Media release - Inquiry Terms of Reference critical on election funding law

The Terms of Reference adopted by a Parliamentary Inquiry would be critical in ensuring electoral funding legislation did not make elections less fair, Local Government NSW (LGNSW) said today.

LGNSW President Linda Scott said the Electoral Funding Act 2018 – rushed through the Parliament in May – imposed inconsistent expenditure caps for candidates and appeared set to stifle information that could help voters make their choice at the ballot box.

Clr Scott called on the Berejiklian Government to ensure the Terms of Reference referred to the Joint Standing Committee on Electoral Matters were broad enough to address the flaws and unintended consequences legal experts had identified as flowing from the Act.

“Local government supports a move to clearer, cleaner elections at all spheres of government, but the Electoral Funding Act fails to provide this,” Clr Scott said.

The Act effectively introduced expenditure caps on local government candidates, parties and third-party campaigners but applies complex formulas that do not provide for consistent campaign expenditure across the state.

For example, a candidate for Orange City Council would be allowed to spend $0.17 per voter, compared with $0.69 per voter by a candidate for Dubbo Regional Council. In rural Walcha, the allowable spend is $8.71 per voter. Meanwhile in metropolitan areas, a Campbelltown City Council candidate would be allowed to spend $0.05 per voter, compared with the $0.44 per voter allowed in Waverley.

“This new legal advice tells us there is no consistency in the application of caps and an obvious disparity in allowable funding – not only between metropolitan and regional areas, but within those areas themselves,” Clr Scott said.

“The provisions of the Act fail to establish a scheme that is fair and equitable to all registered voters across NSW.”

The Act also impose expenditure caps on third party campaigners – groups such as LGNSW, the NSW Farmers Federation, the Country Women’s Association, ACOSS and the Combined Pensioners and Superannuants Association.

“The cap for council elections is as low as $2,500 per local government area, and around $61,500 per electorate in state elections, making it extremely difficult for community groups to promote key policy issues to voters,” Clr Scott said.

“This legislation could be perceived as a gag law, and may be inconsistent with the implied right to freedom of communication – a position the courts have said is necessary to ensure voters can exercise an informed choice at the ballot box.”

Clr Scott urged the Government and Joint Committee members to consider LGNSW’s preferred Terms of Reference, which sought to address the identified problems and ensure the Act achieved its objectives.

“LGNSW welcomes the State Government’s commitment in May to refer the Act to a Parliamentary Inquirybut it’s disappointing this has taken more than two months – particularly given the time pressure created by the upcoming State election,” she said.

 “The Act clearly requires sensible amendment well ahead of the 2019 State elections and the 2020 local government elections, and that means acting now.

“It’s the only way councils and communities will get the electoral certainty, consistency and fairness they deserve,” she said.

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Joint Standing Committee on Electoral Matters – Inquiry into Expenditure Caps of the Electoral Funding Act 2018

Draft Terms of Reference

The Joint Standing Committee on Electoral Matters inquire into and report on:

1)    Whether the restrictions on local government electoral expenditure and third-party campaigner expenditure in both state and local government elections (including with respect to limitations on acting in concert):

a)      burden political communication;

b)      serve a legitimate end;

c)      are proportionate; and

d)      meet the objectives as set out in section 3 of the Electoral Funding Act 2018.

2)    Whether caps on local government electoral expenditure in respect of council areas should vary, taking into   account:

a)      The geographic size of the Council;

b)      The number of electors within the Council;

c)      Whether or not the Council is divided into wards;

d)      Whether the Mayor of the Council is directly elected;

e)      Whether the Council is a metropolitan or non-metropolitan Council; and

f)       The different categories of Council identified by the Local Government Remuneration Tribunal.

3)    Whether caps on local government electoral expenditure in respect of candidates should vary, taking into account:

a)      Whether candidates are endorsed by a registered political party contesting an election:

i)      In one council area; and

ii)    ln multiple council areas;

b)      Whether candidates are nominating as a group or as individuals;

c)      Whether candidates have nominated for election as mayor and as a councillor; and

d)      Whether candidates should be subject to a single cap, or there should be separate caps for groups and individual candidates.

4)    And report on appropriate caps and the need for variations between caps, taking into account the issues raised in paragraphs 2) and 3) and having regard to:

a)      the objectives as set out in section 3 of the Electoral Funding Act 2018 for parties, and in particular the following objectives:

i)      To establish a fair and transparent electoral funding, expenditure and disclosure scheme; and

ii)    To promote compliance by parties, elected members, candidates, groups, agents, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme. 

b)     The issues raised during the Parliamentary debate of the Electoral Funding Bill 2018; and

c)      An indicative review of electoral expenditure at the 2016 and 2017 local government elections to determine actual electoral expenditure, variations in electoral expenditure between councils, parties, groups, and individuals and the reasons for these variations.

Available on request: legal opinion on issues of concern in the Electoral Funding Act 2018.