Bureaucratic overkill on campaign finance law

NSW and Queensland have extremely complex campaign finance laws. I think the underlying assumptions – that we need regulation to limit ‘undue influence’ and to ensure the voices of the rich don’t drown out the voices of others – are dubious (explained in detail in my campaign finance paper, finally out today). But let’s grant them for the sake of argument. Is it necessary to have anything like the current campaign finance regimes to move towards these goals?

In NSW, three types of restrictions are imposed: bans on some donors, caps on all donors, and disclosure of all donors over $1,000. Queensland has capping and disclosure. All have their defects (see my paper). But many of them could be avoided if the regime was restricted to capping alone.

For example, even if there was a case for believing that some donors were intrinsically worse than others, if donations are capped at low levels – as they are, $5,000 to political parties, $2,000 to candidates and third parties – they can’t have much influence anyway. Bans are overkill, since the caps alone achieve almost all the original objective of diminishing the influence of groups deemed undesirable. And lifting the bans would save political parties and third parties from the time-consuming task of checking whether donors are legal or not.

The purpose of donations disclosure is to let the public determine whether donations signal ‘undue influence’. The downside of disclosure is that many people are reluctant to give if their names will be reported: they fear repercussions from the government, or commercial or social disadvantage. But if caps are set at the point where individual influence of any kind is unlikely, as I think they are in NSW and Queensland, nothing is added by public disclosure. Names of donors and the amount of their gift would still need to be submitted to electoral authorities to ensure that they were within the cap, but this would be confidential information unless a prosecution for breaching electoral laws was required.

So bans and disclosure add lots of problems without adding much to the ‘solution’ already provided by capping.

One Response to “Bureaucratic overkill on campaign finance law

  • 1
    June 4th, 2011 18:02

    Bravo Andrew!

    From what I can see, this is a v. important issue. The population appears to have handed responsibility for funding competing political groupings over to the state, like a public good which would otherwise be underprovisioned. These nonsense rules, formed in a ‘kneejerk’ fashion against supposed problems in previous arrangements, further cement this less than optimal outcome, and are a kick in the guts for civil society.

    My only concern is that the media will only pay attention to the issue after some sort of problem arises. And even then, we may have to wait a long time until the problem becomes serious, since anything less wouldn’t be v. newsworthy.

    Publishing in the Aus was a good step. It has a good record in exposing absurd government interventions, so maybe there is some hope that an observant journo – possibly Imre – will pick it up and run with it.

    Again, well done.