Inside Story

On political donations, Queensland sets the pace

Urged on by an independent MP, Annastacia Palaszczuk’s government has shown how real-time disclosure can work

Graeme Orr 13 March 2017 1444 words

Timely announcement: Queensland premier Annastacia Palaszczuk (centre), attorney-general Yvette D’Ath and independent speaker Peter Wellington at last month’s press conference unveiling the real-time donation disclosure system. Dan Peled/AAP Image

According to the old joke, Queensland has its own sense of time, literally and politically. “We have crossed the Tweed river, please wind your clocks back one hour and ten years.” Today, a failure of commuter trains to run on time, or sometimes at all, is one of the Queensland Labor government’s biggest headaches.

But in a leap into modernity, Queensland has now become a national leader in timeliness and political accountability. The state Electoral Commission’s Electronic Disclosure System, covering both state and local government political donations, went live just a fortnight ago.

The system has two broad aims. The most important is timeliness: it seeks to get as close as possible to “real time” disclosure of donations. (A corollary is that disclosure will also be relatively continuous, rather than annual or biannual.) The other broad aim is ease of access.

The reform converts a paper-based system, onto which had been grafted the reproduction of the paper reports on the web, into a purely online database. This will help donors, parties and candidates make reports. Most of all it will give streamlined access to people in the media and civil society who wish to question or research donations. The Electoral Commission hopes the system will also encourage compliance by improving its own ability to track data.

Queensland versus the rest

The system has been a long time coming. As I described in Inside Story back in 2014, New York City has had online disclosure for decades. In Australia, Brian Costar and other political scientists have been arguing for real-time disclosure for years.

But let’s leave Proust to dwell on all that lost time. How does disclosure in Queensland now compare with the rest of Australia? Ranked in terms of transparency, it looks like Queensland is at the top, with South Australia and the Australian Capital Territory vying for second place. New South Wales lags in fourth, and every other state and territory, together with the Commonwealth, comes a distant last.

Since 2015, the Australian Capital Territory has had disclosure on at least a quarterly cycle: donors who hit $1000 must be disclosed by the recipient within thirty days of the end of each quarter. Things then speed up at the pointy end of the four-year electoral cycle. In the six months or so before the territory’s mid-October election day, disclosure is required within a week of a donor reaching the $1000 mark.

South Australia has adopted a similar system. When a donor hits a total of $5000 in any financial year, that must be disclosed. In non-election years, reports must be lodged twice a year. In an election year, a third report is required by the end of January, and this is followed by weekly updates in the run-up to polling day in mid March.

Over the past decade, New South Wales has developed the most comprehensive political finance laws in Australian history, with caps and bans on donations, and campaign spending limits. Increased disclosure was brought in, on an ad hoc basis, for the 2015 election. At the time of writing, though, the state’s disclosure rules remain very twentieth-century, with disclosure at the $5000 level only on an annual basis.

Elsewhere, disclosure schemes do little more than mimic the Commonwealth rules. The federal government might be moving towards banning foreign donations, as a report released last Friday suggested, but its disclosure system remains rickety. Parties reveal donations or loans of more than $13,200, each year, via an annual form. These reports are not made public until the February after the financial year in question. Last year, Labor and the Greens introduced bills for twice-yearly disclosure of smaller donations; yet, as so often happens, even those suggestions have become caught up in yet another committee inquiry.

Real-time, Queensland-style: in principle and practice

Queensland’s real-time system builds on the twice-yearly disclosure system that has prevailed, at least under Labor, since the late 2000s. Under that model, big contributors were disclosed within a fortnight of reaching the platinum-class level of $100,000. Otherwise, every source that contributed $1000 or more was disclosed twice a year.

Curiously, Queensland’s new scheme is a creature of regulation rather than legislation. Although this allows flexibility, it also leaves the risk that a future minister will be able to backtrack more easily than if the timelines were set in legislation.

At the heart of the scheme is a new rule, and new software. The rule is that disclosure must be made within seven business days of any donor (or lender) hitting a $1000 threshold. This rule also applies to donations to lobby groups conducting political campaigns at state election time. Information from recipients of donations will be published instantaneously, but disclosure by donors will be delayed twenty-four hours. That delay allows parties or candidates to privately rebuff an unwanted gift and avoid the embarrassment of the media reporting any fake donations.

A key feature of the system is not just the publication of raw numerical data, but the display of information via a simple mapping function. This is not a visual gimmick. Geography is a significant issue in a state with no upper house and only constituency MPs. The maps also permit easy identification of out-of-state and international donors.

There are plans, over time, to bring disclosures from previous years into the new format. This will allow the creation of historical maps and easier collation of tables for historical comparisons. The new system will also apply to local government soon, subject to enabling legislation. For councils, the current disclosure threshold is to be nudged up to $500, or half the level for state politics. That figure will always be a compromise, as Queensland councils vary from the largest in the country – the billion-dollar Brisbane City – to tiny, far-flung communities away from the eastern seaboard, like the Banana Shire.

Limits, loopholes and further reform

Electoral commissions cannot guarantee the accuracy of the political finance information they publish. As with tax returns, disclosure is driven by self-reporting obligations. The Queensland Electoral Commission therefore explicitly warns visitors to its site that it “does not verify or validate this data.”

Money is inevitably fluid, too. Across a range of legal domains, thanks to the ease of creating trust funds and shelf companies to act as conduits, the integrity of financial transactions is a cat-and-mouse game. At best, electoral authorities can audit disclosures then insist on corrections. But the resources to do this, and penalties or time limits for prosecuting misleading or late disclosure, remain limited.

Above all, disclosure is not a panacea. Transparency is a necessary but not sufficient condition for a fairer system that balances political liberty, equality and integrity. Queensland, like the Commonwealth, needs to take a leaf out of the NSW statute book and institute caps on donations and, above all, on campaign expenditure.

Whatever its limits, Queensland’s embrace of real-time disclosure is a welcome innovation. The principle has been embraced by a growing number of southern officials, both elected and within parties. These range from minor parties like the Greens, through to party-machine figures such as former Labor senator John Faulkner and current Liberal senator Arthur Sinodinos. NSW Labor pledged it will voluntarily make continuous public disclosure. New South Wales is reviewing its laws after the revelations from ICAC in recent years. Senator Xenophon has even called for the idea of timely online disclosure to apply to MPs’ expenses. Many eyes – media, apparatchiks and reformers – will be on Queensland as its system rolls out and plays out.

We can always question the motivations of politicians, and even the media, when they call for real-time disclosure. The Queensland government was prompted to reform because, as a creature of a hung parliament, it committed to investigate the issue to secure the support of the independent speaker, Peter Wellington. Minor parties receive few corporate and union donations, so they will happily stoke no-smoke-without-fire allegations about donors during election campaigns. And, at Commonwealth level, those who are coming late to the “improve disclosure” party may also be trying to stave off more comprehensive political finance reform.

Principles and partisanship are inescapably linked in the law of politics, and behavioural scientists and cynics can argue over motivations. What matters, ultimately, is the adoption of systems to encourage more open and fair political practices. Advanced democracies are well into the fourth decade of widespread computerisation and the third decade of the internet. Queensland’s pioneering of electronic and real-time disclosure is not a prize-winning development. But it turns the spotlight on the rest of Australia, and especially the Commonwealth. •