Opinion & Commentary
Threat to political minnows
Adam Smith, the great 18th century economist and philosopher, famously observed that people of the same trade rarely get together without the conversation ending in some conspiracy against the public. When the Senate meets again after the winter recess, members of the same trade—party politics—will decide on how to regulate their political competition.
Alternatives to political party membership are prospering in Australia. The multi-issue activist group GetUp! boasts more than 300,000 members. Eight per cent of the population has joined an environmental group. Millions more Australians are involved with organisations such as unions, business associations, or neighbourhood groups that mix politics with other activities.
Political parties with stagnating membership numbers don’t always enjoy the competition. Legislation before the Senate contains major new requirements for and constraints on non-government organisations involved in politics, under threat of fines or jail for those breaching the rules. These include significantly restricting anonymous fundraising and increasing the number of organisations caught by existing disclosure provisions for political expenditure and donations.
Larger non-party political organisations already face onerous annual Australian Electoral Commission reporting obligations. They must itemise their political expenditure between five overlapping categories. They require good predictive skills to report spending on election issues long before elections are even called. They need accounting systems that can distinguish between political and non-political costs. They have to record and release the names and addresses of donors.
Under these Howard government disclosure requirements, introduced out of their frustration with campaigns against them by the ACTU, the Wilderness Society and other left-leaning non-government organisations, small-scale political activity is exempted from the reporting system. Any group which this financial year spends less than $10,900 on political activity is exempt, and groups spending more than that need only report donors giving $10,900 or more.
The Rudd government plans to drop both thresholds to $1,000 every six months, taking the disclosure regime beyond large professionally-run political machines to small-scale political activism. A neighbourhood group printing pamphlets on a community issue could easily run up $1,000 in costs. If their issue could be a local or national election issue, or if the pamphlet expresses views on a political party or election candidate, the group’s organisers would be legally obliged to report to the AEC.
Under the government’s legislation, money-in-a-bucket fundraisers, a typical way of financing local politics, would become very complex. Donors would be limited to $50 gifts. For private events, group organisers would need to record and report to the AEC the date, location and nature of the event, the number of people in attendance, the names and addresses of those collecting the donations, and the total amount received. If that total amount was more than $50 multiplied by the number of people at the event, the surplus would need to be returned or given to the federal government.
If a donor gave $1,000 or more to the neighbourhood group, their name and address would have to be reported to the AEC and put on its website. Remarkably, this applies to donors who are unaware of how their money is being spent. It potentially misrepresents the donor and devalues the disclosure information. We cannot tell whether the donation was political or charitable.
Ignorance of the law is no excuse, so failing to file one of these reports could lead to a conviction and a fine of up to $13,200. If anonymously-raised money was spent on disclosable political expenditure, there is a maximum jail term of one year. If this legislation passes, ordinary political activity could become a crime.
In a democracy, we ought to be suspicious of legal obstacles put in the way of political participation, and wary of governments regulating their political opponents. A very strong case is needed to justify such proposals. Yet the government has offered no clear reason for this attack on democratic political involvement.
The stated purpose of the lower disclosure threshold is to create more transparency in who finances political parties. While private donations to political parties may lead to politicians doing donors secret favours, this is a remote risk with non-party political actors. With no MPs, they cannot misuse public office. We should not take seriously the idea that a $1,000 gift to GetUp! or the Wilderness Society or a group campaigning on a local issue could improperly influence a government decision.
Yet seemingly this notion is being taken seriously by federal parliament. The bill containing these draconian provisions has already passed the House of Representatives. If it passes the Senate, it will be one of the biggest setbacks in Australia’s long democratic history.
Andrew Norton’s paper Diminishing Democracy: The threat posed by political expenditure laws is published by The Centre for Independent Studies.
