The political funding reform bill announced by John Faulkner last week is the most significant reforms to the mechanics of our political system in decades. It will also erase the Howard Government’s outrageous assault on basic political accountability, contained in the laughably-titled Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2005 .

In addition to lifting the reporting threshold for political donations to $10,000 indexed, that Act also, inter alia, disenfranchised prisoners and established the now-famous early closure of the rolls once elections are called. It was defended in Crikey by the unfortunate Peter Phelps, Liberal staffer, noted heckler and now, in a delightfully eponymous demonstration of the Peter Principle, apparently being considered for NSW State Liberal director.

The Coalition will presumably again offer its historical justification for a high reporting threshold – that potential donors do not give to the Liberal Party for fear of public exposure. But it’s time to put up or shut up on this. If the Liberals want to conjure visions of union thugs standing over cowering small businessmen waving printouts from the AEC Funding and Disclosure Annual Returns then they should produce some actual examples, including the prosecutions for extortion that should have ensued from such behaviour. Michael Ronaldson is calling for the Joint Standing Committee on Electoral Matters to conduct hearings across the country on electoral reform – maybe he can produce some evidence then.

The Bill will also end the loophole whereby donors can donate sums below the reporting threshold to multiple divisions of the same party. Critically, however, it will NOT prevent the same trick being played with individual candidates, a matter that Faulkner, when pressed, said would be included in the Green Paper later in the year.

The Bill also bans donations from overseas, but will avoid potentially tricky definitional issues. Rather than defining what an overseas donor is and proscribing them, it will empower the Electoral Commission to check the source of a donation, even if has come via a local company. Foreign sponsorship of MPs’ travel, however, would still be permitted.

Based on their previous form, the Coalition deserve no favours from anyone on this issue. But they’ve correctly asked what the rush is — Faulkner says the Bill will be hurried through Parliament before the end of the financial year so that the new framework, which includes six-monthly rather than twelve monthly reporting, as well as a new link between election funding and expenditure, will be in place for 2008-09.

Given we’ve only just had a Federal election, it’s not really clear why everything needs to be in place from 1 July. Well, it is clear, actually – it provides a perfectly good means of causing the Coalition discomfort on the issue given they can block in the Senate. But previously, when pressed on the Howard Government’s reforms, Ronaldson has declined to defend them. If Faulkner was serious about reform, he’d make an effort to bring the Coalition on board. Or at least give them more than the hour’s notice they got on Friday morning.

Once the Bill is passed, the focus will shift to the Green Paper – a two-part job focussed initially on finance and funding matters and then on issues like the electoral roll. Faulkner emphasised that the Paper would cover every issue – including an outright ban on donations and, his office later confirmed, the role of third parties in political advertising, which any ban must address.

But while the Paper is being drafted, Faulkner might like to check where the long-promised Register of Lobbyists is at. The last advice was that it was beset with “software problems”. Fixing up the accountability of political financing isn’t much use if vested interests can walk in to Parliament House and lobby MPs in secret.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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