Australian electoral reform: the public funding bill debacle

On 28 May 2013 the Special Minister of State, Mark Dreyfus QC announced the government would introduce legislation to reform ‘the disclosure and reporting obligations of political parties,independents and third parties in the electoral process’. This bill had its basis in recommendations of a December 2011 report by the Joint Standing Committee on Electoral Matters, Report on the Funding of Political Parties and Election Campaigns’ (this report can be viewed at http://www.aph.gov.au/Parliamentary_Business/Committees?url=em/politicalfunding/report/finalreport.pdf).  The intention of the government’s bill was ‘to reduce the reliance of political parties on third party donors, making the system more transparent and increasing the independence of political parties’. The bill would reduce the threshold for disclosure of donations from $12,000 to $5,000, require any single donation of $100,000 or more to a political party  to be reported to the Australian Electoral Commission within 28 days, gifts of foreign property would be prohibited and the disclosure threshold for anonymous gives would be reduced to $1,000. The bill also introduced administrative funding for political parties with at least one elected candidate and elected independents based upon the number of first preference votes received by candidates endorsed by the party.  The intention was ‘to reduce the reliance of political parties on third party donors, making the system more transparent and increasing the independence of political parties’ (Dreyfus, M. 2013, ‘Legislation to Reform Disclosure and Reporting Obligations of Political Parties’, Media Release, 28 May http://www.smos.gov.au/media/2013/mr_262013.html). 

These changes to Australia’s federal electoral law were devised and agreed to by a select, small group of parliamentary and party representatives from the two major parties. They were supported by a letter from the Leader of the Opposition Tony Abbott indicating he was satisfied with the agreement that had been reached. Rank and file MPs and many senior cabinet and shadow cabinet ministers within both parties were unaware of the agreement and its contents until the minister’s announcement, including Leader of the National Party Warren Truss who did not know that Abbott had committed the Coalition to the legislation until the government released Abbott’s letter (www.theaustralian.com.au/national-affairs/warren-truss-unaware-of-party-funding-deal-until-abbotts-letter-released/storyfn59niix-1226655339611). 

The increase in public funding was a contentious issue that attracted widespread criticism from within the parties and  the electorate.

Nationals Senator John Williams said the extra funding for political parties was not justified at a time when the budget was in trouble and crossbench MPs Rob Oakeshott, Tony Windsor and Andrew Wilkie were also highly critical of the increase in public funding even though they would have benefitted (www.theage.com.au/opinion/political-news/big-parties-election-funding-deal-wobbles-as-mps-field-protest-calls-20130529-2nc 67.html).  Senior Labor Senator John Faulkner reportedly told the Labor caucus he was ‘ashamed’ and the ALP ‘diminished and tarnished’ by the deal struck with the Liberals.  He argued the changes went against measures incorporated in Labor’s electoral bill currently before the parliament.  The Greens opposed the legislation, even though they also would have benefitted from the increased funding. Their leader Christine Milne proposed it should be referred to a parliamentary inquiry to report back after the next election (www.theaustralian.com.au/national-affairs/donations-reform-at-risk-as-pact-with-coalition-near-collapse/story-fn9iix-1226653359489). She said her party would not support legislation that ‘did not clamp down on corporate donations and runaway electoral spending to stop what is now an “arms race”‘ (Taylor, L. 2013, ‘Labor veteran “ashamed” of party funding deal’, The Guardian, 28 May, http://www.guardian.co.uk/world/2013/may/28/labor-veteran-ashamed-funding-deal). 

The public backlash against the administrative funding proposal heightened concern opposition from coalition MPs that caused Tony Abbott to withdraw his support for the legislation (Griffiths, E. 2013, ‘Tony Abbott declares funding deal dead after going back on agreement with Federal Government’, ABC News, 30 May http://www.abc.net.au/news/2013-5-30/funding-deal-in-tatters-as-abbott-changes-his-mind4722312). Without the support of the Coalition, the Greens and independents there was no prospect of the legislation passing the parliament so the government did not proceed.

The government’s action in announcing the proposed legislation, particularly for a substantial increase in public funding for political parties, just four months out from the federal election was a flawed strategy, even though it initially had bipartisan support.  The proposal for such an increase, a tricky proposition to sell to the public at any time, was rendered more contentious in the context of the recent May federal budget which made substantial cuts to government expenditure to try and reduce the deficit. Putting forward the legislation as ‘a done deal’ without consultation with the rank and file of the parliamentary parties was an act of political naivety on the part of the leadership of both major parties. Strategically it would have been preferable to have introduced the legislation just after the federal election rather than having it caught up in the electoral maelstrom of the federal election campaign.  Ad Abbott said: ‘the Coalition had listened, we’ve learned, and the bill is now dead’, he said (www.abc.net.au/news/2013-05-30/funding-deal-in-tatters-as-abbott-changes-his-mind/4722312).  With it went the other electoral reforms on the disclosure and reporting aimed at increasing the transparency of political donations.

As you can see from Chapter 8 of the textbook, Australian Political Institutions 10e, pp 288-289, public funding is aimed at alleviating the potential for possible corruption associated with political parties having to seek donations from private sources to fund their very expensive election campaigns. There is always the possibility that those donors might seek  favours in return.  The Joint Standing Committee on Electoral Matters Report on the funding of political parties and election campaigns (see website reference above) sets out arguments included in submissions to the committee in favour of public funding: it would provide assistance to new parties to compete effectively in elections; relieve parties of the necessity to constantly focus on fund-raising so they can concentrate on policy development; and ensure that participation in the political process was not hindered by lack of adequate funds. There was a suggestion that the full cost of election campaigns should be met by the state to create a level playing field, although there was also a comment that this would perhaps require a reduction in overall campaign expenditure.

The arguments put to the Committee against public funding as it currently operates in Australia included the comment that it favoured the major parties because it was paid on the basis of how many votes the party received and while minor parties and independents might attract significant support they may not meet the 4 per cent threshold required to qualify for public funding.  It was also argued that it could make the parties dependent upon the state and thus undermine their independence, cause parties to ignore their members and broad civil society, entrench the major political parties and ‘ossify the party system’.  It was also suggested the electorate regarded it as a ‘political hand-out or rort’ and not a high priority in the context of public expenditure.

Australia is not the only country to have public funding for elections.  Of the countries examined through the textbook, the UK, US, Germany and New Zealand all have some form of public funding for political parties.

Policy development grants are awarded to UK parties to help them develop policies for their campaigns for elections to the European parliament, the UK parliament, Scottish parliament, National Assembly for Wales, Northern Ireland Assembly and local government. The grants are distributed using a formula based on representation and performance at an election.  A party must have at least two sitting members of the House of Commons and have taken the oath of allegiance provided by the Parliamentary Oaths Act 1866.  Further information can be found on the UK Electoral Commission website: http://www.electoralcommission.org.uk/party-finance/public_funding.

In the US, federal government public funding is provided to qualified presidential candidates to pay for valid expenses of their primary and general election political campaigns.  National political parties receive federal money for their national nominating conventions.  Further information can be found at the Federal Election Commission website: http://www.fec.gov/pages/brochures/pubfund/shtml#anchor688095.  Some US states and cities also provide public funding but there is no public funding for federal congressional elections (see: A Short History of Public Funding of Elections in the U.S., 2012, Public Citizen, Washington, D.C. 19 June, http://www.citizen.org/documents/short-history-of-public-financing-of-elections.pdf. Arguments against citizen funded elections in the US can be found at http://www.citizenfundedelections.org/ArgumentsAgainst.html). 

German parties that obtained 0.5 per cent of the vote in the latest Bundestag, Land or European elections or 1.0 per cent in the latest state election receive public funding for all their constitutional functions, including campaigning (see http://www.bundestag.de/htdocs_e/bundestag/function/party_funding_05.pdf and ‘Campaign Finance: Germany’ 2012, Law Library of Congress, http://www.loc.gov/law/help/campaign-finance/germany.php.

Public funding for elections for the New Zealand House of Representatives applies solely to broadcasting.  New Zealand’s political parties may only advertise on radio and television for the party vote using funds allocated by the Electoral Commission.  They are not permitted to use their own funds to buy additional broadcast advertising.  They are allocated free time for party campaign opening and closing addresses.  See the New Zealand Electoral Commission website: http://www.elections.org/nz/parties-candidates/broadcasting and The Encyclopedia of New Zealand, Elections and Campaigns, Electoral Finance, http://www.teara.govt.nz/en/elections-and-campaigns/page5.

Malaysia has no public funding for elections.  The fact that the major political parties between them control most of Malaysia’s media facilitates their access to broadcasting and advertising.  It also makes it difficult for opposition parties to get their message across to the electorate.  Critics of the  Malaysian situation argue that ‘money makes politics possible and elections winnable’ (Mayberry, K. 2013, ‘Malaysia opposition battles financial odds’ 28 April, http://www.aljazeera.com/indepth/features/2013/04/20131299055114426.html).  Transparency International – Malaysia has called for reform of political financing in Malaysia, including the introduction of state funding to improve ‘transparency and accountability by the parties and candidates and enhance disclosure and monitoring of political corruption’ (Transparency International-Malaysia, 2011, ‘Reform of Political Financing in Malaysia’, http://www.transparency.org.my).  In response to concerns raised about the validity of the 2013 election after the Barisan Nasional coalition won 133 of the 222 parliamentary seats despite having gained less than half of the popular vote, Malaysia’s prime minister announced the establishment of an independent, bi-partisan parliamentary committee to oversee the Election Commission (Reuters, 2013, http://www.reuters.comarticle/2013/06/01/us-malaysia-politics-idUSBRE95005T20130601).  There is no indication that public funding is on the government’s agenda. 

It is suggested that students examine the pros and cons for public funding in Australia outlined in the Report of the Joint Standing Committee on Electoral Matters referred to above and identify the strengths and weaknesses of the arguments.  Can the various proposals be explained in the context of the interests of their proponents? Can the same test be applied to the situations in the other countries discussed above?

Having examined the systems operating in the UK, US, Germany and New Zealand do you think the administrative funding proposed in the government’s aborted legislation was justified? If so why?  If not, why not?

Are there any improvements you consider should be made to the Australian system? Give your reasons.

Do you consider that public funding should not be granted to political parties.    Give  reasons to substantiate your opinion?

Dr Gwynneth Singleton

 

 

 

 

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