Public Funding of Elections

Many of the world's democracies now have some form of public funding to help parties and candidates meet the cost of campaigning. Largely, it has been introduced to minimise the problems (either real or perceived) associated with the corrupting influence of private political donations being rewarded with political favours.

However, evidence indicates that public funding has done little to reduce the influence of corporate/private donations. Rather, it acts as an extra pool of money that can be used for advertising expenditure etc. For instance, the 2006 Annual Locater Returns of the Australian Electoral Commission reveal that a the Commonwealth level, the major parties still receive about half of their funding from private sources.

The public funding of elections was first introduced in Australia in New South Wales in 1981. Following this, the Commonwealth Electoral Act 1918 was amended in 1984 to provide the same for federal elections. The main principles of the scheme were:

• funding to be based on the annual primary postage rate (30c in 1983), or 90c every three years, indexed to increases in the postage rate;
• funding to be paid at 60c per House of Representatives vote and 30c per Senate vote;
• participants must receive at least 4 per cent of the primary vote to qualify for funding;
• only registered political parties and candidates are eligible for funding;
• payment to be on the basis of total electoral expenditure incurred in the period after an election is announced (ie parties are to be reimbursed for actual election expenditure). Payments are not to exceed the amount spent and evidence of expenditure must be provided; and
• no maximum applies for payments to any party or candidate.

In 1995, changes were made whereby:

• an amendment equalised public funding for House and Senate votes and raised the base (indexed) rate to $1.50;
• funding was now to be paid regardless of how much parties spend on election campaigns (ie is no longer a reimbursement scheme, under which parties are paid according to receipted expenditure up to the amount of their entitlement. Instead, parties are paid the exact amount of their entitlement).

In 2002, an amendment made public funding payable to a party's national secretariat, rather than state or territory branches, or to a party individual.

Public funding is available to registered political parties that receive at least 4% of first preference votes.

Western Australia, South Australia, Tasmania, and the Northern Territory do not have public funding available for their state or territory elections. Queensland, Victoria and the Australian Capital Territory do.

However, it is expected that the Carpenter Labor Government will introduce its public funding legislation to the WA Parliament in late 2006. The reasons put forward are:

• to minimise the reliance on corporate donations; and
• to assist candidates with their campaign expenses so that electors are well informed about policies and able to make sound choices.

The main features of the public funding model proposed by the WA Labor Government are:

• a threshold of 4% of formal first preference votes;
• subject to this threshold, $1.28106 is to be paid to a candidate for each formal first preference vote received in an election for either the Legislative Assembly or Legislative Council (LC);
• if a candidate is a group member, the 4% threshold for the LC is payable on the total proportion of votes received by that group;
• payment is to be reimbursed according to actual electoral expenditure or the amount that would be paid on vote share times amount per formal vote, whichever is the least; and
• the amount to be paid per valid vote is to be annually adjusted according to CPI increases.

It is vital that the introduction of public funding in WA is accompanied by strong quid pro quo reforms.

Document last updated on: 09:45 23rd Aug 2006.