Category Archives: Campaign finance - Page 2

The pattern of growing information regulation

There has been plenty of negative comment on the Finkelstein review proposal to impose federal regulation of the media. But so far as I have seen this commentary has not focused on how it fits a pattern of increasing central regulation of, or proposed regulation of, information flows in Australian society. Further examples here:

* National curriculum. One of the oddities of Australian political culture is that we have always – and the negative reaction to Finkelstein suggests still – been sceptical of government media regulation, but quite unconcerned about government control of what is taught to the young people who must attend school for 10 to 12 years. Many complain about the content of that curriculum – but think that the wrong people are in charge, not that there is too much centralisation of curriculum in the first place.

* The mechanism now exists for the federal minister of education to impose ‘teaching and learning standards’ that could control what universities teach.

* While the federal proposals for controlling 3rd-party opposition to the government are much milder than the draconian NSW regime, it’s highly likely that we will see more controls introduced during the current parliament. Was Wayne Swan’s speech today softening us up for banning billionaires from buying media space when the government attacks them?

* Senator Conroy’s internet filter seems to be on hold, and while not aimed at political speech it would create a mechanism for regulating it at a future time.

Overall, I think technological changes mean that we are in a better free speech situation now than 15 or 20 years ago. It is important to keep things in perspective. But it is hard to see that the at best very minor gains from the proposed or actual centralisation of information control in Canberra are worth the risks.

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.

NSW campaign finance law likely to end up in the High Court

What issue has me lining up with NSW Labor, the ETU, the CPSU and the Shooters and Fishers Party against the NSW Liberal Party? Barry O’Farrell’s campaign finance laws, which were passed by the NSW Parliament this week. The report of the Legislative Council inquiry into these laws shows these organisations were my odd issue bedfellows.

As with the federal inquiry last year, I think my views were given a fair hearing. The final report quoted from my submission many times, though for once I was not a solitary voice on many of the issues I raised. Even many of the usual champions of a more regulated political system thought that this bill went too far.

Unfortunately, despite the report clearly expressing significant concerns with the bill, both on its merits and its constitutionality, the Greens in the end backed the bill with a minor amendment.

The two main effects of the legislation are to:

* during the campaign period starting 1 October the year before a NSW election, any campaign spending that has as a dominant purpose the influencing of voting will be included in the spending cap of any political party to which the campaigning organisation is affiliated (in other words, union campaigns will be counted towards ALP campaign caps);

* ban all political donations at all times to political parties and third parties from organisations (coming on top of an ban on donations from people not on the electoral roll – which of course includes permanent residents and citizens under 18).

The only advantage of this over-reach is that it will now almost certainly end up in the High Court. I’d be amazed if the unions did not challenge; while they are not certain of victory there is a viable argument on freedom of political communication grounds. And a victory on this point might curb the campaign finance excesses likely to eventually emerge from the Green-Labor control of the Senate.

The weak case for a $1,000 political donation disclosure threshold

Reflecting the current orthodoxy on campaign finance policy, the Age yesterday editorialised in favour of the threshold for political donations disclosure being lowered from $11,500 to $1,000.

Despite the popularity of the $1,000 figure, I have never seen any real argument as to why that number is the right one. The Age said this:

For as long as this situation has been allowed to continue, and various donors are – for whatever reasons – free to conceal themselves from public scrutiny, democracy is under threat. Voters must be confident that political donations are not synonymous with covertly buying influence.

But could $11,500 plausibly buy influence? In 2010-11, a donation of that much was 0.000012% of the ALP’s income. I won’t strain your eyes any further by making you count how many decimal places would be needed to calculate a $5,000 or $2,000 donation as a percentage of the ALP’s total income. And the numbers would be even lower for the Liberals, who raised more money than Labor in 2010-11. The parties have incomes that are large enough, and diversified enough, for a single donor at this level not to be important. Read more »

The rise of GetUp!

The Australian Electoral Commission’s political donations and expenditure information for 2010-11 was released today.

For the second year running, business and industry groups outspent left-wing groups, putting more than $21 million into their campaigns (this is an under-count as at least one big-spending industry association has not put in the required report). When the Coalition introduced these laws 2006, the aim was to harass the left-wing third parties that traditionally were the main players. However, increasingly they affect the business community.

Two-thirds of the business and industry spending was an attack on cigarette plain packaging laws. There will be a lot more declared for 2011-12, as the carbon tax and pokies campaigns intensified.

Over the time these laws have been in place, the interesting trend has been the rise of GetUp!, which has increased its spending nine-fold since 2006-07.

The ideological/issue right is much less active than the ideological/issue left in political advertising. For 2010-11 the miscellaneous right-wing groups were the conservative Australian Christian Lobby and the National Civic Council. However, the IPA has taken out a few full-page ads in the last 6 months, so this will add a small-government ideological voice to this political tactic.

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: Read more »

A small win for third party political freedom

The federal parliamentary review of campaign finance law reported last Friday (an Age report with a slightly misleading first paragraph is here.) In put in a submission on third parties. A less technical article on the draconinan NSW and Queensland third party laws – my nightmare scenario – is here.

My summary reaction: it could have been a lot worse. Though I disagree with much of what the majority report says, they have held back on most of the extreme NSW and QLD attacks on political freedom. My views were given a fair hearing – I appeared before the committee and my submission is frequently cited in the chapter on third parties.

Most of the material I disagree with on the lowering the donations disclosure threshold, bans on anonymous donations and bans on foreign donations (critiqued here) is just the same old stuff that Labor has repeatedly tried to legislate over the last few years, not a new reform agenda. (Unfortunately it will probably now pass with Green support).

They have actually accepted one of my recommendations, that the political expenditure laws applying to third parties no longer include ‘the public expression of views on an issue in an election by other means’. It would still include materials requiring the ‘written and authorised’ message and other party political material. This would remove the routine activity of think thanks, universities and the media from the law (which is ignored anyway, but the threat of prosecution would be lifted). Read more »

Another baseless campaign finance story (and one not so baseless story)

There’s an odd campaign finance-related story on page one of today’s Australian. Apparently the brother-in-law of Queensland Opposition leader Campbell Newman put in a bid for a contract with the Queensland Reconstruction Authority. The Australian‘s assumption seems to have been that Newman somehow has questions to answer, which as Newman’s response makes clear he does not:

“I am not a state government decision-maker nor am I an elected member; therefore there is no conflict of interest. I can categorically state that Lisa [his wife] and myself have not received any financial benefit and will not in the future receive any financial benefit from the operations of Frank and Seb Monsour’s company.”

I don’t think there was any story here, and certainly not a page one story. But if there was a story to be extracted from this thin material, what about the angle that the Queensland government wouldn’t do business with a company because its owners had family associations with the LNP leadership? The possibility that politicians might improperly use information about the financial associations of their opponents seems to be largely ignored in the campaign finance debate.

Also on page one, another campaign regulation story: Jewish doctor John Nemesh being prosecuted for posters critical of anti-Israel Green Fiona Byrne, which failed to include the name and address of the printer. An example of how complex campaign rules result in people who are not political professionals being prosecuted for inadvertent and trivial violations of the law.

NSW Libs in ‘cynical attempt’ to restrict their political opponents, part 2

As well as potentially making the ALP guilty for actions committed by others, the campaign finance reform bill introduced into the NSW Parliament yesterday would, if passed, ban all donors who were not on the electoral roll for state, federal or local government elections. So unions, business, and all other associations and organisations would be banned from giving money that would support ‘electoral communication expenditure’ in NSW state elections.

I discussed this idea in my Democracy and Money paper, published in June. As with all the cascading campaign finance regulation, this attempt to tighten the law simply generates new anomalies.

Though this provision is partly aimed at the unions, the unions are better off than most third parties. What any laws restricting donations do is damage donor-reliant third parties compared to third parties that can self-finance their campaigns. So ironically the vested interests that campaign finance law was originally intended to curb – principally the unions and business – can use their own income to continue as before, within the restrictions imposed by the expenditure caps (which obviously would be significantly tightened for the unions if the bill passes). However the more public interest organisations that typically rely on donations would have their fundraising curbed by being denied organisational gifts (the 2010 Labor amendments had already restricted them to maximum $2,000 a year donations). Read more »

NSW Libs in ‘cynical attempt’ to restrict their political opponents?

In a rare case of good timing, my Policy article critiquing restrictions on third-party political rights went online on the same day that the NSW government introduced a draconian new bill further attacking third parties.

Under current NSW law, political parties can spend $9.3 million on their state election campaigns if they contest all Legislative Assembly seats, and third parties (organisations or individuals participating in politics but not standing for office) can spend up to $1.05 million. Third parties are caught by the law if they promote or oppose, either indirectly or directly, the election of a party or candidate, or influence, directly or indirectly, voting at an election.

In a law clearly aimed at limiting union power, the political expenditure of a third party affiliated to a political party is included in the political party’s cap. With some justification, Unions NSW describe this as a “cynical attempt … to silence the political voice of working people”.

The way I read the amendment, the ALP will be guilty of an offence if the spending of one or more of its affiliated unions pushes the collective union/ALP spend over $9.3 million. Yet presumably the ALP cannot control the unions. To take an example from the previous NSW Labor government, if Unions NSW campaigned against electricity privatisation during the restricted campaign period (from 1 October the year before the election) not only would the Labor Party have an unhelpful campaign, they could also be punished for something that did not do and did not want. Read more »