NSW Political Donations Reform – Background and Resources (Updated)

In May 2014, in response to the mounting revelations at the NSW Independent Commission Against Corruption (ICAC) of breaches and circumvention of NSW’s electoral disclosure laws, particularly in respect of donations by prohibited donors, Premier Mike Baird announced a Panel of Experts to review the system of political donations.

The Panel, consisting of Kerry Schott (former Sydney Water Chief Executive), Andrew Tink (former Liberal Shadow Attorney General) and John Watkins (former Labor Deputy Premier), has been tasked with examining, among other things:

  • Whether full public funding of State election campaigns is feasible and in the public interest and what measures are needed to ensure integrity of such a system;
  • If full public funding is not to be provided, what other models are recommended;
  • What is the appropriate level to cap the expenditure on State election campaigns and how it should be determined;
  • Whether penalties for breaching donations laws are sufficient; and
  • What controls should apply to making donations and the appropriate frequency and timing of disclosure obligations.

The full terms of reference for the “Panel of Experts” are here, while the homepage for the Panel, hosted by the Department of Premier and Cabinet is here.

As of 8 September 2014, the Panel of Experts has produced five working papers.

The first, an overview of Australian funding and disclosure laws, can be found here, with an associated annexure summarising the arrangements at the Commonwealth and state levels here.

The second paper, summarising international campaign finance laws and full funding models elsewhere, is here.

The third paper, focussing on the arguments for full public funding, is here.

The fourth paper, dealing with the costs of elections in NSW, is here.

The fifth paper,  “Reconsidering the Reform of Political Donations, Expenditure and Funding in NSW”, a complete revision of Professor Anne Twomey’s 2008 paper on the subject (see below) to take into account subsequent developments, is available here.

On 3 September, the Panel released its Issues Paper. It is available here.

The Panel is now receiving submissions from stakeholders and members of the public. Submissions are due by 17 September 2014. Submissions already received by the Panel have been included on its website.

The Panel will also be holding a series of round table discussions with “leading academics and stakeholders” on 24, 25 and 29 September. It is anticipated that an issues paper will be released in advance of these round table sessions.

The Panel is scheduled to report to the Premier by 31 December 2014. This timetable means that legislative change before the March 2015 election is all but impossible, and certainly would have limited practical effect in the lead up to the election.

Upon the resumption of ICAC’s investigation in early August, however, further revelations resulted in deepening scandal and the resignation from Parliament of two Liberal MPs.

At the Estimates hearing on 21 August, the Premier indicated that he had asked the Panel of Experts for long term solutions to the issue of political donations reform, but was inclined to announce a package of reforms to be implemented in advance of the 2015 election. He advised the Estimates hearing that he hoped to do this by the end of September.


Background material:

Election funding and disclosures, including political donations, for NSW state and local government are administered by the NSW Election Funding Authority, pursuant to the Election Funding, Expenditure and Disclosures Act 1981 and the Election Funding, Expenditure and Disclosures Regulation 2009.

At the Commonwealth level, candidates for federal elections, political parties, their State branches, local units and associated entities, and donors are required to make annual and election period disclosures. The disclosure regime, as well as the returns, can be found here.

Various analyses drawn from official disclosure of political donations have been made by the Guardian here and by the longstanding Greens’ project “Democracy 4 Sale” here.

Reviews and Legislative Change Under Labor (2007-2011)

In June 2007, the NSW Parliament Research Service, published a research paper on development and proposals for reform in electoral finance law. It is a handy gauge of the state of play to that point of time, before a series of inquiries and legislative changes. It can be found here.

In 2007, the NSW Legislative Council established a select committee on electoral and political party funding in NSW. The submissions to the select committee can be found here.

The final report of the select committee, tabled in June 2008, can be found here. The then Government’s response can be found here.

In November 2008, Professor Anne Twomey, constitutional scholar at the University of Sydney, prepared a paper for the Department of Premier and Cabinet on the reform of political donations, expenditure and funding. The paper can be found here.

(It is comprehensively updated by the Panel of Experts’ fifth working paper, “Reconsidering the Reform of Political Donations, Expenditure and Funding in NSW”, referred to above).

In November 2009, the then Premier, Nathan Rees, announced proposals for bans on political donations by property developers. Legislation to this effect was passed the following month. These developments are reported in this Parliament Research Service brief from January 2010.

In December 2009, the NSW Parliament’s Joint Standing Committee on Electoral Matters, commenced an inquiry into public funding of state election campaigns. The submissions to that inquiry can be found here.

The Joint Standing Committee reported in March 2010. The report can be found here. The Government’s response can be found here.

The Joint Standing Committee undertook a similar inquiry into public funding for local government campaigns later in 2010.

Reviews and Legislative Change Under the Coalition (2011 to now)

In 2011, the newly elected Coalition Government introduced the Election Funding, Expenditure and Disclosures Bill.

The Bill provided for, among other things, limits on the aggregate of spending by political parties and their affiliated organisations and prohibitions on donations by any entity other than individuals on the electoral roll.

It was referred to a Legislative Council Select Committee in November 2011, which reported in February 2012.

The Select Committee’s report can be found here. While the legislation was passed the day following the tabling of the report, the Government tabled a response to the report, which can be found here.

A NSW Parliament Research Service brief on constitutional issues affecting the caps on electoral expenditure by political parties, published in January 2012, can be found here. A related brief on banning donations from third party interest groups can be found here.

A report  “Establishing a Sustainable Framework for Election Funding and Spending Laws in NSW”, prepared by Dr Joo-Cheong Tham for the NSW Electoral Commission in November 2012, can be found here.

Earlier work by Dr Tham for the NSWEFA on:

  • regulating the funding of local government election campaigns (November 2010) can be found here; and
  • “Towards a More Democratic Political Finance Regime in NSW” (February 2010) can be found here

Unions NSW and Ors v. State of New South Wales:

Unions NSW, the peak body of unions in NSW, and five unions, as affiliated organisations affected by the 2012 amendments, challenged the validity of the amendments in the High Court.

In December 2013, the High Court ruled the 2012 amendments to be unconstitutional, by virtue of infringing the “implied freedom of political communication”.

The judgment can be found here.

Background materials for the case, including the submissions from the various parties and oral arguments can be found here.

A short supplement for the constitutional law text, Blackshield and William’s Australian Constitutional Law and Theory, dealing specifically with the case, can be found here.

An e-brief, with useful background on the legislation, from the NSW Parliamentary Research Service can be found here.

A paper on the case by Anne Twomey for the Gilbert and Tobin Centre for Public Law’s annual Constitutional Law Conference (reviewing the previous year in constitutional law) can be found here.

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