JOAN STAPLES. Bill weak on stopping foreign donations, but strong on silencing NGOs.

Feb 23, 2018

The current Bill before parliament to reform electoral donations is the most comprehensive attempt I have seen at silencing public advocacy in 30 years.  It does not succeed in its supposed aim to restrict foreign donations – an aim that is supported by NGOs.  Instead, it is a convoluted, excruciatingly complicated maze that will undoubtedly silence a wide range of charities, NGOs and public interest institutions. 

Recently in Pearls and Irritations, Nick Sedden highlighted some definitions in the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill that make its reach so broad and its impact so profound.  He pointed out how difficult it is, even for constitutional lawyers such as Anne Twomey, to assimilate and decipher it.  The NGO sector has consulted widely with a range of leading legal experts, who all agree that the complicated drafting of the Bill makes it problematic to attempt amendments.   Instead, the sector is calling for the Bill to be rejected in its entirety.

Labor in a Bind 

However, Labor is in a bind on how to react to the Bill.  It has expressed support for limiting overseas influence and it wishes to distance itself from the Dastyari affair.  So, rejecting the Bill outright may expose it to perceived weakness on these fronts.  GetUp is concerned that Labor is preparing to compromise. Shadow special minister of state, Don Farrell, has said that Labor would “work with the government to find a sensible way to ban foreign donations, without selling out charitable organisations that do incredibly important work in our community”, and Shadow Cabinet is due to meet early next week.  GetUp! and other groups have activated their membership accordingly to pressure Labor.

The Bill does not succeed in its own stated aim of restricting donations from foreign citizens, because it does not restrict political donations from permanent residents who are also foreign citizens.  Ironically this means it would not have addressed the relationship between Senator Dastyari and Mr Huang Xiangmo, which caused Labor so much pain.  Mr Huang Xiangmo is a permanent resident of Australia and a foreign citizen.

Alternative Solution

Anne Twomey points out in a submission that the government could simply restrict overseas influence by putting a cap on donations and expenditure.  She says,

‘if it genuinely wished to reduce foreign influence in Australian elections, it could instead have introduced caps on donations and expenditure, as exist in New South Wales…… This would mean that permanent residents and corporations owned by foreigners would only be able to make relatively small donations, diluting their ability to influence. Their donations would be no greater and no more significant than the donations of thousands of others, rendering them no threat to the Australian electoral system.’

That system has even survived constitutional scrutiny in the High Court, as it has already been upheld in McCloy v New South Wales (2015) 257 CLR 178.

Continuous Onerous Compliance Measures for NGOs 

Tim Costello of World Vision, has gone so far as to compare the Bill to Putin’s crackdown on dissent, saying it is part of a ‘zeitgeist of a silencing and gagging of civil society’ that is occurring internationally.  Even in democracies such as the UK and Canada conservative governments have regulated to restrict NGO advocacy in relation to elections, and Australia already has legislation introduced by Eric Abetz during the Howard Government that requires reporting on expenditure and electoral activity of NGOs during elections. However, this Bill extends its tentacles in such a way that public advocacy is constrained even between election periods, creating a regime more restrictive than in any Western democracy.

The Bill is about more than an international influence on the electoral process.  NGOs that do not use international funding will face new auditing and compliance measures with significant jail terms and financial penalties.  Some of the more egregious elements of the Bill would have NGO staff committing a criminal offence if they do not get donors to provide evidence, such as a statuary declaration of their citizenship status, within 6 weeks of a donation of $250 or more.  Penalties would be as high as 10 years’ jail, plus civil penalties up to $210,000.

Contrary to our open democracy, senior staff and Board members would be required to publicly state to which political party they belonged.  Any NGO that carries out a significant amount of public advocacy would be classified as a ‘political party campaigner’ or ‘third party campaigner’ and many normal NGO activities would be re-defined as political campaigning with complicated compliance requirements.

Wider Impact on Business

In their haste to draft the Bill, the government has ignored the problematic impact some of the provisions may have on business. This has led to some interesting voices being raised in opposition. The Institute of Public Affairs has said the potential reach of the bill was “extremely concerning” and could effectively silence contributions to the public debate.  While conservative News Limited columnist, Janet Albrechtsen, claims the Bill is ‘lazy and illiberal regulatory overreach’.  Despite this unlikely criticism of the Bill, the NGO sector is still uneasy about the possibility of Labor capitulating with amendments. There is an unprecedented alliance of non-government groups, Hands Off Our Charities, working together on the issue. They have come together fearing that their ability to debate public policy and call government to account hangs in the balance.  Whether Labor is prepared to vote the Bill down is now the crucial issue.

Note: This article only addresses the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill, which most seriously undermines the democratic freedom of speech and the role of NGOs.  However, this Bill is one of a package of three introduced by the government to address the issue of foreign influence.  The other two, the Foreign Influence Transparency Scheme Bill and the National Security Legislation Amendment (Espionage and Foreign Interference) Bill, also have significant provisions relevant to silencing civil society.

Dr Joan Staples was the ACF National Liaison Officer during the Hawke Government and is currently an Associate in the School of Global, Urban and Social Studies at RMIT University. Her research area is the democratic role of civil society.

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