Political funding in Australia is governed by different rules for state (some of which do not require disclosure) and federal governments. Both levels suffer significant weaknesses; foremost is the lack of transparency associated with the place of private money.

When devoted to lobbying, donations can sometimes result in covert influence over the political process. And when made directly to political parties and candidates, they can be shrouded in secrecy.

Neither is public money free from such afflictions; corruption through the misuse of public resources occurs when parliamentary entitlements and government advertising are used for electioneering.

The flow of money into Australian politics also results in various forms of unfairness. The sale of access and influence provides another avenue for the rich to secure greater influence over the political process because of their wealth. And lobbying too can lead to corruption and misconduct.

All these practices are fuelled by the increasing demand for campaign funds, and this is unlikely to change. What then can be done to improve the system of political finance?

Eight steps

An integrated reform blueprint for federal and state politics could comprise eight elements.

Schemes requiring – at the minimum – disclosure twice a year generally, and weekly during the election period, and with a threshold of A$1,000. Ministerial and parliamentary codes of conduct in relation to political donations that require meetings between members of parliament or ministers and party contributors to be recorded. And ban such officials attending fundraising events. Contribution limits set at a low level (such as A$2,000 per year), with an exemption for membership fees (including trade union affiliation fees). A party and candidate support fund comprising election funding payments with a low threshold and calculated according to a tapered scheme; annual allowances calculated according to the number of votes and party members; and policy development grants for new parties. Strict regulation of the amount and use of parliamentary entitlements, including limiting their use to the discharge of parliamentary duties (thus preventing their use for electioneering). Effective processes of accountability in relation to government advertising. Election spending limits that apply six months before polling day. In jurisdictions where there aren’t fixed terms, the application of these limits can be timed from the last polling day. Spending limits for federal elections, for example, can apply two years after the last polling day. Rigorous regulation of lobbying that extends to all lobbyists (not just commercial ones) and provides for transparency in relation to all their activities, especially meetings with ministers.

These reforms would not just counter the plutocratic tendencies of Australian politics arising from private funding of parties and candidates. They would also minimise the kleptocratic risks of incumbent governments and MPs (ab)using public resources, such as election funding, parliamentary entitlements, and government advertising for partisan gain.

Specifically, they seek to meet the danger – and reality – of incumbents gaining an unfair electoral advantage through the use of public resources.

Many elements of this blueprint have been adopted – in one form or another – by the states and territories, particularly New South Wales.

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Constitutional constraints

There are concerns that limits on contributions and spending may be unconstitutional because they breach the freedom of political communication implied under the Constitution.

In 1992, the High Court struck down a federal scheme that banned election advertising and provided for a “free-time” regime. But in 2015, it found the New South Wales caps on political donations to be compatible with the implied freedom.

The High Court had, in 2013, struck down a measure limiting political donations to those on the electoral rolls (that banned donations from non-voters including non-citizens, organisations and corporations) on the basis of its selective scope.

But, its 2015 decision clarified that measures limiting political contributions on a selective basis can be compatible with the freedom implied in the Constitution if properly justified. This decision upheld the NSW ban on political donations from property developers.

The constitutionality of election spending limits were not directly at issue in the 2015 case. But the court also made strong comments that broad-based spending limits would compatible with the implied freedom.

What stands in the way of genuine reform of the federal political funding system is not the availability of effective and practicable measures, but the lack of adequate political will.

This is the last piece in our series on political donations. Catch up on other articles.