Regulating Money in Democracy: Australia's Political Finance Laws Across The Federation

Regulating Money in Democracy: Australia's Political Finance Laws Across The Federation

Dr Yee-Fui Ng

The report for this project is available here.

Watch a short video below of Dr Yee-Fui discussing the report.

Video - About the report

Presenters:

Dr Yee-Fui Ng
Senior Lecturer, Faculty of Law Monash

Abstract

This report provides a comprehensive overview of the current regulation of political finance laws across the federation. Part I outlines the scope and impetus of this report, which is commissioned by the Electoral Regulation Research Network.

Part II provides an analytical framework of principles for political finance regulation. These principles are: protecting the integrity of representative government, promoting fairness in politics, the principle of transparency, supporting parties in performing their functions, and respecting political freedoms. It also provides regulatory options to promote these principles, such as transparency measures, supply-side measures such as source restrictions which regulate who can make financial contributions; and amount restrictions that limit the sums that can be given, as well as public funding of electoral campaigns.

Part III outlines the history of major legislative changes to electoral legislation at the Commonwealth, State and Territory levels in Australia. Australian jurisdictions have previously had minimal regulation of political finance that was described as laissez faire or “lackadaisical” compared to other major democracies. In recent years, however, several Australian State jurisdictions have undertaken various dynamic political finance reforms that have tightened up the regulatory net, particularly Victoria, NSW and Queensland.

Part IV identifies nine key elements of political finance regulation: disclosure requirements (donations and expenditure), caps on donations, caps on expenditure, indexation, bans on donations from certain sectors, foreign donations bans, political funding streams and funding rates, and enforcement. It examines and classifies these key elements of political finance regulation for all jurisdictions in Australia. It shows that there is a distinct lack of uniformity in the regulation of political finance in Australian jurisdictions at the Commonwealth, State and local government levels in all nine regulatory dimensions.

Part V provides recommendations for law reform and harmonisation across jurisdictions as follows:

Transparency Measures: Disclosure Requirements

  • administrative harmonisation across jurisdictions in terms of website functionality and visualisations for disclosures utilising user-friendly interfaces.
  • administrative harmonisation in terms of the format, accessibility and timing of disclosures of electoral expenditure.

Regulation of the Supply and Demand of Money in Politics

  • consideration should be given towards broader adoption of donations caps in Australian jurisdictions to promote political equality.
  • there should be policy harmonisation of adoption of caps on expenditure for all Australian jurisdictions to promote equality between the parties and dampen the demand for electoral money.
  • consideration of broader adoption of bans on foreign donations across Australian jurisdictions to enhance public integrity.

Public Funding

  • consideration should be given towards adopting the SA public funding model of paying a higher fixed-dollar amount for the first tranche of the vote a party attracts, than for the rest of the vote share it wins.
  • policy harmonisation that streamlines the level of public funding across jurisdictions, provided that this is coupled with electoral expenditure caps.
  • policy harmonisation in providing annual funding for parties, including new parties, to ensure that parties are adequately funded to promote their policy platforms.

Indexation

  • indexation categories should be harmonised across jurisdictions in terms of disclosure thresholds, donation caps, expenditure caps, and public funding.
  • harmonisation of the quarter of CPI adjustment across jurisdictions.

Enforcement

  • categories of offences should be harmonised across jurisdictions in terms of breach of disclosure requirements, donation caps and bans, and expenditure caps.
  • penalties for breaches should be confined to fines or civil penalties, rather than imprisonment or criminal penalties.