Proposed lifting of election funding cap alarms Coalition, Greens

The NSW government’s plans to allow third-party contributors to spend up to $226,000 in every electorate – 10 times the previous cap – has been criticised by the Coalition and the Greens, who say it could have an insidious impact on democracy.

The proposed Electoral Funding Amendment Bill – lifting the cap for third-party contributors such as unions, GetUp! or the gambling lobby from $24,700 to $225,900 – has raised fears it could spark American-style political spending in the state.

Unions NSW, led by secretary Mark Morey, has argued that the election spending cap impinged on its rights. Credit: James Brickwood

In January, the High Court handed down a unanimous decision in favour of the argument made by Unions NSW that the previous $24,700 cap impinged on implied freedom of political communication as laid out in the nation’s Constitution.

The proposed figure is set at 75 per cent of the $301,200 candidates in NSW can spend in by-elections and general elections. The High Court’s decision means there is currently no cap in place.

Obtained by this masthead, a dissenting report written by the Coalition noted the number of partisan voices who told the committee the government’s proposed increase could see third-party contributions overwhelm political candidates.

“The scale of the increase is so great that it would allow opposing political parties and their TPCs to swamp another political candidate’s lawful expenditure, thereby impermissibly burdening the constitutional right to the freedom of political expression,” Coalition committee members Chris Rath and Sam Farraway wrote.

Greens MP Kobi Shetty is critical of the government’s proposed increase to third-party contributor expenditure caps.Credit: AAP

The pair pointed to comments by University of Sydney professor Anika Gauja and Centre for Public Integrity director Geoffrey Watson who told an upper house committee considering the bill on Wednesday the proposed caps were too large and disproportionate to other jurisdictions.

The High Court’s decision leaves critics of the government’s proposed expenditure cap in a precarious situation: trying to find an agreed-upon lower expenditure cap that can’t be considered as inhibiting the political freedoms of third-party contributors.

Liberal Party state director Chris Stone said the proposed bill would inordinately benefit Labor to the detriment of other parties, and “particularly harmful to minor parties and independents”.

“It benefits trade unions and their political wing, the Labor Party, by allowing an excessive uplift in the cap for third-party campaigners – an almost tenfold increase,” he said.

“Put simply, these amendments will distort the democratic process and have a direct impact on the electoral outcomes in NSW.”

Greens democracy spokeswoman Kobi Shetty and Greens MP Cate Faehrmann warned the well-funded third parties “could drown out the voices of candidates”.

“There needs to be integrity in politics, and we mustn’t allow interests like the gambling lobby and fossil fuel corporations to interfere with this process by pouring huge amounts of money into general elections,” Shetty said.

The Greens will seek to move amendments to the bill this week, reducing the expenditure cap to $101,000 per third-party contributor.

Unions NSW boss Mark Morey, however, the believed the current caps were too restrictive and below the amount necessary to run election campaigns, noting the High Court reached similar conclusions.

“Running a campaign in a by-election at $20,000 doesn’t give you enough money to mail every person in the seat, let alone do anything else,” he said.

“The High Court points out that no voice should be drowned out in an election. I think that applies to not only political parties but third parties as well.”

A spokeswoman for Premier Chris Minns said the expenditure cap recommendations had been made by the Coalition-chaired Joint Standing Committee on Electoral Matters (JSCEM) last year.

“A committee controlled by the Coalition made the recommendation in the previous parliament to set the cap at the proposed level (indexed) and the government bill adopts that approach. This is also consistent with previous arrangements,” she said.

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