Campaign finance laws are another brick in the wall

So let’s follow the money.

The provision of the new laws on state funds, which are allocated to any party or independent MP who received more than 4 percent of the vote in the last state election, is the most commented on. Under the indexed formula, they are currently entitled to $6.33 for each lower house vote they receive and $3.16 for each upper house vote they receive.

Figures released by the Victorian Electoral Commission show that between the last state election and April this year, the provision took $13.6 million into Labor coffers, $10.8 million into coalition parties and $3.3 million into the Greens .

The next brick in the wall is more than $20 million in government funding to cover administrative costs provided to sitting MPs. It is calculated based on the number of seats in the upper and lower houses held by parties and independent deputies.

It follows from the same that the money cannot be used for political expenditure, but under Victorian law the definition of political expenditure is so narrow that it allows many activities that are inherently political and necessary for a successful election campaign: the management of political position, development of policy, payment of policies. The ALP and Coalition parties have so far received more than $7 million each in administrative funding.

Next comes a special carve-out for the major parties: exempting designated organizations from the donation limit. Under Victorian electoral law, any registered political party can nominate an organization as a nominated organisation. This allows the ALP and the Liberal and National parties to continue receiving unlimited political donations from trusts that control legacy assets such as property and shares.

For labor, a particular cash cow is an organization called Labor Services and Holdings. For the Liberal Party it is the Cormack Foundation. For the citizens, it’s James Barry-sounding Pilliwinks Pty Ltd. These are the only three nominated organizations listed by the Electoral Commission of Victoria. In the year of the last state election, the Cormack Foundation donated $2.5 million to the Victorian branch of the Liberal Party and Labor Services and Holdings donated $3.1 million to the Victorian branch of the ALP.

Any new party can designate a designated organization, but here’s the catch: Donations to a designated organization are covered by a cap that limits donations to $4,320 in any four-year election cycle. The practical effect of this is that if you didn’t have these mechanisms in place before the laws were passed, it’s almost impossible to put them in place now. “Essentially, it’s too late for everyone else,” says Kathryn Williams, director of research at the Center for Public Integrity.

The new laws also make special allowances, outside of donations, for party membership and union dues, which contribute about $1.5 million a year to the Victorian Liberal Party and the ALP respectively.

The last brick will be contested by the main parties, but it is an important part of the advantage they have under the Victorian regime.

Under pre-existing laws, all members of the legislature and council receive a share of the electoral office and communications budget. As with the funding of administrative expenses, this money should not be used for political purposes, but as former ALP campaign strategist and current sociologist Kos Samaras explains, the money is used wherever possible to boost an MP’s re-election prospects.

“When I was a party official, a very important part of my job was to make sure sitting MPs made full use of their communications budgets to promote the government, the work the MP did and, by extension, the MP’s brand,” he says. .

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Holmes a Court describes it more bluntly: “It is a publicly funded budget that increases the profile that claimants do not benefit from.”

When all those bricks are glued together, any outsider who holds a state seat in November must overcome a wall of $100 million in benefits from the incumbent.

“In terms of the flow of money, we have a public funding formula that rewards incumbent parliamentarians and is skewed against up-and-coming candidates,” says University of Melbourne electoral law professor Ju-Chong Tham, an expert on money and politics. “Then we have a designated exemption from the limit on political donations that clearly benefits the major parties.”

Holmes a Court notes that while the public debate on campaign finance has focused on caps on donations, private donations now make up a tiny amount of money flowing into Victorian politics. If you think of political funding as an iceberg, campaign donations are the tip. The rest – almost all of it provided by taxpayers – is below the waterline.

The vested interest of Holmes and the Court in challenging the fairness of Victoria’s electoral law is clear. If independent Kooyong MP Monique Ryan, is filing her first annual return with the Australian Electoral Commission later this year, is expected to have spent about $2 million to unseat Josh Frydenberg. About 35 cents of each campaign dollar came from 11,200 Climate 200 donors.

Holmes a Cort has personally donated $4000 each to independent candidates in Hawthorne and Kew – a donation matched by his wife Katrina – but admits it is difficult for the motley movement to build a campaign structure under Victorian law.

To find candidates in Hawthorn and Kew – traditional Liberal-held seats that overlap with the federal seat of Cuyong – each of the respective campaigns has booked half-page ads running back-to-back in this newspaper. Although newspapers are notoriously finicky about advertising costs, the cost would have been about $20,000.

To raise the money for the payment, the companies went door-to-door collecting small donations. “I just went out and talked to as many people as I could and asked them if they would give it a shot,” says Brendan Hodgson, campaign manager for Melissa Lowe, the teal candidate for Hawthorn. The difference in campaign spending can still be seen on the streets of Hawthorn, where two months before Victoria heads to the polls, the billboards and campaign posters that mushroomed long before the federal election are nowhere to be seen.

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The short-lived Victorian party, which had planned to field candidates for all lower and upper house seats, was deregistered this month after its main organizers failed to find a way to raise the funds needed to campaign. “The cap is killer,” says a source connected to the short-lived party. “We were prepared to fight this in court.”

Such a fight would have significant risks. Anyone who tries to deliberately circumvent the campaign’s donation limit faces up to 10 years in prison.

The Holmes court is not alone in arguing that the Victorian regime, while improving on previous arrangements, is a defense of the status quo. Four years ago, the Greens voted with Labor to push electoral law amendments through the upper house. At the time, Greens leader Samantha Ratnam raised concerns about the “significant gap” in nominated organisations. It has now strengthened its resolve to repeal the provision after this election.

“The major parties have created a system that benefits them to the detriment of the smaller parties and independents,” she said. The era. “To fix this, the nominee provisions, which allow Labor and the Liberals to retain an aging asset base to fund their elections, must be scrapped and spending caps must be put in place.”

Reason MP Fiona Patten is also pushing for limits on election spending. Under a review provision inserted into the laws by MPs, a panel of experts appointed by the next government will review the spending cap within 12 months of the November 26 poll.

Joo-Chong says three changes are needed: impose a limit on election spending, close the loophole for nominated entities and expand the definition of political spending so that more money falls under the donation limit.

The Liberal Party, which initially supported the laws, voted against them in 2018. This was largely a political calculation made by the opposition, led by Matthew Guy, to prevent Labour’s “red shirting” scandal over the systematic abuse of polling staff from continuing until the election. day When asked how the rules work in practice, Liberal Party state director Sam McQuestin said flatly: “Labour will always make the rules that suit themselves. Whether we like them or not, we’re going to deal with the rules we have and make the most of them.”

In response to questions from The eraThe prime minister declined to comment on whether the new laws would encourage opposition to new parties and independents, and did not explain why the main parties should benefit from their arrangements with designated organisations. A government spokesman said Victoria’s laws on political donations were among the toughest in the country and next year it would be determined whether further changes were needed.

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