Daily Archives: February 20, 2012

Barry O’Farrell’s unintended favour to traditional vested interests

Barry O’Farrell’s campaign finance reforms were intended to diminish corporate influence in NSW politics. Certainly, they will stop corporations donating directly to political parties. But especially after the 2010 reforms capped these donations at $5,000 a year, and bestowed lavish public funding on the major political arties, this was not a very plausible conduit of influence in any case.

Issues politics has long been trending away from the political parties, and corporate Australia has been following the trend with increasing numbers of 3rd party campaigns. And in this space, ironically O’Farrell’s laws favour traditional vested interests like companies over not-for-profits.

This is because NSW’s campaign finance law tightly regulates spending money via donations at all times, but outside the campaign period from 1 October the year before the election does not regulate other forms of spending. So if a corporate spends its own money, or can structure its political payments to other organisations so that they are for consideration and not a gift (for example, paying a peak body to run a specified campaign), they can spend as much as they like.

Not-for-profits, by contrast, are usually reliant on donations. So under the O’Farrell campaign finance regime, on an issue that may affect voting in a NSW election, a not-for-profit can now only receive donations of up to $2,000 a year from people on the electoral roll. Even other not-for-profits are prevented from giving financial support, as are unions, corporates, permanent residents, people under 18, and others not eligible to be on the electoral roll. Because this includes the federal election roll, as a Victorian on the electoral roll I have more political rights in NSW than many people living in NSW.

Of course corporations have always had deeper pockets than most not-for-profit third parties. But NSW campaign finance law further tips the balance against the not-for-profits, severely hampering their fundraising while leaving corporate political funding largely unaffected.

It’s absurd – but it is now the law.