Excluding Charities Makes Foreign Donations Ban 'Entirely Ineffective' Says Cormann

Finance Minister Mathias Cormann believes excluding charities from a foreign donations ban would “make such a ban entirely ineffective”, despite Labor leader Bill Shorten’s assertion that reform can occur without “silencing” the charity sector.  

Cormann referred The Election Funding and Disclosure Reform Bill – which aims to ban foreign donations and requires registration and disclosure requirements for a broader group of non-party political actors than is currently the case – to the Joint Standing Committee on Electoral Matters on 6 December.

The charity sector has responded to the inquiry with concerns that the proposed legislation will unfairly curtail the ability for charities to advocate and impose unnecessary red-tape on these organisations.

In parliamentary question time on Monday, Labor leader Bill Shorten asked why “the good work of Australian charities [was] being put at risk because of the prime minister’s inept handling of foreign donation laws”.

This followed comments from Shorten on Sunday, which indicated that Labor would not support laws that silence charities.

“Labor has led the way on reforming political donations and removing foreign influence from the political process. We’ll keep working with the government to ban foreign donations, which is already Labor policy,” Shorten said.

“I believe we can clean up donations without silencing our charities and not for profits.

“Labor is not interested in laws which punish Australian charities and not for profits.”

Labor supports banning foreign political donations, but we can clean up donations without silencing charities. https://t.co/viPfqMQSTP #auspol

— Australian Labor (@AustralianLabor) February 25, 2018

But Finance Minister Mathias Cormann told Pro Bono News these comments were “just another case of a Bill Shorten wibble wobble”, with Labor’s own bill even tougher on charities.

“Bill Shorten’s bill captures charities in the ban on foreign donations to fund political expenditure and does not provide an explicit exemption for charities as our bill does for their non-political activities,” Cormann said.

“Our bill explicitly allows charities to seek and receive foreign donations to fund their charitable and other non-political activities but applies the same prohibition on foreign donations in relation to political campaign expenditure to them which applies to all other political actors.

“Under our legislation charities can continue to engage in political advocacy as long as it is funded by permissible Australian domestic donations – but they cannot fund political expenditure under our bill or under Labor’s bill with foreign donations.”

Cormann said that excluding charities from the legislation entirely would “create a massive loophole” and go against the core proposition of the bill.

“There was supposedly bipartisan support for the core proposition that foreign donations should not be allowed to fund political expenditure in Australia,” he said.

“To exclude charities from a ban on foreign donations to fund political expenditure would make such a ban entirely ineffective.

“It would create a massive loophole and is inconsistent with Labor’s own bill designed to ban foreign donations in relation to all political expenditure – including political expenditure by charities.”

The finance minister also denied that the bill prevented charities from advocating for their stated cause in any way.

“It doesn’t curtail their ability to engage in political advocacy at all, it just cannot be funded by foreign interest,” Cormann said.

“This bill allows charities to continue to collect foreign donations to fund non-political activity, such as medical research, conservation or aid projects as well as raise political donations from Australians and Australian organisations to fund political expenditure in Australia.”

Constitutional law expert Professor Anne Twomey, recently told the parliamentary electoral matters committee that the foreign donations bill was “unconstitutional” and that there was a “reasonable likelihood” it will be struck down by the High Court.

Professor Anne Twomey on the @TurnbullMalcolm Government's foreign donations bill: 'It's going to get killed, either here [in Parliament] or in the High Court.'#auspol #jscem #HandsOffOurCharities

— Gideon Rozner (@GideonCRozner) February 15, 2018

But Cormann said he was not concerned that the bill was unconstitutional in its current form.

“We believe that our proposed ban on foreign donations for political expenditure is constitutional and legal,” he said.

“Many of the same experts predicted that the Australian Marriage Law Postal Survey would be found to be unconstitutional. It wasn’t.”

The Joint Standing Committee on Electoral Matters will report their findings on the foreign donations bill on 28 March.

Cormann indicated that the government would consider any recommendations offered by the committee.

“We look forward to the considered recommendations of the committee in due course and will act on those as appropriate,” he said.