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Dangerous developments for democracy?

By Andrew Norton - posted Thursday, 10 February 2011

The annual Australian Electoral Commission disclosure of political donations, which occurs early in February each year, produced the usual fretting about interest groups buying influence, as they poured millions of dollars into political party coffers. But these disclosures also show that some interest groups don’t think that they can buy the influence they need. They are by-passing the political parties in favour of big campaigns of their own, going over the heads of the political parties to appeal directly to voters.

Last financial year, Australia’s miners were the big spenders. They reported outlaying $22 million on their campaign against the mining super-profits tax. But over the longer term, the unions are the biggest non-political party campaigners. In 2007-08 the union movement spent a record $28 million on their fight against WorkChoices, coming on top of the nearly $24 million they had reported the year before. Both the miners and the unions succeeded in getting policies altered. Hoping to emulate this success, clubs and hotels are threatening a $20 million campaign against the Gillard government’s proposed pokie machine laws.

Writing about interest group advertising in the Sydney Morning Herald, columnist Peter Hartcher concurred with a 2007 Liberal Party view that spending on this scale is a ‘dangerous development for democracy.’ He feared that interest groups could veto policy, making it harder to implement reforms of the kind that served Australia well in the 1980s and 1990s.


Depending on our own policy views, interest group successes can look like policy failures. But we should think very carefully about the implications of declaring these campaigns bad for democracy. It is effectively saying that the government should be able to launch major policy attacks on sections of Australian society, but their targets should be muzzled in their response.

This is a very odd view of democracy. Democracies do not award political rights according to whether or not exercising those rights will lead to a preferred or predetermined policy outcome. Democracy is instead a process for deciding what those policy outcomes should be, with political rights to ensure that the government cannot silence people who disagree with it. Political campaigns in which different views are expressed are what democracy is all about.

Unlike political donations, political campaign expenditure raises no issues of secret influence on government. Advertising is completely out in the open, on our TV screens and in our newspapers. As with any advertising, it is up to the public to decide whether or not they buy what is on offer. And as in the real word of marketing, another campaign can cause the public to change their minds. Nobody believes that the public always makes the right choices. But people who think their cause has been wrongly defeated need to try again with different arguments or better campaigns. That is the democratic response, not trying to rewrite the rules of the game in their own favour.

The real dangerous developments for democracy are various attempts by governments to curb these protests from people affected by policy decisions. New South Wales has already imposed a state election campaign spending limit of just over $1 million for groups not standing for office. The Queensland government proposes an even more restrictive $500,000 for its state election campaigns. A promised federal review of election laws will almost certainly canvas similar political expenditure controls.

Restrictions like these offer governments substantial protection from their critics. Even campaigns that are headline-grabbing expensive, like the miners’ $22 million, represent spending of less than $2 per voter. While cheaper campaigns can get a political message noticed, it costs more to keep issues in voters’ minds. That was one of the main reasons the anti-WorkChoices campaign was so costly. The unions won the public opinion battle early on, but they needed to keep workplace issues on the political agenda until the 2007 election. Low spending limits mean that anti-government campaigns could lose momentum before voters go the polls.

Governments would further insulate themselves from their critics by capping anti-government advertising, but leaving uncapped spending on their own propaganda. The AEC’s disclosure system does not apply to government, and so misses our biggest source of political advertising. Labor budgeted nearly $40 million for a campaign in favour of the mining tax, and the Coalition spent an estimated $55 million of taxpayer’s money promoting WorkChoices. Promises to curb government advertising can easily be broken - Kevin Rudd abandoned his commitment as soon as he saw political advantage in doing so. So inevitably we would be left with double standards: one for the government, and another for its critics.


Though governments most want to stop organisations that can appeal to mass constituencies, actual political expenditure laws affect all but the very smallest groups that want to campaign on election issues. In New South Wales, any person or association planning to outlay more than $2,000 on ‘electoral communication expenditure’ must register with the NSW Election Funding Authority—so NSW citizens now have to register with the government to run a campaign against the government. To avoid being punished for their political activity, campaigners need to navigate a maze of complex bureaucratic requirements. A guide issued by the Election Funding Authority lists 23 possible breaches of the law, with penalties including substantial fines and in one case up to 12 months jail.

The right to change election law has always been treated as a spoil of office, a chance to redesign the rules to favour the government and hamper its opponents. Normally these changes are seen for what they are, and receive a critical press. But the NSW government has been allowed to get away with a radical attack on our democratic freedoms with little criticism. A least one senior Sydney Morning Herald journalist seem to think that cracking down on opponents of government policy is a good idea. It isn’t, and we should fight similar laws being imposed on Queensland and the Commonwealth.

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Andrew Norton's paper Democracy and Money: The Dangers of Campaign Finance Reform will be released by the CIS in autumn.

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About the Author

Andrew Norton is a research fellow at the Centre for Independent Studies and Director of the CIS' Liberalising Learning research programme.

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