New Laws Restrict Cronyism, Not Speech


Changes earlier this year to political donation laws in NSW continue to attract opposition from Labor and union leaders, who suggest — among other arguments — that by limiting the ability of organisations to donate to political parties, the NSW Parliament is restricting free speech.

At a recent forum organised by Unions NSW considering the impact of these new laws, Unions NSW Secretary Mark Lennon reaffirmed his organisation’s plans to challenge the laws in the High Court. He launched the event saying these laws would not have allowed a Your Rights at Work Campaign and concluded his remarks, "freedom of speech … is a fundamental foundation stone of democracy in this country".

The speakers at the forum — constitutional lawyer George Williams, the Institute of Public Affairs’ Chris Berg and Wilderness Society National Campaign Director Lyndon Schneiders made clear that central to their concerns with the laws were issues of free speech. But more than that, Williams and Berg specifically equated the giving of money with free speech.

"Unions could lose their voice as they are no longer able to financially contribute to the ALP," Williams said.

Berg made it clearer: "Money can be speech … when we use our hard earned money to express ourselves, to donate to a political party, to donate to a union … we’re performing an act of speech."

Such a claim ignores the continued ability under the laws for individuals to donate to both political parties and third party campaigners such as unions. Furthermore these third parties are still able to campaign using those donations.

The argument also ignores the opportunity created by the new laws. By removing the ability of corporations and other organisations to donate to political parties and third party campaigners like unions, these organisations will be forced to engage more meaningfully with their members and supporters, as well as the electorate.

It is important to remember why the political donation laws were changed in the first place. Until the 2011 NSW state election there was a palpable distrust within the electorate of money politics and the influence of corporate political donations, particularly on property development decisions.

The view of many in the electorate was that their voice was being drowned out by the large sums of money being donated to political parties. A number of changes over several years have seen legislative amendments that have now banned all corporate political donations, as well as political donations from other organisations including unions.

But the law continues to allow capped political donations from individuals to political parties, and also individual donations to third parties like unions, environment groups, the shooting lobby and religious organisations who may wish to run political campaigns during a state election period. In this context, with the right of individuals to give political donations remaining, the free speech argument seems a narrow one. The real point of contention with these laws seems to relate to the right of one organisation, for example a trade union, to give money to another organisation such as a political party or for groups of organisations to aggregate their money in a central body.

The argument in support of union donations to political parties, which are commonly paid as affiliation fees, is that people should be able to pool their resources and speak collectively. But the reality is that they still can. A group of people can pool their resources by all donating to a political party as individuals or they can contribute to a union or another organisation that can campaign as a third party and reflect the collective views of their members and supporters.

Restricting organisational donations to political parties is important is because it means that the decision to make a political donation remains with the individual member of that organisation, not with an executive or union official, who may chose to give member money to a political party or another campaign.

If the result of these laws was to rule out a future Your Rights at Work Campaign then they should rightfully be opposed. But that is not the reality of these laws. The way money would be able to be collected and distributed to contribute to such a campaign under these laws would be different, but certainly the changes would not prohibit it.

In fact, unions in NSW are currently running a number of major public campaigns — including several responding to the O’Farrell Government’s cuts to the public service. Far from being silenced, unions and their peak body continue to advocate strongly for their members, as they should.

The opposition of union officials to these laws therefore seems to be less about freedom of speech and restricting campaigning and more about retaining their money influence over the Labor party and being able to use donations and affiliation payments to influence pre-selections and campaign priorities.

It would be very interesting to conduct a referendum or poll of grassroots union members as well as grassroots Labor members to see if they share the same concerns as their higher officials. The results from such a survey would certainly inform the public debate.

Of course all of this is now happening in the context of a total ban on corporate donations, the real benefit of the law changes and something the electorate clearly supports. It is also vitally important if we are to create the space for more diverse views to be heard at election time.

The reality is that organisational donations to political parties empower those who control those organisations, whether they are the CEO of a corporation, the president of a gun club, or secretary of a trade union. The public wants democracy based not on the influence of a small clutch of individuals who hold the purse strings, but on rational political debate, grassroots political action, and voting at elections.

If you see the changes to donations laws in NSW through a lens focussed backwards on the old model of political parties and interest groups including corporate donors and union officials deciding in backrooms the direction of money for electoral campaigning, then these laws will seem restrictive.

In contrast, looking forward to a civic society where political parties and other interest groups will need to engage more fully with the community to attract supporters and individual financial contributors, then we see a pathway to a better model, a more informed and engaged electorate and a growing trust in the political system. It is a step towards a more robust democracy based less on money.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.