It is good to see the Labor Party making some running on the Howard Government’s quite outrageous attempts to weaken our system of campaign finance disclosure whilst also introducing yet another form of subsidy through an increase in the tax deductibility of political donations.

Alan Griffin’s feisty speech to Parliament on 29 March spelt out most of the arguments but former WA Labor MP turned ANU politics lecturer Norm Kelly also landed some telling blows in this article for The Canberra Times on March 27, which included the following:

The Government argues that increasing the donation disclosure threshold to $10,000 brings Australia into line with comparable countries. This is misleading, if not blatantly incorrect. While the proposed new threshold is comparable with New Zealand ($A8600) and Britain ($A12,200), it is well above limits in Canada ($A200) and the United States ($A1400). However, these otherwise comparable countries all place campaign spending limits on parties and candidates, unlike Australia. These restrictions mean there is less likelihood of being able to “buy” an election. In Australia, the lack of spending caps or upper limits on donations means the capacity to unduly influence an election result remains real.

The reduction in disclosure by lifting the threshold from $1500 to $10,000 is just appalling, especially given that such disclosure already occurs belatedly on 1 February each year, seven months after the end of the financial year. Compare that with the UK which has quarterly donation disclosures that become weekly during election campaigns.

As for the increase in tax deductibility of donations from $100 to $1500, it is worth considering just how subsidised our political system already is through public funding – a rort that delivers candidates almost $2 a vote, which equates to about $30 million each Federal election. Why does our political duopoly then deserve the estimated $22 million in additional subsidies over the next four years through tax deductions of donations.

This political welfare has been spreading from state to state over the years. The Bracks government introduced public funding in 2002 which will run at $1.28 a vote in this year’s Victorian election, provided candidates poll above the threshold of 4%.This will cost Victorian taxpayers more than $7 million.

Norm Kelly has sent through a table pointing to the disproportionate amount that lower income earners have to spend to make an equivalent $1,500 donation:

Taxable income Tax rebate Net cost to donor
$100,000 $705 $795
$50,000 $450 $1050
$20,000 $255 $1245

Isn’t it funny how we have some of the most punitive income tax rates on wage earners in the western world , yet we’re now giving them a new way to claim a deduction.

Despite receiving all this taxpayer largesse, political parties don’t have to disclose a balance sheet each year when my local community run kinder has to annually tell the Bracks Government our net assets.

When you put all this together, it is clear that Australia is fast developing the weakest and most rortable system of political funding in the developed world. Yet more and more taxpayers subsidies are flowing into the system. Surely after the incredible AWB scandal, the disclosure of payments to governments or political parties should be strengthened rather than dramatically weakened as John Howard is now proposing to do.

Peter Fray

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