What if there was a way of reforming how our elections are funded that relied on the choices made by voters themselves rather than the politicians or big donors?
Let me introduce you to the idea of democracy vouchers, a system that is has been used in parts of the United States and which has—according to detailed research like this—had a positive effect on the jurisdictions in which they have been used.
I’ll explain exactly what a democracy voucher is in a second but let me first explain why we might need them.
Our current electoral laws were created in an era where Labor and the LNP dominated our politics. As we all know, that era is coming to an end—or is, at least, being radically transformed—with the rise of independents and smaller-party candidates who are now close to constituting around a third of the electorate: that is, nearly a third of people vote for someone other than Labor and the LNP.
A joint standing committee on electoral matters released their final report on the 2022 federal election late last year and made a number of recommendations about changes to our electoral system, looking at things like real-time disclosure of political donations, truth-in-political advertising, as well as donation spending caps. Such reforms—with various qualifications—have the support of the crossbench, and in fact, independents Kate Cheney (House of Representatives) and David Pocock (Senate) along with Greens’ Senator, Larrissa Waters, co-sponsored a bill that addresses all these matters.
As Cheney has made clear, the logic of the bill is that “Voters deserve to know who is funding their candidates and be protected from outright lies in political advertising. They also deserve to know they have a competitive choice of candidates.
“We know that the Liberal Party doesn't want reform on transparency, reducing financial influence or levelling the playing field. It seems likely they will only be willing to do a deal with the government if that deal embeds the two-party system and makes it harder for new candidates to get elected.
“This Bill provides the government the opportunity to show it has listened and is interested in reforms that build trust, not changes that embed the two-party system.”
Nonetheless, the final shape of the legislation is likely to be unduly influenced by the interests of Labor and the LNP, with the two majors potentially teaming up to defeat the crossbench bill. Democracy vouchers may be a way around that sort of self-interested collusion.
The idea of democracy vouchers, then, originated at a municipal level in Seattle, Washington, where the local government instituted a property tax to pay for it, and here’s how it works:
Each registered voter in Seattle is given four $25 vouchers which they [can] give to any eligible candidates standing for election to municipal office…To be eligible, candidates must have
already raised between $1,500 and $6,000 from a minimum number of donors;
agreed to campaign finance restrictions, including accepting no more than $250 of non-voucher funds from any individual contributor (or $500 for candidates standing for the office of mayor), and
agreed to cap campaign spending to a determined limit. In addition, participating candidates must not have received any contributions from a person or organization with more than $250,000 in service contracts with the city. People who are not eligible to vote, such as permanent residents, were also eligible.
To put it slightly differently: “Democracy vouchers are a form of public campaign financing where eligible voters are given a set amount of vouchers or credits by the government. These vouchers can then be donated to political candidates, allowing voters to financially support campaigns they believe in without spending their own money.”
IN the US, the research suggests that the vouchers go some way to restoring trust in the system, allowing people to see that candidates are not just responding to those with the deepest pockets.1 As well, more people donate than usual and this increases not just political participation, but political knowledge as voters engage in research—reading newspapers and other news sources, as well as attending more campaign events—in order to decide who should get the vouchers they (the voters) have been allocated.
There has also been an increase in voter turnout—less of an issue in Australia where we have “compulsory” voting2—as well as an increase in the diversity of candidates.
On the latter point, the Stateline news organisation reported that:
Since Seattle voters approved democracy vouchers in 2015 and the city implemented the program two years later, the taxpayer-funded donations have made elections more competitive, and campaign contributions have come from an increasingly diverse group of voters, said Wayne Barnett, executive director of the Seattle Ethics and Elections Commission, which administers the program.
“More competitive” in this sense means a bigger pool of candidates emerging to challenge the “usual suspects”.
Given the trend in Australia is already away from the major parties, democracy vouchers would be a way to match campaign financing with people’s electoral wishes, while at the same time undermining the role that people like Clive Palmer can play in distorting the system to their own advantage by virtue of their immense wealth.
It might also be a way of extending the sort of reform that has happened organically in the leafy suburbs—where people have the resources necessary to develop community candidates—to less well-off electorates who have struggled to get Voices of-type candidates off the ground. Indeed, this is one of the driving ideas behind the introduction of the vouchers in Seattle:
The primary objective is to democratize political donations and ensure that all citizens - regardless of their economic status - can have a financial impact on political campaigns.
The introduction of vouchers hasn’t all been smooth sailing, but the basic principle is worth considering: take the decision about how to spend public money on elections out of the hands of self-interested major parties and let the voters decide instead. Not only does this provide practical support for a trend to alternative candidates that voters have already instigated, it may enhance political participation in those electorates that otherwise lack the resources to develop their own community candidates.
Democracy vouchers have the potential to do for campaign financing what the Voices Of movement did for independents at the 2022 election: empower people in communities to make their own choices about, in this case, how public money is spent in support of candidates.
It is the sort of structural reform that could limit the ability of well-financed vested interest to influence electoral outcomes and hand some degree of political power back to communities. You know, democracy!
And while we’re at it, why not journalism vouchers too? Maybe we could instigate a system whereby the government provides voters with vouchers that they spend with the media outlet of their choice, whether it is a subscription/donation to The Age, The Australian, or an independent newsletter like this. The voucher system could be funded by a revamped version of the News Media Bargaining Code, where the big social media platforms contribute as per the current system, but instead of funnelling that money to a handful of legacy media outlets, consumers of media can decide for themselves which media it is they want to support.
A system for publicly financing journalism predicated on the individual choices of the consumers themselves? Talk about social media!
“…Democracy Vouchers reduce candidates' reliance on large contributions by increasing small donations while decreasing large donations. This shift makes candidates more reliant on voucher donors and small cash donors for funding, which may make candidates more responsive to the desires of less wealthy voters.”
https://onlinelibrary.wiley.com/doi/10.1111/coep.12625?utm_source=pocket_saves
But not a non-issue given participation rates in various electorates have dropped considerably in recent state and federal elections:
This year’s election (2022) had the lowest turnout for a century. For the first time since compulsory voting was introduced for the 1925 federal election, turnout fell below 90%.
For most of the last 100 years, voter turnout, which measures the number of people who lodge a vote as a percentage of all enrolled to vote, was around 95%. Since the 2007 federal election, however, it has declined steeply.
Count me in! Anything to get rid of Gina and Clive and their ilk - Big Media, Big Mining, Big Pharma, Big Tobacco/Vaping, Big Any-Vested-Interest...Nothing corporate or overseas-owned. Hurrah!
Fantastic idea! Putting the 'd' back into 'democracy'. And the 'j' in 'journalism'.
Thanks for another great piece Tim!