More than luck

Strengthening democracy

3 Comments 15 July 2010

by Marian Sawer, Kathy MacDermott and Norm Kelly

‘Everybody to count for one and nobody for more than one.’ – Jeremy Bentham

The principle of political equality has always been central to democracy and to the way democracy was understood by the democratic reformers of mid-19th Century Australia. The Australasian colonies were regarded as being in the vanguard of democratic innovation and at the end of the 19th Century such innovations became part of the federal compact. The new Constitution expressly precluded plural voting (provisions for property owners to have extra votes), and the Senate was to be directly elected on a popular franchise, unlike any other upper house of the time.1 There were to be no privileges based on property, and in the words of the first commentator on the Australian Constitution, University of Melbourne Dean of Law Harrison Moore: ‘The predominant feature of the Australian Constitution is the prevalence of the democratic principle, in its most modern guise’. He believed that this underlying principle meant that rights were protected not through a Bill of Rights, but through ensuring as far as possible that individuals had an equal share in political power.2

During the 20th Century, progress in this area continued. For example, property qualifications for State upper houses were finally abolished. Later, the malapportionment which made the votes of rural property holders worth more than the votes of urban residents was gradually removed, except for in the Western Australian Legislative Council. However, the last quarter of the 20th Century saw the influence of property again assume a major role in electoral politics. The dependence of political parties on corporate donations has served to undermine fair electoral competition and hence the principle of political equality.

Australia started introducing public funding for political parties in the 1980s in order to reduce dependence on corporate money and to ensure parties had the means to communicate with the electorate. As in other countries, the amount of public funding was tied to the level of public support for the party, measured by the number of votes gained above a certain threshold, with all votes being of equal value. However, Australian governments “forgot” to tie receipt of public funding to abstention from private donations. Unlike public funding, corporate donations were not tied to a fairness formula, so that parties received very different levels of funding per vote. For example, at the 2001 federal election the amount of private money received by political parties with parliamentary representation varied between $29 and $6 per vote, while public money was set at a standard $1.80 per vote.3

Instead of becoming less dependent on private money, the major parties became ever more dependent on it, especially with the escalating costs of television campaigning. At the same time, the remaining statutory caps on campaign expenditure were removed, except for the Tasmanian Legislative Council, giving an advantage to those with the wealthiest friends and backers. The degree of fairness that public funding was intended to introduce into democratic elections had been swiftly undone.

What’s wrong with corporate donations?

Corporate donations (including union donations) are incompatible with the principle of political equality, quite apart from their association with corruption.

  • Corporate entities gain greater access to decision-makers and greater power over the democratic process than do citizens, challenging the idea that only people, not property should have voting rights
  • Private money skews the level playing field for electoral competition. Corporate donations are not made in accordance with a fairness formula, unlike public funding
  • Lack of timely donation disclosure makes it more difficult for voters to make an informed choice at election time

Political finance reform in international perspective

Australia is not the only democracy confronting the dilemmas posed by the role of money in electoral politics. The combination of the escalating cost of campaigns, shrinking party membership and deepening public mistrust about politicians and money contributes to loss of confidence in democratic institutions. The 2007 Australian Election Study showed that 69 per cent of voters believe that big businesses – the kind of organisations which make the most substantial donations to political parties – have too much power.

Two effects of the arms race in campaign expenditure

  • Dependence on corporate donations arouses suspicion amongst the public that policy will favour the “big end of town” that provides large donations
  • Corporate donations help pay for the negative advertising that creates generalised distrust in politics and politicians

But while other democracies, including Canada, New Zealand and the United Kingdom (UK) have taken serious steps in recent years to tighten up their political finance regulation,4 Australian governments have been slow to grasp the nettle. Indeed, under the Howard Government things went backwards at the federal level, with the weakening of disclosure requirements, raising the threshold for disclosure to $10,000 (or $90,000 if a donor gives to the State, Territory and Federal divisions of a party). The Rudd Government twice brought forward Bills to bring the disclosure threshold back down to $1,000, but they were defeated in the Senate.

There are remarkably few restrictions in Australia on the size or source of donations to political parties. Australia even allows donations by foreign interests or those with an interest in government contracts or planning decisions. One exception, arising from continuing and well-publicised scandals, is the legislation passed in New South Wales in December 2009 prohibiting donations from property developers.5 While the singling out of one class of donations is understandable, it is unlikely to be effective in the long term in allaying integrity concerns or achieving a level playing field.

Australia’s laissez-faire attitude to money politics

  • Few restrictions on the size or source of political donations
  • No restriction on donations by overseas interests
  • No caps on campaign expenditure except in Tasmania
  • No limits on purchase of political advertising in the electronic media
  • No limits on third party advertising

By contrast, in Canada both Liberal and Conservative governments have taken major steps to remove the influence of corporate money from the electoral process and to ensure a level playing field in elections. Instead of campaigns being mainly funded by large corporations, they are now predominantly funded (at a lower level) out of the public purse.

Canadian model of political finance regulation

  • Ban on corporate or union donations to parties or candidates
  • Individual donations limited to $1000 adjusted for inflation
  • Cap on expenditure of parties/candidates; disclosure requirements
  • Cap on third-party expenditure; disclosure requirements
  • Public funding:
    • (partial) reimbursement of campaign expenditure
    • allowance paid quarterly for parties gaining over two per cent of the national vote
    • free broadcast time plus allocation of paid time determined by Broadcasting Arbitrator

But what of the so-called hydraulic nature of political finance – the idea that if money can’t go directly to political parties it will flow through other channels, such as third parties? In Canada, third parties have to register with Elections Canada once they have spent more than $500 on election advertising. They then have to disclose their expenditure and donors and comply with an upper limit on third party expenditure ($150,000).

The Canadian model of political finance regulation, in the fully-developed form shown above, has been in place for the last three general elections. It requires close oversight by a highly-respected and independent electoral management body (Elections Canada) and provides a useful model for Australia to build on.

In Australia, it is sometimes suggested that political finance reform would be constitutionally impossible. The argument is based on Australia’s short-lived (1991–92) ban on paid political advertising in the electronic media, which was found by the High Court to infringe the implied Constitutional right of political communication. Similarly in Canada, Constitutional challenges were made on the grounds that restrictions on third-party advertising infringed the freedom of expression guaranteed by the Canadian Charter of Rights and Freedoms. However, the most recent restrictions (rather than bans) have survived such a challenge, with the Supreme Court finding in 2004 that the restrictions were reasonable in the interests of electoral fairness.6 It concluded that the restrictions were necessary to provide a level playing field for political discourse. The restriction of some voices was necessary so that others might be heard.

Freedom of speech does not mean allowing some voices to drown out others

This should also be the argument put forward in Australia. There should be limits on the size of political donations and on campaign expenditure, whether by parties or third parties. Through ensuring that these limits are reasonable and appropriate to achieving electoral fairness, they should not fall foul of the “implied right of political communication” identified by the High Court in the 1992 Australian Capital Television Case.7 Such reasonable restrictions already exist in Australian electoral law, including the three-day blackout of electronic political advertising in the final few days of a campaign.8


The only real restriction on political donations in Australia has been the requirement for disclosure. However, the usefulness of disclosure has been significantly reduced by its lack of timeliness. For example, it took 16 months after the 2004 federal election before voters found out that Lord Ashcroft, a foreign citizen (of Belize and the UK) had given $1 million to the Liberal Party before the 2004 election. If he had given this amount to the British Conservative Party during an election campaign it would have been disclosed within a week.9

Some steps have been taken in Australia to improve timeliness. For example, New South Wales and Queensland now require disclosure every six months.10 However in the era of electronic transfers, there is no reason why donations should not be reported to the Australian Electoral Commission (AEC) at the same time as they are transferred to the bank, and then published on the AEC website.

Challenge #1: Cleaning up political finance

  • No corporate or union donations
  • Donations only by individual citizens or permanent residents, and a capped amount
  • Caps on party and third-party expenditure
  • Immediate disclosure of donations

Government advertising

One way in which political parties supplement the donations received from private sources is by using government resources for party purposes. Clearly this is most open to incumbent governments, and the most flagrant example is the use of government advertising for political rather than public benefit. Expenditure on government advertising reached a peak in the later years of the Howard Government when the federal government became Australia’s biggest advertiser, ahead of corporations such as McDonalds or Coca-Cola.11

Then Labor leader Kevin Rudd declared the misuse of government advertising to be a “cancer on democracy” and the 2007 Labor Platform made a number of important commitments to remove this “cancer”.

2007 Promises

Labor will not support the use of government advertising for political purposes. Labor will introduce legislation to ensure:

  • government advertising campaigns only occur after government policy has been legislated for by parliament
  • all government advertising and information campaigns provide objective, factual and explanatory information, free from partisan promotion of government policy
  • all advertising campaigns in excess of $250,000 are examined by the Public Service Commissioner, who will report to ministers on whether the proposed advertising complies with Auditor-General’s 1998 guidelines on government advertising, and,
  • the cost of government advertising is minimised by the targeted use of media other than television advertising

(ALP National Platform 2007, s. 54)

In 2008 the Rudd Government fulfilled its promise to put in place guidelines to ensure taxpayer-funded advertisements were not used by the Federal Government for party political purposes. The guidelines set out procedures for ensuring that advertising campaigns of a certain value complied with five principles – relating to when campaigns could be conducted, how campaign materials should be presented and the legal and procurement responsibilities to be considered. In 2010, those guidelines were amended following a review conducted by former senior public servant Dr Allan Hawke. The main issue arising from the amendments is whether the revised guidelines will make it easier for the government to spend taxpayers’ money on campaigns that serve its political interests rather than the public interest.

2010 Information and Advertising Campaign Principles (Key Headings)

Principle 1: Campaigns should be relevant to government responsibilities.

Principle 2: Campaign materials should be presented in an objective, fair and accessible manner and be designed to meet the objectives of the campaign.

Principle 3: Campaign materials should be objective and not directed at promoting party political interests.

Principle 4: Campaigns should be justified and undertaken in an efficient, effective and relevant manner.

Principle 5: Campaigns must comply with legal requirements and procurement policies and procedures.

The 2008 Guidelines were not legislated (indeed, the commitment to legislation was dropped from the ALP’s 2009 National Platform) and were not always clear with respect to some procedural matters. But they did have a practical impact. For example, expenditure on public advertising fell. Transcripts of government advertisements can now be found on agency websites, as can certification from both the Auditor-General and agency chief executives that campaign material complies with the guidelines and is not party political in content. The factual content of campaign advertisements has arguably increased, although there is little evidence that the “good news” overtones are being muted.

It is important to understand what has been achieved through the Government’s 2008 Guidelines in order to understand the extent to which this achievement has been put at risk by the 2010 revisions.12 The revised approach incorporates two key changes: the transfer of the responsibility for reviewing proposed campaigns from the Auditor-General to a new Independent Communications Committee appointed by government and composed of eminent former public servants, and the widening of the scope for exemption from the Guidelines.

The transfer of the responsibility for reviewing proposed campaigns from the Auditor-General to a new Independent Communications Committee has occurred because of concerns that the Auditor-General was taking, ‘an overly risk-averse, conservative approach to Government communications activities’.13 The Guidelines require the Auditor-General to pronounce on the compliance of a campaign with the Guidelines before that campaign is undertaken, while the ongoing functions of the Auditor’s Office entail undertaking performance audits of the same campaign after it has been completed. As the ACT Auditor-General noted when asked her views on the same model: ‘That created a risk for us, because later on, if we come back and do a performance audit and find a number of government advertisements are totally a waste of money because they did not achieve the intended outcome to change people’s behaviour or to inform people, it looks as if we are in conflict with ourselves because we approved them in the first place’.14 The possibility of such a perceived conflict, it has been argued, would tend to make the Auditor-General’s decisions unnecessarily conservative. Hence the expectation that the transfer of the review function to an Independent Committee is likely to result in a more relaxed application of the Guidelines.

Moreover, the scope for excluding particular advertising campaigns from compliance with the Guidelines has been widened. Under the old 2008 Guidelines, the Cabinet Secretary could exempt an advertising campaign from compliance on the basis of a national emergency, extreme urgency or other extraordinary reason. In the revised Guidelines “extraordinary” has been revised to “compelling” on the ground that this revision provides more flexibility. There is clearly a question as to whether such additional flexibility is desirable or necessary.

These are the changes that have been criticised as watering down the implementation of the government’s 2007 election commitment and widening the scope for political interference in government advertising campaigns. Such concerns have been exacerbated as the government moved quickly to give itself an exemption from its own Guidelines in order to fast-track a defensive campaign on its proposed mining tax.15 That campaign was withdrawn following a deal with the mining industry, which ceased its own campaign at virtually the same time. It is to be hoped this exemption did not represent the first of a series that will progressively undermine Labor’s 2007 election commitment to clean up government advertising.

Until they become law, the Guidelines will remain vulnerable to reinterpretation or revision. In the Australian Capital Territory the Liberal Opposition, with support from the Greens, has passed legislation to regulate government advertising. The Government Agencies (Campaign Advertising) Act16 was passed in December 2009 and came into force July 1st 2010. Among other things, the Act requires campaigns costing over $40,000 to go to an independent Campaign Advertising Reviewer for a compliance review. The appointment of the Reviewer must be supported by at least two thirds of the members of the Legislative Assembly. Ministers may exempt urgent matters from the Act, but the exemption will be disallowable by the Assembly.

The incoming federal government should follow the example of the Australian Capital Territory and legislate to ensure government advertising is not used for party purposes. Any exemption from the procedures and principles applying under the legislation because of a national emergency, extreme urgency or other compelling reason should not exempt the campaign from the application of Principle 3 (Campaign materials should be objective and not directed at promoting party political interests). Where an information or advertising campaign has been exempted from the usual compliance oversight, agency chief executives should be required to certify that the campaign is nevertheless compliant with Principle 3.

The legislation should, at minimum, incorporate a requirement to report annually on the value of each campaign as defined in the 2010 Guidelines.

Challenge #2: Cleaning up government advertising

  • Legislate to ensure that Commonwealth information and advertising campaigns comply with the five principles as set out in the 2010 Guidelines.
  • Legislate to ensure that Government campaigns can be approved for launching by a Minister only when the chief executive of the agency undertaking the campaign certifies that the campaign complies with the five principles and, in the case of larger campaigns, after the Auditor-General reports to the Minister responsible for undertaking the campaign on the proposed campaign’s compliance with the principles.
  • No campaign should be exempt from the application of Principle 3. Where, exceptionally, a campaign has been otherwise exempted from the procedures and principles set out in the legislation, agency chief executives should be required to certify its compliance with Principle 3.
  • The legislation should, at minimum, incorporate a requirement to report annually on the value of each campaign as defined in the 2010 Guidelines.

The electoral roll

While getting private money out of electoral politics and preventing the misuse of public money is part of the recipe for restoring the principle of political equality, another equally important ingredient is ensuring that eligible citizens are able to participate.

Although enrolment is compulsory for eligible Australians, the Australian National Audit Office estimates that 1.1 to 1.4 million otherwise eligible voters are missing from the electoral roll.17 This is because they have never enrolled, or because they have moved location and have not enrolled at their new address. Apart from the portion of the population who will intentionally avoid being enrolled, there are two significant reasons for this high level of non-enrolment: complicated procedures to enrol, and a lack of sufficient time to enrol after an election is called.

While the AEC is mandated to remove from the roll those who are not eligible… automatic deletion is not mirrored by automatic enrolment. Put bluntly, “the AEC is getting much better at taking people off the roll, but not at putting them on”.

Brent, Costar and Kelly, Democratic Audit of Australia submission.18

In 2006 the Howard Government introduced more stringent “proof of identity” requirements for people wishing to enrol or to change their enrolment. The new ID rules make it more difficult for the AEC to enrol people, even when the Commission is aware of an enrolled person’s new address. Under current Commonwealth rules, the AEC can send an enrolment form to a person’s new address, but the person has to fill out, sign and return the form to the AEC before becoming enrolled. Often a voter will see that the AEC has their new address, and assume that they are enrolled. In addition, the 2006 changes shortened the opportunity to enrol once an election was called – previously seven days – to the day election writs are issued. Federal elections are not held on a fixed date (as occurs in some States, including New South Wales and Victoria), so this leaves potential voters little time to enrol or update their enrolment.

Best practice in modern international electoral administration provides for “smart” enrolment, also known as “direct” or “automatic” enrolment. Under an automatic enrolment regime, a commission initiates or updates a person’s enrolment when it is notified by government agencies that a person has reached enrolment age or has changed address. The person is then informed that they are enrolled and asked whether they have any objections. This shift of emphasis is important, as it requires the person to take action to un-enrol, rather than to enrol. Automatic enrolments address, in particular, the relatively low enrolment of young people who tend to be highly mobile and either drop off the roll, or never get on it. Other demographic groups, such as transient workers and renters, also benefit. In these days of electronic rolls, automatic enrolment also largely removes any need to “close” the rolls before an election. There is no reason why new enrolments and enrolment updates cannot continue up to election day, as occurs in countries including Canada and New Zealand.

The debate about when rolls should close is “like arguing over Beta and VHS when the answer is DVD”.

- Peter Brent19

Of course, best practice in achieving a more comprehensive roll can also have partisan affects. Young and itinerant people are considered less likely to vote for conservative parties and more likely to vote for Labor or the Greens. However, the democratic principles of fairness and inclusiveness should override any partisan considerations. While the Coalition may argue that citizens have a duty to comply with the current registration requirements, there is an onus on government to facilitate ease of access to participation, especially under a compulsory enrolment and voting regime.

On the question of reforms to ensure a more comprehensive electoral roll, the argument should not be about assumed partisan advantage. All eligible voters should be on the roll. The onus should be on government to facilitate this.

In 2009, the New South Wales Labor Government passed legislation for automatic enrolment, and is set to implement it ahead of the March 2011 State election. In order to avoid confusion, New South Wales is waiting until after the Federal election to implement the new arrangements. In June 2010, the Victorian Labor Government introduced legislation into Parliament for automatic enrolment. With a general election due to be held in Victoria on November 27th 2010, it is unclear whether the Brumby Government will seek to pass the legislation prior to then. As the States and Territories operate “joint-roll” arrangements with the AEC, there is huge potential for confusion if voters become automatically enrolled at the State level, but remain unenrolled for Federal elections. The different systems will create confusion for voters unless the Commonwealth also adopts automatic enrolment. Given that the two largest States (which contain 58 per cent of all Australian voters) are moving to modern enrolment systems, it is imperative that the Commonwealth and other States and Territories also adopt a process that is seamless for voters.

Since coming to power in 2007, the Labor Government has introduced legislation to reform the current enrolment requirements. The proposed changes include restoring the seven-day enrolment period after an election is called, removing some of the ID requirements introduced by the Howard Government, and to allow voters to update their enrolment electronically (as you would, for instance, for your bank accounts). Previous reform attempts have been stymied by the Senate, so it may not be until the new Senators take their seats from July 2011 that the current Bills can be passed. Under the agreements between the newly-elected Gillard Government and the Greens and Independents a national inquiry into broader electoral reform will also report by October 1st 2011, enabling further legislation in 2012.

Challenge #3: Simplifying electoral enrolment

  • Introduce automatic enrolment
  • Standardise enrolment procedures between Federal, State and Territory jurisdictions
  • Allow new enrolments and enrolment updates up to the day of the election

It is time for reforms that place political equality ahead of perceived partisan interests. Political equality and democratic integrity cannot be taken for granted. These values require sound legislation and strong oversight bodies that remove temptation from the government of the day. We have attempted to show the urgent need for this in the areas of political finance, government advertising and electoral enrolment.

Photo Credit: Kat Mere,


  1. Upper houses were generally appointed or elected on special property franchises. In the United States, the Senate was indirectly elected until 1911.
  2. Harrison Moore, W. (1902) The Constitution of the Commonwealth of Australia. London: John Murray, pp. 327; 329. It should be noted that the Constitution did not guarantee all individuals equality of voting power, because of the over-representation of the small States in the federal parliament, and because of possible disqualification on grounds of race or sex (although the latter was addressed in the 1902 Franchise Act).
  3. Young, S. and J.C. Tham (2006) Political finance in Australia: A skewed and secret system, Democratic Audit of Australia, Report No. 7, p. 33.  Available online:
  4. For a survey of political finance regulation in 111 countries see Austin, R. and M. Tjernström (2003) Funding of Political Parties and Election Campaigns, Stockholm: International IDEA, 2003, pp. 181–223.
  5. Election Funding and Disclosures Amendment (Property Developers Prohibition) Act 2009 (NSW). Note also the Electoral Act 2002 (Victoria) which prohibits holders of gambling or casino licences from making donations of over $50,000 to each party.
  6. Harper v. Canada (Attorney General) (2004) 1 S.C.R. 827, 2004 SCC 33. Available online:
  7. See Tham, J.C. (2010) Towards a More Democratic Political Funding Regime in NSW: A Report Prepared for the NSW Electoral Commission, pp. 91–109. Available online:
  8. Schedule 2, Broadcasting Services Act 1992.
  9. Moreover, the UK does not allow foreign donations.
  10. Before 2008 disclosure was only required every four years in NSW, after elections, so complaints were made that it was difficult to find receipts after all that time!
  11. Young, S. and J.C. Tham, Political finance in Australia: A skewed and secret system, op.cit., p. 65. Available online:
  12. Department of Finance and Deregulation (2010) Guidelines on Information and Advertising Campaigns by Australian Government Departments and Agencies. Available online:
  13. Hawke, A. (2010) Independent Review of Government Advertising Arrangements (Hawke Report), p. 15.  Available online:
  14. Select Committee on Campaign Advertising, Inquiry into the Government Agencies (Campaign Advertising) Bill 2008, August 2008, p. 16
  15. Senate Hansard 15 June 2010, p. 23 Available online:
  16. See
  17. Australian National Audit Office (2010) The Australian Electoral Commission’s Preparation for and Conduct of the 2007 Federal General Election Report 28/10, Commonwealth of Australia Canberra, pp 15 – 23.
  18. Brent, P,  B. Costar and N. Kelly (2008). Submission to the Joint Standing Committee on Electoral Matters: Inquiry into the Conduct of the 2007 Federal Election, Democratic Audit of Australia, p. 2.
  19. Brent, P. (2009) ‘Sprucing Up the Horse and Buggy’, Inside Story,

Your Comments

3 Comments so far

  1. earnestlee says:

    The Cancer of Political Parties has killed “Representative Democracy” and a citizens voice has no value against “vested interests”
    The rotten carcass should be buried and an incorruptible “Direct Democracy” adopted.
    Once again Australia should lead on Social Innovation.
    The People should vote on the issues not personalities!!!


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