Joo-Cheong Tham is associate law lecturer at La Trobe University. He wrote a chapter on campaign finance reform in Graeme Orr, Bryan Mercurio and George Williams (eds), Realising Democracy: Electoral Law in Australia (2003), Federation Press, forthcoming.

The continuing controversy surrounding the Abbott-controlled Australian for Honest Politics Trust (AHP Trust) has thrown into sharp relief the role of the Australian Electoral Commission (AEC) in enforcing the disclosure obligations under the Commonwealth Electoral Act (AEC chief intervenes in Abbott slush fund secrets).

This issue of enforcement, firstly, raises the question of the AEC’s handling of AHP Trust. It appears from newspaper accounts that the AEC in assessing whether AHP Trust was an ‘associated entity’ and, therefore, subject to disclosure obligations, relied heavily on evidence volunteered by Abbott. Brad Edgman, the AEC official responsible for enforcing the disclosure obligations in 1998, has said that he based his decision that AHP Trust was not an ‘associated entity’ mainly on the trust deed and letters from Abbott (AEC took Abbott’s word for it to keep ‘honest politics’ donors secret).

It is important to stress that the evidence that can be used by the AEC in assessing whether such a trust fund is an ‘associated entity’ is clearly not confined to the evidence volunteered by the trustees. In particular, it is not confined to the trust deed or letters written by the trustees.

The AEC can obviously request the trustees to provide further evidence. More significantly, the Act arms the AEC with significant investigative powers in determining whether an entity is an ‘associated entity’. These powers, conferred by section 316(3A) of the Act, include the power to require officers of entities reasonably suspected to be ‘associated entities’ to produce documents and to give sworn evidence. In the case of the AHP Trust, for instance, the AEC could require Tony Abbott, as an officer of the trust, to give sworn evidence concerning the purposes and activities of the trust. If Abbott unreasonably refused to comply with such a requirement or knowingly provided false or misleading evidence, he would then be committing an offence under the Act.

Indeed, given the public disquiet surrounding the AEC’s decision in 1998 determining the AHP Trust not to be an ‘associated entity’, the AEC should, when considering its present position, require the trustees of AHP Trust to provide further documents and sworn evidence. In this instance, effective enforcement and public confidence in the AEC can be met by a judicious use of its investigative powers.

It would, however, be a mistake to consider the AHP Trust episode without regard to the wider considerations constraining the AEC’s effectiveness.

Foremost is the question of adequate resources. Policing the disclosure obligations is resource-intensive – not least due to what the AEC has characterised as ‘an unwillingness by some to comply with disclosure’. It is, however, unclear whether the AEC has sufficient resources to devote to this area. In a parliamentary submission last year, the AEC drew attention to its ‘very tight budget situation’. As far as this situation continues, it must necessarily impair the effectiveness of the AEC in policing disclosure obligations.

The question of resources, importantly, reveals the institutional bind that the AEC finds itself. It is reliant on the goodwill of politicians – especially those from the major parties – for any increase in its budget. These are the very same people it regulates under the Commonwealth Electoral Act. The AEC’s position is akin to the Australian Competition and Consumer Commission being dependent on the grace of big business for budget increases. This institutional bind must be addressed for there to be effective enforcement by the AEC.