The Turnbull government should implement a sweeping ban on political donations from developers, banks, mining companies and the tobacco, liquor, gambling, defence and pharmaceutical industries, according to a Senate inquiry examining the influence of money in politics.
The report of the Greens-dominated Senate select committee makes 14 recommendations for the reform of Australia’s much criticised donations and disclosure system, including requiring online, continuous real-time disclosure to the Australian Electoral Commission of donations to political parties, candidates and associated entities.
• Sign up to receive the top stories in Australia every day at noon
It backs caps on campaign expenditure by political parties, candidates and associated entities, indexed to inflation and subject to periodic review.
It also proposes a cap on donations to political parties, candidates and associated entities to a maximum value of $3,000 per parliamentary term, and says contributions from the same donor should be aggregated for the purpose of the cap.
Recognising that the proposed caps would divert donations away from politics towards activist groups, and with the charities sector and not-for-profits already up in arms about being classified as political campaigners – the new report floats limits on third party expenditure only in general terms, with the proviso that any change “enable continued democratic participation and advocacy, while removing any unfair advantage that can be enjoyed by interest groups with the largest financial resources”.
“The committee is of the strong view that only activity by third parties that is seeking to directly influence elections should be regulated,” it says, adding that charities should not face additional regulation.
The report, tabled Wednesday, also proposes that the current definition of gifts under the Electoral Act be amended to include payments made in return for membership subscriptions and attendance at events and fundraisers of candidates, political parties and associated entities – which would force significantly more disclosure of major party fundraising activity than exists currently.
To counter the loss of resources from private fundraising, the report recommends “a small increase in public funding to political parties”. It also revives the call to ban foreign donations and introduce a national integrity commission.
It also recommends a significant strengthening of the regulatory regime, including boosting the power of the AEC to monitor and enforce compliance with the political funding and disclosure regime and to investigate breaches of the rules, as well as “strict sanctions and penalties for breaches of legislative requirements”.
The new report highlights case studies where political donations from corporations have occurred at the same time as policy formulation relevant to the sector.
Drawing on research by the Foundation for Alcohol Research and Education, the report highlights a case study relating to political donations from the alcohol industry and correlating trends with changes to the alcohol tax system – in particular, to the wine equalisation tax (WET) and the WET rebate.
It also examines similar research on donations made by clubs and hotel interests at the time when poker machine reform championed by the Tasmanian independent Andrew Wilkie was pursued by the Gillard government.
While some interest groups appeared before the committee and gave evidence, a number declined to participate. The Greens leader, Richard Di Natale, noted during one of the hearings that the big four accounting firms, the salary sacrifice industry and some individual companies declined to appear.