A short, sharp political education

By Mark Coultan
January 8, 2005

Back in 1993 the NSW Parliament passed an amendment to the Election Funding Act that was supposed to tighten a series of loopholes. It was part of a deal with the independents who held the balance of power during the Greiner and Fahey governments.

But the legislation contained a section that completely changed the way state politics is funded in NSW. The legislation was put on the table one week, and brought on for debate at 1.50 one morning of the next. After three speakers it passed the Legislative Assembly by 2.03am.

The changes established what is called a "political education fund" in NSW. But the money didn't go to schools to educate children about democracy or the electoral system. It didn't go to the parliamentary library, it didn't go to the electoral commissioner, and it certainly didn't go to the various schools of government in the various universities around Sydney.

Instead, the money went to the political parties. In a single stroke, public funding of political parties was doubled. Basically, the legislation gives parties the cost of a stamp for every vote they received in the previous lower house election. And they get it every year for the four years between elections.

From the parties' point of view, the only trouble with this little arrangement is that the cost of a standard postage stamp has hardly risen since 1993.

But still, in the years since that dead-of-the-night trick in 1993, more than $15 million has quietly flowed into party coffers.

It's not as if this is the only form of taxpayer subsidy of political parties. NSW, like the Commonwealth, already funds the parties to run election campaigns. The last state election campaign cost taxpayers $6.8 million in subsidies to candidates and parties.

Much of political reporting is ritualised conflict. And much of what passes for news is one side of politics using the media to attack the other. This may be the theatre of a healthy parliamentary democracy, but sometimes it hides the fact that the things the big parties agree on are the things that need the greatest scrutiny. When it comes to things that are in the mutual interest of the big parties, they are unlikely to complain too much about, say, politicians' pay or entitlements, or anything that makes life easier for the party organisations.

At least administration of NSW election funding is more rigorous than the federal system. A few years ago the feds got rid of the requirement that candidates justify the money spent on elections. These days, they simply get $1.94 for every vote they receive, as long as they poll above 4 per cent of the vote.

This cost taxpayers $41,926,158.91 at the last election, without candidates having to prove they actually spent the money on getting elected.

The most obvious example is Pauline Hanson. She entered the Senate campaign late, and ended up getting 102,000 votes, or 4.5 per cent of the Queensland vote. She didn't get elected, but she did get $199,886.77 in election funding.

We won't know how much she spent on her campaign until March, when the returns are released, but it would be a very unhealthy precedent if candidates could make money out of standing for office. And this from a woman who was convicted and then acquitted of, among other things, dishonestly obtaining nearly $500,000 in electoral funding. But there's nothing dishonest in what she's done - it's the system that is at fault.

One of the arguments for introducing public funding of campaigns is to reduce the risk of corruption by making political parties less dependent on political donations. The trouble with that argument is the parties still accept donations - they simply spend more on campaigns. In NSW, there was $6.8 million to distribute between the parties at the last state election. Yet the Labor Party, which got $3.37 million of that, spent $13 million thrashing the hapless Liberals.

The parties are starting to develop a conscience about who they accept money from - Labor no longer accepts cash from the tobacco companies, and both sides eventually decided that James Hardie's money was tainted. But they still accept money from just about anybody - particularly hoteliers and developers. Unlike the US, there is no prohibition here on accepting foreign money.

Years ago there was a vigorous debate when public funding of election campaigns was introduced - the Liberals opposed it but then turned around and accepted the money. But there was not a squeak when taxpayers picked up the bill for "political education".

If you haven't heard about it, you could be forgiven. Even though election funding is regularly reported as a matter of course, the funds that go to the political parties between elections are rarely mentioned.

One of the three speakers during that early-morning debate 12 years ago was John Hatton, the independent who fought against corruption for his whole political career.

But while the political education fund finances political parties, it cuts out independents, and any party that doesn't get elected to Parliament, thus serving to entrench the status quo.

The legislation is pretty vague about what political education purposes are, but they "can include, but are not limited to, the posting of written materials and information, regardless of whether the information contains material only about the party concerned". The only real prohibition in the legislation is on travelling and accommodation expenses.

This vagueness has been exploited by the parties to fund a large proportion of their everyday expenses, and expand their head offices. When you strip out the donations and costs of running campaigns, the $800,000 the ALP gets from political education finances the difference between what the party gets from membership subscriptions and the cost of running its head office.

If the legislation isn't dubious in itself, then the way it is administered should raise eyebrows. What the parties claim as political education purposes often have nothing to do with political education, but the Election Funding Authority pays them anyway.

The reason is that the parties are allowed to attribute a proportion of their overheads and general expenses to "political education". So the taxpayers end up paying part of the cost of the parties' rent, electricity and the like.

The ALP claim for 2003 - the most recent available return - included 100 per cent of the salaries of five staff members and differing proportions of the salaries of almost all staff members, including 60 per cent of the $115,000 salary of Mark Arbib, who was then assistant secretary. That means that in a state election year Arbib, now the party boss, spent only 40 per cent of his time trying to get the Carr Government re-elected.

Labor's other claims included $1363 for media training workshops and $6909 for the "research and development of management skills for MPs". It also claimed $57.50 for tea, coffee and biscuits at Parliament House for a "campaign insight" seminar, despite one of the few guidelines saying that money not be used for "expenditure in relation to and during election or by-election campaigns".

A claim of $136.76 for flu injections was rejected.

The parties almost always claim more than their entitlements, presumably in case the Election Funding Authority knocks them back on particular items.

This is a not a story bashing the Labor Party. After all, the legislation was passed by the Liberal government. The Liberal Party's claims are pretty similar to Labor's. The party was a little more careful in claiming staff costs, deducting the period of the election campaign from its calculations of the proportion of salaries claimed. But the Liberals still made wages claims for 22 staff, ranging from 12 to 88 per cent of their salaries. That's still a lot of political education.

They also claimed $7482 for telephone calls, $16,625 for computer services, $29,159 for photocopier expenses, even $47,070 as a proportion of rent and cleaning costs. They also claimed $14.30 for dishwashing detergent, $16.50 for Earl Grey tea, and $32 for Panadol tablets.

So how did taxpayers end up paying for the Liberal Party's headaches, in the name of political education?

The Election Funding Authority is in charge of approving payments from the political election fund, just as it is in charge of election funding. While it can't do much with a sloppy piece of legislation, it could interpret it in a much narrower way, if it chose. The one big brake the authority has put in place, apart from demanding audited claims, is that political education funds can't be used for election purposes - presumably because they get paid out of a different taxpayer bucket.

The Election Funding Authority is made up of three people: the electoral commissioner, a nominee of the premier, and a nominee of the opposition leader. In other words, representatives of the two major parties outnumber the electoral commissioner.

The political education fund is used not only by the major parties, but also by the minor ones. Everyone's into it. The Greens claimed $157,000. This included $92.50 as a proportion of the cost of installing window grilles and $32.50 as a proportion of the cost of repairing a crack in a toilet bowl. Money, you might say, down the drain.

The druthers that led to a drubbing

If you were serious about political education, you'd start with how the electoral system works. But while most of us have some idea about preferential voting, few would be able to describe how proportional representation works in the Senate or the NSW Legislative Council.

If there was more knowledge of the electoral system, there would be more informed debate. After the recent federal election there was much talk about the way that Family First got elected in Victoria. Family First's Steve Fielding got 56,372 first-preference votes and was the sixth senator elected from Victoria. The Greens polled 263,551 votes and didn't make it. Even the long-forgotten Democratic Labor Party outpolled Family First, scoring 58,042 votes.

So why did Family First's candidate get elected? Because the ALP decided to play silly buggers with preferences.

But first some explanation. When you vote above the line (just putting a "1" in the box above a list of a party's candidates), you entrust your preferences to be distributed according to tickets that the parties lodge before the election. This practice leads to horse trading for preferences - "you give me yours and I'll give you mine" stuff.

Although these tickets are registered before the election, it's almost impossible for ordinary people to know who they are really electing, even if they looked at the tickets. Even party bosses find it hard to understand. Over the years, several have made mistakes in their lodged allocation of their preferences.

Labor made a decision not to direct preferences to like-minded parties, but to instead court political opposites, in a vain attempt to shore up its own position. It didn't work, at least not in Victoria. Labor 0got only two senators elected. Its remaining preferences elected Family First's Fielding.

Labor's dirty little deal subverted the first rule of preferential voting: number the candidates and parties in the order you want to see them elected.

As Antony Green, the ABC's - and Australia's leading - psephologist, says: "The trouble about ticket voting is that it takes power away from voters and gives it to party bosses."

There have been suggestions about introducing a minimum quota of primary votes to stop minor parties preference-harvesting. But Green says this would only make things worse, with the big parties able to do deals in the safe knowledge that the micro-parties could never get elected.

Instead, Green says, the system should be changed so that it's easier to indicate your own preferences; either abolishing the need to number every square if you vote "below the line" or , as in NSW upper house elections, allowing people to number preferences above the line.

Green has been doing research for the NSW Parliamentary Library on the infamous 1999 tablecloth election, with its metre-wide ballot paper and 264 candidates. Of the more than 3.5 million voters, only one voted for the first person on the ballot paper, Peter Breen, and then proceeded to number every square sequentially across the ballot paper. In other words, a donkey vote.

His research has revealed that only 649 people in NSW filled in every square. (In NSW, you need fill in only 15 squares for your vote to be valid.)

He hasn't quite worked out how many people tried, and failed.

By the way, Green was one of the 649. Now an admission: so was I. In fact, I filled out the ballot paper in reverse order of preference. I started at 264 with the candidate I least wanted to see elected, and then proceeded backwards until getting to my first preference. But that says more about me than it does about the system.

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