Joint Standing Committee on Electoral Matters
Inquiry into the funding of political parties and election campaigns, Tuesday 9 August 2011
Mr Stephen Mills, Private capacity
Full transcript available here.
Senator RHIANNON: Thank you very much, Mr Mills. Regarding the broad approach that you have, you linked the condition of public funding to actual limits. Does that mean that, if a party did not agree to that, they could just spend as much as they wanted if they were getting lots and lots of donations in?
Mr Mills: I would not permit an opt-out. In other words, I would say that if you are a registered political party—
Senator RHIANNON: So part of the scheme is that everybody comes in?
Mr Mills: Everybody gets public funding according to this formula and that is it: you cannot opt out and do an Obama, as it were, and just rely solely on private funding. That said, I do emphasise that I am not ruling out private funding. I certainly see there being an ongoing role for parties to draw funds from donors, members and supporters, but the marginal utility of extra dollars would fall in a capped spending environment. So, once the public funding is providing the bulk—not all but the bulk—of funding, then you have—
CHAIR: Can I clarify: you cannot opt out under your system?
Mr Mills: I would say do not opt out.
CHAIR: You are not allowed to opt out like Obama did, who then went and got private funding?
Mr Mills: Correct.
Senator RHIANNON: You are not proposing to put in place any bans on donations but you consider that that would be implicit because there really would not be any point in parties doing a lot of fundraising because there is a limit.
Mr Mills: Yes, there would be less point. You might have private fundraising for administration as opposed to campaign purposes. I would certainly like to see the lower threshold on reporting and perhaps caps on donations, but I think this makes capping donations less of a stress point.
Senator RHIANNON: Considering there is often a blurring between costs on the administrative side of the party and costs on the electioneering side, if you did not have those caps in place so that the amount of private money coming into a political party was limited, you could see an increase in so-called administrative costs, which, at the end of the day, could well be assist the electioneering work of the party. Do you see that that could be a potential problem?
Mr Mills: I think there are all sorts of issues with party expenditure. The reality is that we are all in the dark because we do not have proper data on how, or if, parties spend their money, whether it is campaign or administration money. There used to be some data provided by the parties in the eighties and nineties, but we just do not get that information. We really do not know enough about party funding, and one of the desirable outcomes of this current inquiry is that parties might be required to be more carefully audited, perhaps, and more transparent about what they actually do spend their money on. I think it is a public matter.
Senator RHIANNON: Considering what we have seen in this trend over recent elections where the party that spends most money is most likely to win the election—and you see that very clearly—
CHAIR: Oh, come on, that is not right.
Senator RHIANNON: It is. There is a very clear trend there. When you break it down per party and by how much they spend by vote it really stands out. We have seen some of the questioning suggesting that there is no need to have these limits in place. I am wondering whether you see that there is a need, in terms of the democratic process, for linking the need for changes to the need to enhance our democracies. Do you see that there needs to be more limits here?
Mr Mills: My first point is that I certainly do not accept that the biggest spender wins. There have been examples where the biggest spender has lost, and that has been the case right through from the 1970s.
Senator RHIANNON: Isn't that infrequent though?
Mr Mills: It is infrequent. Party officials spend money because they believe it will help them win campaigns. It is just they cannot control the thing and they are always up against good opponents that sometimes outspend or out-campaign them.
Senator RHIANNON: I am happy to be corrected on that but, having looked at the trends mainly in New South Wales and federally, my recollection was that there was a clear correlation between spending and outcome.
Mr GRIFFIN: That is two jurisdictions out of a total of eight across the country that you have looked, so it is a rather small component of the overall. Drawing conclusions from that, which puts a widespread slur on the question on the operation of the democratic process, I think, is a bit rich.
Senator RYAN: I have heard a lot of evidence, to be fair, about how the current the disclosure regime does not capture all the money. I think there are points there to see that, while correlation does not imply causality as the first point, the second point is that I agree that we do not capture all the current spending, because we capture receipts and donations. I think you could change a couple of those figures quite substantially depending on how you defined associated entities and activity by association.
Mr GRIFFIN: I do not think that the history shows that you can buy elections in a manner which is being suggested.
Senator RYAN: I agree.
Mr Mills: There are parties which recognise that they will not win therefore they do not spend.
CHAIR: In the ALP in 1996, one of the criticisms of the national secretary was that he did not open up the books.
Senator RYAN: If people do not think you are going to win you do not get the money to win.
Senator RHIANNON: From the New Zealand experience I understood that they ran into some problems with their legislation. Do you have you any more about the New Zealand experience? I did not think they just relied on polling.
Mr Mills: I am not the world's best expert on New Zealand. They do not just rely on polling. They have the amalgam model that we were talking about before where they include polling but only on top of a lot of pre-existing, hard voting data. Yes, they did run into some issues in the broadcast allocation cost, which I think Senator Ryan was referring to before. I do not have the full details on that and I believe that there have been some modifications made. Both Canada and New Zealand do have experience of a central authority administering public funding across the parties in a way that we do not. I think it is certainly worth expanding our public funding system through looking at those options.
Mr SOMLYAY: In public funding, assuming a level playing field, how do you put a value in the campaign on incumbency and all the things that come with it?
Mr Mills: The public funding system does not. Again, that is the beauty of it. We have a dollar per vote system which is blind to large or small party, blind to incumbent or opposition and blind to House of Representatives or Senate. It just says dollar per vote. It seems to me that there is a beauty in that which we should not dismiss.
CHAIR: Let me just qualify that. For the incumbents who recontest there are parliamentary entitlements that they can use and are using.
Mr SOMLYAY: And the executive.
CHAIR: Which is separate, obviously, from public funding.
Senator RHIANNON: It does give an advantage.
CHAIR: It does give an advantage.
Senator RHIANNON: Mr Mills, with your plan have you given any thought to new parties? It is becoming increasingly difficult for new political parties to break into the system and to establish themselves. Considering the way your system is structured, I feel that that could be a downside.
Mr Mills: Yes, it certainly is a downside, but the public funding system does not fund parties until they get four per cent of the vote. It does not say, 'Just set up a party and then you are automatically entitled to it.' It says, 'Set up a party, go out and win some votes, and then, if you get above the four per cent threshold'—and, as I have said, I think that could be a lower threshold—'then you get funded.' Senator, I think your party is an excellent example of a party which is growing through the public funding system; it is winning primary votes and therefore it is growing stronger.
Senator RHIANNON: Yes. I do think it is becoming harder for parties to come through, for various reasons. Thank you.
CHAIR: Thank you, Mr Mills, for your attendance here today. You will get a transcript of the evidence from today and if you need to make any corrections of fact please feel free to do so.
Mr Mills: Thank you very much.