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 »

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.

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 »

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 »

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. Read More »