Will third party campaign finance law increase or decrease political participation?

Today The Conversation website published an article by me criticising regulation of third parties, and another by Marian Sawer partly critiquing my article.

My article was mainly about what I regard as the systemic effects of third party regulation, which is how restricting third parties affects the overall balance of political influence. This is principally about the big third parties, the organisations capable of reaching and potentially influencing a mass audience. These include unions, business, environmental groups, and GetUp!. At the systemic level, the most important aspects of third party regulation are the caps on expenditure, and to a lesser extent the caps on donations.

Sawer’s article is mainly about what I call the participation effects of third party regulation, the opportunities that individuals and small groups have to get involved in politics. Unless many of these third parties spontaneously pursue the same causes, I don’t think they are likely to have much effect on political outcomes. But in a liberal democracy, people being able to have their say is important in itself.

According to Sawer, third party regulation could be positive for participation. The argument here seems to be that there is limited space for political communication, and to the extent to which attention is grabbed by a few big players this denies smaller groups their opportunity to be heard.

I’m not sure that this will be the case. Small third parties will still struggle with the newsworthiness problems they have now, and not being able to afford to buy very much commercial media space. The media will still run bigger stories than whatever the small third parties have to say, and the advertising space vacated by the bigger third parties will be left empty or filled with ads selling junk food, cars, holidays etc.

By contrast, I argue that third party laws will be a negative for political participation because they impose complex rules with heavy compliance costs and risks of penalties, mostly fines but including jail in some cases (there are summaries of the federal, NSW and Queensland rules in appendices to my submission to a Commonwealth parliamentary review). Under NSW law, for example, there are 26 offences a third party could commit.

The major third parties can employ lawyers and political professionals to navigate their way around these laws. But small third parties could reasonably decide that it is all too complex, and give up or scale back their activities.

For participation effects, the most important part of the law is the threshold for coming under campaign finance regulation. Third parties below the threshold can enjoy traditional political liberties, able to have their say without bureaucracy or fear of punishment. In NSW the threshold is $2,000; in Queensland in some contexts it is as low as $200.

Even from the perspective of those who support stricter campaign finance regulation it is hard to see what useful purpose is served by regulating micro-groups spending $2,000. And I have never seen any serious argument (or indeed any argument at all) defending this as a threshold. While I would prefer no third party regulation, I think the threshold should be at least $50,000, to ensure that only groups with some non-trivial capacity to gain attention are covered.

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