Rebuilding Australian Political Parties

• We invented the modern secret ballot—which is even called the “Australian ballot” in many places around the world. 
• We were the first nation to grant women the right to stand for Parliament and one of the first to grant women the right to vote. 
• We had the world’s first independent electoral commission, taking control over the electoral roll and electorate boundaries away from self-interested politicians. 
• We pioneered the adoption of preferential voting and the single transferable vote—two electoral systems that best strike the balance between stable government, local representation and representing the views of the majority of voters. 
• We remain one of the only nations with compulsory voting, building on an inclusive and committed civic culture that dates back from the very first colonial elections in the 1850s. 

Today, more than ever, these achievements are the envy of many across the world. Economist Justin Wolfers went so far as to call Australia's political institutions the world’s best at this year’s Boyer Lectures. Political scientist Alan Davies attributed these innovations to Australia’s unique talent for bureaucracy, and it's true that many of these democratic innovations we celebrate now were originally thought up by problem-solving bureaucrats to build public trust in our fledgling democracy. But they’re also part of Australia’s rich history of delivering a real and genuine citizens’ bargain that connected socially liberal values, strong democratic institutions, and a considered and arbitrated approach to economic reform. 

Real democratic participation has been key to that bargain and to the resilience of our electoral and political bureaucracy engagement. It was built on a foundational commitment by our constitutional drafters and public servants to genuine majoritarianism. This isn’t the cynical modern definition of majoritarianism, where merely whoever wins the most votes should rule unfettered. But rather a deeply-held belief by colonial democratic reformers that politics—from the very act of voting to the make-up of Parliament and the government—should reflect the real and considered views of as many voters as possible. This was to ensure policymakers take every step to include people in the democratic process as a way to retain faith in our democracy and ensure a commitment to settling our differences through peaceful political negotiations. 

Not only did engagement build trust in democratic institutions by connecting those institutions with everyday people, it also built a new framework for how people think about their relationship with the state. It entrenched democratic acts like voting as a personal responsibility and obligation to each other and our communities, rather than an individual right. Australians’ trust in our collective democracy is a practical and unique shared responsibility that every citizen has to each other to this bargain and the democratic settlement it's built on.

To fix representative democracy, we need to celebrate the institutions that drive it. There is real strength and resilience in systems that centre Parliaments as the central site for resolving political conflict and expressing politics peaceably. But maintaining that trust takes work. The wider the gulf grows between individual representatives, their parties and everyday people, the bigger the risk that we start on the same slide away from high-trust democracy that we have seen around the world.

Time is of the essence. While Australia’s political institutions might be world-class, trust in our democratic institutions is falling just as surely as the rest of the world. Recent research found that only one in three Australians felt like they even had a voice in government decision-making—whether that’s electing a politician who reflect their views or feeling like they had any meaningful input into policymaking on the ground—and this alienation is highly correlated with declining trust in democratic institutions in other countries. 

If anything, our strong political institutions create exactly the conditions for us to be able to experiment. We shouldn’t use our privileged position as an excuse to not innovate but see it as our duty to use our advantages to test and evaluate democratic innovations that other countries more vulnerable to political disruption can’t. We can take risks others can’t afford to. 

Focusing on declining trust rather than declining participation is a wrong first step. A focus on trust prefigures an inactive politics, one where people are not necessarily interested in big ideas about society or justice. Inactivity is inconsistent with the majoritarian politics Australia built its remarkably stable and trusted democracy on. 

Strong memberships are the foundations of strong parties who are the foundation of strong democracies—but what do we do when the parties don’t want to save themselves from fifty years of membership decline? Parliamentary parties in Australia have in that time retreated into the safety of electoral cartels. They have effectively become natural monopolies controlled by a small group of largely unregulated private entities who can coordinate together to restrict both internal and external competition. Desperate to avoid any threats to their privileged positions, the machines that run our parties are not just disinterested in rebuilding their connection with everyday people but actively resist moves to get people more involved. In doing so, they’re condemning our other democratic institutions to lose the public’s trust the way their parties have. 

These parties need a bit of a push to get back on the right track. With a bit of give and take, Democracy Dollars can rebuild our political parties and our society’s faith in democracy. We can force our cartel-like political parties to be more open, transparent and democratic while at the same time giving them a new revenue stream, while we can start tearing down the barriers stopping people from participating in political parties and civic institutions. 

In the spirit of this government’s commitment to progressive patriotism, it’s time to reforge the citizens' bargain and rediscover Australia’s proud history of democratic innovation. Australia can once again be a leader and maybe save liberal democracies worldwide from themselves. 

There are four elements to Democracy Dollars.

• First, set up an annual voucher scheme where anyone can become a full member of democratic organisations—particularly political parties—for free
• Second, cap the scheme at $60 per person on the electoral roll—which assuming 10% uptake would cost around $110 million per year, completely replacing the current public funding for political parties that hand over $52 million per year with no public benefit
• Third, make political parties meet minimum transparency, governance and integrity standards and give all members—including voucher members—full and equal voting rights and opportunity to engage with policy and strategy decisions in order to be eligible to participate in the scheme
• Finally, take advantage of the promotional nudges that encourage uptake to also encourage active participation—reminding participants to go to events, vote in elections and take part in civic debates

It’s become fashionable to be anti-party today, even among political activists. We don’t even try to defend the important role organised political parties serve in keeping our democracy healthy, functional and accessible to everyday voters—something that is equally true about organised independent networks like Australia’s Voices Movements. But any efforts to rebuild trust in our democracy that don’t embrace our existing political parties are doomed to fail. 

Parties are the most effective means for people to understand politics and overwhelmingly the path they choose to influence it. Rebuilding trust in democracy is contingent on rebuilding trust in political parties and politicians themselves, rather than trying to circumvent them. Fundamentally, this means giving everyday people more of a stake in politicians’ work by restoring public understanding of and then participation in our political parties. 

Parties aren’t passive actors, merely reflecting the timely desires of the public. Parties are agents of political change in themselves, independent of the individual members within them. At their most basic, parties fulfil three complementary roles in democratic politics: 

• governance—creating structured en-bloc interconnections with Parliament and having predictable processes for formulating policies and selecting leader; 
• aggregation—capturing and linking the concerns and values of like-minded people into a coherent and negotiated whole; and 
• integrity—entrenching and enculturating people with the rituals and norms of liberal democracy. 

I would add two more that serve, like the integrity role, to foster an underlying culture of good democracy and more importantly transform a passive citizen into an active agent for change:

• tractability—acting as linkages between an issue that invigorates an individual to political action into broader political structures and movements, and as shortcuts to help people see the cleavages and contradictions in society and the economy; and
• education—shaping public opinion, raising new ideas and creating space for citizens to explore, interrogate, debate and develop their political opinions.

This transformation of a passive citizen into an active citizen—and ensuring that process is seamless, obvious and accessible—is what matters. In fact, as Kevin Elliott argues in Democracy for Busy People, for the vast majority, politics is a sometimes activity because people are interested and engaged in politics but lack the time or inclination to get formally involved until some inciting incident calls them into action. Elliott makes the argument that reformers must care about the “unequal division of political influence [that results] from unequal busyness” and he puts the role of diverse and ideologically-tractable political parties front and centre in rebalancing that, both for voters and for activists. 

People are time-poor and—frankly—have more important things to worry about than politics. But there’ll be times when they feel animated to act. The impulse may be fleeting, which is why it’s so important that that policymakers take every opportunity to tear down the barriers that stop people turning that impulse into political action—namely, feeling like they don’t have the civic skills to know where to start and feeling alienated from the wayfinding social networks that help them navigate participation. 

Both of those barriers are really difficult to tackle and involve policymakers thinking about political parties, risking accusations of partisan bias. So it’s not surprising that a lot of policymakers have avoided the question. But that unwillingness of not just politicians but even policymakers or thinktankers to reconceptualise the relationship between parties and everyday people has condemned us to consistently misdiagnosing the problems with our democracy. If we're going to restore trust in our political institutions, we need to start by restoring trust in political parties and we can only do that with strong structural incentives and disincentives.

The core problem is this: today, fewer than one in 100 Australians are members of a political party—and as policymakers continue to treat these parties as simultaneously inevitable and inviolate, these private associations beyond the reach of regulation or accountability are more and more empowered to access special privileges not afforded to others. 

Australian political parties are—compared to other OECD countries—notoriously cagey about their membership numbers, with the few glimpses we have from leaked election reviews or political gossip. Recent reporting from Queensland suggests that party memberships might quite literally be dying out with the average age of an LNP member sitting at 72, and Labor at 53—which isn’t much better. The median Australian is 38 years old. Based on most recent academic estimates, party membership nationally is estimated at 45,000 for the Liberals, 54,000 for Labor and 14,000 for the Greens. However, more recent news suggests that the Liberals membership has likely dropped by more than 40% since that measure was taken—and without disclosures to the contrary, we can assume other parties have also contracted since. This trend isn’t new but it is accelerating. The Australian Bureau of Statistics estimated that 4% of the population were party members in the 1960s, dropping to just over 1% in 2006. We are now well below 1%. 

This was not always the case. Our democratic culture once drove Australian political parties to be as internally innovative as our electoral administration was. The Australian Labor Party was one of the earliest and most successful social democratic parties in the world in the 19th century in part because of its strong internal organising culture. The party rediscovered this passion for internal reform in the early 2010s, when they granted members a say over their federal party leadership. The Country Party in New South Wales saw unprecedented growth in the 1950s and 1960s by letting new members join by bank order rather than through the traditional branch system—something that is now practically universal among almost all member based organisations—and then again in the 2010s as the Nationals with experiments with public primaries that gave the local communities they were losing to Community Independents a direct say over who their representative would be no matter who won. 

What’s different about these 21st century innovations is that they were driven less by a historic commitment to the citizens’ bargain and political majoritarianism than by desperate attempts to stem the slow but terminal collapse of grassroots party membership and the terminal leadership instability that management by party elites brings.

In fact, while we were a world leader in the 19th and early 20th centuries, the pace of our innovations slowed after World War II, and by the 1990s they’d practically stagnated. It’s no coincidence that it was around that same time that major political parties globally—especially parties of government—moved away from seeing themselves as vehicles for like-minded people to organise for change and towards the centralised, elite “cartel party”. The innovations of the last forty years have either been written off as failed experiments or been subsumed by illusions of democratisation that nonetheless entrench the power of incumbents. There is clearly a link between Labor and Liberal parties backing away from greater membership engagement and democratic innovation and the cratering of their membership numbers—and connection with everyday people. 

Reflecting on the collapse of party membership, policy analyst Sam Roggeveen wrote in Our Very Own Brexit: 

the parties have responded with their own withdrawal, eroding the links between politics and the public: from mass membership they have moved to reliance on a cadre of professionals, and they have increased their financial dependence on the state and wealthy donors.

Back in 1994, former Liberal Senator Chris Puplick wrote Is the Party Over where he said of the future of Australian political parties “there are now only three types of people who join: the mad, the lonely, and the ambitious.” Party membership has dropped by half again since he wrote those words. Even with a more charitable view of why people join parties today, how can those parties be trusted to identify and select local candidates, canvass local problems, think up new solutions, aggregate their voters’ values and needs and all the other important civic functions parties do if only a tiny fraction of people can be bothered joining.

Right now political parties receive huge sums of public funding and exclusive privileges in our electoral and legal systems for very little by way of public benefit for everyday Australians. As a result, there’s very little incentive for them to change in ways that would make them more open, transparent and build—rather than undermine—trust in our democratic institutions. If we accept that they are critical to the health of our democracy and also recognise that parties around the world consistently refuse to take the necessary actions to save themselves, it may end up incumbent on the state—in recognition of the important role these parties play in good governance and a stable, trustworthy democracy—to use whatever tools are available to them to push those parties towards reconnecting with everyday people. 

It isn’t that Australians have switched off. There’s still a clear appetite for people to be active citizens. It’s just that they’ve stopped being active in parties, which are the places that matter to our long-term national wellbeing. And it’s critical to that wellbeing that we work out why and how to fix it—soon.

In 2023, the Trust and Satisfaction in Australian Democracy survey found that 16% had tried to have a persuasive political conversation that year, 13% had written or spoke to a politician, 6% had attended a protest, 4% had attended a local council meeting and 4% had been actively involved in a political campaign or advocacy group. These figures have remained fairly stable over the last ten years. Despite Australian research showing young people feeling like electoral democracy does not work for them, the same research shows that young people are—broadly—highly engaged in politics and find alternative outlets for their desire to act outside traditional or formal politics. Young people especially have higher distrust in political institutions and feel failed by them, abandoning those institutions in favour of more direct action.

So why has political party membership dropped off while other political activity has stayed steady? That Trust and Satisfaction in Australian Democracy survey has some insights into why memberships have dropped. While half the population are either disinterested in being more active or uninterested in civic affairs entirely, the remainder are equally split between feeling like their participation won’t make a difference, that they don’t have the time or a friend who can get them more involved, and that participation isn’t fair, open or accessible. At its core, there is a disconnect between the institutions that make decisions, design policy and set the borders of acceptable political discourse—political parties—and everyday voters, which manifests as a feeling that democratic participation can’t build something new anymore.

Australians face a tension between feeling like they’re an audience watching politics and not knowing how or why they should do more. They view themselves as observers of, rather than participants in, formal politics. In fact, 70% felt they had no influence on local and state politics, rising to nearly 90% for federal politics. On a global scale, Australia ranks below average compared to other OECD nations, on par with the United States and Japan for people feeling like they have any meaningful ability to influence politics. The nation that once led the world on democratic and electoral reform should be aiming for better than middle of the pack.

A 2016 study found that, contrary to popular opinion, Australians do not necessarily want more compromise, consensus, business-thinking and “getting on with the job”. They think extensive debate and inquiry in Parliament is important, want their politicians to stand by their promises and principles, and want to be more engaged in formal politics. These surveys also found a significant difference between what everyday people think is important in a democracy—both in principle and in terms of practical reforms—and what politicians and senior journalists feel comfortable with. 

Whether that’s cynical concern for their own loss of power and influence or a belief that they know better, politicians pre-emptively write off democratic reforms that all evidence suggests are broadly popular. While surveys find that voters want more party democratisation, smaller electorates, and more free votes in Parliament, politicians mainly just want longer Parliamentary terms or more investment in civics education—things that leave their own privileges untouched.

Over the last ten years, media and civil society figures have become enamoured with “deliberative democracy” to circumvent the distasteful messiness that parties embody. Those figures and especially deliberative democracy advocates like to talk about how things like citizen’s juries would close our trust gap—but the arguments for broadening their scope beyond elaborate “consultation” mechanisms on a local policy issue, Tomás Daly argues, result in deliberative democracy processes “simply being used as ‘bypass institutions’ to avoid the difficult and overdue work of reforming existing underperforming political structures such as parliament by creating a new body to replicate what, ideally, parliament should do.” 

Even if deliberative democratic processes manage to command democratic legitimacy by being broadly representative, many fall afoul of what Kevin Elliott calls the paradox of empowerment: the well-documented process where “increasing opportunities for greater participation may often perversely function to further empower existing elites and empowered groups rather than broadening access to power to marginalized groups”—even where those opportunities are carefully calibrated to be representative of the population at large and accessible as practicably possible. Further—and most unassailably—deliberative institutions under our existing Constitutional framework can never overrule or bind future Parliaments. 

Generalist campaign outfits like GetUp are sometimes spruiked as a replacement to traditional parties, appealing to “people’s changed preferences to participate in politics on the basis of issues and on an ad hoc basis”. On their face, they are a benign realignment of politics as younger, time-poor and tech-rich people frustrated with intransigence on the climate and housing crises move to a more bespoke activism that suits their lifestyle. There are however deeper political problems with campaign outfits taking over from legacy political institutions. For starters, these organisations still often lack strong internal democracy or pathways for institutional capacity-building for engaged activists outside of their employed organisers or designated leaders. 

While they share a lot of the same attributes with those digital-first insurgent parties that swept Europe in the mid-2010s, Australia's outfits seem to have no intention of translating that insurgent support to taking direct political power or even activating their membership in a deeper way. Which might go some way to accounting for their lack of longevity. 

In a broadly functioning liberal democracy, any social media driven political movement is, fundamentally, not a democratic one—they are participative but illiberal and are more therapeutic or status-signalling than any challenge to power. While social media might hold revolutionary potential in illiberal regimes, their democratic potential in systems with functioning democratic institutions isn’t as clear and by fixing their participation on platforms that are increasingly illiberal themselves, they risk accelerating the fragmentation of our shared information environment and even shared values those platforms are causing.

Democracy Dollars, or democracy vouchers, are an experimental approach to public campaign finance that’s seen a now-decade long pilot in Seattle expand into Oakland and Los Angeles. The programme has been evaluated positively. It has a higher approval rating than other public campaign funding models, resulted in seven times more unique donors than previous including with donations larger than the value of the voucher, and saw a significantly higher uptake among underrepresented cohorts—especially women, lower-income people and younger people. In brief, the Seattle programme sees voters receive four vouchers worth $25 each—funded from a dedicated property tax—that they are allowed to give to any candidate at a municipal election. Those candidates need to meet certain eligibility and transparency thresholds to access the funds. Over four elections, participation in the scheme has fluctuated between 4% to 8% of eligible voters—but participation is much greater than typical political donation rates among voters from low socio-economic backgrounds or people speaking a language other than English at home. 

Most people advocating for this in Australia see Democracy Dollars—like their US counterparts—as replacements to existing campaign finances (either political donations or public funding). They see them as solving a problem of fairness and political equity. But with just a little tweak, this same approach could solve a totally different problem that’s much more central to the crisis of trust in our democratic institutions: the problem of participation. Rather than being an alternative approach to campaign finance, I see this as a vehicle for encouraging people to join and get active in democratic organisations. It is a direct way to connect greater internal democracy and member engagement with the incentive that most political parties seem to respond most strongly to: more money. 

But it’s not just parties who could benefit from a scheme like this. In fact, opening this scheme up beyond just parties is key to it working. Any not-for-profit organisation that organises themselves democratically and advances the causes of democracy, civic engagement, public policy, and good governance should be able access this scheme. That way, if someone is diligently non-partisan, they could choose to use this voucher to become a non-industrial member of a union or industry association, contribute to a political foundation or thinktank, join a campaign or advocacy organisation, or even sign up to a cooperative enterprise. 

Those who sign up through such a scheme must be entitled to full membership, with the privileges and entitlements afforded any other full member. There is nothing stopping organisations offering additional membership tiers like they already do based on income, work status or willingness to contribute, provided the basic membership still affords members the right to vote in internal ballots and have a genuine say over strategy and policy. Organisations would of course retain the right to review and refuse membership, provided that the grounds and eligibility criteria are publicly disclosed. 

Such a scheme would need regular nudges to encourage uptake whether that’s a notification in myGov that you haven’t used your voucher this year or a reboot of the iconic 1980s Life Be In It campaign. All of these are opportunities to not just encourage uptake but to encourage active participation—reminders to go to events and meetings, to vote in internal elections, take part in civic debates. Like a muscle, civic skills need exercise to stay fit and when you’re busy, it’s easy to stop practising and lose track of how to get started again. As Andrew Leigh wrote in Disconnected, “there is little benefit to civic society if someone pays annual dues to a political party and does nothing else.”

Imagine a future where, every year, you get a letter in your mail reminding you of your patriotic duties to engage with our nation’s democracy and to help your community with a prompt to join—for free—a democratic organisation of your choosing. This annualised prompt would remind people that they have a special pool of money to spend exclusively on joining one of our proud democratic institutions—or miss out on a free lunch.

Now is the moment to make a big change like this. Big disruptions to our electoral systems—like the imminent expansion of Australia’s Parliament—trigger even larger changes to how politics and campaigning are conducted. In 1948, the creation of new seats in Parliament triggered an arms race in new campaigning techniques, seeing the widespread adoption of in-person canvassing over previous institutional bloc campaigning that defined pre-war elections. We’ve seen a return to grassroots campaigning in recent years, with Labor, Greens and independents across the country all attributing electoral successes to more people campaigning more often—especially in an increasingly fragmented information environment. Smaller, more competitive electorates will only accelerate this shift. If those parties want to hold off that competition, they need to mobilise more supporters, keep them engaged, trained and passionate, ready for on the ground campaigning. Otherwise they might find themselves pressured on more fronts than they can manage. A scheme like this might be the push these parties need to mobilise the people needed to not get outmanoeuvred in all these seats with no incumbency advantage.

A simple scheme—signing up to organisations directly and choosing to use your credit—would put the onus on the organisation to recruit members and acquit to get payments. The extant schemes in the United States follow this model, where voters are mailed their vouchers each year alongside a reply paid envelope, a scannable link to a webportal, or advice that they can hand it directly to a candidate. 

Organisations could put a “pay by voucher” option on their membership forms with a mechanism for quarterly acquittals to access the funding, while a central government web portal could direct voters to sign up to the 50 largest organisations in their state by membership. A more complex scheme—building a sign-up service into MyGov and prompting people to use their voucher in their annual income tax return—puts the onus on the state to get people to join. This model where a voucher is distributed through the tax return process has also been floated by French economist Julia Cagé, with her model recommending that the remainder of each year’s fund that is unallocated by vouchers be distributed proportionally by election results. 

Regardless of how it is administered, either scheme would require some kind of data-matching between agencies to build a system of identifiers to distribute and disburse the vouchers. The likely mechanism would use either the electoral roll or tax file numbers. There are currently just over 20 million tax file numbers registered to individuals in Australia and of those nearly 11 million complete a tax return each financial year. Just over 18 million people are on the electoral roll. Either would be more than adequate safeguards against fraud. If even a fraction of people eligible sign up, and a fraction of them become active members, that’s a huge boost to Australia’s sluggish political participation rates and a reconnection of parties and society at large. 

Most parties’ annual membership fees start at around $20 a month but given the volume of sign-ups a scheme like this would drive towards participating organisations, even a $20 annual contribution per member would be a very significant windfall. We can assume that the low range of takeup would be around 6% based on the Seattle experience while aggressively promoted voucher programmes like Victoria’s Power Saving Bonus tend to have a maximum 25% uptake. We can also assume an administrative overhead of roughly $2 million a year to spin up a branch sized element within the relevant department to oversee this work. With those figures in mind, here’s a rough estimate of how much a programme like this would cost.

Estimated Commonwealth public funding going to each political party and affiliates over one electoral term

Credit:

Author analysis

By comparison, political parties currently receive just over $52 million per year in public campaign, administrative and other sundry funding. The Australian public should expect to get some social good out of these windfall gains, and tying public funding to membership recruitment is a way toward that. This would be more than enough to completely replace that funding like The Australia Institute advocates for while ensuring Australians feel like they’re getting value from this programme rather than simply having slightly more control over how the money gets disbursed.

People will—correctly—argue that it isn’t clear that cost is the main barrier to people joining political parties. While our membership fees are on the higher end globally, for most Australians the barrier isn’t financial cost but opportunity cost. There is an implicit time-cost in developing the civic skills and personal networks needed for people to feel comfortable joining parties—and when the trade-off is between that and precious time with families and friends or just time off to recharge, it’s hard to justify that sacrifice without seeing any ready benefits. 

The Commonwealth’s 2023 Trust and Satisfaction in Australian Democracy survey found that among those remotely interested in getting politically involved, the biggest barriers were the trade off between the time-cost to learn how to get involved, find likeminded people to get involved with and maintain that ongoing participation — and the impact or influence their participation would even have. Why would someone invest time in learning about, joining and becoming active in a party if the party’s machinery isn’t giving them real influence over its decisions. This goes beyond civics education or even building and maintaining civic skills because neither of those address structural lack of voice.  

From the perspective of a prospective member, at most the voucher scheme creates a "use it or lose it" nudge which will help push them past the cognitive load to sign up in the first place. Even if it’s just a small barrier, the thought of putting up your own money to join a political party creates decision fatigue—while replacing this with a voucher scheme creates an endowment effect of having money to spend, flipping the incentive on its head. And while joining a political party won’t in and of itself guarantee they become active internally, it removes both the cognitive and social barriers that stop someone turning their impulse to stand up to taking real political action. Even a small number of people joining parties off the back of the scheme would create social proof of the value of being involved and amplify the network effect of having friends and family involved. 

The real targets for behavioural change, though, are the parties themselves. Democracy dollars would force parties—both through the potential of additional revenue and additional governance rules imposed on them to be eligible to participate in the scheme in the first place—to make participating easier and to maintain high participation rates to keep the public money rolling in each year.

Despite their importance to the functioning of our democracy, Australia is an outlier in how little we regulate political parties compared to the many special privileges we give to them in our electoral system. Almost uniquely, parties in Australia are left largely to their own devices except for legal registration requirements, but nonetheless receive significant and exclusive privileges including public funding. Compared to the United Kingdom, New Zealand or even the United States, our laws expect very little from political parties beyond requiring financial compliance checks and proof of a minimal number of affiliated supporters. 

Many political elites still maintain kayfabe that their parties are still entirely private associations—despite the immense public funding they are entitled to and exclusive privileges that being a party brings. In Party Rules?, Anika Gauja describes a regulatory disconnect between Australia’s arms-length approach to party regulation and its intense regulation and scrutiny of the internal operations of charities and not-for-profits. Unions in particular are required to engage the electoral commission to oversee their internal elections. 

Rather than think of political parties as purely private associations, we should think of them as analogous to public utilities. Parties are organisations that straddle the private and public spheres because they exercise an effective monopoly over a sector—in this case influence and control of government—that’s in the public interest. This process of utilitisation has been charted in The Law of Politics by Graeme Orr, one of Australia’s most eminent scholars of electoral regulation. 

Parties are effectively natural monopolies controlled by a small group of largely unregulated private entities who can coordinate together to restrict both internal and external competition is definitionally cartel-like behaviour. Using state regulation to force these entities to create conditions for newcomers that generate genuine competition while protecting consumers is good regulation of public utilities. 

We already know a lack of effective political voice, a lack of clarity around influence or impact, and the simple opportunity cost of investing time in navigating our party systems are the key barriers disempowering people in our democratic system—but cartel party theory tells us that party machines aren’t incentivised to remove those barriers. In fact, they’re disincentivised from opening their parties up at all. 

Surveys of Australian voters suggest that parties’ internal democracy (or lack thereof) is one of the big drivers of growing distrust in Australia’s democracy at large. That’s why introducing minimum governance standards is one of the most important possible reforms to our electoral democracy. But while very large and plentiful carrots are already afforded to political parties, the only way forward to improve the governance and transparency of political parties is by offering even more carrots to make them able to stomach any sticks. 

Admittedly, it’s hard to justify yet another increase in public funding for political parties in the face of last year’s stratospheric increase that takes the funding the Commonwealth gives to political parties (and their various affiliated entities and elected representatives) to over $156 million per term.

Estimated cost of a national Democracy Dollar program based on current electoral roll figures

Credit:

Author analysis

It’s hard to justify unless that increase delivers a different public benefit altogether: wrenching these political parties open and exposing them to public scrutiny, public oversight and public control. It’s time that politicians and their parties open up to the public with more members and greater transparency in exchange for larger public funding systems that actively empower everyday people to participate in our democracy. 

There have been attempts at tightening party regulation in Australia in the past—with mixed success. Party registration requirements have been made more restrictive both nationally and in many states in response to various “preference harvesting” scandals. Kevin Rudd’s 2009 electoral reform green paper noted that “parties should be required to conduct themselves democratically, responsibly and professionally… [to] foster a civic culture” while a 2014 NSW panel of experts determined that “public funding should be conditional on good governance practices and assurance that the public funds are expended and accounted for appropriately… [and is] important step towards restoring community trust in politicians, parties and government”. 

As an international benchmark, one of the most robust laws on the internal regulation of political parties is the German Parteiengesetz, which sees the function of the party as: 

bringing their influence to bear on the shaping of public opinion; inspiring and furthering political education; … promoting an active participation by individual citizens in political life; training talented people to assume public responsibilities;… [and] ensuring continuous, vital links between the people and the public authorities. 

Total and provable compliance with these laws are preconditions for contesting elections, receiving public election funding or receiving any of the regulatory or tax privileges being a party brings. 

Even New Zealand decided to introduce a minimum standard for internal party democracy and require candidates be selected either by a vote of party members or through delegates to a party convention, following the 1986 Royal Commission into the Electoral System that led to the adoption of its now-celebrated mixed-member proportional system. The regulations ensure a minimum standard while providing a broad scope within it, allowing parties to “organise selection processes as they wish, acknowledging the political reality that selection decisions often need to be made quickly by a centralised body, and may often override majoritarian tendencies within the party to install candidates from minority backgrounds”.

Democratic organisations, especially parties in receipt of millions of dollars in public funding should be required to—on a centralised public register much like those imposed on unions through the former Registered Organisations Commission and on charities and not-for-profits though the Australian Charities and Not-for-Profits Commission—publish: 

• key governance structures and policies, including their constitution, eligibility and conditions for membership, organisational structure, number and status of employees, and mechanisms for internal dispute resolution;
• key financial information, including a broad overview of operational budgets, remuneration for senior staff and elected positions, receipt of any government grant, high value contracts and grants to other organisations, and schedules of membership fees; and
• membership information, including overall membership figures, demographics like location, age, gender and LGBTIQA+, CALD or First Nations identity, and participation in internal committees and working groups.

For most democratic organisations that aren’t political parties, they’ll already do this. And notably none of this requires them to conduct themselves in a more democratic way, impose external rules or forms on a party, or expect them to disclose sensitive strategic, campaign or policy deliberations. 

That is why, in order to access the Democracy Dollar voucher scheme, organisations would also need to commit to:

• ensuring their internal elections are genuinely free, fair and contested without incumbents leaning on the scales by using staff to campaign on their behalf or tithing staff to defend their own elected positions;
• giving all members an equal and genuine opportunity to contribute to important strategy and policy decision-making;
• publishing reports on internal elections, including eligibility to vote and nominate, the position descriptions of elected positions, actions taken to promote and recruit potential candidates and to promote turnout and formality, and comprehensive turnout analysis including how that compares to the demographics of the broader membership roll; and
• disclosing any agreements made with other parties on the conduct of elections, how and whether to avoid electoral competition between them, or the formation of governments and the policy and Ministerial benefits afforded to each of the signatory parties.

Organisations of course could choose not to participate if they don’t want to meet these pretty minimal standards. Nor would participation in the scheme necessarily make these internal rules and contests justiciable to members, only giving the vouchers’ administrating body power to withhold or suspend payments. But in choosing to not make their internal processes more transparent and democratic, those organisations pass up a very sizable income stream. Carrots and sticks.