Political spending has become an arms race in Australia. We should cap it, for democracy’s sake
Australia likes to think of itself as an electoral innovator. We pioneered the secret ballot, Saturday voting, women’s suffrage and compulsory voting. We even had statutory caps on commonwealth electoral expenditure … until 1980. While our electoral system has never been perfect – and often far from it – Australians have always taken pride in promoting reform.
However, when it comes to money and politics, Australia is now an electoral straggler at the federal level. It has fallen significantly behind the states and other comparable advanced democracies. It maintains no caps on donations, an unsophisticated and ungainly public funding system, and, unlike many of the states and both territories, no caps on electoral expenditure.
Our recent research at the Centre for Public Integrity makes the case for caps on political spending ahead of federal elections. We closely tracked the explosion in spending since records began and found that inflation-adjusted payments by parties and candidates increased by 144% between 1998-99 and 2018-19. We also found that inflation-adjusted election spending by the Coalition and Labor grew by 80.7% and 50.4% respectively between the 1998 and 2019 elections.
There is now an arms race of electoral expenditure with no sign of slowing down.
It may be suggested that such election spending is a sign of a vibrant democracy. This is definitely not the case. Excessive and unachievable levels of expenditure deter many otherwise competitive candidates from contesting elections. Free electoral choice is merely an illusion if only a select few can raise enough funds to be competitive. The high court in McCloy recognised that equality of opportunity to participate in political sovereignty is guaranteed in our constitution – and it is high time parliament held up their end of the bargain.
High levels of political spending also risk endangering the decision-making of our representatives. The need to raise funds to remain competitive exposes parties to quid pro quo corruption. While soliciting the first few donations to fund increasingly expensive campaigns might not be problematic,
the donors soon start to expect favours in return. Integrity in decisions requires that politicians engage with stakeholders irrespective of their capacity to fund the next election.
We expect our representatives and ministers to spend their time advocating for our interests and directing the organs of the state. Consistently high expenditure means our elected representatives spend a significant amount of time looking for the next election’s funds, rather than doing the job we sent them to Canberra to do.
The problem is not confined to excessive spending by parties and candidates. Inordinate third-party electoral spending also risks corroding our democracy. Targeted historic campaigns against the mining tax and plain cigarette packaging laws are emblematic of this. These expensive corporate campaigns threatened to derail the pursuit of good public policy supported by most of the electorate. The omnipresent threat of a mining tax style campaign still looms large over reformist governments.
We need only look overseas to see the dangers of leaving the system as it is. With more than $21bn spent in 2020, American elections have now devolved into merely auctions. Prohibitively high expenditure has cemented the two-party duopoly and left election participants beholden to well-resourced donors.
This outcome is not inevitable. Our research shows that caps on electoral spending for all election participants can stop this unsustainable and damaging cycle. Well-designed caps such as those already introduced in New South Wales and the Australian Capital Territory have shown the ability for spending limits to promote electoral competition. Accompanied with appropriate regulation of donations, these caps also mitigate the corruption risks associated with fundraising.
Political spending caps reinforce the fundamental democratic axiom that elections are a competition of ideas rather than dollars. Elections in Australia currently run the risk of being reduced to no more than auctions – such an outcome can and must be avoided.
Australia is not insulated from the challenges democracy faces globally. Trust in government, corruption, accountability, and money in politics are all intimately intertwined. The Albanese government’s integrity reform agenda must include necessary changes to the relationship between money and the conduct of elections.
The inquiry into the 2022 election by the joint standing committee on electoral matters provides a unique opportunity to make these changes a reality and for the commonwealth to reassert its rapidly deteriorating status as a democratic innovator.
Anthony Whealy KC is the chair of the Centre for Public Integrity and former assistant commissioner to Icac. Max Douglass is a researcher at the Centre for Public Integrity
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