The Coalition Government is not “moderate”, it is privatising NSW

One of my biggest gripes is about how the Coalition Government in NSW is portrayed. It has been called “centrist” and “moderate” when its agenda is clearly driven by vested business interests.

It is mistaken as “moderate” because it is contrasted against the socially conservative and reactionary federal Coalition. The fact is that it would be impossible for a Coalition Government to get elected in NSW if it was seen as a bunch of bigots. It understands that it cannot be seen as too overtly socially conservative or racist.

Unlike the federal Coalition, the NSW Coalition is playing the long game and has sought to avoid overtly antagonising key groups. The use of the “asset recycling” narrative is their way of doing this as they pursue widespread privatisation. The history of New South Wales being a naturally Labor state and the failure of the last NSW Coalition Government undoubtedly played a role. The decisions it has made are strategic, seeking to gradually change New South Wales over many terms, not a single term.

As a result, there are many decisions that the NSW Government has made which have flown under the radar, assisted by a lack of scrutiny. Resourcing to the Opposition is pitiful and the media is focused on federal politics. If the same level of scrutiny was applied to the NSW Government that has been applied to Auburn Council, there would be community uproar.

Below is an ongoing and incomplete list of things that show how the NSW Coalition Government is privatising the state and delivering for its base of property developers, big business and conservative interests. Feel free to share this list and let me know if there is anything I have missed:

1. Privatising the electricity network.
2. Privatising the Northwest Rail Link & beginning the privatisation of our rail network.
3. Selling the land the Powerhouse Museum is on to developers.
4. Exempting the casino and a range of pubs from the lockout because of pokies.
5. Evicting tenants from public housing in the inner city and selling off their housing in Miller’s Point.
6. Using the Metro to demolish public housing in Waterloo.
7. Slashing funding to womens’ shelters, leading to closures & transferring remaining shelters to faith-based providers.
8. Ending one person, one vote in the City of Sydney.
9. Gerrymandering local government boundaries.
10. Watering down the powers of ICAC.
11. Destroying TAFE by introducing contestable funding.
12. Using the NDIS as an excuse to shut down all publicly run disability services by 2018.
13. Changing strata laws to make it possible for developers to force people to sell their home.
14. Allowing James Packer to take public land from Barangaroo to build a casino through an unsolicited bid.
15. Privatising all public transport in Newcastle.
16. Shutting down the Newcastle rail link because developers wanted it.
17. Privatising ports in Newcastle, Port Kembla and Port Botany.
18. Privatising the land registry, which is a natural monopoly.
19. Selling off historic public service buildings in the CBD to hoteliers and Australian Technology Park.
20. Selling the land Hurlstone Agricultural High School is on to developers
21. Imposing a wage cap on public servants and taking away power from the Industrial Relations Commission to determine wages and conditions
22. Demoted the Department of Environment to an office under the auspices of the Planning Department
23. Allowed councillors with a pecuniary interest to vote on planning controls that effect all or a substantial part of a local government area as long as they declare the interest.
24. Outsourcing public sector jobs in IT, corporate services, construction & maintenance that will undermine public sector capacity.
25. Impose additional and reintroduce tolls on the M4 & M5 to pay for WestConnex
26. Allowed shooters to hunt in national parks.
27. Cut all funding to the Welfare Rights Centre.
28. Introduced donations and expenditure laws to make it impossible for unions to run political campaigns.
29. Promising to repeal legislation to allow the clearing of native vegetation like the Newman Government did
30. Pursuing an anti-cyclist agenda by tearing up bike lanes and making it harder to cycle.
31. Making it more difficult for children to enrol in ethics classes at school.
32. Privatising HomeCare by stealth by transferring it to Australian Unity with no transparency.
33. Selling off and closing regional TAFE campuses.
34. Setting up the Greater Sydney Commission to override local council planning controls.
35. Privatising ferry services in Sydney.
36. Introducing ‘three strikes’ laws to evict public housing tenants with little recourse to natural justice.
37. Rezoning a potential World Heritage site in Parramatta to allow developers to build apartments on it.
38. Wasting $38m on a little used pedestrian bridge over Anzac Parade while refusing to fund the Iron Cove to Cooks River GreenWay.
39. Carving off parts of Sydney Park to make way for WestConnex.
40. Using the legalisation of Uber to water down taxi regulations such as vehicle standards and deregulate fares.
41. Using the promised “one-stop shop” of Service NSW to shut down service branches and call centres and force people to use digital transactions.
42. Compromising the safety of Sydney’s water by axing the jobs of five of the six top scientists responsible.
43. Bulldozing a major arterial road through the historic Thompson Square and Windsor Bridge.
44. Forcibly relocating a long-standing community  pool in Parramatta to make way for the corporate redevelopment of Parramatta Stadium.
45. Cutting down 100 year old trees along Anzac Parade and Alison Road for a light rail route so Randwick Racecourse can keep a bus lane and 150 car spaces.
46. Seeking the power to shut down rail lines without Parliamentary approval for the benefit of developers.
47. Increasing usage of the “Cabinet in Confidence” excuse to block Freedom of Information requests.
48. Environment agencies getting their budgets slashed by $20 million, with National Parks and Wildlife and the Royal Botanic Gardens among the hardest hit.
49. Examining the privatisation of Sydney Trains.
50. Refused to support a pill testing trial as part of a drug harm minimisation strategy.
51. Failing to invest in our urban water infrastructure, forcing Sydney Water to pump sewerage into our waterways.
52. Expanded police powers to use against protestors, including removing restrictions on move on powers and extended search and seizure powers.
53. Reducing penalties for companies that explore or mine illegally.
54. Pursuing a contestability agenda in prisons to drive down wages for staff and conditions for prisoners.
55. Resourcing shortfalls pushing Western Sydney public hospitals in Penrith, Westmead and Blacktown to breaking point.
56. Giving police the power to ban individuals from public places for 72 hours without a judge’s approval.
57. Banning schools from being show a documentary about gay parents during school hours.
58. Supporting the gutting of the Safe Schools program.
59. Calling for a GST increase to pay for tax cuts for corporations and the wealthy.
60. Planning to turn open parkland at Moore Park into car parks and stadiums.
61. Concealing illegal donations and refusing to reveal their identities.
62. Accepting cuts to federal funding to public schools.
63. Closing down ticket offices at rural and regional railway stations.
64. Effectively pushing for welfare quarantining for public housing residents by supporting deducting rent directly from Centrelink payments.
65. Cut funding to ICAC.
66. Imposing an extremely harsh penalty regime on cyclists.
67. Making fines for protesting illegal mining greater than fines for illegal mining.
68. Privatising education and training in prisons.
69. Establishing a Commissioning and Contestability Unit to come up with new ways to privatise public services.
70. Pursuing outsourcing of the operation of school and recreation facilities.
71. Destroying critically endangered woodland to provide temporary parking for WestConnex.
72. Privatised foster care services.
73. Transferring a third of public housing from the public sector and demolishing estates which will be rebuilt as majority private residencies (70:30).
74. Selling off the Sirius Building in the Rocks and opposing heritage listing to allow its demolition.
75. Increasing land registry fees by 25% prior to its planned privatisation.
76. Getting the NSW inter-city train fleet built overseas at the expense of local jobs, investment and skills.
77. Privatising five regional public hospitals in NSW.
78. Planning to use proceeds from privatising the land registry to pay for a stadium upgrade.
79. Closing Service NSW shopfronts and reducing opening hours.
80. Temporarily relocating Ultimo public school to a site contaminated with lead.
81. Seeking federal government “reward payments” for privatising public services.
82. Letting councils outsource the running of local government elections.
83. Proposing changes to Compulsory Third Party insurance that would remove motor-accident victims access to fair compensation and legal representation.
84. Seeking to get rid of licences that strictly control the number of native animals killed.
85. Spending $150m per annum on consultants, significantly more than the previous government.
86. Outsourcing fleet management.
87. Selling off prime real estate in the CBD to pay for an upgrade of Circular Quay and refusing to say how much revenue will be foregone.
88. Selling off a historic house to a wealthy private school when local public school enrolments are surging.
89. Offshoring public sector shared services and using 457 visas to do IT work.
90. Changing legislation to make it easier to privatise public spaces like beaches and parkland.
91. Privatising the state superannuation administrator.
92. Planning to privatise all public transport within the next fifteen years.
93. Forcing council amalgamations in Sydney but not in areas in regional NSW and the Eastern Suburbs and North Shore of Sydney controlled by the Coalition.
94. Privatising Inner West bus routes.
95. Selling off $9 billion of government-owned property.
96. Ramming through legislation to force the homeless from Martin Place.
97. Putting a $110 levy of Parramatta residents to pay for its light rail but not on Eastern Suburbs residents to pay for theirs.
98. Effectively subsidising private toll roads by giving free car registration to those who pay $25 a week in tolls.
99. Spending $1.6 billion on rebuilding stadiums when neither gets anywhere near capacity on a regular basis.
100. The former Water Minister sharing confidential documents with irrigation lobbyists and offering assistance.

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Do Ministers really need to be MPs?

Earlier today, NSW Labor leader Luke Foley announced that Jodi McKay would join his Shadow Cabinet as Shadow Planning Minister. What made this announcement significant was that she is not currently a member of the NSW Parliament. Ministers and Shadow Ministers have always been a member of Parliament in recent memory.

One of the recurring criticisms of state politics has been the dearth of talent in the parliamentary parties. State politics once mattered but it has now shrunk in perceived importance and it now plays second fiddle to federal politics. The shrinking political talent pool and focus on federal politics has meant that state politics has been disproportionately affected. This is despite states continuing to have responsibility for the delivery of essential services and programs that affects our quality of life on a daily basis.

Major parties have sought to address this dearth of talent through the parachuting of candidates into safe seats but more creative solutions are possible. While the Australian Constitution states that no Minister of State shall hold offer for more than 3 months unless they become a Member of Parliament, NSW does not explicitly have that prohibition. Ministers only have to be members of the Executive Council which is appointed by the Governor (with advice from the Premier). Only Parliamentary Secretaries need to be members of Parliament.

Given that NSW Ministers do not have to be members of Parliament, why not have Ministers from outside of Parliament? While it goes outside the Westminster tradition, it does occur in other parliamentary systems. So long as accountability to the Parliament and ensuring scrutiny through parliamentary processes is maintained, it should not be an issue. The greater use of committees and allowing Ministers appear at Question Time are some options.

Advocates of the Westminster system of government have argued that its flexibility is a key strength. That flexibility should be put to good use. NSW could serve as a model for rethinking the Westminster system in Australia. It would not be the first time that Labor has done this.

In 2002, South Australian Labor formed Government and included non-Labor members of Cabinet for the first time since 1904. It was the product of political circumstances where Labor was in the minority and needed support from the cross-bench to form government. The non-Labor Ministers were allowed the right to dissent and not be bound by Cabinet. It was a successful model that continued beyond a single election despite SA Labor winning in a landslide. So successful was the South Australian model that it was repeated in coalition governments in Tasmania and the ACT and again in South Australia after the 2014 election and it shaped the offer of a Ministry to Rob Oakeshott by Julia Gillard.

It was not the only experiment with Westminster governance by South Australian Labor. In 2005, Mike Rann installed two non-elected, non-Government as part of the South Australian Labor Cabinet’s senior Executive Committee, businessman, Robert Champion de Crespigny and senior Catholic Church member, Monsignor David Cappo.

The fact is some good Ministers make terrible MPs and some great MPs are terrible Ministers. It is something we should accept and have provisions that allow the recruitment of highly talented individuals who would make excellent Ministers at a state level without requiring them to become MPs. We should, however, be wary of its widespread use as it should only be used to recruit extremely talented individuals otherwise it will be open to abuse and will repeat current problems such as the appointment of party hacks to Ministerial positions.

The appointment of non-elected Ministers will not be a panacea to the broader problem of a shrinking political talent pool, only a more open, democratic and competitive process can do that, but it can be a good way to help improve the calibre of Ministers at a state level in NSW.

UPDATE 6/1/15: Not all states allow Ministers who are not a member of Parliament. Victoria, South Australia and Tasmania prohibit this in their Constitution Acts. All have Constitutions Acts that were adopted many years after Federation and have similar language to the Australian Constitution.

What is the factional breakdown at Labor Conferences?

A fortnight ago was a historic occasion for the Queensland Labor Party. For the first time ever, the Left faction had a majority of Conference delegates in their own right.

A change in balance of power at party conferences can have big implications for the party rules, who controls the party machine, preselections and delegates to National Conference (which in turn determine the National Executive).

The most notable changes in balance of power have occurred in Victoria. For many years after “the Split”, the Left had a majority at Conference. Splits and realignment amongst unions meant that the Left lost this majority in the 1990s. A realignment in the early 2000s meant that the Left ruled in coalition with the National Union of Workers (NUW) before the NUW rejoined the Right. The Right then split again in 2009 and sub-grouping aligned to Shorten and Conroy (ShortCons) formed a "stability pact" with the Left which continues to today (with the SDA back in the tent with the ShortCons).

The table below outlines who has a majority in each state branch and federal with a rough estimate of factional delegations at each Conference:

Jurisdiction	Conference breakdown	Who forms the majority?
National	Labor Right: 52% Labor Left: 48%	Labor Right majority at Conference & on Executive
NSW	Centre Unity: 60% NSW Left: 40%	Centre Unity majority
Victoria	Socialist Left: 37% Labor Unity (ShortCons): 24% SDA: 21% NUW: 8% Independent (Ferguson) Left: 5% Union and Community Alliance: 2% Victorian Independents Group: 1%	Stability Pact between Socialist Left and Labor Unity-SDA
QLD	The Left: 50% Labor Forum 40% Labor Unity 10%	The Left-Labor Unity alliance
WA	Broad Left: 65% Labor Unity: 30% Unaligned: 5%	Broad Left majority but cross-factional deals are made by sub-factions
SA	Labor Unity: 45% Progressive Left Unions and Sub-branches (PLUS): 35% Others (including remnants of the Progressive Labour Alliance industrial bloc): 20%	Labor Unity supported by 'Others'
TAS	Broad Left: 70% Labor Unity: 20% Unaligned: 10%
ACT	Left Caucus: 51% Combined Right (Centre Coalition, Labor Unity): 35% Others (ACT Independents & unaligned): 14%	Left majority
NT	The Left: 60% Labor Unity: 40%

The table shows that the Right has a majority in three branches (Victoria, New South Wales and South Australia) while the Left is dominant in the other smaller branches.

Things become far more interesting when you apply the state Conference proportions to delegations to ALP National Conference for a rough estimate.

	Left Delegates	Total Delegates
National Presidents	2	3
FPLP Leaders	2	4
AYL	1	3
FPLP	3	6
NSW*	43	109
NT	3	7
ACT	4	7
QLD	37	73
SA	13	35
Tas*	17	23
Vic	40	87
WA	27	43
Total	191	400

* Tasmania and NSW direct elect some National Conference delegates

What becomes clear is that it will be impossible to end the Labor Right’s absolute majority at Conference and on the National Executive without a shift in delegations from NSW. An absolute majority has been held by the Right following the 2004 ALP National Conference when the remnants of the Independents Alliance collapsed and seceded its balance of power role.

Unlike every other state or territory, NSW has no element of proportionality in its election to State Conference. The gerrymander has meant that the balance of power has not shifted despite national intervention in 1971 and in 2013. Recent One Member One Vote ballots held in NSW for the State and National Policy Forum have resulted in the Left electing equal numbers of candidates to Centre Unity if not beating them.

The road to a truly democratic party, one that is not dominated by the Labor Right, lies through reforming the New South Wales branch of the Australian Labor Party and changing the balance of power at National Conference.

UPDATE 13/03/15: Since this post, the Independent (Ferguson) Left has reunified with the Victorian Socialist Left.

UPDATE 06/04/17: The movement of the MUA and CFMEU from the Broad Left to a new Progressive Labor faction with right-wing unions will result in changed numbers for Western Australia.

UPDATE 31/07/17: The industrial bloc, bits of PLUS and one of the CEPU have formed an Active Left faction.

Why I don’t support the full public funding of elections

The ongoing revelations at ICAC are strengthening the case for reforming donation laws in NSW and there is an emerging consensus that change needs to happen. NSW Liberal Premier Mike Baird has said he favours full public funding and has commissioned an expert panel to investigate it as an option by December. Labor Opposition Leader John Robertson has also called for a ban on all donations and the implementation of full public funding for elections.

While I agree that political donation and expenditure laws need to be reformed, I do not support full public funding of elections. Constitutional law experts Anne Twomey and George Williams have both argued against it with good reason. Questions remain about the constitutionality of such a ban and about the practical implementation of such a scheme.

Much of the debate about reforming donation laws is based on the premise that donations equals corruption, that interest groups are “buying” democracy and influence. It ignores the fact that all political parties represent some kind of interest groups and that meddling with donations is unlikely to change that. It is also naive to think that by banning donations, groups will not seek to exercise influence in other ways, particularly seeking leverage through third party campaigns (or threats of campaigns) to extract concessions. Donations are not the only form of transactional politics.

The fact is that NSW already has the toughest set of laws in the country as this summary from the Expert Panel shows. The laws include caps on expenditure and donations, prohibited donors and regulation of third party campaigns. If anything, the recent ICAC investigations have shown that where laws are introduced, there are attempts to get around the new laws. Rather than for elections to public office, donor money may shift to factional slush funds for internal contests to preselect MPs in safe seats and the Upper House. There needs to be a greater focus on enforcement as there will be attempts to circumvent whatever reforms are adopted.

There are also practical questions about the amount of public funding available under a fully funded model and how the allocation of funding be determined. Then there is the issue for parties that do not have representation or are newly formed – how much funding do they get? How will administrative funding for political parties and membership fees be treated?

Within parties there will be questions about who gets to determine the distribution of public funding within the party to campaigns and candidates. Will it be based on previous results in the seat or left up to head office? This is my biggest concern given that political parties are not always the most democratic organisations and scarce resources will mean that candidates who are not favoured by the party machine will not be able to get the resources needed for their campaign.

Finally, there is also the assumption that public funding will not be rolled back. It ignores changes to public funding that often have a partisan undertone, for example, the Liberals decision to target unions by changing donation and expenditure legislation. It isn’t an isolated case in Australia, in Queensland, the Liberal National Party have raised the threshold to receive public funding. Overseas, Italy is ending state financing of political parties and the Canadian Conservatives raised donation thresholds and ended per-vote subsidies. It is not inconceivable that a future government tries to roll back public funding.

There is a lot that could be done such as real-time public disclosure, lower donation and expenditure caps and tougher penalties but what needs to be addressed the most are the inconsistencies between federal and state laws. The implication of Brian Loughnane by ICAC shows that there is a level of co-ordination between state and federal branches to get around donation laws. It would also address a major loophole in the NSW legislation that allows the transfer of funds from other branches of the same political party. Until these inconsistencies are addressed and the loophole is closed, there cannot be full confidence in any donations and expenditure regime.

Unions NSW are right to challenge O’Farrell

My article for New Matilda on the New South Wales political donations and expenditure laws.

Why progressives should oppose NSW-style donations laws

Over past few days, an opinion piece by Keith Ewing, a professor of public law from King’s College, has been doing the rounds on social media. In it, Professor Ewing argues that the donations laws passed in NSW effectively make labour parties illegal. It is mainly being shared by Labor Party members and, in some instances, has turned into a Greens bashing exercise.

Some Greens members have responded to the criticism. One response I saw from a Greens member was that the laws stop parties from taking money from big business and developers. From companies, maybe, but not individual developers and executives in big business.

It made me stop and wonder whether many progressives actually understand how insidious these laws are. If they have looked at the legislation and still think they are good laws, they are likely to argue in support from a small ‘l’ liberal perspective about the influence of vested interests, procedural fairness and exercise of individual choice. This is the approach of supporters of the law such as Norman Thompson and Justin Field.

Personally, I am not opposed to caps on election expenditure and the role of money in politics needs to be addressed but the laws as they are disadvantage progressives far more than they disadvantage developers and big business.

There are two key elements to the laws that progressives should know about:

1. restrictions third party campaigning by peak bodies; and
2. disincentives for organisations to affiliate to a political party.

Restrictions on third party campaigns by peak bodies

A lot of the confusion is around the restrictions on third party campaigning. Mark Lennon, Secretary of Unions NSW, has argued that the Your Rights at Work campaign would not be possible under the NSW laws while NSW Greens MLC John Kaye has claimed:

“There is nothing in the current act that would impede another Your Rights at Work movement being funded by unions.”

Which of them is correct? Well, both are in a sense.

A campaign about rights at work can be run through a third party, however, what will be illegal is the funding structure of the Your Rights at Work campaign, where a levy was placed on affiliates of the ACTU to pay for it. A levy on affiliates would be considered a “political donation” under Section 85:

(1) For the purposes of this Act, a “political donation” is: (d) a gift made to or for the benefit of an entity or other person (not being a party, elected member, group or candidate), the whole or part of which was used or is intended to be used by the entity or person: (i) to enable the entity or person to make, directly or indirectly, a political donation or to incur electoral expenditure

Under Section 96D of the Act, political donations that are spent on electoral expenditure can only come from individuals on the electoral roll:

(1) It is unlawful for a political donation to a party, elected member, group, candidate or third-party campaigner to be accepted unless the donor is an individual who is enrolled on the roll of electors for State elections, the roll of electors for federal elections or the roll of electors for local government elections.

What this means is that in order for peak bodies to run a campaign to influence voting, they would have to get individual members to donate to a third party entity. Field and Thompson think that would be a good thing but in practice it is very detrimental to progressive organisations.

Firstly, it would be an absolute privacy minefield for unions to pass on member details to a third party entity without the permission of individuals. Secondly, imagine the amount of resources needed to for a peak body to personally contact every member of an affiliate, whether they be members of unions (600,000 in NSW) or environmental groups, to get them to directly pay into a third party fund. Peak bodies are not set up in this manner & massive resourcing will be required. Given how limited resources the Left has are, the diversion of additional resources would aid the Right.

The NSW Greens have argued that the laws still allow for issue-based campaigning by peak bodies. The problem is that the definition of what is electoral expenditure is so broad that campaigning by peak bodies on “issues” during an election campaign may be seen as indirectly influencing voting. There are two relevant parts in Section 87 of the Act:

(1) For the purposes of this Act, “electoral expenditure” is expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election.

And:

(4) Electoral expenditure (and electoral communication expenditure) does not include expenditure incurred by an entity or other person (not being a registered party, elected member, group or candidate) if the expenditure is not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election.

How can one clearly show that issue-based campaigning does not have the dominant purpose of indirectly influence voting during an election? Unless an entity does not make a single demand on an issue during the election campaign and does not highlight any party responses to those demands, it is pretty hard to show that main purpose is not to influence voting. It truly is absurd.

Disincentives for organisations to affiliate to a political party

The restrictions around organisational membership of a political party are far more complex. Instead of an outright ban, the laws creates a series of disincentives for both parties and affiliates. This primarily affects the Labor Party as the Greens and Liberals do not have organisational membership but the Shooters and Fishers are also impacted. What the laws do is privilege a political party structure based on individual membership.

The ban on donations to political parties under Section 96D is well-known:

(4) Annual or other subscriptions paid to a party by a person or entity (including an industrial organisation) for affiliation with the party that are, by the operation of section 85 (3), taken to be gifts (and political donations to the party) are subject to this section. Accordingly, payment of any such subscription by an industrial organisation or other entity is unlawful under this section.

The truly insidious part of the legislation, however, is less well-known or understood. It is the aggregation of expenditure under a single cap under Section 95G that creates a massive disincentive for affiliation:

(6) Aggregation of expenditure of parties and affiliated organisations Electoral communication expenditure incurred by a party that is of or less than the amount specified in section 95F for the party (as modified by subsection (2) in the case of associated parties) is to be treated as expenditure that exceeds the applicable cap if that expenditure and any other electoral communication expenditure by an affiliated organisation of that party exceed the applicable cap so specified for the party.

(7) In subsection (6), an “affiliated organisation” of a party means a body or other organisation, whether incorporated or unincorporated, that is authorised under the rules of that party to appoint delegates to the governing body of that party or to participate in pre-selection of candidates for that party (or both).

It makes it very difficult for a union or any organisation to justify continuing its affiliation if their election expenditure is counted under the same party cap regardless of what electoral expenditure is on. As I have previously mentioned, Andrew Norton provided a good example where both would be penalised when disagreeing:

The ALP will be guilty of an offence if the spending of one or more of its affiliated unions pushes the collective union/ALP spend over $9.3 million. Yet presumably the ALP cannot control the unions. To take an example from the previous NSW Labor government, if Unions NSW campaigned against electricity privatisation during the restricted campaign period (from 1 October the year before the election) not only would the Labor Party have an unhelpful campaign, they could also be punished for something that did not do and did not want.

The intent of the laws are pretty clear when you read the legislation. The goal of this aggregated cap is to end union affiliation to the Labor Party by making organisational membership of a political parties as unattractive as possible.

What happens after the High Court challenge?

Fundamentally the current laws are an indirect attack of freedom of association by making it difficult for organisations such as trade unions join a political party. The laws are also an attack on freedom of expression as they heavily restrict the ability of peak bodies such as Unions NSW and the Wilderness Society to campaign against political parties when an election is occurring. Unions NSW is right to try to get rid of these laws through a High Court challenge.

There is a lot at stake if Unions NSW loses this case. If the High Court upholds these laws, more conservative state governments are likely to adopt similar laws. Queensland will and Victoria could as the Coalition controls both houses of state parliament. The aim would be to weaken the union movement, peak environmental groups and the Labor Party permanently.

Progressives across all parties need to understand that the Coalition only proposes NSW-style laws because they know any collateral damage to them would be far less than the damage caused to the Labor Party, unions and peak environmental bodies. Progressives across all parties should unite to oppose these proposals in other jurisdictions and work together on donation and expenditure laws that do not attack our allied social movements.

O’Farrell’s donations cap could lead to a radical shakeup of political parties

You wouldn’t know it from the coverage but the proposed changes to electoral donations in NSW could lead to the biggest shake-up of political party structures we have seen in a long time. Its impact could extend well beyond NSW and across the country.

The Election Funding, Expenditure and Disclosures Amendment Bill 2011 is the first attempt in Australia to restrict political donations to individuals. The rationale for the Bill is that it closes loopholes left by the Keneally Government when it introduced caps on donations to political parties and restrictions on electoral expenditure.

Under the proposed amendment, donations for political purposes will be restricted to individuals on the electoral roll and party affiliation fees will be banned. Electoral expenditure by political parties and any affiliated organisations will also be grouped together under a single expenditure cap.

It will severely limit the capacity of organisations with an affiliate structure that engage in third party campaigning. Groups such as Unions NSW, peak business and environmental organisations are effectively banned from receiving funding from affiliates for political activities. It also effectively legislates against political parties have affiliate members. A membership structure, based on individuals is practically mandated.

The amendments create a disincentive for affiliation to a political party. Affiliated organisations will be forced to choosing between participating in political parties as an affiliate or being able to campaign electorally as a separate organisation. It is an absurd situation. Political parties and their affiliated organisations are not one and the same and often disagree. Andrew Norton provided a good example where both would be penalised:

The ALP will be guilty of an offence if the spending of one or more of its affiliated unions pushes the collective union/ALP spend over $9.3 million. Yet presumably the ALP cannot control the unions. To take an example from the previous NSW Labor government, if Unions NSW campaigned against electricity privatisation during the restricted campaign period (from 1 October the year before the election) not only would the Labor Party have an unhelpful campaign, they could also be punished for something that did not do and did not want.

Understandably, Unions NSW has threatened to take the Bill to the High Court and challenge its constitutionality. However, if the challenge does not succeed, there may be massive implications, particularly for the ALP.

Unless ruled to be unconstitutional, an amendment that restricts donations to individuals is likely to pass both houses of NSW Parliament. Support may come from the Greens as their policy position is to prohibit “donations from corporations and other organisations to political parties, candidates, associated entities or elected representatives.”

The proposal to group electoral spending by affiliates with political parties may not necessarily pass. NSW Greens MLC John Kaye has indicated that the Greens would move amendments to exempt third party issues-based campaigns. However, it is likely that restrictions on affiliates advocating election votes would be maintained as Kaye indicated that the proposal to restrict donations to individuals is ”tough on Labor, but creates a level playing field”.

Furthermore, the adoption of restrictions in NSW may encourage similar legislation elsewhere. Agreement by the Greens and Liberals to restrict donations to individuals and effectively ban affiliation fees is very possible in other states and territories. Both may see a relative electoral advantage by weakening links between Labor and its affiliated unions. It will gradually close any loophole that allows transfers from other state ALP branches.

The ALP will, as a result of these actions, become more reliant on individual members and supporters. They will become the only source for money and campaigners. Unless membership levels turn around, the situation will necessitate far reaching party reform. What was suggested in the ALP National Review will not be enough. The debate about party reform will shift to being about electoral survival and having the resources to run an election campaign.

The reforms that will be adopted is hard to predict. There are a number of possible outcomes and most are likely to involve root and branch changes to party structure. Changes may include:

1. introduction of a rank-and-file component in the election of party leader at state and federal level;
2. a reassessment of how the formal trade union link operates, including a push to dilute the influence of unions;
3. lowering of barriers to participation in the party (whether through making party membership easier or including “supporter” participation); and
4. a greater say by rank-and-file members over administration and policy (more direct elections/rank-and-file preselections).

The main purpose of the changes would be to encourage more members. There will be a greater need to rally the party base to get donations and campaigners needed to win elections. Despite the objections of some, self-interest and the desire for electoral success will drive these changes.

These changes won’t only be isolated to the ALP. Any electoral success and substantial growth in membership is likely to encourage other parties to adopt similar changes. The gradual acceptance of One Member One Vote in leadership ballots by all political parties in Canada is case in point.

It may not have been intentional but party reform might be coming sooner than expected, courtesy of the NSW Government. The question is whether any of Australia’s political parties will be prepared for what may be coming.