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Estimates: Finance and Public Administration Legislation Committee (Australian Electoral Commission)

Estimates & Committees
Lee Rhiannon 29 May 2014

Senator RHIANNON: Mr Rogers, I was interested in your opening remarks with the emphasis on the integrity of the process and quality and compliance. However, as you read through it, I noted that it was about voting—which is very important—but that was the only issue that you took up. I have got to say that I was surprised. You have heard tonight considerable consideration questions given to the issue of disclosure. It has come up many times before when we have met under these circumstances and there is so much of it in the media, so I was very concerned about that because you are working—

Senator Ronaldson: Senator, opening statements are not historically used to give a complete overview of what issues may be raised during Senate estimates. I think it is a little unfair to reflect on the opening statement by saying that an omission means a lack of interest, knowledge or understanding. I think that is an unreasonable imputation.

CHAIR: Point taken, minister, but I think that the senator was complimenting Mr Rogers on his opening statement but flagging, perhaps, an area that she would like to explore further. I think you are about the explore the question further, is that right?

Senator RHIANNON: Thank you, Chair. I think that is fairer than the minister was. I think he was verballing me to some extent, but considering the shortness of time I do want to move on to some of these questions because they are so considerable. Some of them are similar to the line of questioning from Senator Faulkner; I will go to amended returns before I go to associated entities. Clearly amended returns are an important part of the process. They can allow parties and candidates to correct inadvertent mistakes or oversights. However, at times we see some quite extraordinary new information come forward, and one is left wondering whether the law had been deliberately broken, for whatever reason is now being reported. I was interested in what process the AEC follows when these major discrepancies become apparent. I listened carefully to the comments made in answer to some of Senator Faulkner's questions about the process that you go through when you are looking at these issues. It was not so much the details of the law I wanted in the first instance but how you pick things up. Do you pick them up when things are reported in the media, with what is happening at ICAC? Does that trigger you going back to look at what is going on? I thought I could ask this by picking up on some of the media questions so that we could do it by example. In March this year The Guardian had quite a substantial article about the inconsistencies between donor and recipient forms. This is with regard to a donation to the Labor Party that the Labor Party says it does not get. This is about the AEC, not said by the AEC.

CHAIR: Senator Rhiannon, it might be beneficial if you asked a question.

Senator RHIANNON: Yes, I am at the question. The Guardian article states:

A Labor party spokesman said: “We confirmed with the AEC that we did not receive an amount of $25k from Jefferson in 2012-13. The AEC were satisfied with this response.”

Could you use that as an example to detail how you handle these sorts of issues when they come to your attention to satisfy yourself with regard to why there is such a discrepancy?

Senator Ronaldson: Could you table that press article, please?

Senator RHIANNON: I am happy to. The question still stands, please.

Senator Ronaldson: Well, you are basing the question—

CHAIR: It is appropriate to table—

Senator RHIANNON: Of course. It is just a Guardian article that I am sure the representatives at the AEC would have read many times.

CHAIR: Would you be able to table that so that we can all have a copy, thank you.

Senator RHIANNON: I am quite happy to table it.

Senator Ronaldson: I think Mr Rogers can take a question in relation to the article once he has the article in front of him. If you want to refer to specific parts and quote them directly, if Mr Rogers has access to that then we can move on from there.

Senator RHIANNON: Okay. I will ask a question similar to what Senator Faulkner asked about the Free Enterprise Foundation. The Free Enterprise Foundation, in some of these amended returns, has declared receipt of donations of similar amounts to some of its donors, but they said they did not declare any donations made to any Liberal or National Party branch. But one of the donors said that they asked for their donation to go to the Liberal Party via the Free Enterprise Foundation.

Senator Ronaldson: Senator, is this the amended return that you are quoting or are you quoting from another press report?

Senator RHIANNON: It is from the amended returns that I have looked at. I do a lot of work on this, so it is from amended returns.

Senator Ronaldson: Just a clarification: the words you have just used you are quoting from the amended return—or is that your interpretation?

Senator RHIANNON: No, it is from my notes. It is from the notes about the amended return. If you want a general question: considering there is a lack of action around discrepancies with regard to disclosure, when information is in the media or is supplied to you by people concerned about the system or through inconsistencies in amended returns, what action do you take to determine if the law has been broken?

CHAIR: Mr Rogers, I would invite you to answer that question.

Mr Rogers : The first thing I would note is what you said at the start of the statement, which is that returns can be amended, and that is a deliberate thing at any time. That is part of the process of transparency.

As to the article that I have just received—and I would just point out that reporting obligations for donors are obviously different from the reporting obligations for political parties and associated entities—where we become aware that there is an issue or something is raised that we need to look at, we clearly look at those things. We also adopt a risk based approach to determining our compliance review schedule for the following years as we move forward. These matters that you are raising would factor into our risk based assessment of where to do compliance reviews. One of the ones raised previously which I think was mentioned earlier on was, I think, the Free Enterprise Foundation. We had already done two compliance reviews in 2009-10 and 2011-12, so we have already been active in that area. Mr Pirani, I am not sure whether you have anything to add in that regard.

Mr Pirani : Senator Rhiannon, we have had this discussion before. It is impossible, the way the act is structured at the moment, to match donor returns with returns from associated entities, political parties and candidates. Part of the issue is the difference in relation to the disclosure thresholds. I mentioned the issue earlier about section 314AC, where the reporting obligation on the recipient is different from the reporting obligation on the donor because of the different thresholds that apply. I have in front of me the actual amended return from the Free Enterprise Foundation. I note the amended return is actually dated 15 March 2012, and it is possible that that amended return was the result of one of our compliance reviews. Quite often, amended returns are made as a result of—

Senator DASTYARI: No they are not.

CHAIR: Just show some respect.

Mr Pirani : compliance reviews. There are numerous examples on our website where that is in fact what has taken place. So part of the problem—and the AEC has made numerous submissions to the Joint Standing Committee on Electoral Matters in the time that I have been in the organisation—is the difficulty and the complexity and the different reporting requirements of donors and recipients. That is one of the key issues that we always look into.

When there is a mismatch, we do go back to the organisation and we ask the question: 'Is there a reason for this?' I am aware of examples where I have been contacted by the media whereby the donor thought they were doing it to a particular organisation, but, when you have a look at the cheque and where the money was cashed, that is not where it ended up. That is part of the problem that we have at the moment with the legislation as it stands. We do go in and have a look, as the Acting Electoral Commissioner has said, in relation to our risk profile, and determine whether we need to go in and do a compliance review in relation to the particular amounts. But quite often the explanations are—well, I will not say 'innocent', but they are inadvertent. I will give you one example: the issue in HSU East in New South Wales, where they had a person who was on leave; somebody else came in, did not realise how to operate their MYOB system and underreported by a factor of several million dollars. These things happen. We go in, we have a look, and then the decision is made: 'Does this be to be escalated? Is it a training matter? Is it something we can assist with, in their learning more about the requirements of our act? Or is it a matter that needs to go to the DPP?'

Mr Rogers : Just to talk on the specifics of the press release I have in front of me: I can take the detailed question on notice about what we have done with this particular issue; I do not have that with me this evening—

Senator RHIANNON: Thank you, Mr Rogers.

Mr Rogers : but, as a generic statement, when we receive information, we do feed that into our risk matrix for selection for compliance reviews of entities moving into the future, and that is exactly what we will do moving into the future.

Senator RHIANNON: When you have a mismatch, what size of discrepancy triggers you to look further? Is it $100,000? Or is that not how it works?

Mr Pirani : My understanding of the risk management that is looked at by the compliance team is that the money amount is not necessarily the prime factor that is looked at; it is one of the factors that is looked at. I am not aware of there being any set monetary amount that would determine whether we would look into it or not.

Mr Rogers : That is my understanding as well.

Mr Pirani : Clearly it would have to be material, in the broad sense. So if we are talking about several dollars out of several million dollars, it would not be an issue we would be that greatly concerned about. But the general rule is: the money amount is not the key issue.

CHAIR: Senator Rhiannon, I would ask you to ask a final question.

Senator RHIANNON: If a fundraising event is held and the event is provided free-of-charge, is that a gift in kind? Do gifts-in-kind have to be declared if they are over $12,400? Are gifts-in-kind cumulative? As it is my last question, I am referring to this place—if it is used for a number of fundraisers in one year in different rooms, is that cumulative and does that need to be reported to you?

Mr Pirani : The fundraising issue is one of the things that is specifically addressed in our handbook on financial disclosure. If I can draw your attention to that, it is an example that is in there. Fundraisers are a problem in relation to working out how much is provided gratis and what the market rate of it is, because anything to do with the electoral act, of course, has to tie back to the definition of 'gift' in section 287. That refers to property that is given, I think it is, without consideration—so we have to attempt to put a value on it in relation to those sorts of activities. It is one of the examples that we specifically address in the handbook and the guide that is published, for people to return to. It is a difficult area to police.

Mr Rogers : Mr Pirani's advice is absolutely right, but I am nervous if we are starting to head into providing advice on a specific incident we are not aware of. I would prefer to take that on notice and look at it in detail, rather than provide a possibly inadequate answer here, if there is a specific issue.

Senator RHIANNON: Okay, would you take it on notice.

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