PARLIAMENT OF NEW SOUTH WALES Joint Standing Committee on Electoral Matters Public funding of election campaigns Report No. 2/54 – March 2010 New South Wales Parliamentary Library cataloguing-in-publication data: New South Wales. Parliament. Joint Standing Committee on Electoral Matters Public funding of election campaigns [report] / Joint Standing Committee on Electoral Matters, Parliament NSW. [Sydney, NSW] : The Committee, 2010. 396 p. ; 30cm. (Report ; no.2/54). Chair: Robert Furolo MP March 2010 ISBN: 978-1-921686-10-8 1. Campaign funds—New South Wales. I. Title II. Furolo, Robert. III. Series: New South Wales. Parliament. Joint Standing Committee on Electoral Matters. Report ; no 2/54 324.78 (DDC22) Public funding of election campaigns Table of contents Membership and staff ......................................................................................iv Terms of reference ...........................................................................................v Chair’s foreword.............................................................................................. vii List of recommendations...................................................................................x CHAPTER ONE - RECOMMENDATIONS AND FINDINGS ............................1 Introduction .......................................................................................................1 Principles ..........................................................................................................2 Caps and bans on donations............................................................................3 Quarantined accounts.......................................................................................7 Other sources of income...................................................................................8 Disclosure .......................................................................................................12 Caps on expenditure.......................................................................................14 Public funding .................................................................................................28 Compliance and enforcement.........................................................................33 Legislative and administrative reform .............................................................43 Local government ...........................................................................................45 CHAPTER TWO - INTRODUCTION ..............................................................47 Background to the inquiry referral ..................................................................47 Conduct of the inquiry.....................................................................................48 CHAPTER THREE - BACKGROUND............................................................50 Election Funding and Disclosures Act 1981 – Recent developments............50 Report on legal and constitutional issues.......................................................52 Developments in other Australian jurisdictions...............................................54 CHAPTER FOUR - PRINCIPLES ..................................................................58 Principles of public funding and disclosure.....................................................58 Developments in other jurisdictions................................................................61 Inquiry participants’ views...............................................................................62 Constitutional issues.......................................................................................63 CHAPTER FIVE - CAPS AND BANS ON POLITICAL DONATIONS............78 Current regulation of political donations .........................................................78 Current funding and political donations ..........................................................82 Rationale for reform ........................................................................................89 Donations in other jurisdictions.......................................................................91 Inquiry participants’ views...............................................................................97 Report No. 2/54 –March 2010 i Joint Standing Committee on Electoral Matters Fundraising for federal elections.................................................................. 105 Other sources of funding.............................................................................. 107 Disclosure..................................................................................................... 114 CHAPTER SIX - CAPS ON EXPENDITURE................................................119 Current regulation of electoral expenditure.................................................. 119 Expenditure levels at previous state elections ............................................. 122 Rationale for reform ..................................................................................... 124 Expenditure limits in other jurisdictions........................................................ 127 Definition of electoral expenditure................................................................ 135 Timing of expenditure limits ......................................................................... 138 Level of expenditure caps ............................................................................ 141 Differential expenditure caps........................................................................ 150 Expenditure caps for third parties ................................................................ 152 Third party expenditure limits in other jurisdictions ...................................... 154 Electoral Mailout Account............................................................................. 167 Government advertising ............................................................................... 169 CHAPTER SEVEN - PUBLIC FUNDING .....................................................183 Current political funding scheme.................................................................. 183 Current levels of public funding.................................................................... 186 Rationale for reform ..................................................................................... 190 Public funding in other jurisdictions.............................................................. 192 Inquiry participants’ views ............................................................................ 197 Administration and operational funding........................................................ 214 Political Education Fund............................................................................... 218 Emerging parties and independent candidates............................................ 218 CHAPTER EIGHT - LEGISLATIVE AND ADMINISTRATIVE REFORM .....222 Legislative reform......................................................................................... 222 Role and composition of the Election Funding Authority ............................. 227 Role of the Auditor-General ......................................................................... 229 CHAPTER NINE - COMPLIANCE AND ENFORCEMENT ..........................232 Introduction................................................................................................... 232 Current regulatory system............................................................................ 233 Difficulties with the existing system.............................................................. 237 Comparative jurisdictions ............................................................................. 248 Features of a new enforcement system....................................................... 255 CHAPTER TEN - LOCAL GOVERNMENT..................................................274 Current system............................................................................................. 274 Legislative Council Select Committee Report.............................................. 274 ii Parliament of New South Wales Public funding of election campaigns Inquiry participants’ views............................................................................ 278 APPENDIX 1 – FUNDING MODEL ..............................................................284 APPENDIX 2 – TABLE OF EXISTING OFFENCES AND PENALTIES UNDER THE ELECTORAL FUNDING AND DISCLOSURES ACT 1981 .................291 APPENDIX 3 – ELECTION FUNDING AUTHORITY SUBMISSION TO THE INQUIRY INTO 2008 LOCAL GOVERNMENT ELECTIONS.......................294 APPENDIX 4 – ELECTION FUNDING AUTHORITY ANSWERS TO QUESTIONS ON NOTICE FOR INQUIRY INTO 2008 LOCAL GOVERNMENT ELECTIONS .................................................................................................317 APPENDIX 5 – ELECTORAL REGULATIONS IN INTERNATIONAL JURISDICTIONS..........................................................................................328 APPENDIX 6 – TABLE OF CANADIAN STRICT LIABILITY OFFENCES..333 APPENDIX 7 – TABLE OF OTHER CANADIAN OFFENCE PROVISIONS AND PENALTIES.........................................................................................341 APPENDIX 8 – TABLE OF NEW ZEALAND OFFENCE PROVISIONS AND PENALTIES .................................................................................................343 APPENDIX 9 – SUBMISSIONS ...................................................................347 APPENDIX