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.

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 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.

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 »