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Legislative Council - Fifty-First Parliament, Second Session (51-2)
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DEVELOPMENT (POLITICAL DONATIONS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 April 2008. Page 2347.)

The Hon. J.M.A. LENSINK (23:16): This bill has been proposed to address corruption, perceived corruption or potential corruption involving development. There are two aspects in relation to corruption: the actual corruption that may take place and the perceived corruption that may arise from conflicts of interest, not necessarily being on the take and so forth.

In his second reading contribution, the Hon. Mark Parnell made the comparison with New South Wales, which has had a fair circus of goings-on with developments in the Wollongong City Council area. He stated that the two reasons that that level of corruption would not happen in South Australia were that we had independent development assessment panels and that our councils were inherently less political. I tend to agree with him that those arguments do not necessarily substantiate our not being concerned about potential levels of corruption.

This bill will, in effect, force property developers to disclose all donations to political parties when lodging development applications, and it would apply only to applications of greater than $4 million or those including a subdivision of 10 or more plots, and they would be accompanied by a statutory declaration. The honourable member states that he does not oppose donations to political parties from developers and that his proposal is that a zoning change or a development application will trigger the need to disclose.

We have disclosure laws imposed by our electoral legislation, and one may argue whether or not they are adequate. However, the Liberal Party views this measure as targeting one industry, whereas, in fact, this may occur in other industries. I will give one example, which I have not been able to substantiate. I have certainly been told that the waste industry in South Australia may be subject to some corruption, and the allegation is made that some of the shonky operators who stockpile materials so that they can avoid paying the solid waste levy are close to senior people in this Labor government.

I raise it to state that, while there may be more opportunities for developers, I do not think it is good practice to target a particular industry. Also, our official stance as a party is that we support the establishment of an ICAC, which would be able to refer any issues to that process. I think it is important to have a process such as an ICAC because one may raise, on the one hand, a developer having a successful application and, on the other hand, reporting the particular donations and the dollar value of those donations, and that gives a perception that there is a conflict of interest.

If we were to have an ICAC it would solve that problem because there would be an established process that everybody would know about. Rather than implying, through raising the issue of the successful application and the amount of the donation (which implies that there might be a perceived or an actual conflict of interest), an ICAC would be a well-accepted way by which anybody who had concerns would be able to have those concerns investigated. With those brief words, I indicate that the Liberal Party does not support the bill.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (23:21): The government does not support the bill. I guess it is understandable that the Greens, as essentially an anti-development party, would put up such a proposal. It is a party that is financed by people from conservation groups and the like that would normally be opposed to development and, obviously, they support measures which, for them, would create a more level playing field. So, in that context, one can understand the motive behind this bill and, indeed, many of the other measures that the Greens put forward. Every day they are in the media advocating something that generally would try to make traditional economic development more unlikely within our society, and that is fair enough: that is their stance.

However, I suggest that this is the wrong act for measures in relation to political donations. This bill seeks to amend the Development Act but this is not a development matter; it is an electoral matter. In fact, there are existing arrangements within the Electoral Act for the declaration of political donations. Whether or not they should work better is another matter, but I suggest that should be addressed in the context of the electoral legislation.

The fact that the arrangements work as well under the Electoral Act as they would under this bill is illustrated by the fact that the Hon. Mark Parnell and the Hon. Rob Lucas (for that matter) have obviously spent time scrutinising those donations and have raised issues within this parliament in relation to them. If there was not that transparency, if you like, in relation to donations, those issues would not have been raised. I do not really see how any improvement is going to be achieved by putting such requirements as already exist in the Electoral Act into the Development Act also.

In his speech the Hon. Mr Parnell said that sunlight is the best disinfectant. That might be so, but that is why, indeed, it should be within the Electoral Act. That is where it belongs. Perhaps the real argument or the strongest argument against this bill is that the amendments, effectively, would be useless in achieving the purpose that the Hon. Mark Parnell expects them to achieve. The loopholes in this bill would be most transparent. Companies could simply donate via third parties.

When some of these issues were raised, I referred to a major project in this state by the Bradken company, which this government supported. To my knowledge I do not believe that company has given any donations to the ALP, but it did give a donation of $12,500 to the New South Wales Liberal Party and, in turn, there was a donation of $12,000 from the New South Wales Liberal Party to the South Australian Liberal Party.

Whether or not those two are connected, I do not know, but clearly it gives an example of the sort of vehicle whereby companies might be able to donate through a third entity to avoid this bill, be they so minded. In any case, as in the case of Bradken, those donations are captured in the Electoral Act anyway. In fact, they are captured in a way that you would not be able to get the same information through the Development Act because you would not have got the first donation to the third party through the Development Act, so in a sense it would be less effective than the legislation we already have.

Most of the development decisions are made by local government, and it has already been pointed out that we have a different structure than New South Wales. That is not to say that the likelihood of corruption would necessarily be any less but, given that in this state there are not caucusing or political parties, any perception of corruption within local government through donations to political parties is less likely to occur. Of course, there are members of local government who are members of political parties; often their affiliation is well known, but the point is that they do not have caucusing. They are not committed to a party line; in fact, they stand as individuals and they act as individuals, so donations to political parties have no relevance to that behaviour anyway.

Perhaps the final argument against the bill—and this was touched on by the Hon. Michelle Lensink—is that it really is discriminatory in that it singles out development as one industry sector that should have special rules. If we are going to go down this track, why would we not capture the mining industry because the Greens do not like that industry? Should they be captured as well? Given the Hon. Mark Parnell's bills in relation to superannuation, perhaps he would have ethical donations for political parties where you can donate only if you are from an ethical source. Of course, his definition of ethical donations might be different than other people's.

One could give a whole lot of examples: the hotels industry in relation to liquor licensing matters, the fishing interests in relation to fisheries bills, medical practitioners in relation to certain bills—all of those cases could come up. But one could also say if one was going to go that far: then what about groups like Greenpeace or conservation groups donating to anti-development parties? Should their donations also be declared, because that is the other side of the coin? If influence is being used to achieve a particular political outcome, should that also be declared?

But where does one draw the line? Sometimes parties make their own decisions. I know that the ALP made a decision not to accept donations from the tobacco industry; other parties may not, but I think that is really up to them. That is all in the public arena. The voters at the end of the day can make their choice on what stands political parties make. But what is important in relation to any development decision is that this declaration should be transparent.

In any case, that reminds me of another obvious loophole in this legislation, which would be the timing of donations. What would be the difference if the developer lodges and a donation is made after the event? Is that any less relevant than if it is made before? These timing issues come into it. I believe that the best transparency—the way that sunlight is the best disinfectant—is to have regular scrutiny of political donations right across the country, as they are, so that you can cover movement in donations, and that is best done through the Electoral Commission. If there is need to tighten those, then maybe it should do that. Even if the Electoral Act limitations were effective, if you just had a $1,000 limit, presumably you could have a whole lot of dinners for $990 involving spending by different individuals, and that would be another way of getting around the laws. That is exactly what has been done by the federal Liberal Party for some years.

The Hon. R.I. Lucas interjecting:

The PRESIDENT: The Hon. Mr Lucas is down to speak later.

The Hon. P. HOLLOWAY: These are the limitations with the bill, but there are essentially the same limitations with the Electoral Act, only I would suggest that they are even worse in the Development Act than they are in the Electoral Act, because they are not as comprehensive in terms of the broader coverage that would be made of it. If one is going to look at the whole issue of electoral donations, then it should be done as a whole, right across the spectrum and not just picking out one particular part of it.

Let me just give a final example, and it is a real example. This bill covers things like subdivisions. There is one company in the near areas of Adelaide which is subdividing. The company is a well-known donor to the Liberal Party. It is about to move its headquarters and sell that property. What value would there be in the company declaring the fact that it donates to the Liberal Party? We all know that it does, but the point is that it will not affect the decision of that particular company in relation to subdivision. Nor will it affect, I should say, this government's decision in relation to any proposal that might come forward in relation to that.

If we are really trying to suggest that somehow or other political parties are influenced by these things, then it would work both ways, presumably. If you have favourable influence, does that mean that you also get unfavourable influence because a party donates to one rather than another? The reality is that, if one looks at the record—and the record is there; it is transparent which companies have given donations—some companies have given to one party or another or both.

Other companies have not, but all of them have at various times received favourable and unfavourable decisions from government, as indeed should be the case because, I would suggest, those decisions are decided on their planning and development merits and not in relation to donations. For those reasons, I do not believe that this bill is an effective way to deal with it. We must have proper scrutiny of political donations, but it should be done as it is now under an effective Electoral Act.

The Hon. SANDRA KANCK (23:32): I am pleased to support this bill, which is a modest one, simply seeking to shed some light on the darkness that surrounds the way that decisions are made in this state. The Hon. Mark Parnell speaks of sunlight being the best disinfectant, but I am inclined to think that we need something a little stronger: caustic soda, perhaps?

The Hon. M. Parnell: Dettol.

The Hon. SANDRA KANCK: Dettol, maybe. Yes, for I believe corruption must be widespread in this state. I come to this conclusion by applying the arguments used by the government and other parties in this chamber. The argument is made that our tough bikie laws will cause an exodus of bikies to the eastern states and that our lax marijuana laws make South Australia the cannabis capital of Australia. If that is true, then this apparently soft approach to corruption, combined with our development boom, must be attracting crooked developers and encouraging dubious practices.

The Hon. Mark Parnell has made the point that, where bodies are established to find it, corruption is found, but in South Australia, we have preferred not to look. According to a director of the New South Wales ICAC, there are four risk factors for corruption: opportunity, cultural acceptance, little fear of detection and a lack of leadership in support. In South Australia, opportunity is arising from the development boom, but the lack of an ICAC reduces the fear of detection and we suffer from that lack of leadership.

The lack of leadership is demonstrated by the state government's complete lack of interest in, and antipathy towards, deterring corruption. It is important to note that New South Wales sees education in the public sector and the community as an important part of preventing corruption but, in South Australia, our government is so intent on convincing us that everything is fine that it does not bother with that sort of education. This suggests that there may be pockets where there is a cultural acceptance of corruption. So, we probably have all the factors that drive corruption, and there are state politicians who have an almost universal Freudian attraction to vertical objects, giant holes and huge machines.

What deters corruption? According to the New South Wales ICAC, again, the key factors are: investigation. The powerful tools of surveillance, search and seizure, deter corruption. Unfortunately, we do not have an ICAC and this government opposes it. Corruption prevention, which looks at systemic factors that support or prevent corruption. Well, we do not have an ICAC that can do this and no-one else is actually doing anything about it.

Education: raising the awareness of both the public sector and people who deal with the public sector. Once again, no ICAC and no effort from anyone else to make sure this happens. In fact, outright corruption must just be the tip of the iceberg. Much more common would be the legal but lethal seduction of communities and individuals through job sponsorship and job offers.

The District Council of the Copper Coast is currently the most obvious example of developers employing council staff. Let me remind members of some of the salient details. The Copper Coast, with a population of 11,500, is experiencing the construction of a massive golf resort, The Dunes.

The Dunes project will cost about $750 million and include accommodation for about 2,000 people. The former CEO of the council, John Shane, is now a director of Quickview, the developer of The Dunes project. The former general manager of infrastructure and environmental services of the council, Roly Kavanagh, recently went to work for Quickview as the site manager. There are reports that other council staff are working for Quickview.

One of the councillors, Graham Hancock, has been a consultant for the developer. The mayor and deputy mayor have been asked to step down from the development assessment panel by another council member, councillor Tommy Tonkin, because he believes that routine discussions between the mayor, deputy mayor and developer, conflict with the code of conduct established under section 21A of the Development Act—they have refused. I am not saying that anything illegal has occurred, but it is certainly not best practice. If we had an ICAC it would, at least, be considering an investigation of this council.

There is then the careful cultivation of acceptance by sprinkling sponsorship money throughout key community groups. For example, I note that this year's Make a Wish Foundation fun run will start and finish at The Dunes development. It is not illegal, but it is clear to all concerned that it is designed to buy community support.

The transparency sought by this bill is probably the mildest of the range of tools required to seriously tackle corruption. The government will, no doubt, oppose even this mild measure and, in fact, the Hon. Paul Holloway has indicated that is his party's position. The government will continue to insist that there is no problem and argue that somehow South Australians are different: we do not give into temptation here.

If pressed for justification the government will argue that an ICAC is too expensive. This begs two important questions: what price influence, and what price democracy? South Australians deserve some transparency and reassurance in these matters. Unfortunately, I suspect that we have a situation where the major parties will want to have their cake and eat it as well. Supporting this bill, however, would be a step in showing that the two major parties are serious about fighting corruption.

The Hon. R.I. LUCAS (23:38): In speaking to this particular bill I will start with two quotes. The first quote is from the Labor Party policy of 2002, the plan for honesty in government, which quotes the now Premier, Mr Rann, as follows:

We will lift standards of honesty, accountability and transparency in government. Secrecy can provide the cover behind which waste, wrong priorities, dishonesty and serious abuse of public office may occur. A good government does not fear scrutiny or openness.

The second quote I turn to, appertaining to the substance of this bill, is from 2 May 2007 in an interview with Mr John Blunt on the Bevan and Abraham show on ABC Radio. Mr Blunt was either general manager or CEO of the Makris Group. The context of this debate was revelations made in this parliament that the Makris Group, through four or five different companies, had donated $182,000 to the Australian Labor Party prior to the 2006 election. Bevan and Abraham were interviewing Mr Blunt, who was disarmingly honest in his reply. The record of the interview is as follows:

In responding to a question from David Bevan about why the Makris Group chose to donate to Labor, John Blunt replied: 'I mean, we have got business interests, as well, so we want good governance. We want to see things happen in this state.'

Matthew Abraham interjected, 'You want to be looked after, too?'

John Blunt: 'Yeah, we want to make our projects happen, that's for sure, but, you know, that's a part of the way the system—you know, politics—works here...'

I think those quotes summarise the issues that are being addressed by the Hon. Mr Parnell in this legislation. Here we have the chief executive officer of a major developer who, in the period leading up to the 2006 election, had donated $182,000 not just in the name of the Makris Group but through groups called the Gawler Northern Market Group, and Acanana, and a number of others.

It was only through work done by the opposition in tracing back through company searches that the associated interests of these companies with the Makris Group were revealed. As a result, there were these interviews from Bevan and Abraham, and I quote Mr Blunt again, 'Yeah, we want to make our projects happen, that's for sure, but, you know, that's a part of the way the system—you know, politics—works here.' That is a damning criticism of this government and of this minister, who has been the minister associated with a number of the developments of interest to the Makris Group, to which I will refer in a moment.

In addressing the issues of this legislation, and other related matters, I seek leave to incorporate in Hansard a purely statistical table that analyses the donations made not just by developers but also by other major interest groups to the Australian Labor Party between the period 2002 and 2007, all from Australian Electoral Commission returns.

Leave granted.

Donor for period 2002-2007 Total Amount
ALP Holdings Pty Ltd $1,568,000.00
Shop Distributive Association $778,648.61
Construction, Forestry, Mining and Energy Union $753,130.95
Liquor Hospitality and Miscellaneous Workers Union $548,865.48
Australian Manufacturing Workers Union $405,736.51
Australian Workers Union $267,673.36
Companies associated with Makris Group, including: Makris Group Pty Ltd, Balgara Shopping Centre Management, Acanan Pty Ltd, Gawler North Market $261,150.00
Australian Hotels Association $221,650.00
Transport Workers Union $186,338.66
Companies associated with Mr Pickard, including: Fairmont Homes Group Pty Ltd, Pickard Retirement Pty Ltd, Land SA $119,450.00
Companies associated with Mr Gandel including: Lewiac Pty Ltd, Northgan Pty Ltd $71,100.00
Westfield Shopping Centres $64,100.00
Urban Construct $48,250.00
Strategic Contacts Pty Ltd $33,000.00
Caversham Property Development $30,000.00
Companies associated with Bilfinger Berger Australia, including: Bilfinger Berger, Baulderstone Hornibrook Pty Ltd $29,850.00
Walker Corporation $25,000.00
Companies associated with Mr Sadri, including: MDS Australia Pty Ltd $24,400.00
Babcock and Brown $24,400.00
ABN Amro Pty Ltd $17,700.00
Westpac Banking Corporation $4,000.00
Total $5,482,443.57


The Hon. R.I. LUCAS: This table refers to donations to the Australian Labor Party between 2002 and 2007. Unsurprisingly, the secretive, mysterious, and some might say sinister, ALP Holdings Pty Ltd is the biggest donor to the Australian Labor Party—approximately $1.6 million donated through that particular entity. Where that money has come from, or how the money has been accumulated, no-one in this parliament, other than the minister—

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: No; no-one other than the minister or members of the Labor Party would know that.

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: The Australian Electoral Commission returns, to which the minister refers, saying 'Everything is transparent, everything is disclosed,' indicate nothing more than that—that is, three different donations totalling some $1.6 million to the Australian Labor Party.

As I go through and refer to some of the individual aspects list, one of the points I would like to make is that, in my view, we are talking about a danger to democracy in terms of the direction we are heading with contributions to all parties, including both the major parties. However, I can assure you, from looking at the returns, in South Australia recently it has been to a much greater extent than ever existed with the former Liberal government in the eight years leading up to 2002.

In the financial year 2005-06, receipts for the Australian Labor Party in South Australia alone were $4.9 million, while I note that the national Australian Labor Party returns for that same year were just $3.7 million. So, the national office of the Australian Labor Party had receipts of $3.7 million in 2005-06 while the South Australian branch of the Labor Party, a mere 7 per cent of the national total, had receipts of $4.9 million in that period.

We are not talking about small beer here, we are not talking about small bickies. For the first time ever we are talking about significant lumps of money being dumped into one political party. Contrary to what the minister is saying, there is some transparency in terms of many of the aspects of the public disclosure requirements.

I am not going to go through all the list. It is now incorporated in Hansard, but unsurprisingly, Mr Acting President, you will not be surprised to know that an association that you have very close affiliations with, the Shop Distributive Association, is the next biggest donor at $778,000, and then a number of other unions. Going down the list, as I indicated before, the companies associated with the Makris Group during that period made total donations of $261,000, through various entities called Acanan, Gawler North Market, Balgara Shopping Centre Management and the Makris Group Pty Ltd itself.

The Australian Hotels Association, which is a very big donor to the Labor Party and to be fair, is also a donor to the Liberal Party, made donations of $221,000. Companies associated with Mr Pickard, again who has been a donor to both the Labor Party and the Liberal Party, through entities such as Fairmont Homes, Pickard Retirement Pty Ltd, and Land SA, donated $119,000. Companies associated with the developer by Mr Gandel, which included the Lewiac Group and Northgan, donated $71,000. Westfield Shopping Centre, $64,000; Urban Construct $48,000; Strategic Contracts Pty Ltd $33,000; and Caversham Property Development $30,000.

Companies associated with Bilfinger Berger Australia donated nearly $30,000; and Walker Corporation $25,000. Companies associated with Mr Roost am Sadri, which also includes MDS Australia Pty Ltd, donated just over $24,000; Babcock & Brown just over $24,000; ABN Amro $17,000; and Westpac Banking Corporation $4,000.

The point of doing that analysis is to indicate that it is not just the development industry—although that is a healthy source—from which the Australian Labor Party has garnered much of its donations, but in looking at those one can clearly see that. I hasten to say, as I said in an earlier speech on this issue, that the speech that I am making tonight will make no allegations of impropriety against any company. I am just outlining the facts in relation to who has given what and an analysis of what they are also involved with.

The Makris Group is clearly involved with at least a couple of controversial developments in relation to Le Cornu and a major shopping centre down at Encounter Bay, about which I have asked questions of the minister already. Walker Corporation is associated with a controversial development at Buckland Park. Urban Construct is involved with a controversial development at Newport Quays and a number of other developments as well. Bilfinger Berger Australia, which includes Baulderstone Hornibrook, is involved in a number of developments in South Australia as well.

Babcock & Brown is associated with a number of the bidding groups for the PPP projects in South Australia. For example, Babcock & Brown is in one consortium bidding for the $0.5 billion PPP prisons project. I think Bilfinger Berger is also part of a consortium bidding for the $200 million plus PPP project in education. Caversham, or the Aspen Group, is tied up with the City Central project, and also I understand with the SA Water building project as well. Hansen Yuncken was tied up with the PPP for police stations, regional police stations and court houses, and it has been tied up with a number of other major developments, such as the Lyell McEwen Hospital redevelopment.

So, if you go through the PPP projects in terms of the bidding groups—Bilfinger Berger, ABN Amro, Babcock & Brown, Hansen Yuncken, Built Environs—all of them are part of bidding groups for major PPP projects in South Australia. One can only imagine that when the bidding comes for the nearly $2 billion Marjorie Jackson-Nelson project, a number of those particular groups (the development groups and also the financial groups and other groups associated with those consortia) potentially also will be part of the consortia that will be bidding.

That analysis indicates that the development industry is a significant part of the donor group, but so are many other groups as well. I share the views of my colleague the Hon. Miss Lensink and the Leader of the Government, in part, and that is, if this issue is to be tackled (as, indeed, I agree, it should be), I do not believe it can be tackled through the mechanism the Hon. Mr Parnell is advocating, that is, isolating the development industry in this way.

As I said, when you look at this analysis of donations to the Australian Labor Party, it shows groups such as ALP Holdings and Progressive Business (the organisation about which a number of questions have been raised). For the first time last year a return was lodged with the Australian Electoral Commission. It has been my view for some time that, as an associated entity of the Labor Party, it should have been submitting returns for a number of years, as indeed its sister organisation in Victoria has been lodging annual returns with the Australian Electoral Commission. Nevertheless, it started to lodge returns, and I am currently undertaking an analysis of that, and associated entity returns also.

Of course, add to this area of interest the Hon. Mr Parnell has raised in relation to development projects, etc., the work of Progressive Business, which is headed by former Senator Nick Bolkus, and look at the fact that Mr Bolkus has also acknowledged he is a lobbyist in his own right on a number of interests. Look at his work as chair of Progressive Business, raising hundreds of thousands of dollars for the Rann government. It is an unpaid job, but then you look at the other part of the equation, that Mr Bolkus and Mrs Bolkus (Mary Paterson, as she is known) have a significant number of appointments from the Rann government. For example, Mr Bolkus is the chair of the Stormwater Management Authority and, I understand, a member of the healthy living committee. His wife, Mary Paterson, is a board member of the Housing Trust (which pays just under $30,000 a year), and is on the Local Government Grants Commission and the Social Inclusion Board.

So, there is a web in terms of Mr Bolkus undertaking a significant amount of work (he says, unpaid) for this fundraising arm of the Rann government and raising hundreds of thousands of dollars. He is also a lobbyist in his own right. On the other hand, the Rann government rewards him and his wife with what looks like at least five appointments of a paid nature out of the taxpayers' purse. As I said, one of those appointments is up to almost $30,000 a year in the Housing Trust.

It is not surprising that the Hon. Mr Parnell, and others I am sure, raise questions about transparency, particularly when one sees comments of the nature of Mr Bunt's. As I said, blunt by name, blunt by nature and blunt in this interview—disarmingly honest. But I can assure members that many similar statements are made off the record and in private by people in relation to the development industry. That is, they believe that to ensure that they are in the hunt, rightly or wrongly, they need to be participants in Progressive Business and making donations of a significant nature to the Rann government.

This current free-for-all we have is a danger to democracy. There is the perception amongst many commentators and observers for potential corruption or impropriety in relation to all these things. My speech tonight is not alleging impropriety against any particular donor I have mentioned in my contribution, but it will be particularly highlighted when a government makes a significant change in a long-standing policy. I have addressed this issue in a number of other areas, but if a government has a particular view in an area, a policy position, and makes a significant change in that policy, and if at the same time one sees significant donations being made to the Australian Labor Party, then it is not surprising people will say, 'Hey, what's going on here?' in relation to what is occurring.

Given the time, I will not go through what I believe all the changes ought to be, other than to speak briefly and highlight a number of my personal views on these issues—I certainly do not profess to speak on behalf of my party. There is no doubt that there now has to be a significant change in relation to electoral disclosure laws. I do not support, for the reasons I have outlined, this particular endeavour from the Hon. Mr Parnell because, if you are to make change, it cannot just be for the developers but ought to cover the gaming industry, hotels and the other donors as well.

I am not the only one raising these issues: Mr Parnell has his model; the federal Labor Party through Senator Faulkner is raising the possibility amongst a number of options (I do not think they will eventually go down this path of banning political donations); the former federal president of the Liberal Party (Shane Stone) is canvassing the potential banning of donations; and Malcolm Turnbull and Christopher Pyne in the federal Liberal Party have talked about significant restrictions or inhibitions in terms of the current practices of donations to all parties. My personal view is that there needs to be a massive overhaul of the current disclosure laws. I have changed my views on these issues as a result of what I have seen over the past five or six years. I am now a supporter of public funding being introduced in South Australia. I do not believe that is the solution in and of itself to the problem, but it can be part of it.

I certainly now support at the very least some limit on the level of political donations that can be made by any individual or associated group to political parties, and I see that being at a modest level. I have looked at some of the disclosure regimes in the United States—given the hour I will not go through them now, but when the parliament returns I intend to speak on some of the options I have looked at in the United States and Canada. I certainly now support much tougher disclosure of all donations and, with the benefit of hindsight, the change my own party made to go from $1,500 to $10,000 is now not something I support. At the federal level members on both sides now support a reduction in that figure, maybe even a reduction to below the old level of $1,500, although I think the Labor Party is looking at $1,500 as well.

I refer also to the issues of aggregation under current disclosure, where companies are meant to aggregate and go over the disclosure level and disclose. In many cases, in relation to both the Liberal and Labor Party, where companies do not know because the regime is not being policed strongly enough or because they are deliberately not disclosing as they should, the issue of being able to donate to a party in a number of different states up to the threshold level needs to be tackled as well. There are a number of areas in relation to disclosure, but time does not permit me to go through them all this evening. However, I will address my views on them when the parliament resumes.

From looking at what is occurring in the United States, one of the lessons is that, if you do introduce a tougher regime in terms of disclosure and/or including limits on the level of donations, then again the clever operators in the United States have got around that. They have done that through what is known as the independent expenditures. I refer members to the report from the Fair Political Practices Commission in California of June of this year, which is a report on 'Independent Expenditures: The Giant Gorilla in Campaign Finance'. That demonstrates that, with their very tough limits on donations and very tough disclosure (probably second only to Washington), the clever operators have got around that through independent expenditures through independent expenditure committees.

That particular report and a number of others at which I have looked from the Fair Political Practices Commission demonstrate the cleverness of those who wish to donate, and if you think you have closed the loopholes, then you will need to think again. It is not easy, even if you are determined to crack down on it. If we do move to a tougher disclosure which, as I said, I personally support, then, at the same time, you have to tackle the issue of independent expenditures. If you do not, then the American experience demonstrates that you are almost wasting your time—$100 million in the Sacramento case. I think it was almost an increase of 6,000 per cent in the space of four years. Once the tougher disclosures came in, all the money went back in through independent expenditure committees.

With that, I indicate my inability to support this particular model for reform but, as I said, I am not speaking on behalf of the party, I speak as an individual. I do personally support a comprehensive overhaul of this whole area and I think there do need to be much tougher disclosure regimes in the future to try to guarantee that there is not to be corruption or, indeed, as raised by a number of members, to reduce the perception of potential corruption or impropriety in this whole area.

The Hon. M. PARNELL (00:01): I commence my summing up by thanking the Hon. Sandra Kanck for her support, and the Hons. Michelle Lensink, Paul Holloway and Rob Lucas for their contributions. I asked for this to be brought on for a vote about a month ago, and I am glad that we finally got to it tonight, albeit on what appears to be the last sitting day of the session. I am only very slightly encouraged by the Liberal contributions which provide mooted support for what I am trying to achieve. As I take it from the contributions of the Hon. Michelle Lensink and the Hon. Rob Lucas, the main reasons are that my measure is incomplete as a solution to political corruption. I accept that absolutely. My bill was not designed to be the be all and end all of ending political corruption through inappropriate donations. I never intended it to do that, and I will explain some of the reasons why.

The other argument given is that an ICAC would be the way to go. I agree, an ICAC would be the way to go, but we do not have one, there is not one before us. It looks as if it will be some little time before we get one and, in the meantime, piecemeal as it may be, I think the type of measures that I am proposing as per this bill are the way to go to increase transparency and accountability.

I do need to comment on some of the comments of the Hon. Paul Holloway. Perhaps it is the lateness of the hour, but he was much more mooted tonight in his anti-Green rhetoric, saying that we are an anti-development party. I was waiting for the reference to the Greens' support for the East German planning system of the 1950s. I can assure the honourable member that I do not sit down with Maurice Iemma and hark back to the good old days of East Berlin in the 1950s. The Greens are not anti-development. However, if the minister regards this bill as anti-development, then if any development is actually prevented by this bill—in other words, if anyone sees that they cannot go ahead with their development because they have made a donation—what more evidence do you need than something is crook.

If the fact of having to write a statutory declaration saying that you have given some money to a political party means you cannot go ahead with a development, clearly there is something wrong. If people think that it is onerous, bear in mind that in September we will be dealing with a piece of legislation that says, 'If you take $300 worth of empties to a container deposit place, you have to sign a statutory declaration.' It is not a great imposition on developers, especially given that the threshold is set so high—$4 million developments or 10-lot subdivisions—to require that declaration.

I agree with the Hon. Paul Holloway that there are other measures, such as the Electoral Act, but we do not have those measures in place and we do not have disclosure laws in South Australia. One of the difficulties we have in trying to cover the field is that, in the absence of an overall regime for political disclosure in this state, we need something to trigger that requirement for making a declaration. That is why I have focused on the development industry: because the trigger is when they want something. They want a development approval and they obtain that approval by lodging an application. It is not the same situation in relation to rezoning exercises or the hotel industry. It is not as if they are coming to government every other day looking for a new permit or licence. The triggers simply are not there.

The Hon. Rob Lucas went to some length to talk about some of the developer donations, especially in relation to the Labor Party. The analysis the Greens have done, especially through our democracy4sale website, shows that the development industry now outspends the union movement in donations to the Labor Party. More money goes into Labor coffers from the development industry than from the unions.

The Hon. R.I. Lucas: Not in South Australia.

The Hon. M. PARNELL: Not in South Australia, no, but certainly in New South Wales—which is the focus of the democracy4sale website. I can see why the government is unhappy with this legislation.

One of the things I occasionally do in this place is to take ideas from other jurisdictions. I have taken this idea from Labor Premier Morris Iemma. In June this year—after I introduced my bill—Morris Iemma and the New South Wales Labor government introduced the Local Government and Planning Legislation Amendment (Political Donations) Bill 2008. The bill inserts a new section 147 into the New South Wales Environmental Planning and Assessment Act, the equivalent of our Development Act. Under the heading 'Disclosure of political donations and gifts' the bill provides:

The object of this section is to require the disclosure of relevant political donations or gifts when planning applications are made to minimise any perception of undue influence by:

(a) requiring public disclosure of the political donations or gifts at the time planning applications (or public submissions relating to them) are made...

It is pretty well exactly what my bill seeks to do. That is what Morris Iemma sees as an appropriate response to the perception of corruption that comes from developers giving donations.

Certainly, the rhetoric of the New South Wales Premier, Morris Iemma, was stronger at the height of the Wollongong corruption scandal. Certainly, the New South Wales bill does not go as far as my colleagues in the Greens in New South Wales would have liked. In fact, they sought to amend the bill to have it go further because New South Wales was mainly targeting donations to local council politicians rather than the state government or political parties.

In the end, Labor and the coalition combined to require only a developer who submits a development application to a council to disclose donations that were made to local councils and not to political parties. It is not as strong as they would have liked, but the point I am making is that the opposition from Labor to this bill is in direct contrast to the position their colleagues have taken in New South Wales. Certainly, since I introduced this bill, the debate has moved on a great deal.

I will tell members some of the things Morris Iemma said in The Sydney Morning Herald earlier this year. On 22 March, Morris Iemma said:

My view is the time has come for us to now seriously consider moving away from donations and having a fully-funded public system...It's now got to the point the mere fact of giving a donation creates the perception that something has been done wrong. The time has come to test the viability of a full public system.

I acknowledge that the Hon. Rob Lucas expressed some support for a publicly funded system; and, certainly, that is the Greens' position as well. Morris Iemma further said:

There's no example of a minister or MP who has done anything wrong, but there is a perception as far as donations are concerned and the time has come to go further in the reforms.

The position of the New South Wales government is not just this disclosure legislation (similar to what I have before the council now), but Morris Iemma is also proposing complete bans on political donations. Mr Iemma said that he wanted to:

...kill that perception...that you can buy influence. What I want to do is [go towards] a model of full public funding.

That quote appeared in The Sydney Morning Herald. In an article in The Australian in April this year, Mike Steere said:

The debate about cleaning up the scandal that is Australia's laws on political donations has come a long way in a short time. Suddenly, ideas considered sheer political folly a few months ago are being advocated by the main parties, such as the complete ban on all private donations by political parties canvassed by NSW Premier Morris Iemma, forcing parties to rely on public funding.

About Morris Iemma, Mr Steere said:

If he's serious, it's a great idea. When Wollongong councillors in New South Wales ask for a minimum donation of $20,000 in return for approval of a development application, according to allegations before the state's Independent Commission against Corruption, and when ministers, state and federal, sell seats at their dinner table for $5,000 or more each, it is past time to call a halt.

The article then goes on to talk about the idea of public funding for elections. I would urge particularly members of the crossbench who have not yet committed to a position to accept this very modest reform in transparency in relation to political donations. In comparison to a move to ban donations or to go to full public funding of elections, this is a very modest step. It is just saying that, at the time those biggest developers lodge their development applications (the ones we never find out about until the AEC disclosures come out, often 18 months or so after), they put in a stat deck saying, 'In the last two years, this is what I have given to political parties.'

It is not onerous, it is not expensive and it is not difficult. It will catch only the biggest of developers, but it will provide that element of sunlight that is currently missing. If to get Liberal Party support required the full raft of legislative reform, I am very happy to work with my colleagues in the opposition over the next few months, because I think we could do better than just this bill. This bill, as a stand-alone measure, does deserve support, but I am more than happy to work with the opposition to try to get some more far-reaching reforms along the lines, for example, of some of the issues raised by the Hon. Rob Lucas. But, for now, I urge members to support this bill.

The council divided on the second reading:

AYES (2)

Kanck, S.M. Parnell, M. (teller)

NOES (17)

Bressington, A. Brokenshire, R.L. Darley, J.A.
Dawkins, J.S.L. Finnigan, B.V. Gazzola, J.M.
Holloway, P. (teller) Hood, D.G.E. Hunter, I.K.
Lawson, R.D. Lensink, J.M.A. Lucas, R.I.
Schaefer, C.V. Stephens, T.J. Wade, S.G.
Wortley, R.P. Zollo, C.

Majority of 15 for the noes.

Second reading thus negatived.

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