Life as an older renter, and what it tells us about the urgent need for tenancy reform



File 20180925 149973 ln0972.jpg?ixlib=rb 1.1
Uncapped rent increases and ‘no grounds’ evictions leave older women particularly at risk of substandard housing conditions or even homelessness.
Shutterstock

Emma Power, Western Sydney University

The New South Wales government has introduced a bill to reform the Residential Tenancies Act. This act sets out the rights and responsibilities of landlords and tenants in private rental accommodation in NSW.

The bill’s proposed limit on rent increases to one in every 12 months is essential, as are the proposed minimum standards for rental accommodation. However, my ongoing research with single older women renting in Sydney points to an urgent need for a cap on the value of rent increases and for an end to “no grounds” eviction. Victoria adopted these measures earlier this month.

Reform is essential. Growing numbers of Australians rent their housing and increasing proportions are expected to rent long-term. This makes it essential that private rental housing meets the need that every person has for a secure and affordable home.




Read more:
An open letter on rental housing reform


It’s getting harder for older renters

It is getting harder for older renters to find adequate, appropriate and secure housing. Older women – the focus of my work – are at particular risk. This is due to longer life expectancy, lower incomes across the life course, and less access to benefits like superannuation. Women also experience a greater loss of income and housing standard than men do after relationship breakdown, and are at greater risk of domestic violence.

Their stories point to the role of flaws in the Residential Tenancies Act in compounding housing insecurity.

Rising rents add to hardship

Rising rents were a problem for nearly all women I spoke with. They depleted women’s budgets, leaving little money to buy food or pay for utilities. Many relied on local charities for food and help to pay energy bills.

One woman described how she would add protein to her meal by buying a single chicken breast, slicing it thinly and freezing each piece separately to be defrosted over the next week or so. Another relied on vegetables the local greengrocer bundled and discounted before throwing out.

In winter, when heating bills mounted, she relied on a local church with a weekly food pantry. This food, donated by local supermarkets and community members, was frequently past its “best before” date. As a low-paid community worker living in an area with a significant number of disadvantaged families, she collected food alongside her clients.

Two women coped by moving into their cars. They subsisted on tins of food that they could hide in the car. At night they kept themselves safe by parking in familiar locations.




Read more:
More and more older Australians will be homeless unless we act now


Living with substandard conditions

Rent rises also made it difficult to find appropriate housing. Affordable housing was often substandard. Many had difficulties getting landlords to agree to repairs.

One woman described how her rented unit began leaking. The leak was severe and lasted for nearly two years. In this time she lived with increasing mould and lost access to nearly 40% of her home. She sought repairs from the landlord, but only cautiously, because she was afraid of eviction.

When the leak was eventually fixed her rent went up 20%. That left her with only A$30 a week after rent, essential bills and transport. She couldn’t afford food and relied on local charities until she found cheaper housing in a distant, transport-poor suburb.

Another described a similar leak:

When it rained the water would come straight down into the doorway. And that was the only way you could get into the house […] it was in the house and even in the bedroom.

Despite this the owner increased the rent. The real estate agent notified her of the increase by letter, but distanced herself from repair requests when confronted in person stating: “Well, we can’t do anything [to fix the property] until the owner says we can.”

The agent helped the landlord to make more money from their investment, while illegally blocking this woman’s entitlements to secure and usable property. The impact on her capacity to take care of herself was significant. Living with the leak risked her health. However, challenging the landlord – pushing them to repair the leak – risked eviction.




Read more:
Rental insecurity: why fixed long-term leases aren’t the answer


Rethink the value of rental housing

These stories show the need to rethink how we value and regulate private rental housing. It is time that we recognise the fundamental role that housing plays in our ability to meet basic needs – for shelter, warmth, food and above all a sense of security and home.

When housing is too expensive, unsafe or inadequate, our capacity to meet our care needs deteriorates and our health suffers. For women in my research their capacity to age in place – and even to remain housed – was challenged.

This is not good for tenants or landlords. Although popular wisdom suggests tenants and landlords have different interests, they in fact have very similar concerns: both benefit from secure tenancies and rental properties that are well maintained and cared for.

The proposed amendments to the act are a good starting point.

Restrictions on the number of rent increases in a year are essential. However, the women in my research struggle not just because of the number of rent increases they face. They find themselves in precarious situations because of the size of the increases, which in some cases left them unable to afford necessities like food.

Minimum housing standards are also essential. The women in my research cannot begin to maintain their health or age well at home if their home leaks or does not meet other basic standards.




Read more:
Dickensian approach to residential tenants lingers in Australian law


But perhaps more pressing is the need to end no grounds evictions. For women in my research, repair requests carried the risk of eviction. This left many afraid to ask for repairs. They lived in unhealthy and unsafe housing rather than risk eviction in a market with few affordable options.

Landlords in many areas can readily replace tenants. And an evicted older woman can easily end up living in her car.

Ending no grounds evictions will have no impact on landlords who do the right thing. They will still be able to terminate a lease on reasonable grounds such as renovating or moving into the property. It would, however, help put an end to retaliatory evictions, which in turn would support efforts to maintain minimum housing standards.


This article is based on research findings presented in a talk by the author at an event, Fair for Everybody: Reforming Renting in NSW, hosted at Parliament House on Wednesday.The Conversation

Emma Power, Senior Research Fellow, Geography and Urban Studies, Western Sydney University

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

Advertisements

An open letter on rental housing reform



File 20180924 85758 16rnxyf.jpg?ixlib=rb 1.1
The right of landlords to terminate a lease with no grounds is the most serious deficiency in residential tenancy laws in New South Wales.
Shutterstock

John Watson, The Conversation

Following a review of the New South Wales Residential Tenancies Act 2010 in 2016 and extended consultations, the NSW government has introduced a number of reforms to parliament. Debate is expected to occur this week. However, without reform to current eviction proceedings, many housing advocates have expressed concern that these generally good proposals will have little effect. Today, 45 housing researchers from a range of disciplines have signed the following open letter.

We are academics who research and teach about housing. We come from a range of disciplines – for example law, economics, social sciences, planning – and many of us have worked variously with housing providers, tenants’ groups and government agencies on housing issues. We have in common commitment to the principle that everyone should have a secure, affordable home of decent standard, whether they own or rent.

Too often, however, our rental housing sector fails to deliver on this principle. There are numerous reasons for this; one of them is the legal insecurity of tenants under current New South Wales residential tenancy laws. In particular, the provision for landlords to give termination notices, with no grounds, at the end of a fixed-term tenancy or during a continuing tenancy is contrary to genuine security.

“No grounds” termination notices give cover for bad reasons for seeking termination, such as retaliation and discrimination. The prospect that a “no grounds” termination notice may be given hangs over all tenancies, discouraging tenants from raising concerns with agents and landlords and undermining the legal rights otherwise provided for by their leases and the legislation.

The deficiencies of our current laws are becoming worse, as more households rent, and rent for longer into their lives. About 32% of NSW households rent and this proportion is growing. Over the five years to 2016, 63% of the net growth in the number of NSW households was households in rental housing. And 42% of NSW renter households include children.

Our deficient current laws are also increasingly out of step with tenancy laws in comparable jurisdictions. Many European countries, as well as most of the Canadian provinces and the largest US cities, do not provide for “no grounds” terminations by landlords.

Last year, Scotland reformed its tenancy laws to remove provisions for “no grounds” terminations and replace them with prescribed reasonable grounds for termination. In Australia, Tasmania has for some years not allowed “no grounds” terminations of continuing tenancies. This month, the Victorian Parliament amended its residential tenancies legislation to remove provision for “no grounds” termination notices for continuing tenancies and for fixed-term tenancies, except at the end of the first fixed term.

We call on the NSW state government to improve security for renters, by legislating to end no-grounds termination by landlords and providing instead for a prescribed set of reasonable grounds for terminations.

These reasonable grounds would include grounds already in the legislation, such as rent arrears and other breaches by the tenant, and sale of the premises, as well as new grounds, such as where the landlord needs the premises for their own housing, and where the premises are to be renovated, demolished or changed to a non-residential use.

The prescribed reasonable grounds should have different notice periods, reflecting their different degrees of urgency and priority. Proceedings on notices should go, as they currently do, to the NSW Civil and Administrative Tribunal, and the tribunal should determine whether the ground exists and whether termination is justified in all the circumstances.

This reform would make all tenants feel more secure, without unduly restricting landlords in reasonable uses of their properties. The only inconvenience would be to the retaliators, the discriminators and those who cannot cope with even a modest level of accountability. If the reform prompted these landlords to leave the sector, they would sell to a new home owner or to a more professionally minded landlord – either of which is to the good.

There is more to be done across a range of policy areas to improve the functioning of all aspects of our housing system. We need more accessible home ownership, a differently structured and more professional market rental sector and a revitalised social housing sector. These changes require a comprehensive housing policy, coordinated across areas and levels of government and carried out over a long term.

But, in tenancy law, the single most important reform is ending “no grounds” termination by landlords. And the parliament could do it now.

Signatories

Dr Chris Martin, Research Fellow, Faculty of Built Environment, University of New South Wales

Professor Brendan Edgeworth, Faculty of Law, University of New South Wales

Professor Chris Gibson, Human Geography, University of Wollongong

Professor Keith Jacobs, Director, Housing Community Research Unit, University of Tasmania

Professor Alan Morris, Institute for Public Policy and Governance, University of Technology, Sydney

Professor Kath Hulse, Director Centre for Urban Transitions, Swinburne University of Technology

Professor Hal Pawson, Housing Research and Policy, University of New South Wales

Professor Pauline McGuirk, Director Australian Centre for Culture, Environment, Society and Space, Faculty of Social Sciences, University of Wollongong

Professor Peter Phibbs, Urban Planning, The University of Sydney

Professor Bill Randolph, Faculty of Built Environment, University of New South Wales

Professor Eileen Webb, Faculty of Business and Law, Curtin University

Adjunct Professor Michael Darcy, School of Social Sciences and Psychology, Western Sydney University

Associate Professor Hazel Easthope, Faculty of Built Environment, University of New South Wales

Associate Professor Daphne Habibis, School of Social Sciences, University of Tasmania

Associate Professor Kurt Iveson, Urban Geography, The University of Sydney

Associate Professor Kristian Ruming, Department of Geography and Planning, Macquarie University

Associate Professor Judith Yates, School of Economics, The University of Sydney

Dr Gareth Bryant, Political Economy, The University of Sydney

Dr Nicole Cook, Lecturer in Human Geography, University of Wollongong

Dr Louise Crabtree, Senior Research Fellow, Institute for Culture and Society, Western Sydney University

Dr Laura Crommelin, Research Lecturer, Faculty of Built Environment, University of New South Wales

Dr Tanja Dreher, Associate Professor, School of Arts and Media, University of New South Wales

Dr Christina Ho, Senior Lecturer, Social & Political Sciences, University of Technology, Sydney

Dr Justine Humphry, Lecturer in Digital Cultures, Department of Media and Communications, The University of Sydney

Dr Edgar Liu, Senior Research Fellow, Faculty of Built Environment, University of New South Wales

Dr Sophia Maalsen, IB Fell Post-Doctoral Research Fellow, Faculty of Architecture, Design and Planning, The University of Sydney

Dr Daniel Ooi, Research Fellow, Victoria University

Dr Justine Lloyd, Senior Lecturer, Department of Sociology, Macquarie University

Dr Jean Parker, Research Associate, Department of Gender and Culture Studies, The University of Sydney

Dr Madeleine Pill, Researcher, Department of Government and International Relations, The University of Sydney

Dr Emma Power, Senior Research Fellow, Institute for Culture and Society, Western Sydney University

Dr Dallas Rogers, Program Director, Master of Urbanism, The University of Sydney

Dr Ben Spies-Butcher, Senior Lecturer, Economy and Society, Macquarie University

Dr Adam Stebbing, Director of Bachelor of Social Science, Department of Sociology, Macquarie University

Dr Amanda Tattersall, Post-Doctoral Fellow, Henry Halloran Trust, The University of Sydney

Dr Lawrence Troy, Research Fellow, Faculty of Built Environment, University of New South Wales

Dr Robert Mowbray, Older Persons Project Officer, Tenants’ Union NSW

Deb Batterham, Researcher, Launch Housing

Zahra Nasreen, Researcher, Department of Geography and Planning, Macquarie University

Pratichi Chatterjee, PhD Candidate, Faculty of Science, The University of Sydney

Sophie-May Kerr, PhD Candidate, University of Wollongong

Craig Lyons, PhD Candidate, School of Geography and Sustainable Communities, University of Wollongong

Gemma McKinnon, Researcher, University of New South Wales

Bill Swannie, Academic, College of Law and Justice, Victoria University

Alistair Sisson, PhD Candidate & Research Assistant, School of Geosciences, The University of SydneyThe Conversation

John Watson, Section Editor: Cities + Policy, The Conversation

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

Reforming our political system is not a quick fix. Here’s a step-by-step guide to how to do it


File 20180910 123134 1gyn518.jpg?ixlib=rb 1.1
Regaining public trust in government starts with steps like capping political donations and establishing a federal anti-corruption body.
Lukas Coch/AAP

Mark Triffitt, University of Melbourne

With public trust in government already in serious decline over the last ten years, the downfall of yet another prime minister between elections underlines both the importance and urgency of making serious changes to our political system.

The key to renewing Australia’s democratic system is to view it as our next major reform challenge, just as economic renewal was prioritised in the 1980s and ’90s.

So far, however, the changes proposed by political commentators, academics and think tanks are largely single reforms, such as citizens’ juries to seek more public input into policy, or fixed four-year terms for federal parliament to allow more time to tackle big problems and implement complex policy.

These fall short of matching the scope of the challenge: democratic renewal requires multi-level and multi-step change addressing interconnected issues. In short, we need a comprehensive roadmap for political reform.


https://datawrapper.dwcdn.net/zqYaz/4/


Charting a roadmap for renewal

We first need to recognise that two distinct crises are contributing to declining public trust in government.

The first is a “crisis of representation”. This results from a fragmented, highly diverse electorate that increasingly fails to connect with major parties. The major parties are left with shrinking, less diverse memberships.

The second is a “crisis of functionality”. Our democratic system is increasingly unable to deliver good public policy in a consistent or coherent way, and to convince the public to support it.




Read more:
Australians think our politicians are corrupt, but where is the evidence?


This “crisis of functionality” is partly due to the decline of the public service and its ability to deliver independent, quality policy advice to ministers. Also to blame is an increasingly myopic approach to policymaking by parties obsessed with short-term polling and point-scoring.

But it is also linked to the “crisis of representation”. As an increasingly disconnected public turns its back on politicians, it also loses trust in their ability to deliver sound policy programs and decisions.

A two-stage approach

The dual nature of these problems underlines a critical issue. The roadmap not only needs to link up separate reforms, it also needs to be rolled out in stages to persuade a highly distrustful public that democratic renewal is in the interests of everyone – not just those in power.

The first stage is what I would call “creative governance”. The aim here is to start restoring public trust in government by making immediate and tangible improvements to the political system.

These reforms would have clear precedents or strong levels of public support. For example, national uniform caps on campaign spending, like those recently introduced in New Zealand, would reduce money in politics. This in turn would put the onus on politicians to explain their policies with more fact-based detail instead of expensive, slogan-based advertising campaigns.




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


Other possible reforms include real-time disclosure of all political donations, which is already in effect in Queensland, and the establishment of a federal anti-corruption commission, also already in existence at the state level.

Recent surveys show that a majority of Australians support both moves and believe these would improve transparency in the political system.

Setting the scene for deeper reform

The more difficult second stage of political reform is what I call “systemic renewal”. The goal here is to realign our democracy with the fundamentally changed dynamics and expectations of how it should work in the 21st century.

For instance, a major overhaul of our federal-state constitution is needed to update a framework originally written in the 1890s. It’s replete with outdated rules, processes and responsibilities.

However, this has largely failed to capture the public’s imagination because of the arcane way experts talk about the problem and potential solutions. Reframing it as part of a broader democratic renewal to usher in a more nimble and representative political system is much more likely to gain public traction.




Read more:
Ideas for Australia: Voters have a good choice of politicians, but need to overcome their mistrust of them


Major reforms are also needed to make federal parliament more effective and less dysfunctional. These might include eliminating Question Time and mandating a strict code of ethics for MPs aimed at addressing toxic behaviours like the bullying crisis rocking the Coalition government.

Reforms like these would raise the level of decorum in parliament and set a new standard for parliamentary behaviour. This would increase public confidence that politicians both reflect and are accountable to modern values.

Lastly, a “Citizens’ Assembly” could be formed of randomly selected citizens to act as a non-partisan check and balance on parliament. Such an assembly could be modelled after the citizens’ juries that have been trialled successfully around the world, including Ireland, Canada and South Australia. The assembly would be given the responsibility to chart out long-term, national policy blueprints in areas like health, tax and education.

With this kind of direct voice on a national level, the public would be much more involved in policymaking and thus more vested in the success of their government.

Thinking like reformers

What’s clear is we must do the hard strategic thinking of reformers if we are serious about fixing our political system.

Like every credible plan to reform a major institution showing multiple dysfunctions, we need more than one reform idea. We also need to test these ideas against the root causes of the institution’s malaise. And we need to organise them into a strategic and practical sequence.

The alternative is to believe Australian democracy will magically right itself. Which is no alternative at all.The Conversation

Mark Triffitt, Lecturer, Public Policy and Political Communications, University of Melbourne

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

Enough is enough on section 44: it’s time for reform


H. K. Colebatch, UNSW

Among the many lessons the recent Liberal leadership spill has taught us is that the problems arising from section 44 of the constitution, which already has quite a hit list, have not gone away, and there may be more to come.

The section deals with disqualifications from parliament. The problems with it have not gone away, but have become part of the political struggle. They are also not only about citizenship, nor are they simply a matter of doing the paperwork.

It is not clear what the disqualification provisions are, or how they are enforced. And, finally, the problem is not going to be resolved if politicians continue to ignore it.

When section 44 issues were first raised, then Prime Minister Malcolm Turnbull tried to use them as a way of attacking his parliamentary opponents. The ALP is now repaying the favour. Both sides have been more interested in using the issue as a weapon than reaching a solution.




Read more:
Could Section 44 exclude Tony Abbott and Barnaby Joyce from parliament?


More than dual citizenship

The original disqualification questions were about holding foreign citizenship. But it is now being asked if the special jobs created for Tony Abbott and Barnaby Joyce breach the “office of profit” provisions, while Peter Dutton’s business dealings have come under scrutiny for a potential s44 breach.

Meanwhile, the question of disqualification on the basis of an entitlement to foreign citizenship, or to its “rights and privileges”, remains unaddressed. If the High Court were to look into the cases of the MPs with such entitlements, and to rule consistently with its earlier decisions, up to a third of the parliament could be disqualified.

But the whole issue is clouded in uncertainty. The section is very badly drafted; partisan conflict has meant that few cases have made it to the High Court and, when they have, the court’s judgments have been, in Jeremy Gans’s words, “too rare, sparse and cryptic for anyone to confidently rule most Australians in or out” of eligibility.

Different judges have reached different conclusions on the same cases. Even those who have agreed with the other judges have done so for different reasons, so no consistent rule can be derived from the case.

Judges are more interested in reaching a decision on the case in front of them than articulating a general rule that can guide future action. So while QCs may make declarations about how the High Court would rule in any case put to them, as the Commonwealth Solicitor-General said on the Dutton case, “it is impossible to predict” how the High Court will rule on a particular case.

The fact that no one is responsible for applying and enforcing these provisions exacerbates the uncertainty. While section 34 on qualifications is amplified by the Electoral Act and administered by the Australian Electoral Commission, there is no comparable authority for determining disqualifications.

The constitution provided three avenues: the ancient right of parliament to determine if members were qualified to sit; some ways in which the High Court could determine disputes as a Court of Disputed Returns; and the possibility of lawsuits by citizens against members whose eligibility was challenged.

This has meant there is no consistent enforcement. The AEC has refused to involve itself in judging disqualifications. The parliamentary power to determine is completely discredited by the partisan motivation of the politicians. The High Court will only hear cases brought within 40 days of the election unless these are referred by parliament. And the first time anyone used the Common Informers Act, the High Court sniffily declared the act was not properly drafted and was in breach of the constitution. The court threw out the case, nullifying the provision specifically inserted in the constitution to give ordinary citizens the right to enforce the disqualification rules through the courts.

Turnbull announced that all MPs would be asked for a declaration that they were not disqualified by reason of holding a foreign citizenship. These declarations were recorded in a citizenship register, but no action was taken as a result. The register appeared to be an empty gesture.

So we have rules on disqualification that are applied only to those who are honest enough to resign or unlucky enough to find a parliamentary majority organised to refer their case to the High Court.

The multiparty parliamentary committee investigating the problem (the third one to do so) concluded (like its predecessors) that section 44 is not fit for purpose. It proposed a constitutional amendment to put the determination of disqualifications back into the hands of parliament. But Turnbull rejected this proposal before the committee had even proposed it.

Where do we go from here?

Probably everyone in Canberra is too shell-shocked right now to think of more than surviving the upcoming election. But, after the election, the best starting point would be the parliamentary committee’s recommendation to put responsibility back into parliamentary hands. This would enable work to begin on how best to deal with the tensions arising from citizenship, public employment, business dealings and so on, and what sort of regulatory structure would be most appropriate.

The question is how to overcome the inertia and partisan opportunism that have impeded the search for a resolution of the problem up to now. The most promising course would be the development of a cross-party advocacy network, building on the work of the Joint Standing Committee on Electoral Matters. It would help if members of the public were to write to or ring their MPs and senators to express their concerns.




Read more:
Explainer: is Peter Dutton ineligible to sit in parliament?


If this sounds too unambitious, those with the energy to do so could organise to challenge, within the 40-day window, the election of all those members and senators who are entitled to another citizenship or to its rights and privileges.

How many were caught in this net would depend on how many of the present representatives were re-elected, but it would probably not be less than 20-25% of the parliament. For them, the exclusion would be permanent, because while a foreign citizenship can be renounced, an entitlement cannot be: it remains in the law of the foreign country, and the High Court recognises foreign law as the determinant of citizenship status.

The possibility of having a quarter of the parliament thrown out in this way might just be enough to induce the parliamentarians to support a move to a better system.The Conversation

H. K. Colebatch, Visiting Professorial Fellow, UNSW

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

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.

Rising reliance on personal income tax signals need for bolder reforms


Phil Lewis, University of Canberra

The Parliamentary Budget Office (PBO) has just released a report on trends in Commonwealth taxation receipts. While supporting the expectations of a budget in balance by 2019-20, it exposes worrying trends in the balance of the burden of taxes in Australia. In particular, its analysis of trends in the composition of tax revenue identifies an increasing reliance on personal income tax.

The PBO shows that tax revenue from labour (mostly income tax) was 8.6% of GDP in 1971-72. By 2015/16, this had risen to 12.6% of GDP. Over the same period, tax collections from capital (mostly company tax) as a percentage of GDP was virtually unchanged, from 3.3% to 3.2% – although this increased noticeably during the “economic boom”, which ended when the Global Financial Crisis (GFC) hit in 2007.

Taxes on consumption (such a GST and excise duties) were 5.3% of GDP in 1971-72 and 5.7% of GDP in 2015-16. While the introduction of the GST in July 2001 raised consumption taxes temporarily, revenue from both GST and particularly excise taxes has been in decline as a percent of GDP since.

Figure 2 from the report shows these trends over the decades.

Trends in revenue from categories of Commonwealth taxes.
Source: ATO data and PBO analysis

The main emphasis of the PBO report is on the period since 2001-02. The chart below shows the increased reliance on income tax and declining importance of taxes on consumption and capital.

What is driving these shifts?

The main reason for the rise in income tax revenue is “bracket creep” as incomes increase and taxpayers move into higher marginal tax brackets. This is due to successive governments not fully indexing tax brackets to increases in CPI or average earnings.

Meanwhile, consumers have been changing their tastes and responding to prices by altering their consumption patterns. The so-called “sin taxes”, or rates of excise duties on alcohol and tobacco, have increased significantly over time.

This has been particularly true for tobacco where the volume of consumption has fallen as fewer people smoke and those who do smoke less. However, the percentage fall in consumption has been less than the percentage rise in tax, so tobacco tax revenue has risen.

For alcohol, consumers have been switching from more highly taxed beer to wine, which is more lightly taxed. For instance, a full-strength beer from your bottle shop carries a tax of $37.10 per litre of alcohol. A moderately priced bottle of wine bears a tax less than half that ($17.60 per litre).

What might be considered a distortion in the taxing of alcohol means that changes in tastes towards drinking wine reduce tax revenue. The system of taxing alcohol is distorting in that encourages changing consumption habits away from beer drinking to wine.

Fuel excise is levied on a number of fuels but revenue comes mainly from petrol sales. The indexing of fuel excise rates was abolished in 2001 before being reintroduced in 2014. This reduction in the real excise rates was accompanied by significant reduction in the volume of fuel per household, from 11.4 L/km in 2001 to 10.6 L/km in 2016, as vehicles became more fuel-efficient.

The combination of reduced real excise rates and reduced consumption have reduced fuel excise revenue as a percentage of GDP.

The GST, one of the principal aims of which was to provide a broadly based growth tax, is declining in relative importance. This is mainly due to the exemptions from the GST base. For instance, spending on education and health, which are exempt from GST, is growing faster than spending on other goods and services. There is also some loss in revenue due to online purchases from overseas, which the government is trying to address.

As the share of consumers’ spending continues to switch from GST-liable to GST-exempt items the share of GST revenue will continue to fall.

Company taxes have diminished in importance in Australia and elsewhere because of the way multinational companies can arrange their tax liabilities across national borders to minimise tax. However, there is also worldwide recognition of the need to reduce company tax rates because of the detrimental effects these have on investment and growth.

The need to cut ‘deadweight loss’

When discussing taxes economist often refer to “deadweight loss”, which is the loss to the economy over and above the amount recouped in tax revenue. When revenue is taken from individuals or companies this results in less of a service or good being produced.

It is argued that governments should put more reliance on taxes that cause less distortion – less deadweight loss. That is, they should have as little effect on individuals’ and firms’ behaviour as possible.

A broad-based GST is efficient because all goods and services bear the same tax rate and therefore will not change relative consumption. It is exemptions that bring about inefficiency by encouraging consumption of untaxed items and discouraging consumption of taxed items. Taxing wine more lightly than beer encourages wine consumption at the expense of beer.

The Australian Treasury has named company tax and income tax as having the “biggest deadweight loss” of all the Commonwealth taxes. International research backs this up. The deadweight loss falls on consumers and shareholders but mostly on workers and wages through lower investment.

The Treasury estimates the deadweight loss of company tax could be more than half the revenue raised from taxation. For income taxes, the deadweight loss is estimated to be 21 cents for every dollar of revenue. This comes about from reduced incentives to work, save or invest.

The ConversationThe PBO report suggests that with continuing trends in taxation revenue the budget’s reliance on personal income tax will increase if current levels of Commonwealth taxation are maintained as a percentage of GDP. While proposals to reduce company tax rates will reduce inefficiency of taxes somewhat, a heavy and increasing reliance on personal income tax points to the need for substantial tax reform. But that’s something neither major party seems prepared to do.

Phil Lewis, Professor of Economics, University of Canberra

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

Victorian ReachTEL poll: 51-49 to Labor, and time running out for upper house reform



File 20180709 122280 1ytspze.jpg?ixlib=rb 1.1
Victorian Premier Daniel Andrews’ Labor party leads in the latest polling ahead of the November 24 state election.
AAP/Alex Murray

Adrian Beaumont, University of Melbourne

A Victorian ReachTEL poll for The Age, conducted July 5 from a sample of 1,500, gave Labor a 51-49 lead. Primary votes were 39.4% Coalition, 35.4% Labor, 10.5% Greens, 3.6% One Nation, 2.8% Shooters and 3.5% undecided. The Victorian election will be held on November 24.

According to The Poll Bludger, if undecided voters were excluded, primary votes would be 40.8% Coalition, 36.7% Labor, 10.9% Greens and 3.7% One Nation. ReachTEL uses respondent allocation for its two party results, and this result is about the same as we would get using 2014 preference flows.

Premier Daniel Andrews led Opposition Leader Matthew Guy by a narrow 50.6-49.4 margin as better Premier. ReachTEL’s forced choice better Premier/PM question tends to be more favourable to opposition leaders than polls that do not use a forced choice.

In other forced-choice questions, Guy edged Andrews by 50.1-49.9 on who voters thought was more trustworthy. The Coalition had a 50.8-49.2 lead over Labor on party best to handle Melbourne’s congestion, a 51.6-48.4 lead on managing Melbourne’s growing population, and a 55.8-44.2 lead on law and order. Labor was just ahead by 50.2-49.8 on cost-of-living.

The responses to these issue questions are not good for Labor, but this poll did not ask about health, the economy and education, which are likely to be significant issues in voting decisions.

This ReachTEL is the first Victorian poll since a mid-April Newspoll, which also had Labor ahead by 51-49. If there is no early federal election, the Coalition will still be in power federally by the time of the state election. State parties tend to do better when the opposite party is in power federally. As Labor has a poll lead, and this is its first term, Labor will probably win the state election.




Read more:
Poll wrap: Labor’s Newspoll lead narrows federally and in Victoria


Time running out to abolish group ticket voting in Victorian upper house

All 40 upper house seats will be up for election at the state election. There are eight upper house regions that each return five members, so a quota is one-sixth of the vote, or 16.7%.

In early 2016, group voting tickets were abolished for the federal Senate, and in late 2017, they were abolished for the South Australian upper house. However, these tickets are still current electoral law in Victorian and Western Australian upper house elections.

Under group ticket voting, above-the-line voters cannot direct their own preferences. Instead, the party that receives a “1” vote controls that voter’s preferences. Votes can go to parties that are very different from the party that received the “1” vote.

The biggest problem with the group voting tickets is that the near 100% preference flows allow parties with negligible support to pass other parties, and then benefit from those parties’ preferences. At the 2014 state election, Vote 1 Local Jobs won the final seat in Western Victoria region on just 1.3% of the vote, or 0.08 quotas, a seat that should have gone to the Greens.




Read more:
Proposed Senate electoral reform is essential


To direct their own preferences, votes must be cast below-the-line. It is easier to vote below-the-line in Victoria than in other jurisdictions, as only five numbered boxes are required for a formal vote.

New South Wales and South Australia now use optional above-the-line preferential voting. Voters are required to number “1”, and can continue with “2”, “3”, and so on if they wish. Votes will exhaust when there are no further preferences to allocate.

In the federal Senate, voters are told that six numbers are required above the line, but only one is needed for a formal vote. The reformed Senate voting system performed well at the July 2016 double dissolution election.




Read more:
Further Senate results and analysis


The ConversationThere is no news regarding suggestions for electoral reform. I would be happy if Victoria adopted either the New South Wales or federal Senate models, but time is running out for electoral reform. Any proposal would need to pass both chambers of the Victorian parliament, likely needing bipartisan support. The final sitting day before the election is September 20.

Adrian Beaumont, Honorary Associate, School of Mathematics and Statistics, University of Melbourne

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

Eight charts on our growing tax problem: what abandoning tax reform means for taxpayers


Rebecca Cassells, Curtin University and Alan Duncan, Curtin University

As we move closer to Treasurer Scott Morrison’s third budget, what we do know is this – Australia has a revenue problem. A more global and digital economy; an ageing population with fewer taxpayers and sluggish wage growth make future predictions of revenue even more precarious. There’s never been a better time for tax reform.

But as governments have tried to reform (and stumbled) over the years the burden has shifted to individual taxpayers and the latest budget is likely to be no different.




Read more:
Government spending explained in 10 charts; from Howard to Turnbull


We looked at revenue data over the last 20 years drawing from budget papers, government finance statistics and the Australian Tax Office. To compare revenue over time, we have adjusted for the effect of inflation by using real measures.

Tax revenues have risen 26% in Australia since the global financial crisis, from A$310.3 billion in 2009 to A$389.8 billion by 2016.

Income tax has contributed most to this growth and some is driven by rising wages and jobs growth. Between 2009-10 and 2016-17, individual income tax revenue grew by 37% – an average of 5% each year.

https://datawrapper.dwcdn.net/6474m/7/

But bracket creep also comes into play as personal tax thresholds have not kept pace with inflation, causing average tax rates to rise among middle income earners in particular.

The growth in business tax revenue leading up to the global financial crisis was heroic – averaging 11% each year and well above any budget forecasts. In the ten years to 2007, business tax revenue grew by almost 130% – from A$41.4 billion to almost A$95 billion.

https://datawrapper.dwcdn.net/aIP16/4/

But what goes up must come down, and business tax fell by 6.3% between 2008 and 2016. However we can see strong growth between the last two periods, with business tax receipts growing by 10.7% from A$72.6 billion to A$80.3 billion.

Revenues from GST and sales taxes have risen, by 16% since 2009.

https://datawrapper.dwcdn.net/zOSNh/8/

The relationship between Australia’s economic output and its tax revenue looks somewhat different. The tax-to-GDP ratio reached nearly 25% prior to the global financial crisis, but dropped to 20.5% in 2010-11. It recovered to around 22% by 2012 and has remained essentially flat since then.

https://datawrapper.dwcdn.net/8pwOk/7/

A history of reform attempts

Successive governments have attempted to create an efficient tax system that’s fair and reliable with few distortions. Prior to the turn of the century the Howard government argued the tax system was out of date, complex and inequitable, heavily reliant on individual and company tax, and prevented Australia competing on a global level.

The Howard government’s new tax system in 2001 was an answer to this. This new tax system seemed to have all the reform solutions needed – income tax cuts for hard working Australians and at long last the introduction of a goods and services tax, along with some pretty big welfare reforms.

Everything appeared to be going quite well with the new tax system – revenue from company tax was way, way above any Treasury official’s forecast.

But fast-forward 10 years and cracks began to show, prompting a new review into the effectiveness of Australia’s tax system. The Henry Review, provided some 138 recommendations for tax reform, yet very few saw the light of day. And just five years later, another review was conducted with then Treasurer Joe Hockey at the helm, which since seems to have been not so much parked as abandoned.

https://cdn.theconversation.com/infographics/264/771106ca8f0bf8ba728e219a8b60d33fbe6ebe5b/site/index.html

Income taxes from individuals have always made up the greatest share of tax revenue in Australia. Prior to the introduction of the Howard government’s tax system, income tax from individuals made up 57.3% of the total tax pool – it now accounts for 51.0% of total tax revenue.

The Howard reforms included a reduction in personal income tax rates. During the next ten years Australian businesses shouldered a greater share of the tax burden, with their share rising from 17.9% in 2000-01 to 27.4% in 2007-08 at the peak of the resource boom. This has since fallen to 20.6%.

The contribution of taxes on goods and services has remained fairly steady since moving from sales tax to the GST in 2001. GST revenue is consistently around 16% of all tax revenue.

https://datawrapper.dwcdn.net/byxQ9/5/

The share of tax revenue from customs duties, excises and levies has been falling since 2001, from 14.5% to 9.5%. Other tax revenue has been fairly consistent over time, contributing less than 2% of total tax revenue. However, in 2012-13 this increased to around 4%, with the introduction of the short-lived carbon pricing mechanism.

The problem with predicting future revenue

Taxation revenues were consistently underestimated prior to the global financial crisis, but have fallen below expectations since its end. The tax-to-GDP ratio has been anchored close to 22% since 2012-13. This is despite eight successive federal budgets since May 2010 projecting future tax revenues in excess of 24% of GDP.

And where does the greatest divergence lie between forecast revenues and out turns?

Company tax revenues are consistently – and by some margin – the most difficult to predict. Receipts fell short of forecast estimates of around 5% of GDP, by around one percentage point over four years, since the May 2010 budget.

Estimates of company tax receipts for 2017-18 were revised upwards by A$4.4 billion in the latest MYEFO update in December 2017. Should this eventuate, it will take total company tax revenues for 2017-18 to A$83.8 billion (around 4.6% of GDP).

The government may well feel that this creates space for a company tax cut and personal income tax cuts in the upcoming budget.

https://cdn.theconversation.com/infographics/268/d0b3499c04c8256881086278e98204a42ac38918/site/index.html

Revenue from individual income tax has been projected to rise to around 12.5% of GDP over the forward estimates, in each budget, since May 2013. Revenue has risen from 9.5% of GDP in 2009 to 11.4% by 2016 before dropping marginally by 0.2 percentage points in the latest Mid-Year Economic and Fiscal Outlook (MYEFO) forecasts.

But wages have not played the leading role that they have been cast in, in every budget going back to May 2011. Since this time wage growth has been forecast at an elusive 3% mark or thereabouts, yet has fallen well short of this each year and currently stand at 2.1%.

https://cdn.theconversation.com/infographics/269/70054f29a094207444d5bea6aa727fa0af8b543c/site/index.html

Tax thresholds remained fixed between the 2012 and 2016 budgets, and the only change since has been to lift the 32.5% tax threshold from $80,000 to $87,000, effective 1 July 2016. Tax revenue growth up to now has certainly been driven by the effects of bracket creep.

Unless tax thresholds in the future are increased at least in line with inflation, this means that average taxes will continue to rise.

Plans for a 0.5% increase in the Medicare Levy rate from July 2019 have been shelved, which would have raised around A$8.2 billion over the next four years to support the National Disability Insurance Scheme.

Expectations have been raised for tax cuts to businesses as the government advocates for the “trickle-down” benefits to Australian households.

It’s hard to see how this will lead to anything other than a shift in the tax burden towards individual taxpayers – at least in the short term. This is unless company tax cuts are balanced with substantial, not modest, cuts to personal income taxes as well.

The ConversationIt seems Scott Morrison will be banking ever more on a strengthening economy to support Australia’s taxation revenues into the future.

Rebecca Cassells, Associate Professor, Bankwest Curtin Economics Centre, Curtin University and Alan Duncan, Director, Bankwest Curtin Economics Centre and Bankwest Research Chair in Economic Policy, Curtin University

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

Batman is a strong victory for Shorten, but he still has a selling job on tax move



File 20180318 104673 rqukrf.jpg?ixlib=rb 1.1
Ged Kearney and Bill Shorten pose for a photo at Preston Market.
AAP/Ellen Smith

Michelle Grattan, University of Canberra

On “Super Saturday”, Bill Shorten dodged a political bullet, while Nick Xenophon took one. South Australian Liberal leader Steven Marshall got the result he should have secured four years ago. The Greens proved the old maxim that disunity is death.

The Batman byelection and the poll in South Australia threw up all sorts of interesting points – even though in other circumstances, contests in a heartland Labor seat and a state with a 16-year-old government might have been routine.

For Shorten, avoiding defeat in Batman was vital – for Labor’s current momentum, for confidence in his leadership and, given his gamble of announcing his latest tax move in the campaign’s last week, for holding the line on a controversial policy.




Read more:
After 16 years, electoral dynamics finally caught up with Labor in South Australia


Many things contributed to Labor’s win, but if you were looking for one, I suspect it might have been that Ged Kearney wasn’t David Feeney. Kearney was the sort of candidate who encouraged Labor voters to be faithful, and not run away in fury.

As for the tax announcement, election watcher Tim Colebatch notes that the pro-Labor swing in the postals and pre-poll votes was much bigger than in the polling booths on the day, and suggests this may show the impact of Shorten unveiling his plan to scrap cash refunds for excess dividend imputation credits.

That the announcement didn’t stymie Labor in the byelection doesn’t mean Shorten has won the argument more widely. Labor will have much explaining to do in this complicated area. But if it had seriously backfired in Batman, that would have given ammunition to the Coalition and caused tensions in the opposition.

Labor was helped in the byelection by the Greens’ internal backbiting. The Greens’ failure to capitalise on a great chance reflects badly on their locals and on leader Richard Di Natale.

The party has deeper problems than its schisms in Batman. It lost a seat in the recent election in Tasmania, its heartland. Nationally, the citizenship crisis has taken its toll, costing it a couple of its strongest Senate performers in Scott Ludlam and Larissa Waters. Batman suggests it may have stalled in its push for inner-city federal seats. The next federal election sees the Greens particularly exposed because of the number of senators the party has going out.

The South Australian result has presented something of a reality check on perceptions of the potency of so-called “insurgencies”. This is the third recent state poll in which a major party has won a majority. Late last year in Queensland, Labor secured a second term, as did the Liberals in Tasmania earlier this month.

In Tasmania, the Jacqui Lambie Network got nowhere. In Queensland, One Nation won votes but only one seat. And in South Australia, Xenophon’s SA-Best crashed after initial too-good-to-be-true polls, with Xenophon failing to win the seat he was seeking and SA-Best expected to have no lower house representation.




Read more:
Liberals win South Australian election as Xenophon crushed, while Labor stuns the Greens in Batman


At state level, even when such parties achieve a respectable vote (SA-Best received about 14% of the statewide vote, as did One Nation in the Queensland election), the electoral system makes it hard for them to translate that into lower house seats.

Federally, the Senate’s proportional representation voting system has given small players a relatively easy passage to a very powerful place, although changes to the electoral arrangements will make that more difficult in future.

The “disruptors” are important, because the support they attract is a measure of the disillusionment and fragmentation in the contemporary political system. But South Australia reinforces the point that the major parties are still strong. For quite a few voters, the choice is between duelling desires – between sending an angry message or opting for stability.

Outgoing premier Jay Weatherill, gracious in defeat on Saturday night, didn’t look all that upset. Labor’s bidding for a fifth term in this day and age was an almost impossible ask; anyway, Labor won last time with only about 47% of the two-party vote, so it has been on borrowed time.

The huge loser in South Australia was Xenophon. In politics, as in business, you can be too greedy. Xenophon led a three-person Senate block that had a decisive share of the balance of power. It was capable of exerting much influence, and winning concessions in negotiating legislation. Then he decided he wanted to be kingmaker in South Australia – while still aspiring to be the absent master in Canberra.

His party is likely to end up with just a couple of upper house seats in South Australia. Meanwhile, the federal Senate team has been hit by the citizenship crisis as well as weakened by Xenophon’s departure.

Due to a fight with the party, Tim Storer, a replacement for Skye Kakoschke-Moore, a casualty of the citizenship debacle, will be sworn into the Senate on Monday as an independent. The Nick Xenophon Team has been reduced to two senators (and Rebekha Sharkie in the lower house, who could face a byelection in the citizenship saga).

Xenophon is in neither parliament, and the road ahead for his party is rocky. He now talks about SA-Best as a “start-up party” to gloss over its bad result, but it’s hard to see it as a “start-up” with an enduring future. Xenophon dismisses the prospect of a return to the Senate, but it remains to be seen whether his feet will become itchy.

Federal factors were not significant in the change in South Australia. But the outcome has positive implications for Malcolm Turnbull’s government. One of the big arguments between the federal and Weatherill governments was over energy policy, with Weatherill holding out against Canberra’s National Energy Guarantee (NEG). On Sunday, the federal government was welcoming the South Australian result as very good for the future of the NEG.

Another Liberal win at state level, coming after Tasmania, will also be a morale boost, albeit a limited one, for the embattled federal Liberals.

The ConversationSo, Super Saturday had positive spin-offs for both federal leaders, but substantially more for Shorten than Turnbull.

Michelle Grattan, Professorial Fellow, University of Canberra

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.