Estimates: Australian Electoral Commission

Finance and Public Administration Legislation Committee

Estimates hearings, 18 October 2011

Australian Electoral Commission

• Senator Scott Ryan, Liberal Senator for Victoria
• Mr Ed Killesteyn, Electoral Commissioner
• Mr Paul Pirani, Chief Legal Officer

Full transcript available here

Senator RHIANNON: I notice that the AEC website now has a function allowing donors, parties and candidates to lodge their returns online directly. Do you envisage this is the first step towards some form of continuous disclosure?

Mr Killesteyn: I think we have had this conversation before. Certainly if we move to a system of continuous disclosure then the AEC could not envisage that this would be done without some form of electronic assistance. Whether it is a first step is really up to the parliament to pass legislation to require it. As I said, we see that the technology is there to assist that if parliament so wishes.

Senator RHIANNON: Are there any increased costs associated with what you are doing, or do you feel that because it is online it could actually reduce costs?

Mr Killesteyn: There is certainly an implementation cost. This system that has been designed so far is fairly minimalist, and if we are going to a continuous disclosure system then we would have to increase the capacity of the system. There is probably some complexity as well in the nature of the detail that is required. So the cost would not only be on the AEC; it would also be on those people who are obligated to make the disclosure. So those costs in a sense would shift. Each organisation would need to establish its own internal processes by which it could identify which of the myriad transactions that they are no doubt conducting on a day-to-day basis would need to be disclosed to the AEC.

Senator RHIANNON: Has there been any research conducted into the ease of use of the AEC's donation disclosure website? Has there been any user acceptance testing?

Mr Killesteyn: We have not done any post-implementation evaluation as such but there was considerable consultation with the political parties during the design of the system. It is a relatively new system. Unless Mr Pirani has other advice, I do not think we have received any negative commentary about the system; in fact, I think it has been well received.

Senator RHIANNON: I want to move on to automatic enrolment. If automatic enrolment for federal elections is not legislated in time for the AEC to complete a thorough automatic enrolment program prior to the close of rolls for the next election, what steps will you take to contact those voters who have been automatically enrolled at a state level in New South Wales or Victorian elections and how would you encourage them to enrol for the federal elections?

Mr Killesteyn: We are already taking steps to make contact with all of those electors that have been directly involved by both the New South Wales Electoral Commission and the Victorian Electoral Commission. My officers will have the statistics but I think in relation to both New South Wales and Victoria we sent out something in the order of 60,000 letters to those people for whom we have advice from their respective electoral commissions that they have been enrolled. I might point out too that, at the time that both the New South Wales and Victorian electoral commissions directly enrol individuals, they are given information about not only their state enrolment but also the requirements to complete their federal enrolment. So by the time we contact them they will have had at least one letter from their state electoral commission plus our reminder. It is worth noting too, however, that the response rate to our letters to these individuals is relatively low. I think the number of people who are then taking action to complete their enrolment form with the AEC is about 12 per cent.

Senator RHIANNON: That is quite worrying. Do you have a follow-up step?

Mr Killesteyn: We will continue, as we have available under the legislation, to remind those individuals. Unfortunately, at some stage, if we do not get a response, then ultimately the other obligations under the act kick in, and they may have to be objected off the federal roll. We have pointed to the dangers that can arise in relation to divergence of both the Commonwealth roll and the state rolls.

Senator RHIANNON: So you have written to them. There are other measures that you have talked about. Could you outline them? Is it an education campaign, an advertising campaign—what are you looking at?

Mr Killesteyn: We are constantly looking for ways in which we can make it easier for people to meet their obligations. That was my point earlier to Senator Ryan—we think an appropriate strategy, given that the research essentially tells us that the stimulus for most new electors and existing electors who have an obligation to update their roll details is the calling of an election, is to try to move the stimulus away from the election to an earlier point. We think that things like the partnership we have with Australia Post and the Australian Taxation Office essentially make it easier for people—there is an inbuilt stimulus there—and, while they are changing their address for another process which they apparently attach more priority to, we are there reminding them at the same time. If it is easier—they can do it online—then we think there would be some value in that.

Senator RHIANNON: If there was a change to House of Representatives voting to allow the lodging of preference tickets so that votes which would otherwise be determined as informal were counted, what changes would the AEC have to make in the lead-up to the election and in the actual counting of the votes?

Mr Killesteyn: At this stage we only have the recommendation from the joint standing committee for those savings provisions. We are looking at the implications of that. Clearly there are some immediate implications of the potential to reintroduce into the count some 230,000-odd ballots. So there is an extra counting process there, and there is obviously a process of training our polling officials in how that count would be conducted and in the importance of ensuring that the particular group voting ticket matched the ballot that was not completed fully. As I said, we are still exploring all of those implications.

Senator RHIANNON: Could you outline how you see advantages or disadvantages that would be created in reporting of election results and conducting a preference count in this way?

Mr Killesteyn: I think these sorts of issues have been discussed in the joint standing committee. The primary advantage of these systems is that they potentially reduce the level of informality, and if you ascribe and attach a importance to the level of informality—which I think most people do—and think that there is value in the objective of as many people as possible not having their vote wasted, then—

Senator RYAN: But they do count votes that were not made, don't they?

Mr Killesteyn: Yes, but I am trying to balance the argument. I am saying that, on one side, if you believe in the notion that high rates of informality is not a worthwhile outcome in Australia's system, then this is one way of dealing with informality. On the other side, however, there are arguments which militate against these sorts of systems, and I think the primary argument that we laid out in our submission was the potential for a group voting ticket to determine the outcome of a person's ballot rather than the person themselves. How you balance that and how parliament balances that is, I guess, a matter for some continuing debate. I make the point that the Australian Electoral Commission is not taking a view here; we are simply putting the counterarguments for consideration.

Senator RHIANNON: Could you provide comment on the amount of additional resources that would be required? Is it within how you already manage an election, or would it change things substantially?

Mr Killesteyn: I have not done, and my people have not done, any estimates of that at this stage. If the legislation moves ahead then, obviously, we will examine the issue of costs. An election currently is costing around $110 million, most of which is spent on polling officials. I could imagine, simply because of additional ballots being included in the count and the need to distribute preferences, that there would be additional counting costs. There is also some education about the way in which the system is designed, which would require some different or additional advertising from what we already put out, but we have not made any estimates at this stage.

Senator RHIANNON: I would like to ask you about what appears to be a loophole with regard to the disclosure threshold. I want to set this out for your comment. If a donor donates $11,500 or more in one amount then the party must disclose the details of the donor. If, however, a donor makes multiple donations of, say, $10,000 on many different days then the party is not required to disclose the donor's details, as each amount is under the $11,500 disclosure threshold. The party is only required to include the amounts as part of total receipts by the party. You could take an extreme example: a donor donating $10,000 on each of 300 days in a financial year would have donated $3 million, but the party is not required to provide the AEC with the donor's details. That example could be any amount. The donor in such circumstances is required to disclose the cumulative donations in November—a month after the party's return—however, from my experience, many donors fail, at least initially, to lodge a return. If the party accounts are not audited by the AEC or the cumulative amounts of donations are not picked up in a compliance audit, then the cumulative donations that are above the threshold may never come to light. Is that an explanation of how it works, and do you see that as a loophole?

Mr Pirani: Senator, the only things on record indicating that there are issues in relation to the reporting by political parties and reporting by donors is that it is confusing for people often to understand the different reporting requirements and why we do not, on some occasions, have a match between an amount reported by a political party and an amount that is reported by a donor and vice versa. It is an issue, and it is an issue about which there was legislation which, to my understanding, is still before the Senate to partially address.

Senator RHIANNON: There was a question I forgot to ask earlier when I was asking some questions about the website. Are there any plans for the AEC to improve the functionality of the website, in particular the ability to cross-reference donations from the same donor over a number of years?

Mr Pirani: We have done as much work as we feel we can with our current resources on the current e-FAD and super-FAD return systems that we have on the website. We are hoping to do more development work as resources become available.

Senator RHIANNON: I want to ask about the issue of compliance. I am aware that it has come up a number of times before, but it continues to be something that is often queried when this work is looked at. If penalties for failure to comply with reporting requirements were strengthened, would this result in more cases, where the electoral funding law had been broken, ending up before the court? Would you then see that this could result in greater compliance?

Mr Killesteyn: I think we are in the land of speculation. Clearly there is an issue about the extent to which the DPP and the AFP make judgments about the value of mounting investigations based upon the relative size of the penalties, and if they are adjusted significantly then that may change their view. That is really a question that you need to pose to them. We have, however, put on record a consideration that—at least in relation to those offences which are objective offences such as late lodgement of disclosure returns—there would be value in consideration being given to an administrative penalty, which we believe might assist in compliance. But that is for strict objective penalties, such as late lodgement. There are other areas of offences such as misleading statements and so forth—incomplete statements where we do not believe that administrative penalties would necessarily be appropriate.

Senator RHIANNON: And on associated entities, should the definition of associated entities be rewritten to make them clearer and to include all organisations that operate totally or to some extent for the benefit of political parties?

Mr Pirani: Senator, we have raised issues about paragraph (b) of the definition, because it appears to be somewhat confusing. We have made some recommendations about an amendment to section 287, subsection (1). But of course part of that will depend on whether the current JSCEM inquiry has a result which is similar to the Canada model, then associated entities will be meaningless.