The Labor/Liberal Duopoly’s autocratic bid for power | Anne Twomey

Transcript AI

Welcome back to the Constitutional Clarion. The Australian Government recently introduced two controversial bills, one dealing with campaign finance and the other with truth in political advertising. The campaign finance one is apparently going to be rushed through Parliament with virtually virtually no scrutiny, even though it will not apply until after the next election. The truth in political advertising one is being left to languish, so I’ll deal with that on another occasion.

The campaign finance one is over 200 pages long. Here it is, and this is double-sided, okay? It is incredibly complex. What it does is it amends existing legislation, the Commonwealth Electoral Act, so a lot of it involves adding or altering words in existing provisions, including definitions which affect other parts of the Act. This makes it impossible to read the bill as a whole and make sense of it. The only way of doing it is to look at each amendment and figure out how it will alter the existing provisions in the Commonwealth Electoral Act and then try and work out how it all hangs together. Now, to do that properly would take weeks.

But we don’t have weeks because the Labor government and the coalition opposition have done a deal behind closed doors and want this rushed through Parliament before anyone, like me, can point out what’s wrong with it.

Now that’s dreadful from a democratic accountability point of view. A bill that is so complex and has such a profound impact upon our democratic system requires proper scrutiny. It’s even more important that it be properly scrutinized because those proposing and passing this law have a very strong self-interest in it.

It potentially preserves their power and uses taxpayer money to prop up the political parties. The government’s weak excuse for the lack of scrutiny is that there was a parliamentary inquiry into the previous election, which did discuss the general issues of caps on donations and expenditure. Yes, there was, and I, along with others, did make submissions to that inquiry and gave evidence to it. But that was talking about generalities. It did not deal at all with specific provisions and how they would operate together, because there was no bill to discuss.

Any suggestion that this bill has already been subject to proper scrutiny is completely disingenuous. So I’ll do my best here to give you an idea of what’s in the bill and the aspects that I think are concerning. But because I actually have real work that I do have to do, quite a lot of which actually has to be done before the end of the year, my analysis cannot be comprehensive and it may not be perfect as well. I can’t guarantee that what I tell you will be absolutely correct because there may be some tiny little amendment to a particular definition somewhere that actually makes a difference. So I’ll do my best and in doing these videos, I’ll put them in different slices, looking at different aspects of the bill to make it manageable.

So in this particular one, I’ll do an overview of the bill and then I’ll focus on the political donations aspect of the bill, leaving expenditure, public funding, etc. for later. Now for those of you who only watch the first couple of minutes of my video and then make comments in the comment section that assume what I am going to say, often inaccurately, let me give you the TLDR. In principle there are good aspects in this bill, but when you get down into the detail some of it is bad and parts of it may also be struck down as unconstitutional.

So yes, I am critical of the bill. But I’m also conscious that the perfect should not be the enemy of the good. If the bill were to be defeated, we would lose an opportunity to implement useful and necessary reforms. So if the major parties are not prepared to make fair amendments to this bill in Parliament, and I’m guessing they’re not, it may still be best for the bill to pass and then see what the High Court will make of it and whether it takes a scalpel to the more dodgy aspects of the legislation when it is inevitably challenged.

So what’s good about the bill? The Commonwealth has been lagging behind on campaign finance reform for a long time. Its disclosure requirements are weak, with a very high threshold for disclosure of donations and long delays before disclosure is required. It has no caps on donations or expenditure, so that donors can spend large amounts to either influence the outcome of the election or to influence ministerial decisions by buying access and support for their interests.

This bill will lower the disclosure threshold for donations to $1,000 and will require much faster disclosure, ordinarily monthly, but more quickly around polling day. It will impose caps on electoral expenditure, bringing down the cost of campaigning as well as putting caps on donations. These two things should, at least in theory, balance each other out in terms of cost. The expenditure limits should reduce the amount of money that needs to be raised in political donations, compensating for the reduced amounts raised in donations due to the donation caps. However, the political parties would not let the opportunity go by to increase their public funding by the taxpayer.

So the capping of donations, even at ludicrously high levels, as I will explain, is used to justify massive increases in public funding for political parties, both for running electoral campaigns and for internal party administration.

None of this is good from a taxpayer’s point of view. So let’s get into the detail now about the caps on political donations. First, a little explanation as to what the point of them is. The idea is that if you place a low enough cap on the maximum amount a person can donate to a political party or its MPs or candidates during a year, then you can eliminate the donor’s capacity to exercise influence over MPs?Well, can donations result in political influence?

The answer is yes. In the McCloy case in New South Wales, Mr. McCloy, a property developer and a political donor, actually argued in court that political donations are made to secure access to politicians in order to seek to influence them. He even argued that this was protected by the Constitution, by the implied freedom of political communication, because this was his means of participating in the political system. Now the court, unsurprisingly, rejected that argument. Justice Gagler even described it as being as, quote, perceptive as it was brazen, unquote. The court identified different kinds of corruption that might arise through political donations.

One is clientelism, where an office holder becomes financially dependent upon donors so that he or she ceases to act in the public interest and instead acts in the interest of the donor.

Another is War-chest corruption, in which the best funded candidates and parties squeeze out other voices from political discourse by dominating advertising and other means of mass communication. The court accepted that laws which limit the, quote, uncontrolled use of wealth, unquote, in electoral campaigns can serve the legitimate purposes of preventing the risk or perception of corruption, creating a more level playing field where people have an equal opportunity to participate in the democratic system, and three, preventing the voices of the well-resourced few from drowning out the voices of others in political discourse.

In New South Wales, caps on donations were initially set at the level of $5,000, although it’s indexed, that’s now moved up to $7,900. And the rationale for that $5,000 cap was that the $5,000 of the billionaire was worth as much as fish and chip shop owner down the street. And neither of those $5,000 or those donors can buy access or influence because the amount is too low and there would be too many other people donating at that level.

The validity of those caps was upheld by the High Court. How then does this theory translate to the Commonwealth’s bill? What caps does it put on political donations by a donor? Let’s say we have a rich donor called Mr X. Mr X would like to influence Commonwealth ministers to look favourably upon his business interests. Under the new bill, donations to a single party and its MPs and endorsed candidates are all aggregated together under a single cap. So Mr X could donate no more than $20,000 to them.

Now, while $20,000 is a much higher cap than it applies in different states. So for example, $6,000 in Queensland, $7,900 in New South Wales, $4,850 in Victoria, and there over the entire electoral period, it’s still not on its face excessive. But it gets more complex. Major parties are structured so that each state or territory branch of the major party is treated as a separate party. Accordingly, a donation under this bill to the members or candidates who are endorsed by the New South Wales branch of a party is treated separately from a donation to its South Australian branch.

Now the upshot of this is that Mr X can make his $20,000 donation to the different branches of the same major party in each of the six states and territories and the federal branch. And this is an annual cap. So Mr X can make that $180,000 in donations to political parties and candidates of the same party in each year.

That means that Mr X can make $540,000 worth of donations to his favoured party and candidates over a three-year electoral cycle. But there’s more. The caps reset once an election is held. So during an election year, you get the full cap in the period before the election.