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

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?

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