The potential remains today to buy legislation and this alone highlights how serious the issue has become. I have formed the view that donations have a corrosive level in New South Wales.

These concerns were further highlighted by an investigation by the Sydney Morning Herald in February this year, which revealed that some of the biggest winners from New South Wales Government decisions were also some of the Government's biggest donors. For example, an ethanol company donated over $200,000 at the same time as the New South Wales Government mandated that 2 per cent of petrol sold in this State must contain ethanol. The builder of the Millennium trains, which holds a $3.6 billion carriage contract, donated $70,000. Property developers donated more than $2 million to the Australian Labor Party before the State election, while the Minister for Planning changed planning rules viewed by many as providing a generic benefit to developers. The hotel industry, which won concessions on allowing Keno into pubs and outdoor smoking areas, also gave a significant amount—over $600,000. Star City Casino donated $100,000 only months before the New South Wales Government decided to renew its exclusive licence. Clubs NSW, which brokered a deal with the Government in 2007 on poker machine tax, donated $86,500.

I need to be clear at this point that I am not in any way calling into question the integrity of the Ministers involved in these decisions or the companies or industries identified. It is also not just an Australian Labor Party issue. Whilst the Leader of the Opposition has articulated some very clear concerns that need to be answered by the Iemma Government in relation to donations, I have to acknowledge that if we were in government and making decisions like this everyone would be looking through this prism—who donated and for what and is there a connection to the legislated outcomes? The swirl of this issue means that even the word "donation" is viewed as corrupt. The fact remains that it is the system that needs fixing, not necessarily the people involved. The critical problem for the Iemma Government—indeed, any government—is that every decision can be viewed through the prism of legislation benefits for those who have provided donations. Quite bluntly, the potential remains for corruption, even under the measures contained in this bill.

In terms of proposed solutions I have advocated full public funding of campaigns. The debate in recent weeks and months has shown that donations are provided across the political spectrum and that all parties need to join in the reform. A bipartisan approach is essential. If we ban particular categories of donors and not others we will open up loopholes that could be exploited. However, if election campaigns were fully funded by the public purse it would remove the potential to buy access and legislation. In addition, the difficulty of restricted donations in terms of amounts, industries, individuals, corporations or unions would be removed. The simplicity of all campaigns being funded by the public purse would end confusion and, more importantly, restore the integrity of Parliament in the mind of the community. We need to follow international examples, which I will talk about shortly, which have developed comprehensive public funding systems.

I do think we need to limit campaign spending, again something that is not addressed within this bill. Funding caps to the amount political candidates can spend must also be introduced. My view is that $100,000 would be enough for any major party candidate to spend on direct mail, posters, advertising, T-shirts and campaign literature. The important point is that we need to ensure that the community has the opportunity to be fully informed and the amount would need to be reviewed before each election. Minor party and independent candidates would be entitled to the same amount, provided they get at least a percentage of the primary vote. In my view, that might be 7.5 per cent of the vote, but it would be an agreed amount. This should not in any way put an impost on independents or minor parties running. It needs to be a level playing field and I believe that a system could be found. In terms of monitoring compliance, I believe the Australian Electoral Commission should monitor the system and undertake audits to ensure compliance by all candidates. The key issues will be the need to ensure that only the capped amounts are spent and any third party endorsements and spending are audited.

A further point is it takes a major distraction from this place. I believe the requirement of Ministers and members of Parliament in general to seek and procure donations is a significant distraction from ongoing policy decisions and formation. The public does not appoint someone to Parliament so they can spend time fundraising. They expect all energy to be focused on governing the State and providing and securing research for solutions to the problems of State funding. I see the public funding model as providing the opportunity for all members of Parliament to spend more time on policy research, formation and implementation—another merit as to why we should pursue it.

In relation to funding, there is a very simple model. I believe there should be restrictions on government advertising. The recent Federal and State elections show that a significant amount of funds would be available if advertising prior to an election were restricted. I believe the State Government radio and television advertising should be banned for the six-month lead-up to a State election. The only exceptions would be advertising in the public interest, which could be approved by both the Premier and the Leader of the Opposition or a similar independent arbiter. Given that the New South Wales Government spent more than $110 million on placing advertisements in the year before the last State election—and I more than suspect that the former Federal Government did something similar—these savings would more than pay for the public funding of candidates. In fact, the total cost is significantly less than these amounts.

Why is this a broad issue and why do I think we should do it holistically rather than piecemeal? The international examples tell that story and if one reads them one sees that many countries have implemented reforms that we should consider. I know that the parliamentary inquiry has considered some of these, but we should be implementing them right now. Forty countries—including Canada, the United States, the United Kingdom, Iceland, Ireland, France, Canada, Poland, Japan, Israel, Brazil, Argentina and others—have banned foreign donations; 30 countries have laws specifying a maximum amount that a single donor can contribute; 22 countries have various types of bans on corporate donations to political parties; 27 countries—including France, Belgium, Spain, Portugal, Italy, Hungary, Brazil and Argentina—have bans on donations from government contractors; nine countries have imposed a maximum amount that a party can raise overall; 17 countries have a ban on trade union donations to political parties; and 27 countries have imposed a ceiling on overall party election expenditure. That information is sourced from international Institute for Democracy and Electoral Assistance.

Some countries—such as Canada, Germany and New Zealand—have moved to limit political donations and set up transparent disclosure systems. Australia has lagged behind, and at least there is acknowledgement in the bill that we are behind. There is a call from the community to change and this is a very small step in the long journey that we must make, and I believe it is too little too late. Since December 2006 political donations in Canada have been regulated by the Federal Accountability Act, the provisions of which include a limit of $1,130 per annum on individual contributions to a party or independent candidate; a total ban on donations from corporations, trade unions and associations; and a ban on cash donations. It lines up in many ways with the parliamentary inquiry and I believe it is something that we should be pursuing at this point.

In the United States, Arizona, Maine and Connecticut have public funding systems. This is probably my main point: Why can we not just pursue this as a way of mitigating unfavourable headlines in light of Wollongong council or other similar issues? In 2000 a poll of business leaders in the United States found two in five nominated beneficial legislative consideration among their motives for donating. I would surmise there would be a very similar result in the State of New South Wales. In conclusion, if we are going to restore the public's faith in the democratic process and put an end to the potential to buy legislative outcomes we need significant changes to the current system.

I believe that the current bill and proposal do not do enough. Tinkering around the edges is not sufficient. The changes proposed are a step, but they just do not do enough. Other countries have considered it holistically, and the question is: Why don't we? The public is fully aware that the current political process is being undermined because it is no longer about people and services; it is about donations and paying back vested interests. The inquiry has made recommendations on restricting campaign expenditure, donation restriction and public funding increase. Whilst I believe that they have merit and that there are some things in the bill that warrant consideration and should be embraced, I do believe they should be part of a broader reform that the Iemma Government is remiss in not introducing today.