The Fiscal Gerrymander

The world of political skullduggery has acquired a new phrase - the fiscal gerrymander.

Most Australians understand what a gerrymander is. Electoral boundaries are manipulated to favour one political side over another. The practice is rightly viewed as an attack on democratic competition because it allows politicians to choose their voters rather than voters choosing their politicians. Jo Bjelke Petersen ruled for a long period due to his government’s exploitation of the state’s electoral gerrymander, which over-represented rural electorates at the expense of urban ones.

But what happens when the boundaries are not drawn on a map? What happens when they are drawn around money?

That is the question raised by Australia’s new electoral funding arrangements. (Currently being challenged in one of our courts.)

Under the proposed rules, individual candidates face expenditure caps. An independent candidate contesting a House of Representatives seat can spend only about $800,000 in their electorate. On the surface this sounds entirely reasonable. Most voters do not want elections dominated by billionaires or wealthy interests capable of drowning out everyone else.

Yet the same rules allow political parties to spend vastly greater sums on generic advertising and national campaigns. Political parties might and are also subject to a divisional cap, but they additionally have a much larger national expenditure cap (currently $90 million across the country). The result is a local independent candidate is tightly constrained. The major party machine is not.

A candidate may be prohibited from spending another dollar promoting their campaign, while the party headquarters can continue flooding television screens, radio broadcasts, social media feeds and billboards with party advertising. Technically it is not promoting the candidate. Practically everyone knows it is helping them.

This is where the fiscal gerrymander emerges.

The old gerrymander manipulated geography. The fiscal gerrymander manipulates the economics of political competition.

Its defenders argue that political parties are legitimate institutions and require resources to communicate with voters. That is true. Political parties perform an important role in representative democracy.

But democracy also relies on contestability. New movements must be able to emerge. Independent candidates must be able to challenge established interests. Voters must be able to hear voices beyond those already occupying Parliament.

These rules designed to limit money in politics are deliberate rules that protect those who already possess political infrastructure, brand recognition, volunteer networks and taxpayer-funded parliamentary resources.

A start-up political movement is not competing against another candidate. It is competing against organisations that have spent decades building machinery, databases, donor networks and public recognition. As the new spending rules locks in those advantages, the system ceases to be regulated. It becomes protective.

No serious observer would support a return to the days of unlimited campaign spending. The influence of money in politics is a genuine concern. Big business, big unions and big ideology (aka billionaires wanting to foist their beliefs in the rest of us) have dominated for too long.

But there is a difference between limiting the influence of money and limiting competition.

If electoral funding laws disproportionately burden new entrants while preserving the advantages of established parties, then they are not regulating democracy. They are shaping it.

The question policymakers should ask is simple. Do these reforms reduce the influence of money, or do they reduce the ability of challengers to compete?

This matters because healthy democracies require more than fairness between the major parties. They require fairness between the major parties and everyone else.

Australia abolished electoral gerrymanders because they understood that democracy should not be rigged in favour of incumbents.

We should be equally cautious of the fiscal gerrymander.

The lines may no longer be drawn on maps, but they can still be drawn in ways that favour those already in power.

And given how the world has changed we need more transparency and better communications – not blatant skullduggery.