Unions Lose Their Influence – But Not Their Voice


On 16 February this year the Election Funding, Expenditure, and Disclosures Amendment Bill 2011 was passed by the NSW Legislative Assembly. It had been returned to the Lower House following the passage of an amended bill with the Greens voting with the Government earlier that same day.

This is a historic step in our country. New South Wales has become the first state in Australia to ban all corporate contributions and only allow individuals to give to political parties. This bill is groundbreaking reform in Australia since it bans political donations from corporations and other organisations, including contributions of up to $1.7 million a year in affiliation fees from unions to the NSW Labor Party.

Many organisations and the NSW Greens have been pushing for this reform for years.

A recent article in New Matilda by Mark Lennon of Unions NSW misrepresented the impact of the new political donations law in NSW. Lennon conflates the changes with some supposed restriction on the ability of the union movement to run another campaign along the lines of Your Rights At Work. He also also fails to really spell out the primary concern for many union leaders about this legislation — a ban on affiliation fees.

There has been substantial misinformation circulated in relation to the implications of the new legislation. It does not stop an individual making a political donation to a political party, nor does it stop an individual making a political donation to what is known under the law as a third party campaigner — and this includes unions. 

Amendments to the bill introduced in the NSW Upper House mean that there is no limit on the amount of money an individual, unions or other organisations can donate to a third party campaigner, including Unions NSW, for running genuinely issued based campaigns — ones that are not for the primary purpose of promoting a party or candidate or influencing a vote in an election.

It is not correct to claim that the Your Rights at Work campaign would have been impossible under the new laws. The Your Rights at Work campaign was a federal campaign and is not subject to the NSW laws.

In the unlikely event that the federal government enacts similar legislation, such a campaign could still be mounted. If the primary purpose of the campaign was to influence a vote in an election — and it would be fair to assume it was given the subtitle "worth fighting and voting for" — then political donations made for the purposes of funding the campaign could still be obtained from individual union members or individual members of the public.

In addition, such a campaign could very easily get around that restriction by focusing its primary objective away from advocating for a particular vote. A large part of the Your Rights at Work campaign was an education campaign outlining the problems with the Work Choices law. This type of issues-based campaign would be unlikely to be considered electoral communication expenditure and so the money for the campaign could come from anywhere.

Any argument that the new law is a "restriction on political expression" is clearly incorrect. Unions and other organisations can run campaigns to educate the public on any issue at any time.

It appears that a major concern of union leaders is they no longer will be able to pay huge amounts of money to the NSW ALP in order to affiliate to the party. This affiliation allowed them in the past to have a major say in the party’s operations, policies and pre-selections.

Several commentators believe that banning unions from paying affiliation fees to the Labor Party could lead many or most unions to sever their ties with the Party. Such disaffiliation from the ALP would lead to union bosses losing much of their power.

I argued last year when the bill first passed the lower house that the NSW ALP would now have to rely on its grassroots members to contribute to the party and run its campaigns. The power of the "faceless men of Sussex Street" would be diminished, and the proposed reforms by such party elder statesmen as John Faulkner and Rodney Cavalier may ultimately be implemented. I wrote that this could only lead to a more democratic and competitive Labor Party. This renewal of the party could backfire on both the Coalition and Greens since it would make the ALP more attractive to the public as a truly progressive party.

The well known Labor Party campaigner and former lobbyist Bruce Hawker also argued later in the year that such a ban would most likely cause unions to disaffiliate, leading the party to rely on members for support. This would result in greater power for the rank and file of the party. Hawker gives an interesting example of what happened when Canada introduced similar law reforms about a decade ago.

Canada’s New Democratic Party, which is similar to our ALP, reduced the voting rights of unions in their party from 50 per cent to 25 per cent. This led the party to involve their membership more in the party’s decision making and fundraising. Over the past decade the party’s number of MPs increased from nine to 103, making it the dominant centre-left party in that country. This party became the official opposition party in Canada in 2011 for the first time in Canadian history.

Hawker believes the NSW legislation could end up being the ALP’s salvation.

The current bill built on the Labor government reforms passed in 2010. There is still much work to be done in the future, especially reducing the absurdly high amounts of money third party campaigners can spend on election campaigns and stricter enforcement of expenditure caps for candidates.

Reform has moved slowly but in a positive direction over the past few years. Hopefully, the move toward cleaning up the NSW electoral funding system will continue so that this state will be the beacon for reform throughout Australia.

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