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 »