Does anybody understand NSW campaign finance law?

I spent part of the day celebrating the founding of NSW politics reading the transcripts from a NSW Legislative Council inquiry into Barry O’Farrell’s proposed amendments to NSW campaign finance law. These amendments would ban people not on the electoral roll from making political donations and count union political campaign expenditure towards the ALP’s campaign spending cap.

While the broad policy goals can be stated simply enough, the detail and its interaction with existing NSW campaign finance law are extremely complex. My submission took much longer than I expected to write, as I worked through various different scenarios and how the actual or proposed laws would apply. Especially if these amendments pass, it would be almost impossible for political activists or NGOs that campaign on poiltical issues to stay within the law without legal training or an extensive background in campaign finance matters. This is a serious problem all in itself, quite aside from the major conceptual flaws behind the whole NSW campaign finance regime.

I’m certainly not alone in thinking it is too complex. Appearing before the inquiry, Professor Anne Twomey from the University of Sydney, a leading scholar in the consitutional aspects of campaign finance law, said:

Personally I find this legislation extremely complicated and difficult, and I have great difficulty keeping it all in my head at the same time. So I am not infallible either and if I make mistakes here I apologise, although I am happy to swear that everything I say is true as much as I know it is true. But, as I say, this is really complicated legislation; it is very hard to follow.

One of the reasons this issue came up was that the previous witness had been NSW Premier Barry O’Farrell, who adopted a narrow interpretation of the current law, and therefore the implications of his bill. The key issue is over the implications of this definition of ‘electoral expenditure’:

‘expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates, or for the purpose of influencing, directly or indirectly, the voting at an [NSW] election’

The question becomes when is a third party issue campaign deemed to be directly or indirectly influencing voting, as if it does corporate/union/NGO donations will be banned under the bill. O’Farrell gave the following example of something he thought would not fall within the law:

One of the best campaigns run by a union in this State, in the time that I have been in Parliament, was run by the Teachers Federation in the lead-up to the 2003 election campaign. It was an inquiry headed by Professor Tony Vinson. It produced a landmark study into public education, seeking to influence political parties across the board on issues like smaller class sizes and professional development for teachers. That was not a political campaign. That was a genuine issues-based campaign that did not seek to advocate or target a vote for a particular political party.

But I would have thought that a campaign on public education would be something that could directly or indirectly influence voting. A purely academic study of schooling would probably be ok as it would not be ‘for the purpose of’ influencing voting. But the Teachers Federation is always using politics to try to extract more money for government schools, and academic studies are surely just another political tactic on their part.

From the submissions to the inquiry, other NGOs believe a campaign like this would be covered by the donations ban. So O’Farrell’s comments have made things even more confusing.

As I say in my submission, the best solution (short of scrapping the whole system) would be to limit the law to promoting or opposing a party or candidate. This is a relatively clear and easy to follow test. Just don’t mention or strongly allude to a candidate or party. It would leave issue-based campaigns to proceed unhindered, while dealing with the semi-legitimate concern behind third party regulation – that if political parties are regulated, measures are needed to avoid political activity just being displaced to front groups.

  1. Andrew, I’m not across the detail of the proposed law, but as someone who needed to understand it I can tassure you the existing law is very confusing and difficult to follow. It takes a sustained effort to understand and comply with it.

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