The Case for Public Funding and the Public Trust

These reforms would strengthen the Australian political parties consistently with democratic principles, requiring each to function democratically to qualify for public funding. This would redress serious ongoing concerns expressed by senior members of major parties that their parties’ operations are vulnerable to manipulation and breaches of their own rules and their failure to act in the face of evidence of serious wrong-doing by endorsed MPs. The Australian Electoral Commission (AEC) would be empowered to investigate alleged breaches and impose effective penalties.
The case addresses the OGP Grand Challenge:

Increasing Public Integrity—measures that address corruption and public ethics, access to information, campaign finance reform, and media and civil society freedom.

This grand challenge is founded in the public trust principle whereby politicians, as public officers, must put the public interest ahead of personal, political and other private interests.

This common law obligation to put the public interest ahead of political private interests is at odds with the anomalous treatment of public funding of political parties. The larger political parties are unincorporated private associations. As such, they are not subject to the same legal protections of the public trust that apply to almost every other entity in receipt of public funds. Indeed, their constitutional documents assert that their actions are not justiciable.[1]

Furthermore, there are recurring complaints by members of each major political party that rules providing for the rights of the membership have been thwarted.

In addition, democracy requires political parties are constituted and operated within democratic principles. However, political parties should not be required to adopt specific provisions but should be free to adopt and apply innovative rules and procedures consistent with democratic principles, approved by the AEC.

Accordingly, it is proposed that political parties accepting public funding should be bound by principles incorporated in NAP commitments to and JSCEM recommendations for include (but not necessarily limited to):

(i) A party must be controlled by its membership.
(ii) Unless a party can demonstrate (to the Australian Electoral Commission – AEC) membership control, it will not receive public funding.
(iii) Party rules and internal arrangements to create a legal relationship between members and between members and the party.
(iv) Public funding be administered by the AEC, with far reaching powers of investigation with the force of law.
(v) Every decision on candidate selection and the composition of selection bodies is a matter examinable by the AEC.
(vi) Internal party tribunals must be quasi-judicial and meet contemporary standards ensuring procedural fairness.
(vii) Members have a fundamental right to seek remedy in the civil courts.
(viii) Corrupt behaviour associated with a political party, an associated entity, an official, employee or other person authorised to act on behalf of either or an endorsed candidate or member of parliament will subject to criminal law.
(ix) The courts and the authority will be able to intervene to set aside a provision in a party’s rules or administrative practice that is oppressive, unreasonable or unjust.
(x) Public funding to operate strictly as a reimbursement scheme. Moneys should never be paid to any candidate, or party, unless documentation is provided to prove campaign expenditure has been incurred to at least an equivalent amount. That is, there should be no windfalls.

Application of these principles would enhance the integrity with which public funds are allocated to and used by: political parties; associated entities; officials, employees or other persons authorised to act on behalf of either such parties or entities; endorsed candidates; and members of parliament

Note: A party that considers such oversight as too intrusive would not have to receive public funds.

[1] E.g. (Australian Labor Party, Victorian Branch) RULES NOT ENFORCEABLE IN LAW

23.1 It is intended that these Rules and everything done in connection with them, all arrangements relating to them (whether express or implied) and any agreement or business entered into or payment made by or under them, will not bring about any legal relationship, rights, duties or outcome of any kind, or be enforceable by law, or be the subject of legal proceedings. Instead all arrangements, agreements and business are only binding in honour. … /23.2
23.2 Without limiting Rule 23.1, it is further expressly intended that all disputes within the Party, or between one member and another that relate to the Party be resolved in accordance with these Rules and the National Constitution and not through legal proceedings.By joining the Party and remaining members, all members of the Party consent to be bound by this Rule.

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