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.

Even if the unions and Labor are broadly cooperating, this proposed law is still highly problematic. If Labor decides to use its full $9.3 million, this leaves little room for unions to campaign on issues of specific concern to their members. For example, would the recent protests by unions about the pay deal the state government is offering them come under the law? I think there is a good chance that such protests could influence voters, and therefore be covered. Bad luck if your pay bargaining period coincides with an election.

If this amendment can’t be defeated in the Legislative Council, the best course of action might be to simply ignore it. So far as I can see the fine is only $22,000 – which the unions and Labor may see as a small price to pay to restore their democratic rights.

Whether this was politically the right thing to do would depending on how flouting the law was seen. In practice, electoral law is frequently ignored with little public complaint. But this is partly because with routine political donations law all parties are reluctant to throw stones in glasshouses. None of them can fully enforce compliance on their supporters.

But in this case the Liberals, who have no affiliated organisations, would try to make an issue out of Labor non-compliance with the expenditure cap. Labor could get away with it only if the public was persuaded that the law was indeed a cynical and illegitimate action by the Liberals to restrict the political activities of their opponents.