LIMITATIONS TO POLITICAL FINANCING

This post reproduces Ken Coghill’s Supplementary submission 48 to JSCEM, specifically on political campaign financing.

Accountability Round Table has made two submissions to the Joint Standing Committee on Electoral Matters’ inquiry into the Commonwealth Electoral Amendment Bill 2016. This standing committee inquiry is a regular occurrence after every election. The first submission is by Colleen Lewis for Accountability Round Table. The second submission is by Ken Coghill, made in a personal capacity but reflecting the same principles.  Both address the current problems with funding of political parties in Australia.

Both are available at the JSCEM website (see links below).

Colleen Lewis, Submission 77  (PDF 19 KB)  Attachment 1 (PDF 1829 KB)  Attachment 2 (PDF 1061 KB)  Attachment 3 (PDF 1091 KB)  Attachment 4 (PDF 1042 KB)

Ken Coghill Submission 48  (PDF 265 KB) , and 48.1, Supplementary to submission 48 (PDF 273 KB)

The substantive part of Ken Coghill’s supplement to submission 48 is reproduced below.


Ken Coghill- 31 October 2016

Submission: Political Campaign Financing.

This submission mirrors provisions proposed as part of the Australian Government’s Open Government Partnership (OGP). These address the OGP Grand Challenge:

Increasing Public Integrity—measures that address corruption and public ethics, access to information, campaign finance reform, and media and civil society freedom.

This grand challenge is founded in the public trust principle whereby politicians, as public officers, must put the public interest ahead of personal, political and other private interests.

The 2014 report Political Donations. Final Report of Panel of Experts (NSW) and public statements by senior members of each of the major political parties, respected academic scholars and leading commentators have drawn attention to the perceptions of high risks of corrupt relationships between donors to political parties and candidates.

The case for reform was aptly expressed by then- Senator Faulkner who said;

The choice before us is whether to seek to adapt ourselves, or to throw up our hands and allow participants in the political system to do what they want. Given the importance of political financing to the conduct of elections, the structure of our political system, and the operation of political parties and other political actors, it is incumbent on governments to engage with these questions, and to take active steps to ensure that our democracy evolves in ways consistent with the expectations and requirements of citizens.

Prof Colleen Lewis reports that

evidence from the New South Wales (NSW) Independent Commission Against Corruption (ICAC), (lays) bare how a political party and some of its parliamentary members in NSW manipulated the current patchwork approach to political funding for their personal advantage and that of their party. A national approach, it is argued, would help to plug the gap unashamedly exploited by the federal Liberal Party to circumvent NSW laws pertaining to political donations.

The NSW regulatory scheme is by far the best of the schemes operating in Australia at national and states levels. The report Political Donations. Final Report of Panel of Experts recommended that, subject to some refinements, the scheme be adopted nationally throughout national, state and territory jurisdictions. This paper proposes a number of reforms largely consistent with that report but with some variations drawing on Canada’s national model.

The proposals also reflect more recently expressed concerns that have focused on donations to parties, politicians and candidates by foreign donors. These concerns again highlight the extent to which Australian regulation of political campaign financing lags behind that of other comparable jurisdictions, as identified by the global Electoral Integrity Project and International IDEA.

The confluence of calls for reforms provides a strong basis for action to be taken in the immediate future as part of Australia’s first OGP NAP commitments and co-incidentally the current Parliamentary Joint Select Committee on Electoral Matters inquiry and JSCEM’s following reports and recommendations.

Commitments to and recommendations for reform of political campaign financing should include (but not necessarily limited to):

(i)   Donations (in total) by any individual person or entity to candidates and political parties contesting election to the House of Representatives or the Senate to be subject to an annual cap.1 Penalties to apply to candidates, political parties and related entities which accept donations that exceed the annual cap and should range from forfeiture of public funding (to the value of, say double, the value of the breach), up to disqualification of the candidate(s) &/or deregistration of the party and bans on a third party’s participation in the most egregious cases.

(ii)   Donations by entities other than natural persons (e.g. corporations) must not be made and must not be accepted by a candidate or political party or associated entity unless the donor has identified the beneficial owner(s) of the entity.2

(iii) Donations must not be made by a donor and must not be accepted by a candidate or political party or associated entity unless the donor is an Australian citizen or Permanent Resident or an entity registered in Australia (including in a State or Territory).3

(iv)  Similar types of limitations would apply to donations for political campaign purposes to third parties.

(v)  Continuous real-time disclosure of all donations accepted by candidates, political parties, associated entities and third parties, above a threshold of, say, $100.

(vi)  Limits on the value of campaign expenditure by candidates, political parties, associated entities and third parties, calculated according to the number of voters enrolled in the electorate(s) contested (with a different multiplier for third parties).4

(vii) Continuous real-time disclosure of all expenditure by candidates, political parties, associated entities and third parties.

(viii) Public funding to be based on reimbursement of a percentage of actual expenditure (up to the expenditure limit) by candidates, political parties, and associated entities in the electorate(s) each contested. The level of public funding should approximate the total provided to all candidates and parties under the current Australian scheme.5

(ix) Penalties to apply to candidates, political parties, associated entities and third parties whose expenditure exceeds the relevant limit (penalties would range from forfeiture of public funding to the value of, say double, the value of the breach up, to disqualification of the candidate(s) &/or de-registration of the party and bans on a third party’s participation).


Footnotes
1 The annual cap could be say, total of $1,000, indexed to average earnings.

2 i.e. the people who have significant control or influence over the entity (UK definition)

3 Professor Anne Twomey suggests this is likely to survive challenge in the High Court.

4 This is based on the Canadian model; it creates a more level playing field whereas the current Australian “votes received” model advantages incumbent major parties.

5  No increase in aggregate public funding is proposed as it is already quite high.