religious choice.

 

‘Why More Religions?’

Home and Culture Minister Lyonpo Minjur Dorji told Compass that Bhutan’s government had “no problems” with Christianity or any other faith.

“But Bhutan is a small country, with a little more than 600,000 people, and a majority of them are Buddhist,” Dorji said. “We have Hindus, also mainly in southern parts. So why do we need more religions?”

Buddhism is closely linked with political and social life in Bhutan. Dorji’s office sits in a gigantic monastery in Thimphu known as Tashichho Dzong. Buddhism unites and brings people together, Dorji said, explaining that the social life of a village revolves around its dzong (monastery).

Dorji said India’s multi-religious society had led to tensions and bloodshed.

“India can survive riots and unrest,” he said, “but Bhutan may not, because it is a small country between two giants [India and China].”

With leaders who have been proud that they have not allowed it to be colonized, Bhutan historically has been keenly concerned about its survival. Bhutan’s people see their distinct culture, rather than the military, as having protected the country’s sovereignty. And it is no coincidence that Dorji’s portfolio includes both internal security and preservation of culture.

The constitution, adopted in July 2008, also requires the state to protect Bhutan’s cultural heritage and declares that Buddhism is the spiritual heritage of Bhutan.

A government official who requested anonymity said that, as Tibet went to China and Sikkim became a state in India, “now which of the two countries will get Bhutan?”

This concern is prevalent among the Bhutanese, he added.

Sikkim, now a state in India’s northeast, was a Buddhist kingdom with indigenous Bhotia and Lepcha people groups as its subjects. But Hindus from Nepal migrated to Sikkim for work and gradually outnumbered the local Buddhists. In 1975, a referendum was held to decide if Sikkim, then India’s protectorate, should become an official state of the country. Since over 75 percent of the people in Sikkim were Nepalese – who knew that democracy would mean majority-rule – they voted for its incorporation
into India.

Bhutan and India’s other smaller neighbors saw it as brazen annexation. And it is believed that Sikkim’s “annexation” made Bhutan wary of the influence of India.

In the 1980s, Bhutan’s king began a one-nation-one-people campaign to protect its sovereignty and cultural integrity, which was discriminatory to the ethnic Nepalese, who protested. Their non-compliance, however, resulted in a harsh crackdown by authorities, leading to the expulsion or voluntary migration of over 100,000 ethnic Nepalese, many of whom were Christians, to the Nepal side of the border in Jhapa in the early 1990s.

“Bhutan did not want to become another Sikkim,” said a local resident, explaining why the government did not tolerate the protests.

Bhutan is also rigorous in implementing its laws related to the use of the national language, the national dress code and the uniform architectural standards throughout the country to strengthen its cultural integrity. Bhutanese men are required to wear the gho, a knee-length robe tied at the waist by a cloth belt, when they go to work or attend a public function. Women have to wear the kira, an ankle-length dress clipped at one shoulder and tied at the waist. Non-compliance can lead to fine
and imprisonment.

 

Brighter Future

One hopeful pastor said he expects the government to officially acknowledge the existence of Christianity in Bhutan in the near future.

“Religious freedom will be good for both Christians and the government,” he said. “If Christians are not officially acknowledged, who will the government go to if it wants to implement an executive decision related to religious communities?”

Explaining the reason for his hope, he recalled an incident in the Punakha area in January, when a house under construction was demolished after rumors that it was used as a church.

“The house owner, a Christian, went to his majesty [King Jigme Khesar Namgyel Wangchuck] and told him he was not constructing a church but would have worship with other believers on Sundays,” the pastor said. “The king allowed him to build the house.”

He also said that a delegation of Christians met with Prime Minister Lyonchen Jigmey Thinley in May 2009, who reassured them that there would be more freedom soon.

Christianity is gradually growing, but through word-of-mouth – testimonies of those who have received healing from sickness – and not public preaching, he said, adding that Christians needed to understand and be patient with the government, “which cannot and should not make changes or give freedom overnight.”

 

SIDEBAR

Christians’ Skulls, Bones Used for Buddhist Ritual

The ambiguity in Bhutan over the status of Christians has brought with it a new difficulty: A national daily recently reported that at least eight graves of Christians had been exhumed and the skulls and thigh bones extracted for a Buddhist ritual.

Although the report marked the first time the practice had made the news, Christian leaders said more than 100 graves have been dug up as the trade in human bones has been going on for more than five years.

A local resident of the Lamperi area, near Thimphu, identified as Namgay, told the Bhutan Observer that he found eight graves in a “secret forest graveyard” that had been exhumed by hunters of craniums and thigh bone.

“We saw skulls without craniums and a hand sticking out of a grave,” he was quoted as saying in the daily on May 27.

A human skull garners between 5,000 ngultrum (US$105) and 10,000 ngultrum (US$211) in Bhutan, with men’s skulls considered more valuable. The skull of a man affected by leprosy is not considered ideal for purification. Rather, such skulls are considered best for rituals to subdue evil spirits.

In a visit to the graveyard, the Bhutan Observer found at least eight graves freshly dug up. “Hand gloves, khaddar [a coarse homespun cotton cloth], a currency note, a wooden cross, and a wooden hammer lay scattered all over,” it reported.

The daily said the graveyard apparently belonged to the Christian community in Thimphu and nearby areas.

“Christians in the country say that there should be an official recognition that there are Christians in the country, and other things like burial rights will naturally follow,” the report noted.

A local pastor told Compass that since Christians did not have a burial ground, they buried their dead in forests.

“More than 100 bodies have been dug up, even though we have changed several locations for burial,” he said. “I wonder how the traders in human bones discover these locations. Where do we go now?”

Some local residents reportedly believe that a Christian grave brings bad luck.

Damcho Wangchu, a resident of Thinleygang area, told the daily that the area surrounding the graveyard was holy. He attributed all misfortune in the area – including storms, the death of three students and of four others – to the Christian cemetery.

“We never experienced such misfortunes in our gewog [cluster of villages] before,” he said.

The daily explained that the tradition of use of human skulls and thigh bones in Buddhist rituals was as old as Tantric Buddhism itself. “Thoepai Dagpa is a generic name for the text that illustrates the use and study of quality of skulls,” it reported.

Tantric Buddhism, widespread in Bhutan, involves rituals as a substitute or alternative for the earlier abstract meditations.

An editorial in the same newspaper noted, “Our hunt for the criminal will probably lead us from the unplanned graveyard to the sacred altar.”

Report from Compass Direct News

Christmas could be cancelled by British government

Christmas could be cancelled by a bill being put forward by the Labour government, the Catholic bishops of England and Wales have said, reports Hilary White, LifeSiteNews.com.

In a letter to MPs, Monsignor Andrew Summersgill, general secretary of the Catholic Bishops’ Conference, said that Harriet Harmon’s Equality Bill will have a "chilling effect" on local councils, town halls and other organizations clamping down on Christmas festivities for fear of offending people of other religions.

The Equality Bill combines all previous equality legislation in the U.K., and includes a range of new provisions.

"Under existing legislation," Summersgill wrote, "we have seen the development of a risk-averse culture with outcomes as ridiculous as reports of a local authority instructing tenants to take down Christmas lights in case they might offend Muslim neighbours, or of authorities removing the word Christmas out of cultural sensitivity to everyone except Christians.

"If this bill is serious about equality, everything possible must be done to avoid it having a chilling effect on religious expression and practice."

The Christian Institute, Britain’s leading Christian political lobby group, has listed incidents where public displays of Christianity at Christmas have already come under attack. Councils around Britain are removing all references to the name "Christmas" from their 2009 events. Birmingham City Council has changed the name of this year’s light-switching-on event to the generic "Winterval." Last November an attempt by Oxford City Council to drop Christmas from the title of the city’s celebrations was condemned by both residents and religious leaders.

The Christian Institute complained about the bill, saying that councils "are already over-zealous in applying equality laws." The bill, they said, "will make this worse."

In fact, some of the Labour government’s closest advisors have already urged it to abolish public displays of a Christian origin at Christmas. The Institute for Public Policy Research (IPPR), which has shaped many Labour party policies, said in 2007 that Christmas "should be downgraded to help race relations."

The equality legislation leads only to the law favoring aggrieved minority lobby groups over the existing Christian culture, the Christian Institute says. The group pointed to the closure and forced secularization of several of Britain’s Catholic adoption agencies under similar legislation, the Sexual Orientation Regulations (SORs) of the 2007 Equality Act.

Under the SORs, they said, "the rights of children have been trumped by the rights of homosexual adults. Any agency which refuses to do homosexual adoptions becomes a target for closure."

Report from the Christian Telegraph 

Euthanasia bill unexpectedly defeated in South Australia

In a surprise victory for pro-life advocates, South Australia’s Upper House has narrowly voted down an amendment to their palliative care legislation that would have legalized euthanasia, reports Patrick B. Craine, LifeSiteNews.com.

The bill was proposed by Greens member Mark Parnell. It was expected to pass 11-10, with the support of independent member Ann Bressington, the swing vote. Bressington opted to abstain, however, after amendments she had sought failed. This abstention would have resulted in a tie, meaning that Upper House President Bob Sneath would vote to pass the bill.

In the end, however, member David Ridway announced to the shock of pro-life observers that personal reasons had led him to change his mind, and he voted against the bill.

Parnell has stated his intention to make another attempt at legalizing euthanasia after the state elections in March 2010. With the upcoming retirement of two pro-life members, pro-life advocates have indicated that such an attempt has a real risk of succeeding.

The UK-based anti-euthanasia group SPUC Pro-Life called the vote "a victory for civilised values."

Anthony Ozimic, SPUC’s communications manager and an expatriate Australian, stated: "Those seeking to develop civilised values which respect the sanctity of human life should be encouraged by this vote.

"In spite of all the money, media support and propaganda of the euthanasia lobby, many politicians recognise the dangers to public safety in introducing such legislation. This victory for civilised values joins the recent defeat of a similar bill in Tasmania, as well as the repeated votes by the British House of Lords against assisted suicide."

Report from the Christian Telegraph