Senior members of the Liberal and Labor parties have admitted voter distrust of Australia’s political donations regime has become so pervasive that it is feeding a general disregard for democracy.
The Joint Standing Committee on Electoral Matters, which is reviewing the 2016 federal election, has released a new discussion paper seeking comment about ways to fix the donation system’s flaws.
The paper will inform a review of Australia’s donations system, and a possible overhaul of the rules regulating donations and disclosure for political parties.
It draws attention to the role played by modern activist groups that fall outside the federal Electoral Act and are unregulated by the Australian Electoral Commission (AEC).
“Many Australians do not have sufficient faith in the integrity of Australia’s electoral processes, particularly in relation to donations and disclosure,” the paper says.
“Of concern to the committee is the more general disregard many Australians have for democracy itself, as reflected in successive Lowy Institute surveys on the state of democracy – with the most recent Lowy poll findings that 48% of Australians are dissatisfied with out current democratic system.”
Liberal senator Linda Reynolds, who chairs the committee, said the nature of modern political campaigning and the number of political actors engaging in electoral campaigning had changed significantly in recent years.
She said organisations such as GetUp, green groups, church groups and industry organisations were campaigning and raising large amounts of funds that were not visible to or regulated by the AEC.
However, the national director of GetUp, Paul Oosting, said Reynolds was wrong to say GetUp fell outside the Electoral Act. He said like all third party non-profits, GetUp’s activities were covered by the Act, from disclosures to authorisations.
Reynolds said this week she believed the system needed to be more transparent to restore the public’s faith. “It has to have a much more level playing field,” she said.
“One of the things we’re seeking to do is to make sure that everybody who is campaigning [is scrutinised]. A lot of third-party organisations now campaign on behalf of our candidates and our parties, and they’re completely unregulated by the Electoral Act at the moment.
“So that’s also part of this inquiry – to make sure that we capture how campaigning is done today and make sure that it’s all regulated in the same way.”
The committee’s discussion paper has identified a number of “major problems” with Australia’s donations system.
It says donation rules are too complex and burdensome, the six-month disclosure lag is feeding perceptions of a lack of transparency and there has been significant growth in the number of unregulated campaigning entities.
It wants to scrutinise private funding from small and large donors, public funding to political parties and candidates, and personal funding from candidates themselves.
Labor senator Andrew Giles, the committee’s deputy chair, said this week that the donations system was broken and “it’s incumbent on all of us in the parliament to do something about it”.
“I think more transparency is really important,” he said. “Real-time donation is something that we have been talking about for a long time, but I think expenditure caps should be part of the solution.”
The special minister of state, Scott Ryan, declared last year that any overhaul of the donation rules must consider the role of activist groups in modern political campaigns, because otherwise reforms would create an uneven playing field and not serve the public interest.
Labor accused the prime minister, Malcolm Turnbull, of “buying” the 2016 election after he revealed he donated $1.75m to the Liberal party in the run-up to election day.
Australia’s political funding and disclosure system currently has two main components at the federal level.
Firstly, its public funding regime pays parties and candidates a small amount for every first-preference vote they receive (currently $2.68 per vote, indexed every six months) when they win over 4% of the primary vote in their electorate.
Secondly, its disclosure regime forces political parties and their associated entities to annually disclose their total receipts, payments and debts, and donations larger than a specific threshold (currently $13,500, indexed annually).
The disclosure threshold for political donations was increased from $1,500 to $10,000 (indexed to CPI) by the Howard government in 2006.
The disclosure scheme also requires annual disclosure of returns for donors and third-party campaigners, and election disclosures for candidates, which are made public.
Submissions for the discussion paper are due by close of business on Friday, 29 September.
