On Elections

How people elect parliaments

Australian electoral review baulks at clean foreign donations reform

The Australian Parliament’s Joint Standing Committee on Electoral Matters today released another part of its report on the conduct of the 2016 election.

The multi-partisan panel, formed after every election since 1984, is the primary forum for reviewing election laws and practices and reforming the Australian federal electoral system.

Most Australian states have established similar parliamentary review processes for their own electoral systems.

The review of the 2016 election has largely become occupied by matters relating to financial donations to political parties, including the transparency of those donations.

The terms of reference for the Committee’s current inquiry specifically refer to half a dozen topics to examine.

One issue – the authorization of election-related publications – was the subject of an early interim report late last year.

Today’s second interim report covers another term of reference – the issue of foreign donations into electoral campaigns in Australia

It is not clear when the other terms of reference, or the broader performance of the electoral system, might be addressed, but today’s report at least hints that a “broader inquiry into donations and disclosure” is ongoing, and that a “main report” will be produced at some future point.

Most modern democracies have some form of ban on foreign donations to domestic political parties and election candidates.

Of the English-speaking democracies only Australia and New Zealand has so far adopted no specific bans.

Media reports in advance of next week’s Netherlands election – where no bans are in place – reveal that the far-right populist Freedom Party has received donations from a wealthy private ideological backer in the United States.

In France the right-populist Front Nationale party is alleged to be backed by loans from Russian banks.

In the Australian parliamentary report, while all partisan groups other than the Liberal Democrat senator agree that foreign donations should be banned, the panel has divided on partisan lines about specifically what to do.

The opportunity for a prompt, widely supported reform of the law on foreign donations may have been lost.

In brief, the Coalition government members, while stating a clear opposition to foreign donations, appear to be threatening to refuse to act on the issue unless third party entities – social activist groups including the campaign entity GetUp! being their particular target – are included in any ban regime.

The coalition argues that regulation of ‘third parties’ should be increased to align with that of political parties and their ‘associated entities’. Specifically, the report calls for examination of “how to prevent foreign funds being channeled through organisations engaging in political activities and who are not subject to regulation under the Act”.

But the concept of ‘third parties’ – or “all other political actors” as the report also terms them – could turn out to be unmanageably broad.

To be meaningful as a system of regulating election influence, the concept of third parties would logically need to extend to a broad range of NGOs, industry and professional associations, business lobby groups, social charities, issue advocacy groups, and even entities created temporarily for the duration of election campaigns.

Specific advertising campaigns – such as those run by some mining industry interests in recent years – might also need to be included in the definition. Internet blogs, faux-news sites, Facebook pages and chat rooms that discuss and affect election decisions – which featured prominently in the recent United States elections – will also need to be considered.

The proposed undertaking is clearly a highly complex legislative task.

There are significant constitutional issues in attempting to control political donations in Australia. The High Court has ruled that a free flow of expression of opinion – backed by the ability of actors to finance such free political speech – is inherent in the constitutional task of ‘choosing’ representatives to serve in the houses of Parliament.

While often the beneficiary of campaign support by industry groups, the Coalition is finding that the impact of progressive groups has been greater in recent elections.

Coalition figures have publically attributed the loss of three Tasmanian seats in 2016 at least in part to GetUp! campaigning, and complained repeatedly about their influence.

The Committee’s main report – seen as representing the Coalition viewpoint, against which other committee members have dissented – cites the Mining Council of Australia (which notoriously funded one of the largest short-run political advertising campaigns seen in Australia in 2010) complaining about the activities of a list of environmental groups.

The current Coalition position may be a strategic move to attempt to bring activist groups into the Australian regulatory regime, with the aim of burdening and hindering their electoral impact.

Alternatively, the Coalition position on foreign donations may simply be a parliamentary tactic to delay reform legislation.

Committee members from the Labor Party and the Greens have flatly dissented from the Report’s proposal to bring ‘third parties’ into the electoral regulatory scheme, apparently whether in terms of foreign donations or any other form of political activity. That suggests that legislation for the proposal would almost certainly be blocked in the Senate.

The all too common result is that a large majority of the parties in Parliament now claims to support legislation in general, but a majority might not be found to enact any specific version of the proposal.

One version of a reform bill will pass the House of Representatives, another the Senate, and each side will blame the other for the failure of the project.

GetUp!, meanwhile, has publically stated that it supports a ban on foreign donations.

State legislation in New South Wales and Queensland already limits what foreign donations political parties may accept for the purpose of state electoral matters. However, NSW legislation that attempted to tightly restrict donations to those made by individual persons enrolled in the state were overruled by the High Court in 2013.

Since Australia’s major political parties operate simultaneously at state and federal levels, a distinction between ‘state’ and ‘national’ financial affairs may no longer be meaningful.

Legislation to require the disclosure of political financing, on the other hand, is unlikely to offend the constitutional protection of the free flow of opinions, and may even be seen as an adjunct to the legitimate goal of keeping corruption out of the system.

The report released today makes no new recommendations about political finance disclosure.

During the committee hearings academic commentators including Professor Colleen Lewis at Monash University and Associate Professor Joo-Cheong Tham at Melbourne University urged the Committee to support progress on both disclosure reform and donations regulation.


Today’s second interim JSCEM report did not examine the changes to the ballot paper rules for electing Senators, implemented for the first time in 2016.

After a number of election controversies, the Committee that reported during the last term of Parliament had recommended that the previous system of ‘group voting tickets’, which allowed political parties to control voter preference flows and negotiate between themselves for advantageous election outcomes, be abolished.

The Parliament finally passed the reform legislation in early 2016, replacing the GVT technique with a system of optional preferential voting (voters being required to mark only a modest minimum number of preferences on their ballots) and converting the ‘above-the-line’ option to vote for parties to one where the voters may choose for themselves the order of parties in which their preferences flow.

The reformed ballot rules were challenged in Australia’s High Court, but the Court affirmed the power of Parliament to adopt the new approach.

While the Committee report hints at a “main report” to be published in the future, it is not clear what plans the Committee has to scrutinize the performance of the new Senate voting rules, or to more broadly reflect on the electoral system.

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This entry was posted on March 10, 2017 by in Australia, Current issues, Election finance, Electoral reform attempts.
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