The federal government’s backdown on political donation reform has today prompted a furious response from party elder John Faulkner, who this morning led caucus criticism of a new bill that will hand $60 million to political parties and leave donation disclosure thresholds at five times the level originally proposed by the Rudd government.

The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill, considered by Caucus this morning and approved, but without the usual unanimity, replaces the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2010, which was itself a replacement for a previous bill, by Faulkner as then-Minister of State, that lapsed with the 2010 election after the Coalition and Steve Fielding refused to support it (Brian Loughnane outrageously today tried to blame Labor for failing to bring forward donations reform).

The 2010 bill passed the House of Representatives and was then introduced into the Senate after the Labor-Greens deal following the 2010 election, which required the parties to work towards reform of political donations that broadly matched the 2010 bill except for a “truth in advertising” amendment, which Bob Brown proposed to add in the Senate.

But despite the Greens taking the balance of power in the Senate from July in 2011, Labor never returned to the bill, and now blames Brown moving an amendment for it “stalling” in the Senate. “The Greens would not have blocked the Bill even if Bob Brown’s amendment hadn’t been supported by the major parties,” Christine Milne told Crikey. Instead, the bill languished under one of Faulkner’s replacement as Special Minister of State, Gary Gray, a former ALP national secretary, and there now appears to have been a secret deal done between current Secretary George Wright and the Liberals’ Brian Loughnane. The government’s own summary of the bill states that:

“… [i]n order to obtain a broader consensus across the Parliament and enable legislation to pass with bipartisan support, the Government has agreed to introduce this Bill, which represents a compromise with the Coalition.”

In that process, the bill has been watered down …

  • The original $1000 reporting threshold — which is where it was before the Howard government lifted it to over $10,000 — would instead be $5000.
  • It appears that donation splitting between branches of parties would not be prohibited, potentially allowing donations significantly above the reporting threshold to be provided without disclosure by being given to several state branches.
  • Allowing donors more time — 90 days compared to eight weeks — to report donations.
  • Allowing all anonymous donations up to $1000 rather than $50 at public events.

Attorney-General Mark Dreyfus’s office declined to comment on the specifics of the bill. However, the laws will create a new “special reporting event” for donations over $100,000 that must be reported within 28 days. It still bans foreign donations. And it would still address one of the most glaring faults of the current reporting system, that we have to wait up to 18 months after an election to find out who has donated to whom; under the bill, the longest we’ll have to wait is eight to nine months if an election is held early in the financial year.

But the biggest change was to pick up the Joint Select Committee on Electoral Affairs 2011 recommendation that parties be given “administrative funding” to enable them to meet the increased compliance burden for reporting. You won’t believe this, but there was unanimity across Labor, the Coalition and the Greens on the need for more funding of their parties. Said the committee:

“Administrative funding is one way to provide assistance to political parties to ensure that they are appropriately resourced to develop an understanding of and can meet the increased demands that come with greater disclosure.”

So how much “administrative funding” is required for reporting twice yearly instead of once yearly? The government thinks $58 million over four years, a little of which is to go to the AEC to help it better monitor compliance, but the bulk of which will flow to political parties: $50 million-plus to do a report twice a year and keep better track of small donations that the parties used to have to keep track of before the Howard government lifted the threshold.

Faulkner, who didn’t comment to Crikey before deadline, was said to be deeply unhappy with the increase in the reporting threshold to $5000 and the administrative funding, described by another Labor member as a joke. Faulkner was backed in caucus by veteran Daryl Melham. Anthony Albanese, Mark Butler, the portfolio minister Mark Dreyfus and Gary Gray all spoke in support of the bill.

Faulkner was said to have expressed his disgust bluntly, telling caucus: “I am no longer angry or disappointed, I am now just ashamed.”

Peter Fray

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