REVEALED: MPs' $19m election campaign loophole

FEDERAL politicians have exploited a loophole to spend an extra $19 million to get re-elected at the past two elections.

The windfall was on top of $113 million taxpayers paid to cover their campaign costs at both elections.

An APN Australian Regional Media Newsdesk investigation has found politicians used the taxpayer-funded printing and communications entitlement to boost their campaigns at the 2010 and 2013 elections, creating a 16% boost to the $113 million they received in public funding for the same purpose.

Of the $112 million politicians claimed on the entitlement since mid-2009, more than $19 million - or about 17% - was spent during the 2010 and 2013 campaign periods.

The public funding, delivered through the Australian Electoral Commission, amounted to about $53 million in campaign cost reimbursements at the 2010 election, and about $58 million at the 2013 election - funds paid to all candidates who got 4% or more of the primary vote, largely through political parties.

The entitlement allows politicians to claim the costs of newspaper advertisements, pamphlets and mail-outs to their constituents, as long as they claimed for "electorate" or "parliamentary" purposes - but neither term is defined in the rules.

This makes it possible to use the money to promote themselves more at election time.

Corruption of the democratic process

Political finance experts say the politicians were exploiting a loophole for political gain, to get "incumbency advantages" in what amounted to a "corruption of the democratic process".

Under the entitlement regulations, politicians can only use it for "electorate" or "parliamentary purposes", such as sending out polling booth information; but neither term is defined in the rules.

While ARM does not suggest the claims breached the rules, governments of both persuasions have failed to act on recommendations made five years ago to ban using the entitlement during election campaigns.

Associate Professor Joo-Cheong Tham, director of the Electoral Regulation Research Network at Melbourne Law School, said he considered the practice a "corruption of the democratic process".

"In so far as these are used for electioneering purposes, they're not being used for broader public benefit," he said.

"The problem has been known for close up to a decade or so, reform is overdue and in terms of the review that's currently been initiated use of parliamentary entitlement - this issue should be squarely addressed as part of that review."

Prof Tham said it meant the sitting politicians' entitlements were being "used to advance party political interest".



The top chart is an illustration of how much was spent, when it was claimed and when it was reported.

Use the middle interactive graphic to look up your MP, and see how their printing and communications spending compares with other office administrative costs.

Use the bottom interactive graphic to search by MP, senator, political party and election year, to find out how much politicians spent of their printing and communications entitlements during the 2010 and 2013 election campaigns.




A growing problem

Since July 2009, federal politicians have claimed $7.6 million on the entitlement every six months.

But during the last half of the 2010 election year, almost half of the $15.1 million claimed - about $7.7 million - was spent during the six-week campaign. Similarly, those figures grew to $16.3 million in the last half of 2013 - with $11.4 million, or 70%, spent during the six-week campaign period.

While spending and the type of documents produced under the entitlement are publicly reported, it is unclear how much politicians spent promoting policies or individual achievements, as there is no public record of the content of documents or advertisements produced.

While Prof Tham said he could not be "conclusive" without seeing all the material produced under the entitlement, he believed the figures showed "a strong suggestion this is a big problem".

Should MPs be given money to help with election expenses?

This poll ended on 30 October 2015.

Current Results

Yes. They should not have to spend their own money


No. Why should we have to pay for it


They should be given set amounts


No taxpayers money should be used at all


This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

The Belcher Review

That problem has been identified in a series of national audits of the entitlements system in the past 20 years, one of which led to the first independent review of the system in 35 years, the 2010 Belcher review, and some reforms, including capping the entitlement.

Despite those reforms, and the 2010 review recommendation for a ban on the use of the printing and communications entitlement during election campaigns, governments of both persuasions have failed to act on the issue.

Senator John Faulkner
Senator John Faulkner DEAN LEWINS

Introducing a new $100,000 cap in 2008, Labor Senator John Faulkner said that all MPs, but "particularly the government", "must bear in mind that the printing allowance comes from public funding, and it must be used in the public interest and must be of an appropriate level".

But his successor as Special Minister of State, Gary Gray, in 2011 rejected the Belcher review recommendation.

He said he believed then and now that "the use of those facilities during election campaigns is entirely consistent with their purposes".

"These entitlements aren't about anything other than providing knowledge, profile and supporting communities," he said.

While the use of the entitlement has greatly reduced with caps and spending limits, including a removal of a Howard-era change to allow MPs to "roll-over" spending from one year to the next, a recent change could allow politicians to exceed existing limits.

That change, passed in regulations in late June this year, created a new "office budget" that combined all office-related expenses into a single pool. While it did not increase the total amount politicians could spend on office expenses, it did create more "flexibility".

This flexibility allows politicians who exceed their cap on one entitlement to use other entitlements to boost their expenses, with prior ministerial approval.

It would mean MPs and senators who get permission could effectively circumvent the cap on their printing and communications entitlement, a change no political party has opposed.

A surge in spending

The Belcher Review itself was prompted by a scathing audit of the system, which examined the use of what was then the "printing entitlement" during the 2007 election.

It found the entitlement was being used for campaign purposes, given both "the nature of items printed" and "the surge in spending" under the entitlement during the months leading to the November 2007 election.

Belcher review committee member and former Australian Competition and Consumer Commission chairman Allan Fels said the committee, considering the report, did not want to "curb proper use" of the entitlement.

But he said "there is a concern that on the other hand it gives the incumbent some advantage over challengers".

"They also tend to do it more in the last six weeks when there is an effect (on voters)," he said.

"I see no harm from our particular limit on the six weeks itself."

More MPs spending at campaign time

While many politicians are not overly gearing their spending on the entitlement towards election campaign periods, a growing number have done so at the past two elections.

APN's analysis of the use of the printing and communications entitlement shows the number of federal politicians gearing their spending towards campaign periods doubled from the 2010 to the 2013 election.

While 19 politicians spent 90% or more of their claims in the last six months of 2010 during the campaign - that figure grew to 44 politicians at the 2013 election.

Similarly, 54 politicians spent 70% of more of their claims in the final half of 2013 during the six week campaign - a figure that grew to 135 politicians at the 2013 election.

Mal Brough
Mal Brough Youtube

A new opportunity to end the abuse

A new review into the entitlements system is now underway, led by two respected current and former public servants; former Belcher review member and current Remuneration Tribunal president John Conde and former Finance Department secretary David Tune.

The review's terms of reference outline efforts for "fundamental reform" to create an "independent" entitlements system, but do not explicitly address the use of entitlements during election campaigns.

While Mr Brough would not comment on the review, Mr Gray effectively offered Mr Brough his support, saying he would back any recommendations the government chose to implement.

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