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Biggest rort of all slips under the radar

By Scott Prasser - posted Monday, 6 August 2007

While the federal Opposition and the media have raised concerns about government spending on VIP planes and advertising to promote government programs, everyone has ignored that other great rort quietly supported by all political parties - the public funding of election campaigns.

Initially introduced in New South Wales in 1981 and adopted by the federal government in 1983 and some of the states and territories since, this nice little earner for political parties cost taxpayers $42 million at the last federal election. Since its introduction taxpayers have paid out more than $200 million in funding state, territory and federal election campaigns.

Payments are based on the number of eligible votes parties receive and provided at a set rate per vote.


As it is indexed to inflation the funding just keeps getting bigger. Nice subsidy if you can get it!

Public funding for party election expenses was supposed to ensure there is greater equity by giving all parties access to funds on the basis of votes gained rather than donations received. It sought to tackle corruption by reducing political parties' reliance on donations from interest groups for possible favoured action.

Lastly, it was hoped to reduce election campaign costs.

Public funding of elections has failed on all three counts. First, the main beneficiaries have been the parties who score the most votes and in our political system that's the Liberal and Labor parties. At the last federal election the Coalition parties received $21 million and the Labor Party, $17 million, while all the other parties and independents received $4 million.

Second, political parties continue to seek funding from community and business sources and there is little evidence federally of donations adversely affecting government decisions. More scandals have been about how public funds are spent (e.g. community polling) than about donations from private sources. Third, public funding has encouraged increased election spending by providing cream on top of the election spending cake. Public funding allows parties to indulge in expensive techniques like polling, targeted marketing, and more staff. More importantly, public funding has undermined key aspects of our democracy.

It means all citizens, through their taxes, are forced to fund political parties whether they like them or not. Surely, in a democracy it should be for party supporters to fund their party not the general public. Public funding of party election campaigns is like asking taxpayers to fund churches because they do some public good (like Sweden). While in other jurisdictions parties perform a valuable civic function in encouraging people to vote and thus deserve public funding, this is not the case in Australia with its compulsory voting system.


Also, public funding has made our parties lazy. They do not have to try too hard to recruit members to do key tasks. Since public funding was introduced, party membership in Australia has declined by more than 50 per cent.

Consequently parties hardly represent anyone any more. They have lost their community connection. Knock, knock - who's there? Almost no one - except a small group of increasingly young, ambitious look-a-likes drawn from the same narrow social base desperately seeking seats and who are often parachuted into areas to represent people they hardly know.

Further, with so few members, political parties no longer look to their once large network of rank and file branch members for policy ideas, or to gauge issues locally. Indeed, parties cannot even deliver election pamphlets any more.

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First published in The Courier-Mail on July 30, 2007.

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About the Author

Dr Scott Prasser has worked on senior policy and research roles in federal and state governments. His recent publications include:Royal Commissions and Public Inquiries in Australia (2021); The Whitlam Era with David Clune (2022) and the edited New directions in royal commission and public inquiries: Do we need them?. His forthcoming publication is The Art of Opposition reviewing oppositions across Australia and internationally. .

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