Time for the federal government to catch up on political donations reform


File 20180810 30470 1mevuo3.jpg?ixlib=rb 1.1
The states have pulled far ahead of the Commonwealth on improving transparency around political donations.
AAP/Mick Tsikas

Carmela Chivers, Grattan Institute; Danielle Wood, Grattan Institute, and Kate Griffiths, Grattan Institute

Australians should be able to see who donates to political parties, but our political donations laws fall far short of this ideal. Recent reforms in New South Wales and Victoria mean that voters will have much better information about who is donating. But when it comes to donations at the federal level, voters remain largely in the dark.

Money in politics is regulated to reduce the risk of interest groups “buying” influence. Explicit quid pro quo is probably rare: as the saying goes, “you never bribe someone when you need them”. But the risk is in more subtle influence: that donors get more access to policymakers, or their views are given more weight.




Read more:
The truth about political donations: there is so much we don’t know


Publishing information about larger donors creates a public check on this behaviour. Voters are able to see who political parties rely on for funding, and MPs are more accountable for their subsequent decisions.

States are improving transparency

The trend in the states is promising. Victoria and NSW both increased the transparency of political donations last month.

In Victoria, donations of $1,000 or more will have to be disclosed to the Victorian Electoral Commission within 21 days. Anonymous donations of $1,000 or more are banned. Victoria even capped donations at $4,000 and increased public funding for election campaigns, which might help reduce the reliance of parties on larger contributions (but also comes with other risks).

NSW’s already extensive donations regime was tightened from July 1 this year. NSW political parties are now required to disclose donations of $1,000 or more within 21 days during election campaigns (as in Victoria), and within six months otherwise.

When it comes to transparency, Queensland does one better: the 2017 state election was Australia’s first with “real time” disclosure. Donations of $1,000 or more are lodged through an online portal and are made public within seven working days. The Queensland Electoral Commission even provides interactive maps of donations by electorate.

Most other states also have decent disclosure requirements. In South Australia, parties are required to disclose donations of $5,310 or more every seven days during an election period (and every six months otherwise). The disclosure threshold in Western Australia is $2,300.

Tasmania is the only state with disclosure laws as weak as the Commonwealth’s.

These laws mean voters can know, before they go to the ballot box, who is funding parties’ election campaigns.

The Commonwealth has a long way to go

The states are taking political donations reform seriously – and that’s a good thing. But state reforms are limited by state boundaries. Until the Commonwealth catches up, we won’t be able to “follow the money” across all jurisdictions.

Under Commonwealth regulations, it can take up to 19 months for donations to be made public. That’s why Prime Minister Malcolm Turnbull’s $1.75 million donation to the Liberal Party in the lead-up to the 2016 election was not officially made public until the start of this year.

Only donations of more than $13,800 are required to be disclosed. And there is no requirement to aggregate donations, which means an individual donor can make a series of donations below $13,800 without disclosure.

The result is a huge amount of money in the federal system that we know nothing about. Parties received more than $100 million from undisclosed sources in the two financial years spanning the 2016 federal election. Without this information, it is difficult for public scrutiny to provide a “check” on the possibility of donor influence.

Some of this money no doubt came from “mum and dad” donors contributing $100 to their preferred party. But some is probably the result of “donations splitting”, where people or organisations make multiple donations below the threshold. Some might also be income from fundraising dinners and business forums, for which attendees pay thousands for an opportunity to “bend the ear” of elected representatives.

Donations can also be filtered through associated entities of the parties. This makes money (and influence) even more difficult to track. These entities – unions, investment funds, or fundraising organisations – occasionally frustrate donations restrictions by taking money on behalf of “their” party.

In a particularly egregious case, investigations uncovered that hundreds of thousands of dollars in unlawful donations had filtered into NSW Liberal Party accounts through a federal associated entity.




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


Let the sun shine in

Growing public cynicism about special interest influence is partly born of secrecy. Simple changes could vastly improve what we know about money flowing to Commonwealth political parties.

The disclosure threshold should be lowered as the states have done. The current threshold of $13,800 is well above the amount that a regular voter could afford to contribute to a political cause. A lower threshold of around $5,000 would still protect the privacy of small donors while improving transparency and accountability.

Disclosure of donations should be much quicker. Queensland and South Australia now have “real time” disclosure during elections; the Commonwealth can clearly do better than a 19-month turn-around. Disclosure within three weeks – as in NSW and Victoria – would be far superior to the current system.

The ConversationThe states’ political donations laws aren’t perfect, but they are heading in the right direction. It’s time for Canberra to catch up.

Carmela Chivers, Associate, Grattan Institute; Danielle Wood, Program Director, Budget Policy and Institutions, Grattan Institute, and Kate Griffiths, Senior Associate, Grattan Institute

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



File 20180228 36677 16scf0r.jpg?ixlib=rb 1.1
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.




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


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?




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


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.

The ConversationOn 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.

The truth about political donations: there is so much we don’t know



File 20180201 123862 b6n55t.jpg?ixlib=rb 1.1
AEC disclosures revealed Malcolm Turnbull to be the single biggest donor to a political party in 2016-17.
AAP/Dan Peled

Lindy Edwards, UNSW

The big story about the Australian Electoral Commission’s annual release of political donations disclosures is how little they really tell us. Over the last decade, the major parties have routinely only transparently disclosed 10-20% of their incomes as donations.

There is another 20-35% of party incomes that falls into a grey area, where accounting enables them to conceal the source of the money. Then there is another 50-70% of party incomes the public knows absolutely nothing about.

The precise splits for 2016-17 are:

https://datawrapper.dwcdn.net/M8CDR/2/

https://datawrapper.dwcdn.net/PZNpi/2/

This situation is able to happen because, federally, Australia has some of the most lax political donations laws in the developed world.




Read more:
Australia trails way behind other nations in regulating political donations


A system full of holes

Political parties in Australia at the federal level only have to disclose payments of more than A$13,200. They are requested – but not required – to distinguish between “donations” and “other receipts”.

There are no caps on how much people can give, or who can give. And the disclosures are only released annually, in February each year, with no more than a name and address attached.

This might not sound too bad. But it is actually a system full of holes that can be exploited to hide where parties’ incomes are really coming from.




Read more:
Explainer: how does our political donations system work – and is it any good?


The first problem is what parties declare to be “donations” and what they declare to be “other receipts”. In many cases, parties claim more than half of the payments they receive over the threshold are “other receipts”, even though the payments come as round numbers from those you would expect to be lobbying government.

One journalistic analysis found 80 cases where the donor had declared a payment as a donation, only to have the party claim it as an “other receipt”. An academic study concluded that most “other receipts” should be treated as donations for analytical purposes. However, there are some legitimate “other receipts”, such as union fees, share dividends, and proceeds from property sales.

There are also some crafty schemes parties use to make donations technically qualify as “other receipts”. They hold fundraising dinners, charging people large sums to attend, then report the payments as a fee for a service rather than a donation.

The second problem is parties using fundraising bodies to effectively “launder” the donations they receive. Donors give money to a fundraising body that then gives it to the party. This makes it difficult to work out where the money originally came from.

The very high disclosure thresholds also enable parties to engage in “donation splitting” – when a large payment is split into smaller amounts and paid to different party branches so each payment comes in under the reporting thresholds. Parties don’t even need to aggregate payments made on different days.

Donors are technically supposed to declare their payments if the combined value of their donations is over the threshold. However, they don’t have to disclose payments to fundraising bodies. And if a donor doesn’t disclose, there’s no way to know if anything is missing. The disclosure laws are notoriously weakly enforced.

Finally, a year’s worth of donations data is released in one huge data dump on one day. Thousands of lines of data are released. The data cannot be meaningfully sorted, or tallies that mean anything easily calculated.

Who is funding our political process?

In today’s resource-starved media environment, journalists are reduced to identifying the biggest payment that hasn’t been split or concealed, and attempting to make hay of those unsophisticated enough to have allowed themselves to stand out.

The story fades after a day or two, and the real secrets of who is funding our political process remains buried.

Perhaps the most insidious aspect of the disclosure process is that the payments are only revealed months after they were made.

While small businesses have to pay tax quarterly, and the Australian Tax Office has apps that enable us to collect our receipts in real time, politicians only have to release their accounts annually. This means we only get to see the money that changed hands between stakeholders in the midst of major policy battles months after the issue has disappeared from the headlines.

The ConversationThe annual February festival of lampooning the largest visible donor lulls Australians into a false sense of security that there is a functioning political donations disclosure regime in place. Few realise how ineffective our political donations disclosure regime is, and how badly it is in need of reform.

Lindy Edwards, Senior Lecturer in Politics, UNSW

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

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



File 20171206 31128 1rojv0z.jpg?ixlib=rb 1.1
Australia is among the one-third of countries that allow foreign political donations.
AAP/Mick Tsikas

Yee-Fui Ng, RMIT University

The government has announced a suite of reforms targeting foreign interference and espionage in Australia’s political process. This will include a bill imposing a ban on political donations from foreign bank accounts, non-citizens and foreign entities.

The ban will apply broadly – not just to political parties and parliamentary candidates, but also to trade unions and advocacy groups such as GetUp!.

These proposed reforms follow revelations that Labor senator Sam Dastyari had warned Chinese Communist Party-linked donor Huang Xiangmo that his phone might be tapped by intelligence agencies. Both the Labor and Liberal parties have benefited from donations by Huang to the tune of almost A$3 million since 2012.

But it’s not just foreign donations that can skew the system. If the government is serious about restoring faith in our politics and politicians, there’s much more to be done.


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


Why ban foreign donations?

The rationale for banning foreign donations is to stop the threat of foreign interests undermining Australian democracy. The concern is that foreign people or entities could exercise an unduly large influence on our politicians through generous donations.

Internationally, Australia is among the one-third of countries that allow foreign political donations. This is in contrast to comparable liberal democracies that ban foreign donations, such as the UK, US and Canada. New Zealand caps them at NZ$1,500.


Further reading: FactCheck Q&A: Is Australia one of the few countries worldwide to accept foreign political donations?


Banning foreign donations will certainly reduce the ability of foreign people and entities to influence Australian policy and decision-making. In turn, this will reduce both actual corruption and the perception of corruption in politics. Ultimately, this may improve public confidence in the Australian political system.

But is this ban too broad?

The proposed reforms follow the recommendations of a Senate committee majority that foreign citizens and entities be banned from making donations to political parties, associated entities (such as trade unions and dedicated fundraising bodies), and third parties (such as GetUp! and other campaign groups).

Labor and the Greens supported a ban on foreign political donations to political parties and their associated entities, but rejected extending it to third parties. They argued that banning foreign donations to third parties would restrict the capacity of NGOs to draw attention to their causes, and endanger robust public discourse by civil society.

There may be constitutional issues with such a broad ban on foreign political donations. For instance, banning donations to advocacy groups may be found to stifle the implied freedom of political communication protected by the Australian Constitution.


Further reading: Banning foreign political donations won’t fix all that ails our system


Advocacy groups are one step removed from being able to directly change government policies and decision-making. It may be disproportionate to ban these groups from raising funds to robustly debate controversial policies.

And will this fix the system?

If ruled constitutional, a ban will certainly reduce the impact of overseas interests on domestic policy.

But the proposed ban is both too broad and too narrow. It is too broad because it may stifle legitimate public debate by targeting activist groups. It is too narrow because it does not capture all donations that might corrupt our political system.

Foreign donations are but one element of influence in our political system. The rhetoric on donations to date has focused on the fear of foreigners – the Chinese, in this case – exercising undue influence on Australian politics.

Yet, in 2015-16, foreign donations were a paltry 2.6% of total donations to political parties. In the last seven election periods from 1998-99 to 2016, foreign donations have amounted to between 0.03% and 6.13% of all donations.

Donations from rich Australians, unions or corporations can also influence our politicians to behave in corrupt ways. There have been concerns over donations by big business influencing mining, alcohol or gambling policy. Large donations have been followed by government decision-making that benefited these industries.

Caps on political donations of, say, A$1,000 that apply to all individuals, unions and corporations would better level the playing field. New South Wales already has caps on political donations of A$5,800 per party and A$2,500 for candidates. The state also bans donations from property developers and those in the tobacco, liquor and gambling industries.

Victoria has announced that it will implement a cap on donations by individuals, unions and corporations of $4,000 over a four-year parliamentary term.


Further reading: Victoria gets serious on its political donations rules – now it’s the federal government’s turn


The ConversationThe Australian government has started to take action to reduce the pernicious influence of money on our democracy. But more needs to be done to restore faith in our political system.

Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT University

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

Dastyari saga shows the need for donations reform, and for politicians to take more care


File 20171130 30912 qv466g.jpg?ixlib=rb 1.1
Labor’s Sam Dastyari has been sacked from his position as deputy Senate whip for his poor judgement.
AAP/Lukas Coch

Tony Walker, La Trobe University

New South Wales senator Sam Dastyari has been appropriately disciplined by Labor leader Bill Shorten for exercising poor judgement in his interactions with a Chinese businessman who is not an Australian citizen.

Dastyari has been sacked from his position as deputy Senate whip. This is his second demotion in little more than a year after having fallen foul of acceptable standards of political conduct.


Read more: Dastyari demoted again – but government demands he leave parliament


On that first occasion – confirmed by the release this week of a tape recording – Dastyari contradicted his own party’s policy that is critical of China’s activities in the South China Sea.

Compounding his difficulties, he had also accepted a A$5,000 donation from the Chinese businessman mentioned above to meet personal legal obligations.

On this latest occasion, it’s alleged that Dastyari went to the businessman’s house and advised him that conversations between the two needed to be conducted beyond the range of their mobile phones so as to avoid eavesdropping by Australia’s intelligence services.

Dastyari insists that he was not passing on classified information, but the very fact he was alerting a foreign businessman to the possibility of his phone being tapped by the security agencies justifies his sacking.

This was an act of stupidity, if not disloyalty, for an elected representative who claims he has nothing to hide.

The episode also calls Shorten’s management into question. Dastyari should not have been returned to a leadership role so quickly after his first display of poor judgement.

After his earlier demotion he spent just five months on the backbench. He should now remain there for a long time.

Need for clarity

In all of this there is a much bigger issue, and one that requires urgent attention. This is especially so given China’s continued rise, and its persistent efforts to influence politics among its neighbours.

As an important regional player, Australia is far from immune from Chinese “money” politics.

What is required as a matter of urgency is legislation that bans all foreign political donations, along with a separate register of lobbyists who are operating on behalf of foreign entities.

The Dastyari episode should have brought home to the government of the day the need for clear-cut protocols to preclude the possibility of foreign money tainting the political process.

Labor and the Greens have proposed legislation that would ban all foreign political donations. The government is now saying – belatedly – that it will advance legislation in the new year to bring this about. No reasonable argument exists to delay this process.

At the same time, government and opposition should prioritise the establishment of a National Integrity Commission – similar to state-based independent commissions against corruption – to bolster public confidence in the political process, now at a low ebb.

In a research paper, the Parliamentary Library points out that Australia is “one of the few countries where donations from foreign interest political parties or candidates is not prohibited”.

In defining “foreign interests”, the International Institute for Democracy and Electoral Assistance includes entities that “contribute directly or indirectly [and who] are governments, corporations, organisations or individuals who are not citizens; that do not reside in the country or have a large share of foreign ownership”.

That wording would seem to be a reasonable model for Australian legislation.

Of English-speaking democracies, only New Zealand allows overseas donations to parties, but these are capped at NZ$1,500.

Foreign influence

The Dastyari episode underscores the need for clear-cut rules to prevent those with links to foreign governments from using money to influence the political process.

The Chinese businessman in question, Huang Xiangmo, recently stepped down as chairman of the Australian Council for the Promotion of the Peaceful Reunification of China (ACPPRC), a front organisation for the United Work Department of the Chinese State.

The billionaire Huang, whose applications for Australian citizenship have been blocked by the Australian Security Intelligence Organisation, has deep connections in China’s ruling Communist Party.

None of this should be viewed as surprising, or necessarily cause for alarm, but what should be regarded as completely unacceptable is the use of money by foreign donors to influence policy in the service of a foreign government.

In Huang’s case, he withdrew a $400,000 funding pledge after Labor’s then-defence spokesman Stephen Conroy sharply criticised China’s territorial encroachments in the South China Sea.

What is required is clarity around foreign political donations. Politics and self-interest should not be allowed to stand in the way of reasonable steps to put in place regulations that ban all such donations.

In the Senate today, in several personal explanations, Dastyari insisted that he had not passed classified information to Huang, and that indeed he had never received briefings about relations with China that would have enabled him to do so.

That may well be the case, but perceptions in this case are fairly devastating.

Questions remain, such as:

  • Why did Dastyari need to go to the Chinese businessman’s house in the first place?

  • What did he need to tell Huang out of range of their mobile phones?

  • Who leaked the information about the encounter to Fairfax Media?

  • Was it leaked by a government agency for political purposes?

The point is this story has, potentially, some way to run, and may yet result in unexpected further developments.

What the whole unfortunate episode demonstrates is that public officials need to avoid carelessness in their interactions with anyone who might represent a foreign government. This is especially so in the case of a country whose methods of doing business politically are not aligned with those of Australia.

Finally, in his interactions with Huang, Dastyari may have served his interests better if he had familiarised himself with the example of the former Labor national secretary during the Gough Whitlam era.

David Combe served in the contentious period between 1973 and 1981, during which, it is alleged, he had sought financial assistance from Iraq for Labor’s losing 1975 election campaign. That support did not materialise, but revelations that it had been canvassed at all severely embarrassed Labor.


Read more: What is soft power? Hint: it’s not footing Sam Dastyari’s bills


After he relinquished his role as national secretary, Combe developed a lobbying business and in the process was befriended by a Soviet embassy official in Canberra whom it later emerged was a KGB agent.

In 1983, Prime Minister Bob Hawke expelled the Soviet official. A cloud descended on Combe, who was later found by the Hope royal xommission not to have compromised Australia’s security.

The ConversationHowever, if there is a lesson in the Combe and Dastyari episodes it is that those in positions of public trust cannot be too careful in the company they keep.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

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

Victoria gets serious on its political donations rules – now it’s the federal government’s turn



File 20170919 22691 1bdcijx
The Andrews government’s proposed reforms will significantly improve Victoria’s donations system.
AAP/Mal Fairclough

Yee-Fui Ng, RMIT University

Victorian Premier Daniel Andrews has announced a suite of reforms to the state’s political donations system. It includes:

  • a cap on donations by individuals, unions and corporations of A$4,000 over a four-year parliamentary term;

  • public disclosure of donations above $1,000;

  • a ban on foreign donations; and

  • real-time disclosure of donations.

Harsh penalties will be imposed on those who breach the rules, with fines of up to $44,000 and two years in jail.

These proposals follow several dubious events, including Liberal Party fundraiser Barrie Macmillan allegedly seeking to funnel donations from a mafia boss to the party after Opposition Leader Matthew Guy enjoyed a lobster dinner with the mafia leader.

According to Andrews, these changes are intended to:

… help put an end to individuals and corporations attempting to buy influence in Victorian politics.

Are these reforms good?

The proposed reforms will significantly improve Victoria’s donations system.

The caps on donations will level the playing field and reduce the risk of corruption in the state’s political system. It will prevent rich donors from exerting greater influence over politicians than those who lack the means to do so. Parties will no longer be able to rely on these wealthy donors to fund their election campaigns.

The caps equally target individuals, unions and corporations, meaning that money cannot be channelled through shady corporate structures to evade the rules. However, donations can still be channelled through the federal level, where there are no caps.

Real-time disclosures, which have already been introduced in Queensland, will improve the timeliness of disclosures. Combined with the lower disclosure threshold of $1,000, these are commendable steps towards enhancing transparency.

The move to ban foreign donations may face constitutional issues.

The tough penalties may deter people from breaching the rules. But proper enforcement by the Victorian Electoral Commission is still essential for the laws to be effective.


Further reading: Banning foreign political donations won’t fix all that ails our system


How will elections be funded?

Election campaigns are currently funded by a mix of public funding and private donations. As there will be caps on private donations, public funding of Victorian elections from taxpayers’ pockets will need to increase.

There will be debate as to the level of public funding that should be given. Public funding should adequately compensate parties, but not be overly generous or allow them to rort the system.

Detractors may argue that, in the age of social media, there may be cheaper ways for political parties to get their messages across, so less public funding would be needed.

It is tricky to work out how to allocate public funding between established political parties, minor parties and new parties. There is also a question of whether public funding should cover activities such as policy development and party administration.

But public funding is already part of Australia’s system. In the 2016 federal election, $62.8 million of public funding was provided, which is about half of federal campaign costs.

Victoria’s move toward more public funding is not unprecedented. New South Wales already has caps on political donations of $5,800 per party and $2,500 for candidates, as well as a ban on donations from property developers and those in the tobacco, liquor and gambling industries. This was accompanied by an increase in public funding of elections, amounting to about 80% of campaign costs.


Further reading: NSW is introducing full public funding of major political parties – by stealth


In Europe and Canada, there are high levels of public funding: between 50% and 90% of costs.

Another worry is that enterprising people and businesses might still circumvent the rules through creative means.

In the US, super PACs (political action committees) are special interest groups involved in fundraising and campaigning that are not officially affiliated with political parties. These groups can raise unlimited sums of money from corporations, unions, associations and individuals, and then spend this money to overtly advocate for or against political candidates.

If this possibility is not regulated in Australian jurisdictions, then our system will remain broken.

How can we improve our national system?

Australia’s political donations system remains fragmented. Ideally, we would have a uniform system with tough rules at both the federal and state levels, so that donors cannot easily evade the rules by channelling their money through more lax jurisdictions.


Further reading: Explainer: how does our political donations system work – and is it any good?


The time is ripe for reform. A federal parliamentary committee is looking into how to improve the federal donations rules. The committee will issue its report by December 2017.

The ConversationVictoria has thrown down the gauntlet – and it’s now time for the federal government to take heed.

Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT University

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

A full ban on political donations would level the playing field – but is it the best approach?



File 20170731 5295 wobin7
Sam Dastyari was the Labor Party’s chief fundraiser in New South Wales from 2010 to 2013.
AAP/Mick Tsikas

Yee-Fui Ng, RMIT University

Labor senator Sam Dastyari has called for a full ban on all political donations from individuals and corporations. Dastyari is no stranger to this issue: he was forced to resign from the shadow frontbench in 2016 following revelations that a Chinese company paid his travel expenses.

Opposition Leader Bill Shorten has said he is not in favour of Dastyari’s position:

When it comes to donations, I don’t think the taxpayer is ready to foot the bill for all political expenses in Australia, so I still think there is a role for donations.

Both Labor and and the Liberal Party are in favour of banning foreign political donations, but not all donations generally.


Further reading: Banning foreign political donations won’t fix all that ails our system


Why ban donations?

The key issue with political donations is whether large donations secure greater access to politicians than ordinary people have.

Another issue is whether large donations sway politicians to bestow illegitimate favours or adopt policies that directly benefit donors.

Dastyari was the Labor Party’s chief fundraiser in New South Wales from 2010 to 2013. He explained that some donors give money for philanthropic reasons or to support an ideological cause, while those in ethnic communities may donate as a sign of prestige. But he also explained:

Frankly, some people do it because of that very, very murky world of access. And they want access for outcomes.

The suggestion is that it’s possible to “buy” political access and influence through political donations.

The managing director of Transfield Holdings, Luca Belgiorno-Nettis, has likened political donations to the Latin saying do ut des: “you give in order to have given back”.

Where will the money come from?

Campaigning for election is expensive. To promote their cause, political parties tend to spend big bucks on high-impact slots on TV and radio, travel extensively, and perhaps hire fancy political consultants.

Membership of Australia’s political parties has declined over the years, so they’re now less able to raise money from membership fees. Parties do receive some public funding, but not enough to pay for an expensive election campaign. This has led to the parties being very reliant on political donations.

If we ban all donations from individuals and corporations, funding for political campaigns must come from elsewhere. Public funding of elections would need to increase, meaning taxpayers would bear a bigger burden in funding elections.

The current level of federal public funding is about half of what an election campaign costs. In some parts of Europe and in Canada, the level of public funding of elections is higher, amounting to between 50% and 90% of costs.

There are challenges in calculating how much public funding should be allocated to parties, including the entitlement of new or micro-parties.


Further reading: Explainer: how does our political donations system work – and is it any good?


Is a ban constitutional?

Any regulation of political donations needs to be consistent with the Constitution. Australia has a constitutionally protected freedom to communicate on political matters.

A ban on donations limits political communication by restricting the source of funds available to political parties and candidates to meet the costs of political communication.

The High Court has ruled that any limitations on the freedom of political communication must be proportionate and have a legitimate purpose. Banning donations would seem to have a legitimate purpose: to reduce undue influence on Australian politics and public policy. But it is difficult to predict how the court would rule on proportionality.

The High Court has not previously ruled on a complete ban on political donations, but it has held that caps on donations are constitutional.

Is this a good idea?

Dastyari’s proposal would definitely even up the playing field. It would eliminate the perception and reality that rich donors are able to “buy” access or influence in politics.

Besides fully banning donations, another option is to have a low cap on donations of, say, A$1,000. For example, NSW has a yearly cap of $5,800 per party and $2,500 for candidates. This would also level the playing field and reduce the influence of rich donors.

The ConversationDastyari is right: it is time to take action on the murky world of political donations. Let’s hope the government will heed the call for change.

Yee-Fui Ng, Lecturer, Graduate School of Business and Law, RMIT University

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

Turnbull government must find a way to rid Australia of foreign donations



File 20170616 26433 riow0n
Attorney-General George Brandis (left) and Special Minister of State Scott Ryan need to work together to reform foreign donations laws.
AAP/Dan Peled

Tony Walker, La Trobe University

Let’s start at the beginning on the vexed issue of foreign donations for political parties and candidates in an environment in which globalisation is adding to challenges in combating foreign interference in electoral processes.

Back in 1918, when the Commonwealth Electoral Act was drafted, no distinction was made between donors from Australia or overseas, or (effectively) between donors who were Australian citizens, non-citizens, or organisations.

In the last year of the 1914-18 war not much thought, if any, was given to the possibility that foreign interests would interfere with the Australian electoral process, or would have an interest in doing so.

But now, in an environment in which commercial and political interests leapfrog national boundaries in ways that must have seemed a remote possibility when the 1918 Commonwealth Electoral Act was drafted, it is time to subject the act to a comprehensive revision.

The aim of this exercise should be to exclude foreign donations. Those bans should extend to organisations engaged in the political process as lobby groups for one side or the other.

It would make little sense for bans to be applied to political parties themselves without also extending such bans to unions and business lobbyists.

As much as anything, such a provision would act as a deterrent to those who might seek to utilise foreign funds improperly.

Government ministers tell you it will be difficult to frame legislation that would stop all foreign funding.

What about grey areas, they ask, such as contributions by companies whose main business is in Australia, but whose headquarters is located elsewhere?

The London-headquartered Rio Tinto is one such example.

These are difficult issues and need to be worked through. There is no simple remedy.

Of course, one option would be to make political campaigns fully publicly-funded, thus obviating the need for private fundraising. But that arrangement potentially discriminates against new entrants who may not qualify for such public funding.

The Australian model in which funding is made available on the basis of past performance has merit. But its weakness is that it advantages the major parties disproportionately.

Then there is the whole murky area of funding for organisations like the conservative Institute of Public Affairs, or groups on the left, like GetUp, which supports progressive causes.

Under present circumstances, organisations like the IPA are not obliged to disclose their sources of funding. Since they are involved in the political process, these lobby groups should be required to open their books.

In the United States, funding for similar organisations is transparent, for the very good reason that just as sunlight is the best disinfectant so is transparency in ascertaining what might motivate groups to adopt certain positions.

The IPA, for example, opposed plain packaging for tobacco products on what it insisted were libertarian grounds. It would have been useful, however, to be apprised of whether the tobacco industry contributes funds to that organisation.

Lobby groups should be obliged to place sources of funding on the public register, especially since many of these organisations derive tax benefits from their status as not-for-profit organisations.

The whole question of “money talks” politics has come into focus in the past week or so with revelations in a Fairfax Media/ABC investigation of money being splashed around political parties by Chinese-born billionaires, one of whom is not an Australian citizen.

Clearly, the aim of these contributions has been to influence Australian politicians in a way that would make them more sympathetic to China’s aspirations.

Indeed, in one case, funding that had been promised to Labor was withheld after one of its spokesmen advanced a point of view contrary to China’s interests.

This was a clear example of money being used – or the threat of funds being withheld – for political purposes. It should be regarded as distasteful, and, potentially intimidatory.

If there is a rule of thumb in politics, it is that money does not bring purity, rather the reverse.

Special Minister of State Scott Ryan, who has responsibility for an overhaul of the Commonwealth Electoral Act as it relates to political donations, acknowledges that grey areas exist that will be difficult to legislate.

In framing the required legislation, Ryan might refer to the Political Finance Database of the International Institute for Democracy and Electoral Assistance, an intergovernmental organisation that supports sustainable democracy worldwide.

The IDEA has a formula that would be helpful in establishing exactly what constitutes a “foreign interest”.

It defines such interests as entities that:

contribute directly or indirectly [and who are] governments, corporations, organisations or individuals who are not citizens; that do not reside in the country or have a large share of foreign ownership.

In the case of the latter provision, framing regulations to stop foreign donations would present challenges. Rio Tinto is just one example of companies with large stakes in Australia, but domiciled overseas.

Perhaps the most compelling argument for an Australian ban on political donations is that, apart from New Zealand, Australia is the only English-speaking democracy to permit such donations.

In New Zealand, overseas donations are capped at $NZ1,500.

In Australia no such cap applies.

However, donations to parties and candidates above $13,200 require the name and address of donor to be supplied. This information must be made available at the end of each financial year.

One reform Ryan might consider is to oblige disclosure more quickly. In last year’s federal election, Prime Minister Malcolm Turnbull made a very significant personal financial contribution to the Liberal Party campaign. But under law, this donation did not need to be disclosed in a timely manner.

Turnbull did reveal his contribution – after the election and only under media pressure.

In the case of that contribution it could be argued that wealth in Turnbull’s case enabled him to fund a campaign that gave him an advantage over his opponents.

On the other hand, the conservative side of politics would say that Labor has an inbuilt funding advantage because it can rely on the support of the union movement.

In recent years, several attempts have been made to clean up what is clearly an unsatisfactory state of affairs.

In 2010, the Labor government introduced the Commonwealth Electoral Amendment (Political Donations and Other Measures Bill) that would have banned donations of “foreign property”.

The bill passed the House of Representatives, but was not proceeded with in the Senate and lapsed at the end of the 43rd parliament.

Labor and the Coalition toyed with the introduction of a donation and disclosure reform bill in 2013, but nothing came of these efforts.

In this latest 45th parliament the Greens have restored their own Commonwealth Electoral Amendment Bill that bans donations of foreign property. This version lapsed at the dissolution of the 44th Parliament.

Now is the time for this whole issue to be re-visited.

The ConversationRyan, in conjunction with Attorney-General George Brandis, needs to come up with a bill that seeks to forestall the possibility of candidates and parties being bought and sold in a monied environment that is infinitely more susceptible to influence peddling by foreign interests than it was a century ago.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

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

Turnbull believes in timely disclosure of donations – just not his


Michelle Grattan, University of Canberra

During his Wednesday appearance at the National Press Club Malcolm Turnbull observed he was not a “political animal” like some of his opponents.

He meant it as a virtue – he was extolling his pragmatism on energy policy. But he failed, to his detriment, to show a political nose on something closer to home.

Having agreed that it would be desirable to have political donations disclosed in a more timely and transparent way (and flagging he opposed foreign donations), he then refused to say how much he had given in the last campaign.

The latest donations list had come out only hours earlier but Turnbull’s contribution – speculated to be A$1 million or $2 million – was missing, apparently because of a timing loophole.

So it was obvious Turnbull would be asked the question, equally clear that he would be called a hypocrite if he supported a general change but took advantage of the secrecy to which he is legally entitled.

What was the point? The story, in the broad, is out there (unless the amount is much higher than suggested). The figure will presumably emerge officially in the next disclosure round – that much closer to the election. And his coyness just diverted attention from his main messages about jobs, energy, education and other parts of his 2017 agenda.

How much he kicked in for his own re-election wasn’t the only delicate point on which Turnbull would not be drawn at the Press Club.

He was notably reluctant to buy into the issue of preferences for One Nation, which is topical in the context of the March election in
Western Australia. This week the Herald Sun reported there had been talks between the WA Liberals and Pauline Hanson about preference swapping.

Asked whether he would encourage WA Premier Colin Barnett to follow the precedent of Liberal predecessor Richard Court who did not preference One Nation, Turnbull said this was a matter for the WA division and for Barnett.

Later he was asked how Hanson’s views might have evolved in the last 15 years that made her “in any way less offensive” than when John Howard put her last. And where would Hanson be on his how-to-vote cards next election?
“I am not a commentator on the political evolution of One Nation,” Turnbull replied.

“We deal with all of the parties in the parliament including One Nation. … We respect every single member and senator… All of them have been democratically elected and we seek their support on legislation.”

In her first iteration, Hanson caused intense debate on the conservative side of politics about how her party should be handled. Many prominent Liberals argued passionately in terms of principle. It’s not like that any more.

Second time round, Hanson has changed a little – but only a little. The Liberals seem to have changed a good deal more. We’ll see what happens at the federal election on preferences but in the meantime, power is power and Hanson, with her Senate position, has quite a lot of it.

For Turnbull, despite abhorring many of her views, the relationship with Hanson and her party is all about transactions.

Just as it is with Donald Trump and his immigration crackdown – on which Turnbull keeps his thoughts to himself – and that deal to take Australia’s offshore refugees.

Turnbull had the refugee agreement, done with the Obama administration, reconfirmed in his weekend phone conversation with the President.
But on Wednesday it become mired in fresh confusion and uncertainty.

White House press secretary Sean Spicer reiterated that the deal, which he said involved some 1250 people, had the green light, while stressing there would be “extreme vetting” of proposed settlers. But then in a clarification to the ABC the White House cast doubt on how firmly it was locked in.

The ABC quoted a White House source saying that if Trump did go ahead with the deal, it would only be because of the United States’ “longstanding relationship with Australia”.

Turnbull remains publicly confident in Trump’s private assurance. The test of this confidence, and of the President’s word, will be how many refugees from Nauru and Manus Island eventually do land on US soil after the “extreme vetting” process. We might be waiting a while before we know the answer.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

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

Messianic Jewish Church Won’t Appeal Israeli Court Ruling


Congregation sought apology for riotous attack on baptism service.

ISTANBUL, July 14 (CDN) — A congregation of Messianic Jews in Israel who recently lost a lawsuit against an ultra-orthodox Jewish group that allegedly incited a riot against them has decided not to appeal their case, the church’s pastor said.

After meeting with his congregation and members of the Messianic community in Israel, Howard Bass, pastor of Yeshua’s Inheritance church in Beer Sheva, said that although there are strong legal grounds for an appeal, he believes it is not God’s will to do so.

“We didn’t see that it’s right to appeal, even though there is good legal basis. But we don’t feel it’s the Lord’s will to appeal,” Bass said, later adding he felt the verdict was “totally distorted.”

In 2007, Bass filed suit against Yehuda Deri, chief Sephardic rabbi in the city of Beer Sheva, and Yad L’Achim, an organization that fights against Messianic Jews in Israel, for allegedly inciting a riot at a December 2005 service that Bass was leading.

On Dec. 24, 2005, during a baptismal service in Beer Sheva, a group of about 200 men pushed their way into a small, covered structure being used to baptize two new Christians and tried to stop the service. Police were called to the scene but could not control the crowd.

Once inside the building, the assailants tossed patio chairs, damaged audiovisual equipment, threw a grill and other items into a baptismal pool, pushed Bass into the pool and broke his glasses.

In the days before the riot, Yad L’Achim issued notices to people about a “mass baptism” scheduled to take place at the facility in the city of 187,900 people, 51 miles (83 kilometers) southwest of Jerusalem. In the days after the riot, Deri bragged about the incident on a radio talk show, including a boast that Bass had been “baptized” at the gathering.

Bass demanded either a public apology for their alleged role in the attack, or 1.5 million shekels (US$389,052) from the rabbi and Yad L’Achim.

The case, Bass said, was to “honor the name of Jesus Christ in Israel.” He said he sought monetary damages "to show how serious the offenses were under the law."

The 2005 incident was the second time the church had to deal with an attack after Yad L’Achim disseminated false information about their activities.

On Nov. 28, 1998, a crowd of roughly 1,000 protestors broke into a Yeshua’s Inheritance service after the anti-Christian group spread a rumor that three busloads of kidnapped Jewish minors were being brought in for baptism. The assailants threw rocks, spit on parishioners and attempted to seize some of their children, Bass said.

Bass decided to file the 2007 suit after consulting with members of his congregation and the greater Messianic community in Israel. On June 29, he held much the same meeting, with participants deciding not to appeal. Bass relayed details of the meeting in a group e-mail sent to interested parties.

“No one present, nor any who have communicated with me in the past few days, had a conviction that an appeal is the clear will of God,” he said in the e-mail. “Some were uncertain; others were against.”

The judge issued his decision May 24. Bass read about the decision on May 30 on a government website. The judge ruled that Bass’ attorneys did not prove that the rabbi or the group incited the riot.

“He’s saying what happened inside the walls is separate from what happened outside the walls,” Bass said.

He said he was “astonished” at the judge’s bias in the decision.

“It was a bit amazing to see how one-sided it was,” he said, later adding, “It’s not a righteous judgment, it is a bad judgment.”

Bass said he believes the verdict is a “message from God” that injustice toward Jews who accept Jesus as the Messiah is now the “state of things” in Israel.

The judge ordered Bass to pay a fine to the defendants and cover their legal expenses for a total of approximately 155,000 shekels (US$40,123). The judge gave Bass until June 11 to pay the fine. Because of an outpouring of financial support, the fees were being rapidly paid off, Bass said.

“It’s amazing how quickly people started donating,” he said. “That to me is a further indication of God’s favor in the lawsuit. He’s covered it.”

He said a substantial portion of the donations came from inside Israel.

Also in his e-mail, Bass admitted to approaching the case with his hands tied out of respect for others.

“We did not take to court certain persons who clearly were instrumental in the riot, knowing that they would not testify against the Chief Rabbi or against Yad L’Achim,” Bass said. “We strived to respect the Chief Rabbi because he is the Chief Rabbi of the city, despite his total lack of regard” for the church.

 

Sanctioning Violence

Bass said the verdict may embolden those who want to attack Messianic Jews in Israel. At minimum, he said, the verdict leaves open the potential for future violence.

“They were given nothing to restrain them,” he said. “They were not warned at all by the judge to be careful of what they do.”

The Yeshiva World, a newspaper that caters to the Orthodox Jewish community, has called Messianic Jews both “missionaries” and a “cult.” The newspaper quoted a statement made by Rabbi Dov Lifschitz, founder and chairman of Yad L’Achim.

“We mustn’t become complacent in the face of the ongoing efforts of the missionaries, even as they are licking their wounds from this loss,” Lifschitz said. “This ruling encourages us to continue to fight them with all the legitimate means at our disposal.”

Bass said he understands that not appealing the court loss may lead to the impression that his faith community accepts the judge’s ruling, and because of that, some people in Israel may now side with Yad L’Achim and other anti-Messianic groups.

“We’ve leaving ourselves open to all kinds of opinions,” he said.

But Bass said he is looking at the case in the long term and through the eyes of God. He said that Jesus’ trial was the perfect example of a public defeat and a travesty of justice that God used in a great way.

“His court case seemed like a loss according to the world at the time,” Bass said.

Report from Compass Direct News