Occasional Papers | Public administration and legal system | 2016-03-16

Levelling the playing field by amending campaign finance regulations

In less than six months, the 2016 Legislative Council General Election will take place; before long, the Chief Executive Election in 2017 will be staged. Meanwhile, the Electoral Affairs Commission (EAC) has proposed guidelines fine-tuning election-related activities and is open for public consultation. What can be implemented to promote greater democratic participation and enhance fairness in electoral competition?

The Bauhinia Foundation Research Centre (the Centre) released a new edition of Occasional Paper ‘Rethinking Campaign Finance Laws in Hong Kong: Reform for a New Generation’ to embark on a wholesale evaluation of Hong Kong’s campaign finance architecture. The Centre’s Chairman Dr Donald Li said, “The purpose of this study is not to introduce revolutionary changes to the current system, but to review the merits and limitations of Hong Kong’s campaign finance regulations by making reference to foreign models.”

The study advocates adoption of a package of mutually-reinforcing reforms that raise the expenditure cap, remove excessive red tape around political dissemination, implement a more robust pre-election public finance regime, and require public, pre-election disclosures. The Centre’s Vice-chairman Lau Ming-wai emphasised, “Hong Kong’s campaign finance regime lacks flexibility. Some election campaign regulations are outdated and fail to catch up with the information age, resulting in lower levels of political participation and civil engagement. We believe our recommendations can encourage the involvement of stakeholders and enhance fairness in electoral competition.”

Substantially raise the expenditure ceiling and lengthen the campaign seasons

For electoral systems to be vibrant and mature, those vying for office must be able to adequately disseminate their views to the electorate. However, our low spending ceilings have disabled many candidates from effectively spreading their views with voters. A higher spending ceiling will enable candidates to spend more on publicity materials, and on hiring more professional and competent staff, allowing candidates to effectively campaign in their communities.

The low spending limit also indirectly leads to relatively short campaign seasons. The current practice is once a candidate publicly declares an intention to run for an election, the clock against the spending limit starts ticking. To minimise the chance of having one’s expenses being counted against the spending limit, candidates tend to wait until the last possible moment to declare.

A significant increase of the expenditure ceiling would incentivise candidates to declare their candidacy earlier. This means that candidates will be able to straightforwardly and transparently engage with their electorate for a longer period, which would naturally lengthen the campaign seasons.

Reduce red tape around election advertisements to enhance political dissemination

Existing regulations on election advertisements place excessive red tape around dissemination channels, making it difficult and expensive for candidates to reach the public and spread their views. For example, the revised District Council Elections guidelines issued by the EAC in September 2015 considered social media messages as a kind of election advertisement, which are required to be reported for public inspection within one working day after posting. This move prompted many candidates to give up Facebook entirely during the election season to avoid violation.

The Government should deregulate the internet by loosening the reporting requirements among social media. Hong Kong could emulate the Canadian model, which does not consider as advertisements ‘the transmission by an individual, on a non-commercial basis on what is commonly known as the Internet, of his or her personal political views’.

To encourage a rich diversity of political discussion, the Government should also consider lifting the ban on campaign advertisements on television and radio. Broadcasters are required to apply a principle of fair and equal treatment to all candidates who wish to pay for electoral advertising.

Adopt a new voluntary public financing scheme

A public financing scheme should also be adopted to enhance fairness in electoral competition in Hong Kong. Candidates can choose either private donation subject to the new expenditure cap, or public financing scheme fuelled by the Government’s basic contribution.

By opting into the scheme, those less-financed candidates can narrow down the difference in electoral spending with those better-financed opponents to a certain extent. But it is not necessary for those better-financed candidates to join the scheme if they are confident in fundraising. This scheme will also encourage newer, younger, and less -financed candidates to enter contests and join the public debate.

To prevent non-viable candidates from benefiting from taxpayer-subsidies in the form of public financing, candidates will have to prove viability in some way as a condition of eligibility. A proven record of electoral performance as well as a proven ability to convince constituents to invest in one’s candidacy are strong indicators that a candidate is non-frivolous. On the other hand, the EAC and the Independent Commission Against Corruption (ICAC) should work together to periodically audit candidate disclosures in order to lower the risk of fake donation that might arise in a pre-election public financing scheme.

Require financial disclosures to be made public during an election cycle

Hong Kong’s disclosure system is in some ways in line with best practices found in many countries in the world. However, the Hong Kong model requires that accountings be disclosed to the EAC, not directly to the public, and only after an election is held. This approach can be contrasted with those in other countries that require pre-election and publicised disclosures.

Aiming to equip Hong Kong voters with more information about the candidates before making their decisions, Hong Kong should require financial disclosures to be made public during an election cycle. Such an alternative system might enlist not just the EAC or the ICAC but other political parties, media actors, and civil society writ large to aid in political monitoring and enforcement.

By raising spending ceilings, removing red tape, strengthening public financing, and reforming disclosure rules, Hong Kong can upgrade its campaign finance laws and regulations for a new generation. Because these reforms are mutually-reinforcing, they must be adopted wholesale to have maximal effect. Vice-chairman Lau Ming-wai concluded, “We think these reforms will help promote a fairer, more participatory society, ensuring elections are transparent, open and competitive.”

Please refer to the Paper for details.


Occasional Paper