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Think the US electoral system is flawed? Check out Australia’s …

In the run-up to today’s presidential election, President Barack Obama received just over $632 million in candidate contributions. Want to know who from? These direct, individual donations (known as “hard…

Follow the money: the US may not be perfect, but Australian campaign finance laws need tightening. EPA/Erik S. Lesser

In the run-up to today’s presidential election, President Barack Obama received just over $632 million in candidate contributions. Want to know who from? These direct, individual donations (known as “hard money” in the US) ranged from $2,500 from Sharolyn Farmer in Stone Mountain, Georgia, to $5 from Ivan Smith in Seattle, Washington.

Want to know how he spent it? Well, overall he spent about $49.5 million on TV ads, $5 million on online advertising and $427,000 on phone calls and SMS to voters, among other things.

But if you want to get specific, that included $17,435 worth of spots on Denver’s KMGH TV station during Dancing with the Stars between 23 and 29 October, for example, and $52,500 worth of spots during The Simpsons and NFL games on Fox31 Colorado between 29 October and 4 November.

Want to know what Romney was up to, or which Political Action Committees (PACs) spent money on behalf of which candidates (“soft money”) and where? Too easy — just visit the US Federal Election Commission website or check out the reports compiled by the Sunlight Foundation from publicly available records.

Now let’s try the same thing with Australian federal election campaigning.

Around 12 months after the 2013 federal election, we’ll find out how much our parties raised in donations and where these donations came from, but only for amounts more than $12,100. We’ll never know how much the parties spent, or where, because the current electoral laws don’t require this reporting. And what’s more, the Australian Electoral Commission will give any party that wins more than 4% of the vote $2.42 for each first preference vote they earn, with no questions asked and no receipts for actual expenditure required.

The US is often portrayed as the Wild West of political campaigning — a place where candidates and parties can do, say and spend anything to get themselves elected. But my recent analysis of electoral regulation in America, Australia, Canada, the United Kingdom and New Zealand suggests that the loosest regulatory environment for political campaigning can actually be found much closer to home, right here in Australia.

We’ve been so busy watching Obama and Romney slug it out in history’s first billion dollar campaign that we’ve overlooked the question of electoral reform in our own backyard. As a result, we’re heading into the 2013 federal election with a set of campaign rules that parties and candidates overseas could only dream about.

Take political donations, for example. In the US and Canada individual donations to parties and candidates are capped; the Canadian cap is a flat CAD$1200 while in the USA the amounts range from US$2500 for candidates up to $30,800 for national party committees, subject to an overall biennial cap of $117,000. Campaigners in both countries have to declare all donations over $200 to their respective electoral commissions on a quarterly basis, with the USA requiring additional reports 12 days before an election and 30 days after.

Since the 2010 Citizens United ruling, Political Action Committees can accept much larger donations from corporations, but they too have to register with the electoral commission and abide by the same reporting requirements.

The UK does not impose donation caps, but candidates and parties have to lodge quarterly reports of donations in non-election years and weekly reports during the official campaign period. Only New Zealand mirrors Australia in having a system of uncapped donations where reporting requirements are limited to a single, annual return detailing donations over NZ$15,000 and AUD$12,100 respectively. Importantly, however, the individual branches of Australia’s large, national parties count as separate entities for reporting purposes, which means a donor can potentially donate up to $96,000 to Labor, the Liberals or the Greens before this has to be publicly acknowledged.

The picture is no less murky when considering campaign spending. In an effort to limit the spending arms race which characterises US elections, Canada, the UK and New Zealand have all introduced campaign caps which limit the total amount of money parties and candidates can spend on running for office. They have each also paired this with mandatory, public reporting of expenditure. At the UK’s 2010 General Election, for example, this meant national parties could spend no more than £18 million overall, and they had to lodge reports showing how this was being spent in close to real time.

Thanks to a cultural quirk that equates political spending with free speech, the USA does not cap campaign spending. However, it does require quarterly reporting by candidates, parties and PACs of expenditure on travel, printing, advertising, direct mail, equipment, staff wages and much more, which means that campaign spending is at least reasonably transparent. TV stations and other media outlets are also required to make available their records on who booked and paid for advertising, which is how we know about President Obama’s prime time ad-buys in Denver and elsewhere.

By contrast, there is no limit to how much Australian political parties may spend, and no requirement for them to tell us anything about this spending. Individual candidates are supposed to report their campaign expenditure, but the Joint Standing Committee on Electoral Matters (JSCEM) has noted that the vast majority of candidates indicate “nil” spending as funds are usually centrally controlled and disbursed by party headquarters. This means that the Australian electorate has no way of knowing how much money parties really spend campaigning for office, nor how they target this to reach specific electorates and audiences.

These few examples show that Australia’s campaign rules are notably looser than those internationally; that’s even before we consider parties’ exemption from the Privacy Act 1988 and the misleading conduct provisions of the Trade Practices Act 1974. So does anyone see this as a problem?

Between 2008 and 2009, the federal government released a pair of Green Papers on electoral reform, and these issues were also considered by JSCEM in 2011. That report contained a series of recommendations for immediate reform, but it seems that they’ve been lost in the tumult of the past parliamentary year. That’s probably not surprising, given how much parties on all sides of politics benefit from the current arrangements.

But electoral reform is something we should be giving more thought to as we head into our own election season in 2013. Are we comfortable having some of the loosest electoral laws in the democratic world? Or do we have a right to know more about how Australian campaigns are fought and won?

Join the conversation

27 Comments sorted by

  1. Chris Booker

    Research scientist

    Interesting. Here in New Zealand our laws have come under the spotlight recently where the sole minister in parliament from the right wing Act party (John Banks) received two donations of $25,000 each from Kim Dotcom ($25,000 is the limit for personal contributions) - but they were listed as 'anonymous' in order to avoid detection. It's fairly clear after a police review that the law in question was broken, but is written so poorly that the police decided it wouldn't be worth trying to convict John…

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    1. imogen birley

      logged in via Twitter

      In reply to Jennifer Rayner

      Yes, not to mention a truly broken voting system.

      That is one area where we are streets ahead, along with mandatory voting; but this in no way detracts from your argument about the real need to reform the political donation process in Australia.

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  2. Suzy Gneist
    Suzy Gneist is a Friend of The Conversation.

    Multi-tasker at Graphic Design & Montville Coffee

    Reading up on the Australian system just recently to look at the futures of democracy, I was amazed how non-transparent these party funding and spending issues are to the public. And only recently has there been a change in legislative to stop the ruling party use taxpayers money to promote their policies! (See: http://www.theage.com.au/news/national/howards-2bn-splurge/2007/09/01/1188067438538.html) Not to inform the public but to advertise themselves.
    Luckily advertising guidelines using tax payers money have changed since the Howard years, although the government advertising budget still redirects significant public funds away from important causes and isn't always just informative without promotional intent.
    http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2011-2012/GovernmentAdvertising#_Toc320518558

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    1. Robert Tony Brklje
      Robert Tony Brklje is a Friend of The Conversation.

      retired

      In reply to Suzy Gneist

      Now with the national broadband network under way and ensuring all Australians get access and that disadvantaged Australians get subsidised access and even free access to essential internet services.
      We as a society can start looking at laws that confine all political advertising to the internet and that it be provided free by all the relevant governing bodies, be it local, state or federal, in fact all electioneering can be provided on all three channels simultaneously for all those interested…

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    2. Felix MacNeill

      Environmental Manager

      In reply to Robert Tony Brklje

      Thanks Robert - that's a genuinely interesting suggestion (and therefore, sadly, almost certainly doomed to failure!).

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  3. Rajan Venkataraman

    Citizen

    Thanks for drawing attention to this issue Jennifer. It's a really interesting comparison you make between Australia and the US, UK, Canada and New Zealand. You say that the Green Papers and the JSCEM processes have "been lost in the tumult". Can this really be true? Have there been no further developments on these processes? In the case of the first Green Paper four years have passed. Seems like a great deal of effort has been put in - including many submissions by members of the public - for nothing to have come of it.

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  4. Tim Scanlon

    Debunker

    Imagine if politicians had to win elections based upon their track record and ability rather than how much advertising they can afford. Imagine if lobbyists couldn't spend big on their behalf or sway politicians the way they do.

    I would call this imaginary land Honest Land, where politicians do what is best for all and not those that will get them re-elected.

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  5. Geoff Taylor

    Consultant

    At the moment we are seeing two of the world's leading powers selecting their new leaders.
    Although China has a different system for doing this, it is probably reasonable, given its international importance, to explain in some detail to the rest of the world how the new leaders in China will actually have been selected.

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    1. Michael Wilbur-Ham (MWH)

      Writer (ex telecommunications engineer)

      In reply to Michael Wilbur-Ham (MWH)

      PS - (I wish there was an edit function) - I meant to say that The Greens report donations over $1,500 whilst the law only requires donations of $11,500 or more to be declared.

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  6. Carsick Phil

    logged in via Twitter

    These distortions to the democratic process are amazing. They happen in so many modern democracies, although the shear amounts of money involved in the USA beat most other countries. It's good to see this issue rising to the forefront of the voters' agenda. I've done my bit in song. Singalong at http://www.youtube.com/watch?v=W7yrDAVEpa4

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  7. Byron Smith
    Byron Smith is a Friend of The Conversation.

    Ministry assistant, ecologcal ethicist and PhD candidate at University of Edinburgh

    Thanks for this article. I agree that Australian financing laws need revision and note (as others have) that the Greens have been going on about this for some time.

    Returning for a moment to the US, could the author comment on so-called "Dark Money" options available to Super-PACs?

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  8. Andrew Norton

    Program Director, Higher Education at Grattan Institute

    Almost alone among campaign finance analysts, I think Australia's liberal federal campaign system is better than the overseas systems, and indeed the draconian regimes in place in NSW and QLD.

    But I am tired of explaining to people that the US has a more regulated campaign finance system than Australia, so I like that aspect of your article.

    The US experience highlights how when you try to take people's political rights away, they will look for work-arounds and you end up with either an ineffective shambles (the US) or extreme complexity and arbitrary legal differences beween similar political actors or activities (NSW).

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  9. Gavin Moodie
    Gavin Moodie is a Friend of The Conversation.

    Adjunct professor at RMIT University

    Liberals are normally chary about recognising 'rights' since this often implies that such rights should be protected by the state. But apparently spending unlimited resources on trying to win elections is now a 'right'. Not all would agree. And of course not all liberties should be unregulated.

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  10. none at all

    none

    I'd be annoyed by all this, if it even crossed my mind that Australia was meant to be a secular democracy, rather than a secretive oligarchy with theocratic and trade union privileges, where the nanny state is favoured by a left-leaning compulsory donkey vote. We get by as we are, but I worry about where we're heading.

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    1. Felix MacNeill

      Environmental Manager

      In reply to none at all

      Bob, I realise you're mainly indulging in a bit of a personal rant here, and it frankly doesn't warrant being taken too seriously, but I think your point about 'compulsory voting' is actually worth considering for a moment.

      We do not have compulsory voting in Australia. We have compulsory 'turning up, getting your name ticked off the register, collecting the papers and depositing them in the box.' What you do with those papers (short of incinerating them) is entirely up to you.

      This is probably…

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    2. none at all

      none

      In reply to Felix MacNeill

      Felix, how do you distinguish a volunteered opinion from a personal rant?
      I've always tended to make provocative points, as it encourages people to consider them, but let's take my points one by one:

      1. The candidates who have any chance of electoral success have generally been admitted to a select group to represent various interests, rather than the local constituents they represent. Otherwise, their activities and voting would frequently ignore party policy.
      2. I don't think I'm alone in…

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    3. Felix MacNeill

      Environmental Manager

      In reply to none at all

      You may well be right - I certainly agree with a lot of what you say in your second comment. I just think that tossing about sloppy slogans like 'nanny state' and 'left-leaning compulsory donkey vote' are not in the spirit of open discussion - that's why I accused you of indulging in a personal rant.

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    4. none at all

      none

      In reply to Felix MacNeill

      Felix,
      Your criticism is quite valid. Those two expressions weren't meant in any derogatory sense. I changed to them in the interest of brevity, replacing my more precise original terms, as I assumed that their meanings would be understood. If we were enjoying a cold beer during our discussion, my meaning would have been clear from tone of voice, body language etc., but shades of meaning are often lost in the printed word, as with the interpretation of manuscripts in music.
      You make a good point and I'll be more explicit - if more long-winded - in future. We never stop learning. Thanks.

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    5. Felix MacNeill

      Environmental Manager

      In reply to none at all

      That's very gracious, Bob, and I don't mean to claim the right to be some kind of censor or arbiter of correct etiquette, but I still have some trouble imagining what the non-derogatory version of 'nanny state' might be.

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  11. Yoron Hamber

    Thinking

    You're telling me that all USA Candidate contributions are traceable? I find it very strange allowing for example the industrial complex to spend whatever their little hearts desire on a candidate. And I can't help but wonder about the integrity of those candidates receiving a fat juicy bundle, if specified from some origin.

    http://www.voxxi.com/pacs-figure-us-elections/

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  12. Peter Strutton

    Associate Professor, Institute for Marine and Antarctic Studies at University of Tasmania

    I think this article is mis-titled. It's about campaign regulations, not the electoral system. I would argue that both are flawed in the US, whereas in Australia it may be only the former.

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  13. William Bruce

    logged in via Facebook

    Most importantly I think we need to stop election fraud!...perhaps a central data base where all voters can be checked off and ID provided prior to vote.

    After last Federal election Labor got in to power by less than a handful of MP's ....which won seats by as little as 180 votes....REALLY...there can EASY be this much fraud.....
    For all we know Labor might well be in power DUE TO CHEATING & FRAUD.

    There are wealthy people giving big money to both sides....this IS bribery..NO DOUBT. At a min…

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    1. Michael Wilbur-Ham (MWH)

      Writer (ex telecommunications engineer)

      In reply to William Bruce

      With compulsory voting any fraud will be shown by the same name being crossed off two list.
      (Identity is confirmed when being put onto the electoral role).

      The Australian Electoral Commission would know exactly how often this happens, and clearly it is not a problem or they would be telling us about it.

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