Unions NSW Are Right To Challenge O'Farrell

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Unions NSW are currently before the High Court, challenging the political donations reforms introduced by Barry O'Farrell in 2012. I 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 Justin Field, who wrote in New Matilda yesterday.

Personally, I am not opposed to caps on election expenditure. 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: restrictions on third party campaigning by peak bodies, and 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 – a levy placed on affiliates of the ACTU. A levy on affiliates would be considered a “political donation” under Section 85 of O'Farrell's laws.

Further, under Section 96D of the Act, political donations that are spent on electoral expenditure can only come from individuals on the electoral roll. 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 thinks that would be a good thing. In practice it is very detrimental to progressive organisations.

It would be a privacy minefield for unions to pass on member details to a third party entity without the permission of individuals. And 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 and massive resourcing will be required, a stretch for the left.

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.

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. The Shooters and Fishers are also affected.

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 the laws do is privilege a political party structure based on individual membership. The less well-known or understood section is the aggregation of expenditure under a single cap under section 95G, which creates a massive disincentive for affiliation.

It makes it very difficult for a union or any organisation to justify continuing its party affiliation if expenditure is counted under the same party cap regardless of what it's spent on. Andrew Norton gave 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."

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.

This post originally appeared on the author's blog.

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