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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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ELECTORAL (FUNDING, EXPENDITURE AND DISCLOSURE) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 11 September 2013.)

The Hon. I.F. EVANS (Davenport) (11:59): I indicate to the house that I am the lead speaker for the opposition on this particular issue. This is a bill to introduce publicly funded elections in South Australia. Most other jurisdictions in Australia, at the federal and state level, have publicly funded elections of some description. All of the schemes vary in the way they are implemented and the rules that surround them, and this particular bill sets up a unique system to South Australia.

The Liberal Party will be supporting this bill and moving a series of amendments. I apologise to the house, the amendments were meant to be tabled. I have not seen them, but I understand they are on the way. We will go through the amendments in the committee stage in due course. The issue of publicly funded elections is an intriguing policy question. There are many experts who advocate all sorts of positions on the issue of publicly funded elections.

The Liberal Party, at the state level, has been on the record for probably eight to 10 years as supporting the principle of publicly funded elections in some form or other, subject to the model. The Premier announced earlier in the year that he was going to look at introducing publicly funded elections and seek bipartisan support and opened up the door for negotiations on the model. The Attorney and I have been negotiating on behalf of our respective parties in relation to the bill. I think it is fair to say that no-one got all that they wanted, but we have a bill before us and we will be supporting the bill.

The issue with publicly funded is: what is the ill that you are trying to cure through the introduction of publicly funded elections? The Attorney, in his second reading explanation, hints at the issue of public perception of the influence of donations on the policy positions of parties or individuals. I accept that there is, at times, a media perception about that particular issue and this policy goes some way to address that issue by providing to political parties publicly funded elections, or access to public funds, based on certain criteria, and then restrictions on, in this case, in this bill, the price of fundraising events and also stricter donation disclosure rules and expenditure caps, both at the electorate and state level.

As I say, every model around Australia is different. The trade-off for the public is that they get more control over political parties in the sense of a lower disclosure limit, a cap on ticket price, which I will come to in a minute, they get an expenditure cap and a whole range of reporting mechanisms that make it more transparent, if you like, for the public to see behind the operations of the political parties.

Now all of that has an impact on the capacity of the parties to fundraise and the capacity of the parties to operate. Clearly, the parties, regardless of colour, need to be able to avail themselves of funds to operate. It is important for democracy that we have robust political parties to push the envelope of economic reform or policy issues of all kinds and, if it is in the public interest to restrict the capacity of parties to raise money through various means like donations or certain types of fundraising events, then the logical conclusion is that the public then needs to provide some form of funding to political parties so that they can operate. So, that is the principle behind the bill. That is the principle that has been adopted by the federal government about 20 years ago and other states at different times over the last 20 years. South Australia is 'tail-end Charlie' on this particular policy reform.

To go through some of the key elements of the bill, essentially the government bill sought to start this scheme for this 2014 election. We will be moving an amendment to have it start after the election, and our reasons for that are multiple. The first reason is that it is our view that with the state running a $911 million deficit this year and a $400-odd million deficit next year, the taxpayer should not be paying money to political parties to run themselves at this point in time. It is more appropriate to introduce this scheme when the state will be in surplus and the budget predicts to be in surplus post the election in various years, that is why we are delaying it. The Liberal Party is not comfortable going to the taxpayer saying 'We think you should borrow money to be running the political parties at this point.'

Everyone in the community, including the political parties and candidates, has been preparing for this election which is now only five months away on the basis that there will not be public funding. So, delaying it until after the election really will not interfere with anyone's preparation for this election because for four years we have all been preparing for it on the basis that there is no public funding. We have an amendment to defer it.

The other reason we seek to defer it is that during the negotiations with the Attorney—and I will speak about them later—he suggested after his visit to the New South Wales Electoral Commissioner that I might like to visit the New South Wales Electoral Commissioner because they have a similar scheme, not exactly the same but similar to this, and talk to him about how the scheme works.

The New South Wales Electoral Commissioner's advice to me was that for my side of politics this would be very difficult to implement before the 2014 election because of the complexity and because of our decentralised structure. Every political party is structured differently. The Liberal Party in South Australia has about 160 to 180 branch entities that have cheque books and all of those are controlled by passionate volunteers who have, they would argue, a well placed mistrust of head office. So the cheque books are decentralised in our structure.

What that means is that whatever change we make, there is a huge training regime that needs to go on in regard to this particular piece of legislation. When I met the New South Wales Electoral Commissioner he brought in his training officer, who goes out to all of the political parties and trains them on the operation of their bill, and his advice to me was that it would be impossible for my side of politics to get our volunteer administration up to speed for the 2014 election and we would be placing ourselves at risk.

Another reason we seek to defer it is that there is currently a High Court case in the New South Wales legislation which has caps on donations. I understand that the union movement or representatives of the union movement have taken to the High Court this question of political free speech and whether capping donations is an abuse of that privilege. By delaying it until after the election at least, if that case comes down in the meantime, then we will still have time to consider amendments after the election if it impacts on our bill in some way or other.

From a technical viewpoint—no disrespect to the government—none of the regulations would be ready for this legislation in the next four or five weeks of sitting, which means that the opposition would be at the mercy of the government's regulation-making power in the bill and we would have no ability to influence, reject or disallow the regulations. No disrespect to the Attorney, but that would be a large leap of faith, particularly on an electoral bill to do with political funding five months out from an election. That was perhaps a bridge too far.

We will be moving an amendment to start it from 1 July 2015, which will give parties roughly 15 months after the election to have their officers trained and it will give everyone four years' notice leading in to the 2018 election that the new rules are in place. The bill seeks to start it for this election. We will be moving to start it for 2018.

The bill seeks to have a dollar amount paid to political parties and candidates based on their primary vote in both houses, or in either house, wherever you stand. That is to all candidates, whether they are independent or from a political party. That is to all candidates, whether they are an existing MP or a candidate who is not an MP.

There is a threshold of 4 per cent, which I think is pretty uniform around Australia in relation to funding. Interestingly enough, I checked the informal vote of some elections and it was 5 and 6 per cent, so it seems generous that political parties around Australia have adopted a 4 per cent threshold but, for uniformity purposes, we support the 4 per cent.

The bill also has a system of tapered reimbursement, where it is proposed that for the first 10 per cent of the primary vote the party/candidate would get $3.50 and then, for everything above 10 per cent, they would get a $3 reimbursement. The Liberal Party has some amendments drafted to change that. We believe that all sitting MPs—so parties and sitting MPs in the parliament at the time—should be eligible for a flat $3 per primary vote reimbursement and that, if you are a candidate who is not an MP—we accept that there are emerging parties—the tapered formula, as I have described, would apply, and we have amendments drafted to that end.

In regard to the 4 per cent threshold, the bill says that if you do not get 4 per cent of the vote, you get no public funding reimbursement at whatever the dollar value is. There are some members in the other place (and previous members in the other place) who have been elected to the upper house with less than 4 per cent of the vote. So the policy question comes: how do you deal with that circumstance? We have an amendment that says that even if you do not get to the 4 per cent threshold but you are successfully elected to either house then you should be eligible for reimbursement of whatever your primary vote was, 2.7 per cent, or whatever.

So, we are not seeking to disadvantage those parties that might fall below the threshold but are fortunate enough to be elected; probably the most famous would be Nick Xenophon. I think Dignity for Disabled fall into that category. I might be incorrect, but I think Family First on one occasion at least might have fallen into that circumstance as well. We have amendments to try and correct that.

The bill sets out that there is a cap on how much political parties can be reimbursed, in that they can be reimbursed up to 35 per cent of their primary vote. Nowhere else in Australia does that capping system work, and the Liberal Party believe that you should simply get a reimbursement based on whatever the primary vote you obtain. We do not see that the best horse should be handicapped to that extent. We think that if the voters vote for a particular party—it could be the Labor Party one time and us another that gets the higher primary vote, and the Greens and the other parties that go up and down according to the electoral cycle—that there should be just a simple straight payment based on the primary vote, and we have amendments to achieve that end.

In regard to donations there is no cap on donations, but there is a stronger disclosure mechanism. Currently, the disclosure mechanism federally is $12,400, so if someone donates $12,400 over the course of a financial year you have to disclose that to the Australian Electoral Commission. So, what this bill proposes is actually a lot stronger disclosure regime.

The disclosure limit will be brought down to $5,000 and, importantly, leading into the election, the reporting of that disclosure gets more aggressive and more frequent as you get closer to the election. For the period of January before the election proper—just three months out from the election—you have to do one disclosure report and, from memory, it is weekly after that leading into the election.

Political parties will have to organise their structures so that the state director or the agent as nominated under this bill—we think it will be the state director—would have to be able to coordinate across the party who is donating what, because if it adds up to more than $5,000 in that financial year it will need to be disclosed more aggressively close to the election. This is part of the transparency measures within the bill. There is also a special provision that single donations of more than $25,000 need to be disclosed within a week. This is any time during the four-year period so, again, it is a disclosure measure.

With donations it also includes not only cash donations, of course, but donations of gifts, so if someone gets a painting of something for an auction or 50 dozen wines or a car or something, the value of that contributes to the $5,000 for the purposes of disclosure. It is always interesting for political parties to try and work out what is the actual value of something, but the value concept comes out of the federal legislation, so it is not unknown to the political parties within this state who essentially have to deal with that problem under the federal legislation.

Interestingly enough the bill also, for the first time in Australia as I recall, puts in place a restriction on ticket price for political events where it is advertised that people are going to get access to a member of parliament, a minister or their staff. There is public concern, and we understand the public concern, about someone paying $5,000 to have a seat at the table with the Prime Minister or a minister. We understand why there might be concerns about that particular practice, although I suspect that the concerns are more in the perception than in reality. I understand the genuine concerns but my experience of these functions is there is nothing to really be that concerned about: they are really discussions about the politics of the day.

However, we understand the public is concerned about it, so the bill caps the ticket price at $500. Political parties and candidates, and Independents, will not be able to run fundraisers where they advertise that you are going to have access to a minister, a member of parliament or their staff as a result of paying for the ticket. We are capping it at $500 and that, we think, is a reasonable measure. The $500, of course, would count towards the $5,000 donation.

So that this can be controlled and audited and properly reported to the Australian Electoral Commission, the political parties and the independent candidates will need to nominate an agent to be the person who is going to take responsibility for the administration of the bill. In the Liberal Party, and I am sure in the Labor Party, it will be the lucky state director of the day. Then, as a result of this bill, the state parties, and the Independents, will have to set up a designated campaign account, and it is the moneys going into that campaign account and the expenditure out of that campaign account that are dealt with essentially by this particular bill. The Australian Electoral Commission in South Australia (who will have to have extra resources as a result of this bill) will be able to clearly audit the money trail of donations going in and expenditure going out in relation to this particular bill.

Clearly, you cannot have every gift contributing to the $5,000. For instance, if there is a sausage sizzle and someone gives you a sausage or something at a school fete, does that contribute? Is that a donation? There has to be some practical lower level limit. This bill sets a limit of $200 so a gift under $200 does not count towards the $5,000 a year disclosure limit. There is no perfect rule for this. You could really set the limit anywhere. It is just a matter of how complicated, burdensome and expensive to administer you want to make it. We think the $200 limit is probably a reasonable starting point.

As a result of all this legislation, there are new responsibilities on the political parties. They will get some special assistance funding to help offset the new administration costs, particularly the auditing side of the finances—the financial side and getting all those controls right. The reason that is important is that the penalties under this bill are significant. If a political party or candidate overspends their electoral cap, which I will come to down the track, the penalty is 20 times the amount of overexpenditure.

If you overspend by $1,000, the party will get penalised $20,000, so you can see why the state directors will want to control expenditure tightly, because any overexpenditure will be a significant hit to their finances. The special assistance funding is paid twice a year and, depending on the size of the party, is either $7,000 twice a year or $12,000 twice a year. It is not big bucks—$24,000 in accounting administration fees might, if you are lucky, get you a day a week to try to deal with this legislation.

With regard to the public funding, it is an opt-in system so the Independents and all political parties have a choice: do you want to opt in to get public funding? You do not have to. It is a voluntary scheme but if you opt in then you must abide by the rules that I have set out in my contribution so far. If you do not opt in, you operate as you are now, but the disclosure rules that are set out in the bill—the $5,000 limit and the restrictions on ticket prices and those sorts of things—are still maintained. It is the expenditure caps that I will come to in a minute to which you get public funding, but you have to accept the fact that, in getting public funding, you are going to be restricted in your expenditure. I will come to that in a second.

The political parties have to opt in two years out from the election. They have to notify the Electoral Commission whether or not they are accepting public funding. I have an amendment drafted to make sure that Independents have to nominate at the same time—that is, if you are an Independent member of parliament at the time, you have to nominate at the same time, so that all MPs have to nominate at the same time.

That is so that no-one is ambushed with regard to how the political game is going to be played at the next election. The rules are crystal clear for all players. Other candidates who are not members of parliament, the myriad of people who nominate who wish to get into this place—and sometimes I wonder why—who are not MPs have a six-month or three-month period (or in that range, from memory) where they nominate to the Electoral Commissioner about public funding.

By opting into the public funding scheme, you accept that you are going to get public funding at whatever the dollar value is per vote but you have to restrict your expenditure to within the expenditure cap. So, what are the expenditure caps? The expenditure caps are essentially $75,000 per state electorate that the candidate or the party contests. In the case of my side, we always contest 47 seats so the cap is 47 seats by $75,000 and then there is a $500,000 amount for parties contesting the upper house. That is if they have more than five members contesting the upper house, from memory. That sets the expenditure cap for the major parties.

For the Independents, the expenditure cap is automatically higher; instead of $75,000, the expenditure cap for Independents in the lower house is $100,000, and in the upper house if you are a member of a group or an Independent group, the expenditure limit there is $125,000 per candidate up to a maximum of five candidates. That is a recognition that the bigger political party has a slight advantage because of the size.

I will talk about the lower house for a second. Within those caps, there is the capacity for the state director, with the agreement of the candidate, to change the cap from $75,000 up to $100,000, but they have to stay within the total cap—so, take your 47 seats, multiply by 75 and that is the total cap. If the Liberal Party wants to say, 'Look, in certain seats, we're going to spend less and spend $100,000 in certain other seats,' we can internally arrange that.

We cannot go above our cap, but we have to notify the Electoral Commissioner within three days of making that arrangement with the candidate, so that the electoral commission auditors know that they need to audit that arrangement, so they know we have not overspent. To protect candidates from overzealous state directors—and apparently they exist, Attorney—who say, 'We're not going to spend anything in your seat,' there is a minimum requirement of $40,000 to be allocated per seat, and that can only be lowered if the candidate agrees. What that means is that for those who might consider themselves in a seat that might not get the full allocation, you are in charge of the decision as to whether your party spends less than the minimum $40,000. We have sought to try to cover all options, if you like, in regard to that matter.

What if the cap is broken? If the cap is broken—this applies to all parties including Independents—the fine is 20 times the overexpenditure. If you overspend by $1,000, you get a $20,000 fine. The fine is not an expiation notice; it is simply taken out of the reimbursement. The Electoral Commissioner will dock your reimbursement $20,000. That is how the fine will be implemented; it is cash straight out and you just do not get it. That is a great incentive for everyone to stay within the cap.

How are third parties implicated by this particular bill? A third party is any person or entity who seeks to incur more than $10,000 of political expenditure in the designated period. The designated period is essentially from 1 July prior to the election to a month after the election. It is roughly that 10-month period leading into the election and around the election. They have to register with the Electoral Commission, and they themselves have to have a designated campaign account so that it can be audited.

If a third party acts in concert or agreement with a political party or candidate, the third party's expenditure is counted as the candidate or party's expenditure. What we are trying to do there is to stop third parties as shields, or shadows if you like, running campaigns on behalf of another party and not being counted in as part of their expenditure. I think I have said enough technically about the bill.

I want to place on the record my thanks to the Attorney and his staff, parliamentary counsel and various public servants who sat through nine or 12 months, or whatever it was, of long meetings—some of them went for seven hours—to try to work through the detail of this bill. I also thank the state director of the Labor Party and the state director of the Liberal Party and his staff. It is fair to say that both sides laid out in a full and frank manner the issues, how it impacted on their parties and why certain things could or could not work.

I think the reason we are here is the goodwill shown during those meetings, and again I want to place on the record my thanks to the Attorney and his staff and the ALP state director. I should also place on the record my thanks to my staffer, Charlotte Edmunds, who has done a sterling job behind the scenes, organising everything we had to and dealing with a whole range of issues arising out of this bill.

We have a series of amendments that we are moving. We have spoken to the government about the amendments, so it has not been ambushed. We understand that the government is going to accept the amendments, which means that the committee stage will be relatively brief and that we will just need to deal with the amendments. The bill will operate from 1 July 2015. We recognise that this is a major change to the way that elections are going to be run in South Australia.

My first meeting on this was in April 2006; it was my first approach from the then government to deal with this matter. So, seven years later, I am pleased to be saying that we are supporting the bill, and I look forward to the committee stage.

Mr PEGLER (Mount Gambier) (12:35): I have always been a great believer in transparency and accountability, and this bill certainly addresses, I believe, the regulatory disclosure scheme requiring all political participants to disclose the gifts and donations they receive valued at over $5,000. I certainly support that, and I think that it is a great initiative.

I also strongly support the expenditure caps that are proposed in this bill. I think that will make everybody much more aware of how they should go about these things. I also support the fact that there have to be reporting processes and campaign accounts, etc. I know that when I stood I set up a separate account straightaway. All donations and all expenditure went into or out of that account, and there was full transparency.

I do have one problem with this bill. I find it quite amusing at times that the Labor Party and the Liberal Party and other parties will always come together very strongly when there is a chance to fund their parties from the public purse. I am strongly against taxpayers' money going into funding election campaigns and into funding political parties.

I have a real problem there but, other than that, the rest of the bill, as far as the disclosures, expenditure caps, accounts and reporting are concerned, I certainly support those. But I cannot support the public funding these parties and candidates. I think that there are many other better things that governments can spend taxpayers' money on, and that is where I differ from most others.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Industrial Relations, Minister for Business Services and Consumers) (12:37): I will not go through the process of recounting the effects of the bill because I think that was covered in my second reading explanation, and it was certainly very thoroughly covered by the member for Davenport in his overview of the legislation.

I think that this is a very significant day for South Australia. It almost marks a mark in the maturity and sophistication of South Australia as a political entity, where we have acknowledged, understood and now started to take action about the idea of public accountability for donations to political institutions, recognising that the public have a legitimate concern about transparency and a legitimate interest in knowing who is paying what to whom (and I do not mean by saying this any legitimate concern about improper behaviour by political parties), and that is not unfair.

The public have a right to know and they should be in a position where they can raise their own questions about that, and I thank the member for Mount Gambier for his strong endorsement of that proposal. It also means that the journalists of this world can also make inquiries about these things, and that is also to the public good that there is discourse about issues of that sort.

Anybody looking at this legislation would immediately appreciate that it is an extremely complex piece of work. It is something that has taken, as the member for Davenport said, both of us and those who have assisted us the best part of nine months or more of scores of meetings and, as the member for Davenport said, with some of those meetings going for a very long period of time. What we have here is not some off-the-shelf thing from New South Wales, Queensland or anywhere else. This is an entirely South Australian construct which has been put together looking at all of the problems the other states have had.

If anyone wants to understand what a problem looks like, I invite you to read the New South Wales equivalent of what we are looking at here in the parliament because it is roughly the size of a phone book and I would defy a roomful of Mensa candidates to actually read it and understand it. I have been to New South Wales, as has the member for Davenport, and spoken to the people who have the unhappy duty of policing that legislation, and they have told me (as they told the member for Davenport) that it is a nightmare. So both of us have sought to make this legislation—as much as it is possible to make it—immune from those problems. Similar remarks have been made about Queensland and so forth.

The really interesting and totally unique thing about this legislation is that we do not focus on preventing people making a donation to a political party, in fact there are no donation caps at all. There are a number of reasons for doing that—partly philosophical and partly having a wary eye on the constitutional potential ramifications of mucking around with people's political expression or political right to donate to a political cause. We have said that participation in this scheme is entirely voluntary and that, if you do volunteer to participate, you are not going to have donation caps but you will have expenditure caps. The theory behind that is that we do not want to see the creation of public funding as simply a way of enlarging the platform underneath which all political expenditure occurs. In other words, stacking another storey over the expenditure.

What we are trying to do is actually keep the expenditure confined because that also performs a public service in that it means that both political parties are genuinely less dependent on donations than they would otherwise be. Not that they are equally dependent on donations just with an extra level of expenditure whacked underneath it by public funding which arguably might be the case in other jurisdictions. That is really all I wanted to say about the legislation. I think it has all been said before and I do not have any quibble with anything the honourable member for Davenport said about his overview of the legislation.

I confirm that it is the government's intention to support the amendments which will be moved in committee by the honourable member and, after all these years, in perhaps a few moments one house of the South Australian parliament will have done something that no other parliament in this state has ever managed to do before and that is not only imagine something like this, not only work on it, but complete it and actually have it pass through one house of the parliament. I am reasonably confident that if we get it through this house there is some prospect that the other place might even smile upon it as well, and that would be a very special day. If that happens, I indicate that I have a bottle of ginger beer in my fridge which I will be inviting the member for Davenport—and anybody else who is interested—to share with me. But it is not worth more than $200!

Before I sit down can I just say a few thanks. I would like to thank Reggie Martin, the state secretary, or I prefer to refer to him as 'Mr General Secretary'. He has done a sterling job in being involved in all of these conversations and has at all times been very reasonable and assisting of the whole process so I thank Reggie very much for that. Likewise, Geoff Green who has been absolutely fantastic in this process. He is a very insightful man and he brought a great deal of experience and wisdom to the table.

The member for Davenport is quite right in saying there are things in this legislation which are there to accommodate the particular concerns which everybody had about this being capable of being rolled out. Nobody sought to take advantage of anybody and, also, we were mindful at all times that Independents and minority parties should not also be oppressed by anything that was in here. So, that was front and centre in all of the conversations.

I thank Liam from my staff who began this journey with me some time ago. I think when he began he was a man of little faith, but just like Saint Paul on the road to Damascus he had an epiphany. He has always been enthusiastic and supportive but he has come to actually live and breathe this thing, and that is a fantastic thing. I thank Anne Colbert whom, in particular, did such an enormous amount of work in policy and legislation in the Attorney-General's Department, and she really worked very hard on this; and the Solicitor-General who gave us some very useful advice from time to time.

I would particularly like to publicly acknowledge the great work that the member for Davenport did on this. None of this would have been possible if the member for Davenport and me, his staff and my staff, and the party officials were not able to sit down and have frank discussions where everybody put their cards on the table, where nobody sought to take a rise out of anybody else, and where there was a constant focus on the objective of coming to a reasonable position that everybody could accommodate without anybody seeking to chisel out cheap points or easy yards somewhere. I really want to put on the record my sincere thanks to the member for Davenport and Charlotte—

The Hon. I.F. Evans: Charlotte Edmunds.

The Hon. J.R. RAU: —Edmunds—because she also has had to endure enormous numbers of these meetings.

The Hon. I.F. Evans: She loved it.

The Hon. J.R. RAU: Perhaps we should start again! Obviously I am delighted every time something passes anywhere here. It is a little bit like a person who has tummy troubles—anything that passes is a relief. This particular one is something about which I am very pleased and I think this is one of the landmark pieces of legislation for which, for many years to come, people will say, 'This was the great leap forward.' It might be that in years to come there is finetuning or whatever; inevitably that will happen, but I think this is a very significant moment. With those words of thanks, I also indicate I expect the committee stage of the bill to be very brief.

Bill read a second time.

Committee Stage

In committee.

Clause 1 passed.

Clause 2.

The Hon. I.F. EVANS: I move:

Amendment No 1 [I Evans-2]—

Page 3, lines 5 to 8—Delete clause 2 and substitute:

2—Commencement

This Act will come into operation on 1 July 2015.

For those members in the house I will explain the purpose of the amendment. The amendment brings the act into operation on 1 July 2015, so none of this act will start until then. I explained my reasons in the second reading contribution as to why it should be delayed but, by starting it on 1 July 2015, essentially it gives the political parties 15 to 18 months to train all their volunteers and get all the processes in order.

I should also have said in my contribution that I had a phone conversation with the Electoral Commissioner, Kay Mousley, on this, and I thank her for her professionalism. Her position was that, if the parliament wanted this, then whenever they wanted it to start, they would simply have to abide by the parliament's decision. Obviously the shorter the time the greater the pressure. I think that is a fair summary, but she never at any stage indicated that she would not meet a time line set by the parliament. Of course, there will also be extra cost to their office: something like six extra staff, $1.8 million in set-up costs and then some ongoing administration costs towards the whole process. However, the purpose of this amendment is to have the act commence on 1 July 2015.

Amendment carried; clause as amended passed.

Clause 3 passed.

Clause 4.

The Hon. I.F. EVANS: I move:

Amendment No. 2 (I Evans-2]—

Page 14, line 25 to page 15, line 3 [clause 4, inserted section 130P]—Delete inserted section 130P and substitute:

130P—General entitlement to funds

(1) Subject to this Division, the amount of election funding payable for each eligible vote given for—

(a) each candidate in a House of Assembly election or Legislative Council election endorsed by a registered political party at least 1 member of which—

(i) in the case of a general election—was a member of Parliament at the time of the dissolution of the Parliament in relation to the election; or

(ii) in any other case—is a member of Parliament; and

(b) each candidate in a House of Assembly election or Legislative Council election (other than a candidate of a kind referred to in paragraph (a)) who—

(i) in the case of a general election—was a member of Parliament at the time of the dissolution of the Parliament in relation to the election; or

(ii) in any other case—was a member of Parliament at the time of the event that resulted in the vacancy that gave rise to the election; and

(c) each group in a Legislative Council election endorsed by a registered political party at least 1 member of which—

(i) in the case of a general election—was a member of Parliament at the time of the dissolution of the Parliament in relation to the election; or

(ii) in any other case—is a member of Parliament; and

is $3.00 (indexed).

(2) Subject to this Division, the amount of election funding payable for each eligible vote given for each candidate in a House of Assembly election or each candidate or group in a Legislative Council election (other than a candidate or group of a kind referred to in subsection (1)) is as follows:

(a) for each eligible vote given to the candidate or group that falls within the range of 0% to 10% of the total primary vote—$3.50 (indexed);

(b) for each eligible vote given to the candidate or group that falls within the range of 10.01% to 100% of the total primary vote—$3.00 (indexed).

I intend to explain all the amendments so that the house is clear. This amendment redefines what is the general entitlement to funds. Just to make it clear, because I did not do this in my second reading contribution, political parties cannot profit out of this scheme. This is a reimbursement scheme. You may well get a high vote, which entitles you to a certain amount of money, but if you have only spent half of that amount then you can only be reimbursed half of that amount. So, the entitlement for funding is the maximum you can claim back if you have actually spent it. The reason we have designed it that way is that we do not think it is appropriate that anyone, whether they be a political party or an Independent, should be able to profit out of the scheme, so it is a reimbursement scheme.

This particular amendment sets the reimbursement at $3 per vote, which is indexed over time. That is $3 per primary vote in the respective house of both houses. It applies to all political parties that are represented in the parliament going to the election and any Independent member that is a member of parliament going to an election. At that election, they are entitled to a $3 per primary vote reimbursement. If you are not a member of parliament or you are a party that is not represented in either house, then the reimbursement is $3.50 for the first 10 per cent of your primary vote—so you actually get a higher reimbursement than those existing members of parliament—and then $3 for 10 per cent and above. So, it sets out the reimbursement scheme.

Mr PEGLER: With your leave, Mr Chairman, I would like to ask a general question. If an Independent is to stand, when do they have to apply to be recognised? I will give you an example. You could have a situation where the political party of the day has not nominated their candidate. They probably would not have to nominate their candidate until just prior to the election. They could leave it until just before the writs. There may be somebody who wishes to stand. The political party, because they are registered, will receive any of these funds that they may be able to get, but an individual may not be able to because the time limit is more than up.

The Hon. I.F. EVANS: For the political party, they have to nominate two years out from the election, so everyone will know that all Liberal or Labor candidates, regardless of whether they have been preselected, are going to be subject to the public funding rules. You may not know who the candidate is, but you know if they are going to be publicly funded or not. Under the amendments that I have moved, or will be moving later, sitting Independent MPs will also have to nominate at the two-year level. So, all sitting MPs are on the same time frame.

Mr PEGLER: If they nominate two years beforehand, and then they decide not to stand, there is no problem there, is there?

The Hon. I.F. EVANS: No, if you nominate two years before and are going to accept public funding and then do not stand at the election, then you will not get public funding because you are not standing, so you simply withdraw. Do you have the section number?

The Hon. J.R. RAU: I think it is section 130Z(2)(b)(ii), page 21. The first part deals with people who are an electoral group, and it is 24 months, and then in the case of any other election—oh, I see, that's another election; that's not the other candidate.

The Hon. I.F. EVANS: If you can just bear with us, Chairman. It is covered. From memory, as soon as the Independent candidate makes a public statement that he is standing, then I think it is within a matter of weeks or a month after that date.

Progress reported; committee to sit again.

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