‘A contest of dollars’: Campaign spending soars 144% as parliament looks at reform

Federal political campaign spending has risen by 144 per cent over the past two decades in a trend that has outstripped the increase in the number of voters, according to new figures to be put to a parliamentary inquiry in a bid to put a cap on spending.

Political parties increased spending from $124 million in 1999 to $302 million in 2019 due in part to the entry of new forces in national affairs such as mining billionaire Clive Palmer, the biggest source of new outlays in recent elections.

Clive Palmer’s United Australia Party spent $92.1 million during the financial year that included the 2019 election.Credit: James Brickwood

The work, by the Centre for Public Integrity, will be put to the parliamentary committee that is examining the conduct of this year’s election when it holds public hearings in Canberra on Monday and Tuesday on issues including donations, voting rules and whether it is possible to pass laws to stop campaign lies.

“We urgently need campaign spending caps, donation caps and real-time disclosure to stop our elections becoming political auctions,” said Michael Barker KC, a former Federal Court judge and a member of the Centre for Public Integrity, a not-for-profit think tank.

“At a state level, campaign spending caps have cut spending by half and levelled the playing field. The Commonwealth currently has the weakest laws regulating money in politics.”

The increase in spending does not include this year’s election because political parties do not have to report their 2021-22 figures to the Australian Electoral Commission until October 20 and the disclosures are not revealed to the public until February 1, which means a donation made in August 2021 would not be disclosed until February 2023.

The disclosure regime at the AEC is based on paper-based forms, sometimes handwritten, in a system that makes definitive analysis challenging.

The new analysis estimates that spending on political campaigns reached its highest level at the 2019 election when the Coalition spent an estimated $116.5 million, Labor spent $74.5 million and other parties spent about $18.8 million.

Palmer’s United Australia Party spent $92.1 million during the financial year that included the 2019 election and was estimated to spend a similar amount when fielding candidates in most seats at this year’s election, although his party’s only success was a Victorian seat in the Senate.

The joint standing committee on electoral matters, chaired by Labor MP Kate Thwaites with Liberal National Party senator James McGrath as deputy chair, began its hearings into the election in September and has already published more than 250 submissions.

In a sign the government is willing to consider reforms, Special Minister of State Don Farrell asked the committee to start work, and its terms of reference include looking into donation laws, real-time disclosure, a smaller disclosure threshold (to reveal more donations), expenditure caps, public funding of parties and the potential for “truth in advertising” laws.

Another key issue is the proportional representation of the states and territories and the goal of “one vote, one value” across the country.

The Centre for Public Integrity’s new report was based on public documents lodged with the AEC and examined total payments for each year by the political parties, using this as an indication of electoral expenditure after subtracting routine expenses and adjusting for inflation. It found the increase of 144 per cent compared with an increase in the electoral roll of just 37 per cent.

“When a contest of ideas becomes a contest of dollars, the electorate suffers. Elections become less fair, and our elected representatives are forced to spend their time raising funds from wealthy donors to prepare for their next re-election effort,” the report concluded.

“Further, when corporate interests can bombard the electorate with advertisements to protect their bottom line, our representatives are effectively hamstrung in the pursuit of good public policy.”

The Centre for Public Integrity directors include former NSW Supreme Court judge Anthony Whealy, KC, former Victorian Court of Appeal judge Stephen Charles, KC, University of Melbourne professor Joo Cheong Tham and University of NSW professor Gabrielle Appleby.

University of NSW professor George Williams urged the electoral matters committee to recommend laws to counter misleading campaigns.

“The result should be a narrowly drawn law for truth in political advertising,” he wrote in his submission.

“This law should only target the spread of information that can be proven to be false. No
attempt should be made to regulate opinion or ideas in contested areas.”

Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.