ELECTORAL (FUNDING, EXPENDITURE AND DISCLOSURE) AMENDMENT BILL

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: We had an extended debate last night on the interpretation of the provisions as they relate to the Legislative Council. At this stage, unless the Hon. Mr Parnell or someone else has further questions, I do not intend to prolong that debate other than to say I think it was particularly useful. The few minutes the committee spent further highlighted the importance that the drafting of this has for the future, given that we are going to buy some time in 2018. The contribution of those who have some experience of the Legislative Council campaigns will be of added benefit to whichever government after March 2014 is finally responsible for the drafting of the legislation.

I think a series of questions and issues was raised that will require further consideration. Certainly, the answers that were provided were informative from my viewpoint. I had gone into the debate assuming there was a $500,000 limit on the Legislative Council campaign. Clearly, as is indicated, that is not the case. The parties are able to adjust within the overall approximately $4 million cap. That will have some significance to the major parties, but it will obviously have significance to the minor parties, such as the Greens and Family First in particular, whose main reason for being is to be elected to the Legislative Council. I will leave it at that in relation to the Legislative Council $500,000 related issue.

The other two areas that I want to address, and the minister responded to in part and I had raised in the second reading, were again in relation to the issue of gifts. If you look at new section 130ZJ and related clauses, the intention of the legislation is that if somebody makes a gift of $200 or more, then there are certain clear and specific requirements; that is, it is unlawful for a candidate to receive a gift of more than $200 unless certain things happen. The certain things that happen, as I read them, are that as the person gives you the gift of $200, the person has to give you their name and address. I guess that is relatively clear.

If you are at a function, or whatever it is, and someone gives you a gift you are going to have to say to Bill Smith, 'Okay, what's your real name and what's your real address?' and you must have a genuine belief that that is true; if someone lies to you, the legislation covers you off on that particular point. That is relatively clear because ultimately, if we are going to track the $500,000 aggregate figure, the real name of Bill Smith and his address are going to have to be covered off by the responsible officer for the party to find whether he has been giving donations elsewhere and whether it takes him above the $500,000 level.

As I read this particular provision, it clearly covers circumstances like Bill Smith taking a candidate and paying for a meal, and related gifts like that. Could the government's advisers just clarify whether it is clearly intended to cover taking to a meal or, for example, to a sporting, music or concert event. Commonly, members of parliament are invited to attend those particular events. I am assuming the impact of the legislation is that those sorts of circumstances will be covered as well.

The Hon. I.K. HUNTER: My advice is that the legislation specifically excludes gifts that are given in a personal capacity. We are really looking at gifts that are meant to be given to a party for their benefit—so a gift to a member or a candidate, I suppose, of the like the honourable member has raised of their being taken out for a meal, is not meant to be captured by this. But I suppose that, if the gift was an item of merchantable quality or merchantable value which could be turned into cash which could then be used for the benefit of a political party in a campaign, that would be captured. But a personal gift to a member is specifically excluded.

The Hon. R.I. LUCAS: When one looks at the definition of 'gift', on page 6 of the bill, it provides:

gift means any disposition of property made by a person to another person, otherwise than by will, being a disposition made without consideration in money or money's worth or with inadequate consideration, and includes the provision of a service (other than volunteer labour) for no consideration or for inadequate consideration...

I understand the point here; we are not talking about a personal friend. But let's talk about somebody who is talking parliamentary or political business: someone has taken you to a lunch, which has often happened, as a minister or a member of parliament and, during the course of that, you discuss political and parliamentary issues; for example, members of parliament are invited to a sporting event or a concert.

In the end, you might not discuss a lot of politics or parliamentary business at that particular event but, as has been evident from the travel allowance discussions at the national level, what is being raised now is people being invited to the AFL Grand Final or the NRL Grand Final or a variety of other issues. I am sure that, in many cases, political issues were not discussed, but bodies or individuals have chosen to entertain members of parliament and ministers, and the community and the media would see that as being, in essence, seeking to ingratiate themselves with members or ministers for, potentially, future discussions, and that is why the view is that that should be disclosable.

I would have thought that the impact of the definition of 'gift', and these clauses which relate to 'certain gifts not to be received', would be that, where you are taken to lunch by someone other than your personal friend of 30 years who has nothing to do to politics or parliament perhaps, these provisions would apply in those circumstances. I seek from the minister's advisers, given the definition of 'gift', further clarification of that.

The Hon. I.K. HUNTER: My advice at this stage is that the definition used for 'gift' in 130A is the definition used in other jurisdictions. Regulations will allow us to describe certain exclusions, and I am waiting for advice on the specific section which gives power to my statement made a little earlier.

The Hon. R.I. LUCAS: I am happy to wait for that further advice and proceed with other issues. Again, I do not intend to press further details in relation to this issue; however I want to raise it again. When we get to this real-time disclosure—that is, on a weekly basis during the election campaign period—my reading of this says that if our candidates and MPs, for example, are taken to the Hyatt or the Hilton for lunch and the value of the benefit is $200 or if they are taken to a football final or whatever it happens to be—I guess that is more defined in that you would have been invited to it, you would know it is coming up and you are likely to have accepted knowing roughly what the value of going to the football final might be (and that it is likely to be more than $200). I guess it is going to be arguable, when you get invited to certain events at Adelaide Oval, as to whether or not that is going to be above $200.

Clearly, the requirement is on the candidate to know in real-time the name, address and details of the person who is providing that benefit to you. Where that is an individual I think it is at least clearer than when we get to the next stage, which is much more complicated, where a body corporate is providing you with a benefit.

If my reading is correct, in cases where candidates are taken to a meal and the value of the gift is greater than $200, our candidates are going to be required to advise their state secretary or the state director of their party that day (or certainly within the seven-day period in an election period) that, 'Bill Smith has taken me to lunch and the value of that was $250'—or whatever it happens to be—so that that can be incorporated in the $5,000 rolling aggregate of donations from Bill Smith to the Liberal Party over the last 12 months in terms of the total cost. It is a similar situation with invitations to events, such as football finals, sporting events and entertainment events as well.

Minister, where it becomes much more complicated—and this is an experience that ministers will be very familiar with—is where, under the provisions of 130ZJ, you are getting gifts from a body corporate, in essence; that is, from a representative of a company. Let us not get onto the complication of when you have a lobbyist working on behalf of the company. Let us just take the case where a company is wanting to put a particular point of view to you and takes you to a lunch or to dinner or takes you to an event or whatever it happens to be.

The way 130ZJ is currently structured, in essence, it is unlawful for you as a minister or as a candidate to receive a gift. It starts off from that structure: it is unlawful for you to receive the gift unless you do certain things. In the case of where a representative of a body corporate or a company takes you, you have to get the names and addresses of the members of the board of the body corporate. You also need to have the name of any parent, subsidiary or related body corporate of the body corporate.

If Shell, for example, takes you out for a meal and the value of that gift or event or function is greater than $200, then it is actually a gift. That is unlawful unless you get certain information. The representative of Shell, if my reading of this is correct, will have to provide to you obviously the name of the company, which is Shell, but also the names and addresses of the members of the board, and also the name of any parent, subsidiary or related body corporate of the body corporate, and you, I assume, having got that, have to provide that in real time to your state secretary as the responsible officer. I think the minister would realise the complexity and potential difficulties in relation to that.

My understanding is that this is modelled on provisions that exist interstate or elsewhere, but again, in the end, the letter of the law is the letter of the law. The way it is drafted, where it says it is unlawful for a member of parliament or a minister to do something unless you do certain things, there are some pretty strict requirements in relation to what might be required under these particular provisions. Again, there are dozens of other examples. I do not intend to delay the committee on this particular issue much further, other than to seek an initial response from the minister.

Are there any other provisions in relation to these, in essence, company representatives? As I said, I am not even going to ask you the question about lobbyists acting on behalf of companies; that is, do they have to give you the names of the members of their board and their subsidiaries or is it the company that they represent or is it both? We would know many prominent lobbying firms that are quite complex in terms of their legal structures as well.

Is the legislation going to require the lobbyist to give all the information about their board members, the subsidiaries of their companies together with the board members of the company they are representing at the time and the subsidiary companies of the company that they are representing at the time, all on the basis of having provided a gift or a benefit to you as a minister of something more than $200? Again, in this case, we are not talking about a cash donation towards your party fundraising but, in essence, a gift or a benefit such as an invitation to an event, such as a football final or something like that.

The other issue in relation to this, just to add additional elements of complexity, is that again some ministers will have enjoyed the benefit in the past of upgrades on flights from airlines and clearly, I am assuming, that would be, under the definition of gift, a benefit. It is certainly greater than the value of $200. The difference between an economy flight and a business class flight, particularly overseas, is significantly more than $200, and I am assuming it is intended that those sort of gifts or benefits would be caught up.

Again, in those circumstances, if you attended the airport and then someone upgraded your economy class flight to business class, under the drafting of the legislation, if that is a gift or a benefit, which clearly it would appear to be, then that person is going to have to provide the members of the board of the airline and any related subsidiary companies of the corporation and a variety of other issues like that, if that reading of the legislation is correct. I am really seeking an initial response from the minister in relation to that, but I do not intend to pursue interminably other examples of the complexity of this particular element of the legislation.

The Hon. I.K. HUNTER: In relation to the advice I was waiting on in terms of the specific clause, it was 130ZF(4)(b). I can imagine making some general remarks about the earlier conversation related to that, but if an MP or a candidate were to be invited to a function, such as a football match for example or a concert, you would know who the person is that is inviting you. You would have had some time to find out their details. If it was a donation of money that was being handed to you for political purposes, then obviously you would be wanting to hand over receipts for that and you would need to find out the personal details of that person as well. That is pretty much standard practice across political parties.

In relation to 130ZJ, which is I think what the honourable member has just been talking about, the intention and the difficulties that he foresees under (3)(c)(i), (ii) and (iii) in having to determine the name of corporate's names and address of board members and parents and subsidiaries and such, the intention behind the clause is to look behind who is genuinely making a donation to a political party or a candidate, so that donors cannot hide behind, particularly, other corporate fronts and that everything is transparent.

Obviously, we are asking for a significant amount of information. One would assume that most corporate bodies would be able to provide that information on request. They should know names and addresses of their board members. They should be able to supply that to you and they should also know the details about parent companies and subsidiaries, and would know, if they are in the business of making donations to political parties or candidates, that under this legislation that is information they will need to supply.

However, I understand the complicated nature of this that the honourable member raises and obviously we feel that the policy behind these clauses is appropriate for the reasons I have just outlined but, of course, if there are particular difficulties that are faced in applying it in practice, I am sure we will come back and reconsider it at some stage but, again, I am advised that these are very similar clauses to what is in practice elsewhere.

The Hon. R.I. LUCAS: The next broad issue I want to canvass is in relation to 130ZL, which is in relation to limitation on entry fees for certain events. This is the $500 maximum on, in essence, lunches and dinners, although it can be a variety of other functions or events as well. The definition of relevant event is:

(a) is intended to raise money for the benefit of a registered political party; and

(b) is advertised or promoted as an event at which, or in connection with which, attendees will be given access to—

(i) a Minister of the Crown or a Member of the Parliament of South Australia; or

(ii) a member of staff of a Minister of the Crown or a Member of the Parliament of South Australia.

I just want to clarify that the intent of the legislation and the effect of the legislation is that a political fundraising event for any political party which advertised a federal member of parliament or an interstate member of parliament—from the same political party potentially—or celebrities are not intended to be caught and would not be caught by the legislation. So a political candidate could raise money for the benefit of their registered political party by advertising that the federal minister from the same political party was the guest speaker. The definition of 'relevant event' is quite clear if it is just about advertising or promotion—the mere fact that a state candidate would still be there or that a number of other state ministers might also be there as long as that is not advertised or promoted.

I assume the government's intention in the legislation and the impact of the legislation is that federal members, interstate members of parliament, and celebrities could all be used to advertise or promote at an event irrespective of whether or not state members and state ministers happen to attend those particular functions as well, as long as they were not being advertised or promoted.

The Hon. I.K. HUNTER: My advice is that the Hon. Mr Lucas is correct. If you are using an interstate MP or a celebrity, they are not intended to be captured by this clause.

The Hon. M. PARNELL: Just on the same theme, the theme of access dinners, for some strange reason I appear to be on the mailing list for SA Progressive Business. In fact, they often come through the fax machine and we all jump. We are startled when the fax machine rings because it is so rare. Maybe I am on an indirect mailing list.

My recollection is that as well as access dinners there is another category of fundraising event that, working from memory (I have asked my staff if they can find the faxes) for a certain sum of money—$10,000 sticks in my mind—you could get the Prime Minister, for example, or the Premier to visit you in your boardroom if you are a corporation. Those events are private, so they certainly are relevant events in that they are intended to raise money for the political party but they are not advertised to the general public. Would they still be covered? I am just trying to work out 130ZL(b). Is it the fact of them having been advertised generally? Would those sorts of access arrangements be covered by this prohibition? That is my question.

The Hon. I.K. HUNTER: My advice is that if the invitation to host a dinner is advertised, it would be captured under part B that will apply as well.

Clause passed.

Clause 2.

The Hon. M. PARNELL: I move:

Amendment No. 1 [Parnell-1]—

Page 3, line 6—Delete '1 July 2015' and substitute:

31 December 2013 or on the day on which it is assented to by the Governor, whichever is the later

This amendment is designed to bring the operation of the act forward so that it covers the 15 March 2014 state election. I do not discount the difficulties that the Hon. Rob Lucas alluded to. He makes some valid points. Nevertheless, I will move the amendment but I certainly will not be dividing on it; I understand it does not have the numbers. However, I wanted to put on the record why I thought the government should have conducted itself in a more rapid fashion in bringing this bill into operation sooner than the 2018 election.

The Hon. Rob Lucas raised two main objections to the earlier implementation of the bill. One of them was the budget crisis. That particular argument does not hold much water because when the bill sets a date saying that it is going to come into operation on 1 July 2015, there is an assumption that there will never be another budget crisis, that we will never be short of cash, that it is only just now that we are short of cash, and I do not think that is a valid reason.

The administrative difficulties, on the other hand, that the member raised are valid. I understand his fervent desire to keep his state director out of gaol. He has effectively said that it will be impossible to explain to all the Liberal Party bookkeepers out there what the new rules are, and I am sure the honourable member was not criticising the capabilities or the intelligence of Liberal Party bookkeepers, but he was simply pointing out that they would have to learn some new tricks.

My disappointment in this being delayed is that I am disappointed also that the government did not even attempt to partially bring this bill into operation in time for the election. It would have been appropriate if the government had tried to split aspects of the bill so that we could, for example, have had the expenditure caps in place, even if the disclosure regime was going to take longer. We could have had the expenditure caps on the public funding. I appreciate that there are some threshold dates that have already passed but I think that with appropriate transition provisions we would have been able to get around that.

The implications people need to be clear about of not bringing this bill into operation by the next election are that the arms race that the government railed against nearly 12 months ago will continue. This next election will be the arms race. The other thing to say is that any donations received now—in fact, received any time up to the next state election—will not be disclosed to the people of South Australia until February 2015. Now, given my first formal discussion with the Deputy Premier was in February this year, we could certainly have done better than postponing the operation of this bill effectively until 2015 and the 2018 election.

I am disappointed that we are going to have to wait longer. I understand that, especially with the line of questioning that has occurred under clause 1, there may well be some more fix-ups. So whilst I am moving this amendment, I know that it does not have support and that we will have to wait until the 2018 election before it comes in, but I wanted to put those points on the public record.

The Hon. I.K. HUNTER: I thank the honourable member for his explanation of his amendment. The amendment will be opposed by the government. As members know, the government originally sought to commence this legislation, particularly the disclosure provisions, sooner in a similar way to the effect of this amendment, but the outcome of consultation was that the opposition was in need to commence this legislation at a later stage. For some of the reasons the Hon. Mr Lucas has already laid out for us, you might note that the initial bill as tabled had a schedule in it which included the details of a phase-in period. But the government accepts the view that there was a need to develop new systems and procedures and that sufficient lead in time is necessary. Also, the regulations for this bill have not yet been finalised. As I indicated earlier, there is yet considerable work to be done on this area.

The Hon. R.I. LUCAS: For reasons I have outlined in the second reading, the Liberal Party is opposing this particular amendment. I think the debate that has ensued in the committee stage is further reason, if anyone wanted it, as to why you could not and should not move this amendment. With the greatest respect to the Hon. Mr Parnell, I think that he realises that this amendment makes no sense, but he is publicly committed and already has the media for wanting to proceed with this in terms of transparency and accountability, and for those reasons he feels honour bound to go ahead but hastens to say that he does not expect it to pass, that he will not call a division and 'please don't let it go through', basically. I understand why it would not make much sense if it did go through.

However, on occasions we all play these sort of games, and each to their own. As it relates to the Hon. Mr Parnell's own party, the questions he was raising yesterday in terms of getting answers as to how the Legislative Council cap will be interpreted for his party, will be a critical issue that will have to be determined by whoever is in government after March, and it may well require review of the legislation and those particular provisions.

The final point I would make is that, in his valiant last attempt to salvage some reason for supporting this in part, the member said, 'Well, the expenditure cap should be ahead.' But, as we outlined in committee, that is probably the most complicated part of all this, because you are running this rolling calculation as to, first, how much is being spent in each electorate, what is counted as a House of Assembly expenditure and what is counted as Legislative Council expenditure. In the case of Mr Parnell's photo and the Greens photo on the leaflet that goes into every electorate, will that be counted solely or in part for the Legislative Council campaign or the House of Assembly campaign?

They will be important issues for the Hon. Mr Parnell and his party, as they will be for all other parties as well. That is almost as complicated a part of the provisions as anything else. The Hon. Mr Parnell's suggestion that the government and the Liberal Party should support partial start-up of expenditure caps, and leave everything else in the too-hard basket, misses the point of how complicated those provisions will be as well.

The Hon. D.G.E. HOOD: I briefly place on the record Family First's position, which is that we also will oppose the Greens' amendment. We are sympathetic to the Hon. Mr Parnell's position. If we wanted to and were really committed to it we could have had this provision in place for the upcoming election. However, I think the issues raised by the Hon. Mr Lucas at some length really are very significant, particularly the administration issues, and I do not think we can put this in place until we are absolutely certain it will work in practice.

The Hon. S.G. WADE: I concur with the comments of the Hons Robert Lucas and Dennis Hood. It is important for the house to remind itself that prematurely introducing reforms that have the broad support of the parliament does no credit to the parliament or to the concept. The fact of the matter is, as the Hon. Robert Lucas highlighted, a number of key milestones have passed in terms of time frame. There are still significant implementation risks involved. This will be not be the last element of electoral reform we will consider this year, and I urge the parliament, particularly where we have consensus on the principle, to realise that there is no virtue in recklessly trying to implement proposals that are not fully developed.

I actually see no virtue in the amendment being progressed when the member himself, as the Hon. Robert Lucas highlighted, fears that it might pass. If he honestly believed that a partial implementation was possible, then an amendment in that term should have been put. When we later this year consider matters in relation to optional preferential voting, I hope members will give due consideration to the risks of proposals being implemented without systems and procedures in place that will not risk significant damage to the electoral system. If it is true in this clause, it will be true in that bill as well.

Amendment negatived; clause passed.

Clause 3 passed.

Clause 4.

The Hon. I.K. HUNTER: I move:

Amendment No 1 [SusEnvCons–1]—

Page 21, after line 42 [clause 4, inserted section 130Y]—After subsection (4) insert:

(5) If, after a certificate has been lodged by the agent of a party in accordance with this section, a candidate who—

(a) is a member of Parliament; or

(b) is a member of a group a member of which is a member of Parliament,

ceases to be endorsed by the party in relation to the relevant election, the agent of the candidate will be taken, for the purposes of this Part, to have lodged a certificate in accordance with this section at the time specified in subsection (2)(aa) unless the candidate, within 48 hours after ceasing to be so endorsed notifies the Electoral Commissioner (in a manner determined by the Electoral Commissioner) that he or she does not wish to be taken to have lodged a certificate in accordance with this section (in which case the agent of the candidate may not lodge a certificate in relation to the relevant election).

Amendment No 2 [SusEnvCons–1]—

Page 22, lines 39 to 43 [clause 4, inserted section 130Z(2)]—Delete subsection (2)

The two amendments filed address important issues raised in the other place relating to the operation of expenditure caps and the opting in element of the scheme in relation to a party candidate who is later no longer endorsed. As members would be aware, to opt in to the funding scheme a certificate must be lodged with the commissioner, for a party candidate by the agent 24 months in advance, and for an Independent candidate prior to the commencement of the capped expenditure period.

A number of questions were raised in relation to whether it was appropriate that a candidate no longer endorsed should be forced to remain in the scheme in addition to the application of the expenditure cap, and whether incurred expenditure follows the disendorsed candidate as opposed to the party. It was agreed that the bill does not sufficiently address the issues. Accordingly, the government has filed the amendments in consultation with the opposition.

The first amendment modifies section 130Y, providing that if no longer endorsed, a candidate will have 48 hours to essentially opt out of the scheme if they wish to do so, by notifying the commissioner that he or she does not wish to be taken to have lodged a certificate in accordance with the section. If no notification is received within that time, the candidate will be taken to have lodged a certificate and a relevant expenditure cap will apply.

This brings us to the second issue of the expenditure cap and whether expenditure incurred by a candidate whilst endorsed should follow the candidate or be attributed to the party's spending. Advice on this matter has been received by the government, and subsequently I can advise the council that this matter is to be addressed by way of regulation. I refer the council to the broad regulation-making power in section 139, which will enable us to do this.

The second amendment simply removes section 130Z(2) to allow for the matter to be addressed wholly by way of regulation. I confirm that the government has consulted with the opposition on this matter and I can again confirm that an agreement has been reached with the opposition that the regulations will only be introduced when the proposed operation of a regulation addressing this particular issue has been agreed to by both the major parties and has been subject to adequate consultation. This may occur either before or after the 2014 election, in either case prior to the commencement of the legislation in July 2015.

The CHAIR: The Hon. Mr Lucas. As the minister has moved both amendments, you will be speaking to both.

The Hon. R.I. LUCAS: I indicate my advice from the member for Davenport is that the Liberal Party will support both amendments. I thank the minister, who, on behalf of the minister in charge of the bill, in the last paragraph of his explanation has put on the public record private commitments and understandings between the Attorney-General and the member for Davenport in relation to the critical issue of regulations. In summary, that is that they will be the subject of wide consultation and then ultimately agreement between the government and the opposition. That will occur either before or after the 2014 election, and in either case prior to the commencement of the legislation in July 2015. In thanking the minister for that undertaking that he has given on behalf of the government and the minister in charge of the bill, I indicate again the Liberal Party's support for both amendments.

The Hon. M. PARNELL: I was just trying to think of an example where this provision might have some work to do. It is not that common that people jump ship, but I was reminded of our former colleague here the Hon. David Winderlich, who at one point resigned from the Australian Democrats. I am not sure at what point he ceased to be endorsed, because presumably that is at the election of his party rather than his personal decision to resign.

I am trying to work through how this might happen. I understand the intention would be that in a situation like that if, for example, Mr Winderlich chose then to run as an Independent candidate, his cap would be $125,000. If the Democrats chose to contest a candidate as a registered party, they would have a higher cap. What would the situation be if a candidate was in a political party, had spent, say, $400,000, and then ceased to be endorsed, and had therefore already exceeded their cap? Is this provision designed to protect that candidate?

The Hon. I.K. HUNTER: My advice is yes. Essentially, because of the complexity in the hypothetical scenario the honourable member raises, that is, the purpose of dealing with these issues through the regulations, my amendment No. 2, I am advised, removes the prior expenditure, I suppose, the prior issues of fact, from consideration and would therefore protect the candidate who decided to go off and become another party candidate or an Independent perhaps.

Amendments carried; clause as amended passed.

Remaining clause (5) and title passed.

Bill reported with amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (12:23): I move:

That this bill be now read a third time.

Bill read a third time and passed.