Those who followed last year’s United States presidential election will almost certainly have heard of Citizens United v. Federal Electoral Commission, the 2010 Supreme Court decision that opened the way to huge campaign spending by so-called “Super PACs” backed by large corporations, most of it spent in support of Republican candidate Mitt Romney.

The Supreme Court (by a five-four majority) found that restrictions on campaign spending by corporations were an infringement of the right to freedom of speech. Although it did not quite say (as was often reported) corporations had all the rights of natural persons, it did rule they were entitled to the protection of the First Amendment.

Given the decision, it’s not surprising that Romney was attacked for saying, in a different context, that “corporations are people”. In fact, he was just pointing out that corporations are made up of real flesh-and-blood individuals, an important truth we sometimes forget. But the critics were right, in my view, to argue that corporations are not automatically entitled to rights like free speech.

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Now comes the prospect that Australia could get its own Citizens United decision, in the shape of a constitutional challenge due to be filed today to the New South Wales legislation on state election spending. The Election Funding, Expenditure and Disclosures Act, as amended last year, provides that donations to political parties and campaigners can only be made by individuals who are on the electoral roll. Expenditure by corporations and other entities, whether directly or indirectly, is prohibited.

“Other entities”, of course, includes trade unions, which is why it is Unions NSW that is taking the government to court, claiming that the amendments are an infringement of the implied constitutional right of freedom of political speech.

In the United States, the Citizens United decision was championed by the Right and bitterly denounced by the Left. But Australia, with its more apathetic corporate sector and its close ties between the ALP and the union movement, is in a different position. Here it’s not obvious that the Left has more to fear from an unrestricted flow of money.

As usual, electoral law is all about partisan advantage. The participants might talk the language of high principle, but they will quickly switch sides if they think a particular principle is working against them.

I yield to no one in my support for free speech (and I think the NSW provisions are too broadly drawn), but it seems to me the High Court should think twice before following the Citizens United precedent. Surely there is a principled distinction to be drawn between individuals spending their own money and corporations, unions and NGOs, which are, by definition, spending someone else’s money.

What’s the harm in insisting that if shareholders or union members want to support a political party, they should do so out of their own money rather than asking the company or union to do it for them? Haven’t we already created enough chaos in our legal and financial systems by the fiction that corporations are separate entities?

The current High Court has a pretty conservative record, so my guess is that it will refuse to extend the freedom of political communication to corporate donations. Moreover, it’s not obvious that it will make much difference either way.

Both supporters and critics of the NSW legislation risk forgetting the most important lesson of Citizens United: money does not, in fact, carry all before it. Despite the rush of unregulated funds to Romney, he still lost the election, and the big recipients of Super-PAC support were mostly unsuccessful.

There’s no particular reason to think money talks any more loudly in Australia.

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Peter Fray
Peter Fray
Editor-in-chief
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