Campaign finance in Australia: What are the issues and how are they perceived by citizens?

Australians increasingly feel estranged from their representatives. According to the Australian Election Study, record numbers of Australians are concerned that the government is run not for them but for ‘a few big interests’?  Cross-national data suggests that there is more to this than the broader democratic malaise affecting the world’s developed democracies. By global standards, Australia performs poorly on measures of the integrity of campaign finance and the influence of money in politics. This has implications for the health of Australian democracy, as well as attitudes towards it. In a new article in Political Science, as part of a Special Issue on Electoral Reform and Voters’ Behaviour in Australia and New Zealand, we examine Australia’s campaign finance arrangements and citizen attitudes towards the influence of major interest groups.

Across several measures, Australia underperforms on campaign finance integrity compared to other democracies around the world.

Data from the Perceptions of Electoral Integrity (PEI) expert survey shows that Australia ranks 26th out of 33 OECD countries on the campaign finance dimension of electoral integrity, as shown below. Moreover, Australia’s campaign finance index scores have fallen substantially in its two most recent elections, from 57 in 2013 to 50 in 2016. The campaign finance index combines several indicators including transparency and equitable access to political donations.

Figure 1. Perceptions of Electoral Integrity campaign finance index scores in OECD countries

fig 1

Source: Perceptions of Electoral Integrity (PEI) 6.5.
Note: Figure shows country scores on the campaign finance sub-dimension of electoral integrity (scale 0-100).

Why is Australia underperforming?

To understand what is driving Australia’s poor performance on campaign finance integrity, we compared Australia’s campaign finance arrangements with countries in the OECD and around the world. The table below shows that Australia’s federal requirement to report finances, the provision of public funding for political parties and the newly introduced restrictions on foreign donations are in line with global standards.

However, in a number of other areas of campaign finance legislation Australia’s position falls short of that adopted by a majority of OECD countries (shown in parentheses in the table 1.), such as the absence of limits on:

  • donations to political parties (55%);
  • candidate spending (64%); and
  • party spending (55%).

Table 1. Australia’s campaign finance arrangements in comparative perspective

Regulation Australia Yes (%)

OECD

Yes (%) Global
Ban on Anonymous Donations to Candidates No, but specific limit 36 50
Ban on Anonymous Donations to Political Parties No, but specific limit 52 60
Ban on Corporate Donations to Candidates No 41 25
Ban on Corporate Donations to Political Parties No 45 29
Ban on Foreign Donations to Candidates Yes 58 55
Ban on Foreign Donations to Political Parties Yes 67 72
Ban on Other Form of Donation No 61 58
Ban on Trade Union Donations to Candidates No 39 28
Ban on Trade Union Donations to Political Parties No 42 29
Candidates have to Report their Finances (campaigns) Yes 82 68
Political Parties have to Report their Finances (elections) No 69 58
Political Parties have to Report their Finances (regularly) Yes 97 81
Limit on the Donation to Candidate No 48 36
Limit on the Donation to Political Parties (time-period) No 55 39
Limit on the Donation to Political Parties (election) No 18 20
Limit on Candidates’ Spending No 64 51
Limit on Political Parties’ Spending No 55 34
Direct Public Funding of Political Parties Yes 94 71
Political Parties/Candidates have to reveal identity of donors Sometimes 27 45

Source: International IDEA Political Finance Database via the Quality of Government Standard Dataset.
Note: The table incorporates the 2018 amendment to ban foreign donations to candidates and political parties in Australia.

Australia’s regulatory environment creates risks for donors to exert undue influence on government. Although it is difficult to discern instances of undue influence by political donors, previous research shows that large businesses allocate their donations strategically. Various cases in the past have highlighted how donor interests and patterns of donations intersect with the policy agenda (see here and here). While there have been many reforms at the state-level, reforms at the federal level have been minimal, where the stakes and donations are highest.

The weakness of Australia’s campaign finance arrangements underscores the importance of developing a better understanding of public attitudes towards these arrangements and the influence of donors in the nation’s political life.

What do citizens think?

Data from the Australian Election Study shows that growing distrust of the political system in Australia extends to the role of various interest groups in politics. A record high 56 percent of Australians believe that the government is run for a ‘few big interests’, compared to only 12 percent who agree that the government is run for ‘all the people’. Meanwhile three quarters of Australians believe that big business has too much power—the highest level on record since the question was first asked in the 1960s (see Figure 2).

While citizens have become increasingly concerned about ‘big interests’ generally, this does not apply to the influence of trade unions where citizens have become a lot less concerned since the 1980s (a trend which is linked to a decline in union membership overall) (see Figure 3).

Figure 2. Citizen attitudes on who the government is run for

Fid 2

Source: Trends in Australian Political Opinion: Results from the Australian Election Study 1987-2016.
Note: Estimates are percentages. The question is worded, ‘Would you say the government is run by a few big interests looking out for themselves, or that it is run for the benefit of all the people?’

Figure 3. Citizen attitudes on the power of trade unions and big business

Fig 3

Source: Trends in Australian Political Opinion: Results from the Australian Election Study 1987-2016.
Note: Estimates are percentages. The question is worded: ‘Please say whether you strongly agree, agree, disagree or strongly disagree with each of these statements’ with listed items including ‘the trade unions in this country have too much power’ and ‘big business in this country has too much power’.

What might be driving citizens’ attitudes towards the influence of major interest groups in Australia? Previous studies undertaken in the U.S. show that these attitudes are shaped by individual characteristics. However, current research is divided on whether citizen attitudes are also shaped by the context of campaign finance arrangements.

In our article, we examine what explains perceptions of the influence of major interest groups, using Australian Election Study survey data from 1990 to 2016. By using public opinion data over multiple elections, the paper investigates the impact of characteristics of both elections and individuals on perceptions of interest group influence.

Influence of big business is worrying voters

The results indicate that citizens are more concerned about the influence of big business and other ‘big interests’ in politics when the Liberal-National Coalition is in government. Although this is drawn from a small sample of elections (11), this finding may suggest that citizens have a more sophisticated understanding of political finance than they are often given credit for.

The Liberal Party receives the greatest campaign contributions from business, so when they are in government, it could be inferred that big business has a greater influence on politics, given what we know about how donors provide contributions strategically. Much in the same way, it could be perceived that unions have too much influence when Labor is in government, although this relationship is not significant in the results.

We also find that various characteristics of individuals affect attitudes towards the influence of major interest groups.

First, partisanship matters. Labor and Greens partisans are more likely to believe that the government is run for a few big interests and that big business has too much power. On the other hand, Liberal and National partisans are more likely to believe that unions have too much power. In other words, citizens are more concerned about the influence of donors that disproportionately contribute to the other side of politics.

Second, whether one is an electoral ‘winner’ or ‘loser’ influences attitudes. Those who did not vote for the party that won the election—the ‘losers’—are more concerned that the government is run for a few big interests.

Third, just as perceptions of the economy influence voting behaviour and other attitudes towards the political system, they also affect perceptions of the influence of various interests over elected officials.

The state of public perceptions of representative democracy in Australia provides an imperative for policymakers to take measures to assure voters that political elites are accountable to citizens above other interests, including those of political donors.

Our results indicate that attitudes towards the influence of big interests in politics are shaped by both election context and individual characteristics. This suggests that reform efforts aimed at changing the context of donations, could have a positive impact on citizen attitudes towards the political system.

Indeed, there is evidence that the public would support campaign finance reform. Reforms in line with global best practice, such as caps on donations and campaign spending, as well as transparency efforts, such as lowering the disclosure threshold for donations, could serve to strengthen democracy in Australia.

This blog has been adapted from Cameron, Sarah and Thomas Wynter. 2018. ‘Campaign finance and perceptions of interest group influence in Australia’. Political Science. 70(2): 169-188. https://doi.org/10.1080/00323187.2018.1562307

Sarah Cameron is a Research Fellow in the School of Social and Political Sciences at the University of Sydney. She has contributed to the Australian Election Study and Electoral Integrity Project. Her research focuses on elections, comparative political behaviour, and Australian politics.  She is the co-editor of Electoral Integrity in America (2019, Oxford University Press).

Thomas Wynter’s research focuses on political psychology, public opinion, and elections. He holds a PhD in Political Science from the University of Sydney and has contributed to the Electoral Integrity Project. He is the co-editor of Electoral Integrity in America (2019, Oxford University Press).

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