Election Funding and Donation Disclosure Reform in NSW

Friday 17 October 2014 @ 11.04 a.m. | Crime | Legal Research

As of 15 October 2014, the NSW Premier's attempt to restore credibility to the NSW electoral system and the processes by which political parties raise funding for elections, otherwise known as the, Election Funding, Expenditure and Disclosures Amendment Bill 2014 had passed through the Assembly without amendment and had reached second reading stage in the Council.

Background

In speaking to the Bill in his second reading speech, the Premier said:

"I have made it clear time and again that I am determined to restore the public's trust in New South Wales politics and I will take whatever action is necessary to increase the transparency and accountability of the election funding system in this State."

The Bill is part of a range of measures being adopted by the NSW Government to repair the perceived damage to its image and reputation flowing from the recent breaches of electoral donation and funding laws which the Independent Commission Against Corruption (ICAC) has found several prominent members of the NSW Government have been involved with - particularly, the acceptance of funding from property developers, which is prohibited in NSW.

What the Legislation Aims to Do

The Bill is described in its long title as "proposing an Act to amend the Election Funding, Expenditure and Disclosures Act 1981 (NSW) to make special provision with respect to the 2015 State general election and to make further provision with respect to election funding, expenditure and disclosures generally."

To these ends, the Bill proposes that donations to parties in the lead up to the 2015 State election will be required to be disclosed before voters go to the polls, and that politicians found using "slush funds" to get around laws relating to political donations will face up to 10 years in jail. The Bill also proposes to slash the spending caps on registered third parties, effectively the unions, from more than $1 million to $250,000 for the March 2015 poll.

The legislation will also double penalties for offences relating to electoral funding and cap the size of donations that can be made at 2011 levels – namely, $5000 to the parties and $2000 to individual candidates.

Electoral communications will also be subject to spending caps which will be fixed at $100,000 per party for every seat contested.

The use of third party slush funds, such as the "Eight by Five" fund revealed by ICAC to get around bans and caps will also attract the 10 year maximum jail term.

The legislation will require all donations made between 1 July 2014 and 1 February 2015 to be disclosed and published through the Election Funding Authority by 15 February 2015.

The measures contained in the Bill are reported to be in line with the interim recommendations from the independent panel appointed by the NSW State Government, and headed by former public servant Dr Kerry Schott. In his second reading speech, the Premier said that the changes would ‘‘clean up the system for the 2015 election’’ and that Dr Schott's Committee would also make further more long term recommendations later this year (2014).

Short Term and Long Term Effects

The short term aims of this legislation targeted at the 2015 state election, namely; the increase of penalties and fixing of caps on certain forms of donation are no doubt clearly things that most would agree are needed - effectively matters on which there is community consensus.

In the longer term, however, there are the issues, of whether the legislation in this Bill and that which is likely to follow it are, as Professor of Constitutional Law at Sydney University Anne Twomey writes in her article in The Conversation of 16 October, an attempt to introduce in NSW full public funding of major political parties – "by stealth". As Professor Twomey further writes:

". . . the real story is that, if passed, these changes will effectively provide 'full public funding plus' for the major political parties. Not only will they get full public funding of their campaigns, but they will also still be able to raise and keep donations. For good measure, they will get a major increase in party administration funding as well."

In her article, the professor points out that the NSW Government, through its Bill, has given the impression that it has left the issue of party funding to its independent panel to advise on, but that:

" . . . In the meantime, however, its Bill, introduced into the Legislative Assembly on October 14, seeks to establish what is effectively a form of full public funding, at least for the major parties, by hiding it within a complicated new funding formula".

In all, the professor indicates that the proposed changes will cost NSW taxpayers an extra 10 million in each NSW State election cycle:

"While it is very hard to estimate how much extra these proposed changes will cost taxpayers overall – given that it depends on how much parties and candidates actually spend in their campaigns – the amount is likely to be more than $10 million extra per electoral cycle."

So What of the Cure

Given what it might cost, it is relevant to wonder if the cure might be worse than the disease, as Professor Twomey writes:

"The theory seems to be that the parties will be swimming in so much public money that they will be too lazy to make the effort to be corrupt."

And with the above in mind, as the professor also points out, $10 million of extra funding every four years could also make an important difference to more than one or two state hospital or road projects, were the money not being diverted to a  political corruption deterrence use.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

Related Articles: