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Public Funding and Expenditure Regulation of Australian Political Parties: Some Reflections

Published online by Cambridge University Press:  24 January 2025

Joo-Cheong Tham  and
David Grove
Joo-Cheong Tham
Affiliation:
School of Law, La Trobe University
David Grove
Affiliation:
School of Law, La Trobe University
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Extract

Not so long ago, Australian electoral law was described as being in a Cinderella state, a neglected but promising field of inquiry. Some years down the track, it is clear that Australian electoral law is beginning to shed its Cinderella-status with scholars paying increasing attention to the legal regulation of elections.

In this burgeoning field, political finance laws assume critical importance. Indeed, it has been said that such laws probably pose ‘perhaps the central issue facing electoral law’. Arguably for this reason, this aspect of Australian electoral law, more so than any other, has been the subject of sustained scholarship. It is even showing signs of maturing into a distinct area of electoral law.

Type
Research Article
Information
Federal Law Review , Volume 32 , Issue 3 , September 2004 , pp. 397 - 424
Copyright
Copyright © 2004 The Australian National University

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Footnotes

David was responsible for calculating most of the data in Part II while Joo-Cheong was responsible for the remainder of the article. Thank you to Graeme Orr for helpful discussion of various aspects of this article. Thank you too to the anonymous referees for their useful comments. Research for this article was also assisted by a grant from the Faculty of Law and Management, La Trobe University. The usual disclaimers apply.

References

1 Graeme Orr, 'Editorial: Special Edition on Electoral Regulation and Representation' (1998) 7 Griffith Law Review 166, 166.

2 Such inquiry has clearly gained impetus from the Electoral Law Project co-ordinated by the Gilbert and Tobin Centre of Public Law, University of New South Wales (see <http://www.gtcentre.unsw.edu.au>).

3 Graeme Orr, Bryan Mercurio and George Williams, 'Australian Electoral Law: A Stocktake' (2003) 2 Election Law Journal 383, 396 (emphasis in original).

4 See, eg, Teresa Somes, 'Political Parties and Financial Disclosure Laws' (1998) 7 Griffith Law Review174; Keith Ewing, 'The Legal Regulation of Electoral Campaign Financing in Australia: A Preliminary Study' (1992) 22 University of Western Australian Law Review 239; Deborah Cass and Sonia Burrows, 'Commonwealth Regulation of Campaign Finance — Public Funding, Disclosure and Expenditure Limits' (2000) 22 Sydney Law Review 477; Joo- Cheong Tham, 'Legal Regulation of Political Donations in Australia: Time for Change' in Glenn Patmore (ed), Labor Essays 2002: The Big Makeover: A New Australian Constitution (2001) 72; Graeme Orr, 'The Currency of Democracy: Campaign Finance Law in Australia' (2003) 26 University of New South Wales Law Journal 1 and Joo-Cheong Tham, 'Campaign Finance Reform in Australia: Some Reasons for Reform' in Graeme Orr, BryanMercurio and George Williams (eds), Realising Democracy: Electoral Law in Australia (2003) 114.

5 On 22 January 2004, a workshop specifically devoted towards Australian political finance was organised by Graeme Orr through the Socio-Legal Research Centre, Griffith University.

6 Notable exceptions are Rolf Gerritsen, Election Funding Disclosure and Australian Politics: Debunking Some Myths (1995); Ian Ramsay, Geof Stapledon and Joel Vernon, Political Donations by Australian Companies (2000) (this report was subsequently published in (2001) 29 Federal Law Review 177) and Sally Young, 'Spot On: The Role of Political Advertising in Australia' (2002) 37 Australian Journal of Political Science 81. The New South Wales branch of the Australian Greens has also undertaken a study of donations to the New South Wales divisions of the major political parties (see Democracy4Sale, The Greens <http://www.democracy4sale.org> at 15 October 2004).

7 See, however, Orr, 'The Currency of Democracy', above n 4, 24-5.

8 See, eg, Tham, 'Legal Regulation of Political Donations in Australia', above n 4.

9 See, however, Cass and Burrows, above n 4.

10 See, however, David Tucker and Sally Young, 'Public Financing of Election Campaigns – A Solution or a Problem?' in Glenn Patmore (ed), Labor Essays 2002: The Big Makeover: A New Australian Constitution (2001) 60.

11 Tham, 'Legal Regulation of Political Donations in Australia', above n 4, 78-80.

12 This focus means that this article will not consider state regulation of party finance or regulation of state elections. For a useful summary of state regulation, see the Appendix in Orr, 'The Currency of Democracy', above n 4, 30-1.

13 This limitation means that this article will not consider UK regulation of European Union elections, regional elections and referendums.

14 For an excellent account, see K D Ewing, 'Transparency, Accountability and Equality: The Political Parties, Elections and Referendums Act 2000' [2001] Public Law 542. This Act largely implements the United Kingdom, Committee on Standards in Public Life, Fifth Report: The Funding of Political Parties in the United Kingdom, Cm 4057–I (1998) ('Neill Committee Report'). For a discussion of the report, see Lisa Klein, 'On the Brink of Reform: Political Party Funding in Britain' (1999) 31 Case Western Reserve Journal of International Law 1.

15 Justin Fisher, 'Next Step: State Funding for the Parties?' (2002) 73 Political Quarterly 392, 392.

16 K D Ewing, 'The Funding of Political Parties in Britain: Prospects for Reform' (1998) 7 Griffith Law Review 185, 185.

17 Ewing, 'Transparency, Accountability and Equality' above n 14, 542. For an excellent review of the development of British electoral law, see Keith Ewing, 'Electoral Reform in the United Kingdom' in Graeme Orr, Bryan Mercurio and George Williams (eds), Realising Democracy: Electoral Law in Australia (2003) ch 3.

18 See Cass and Burrows, above n 4.

19 See Tham, 'Campaign Finance Reform in Australia' above n 4, 119-20, 122 and Ewing, 'Electoral Reform in the United Kingdom' above n 17, 27-8. For the purposes of campaign finance law, see Keith Ewing, The Funding of Political Parties in Britain (1987) 175–8 and K D Ewing, Money, Politics and Law: A Study of Electoral Campaign Finance Reform in Canada (1992) ch 2.

20 The Northern Territory Country Liberal Party was treated, for the purpose of this article, as part of the Liberal Party.

21 For the purpose of this article, all parties going by the name 'Green' or some permutation of this word were treated as part of the 'Greens'.

22 Electoral and Referendum Amendment Act 1998 (Cth). It should also be noted that the annual returns of the parties only disclosed the total amount of expenditure with no breakdown in terms of expenditure items: Commonwealth Electoral Act 1918 (Cth) ('CEA') s 314AB(2)(a).

23 The returns of both the federal and state branches of the parties were examined.

24 These categories are defined in the Appendix.

25 Tham, 'Legal Regulation of Political Donations in Australia', above n 4, 79-80 and Tham, 'Campaign Finance Reform in Australia', above n 4, 123–4. See also Joo–Cheong Tham, The Normalisation of Corporate Contributions to Political Parties: A Threat to Democracy (2003) Democratic Audit of Australia <http://democratic.audit.anu.edu.au> at 15 October 2004.

26 Gerritsen, above n 6, 21.

27 Ramsay, Stapledon and Vernon, above n 6, 23.

28 Figures calculated from annual returns for the financial years 1999, 2000–01, 2002.

29 Ramsay, Stapledon and Vernon, above n 6, 26.

30 See text accompanying n 35.

31 See also discussion in Orr, 'The Currency of Democracy', above n 4, 27.

32 The figures relating to the number of first preference votes secured by the parties are available at Australian Electoral Commission <http://www.aec.gov.au/_content/when/past/2001/results/NATIONAL.htm> at 9 December 2003.

33 The anomaly of the 1993 election requires further investigation. It would not seem to be due to the ban on political broadcasting imposed by the Political Broadcasts and Political Disclosures Act 1991 (Cth) because this ban was struck down by the High Court in 1992 (Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106) and hence, did not apply to the 1993 election.

34 The campaign expenditure data for the 1987, 1990, 1993 and 1996 elections were respectively found in AEC, Election Funding and Financial Disclosure Report: Elections 1987 (1988) 50; AEC, Election Funding and Financial Disclosure Report: Elections 1990 (1991) 38; AEC, Election Funding and Financial Disclosure Report: Election 1993 (1995) 52-3; AEC, Election Funding and Financial Disclosure Report: Elections 1996 (1997) 7, 29-32. The political broadcasting data for the 1987, 1990, 1993 and 1996 elections were respectively found in AEC, Election Funding and Financial Disclosure Report: Elections 1987 (1988) 52;AEC, Election Funding and Financial Disclosure Report: Elections 1990 (1991) 64; AEC, Election Funding and FinancialDisclosure Report: Election 1993 (1995) 122; AEC, Election Funding and Financial Disclosure Report: Elections 1996 (1997)29-33. The votes cast for the 1987, 1990, 1993 and 1996 federal elections were respectively 9 233 000 (AEC, Election Statistics 1987: FullDistribution of Preferences: House of Representatives (1988) 77); 10 222 927 (figure calculated from Joint Standing Committee on Electoral Matters, Parliament of Australia, 1990 Federal Election (1990) 1-2); 10 674 805 and 11 294 479 (Joint Standing Committee on Electoral Matters, Parliament of Australia, Report of the Inquiry into the Conduct of the 1998 Federal Election and Matters Related Thereto (2000) 2). The figures for the Average Weekly Total Earnings for 1987, 1990, 1993 and 1996 were respectively $381.30; $464.80(Australian Bureau of Statistics, Average Weekly Earnings Australia, 1941–90 (1992) 6); $512.80 (Australian Bureau of Statistics,Average Weekly Earnings, States and Australia (1993) and $564 (Australian Bureau of Statistics, Year Book Australia 2003: Average Weekly Earnings (2003)).

35 CEA ss 294, 297.

36 The figure is found at Australian Electoral Commission <http://www.aec.gov.au/_content/how /funding_payments/2001_payments.htm> at 4 December 2002. For the section providing for indexation, see CEA s 321.

37 Prior to 1995, the federal election funding scheme operated as a reimbursement scheme hence, required proof of electoral expenditure. This feature of the scheme was abolished by Commonwealth Electoral Amendment Act 1995 (Cth).

38 Joint Select Committee on Electoral Reform, Parliament of Australia First Report (1983) 145-7 [9.3].

39 For a brief discussion of these entitlements, see Sally Young, 'Killing Competition: Restricting Access to Political Communication Channels in Australia' (2003) 75 AQ: Journal of Contemporary Analysis 9, 9-11.

40 Australian National Audit Office, Parliamentarian Entitlements: 1999–2000 (2001) paras 2-3.

41 Calculated from Table 1. Further research is, however, required to determine the amounts that are received by the various parties because there is no readily accessible information indicating how much each party receives of parliamentary entitlements. Collecting such information is complicated by the fact that the use of such entitlements varies according to each parliamentarian: ibid, para 39.

42 See definition of 'parliamentary office-holders' at Parliamentary Entitlements Act 1990 (Cth) s 3.

43 Remuneration Tribunal Determination 2003/14 (consolidated) para 1.

44 Ibid para 4.

45 Ibid para 10.4.

46 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 1, item 7 and Remuneration Tribunal Determination 2003/14 (consolidated) para 9.

47 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 1, items 8-9 and Remuneration Tribunal Determination 2003/14 (consolidated) para 2 (scheduled commercial transport); para 3 (car transport); para 5 (provision of vehicle); para 6 (charter transport) and para 9 (overseas study trips).

48 See Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 2.

49 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 2, item 5.

50 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 1, item 9(1)(d).

51 Remuneration Tribunal Determination 2003/14 (consolidated) para 8.

52 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 1, item 7 and Remuneration Tribunal Determination 2003/14 (consolidated) para 9.

53 Parliamentary Entitlements Regulations 1997 (Cth) reg 3. A much more limited allowance is provided to Senators with their entitlement limited to 10 reams of paper per month: at reg 3A(2)-(3).

54 Parliamentary Entitlements Act 1990 (Cth) sch 1, pt 1, item 3.

55 Remuneration Tribunal Determination 2003/14 (consolidated) para 10.4.

56 Ibid para 2 (scheduled commercial transport); para 3 (car transport); para 4 (private vehicle allowance) and para 5 (provision of vehicle).

57 Australian National Audit Office, above n 40, paras 2.61-2.68.

58 Commonwealth of Australia, Ministerial and Parliamentary Services, Senators and Members: Entitlements (2001) 30.

59 For a good description of the Short and Cranbourne money, see Neill Committee Report, above n 14, 100–1 and United Kingdom Electoral Commission, The Funding of Political Parties: Background Paper (2003) 13-4.

60 PPERA s 12.

61 Elections (Policy Development Grants Scheme) Order 2002 (SI 2002/224) (UK).

62 Representation of the People Act 1983 (UK) c 2, s 91(1).

63 With respect to commercial broadcasters, the ban on political advertising is governed by ss 321(2)-(3) of the Communications Act 2003 (UK) c 21. Such broadcasters are also required to provide free broadcast time through rules made by the Office of Communication: s 333. The British Broadcasting Commission does not run advertising and its duty to provide free political broadcasts is found in an agreement with the government, see generally United Kingdom Electoral Commission, Party Political Broadcasting (2003) and Ewing, The Funding of Political Parties in Britain above n 19, 93-5, 108-17.

64 The amount applies for 2002 given that that was first year such grants were disbursed.

65 See Ewing, The Funding of Political Parties in Britain, above n 19, 120 for amounts payable under the Short scheme for 1980-83.

66 Commonwealth, Parliamentary Debates, House of Representatives, 2 November 1983, 2215 (Kim Beazley, Minister for Aviation, Special Minister of State and Minister Assisting the Minister for Defence, Second Reading Speech to Commonwealth Electoral Legislation Amendment Bill 1983 (Cth)).

67 Ewing, The Funding of Political Parties in Britain, above n 19, 182.

68 Beazley, above n 66, 2215. This specific aim is long-standing. When introducing the original Commonwealth Electoral Bill, Senator O'Connor justified the need for the limits on electoral expenditure in this fashion:

If we wish to secure a true reflex of the opinions of the electors, we must have … a system which will not allow the choice of the electorsto be handicapped for no other reason than the inability of a candidate to find the enormous amount of money required to enable him [sic] to compete with other candidates.

Commonwealth, Parliamentary Debates, Senate, 31 January 1902, 9542 (Senator O'Connor, Second Reading Speech).

69 Beazley, above n 66, 2213.

70 Ewing has also noted that equality of electoral opportunity requires that 'no candidate or party should be permitted to spend more than its rivals by a disproportionate amount': Ewing, Money, Politics and Law, above n 19, 18.

71 Commonwealth, Parliamentary Debates, House of Representatives, 8 May 1990, 68 (Mr Beddall, Minister for Small Business and Customs, Second Reading Speech to Parliamentary Entitlements Bill 1990 (Cth)).

72 Neill Committee Report, above n 14, 93. The committee also noted that campaigning was diverting the parties' attention from the task of policy development: at 93.

73 See Neill Committee Report, above n 14, ch 7. The Neill Committee's position is in sharp contrast with the Houghton Committee's view that comprehensive state funding should be introduced: United Kingdom, Report of the Committee on Financial Aid to Political Parties, Cmnd 6601 (1976).

74 United Kingdom Electoral Commission, The Funding of Political Parties: Issues Paper (2003).

75 See the views canvassed in United Kingdom Electoral Commission, The Funding of Political Parties: Background Paper above n 59, 9-11.

76 Joint Standing Committee on Electoral Matters, Parliament of Australia, The 2001 Federal Election: Report of the Inquiry into the Conduct of the 2001 Federal Election, and Matters Related Thereto (2003) 243.

77 Joint Select Committee on Electoral Reform, above n 38, 149-50 [9.11].

78 See, eg, the Liberal Party's support of the Electoral Amendment Bill (No 2) 1994 (Cth) which increased electoral funding by changing the funding rate for a Senate vote so that it equalled the funding rate for a House of Representatives vote: Australia, Parliamentary Debates, House of Representatives, 9 March 1995, 1951 (D Connolly). The Liberal Party has also advocated increases in electoral funding through a change in the method of calculating such funding. Instead of the present system of basing the amount on the number of first preference votes, the Liberal Party has recommended that the amount be based on the number of enrolled voters: Joint Standing Committee on Electoral Matters, Parliament of Australia, 1996 Federal Election: Report of the Inquiry into all Aspects of the Conduct of the 1996 Federal Election and Matters Related Thereto (1997) 104-5.

79 See text above Table 4.

80 Even with robust regulation of campaign expenditure, public funding is still likely to fuel the parties' expenditure in other areas, for example, through the employment of increased numbers of party staff members and more expensive party events like conferences.

81 Tucker and Young, above n 10, 67.

82 Stephen Mills, The New Machine Men: Polls and Persuasion in Australian Politics (1986) 189-90.

83 See above, text accompanying nn 25-9.

84 See above, text accompanying Table 3.

85 Arguments based on 'purification' have been made by UK proponents of increased state funding, see Neill Committee Report, above n 14, 90-1 and United Kingdom Electoral Commission, The Funding of Political Parties: Background Paper, above n 59, 20.

86 See above, text accompanying Table 3.

87 See above, text accompanying Table 3. Federal electoral funding is provided for votes gained in the House of Representatives and Senate so this discrepancy would also be due to the fact that the Greens do not contest many House of Representative seats.

88 For instance, a two per cent threshold used to apply in relation to the Australian Capital Territory funding and disclosure regime. This threshold, however, has been increased to four per cent: Electoral Act 1992 (ACT) s 208.

89 In instituting a lower threshold or pro-rata funding, it might be desirable to have different systems applying to the House of Representatives and the Senate.

90 CEA ss 273 (Senate) and 274 (House of Representatives).

91 Figures derived from Australian Electoral Commission http://www.aec.gov.au/_content/when/past/2001/results/> at 28 January 2004.

92 Commonwealth Constitution s 24.

93 See above, text accompanying nn 40-1.

94 United Kingdom Electoral Commission, The Funding of Political Parties: Background Paper, above n 59, 22. See also Neill Committee Report, above n 14, 91-2. For similar sentiments, see Young, 'Killing Competition', above n 39.

95 CEA s 314AB(2)(b).

96 Electoral and Referendum Amendment Act 1998 (Cth). This requirement was also removed for the 1993 election but reinstated for the 1996 election, see respectively Commonwealth Electoral Amendment Act 1992 (Cth) and Commonwealth Electoral Amendment Act 1995 (Cth).

97 PPERA s 80.

98 PPERA s 82.

99 PPERA s 81.

100 PPERA s 82(4).

101 PPERA s 84.

102 Joint Standing Committee on Electoral Matters, 1996 Federal Election, above n 78, 102.

103 Electoral and Referendum Amendment Act 1998 (Cth).

104 Commonwealth of Australia, Inquiry into Disclosure of Electoral Expenditure (1981) 8-9 ('Harders Report').

105 See Cass and Burrows, above n 4, 484-5, 491.

106 Schedule 8 of the PPERA lists eight separate categories of expenses including 'party political broadcasts' and 'advertising of any nature (whatever the medium used)'.

107 PPERA s 72(2). It should be noted that a party's 'campaign expenditure' does not include any expenditure that must be reported as the election expenses of any candidate: at s 72. Candidates' election expenditure is regulated by the Representation of People Act 1983 (UK) c 2, see generally K D Ewing, 'Promoting Political Equality: Spending Limits in British Electoral Law' (2003) 2 Election Law Journal 499, 501-3.

108 PPERA s 72(4).

109 PPERA sch 9(3)(7).

110 PPERA sch 9(3)(2).

111 These minimum limits vary according to the nations of the United Kingdom. In relation to England, the minimum is £810 000. The minimum limits for Scotland and Wales stand respectively at £120 000 and £60 000: PPERA sch 9(3)(2)(b).

112 PPERA s 79(2). This provision is supported by strict regulation as to who can authorise the spending and payment of campaign expenditure: at ss 75-6.

113 Ewing, 'Promoting Political Equality', above n 107, 507.

114 Neill Committee Report, above n 14, 116-7.

115 United Kingdom, Parliamentary Debates, House of Commons, 10 January 2000, Column 36 (Jack Straw, Secretary of State for the Home Department).

116 Ewing, 'Promoting Political Equality', above n 107, 499, 507.

117 Neill Committee Report, above n 14, 116-7.

118 See above text accompanying Table 4.

119 As stated by Chief Justice Mason, 'the very concept of representative government and representative democracy signifies government by the people through their representatives' Australian Capital Television v Commonwealth (1992) 177 CLR 106, 137 (emphasis added).

120 This argument only holds when such organisations have democratic internal structures. Federally registered unions, for one, are legally obliged to have such structure: Workplace Relations Act 1996 (Cth) pt IX.

121 Neill Committee Report, above n 14, 36-8.

122 Electoral Commission (UK), Elections 2001: Campaign Spending (2002) 17.

123 Neill Committee Report, above n 14, 117.

124 See Young, 'Spot On: The Role of Political Advertising in Australia', above n 6, 89

125 Fisher, above n 15, 396.

126 Young, 'Spot On: The Role of Political Advertising in Australia', above n 6, 91.

127 Neill Committee Report, above n 14, 118.

128 Note Ewing's comment that fairness in elections goes beyond the question of resources and embraces the content of messages: Ewing, 'Promoting Political Equality', above n 107, 499.

129 See text above Table 3.

130 Joint Select Committee on Electoral Reform, above n 38, 172 [10.38].

131 Harders Report, above n 104, 13.

132 Joint Select Committee on Electoral Reform, above n 38, 172 [10.38].

133 Before they were repealed, the Australian expenditure limits were, in fact, subject to widespread non-compliance. For example, 433 out of 656 candidates for the 1977 federal elections did not file returns disclosing their expenditure: Harders Report, above n 104, 18.

134 The key supervisory committees are the Joint Standing Committee on Electoral Matters and the Estimates Committees.

135 Orr, 'The Currency of Democracy', above n 4, 25.

136 Neill Committee Report, above n 14, 118.

137 The vulnerability of expenditure limits to arguments based on political freedoms also exist in the UK but seems to be have been largely confined to third-party expenditure limits, see discussion of Bowman v United Kingdom (1998) 26 EHRR 1 in Ewing, 'Promoting Political Equality', above n 107, 505–7 and Andrew Geddis, 'Confronting the “Problem” of Third Party Expenditures in United Kingdom Election Law' (2001) 27 Brooklyn Journal of International Law 103, 11-25.

138 Lange v Australian Broadcasting Corporation (1997) 145 ALR 96, 112.

139 For a somewhat heroic attempt to argue that campaign expenditure is not a constitutionally recognised form of political communication, see Cass and Burrows, above n 4, 488.

140 See Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106.

141 As proposed by Orr: see Orr, 'The Currency of Democracy', above n 4, 23. If this method were adopted, other measures would have to be implemented to bring third parties which do not receive public funding within regulatory regime.

142 See Cass and Burrows, above n 4, 489-90.

143 This rationale was accepted in Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106.

144 CEA s 287.

145 For an excellent description of these limitations and other issues pertaining to the annual returns, see Sarah Miskin, Political Finance Disclosure: Party and Donor Annual Returns 2002– 03, Parliamentary Library Research Note No. 49/2003-4 (2004).

146 CEA s 314AC(2).

147 CEA s 287.

148 See AEC, Submission to the Joint Standing Committee on Electoral Matters Inquiry into Electoral Funding and Disclosure (2000) para 8.4.