Proposed local government electoral expenditure caps scheme
Kindly accept this submission in relation to the proposed local government electoral expenditure caps scheme. The QCCL thanks the Department for the opportunity to make a submission in relation to this important matter.
Principles
The right to vote is arguably the most important civil liberty. Discussion of public issues and debate on the suitability of candidates is fundamental to the exercise of that right. Freedom of association is also a fundamentally important right, essential to the ability of civil society to organise and advocate for its own interests.
The Council has long supported a broad right to freedom of speech and freedom of association. But it is not our position that either of these rights is absolute. Interference with those rights may be justified where the state can demonstrate a sufficiently important interest it needs to protect, and it uses means to secure those interests that do not unnecessarily restrict those freedoms.
The interest here is clear – that elections are free and fair. Citizens must have a fair opportunity to contest elections and influence the outcome of political decisions.
While restrictions on electoral expenditure are restrictions on freedom of speech and association, it is clearly mistaken to argue that freedom of expression never licences government to restrict the speech of some in order to allow others a better chance to be heard.[1]
Restrictions on electoral expenditure are akin to the rules of debate in a meeting which restricts the length of speeches and provide for rights of reply. In the context of political speech, the restrictions are essential to fairness, in that the arms race between various political players is continuously increasing the cost of elections, which results in an increasing number of people being excluded from the political process. Capping expenditure would also help to create closer financial equality between candidates at elections.[2]
The principal argument against expenditure caps is that they may be ineffective and encourage methods of circumvention. The Council recognises and appreciates this concern, but nevertheless accepts that it is better to make an attempt than no attempt.
Nevertheless, the Council has several concerns with the proposals in this discussion paper.
Issue 1: Do you support the proposal to align the definition of electoral expenditure with the state scheme?
The Discussion Paper proposes that the definition of electoral expenditure under the Local Government Electoral Act 2011 (the LGEA) is amended to bring it into line with the definition of electoral expenditure under the Electoral Act 1992 (the EA).
Electoral expenditure is defined in s 199 of the EA as particular types of expenditure incurred for a campaign purpose. For third parties, expenditure is not classified as electoral expenditure if the dominant purpose for which the expenditure is incurred is not a campaign purpose, even if the expenditure is also incurred for, or achieves, a campaign purpose. The EA specifically delineates educating or raising awareness about an issue of public policy as a non-campaign purpose.
Central to this definition is the concept of a campaign purpose. Section 199A(1) of the EA provides that expenditure is incurred for a campaign purpose if the expenditure is incurred to:
a) Promote or oppose a political party in relation to an election
b) Promote or oppose the election of a candidate; or
c) Otherwise influence voting at an election.
In s 199A(2), the EA provides that, without limiting the previous subsection, expenditure is deemed to have been incurred for one of these purposes (and is therefore a campaign purpose) if material produced as a result of the expenditure does any of the following in relation to an election:
a) Expressly promotes or opposes -
a. Political parties or candidates who advocate, or do not advocate, a particular policy or issue; or
b. Political parties or candidates who have, or do not have, a particular position on a policy or issue; or
c. Candidates who express a particular opinion;
b) Expressly or impliedly comments –
a. About a political party, elected member or candidate in the election; or
b. In relation to an electoral district;
c) Express a particular position on a policy, issue or opinion –
a. If the position is publicly associated with a political party or candidate; and
b. Whether or not, in expressing the position, the party or candidate is mentioned.
The Queensland Council of Civil Liberties remains concerned that this definition of electoral expenditure is too broad. Campaign purpose is defined as including the purpose to influence voting at an election, which we consider could potentially capture the promotion of any policy which may be supported by one political party or candidate but opposed by another.
This is specifically envisaged by s 199A(2)(c), where advocacy for a policy that is ‘publicly associated’ with a political party is deemed to be expenditure for a campaign purpose. On its face, the notion of a policy being publicly associated with a party is vague. How close must the nexus between a party and policy be? Would simple endorsement be sufficient? If there are multiple parties which have endorsed a policy, would that effect the extent to which a policy is associated with a particular party? What about a particular side of politics?
Furthermore, it is difficult to see how the deeming provisions do not defeat the purpose of the exception made in s 199 for third parties. By requiring that a campaign purpose be the dominant purpose of an expenditure by a third party for it to be considered election expenditure, the legislation appears to be attempting to accommodate the needs of advocacy and awareness-raising groups. But by deeming expenditure that supports a policy that happens to be ‘publicly associated’ with a political party as expenditure for a campaign purpose, the legislation renders the work of advocacy groups almost certain to be classified as electoral expenditure. This subverts the intended operation of the exception for third parties, and leaves advocacy groups effectively unable to advocate for policies that may happen to be associated with a political party, without having to become registered and therefore risk serious criminal penalties for non-compliance.
In our view, defining electoral expenditure in this way goes too far. Expenditure by third parties should only be considered electoral expenditure if it promotes or oppose (directly or indirectly) the election of a political party or candidate.
We note that this would not replicate the position under American law. Under the American Constitution, disclosure laws can only apply to political communication which expressly advocates for the election or defeat of candidates. This approach leaves “issue ads” essentially unregulated. “Issue ads”, whilst missing any statement expressly advocating for the election of a candidate, are functionally equivalent to an ad containing such a statement. This situation has been criticised, and rightly so in our view.
It is our submission that including expenditure for advertisements that indirectly promote or oppose the election of a candidate or party in the definition of campaign expenditure by third parties is sufficient to prevent a replication of the situation in the United States. It simultaneously does not go so far as to make it impossible for an organisation to continue to advocate for a particular policy, which also happens to be the same policy advocated for by a political party or candidate.
Alternatively, it is submitted that the legislation should be amended to make it clear that expenditure will only be considered electoral expenditure if it is the actual intention of the person incurring the expenditure that a party or candidate be elected. This could be achieved by amending the definition of electoral expenditure as follows:
Expenditure, incurred with a view to
a) Promoting or opposing a political party in relation to an election; or
b) Promoting or opposing the election of a candidate; or
c) Otherwise influence voting at an election.
Such a definition has two important benefits. Firstly, it focuses the legislation on its intended target, which is the problem of third parties running proxy campaigns and wielding disproportionate influence in elections. Second, it is consistent with the principles of criminal responsibility usually advocated by this organisation, which is that criminal responsibility should usually be limited to the intentional conduct of a person. The deeming provisions erase the intentionality of conduct from consideration and should be thus amended.
Issue 2: Do you support the proposal to incorporate the concept of gifted electoral expenditure from the State scheme?
The Council supports the incorporation of the concept of gifted electoral expenditure from the State schemes, as part of what should be a broad set of measures designed to prevent parties from circumventing the expenditure caps.
Issue 3: Do you support the proposed capped expenditure periods, as outlined above?
In the United Kingdom, a recent review considered what the capped expenditure period should be.[3] It was and remains 12 months. The review found that most voters were unlikely to be influenced by campaigning 12 months prior to the election, and so recommended the period be reduced to 4 months. We can identify no reason for why Queensland voters would be any different to UK voters in this regard, and so submit that the capped expenditure period should be reduced to 4 months prior to the election.
Issue 4: Do you support registration of third parties?
While the Council supports the registration of third parties above a certain threshold, it is important that the threshold is not so low as to impose unacceptable burdens on advocacy groups, particularly small advocacy groups. Given the extremely serious criminal penalties that failures in compliance could attract, it is important that the administrative burdens are only imposed on appropriate parties.
Ultimately, the question is what amount would a third party need to expend to influence the outcome of an election, and further, what is the appropriate balance between securing the necessary transparency and imposing an unfair regulatory burden on organisations.
We cannot definitively provide an appropriate number. But we submit that $6000 over the approximately seven months before the election is too low.
Issue 5: Do you support separate dedicated accounts for registered third parties and registered political parties?
The Council has no comment on separate dedicated accounts for registered third parties and registered political parties.
Issue 6: Do you support the proposed electoral expenditure caps for mayors and councillor candidates?
The Council has no comment on the proposed electoral expenditure caps for mayors and councillor candidates.
Issue 7: Do you support the proposed approach for groups of candidates and political parties?
The Council supports the proposed approach for groups of candidates and political parties.
Issue 8: Do you support the proposed caps for registered and unregistered third parties?
The Council considers the proposed caps for unregistered third parties to be too low, for the reasons discussed above.
The Council considers the proposed caps for registered third parties to be absurdly large.
Issue 9: Please provide information or evidence supporting your view regarding proposed third-party caps.
The Council strongly opposes the current proposals for third party electoral expenditure caps.
The expenditure cap for third parties should strike a fair balance between respect for freedom of speech and association, and the importance of preventing third parties exercising disproportionate influence in elections and being used to circumvent expenditure caps.
The current proposal is that each third party can spend the same amount as all the mayoral candidate caps combined. This is absurd. This system permits every third party the same influence, in expenditure terms, as all the mayoral candidates combined. It is hard to see how this system would not inevitably lead to the exact outcome the system purports to be trying to avoid – that being the complete drowning out of other election participants’ voices.
The disproportionate caps afforded to third parties are not ameliorated by the ability of candidates and political parties to pool their resources. In Brisbane, this would lead to a combined expenditure cap of approximately $841,000.[4] This is approximately a quarter of the amount a single third party could spend on the Brisbane electoral race.
The proposed approach is completely out of line with the state systems, and the UK. At the state level, political parties and their endorsed candidates can spend up to $150,000 per electoral district. There are 93 state electoral districts, so each political party can spend a combined $13,950,000 in an election – nearly $14 million dollars. At the state level, third parties are capped at spending $1 million in total on an election. This sets the third-party cap at approximately 7% of the applicable cap for political parties.
In NSW, the applicable cap for a third party is a third of the applicable cap for a candidate.[5] In England, the applicable cap for a third party is set at 2% of the maximum campaign expenditure limit for political parties.[6]
These numbers serve as a guide for what is considered a conventionally appropriate balance between third party campaigners and political parties. The current proposal is to put each third party on an equal funding cap to a political party. Regardless of whether any third parties currently spend an amount approaching that figure, we submit the proposed cap is dramatically overinflated to a level that would permit for disproportionate third-party influence in local government elections.
If the cap is set so high to ensure that advocacy organisations are not unduly limited, the Council submits that the preferable solution is to narrow the definition of election expenditure, as argued for above in response to Issue 1.
Issue 10: Do you support the proposals for indexation of expenditure caps and determination of elector numbers by the ECQ?
The Council supports the proposals for indexation of expenditure caps and determination of elector numbers by the ECQ.
Issue 11: Do you support applying the expenditure cap system to associated entities?
The Council supports applying the expenditure cap system to associated entities, as part of what should be a broad set of measures designed to prevent parties from circumventing expenditure caps.
Issue 12: Do you support expanding the definition of associated entity in the LGEA to align with the EA?
The Council supports expanding the definition of associated entity in the LGEA to align with the EA, as part of what should be a broad set of measures designed to prevent parties from circumventing expenditure caps.
Issue 13: Do you support aligning the penalty and recovery provisions in the LGEA with the EA?
The Council has no comment on the alignment of penalty and recovery provisions in the LGEA with the EA.
Issue 14: Do you support the proposed amendments to make expenditure cap offences integrity or serious integrity offences?
The Council generally opposes the application of criminal sanctions to conduct that is not intentional. To that extent, the Council opposes the criminalisation of conduct based on what the perpetrator ought to have known but was not in fact aware of. This is particularly concerning considering that breach can be punished by 10 years imprisonment.
The Council notes that these concerns would be less pertinent in a civil trial. In the context of a criminal trial, however, the Council does not support the proposed amendments.
Issue 15: Do you support aligning the record-keeping and auditing requirements for State and local government elections?
The Council has no comment on the alignment of record-keeping and auditing requirements for State and local government elections.
Issue 16: Do you support resources such as training, guidelines, fact sheets and a helpdesk being made available to election participants? Do you think there are other types of resources that would assist election participants?
The Council supports the provision of such resources to assist election participants with compliance with the new regulations.
Issue 17: Do you support an ongoing review mechanism, and if so, in what format?
The Council supports the existence of an ongoing review mechanism. Stakeholders should be afforded the opportunity to provide ongoing feedback on the implementation of the scheme.
We thank Rory Brown, QCCL intern, for his assistance in the preparation of this submission.
We trust this is of assistance to you in your deliberations
[1] “Content regulation reconsidered’ in The Difficulty of Tolerance: Essays in Political Philosophy Cambridge University Press 2003, at page 166.
[2] Young and Tham, Political Finance in Australia; a Skewwed and Secret System – School of Social Sciences, Australia National University Report Number 7 at page 93.
[3] Lord Hodgson of Astley Abbotts CBE Third Party Election Campaigning – Getting the Balance Right (March 2016) para 4.89.
[4] Jack McKay, ‘Union’s cash to smash councils’, Courier Mail (Queensland), 04 April, 2022.
[5] Economics and Governance Committee, Queensland Parliament, Inquiry into the feasibility of introducing expenditure caps for Queensland local government elections (2020), p. 36.
[6] Lord Hodgson of Astley Abbotts CBE Third Party Election Campaigning – Getting the Balance Right (March 2016) para 6.3.