The Coalition’s self-defeating political expenditure laws

If I am put in the dock for failing to disclose ‘political expenditure’ to the Australian Electoral Commission, it is comforting to know that every other editor in the country who published an article on the 2007 election will be there with me.

On Friday the AEC published the political expenditure returns (here, and a larger number here who submitted too late to be included in the database), and not a single newspaper or magazine has sent in its accounts. They must be banking on the AEC guidelines, rather than the strict letter of the law, applying to their ‘political expenditure’.

This legislation was set up as bureaucratic harassment of left-wing groups, and on that it has succeeded. Of the 49 political groups who have dislosed expenditure, 48 are left-wing. The one exception was ‘Friends of Indi’, a Liberal group that reported $14,263.42 in expenditure (pdf). Two pollsters also put in returns.

While I still believe that this provision of the Electoral Act should be repealed, the disclosures did generate media, and presumably public, interest (to be distinguished from the public interest, of course.) Melbourne’s ABC TV news led on Friday night with $20 million worth of union expenditure on their WorkChoices campaign. But of course the fact that unions spent huge amounts of money advertising against WorkChoices could only be news to people who exclusively watch the ABC, since it was unavoidable on all the commercial stations. (It’s a nice irony; right-wingers should have taken refuge from left-wing propaganda by switching to the ABC.)

GetUp! disclosed $555,000 in expenditure for 2006-07 (pdf). Their return highlights the complexity of calculating the amounts required by the legislation, with separate line items for campaign advertising, contractors and consultants, legal costs, postage and shipping, printing and stationery, research, salaries and wages, superannuation, telephone and internet, travel expenses, and website costs; some have 33% apportionments. There were many hours wasted calculating all that I expect.

GetUp! also had to disclose some of their donors. The ubiquitous multi-millionaire lefties Evan Thornley and his wife Tracey Ellery kicked in $85,000, but they were less generous than authors Susan Varga and Anne Coombs, who put in $90,000, $70,000 of which was for a David Hicks campaign. Deanne Weir – Google suggests she used to work for broadcaster AUSTAR – put in $25,000 and SJ Killelea (perhaps this guy) put in $70,000 to their Senate campaign. I’m curious to know who funds groups like GetUp!, but I don’t think these people should have to disclose their identities unless they consent.

The AEC election expenditure returns reveal no scandal except that the provision requiring it was passed in the first place.

For the Coalition, the disclosure provision will almost certainly end up being self-defeating. Sure, it did cause various leftist groups to waste time filling in forms. But most of them will have no political problem with disclosing the spending or donors; that they spend is obvious and most of the donors already have well-known political allegiances. But for potential right-wing donors facing coast-to-coast Labor governments disclosure is likely to an issue; as the very generous donations to the NSW ALP in particular indicate winning Labor’s favour is necessary to doing business there. With federal Labor threatening to slash the threshold for disclosure, even quite small donors will be caught in the law’s net.

Combined with the normal political donations data released at the same time, this AEC information confirms that the left in Australian politics can and does massively outspend the right. The Coalition’s short-sighted and misguided changes to the Electoral Act in 2006 risk making the imbalance even worse.

16 thoughts on “The Coalition’s self-defeating political expenditure laws

  1. You making it tough on law and order types. I’d like nothing better than having seditious criminals locked up. 🙂

    I see, for example, Oxfam spent heaps of money on the election. In that sense I think this is a usual exercize – charities should fully report on every dollar they spend, and the purpose of that expenditure. Given the kerfuffle over political donations and the promise to wind back that law, it’ll be interesting to see if the ALP winds back this one. I suspect they won’t – they might redefine things a bit so recalcitrant editors don’t get arrested.

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  2. Sinc – I can’t see why there should be obligatory disclosure for charities. While it may be generally desirable for charities to report on their activities to their supporters, who can then be assured that their money is being spent effectively and appropriately, they should not be forced to do so. Those who fail to explain themselves will presumably lose support.

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  3. Charities raise money from the public Jason, and should face the same levels of accountability as do any other organisation that raises money from the public. For example, publicly listed companies.

    I know Andrew thinks this is a consequence of an old IPA project, I don’t know about that. It may well be. My views on this topic come from when I supervised a PhD student on accountability in non-profit welfare organisations. She had wanted to argue for some very draconian reporting requirements, but after consultation with her supervisor took a far more sensible tack. The project did require, however, that she collect publicly available data about charities and we discovered that many charities do not comply with their already very lax reporting requirements – further that some of the non-compliant are not small obscure organisations and that they were very obnoxious when approached and asked for information that they were legally obliged to provide to the public. At the end of the project, many years ago now, the student wanted to publish in an appendix a list of the recalcitrant organisation but in the end we decided not to.

    How did you know I like McCain 🙂 his Supreme court appointments won’t disappoint.

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  4. The difficulty is that non-profits often rely heavily on volunteers, whose motivation rarely extends to wanting to fill in bureaucratic forms. More bureaucracy may be ok for the charities like Oxfam that are effectively multinational companies and have full-time professional staff at the top, but these charities are not typical. While as I said in comment 2 it may often be desirable for non-profits to report on their activity, there should be a ‘market’ decision as to how much and what kind of reporting goes on, given varying capacity to report and interest of supporters in reports.

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  5. Everything you say is true, yet I have yet to hear any non-profit type say there should be a market test for either themselves or for-profits.

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  6. There is a market test in the sense that nobody is obliged to give any money to a charity or other non-profit, and there are thousands of charities and non-profits competing for donors. For many smaller non-profits, donors will have first-hand knowledge of what is happening or this will be visible in other ways.

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  7. The reference to McCain was deliberate yes. Your and the IPA’s argument is similar to McCain’s for campaign finance reform and just as statist. The difference is McCain doesn’t claim to be a libertarian.

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  8. Yes, yes. Okay, with one honourable exception (maybe two) “I have yet to hear any non-profit type say there should be a market test for either themselves or for-profits”.

    I am sympathetic to the market test proposed in #8 (the PhD student and I even produced empirical evidence consistent with that idea), but that test is never applied to business, and many of the non-profits (again with one or two honourable exceptions) who are caught up in this web often complain about big business buying influence and the like – well, we know see that is a game almost everyone plays.

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  9. “Charities raise money from the public Jason, and should face the same levels of accountability as do any other organisation that raises money from the public. For example, publicly listed companies.”

    Sinc, so your solution to the over-regulation of business is to over-regulate the not-for-profit sector? Surely the correct approach is the exact opposite of your statement above.

    BBB

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  10. Is subjecting charities to over-engineered disclosure laws, ie so that they must “fully report on every dollar they spend, and the purpose of that expenditure” on the table? By table I hope you don’t mean ‘on my mind’. I’m not the one making sweeping positive statements. Let’s just focus on where we can free the citizenry from government, rather than worrying about whether the rules are the same for this or that kind of organisation. Surely we agree on that.

    BBB

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  11. What about the tax status of charities?

    They are exempted from paying tax on their income because the income is directed to agreed socially desirable ends.

    SOME degree of transparency is needed to ensure the contributing stakeholders – ie volunteers, donors and government (via tax exemption) are not being ripped off.

    In the US, churches that get too involved in directing voter intentions can lose tax exempt status. Its a good idea.

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  12. ChrisPer – The idea of profit is problematic in non-profits; since they can simply eliminate it by spending it all on their purposes. And it would deter charitable giving if donors thought it would be taxed.

    I think there is a case for eliminating tax deductibility of donations to charities as part of wide-ranging tax reform, but not for trying to tax non-distributed surpluses of not-for-profits (I haven’t seen any estimates on this, but I expect the total ‘surpluses’ of not-for-profits aren’t massive in the context of the overall economy, and of course would be reduced further if they were taxed.)

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