Could political expenditure disclosure laws be unconstitutional?

I am pleased that the NSW government has dumped its absurd and anti-democratic plan to ban political donations.

The apparent cause, however, was not a realisation that the original proposal was a bad idea. It was this advice on its constitutional and practical difficulties by the consistently impressive Anne Twomey.

Twomey’s report does not discuss the law in which I have the greatest personal interest, the federal laws on political expenditure disclosure. Under the current law, persons or organisations spending more than $10,300 on an election issue have to disclose both how they spent the money and, if it was based on donations of that amount or more, who the donors were.

The current federal government plans to reduce that threshold to $1,000, meaning that thousands of people and groups that may comment only incidentally on election issues will be caught up in tougher disclosure requirements than political parties (which have to disclose donations, but don’t have to itemise expenditure). Those individuals, or the office-holders of the groups, face a conviction and possible jail sentence for failure to comply.

Twomey’s discussion of whether bans on political donations would be constitutional or not, given the implied freedom of political communication the High Court has read into the Constitution, made me wonder whether a legal case could be made against the political expenditure disclosure rules.

Obviously this is far-less clear cut than the situation of an outright ban on political donations, which would be a draconian reduction in the right to communicate political views to other people. But I think there is an arguable case that it falls within the test set by the High Court.

This test has two questions. First, “does the law effectively burden freedom of communication about government or political matters, either in its terms, operation or effect?”

I think it does, for two reasons. First, because of the pervasive nature of interaction with government, due to its spread into all aspects of community and business life, people are reasonably concerned about voicing critical opinions. Private donations are a way for these people to have a voice, but lowering the maximum private donation to $1,000 means that they can only have a small voice.

Second, as is common with all schemes for regulating political activity, it is assumed that the only people involved in politics are those with the capacity to monitor activity, keep records, and manage submissions. This may be true of the major political parties and interest groups, but not of smaller organisations, and not even for organisations like the CIS which are political, but do not have election issues as an organising concept, and therefore have no existing systems for calculating expenditure on them. There is a big “chilling effect” here; that it is easier just to avoid comment than to re-engineer the organisation to comply with the law.

If the law does burden political communication, the test of validity is whether it is “reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the system of government prescribed by the Constitution”.

It’s really not clear what end these laws serve, much less that they are “legitimate”. The apparent assumptions that a $1,000 expenditure could improperly sway a decision, and that disclosing whether that money was spent on billboards or leaflets, and whether it came from donor X or Y, would cure or deter impropriety, are I think nonsense every step along the way.

The hardest part of the case would be showing that the added compliance costs, along with the possible deterrent effects on those who don’t want their donations disclosed, are sufficiently serious breaches of the right to political communication that the constitutional protection would be invoked. But particularly if the political expenditure disclosure threshold is lowered to $1,000, it would be worth getting someone like Anne Twomey to give advice on whether there is a plausible case to take to the High Court.

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