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Political donations and electoral finance

1 Introduction The issue of political donations and campaign finance has been the subject of recent public discussion. At the NSW State Labor Party conference in November 2009, former Premier Nathan Rees announced his Government's intention to prohibit the receipt of political donations by property developers. 1 This announcement came on the back of longstanding community concern about the making of political donations by powerful lobby groups and its perceived impact on the integrity of Government. Relevant legislation subsequently passed through both reaffirmed her Government's commitment to maintaining the ban on donations by property developers, as well as indicating the Government's support for the full public funding of election campaigns. comprehensive reviews of election donation procedures at both the State and Commonwealth level, with the Select Committee report recommending changes to the NSW scheme. This E-Brief reviews the current state of play in NSW with respect to the public and private funding of political parties, examines the possibility of instituting bans or caps on political donations and/or campaign expenditure and builds on the issues considered in the 2008 E-Brief, Political Donations Law Update. 2 Public Funding Most Australian States have a system for the public funding of political parties that go some way to reducing the costs of conducting an election campaign incurred by political parties and candidates. Although there has been considerable discussion about the desirability and effectiveness of public funding in the past three decades, the shift in Australian jurisdictions has been away from total reliance on private funding toward a mixed public and privately funded process. Proponents of public funding argue that it maximises the integrity of the electoral process by: • reducing the dependence by political parties on the receipt of