May 11, 2015 - In the domain of parties, legal developments ... Whilst party registration has been a hook on which some regulation has been ... provision about who controls public funding on behalf of parties, created to deal with an internal ...
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Cha pte r 17
The Law Governing Australian Political Parties Regulating the Golems Graeme Orr
A decade ago there was a detectable trend to the ‘juridification’ of parties in Australia (Orr 2000). Juridification is a fancy-word for the process by which entities in civil society come to be subjects of the law. It captures not just the complexity of regulation: multi-faceted activities in a sophisticated society are inevitably governed by intricate rules and norms. It is also concerned with the qualitative nature of regulation. In the domain of parties, legal developments in the 1980s and 1990s brought parties out of the shadows of being merely private associations, giving them new legal recognition and status. Parties became registered (although not incorporated). And parties’ internal affairs – or at least their fidelity to their constitutional rules – became subject to judicial enforcement (Gauja 2010b: 43-7). Each type of regulation has its upsides and downsides. Registration allowed parties to secure their ‘brand’ name on ballot papers; but it also requires that smaller parties maintain minimum levels of membership and compete regularly in elections. Registration permitted parties to control the public funding earned by its candidates securing minimum shares of the vote. But in return parties and their associated entities were obliged to disclose their larger donors and income streams. Judicial oversight has allowed the worst factional disputes and flouting of rules by dominant factions to be resolved independently. But it can be a costly means by which disgruntled elements in a party can air dirty linen in a most public of forums. Whilst party registration has been a hook on which some regulation has been hung, any juridification has proven modest. Australian parties are not seen as constitutional actors as they are, say, under the German constitution: German party affairs are conducted under a bespoke Parties Act (Parteiengesetz). Whilst apparatchiks toy with the idea of giving nonmembers a vote in some pre-selections (see ‘Political Parties and Candidate Selection’, this volume), Australian parties are light-years away from letting
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legislatures enshrine primaries in law (Orr 2011; Miragliotta 2013b: compare Ware 2002 on how US parties helped develop primary laws). So, whilst there are now plenty of explicit legislative references to parties, they are often marginal: the accretion of rules governing particularistic activities like designing and distributing how-to-vote cards. Some rules have been blatantly ad hoc.1 Outside political finance law in the east coast states, the law affecting parties is not the product of any holistic, let alone totalising process. Even there, whilst being driven by genuine concerns about the power of unrestrained money to wield undue influence and diminish political equality, the detail of political finance law has been steered by the major parties in ways that adapt to their needs and interests. As we shall see, there is no jurisprudential conception of the form parties should take or purposes they should serve, aside from the obvious one of standing electoral candidates. Parties are ultimately reminiscent of the Golems of Jewish and central European legend: they are powerful beasts of somewhat indeterminate shape, which hover between being of service to humankind and threatening it.
The Law on Political Parties
What follows seeks to explain the source, gist and purpose of the law affecting parties in Australia. We can categorise this law into four areas: party registration; political finance; electioneering rules and the common (or court-generated) law. There is not space here to be exhaustive (for more see Orr 2010a: chs 6, 10). What this survey reveals is twofold. First, with an emerging exception for the highly-regulated finance regimes in the eastern states, the law is not particularly intrusive. It tends to be piecemeal, even allowing that we are now well removed from the days when political parties were not formally recognised anywhere in legislation and flew below the judicial radar. Second, we should not be surprised that the law is not intrusive. The process of law-making is largely controlled by parliaments. Despite the work of electoral matters committees (Uhr 2003: 76-7), on every significant issue it is driven by governments. Historically this has been Labor governments with Democrats or Greens assistance. But increasingly Liberal governments are active in electoral reform and regulation. The law is thus firmly shaped by the major parties themselves. In other areas of law 1 Witness Commonwealth Electoral Act 1918 (Cth) s 299 (a convoluted, 2400 word provision about who controls public funding on behalf of parties, created to deal with an internal wrangle within the Liberal Party).
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this is known as ‘private law-making’.2 But in the law of politics, especially in systems like Australia without a bill of rights, it is seen as recursive but inevitable.
Party Registration Law
The system for securing and maintaining party registration is of obvious concern to party organisations. This type of law-making should not be con fused with the notion of a ‘recognised’ parliamentary party or opposition. That ‘recognised’ category is set within parliaments or by executive gov ernments, to apportion parliamentary resources: it is of greater concern to the parliamentary party or party-in-office. Party registration, on the other hand, was introduced in Australia in the 1980s as an administrative handmaiden. It was designed to assist the introduction of both ballot labelling (to aid voters) and donation disclosure (to aid transparency). Party registers have spread to every jurisdiction – even to states without campaign finance regimes. Table 17.1 summarises the basic requirements for party registration. Registration is not mandatory, but is highly desirable since various benefits flow from it. Aside from reserving a party’s name and allowing parties to control the receipt of public funding, registration has implications for the taxation treatment of donations. Donors to registered parties enjoy some tax deduct ibility.3 Unless they qualify as socially beneficent charities, other political organisations cannot offer tax deductibility. Ballot labelling has led, in some upper house electoral systems, to party control of preference flows. This enhances behind-the-scenes preference deals between party administrators. Electors tend to be accepting – or at least ignorant – of preference deals. But such deals offend those who wish to see greater actual voter choice, and moves are afoot to require voters to complete their own preferences in the Senate (Joint Standing Committee on Electoral Matters 2014: 47–54). Preference deals give minor parties more leverage in a system that otherwise is weighted against them. Ballot labelling also reduces pressure on party activists to station polling booths; just as compulsory voting laws alleviate pressure on parties to get-out-the-vote. 2 Where laws are drafted by a self-interested industry group, or where a public law is drafted by a private body, then propagated through legislatures: e.g. some United States public law has recently been generated by the conservative American Legislative Exchange Council. 3 Income Tax Assessment Act 1997 (Cth) Sub-Div 30-DA. Independent candidates also enjoy that privilege.
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As Table 17.1 indicates, party registration requirements are not prohibit ive – with the possible exception of New South Wales (NSW).4 Parties have proliferated nationally (fifty-nine distinct parties registered) and in NSW (18 registered). This risks the flooding of upper house ballot papers. But in smaller jurisdictions, and those without proportional representation, the typical number is just seven. So the overall structure of parliament and the voting system, rather than any detailed regulation of party affairs, has the greatest legal impact on parties in Australia. A neglected consideration in Australia is not party registration as such, but ballot access. Ballot access is a contentious issue world-wide. It requires balancing open competition versus the need to keep ballots manageable and minimise voter confusion. In Australia, the chief rationing mechanism is the deposit required for each candidature. Deposits which seem reasonable when taken in isolation may become less so when taken cumulatively across a federal system. Legislation in 2013 doubled Commonwealth electoral deposits. The full cost of ballot access – the deposits a party must stump to appear on every parliamentary ballot paper in Australia over an electoral cycle – has risen to over $320,000. The larger parties can expect most of this back, since deposits are only forfeited where candidates fail to reach a threshold, usually four per cent of the primary vote.5 But minor parties cannot. As if to disprove any strong juridification thesis, party registration law has remained largely procedural, rather than substantive, in Australia. So whilst there are formalities to achieve and maintain registration, these merely require parties to do certain minimal things, rather than to act or organise themselves in any particular way. For example, parties in NSW have to report annually on their membership, and a Commonwealth party that does not stand candidates for a four-year period is liable to be deregistered. But there is no particular requirement that parties structure themselves as any formal type of entity, whether as incorporated, or unincorporated, associations, or as trusts holding property to advance goals or membership aims. More significantly, there is no minimum requirement of internal democracy, let alone a model constitution. Whether or when parties are covered by antidiscrimination law varies from state-to-state and from activity to activity (Orr 2010b). But generally speaking they can discriminate in who they 4 The higher requirements arose after the 1999 NSW Upper House ‘tablecloth’ ballot (264 candidates). 5 1/5th of a quota in Tasmania or 1/5th of the winning candidate’s primary vote in the NT. The four per cent figure also serves as the threshold for electoral funding.
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New South Wales
South Australia (from 2015)
Australian Capital Territory
Fee to Register
Ballot Access Cost
$2.90/vote. Annual admin fund.
Up to 75% of campaign costs. Annual admin fund.
Table 17.1: Australian Party Registration and Finance Law (Sept 2014)
$1,000 pa Continuous disclosure
$5000 pa Regular disclosure
Donation Disclosure Threshold
Only on gaming licensees
$5,700 pa No developer donations.
Upper House cap
Party Campaign Caps
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hire or select as candidates. Ultimately, the only substantive requirement in Australia is that a party must be ‘an organisation … one of the objects … of which is the promotion of the election … of candidates endorsed by it’.6 Boiled down, the law thus envisages parties as no more or less than machines for electoral competition (Orr 2014): however, like the amorphous Golems, they can manifest themselves in various ways. Consider the question of internal operation rather than legal form. There are almost no substantive requirements for internal democracy. In some jur isdictions, party constitutions are required to provide for certain matters, such as admission of membership. But this is a checklist rather than a matter of substance. There is not even legal consensus about what might be the defin ition of a party ‘member’ (Orr 2010a: 133-5). Queensland, after revelations about rorting within the Labor party, went furthest. Its law for State parties appears to mandate a principle of ‘free and democratic elections’ for internal ballots.7 But even that law only requires that party rules weight each member’s vote equally if a membership vote is taken: it does not require that such ballots be held at all, let alone be determinative. Across Australia, party executives retain power to cancel or override branch level pre-selections. Executives and other central councils can be selected through indirect measures. Only the Australian Democrats and recently the ALP have involved party members in the selection of parliamentary leaders – by contrast in both Canada and the United Kingdom membership ballots for leaders are now the norm (Quinn 2012).
Political Finance Law
Modern Australian regulation of the financing of campaigns developed alongside party registration. Its development mirrors the law’s volte from blindness to cognisance of parties. For almost a century candidate expenditure was subject to reporting and caps, under law inherited from the nineteenth century British battle against electoral excess (Cass and Burrows 2000). This approach was abandoned in the 1970s. Then, in the early 1980s, a model arose that put the onus on parties to disclose large donations, whilst defraying their electoral expenditure with public funding according to their vote-share. This model has spread to all bar 6 Commonwealth Electoral Act 1918 (Cth) s 4 definition of ‘political party’, with similar definitions in State and Territory acts. 7 Electoral Act 1992 (Qld) s 76. More useful, in terms of capacity building, are the model pre-selection procedures, which the Electoral Commission Queensland is empowered to audit (see Part 9 of that Act).
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the smallest jurisdictions of Tasmania and the Northern Territory. (From 2015, South Australia will have opt-in public funding in return for cam paign expense limits). But this disclosure plus clean money model only partially achieved its aims of increasing transparency and dampening fund-raising inequalities. Compared to the United Kingdom, Australia lacks such basic transparency measures – of interest to the public as well as party members – as requiring annual auditing and publishing of party accounts (Ewing 2007: 81-3). Only Queensland even manages to require parties to update their constitutions with the electoral commission.8 Elsewhere it is haphazard as to whether party constitutions are publicly available for prospective members and media scrutiny. A debate has emerged in the past decade about the need for more comprehensive campaign finance regulation – or even political finance regulation, given the rise of the permanent campaign. Overall, the debate has been a principled one, seeking to rein in the power of big money, for reasons of equality and even aesthetics, without throttling liberties of communication and association. The debate has centred on the need for caps on electoral expenditure or limits on contributions to parties, as found in ‘sister’ democracies like the United Kingdom, New Zealand and Canada. As the above table shows, in the past three years the eastern jurisdictions of NSW and the Australian Capital Territory (and briefly Queensland) adopted highly regulated regimes. These included tighter donation disclosure and, more significantly, caps on donations for campaigning and electoral expenditure. The rest of Australia however has eschewed caps, retaining the 1980s model twinning disclosure and public funding. A couple of smaller jurisdictions remain laissez-faire. The Queensland and NSW models are interesting case studies. Whilst they share certain commonalities, the Queensland model implied a major-party understanding. It permitted unlimited union and corporate contributions to parties, but put a low cap on any donations to a party’s campaign account. The conservative Queensland government however, in 2014, abolished caps on donations and expenditure and reverted to annual disclosure. The New South Wales laws however exhibited no bi-partisanship on the vexed question of corporate and union contributions. The Labor Government of late 2010 capped such donations, yet permitted unions to continue contributing sizeable affiliation fees for party administration. 8 Electoral Act 1992 (Qld) s 80.
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Alleging that approach was one-sided, the Liberal-National Government opted for deeper regulation, rather than deregulation. It inverted the problem by banning union donations and affiliation fees altogether. This risked effectively mandating an ‘individual only’ party structure, an impost on the freedom of association traditionally enjoyed by parties. The High Court however ruled that it was unconstitutional to ban contributions from unions and corporate entities altogether.9 Obviously political finance law is of central concern to political parties, especially if they are understood as merely campaign machines. It is of in timate concern to the administrators who direct the campaign, balance the books, and have to meet regulatory due diligence. It is also of great concern to the parliamentary party for two reasons. The most obvious is that campaigns are crucial to marginal seat-holders and ultimately to form ing government. The other is that senior MPs are key fund-raisers, and the process of schmoozing is time-consuming and ethically challenging. To ord inary party members, however, apart from accounting for any autonomous branch-level finances, political finance regulation may be a double-edged sword. Whilst branch members and activists have more reason than most to distrust the power of big money, without incentives to focus on grass-roots fundraising any moves to increase public funding and cap expenditure may only further marginalise their role. Beyond parties, what is most noticeable is the extension of political finance law to ‘third parties’. This makes regulatory sense if the purpose is to avoid loopholes or to broaden campaign finance law to political finance; but it risks eliding the differences between parties and civil society groups (Norton 2011).
The Law of Electioneering
The rules governing political activism and especially electoral campaigning form a third category of statutory law affecting parties. Whilst this body of law applies to every political campaigner equally, it is of special concern to parties. Parties today exist not as social, let alone mass movements, but as vehicles for electioneering. Even the deliberative and policy-development roles of party branches and conferences have been negated by the power of the party-in-office. Electioneering rules are not invasive in Australia – certainly not by the standards of Western Europe or places like the United Kingdom or Israel which ban paid broadcast advertising. This reflects a liberal legal culture in Australia as much as any conscious decision by 9 Unions NSW v NSW  HCA 58.
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parties-in-office. It also reflects a hands-off approach to enforcement. Branch members are occasionally prosecuted (e.g. for the bogus, proLabor Islamic pamphlets produced by Liberal activists at the 2007 election in the seat of Lindsay). But overall the assumption is that elections are professionally conducted in Australia and that there is little need to test or develop the law. Parties do face some particularistic regulation. A good example is the requirement, in some jurisdictions, to authorise and register how-to-vote cards in advance of polling day. These rules drill down to minutiae like the size of font used.10 But these rules have tended to be ad hoc responses to failures of transparency generated by dubious major party appeals for the preferences of minor party supporters. There is no holistic regime for truthin-political-advertising in Australia, of the sort developed under consumer law to rein in misleading commercial activity.11 Parties have also tweaked the law to positively suit their campaigning needs. They enjoy preferential access to electronic versions of the roll, despite concerns about electoral integrity and privacy (van Onselen and Errington 2005), and they are allowed to har vest postal vote applications despite electoral commission concerns (Kelly 2012: ch 9).
Courts and Parties
Judges can impact upon parties in two ways. The less common but more grandiose way is when the highest courts rule on the constitutionality of a law affecting parties or their activities. This is relatively rare, given the absence of a bill of rights in Australia. Admittedly, a freedom of political communication has been implied from the constitutional requirement of direct electoral choice by the people.12 But whilst this communicative freedom may inhibit legislators in how they frame political finance rules, a freestanding freedom of political association has not yet been recognised. Several judges have suggested one exists; several others say it only arises as an adjunct to political communication. Either way, in the DLP deregistration case the High Court painted constitutional protections as negative freedoms (freedoms from legal limitation) rather than as positive rights.13 Hence a stat utory scheme like party registration and ballot labelling is something the 10 E.g. Commonwealth Electoral Act 1918 (Cth) s 328B. 11 See now s 18 of the Australian Consumer Law 2010 (Cth). 12 ACTV v Commonwealth (1992) 176 CLR 106. 13 Mulholland v AEC (2004) 220 CLR 181.
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parliament can bestow, shape or remove as it sees fit, provided only that the system does not unduly restrict electoral choice. The more common and direct form of court involvement with parties is the ability of the State Supreme Courts to rule on internal party machinations. Parties are typically structured as unincorporated associations. There has been experimentation with other corporate forms by a few smaller parties, such as Family First Inc, the WA Democrats Inc and the ill-fated and byzantine Queensland One Nation Party (see ‘Organisational Approaches of the Right-of-Centre Minor Parties in Australia’, this volume), but these are exceptions to the rule. Unincorporated status, here as elsewhere, aids party freedom of association, since the common law treats such bodies as having no corporate structure. Unincorporated parties have no necessary shape or legal form, but exist as a set of relationships between their members, under rules set by and within the party (Orr 2014). Unless there was a battle for control of party property, the traditional judicial approach was to treat parties as purely private domains.14 This approach treated intra-party disputes as if they were family squabbles below the radar of the law. Since 1991, however, the common law has become more realistic, so judges will now enforce party rules. To justify this reversal of precedent, judges appealed to the fact that parties are now registered and may receive public funding. The South Australian Court managed to intervene in a State pre-selection even though there is no State-level public funding there.15 The deeper justification for court involvement is simply that parties are too important for their affairs to be beyond litigation. Party disputes can thus be litigated with judges asked to find facts and interpret the party’s rules. A party’s constitution forms a kind of contract amongst the members and the party hierarchy. A typical case will involve a dispute about candidate selection. A more significant case may involve a question of broader process, for example membership rights versus executive power. Recent litigation within the Liberal Party is an example of the latter. In Pogson v Liberal Party, New South Wales Division, the State director and president were sued for ignoring a valid proposal, from a regional branch to the party’s State Council, to require member-only plebiscites to determine candidate selection. The case was interesting not because it broke new ground: in excluding the proposal from its agenda, the party executive was in clear violation of both party rules and the general law governing 14 Cameron v Hogan (1934) 51 CLR 358. 15 Clarke v ALP (1999) 74 SASR 109.
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meetings. What was noteworthy was how swiftly and decisively the Court vacated the party’s State Council to remedy its abuse of its power.16 Court involvement in parties’ internal affairs however has not erected a charter of rights for members. Judges are cautious: they will only enforce existing rules, and then only when those rules are clear. A party’s rules can thus cede as much discretion as they like to the party hierarchy – the Palmer United Party is a case in point. Rules tend to be drawn by party elites rather than bubble up from the grass-roots. Rules can thus be oppressive or undemocratic, but the courts’ job is to uphold them, not remake them. Only exceptionally will a court imply a duty to give natural justice. If members or officials are being disciplined, courts may insist they have proper notice of the charges and an opportunity to respond to the allegations. The courts will not even uphold party rules at the suit of improperly rejected prospective members.17 (Remembering that what one faction sees as an attempted ‘stack’ is another faction’s legitimate attempt to break down a factional imbalance). Ultimately, there is a potential paradox at the heart of court interventions to uphold members’ rights under party rules. What should a court do when a party’s rules explicitly ‘oust’ court jurisdiction, by providing an internal grievance mechanism but a clear statement that the constitution is not to be enforceable in court? Such rules, on their face, uphold the shared interest within the party of avoiding the publicisation of internal disputes. Yet if such rules were barriers to litigation, all sorts of wrongs could be done within a party without formal redress. Ignoring such clauses is consistent with the general law rule that ‘no contract can … take from a party to whom a right actually accrues … his power of invoking the jurisdiction of the courts to enforce it …’18 That is, people can agree to give up all sorts of substantive interests, but the courts will insist on playing back-stop and enforcing agreements. A simpler alternative to recourse to the courts would be a Political Party Ombudsman. But such an office would need a high level of trust, especially since such an investigator would have to deal with sensitive issues across various competing parties. 16 Pogson v Liberal Party of Australia, NSW Division, Supreme Court of NSW (Equity Division), 20/9/2012. 17 Baker v Liberal Party of Australia, SA Division, Supreme Court of SA, 21/2/1997. 18 Dobbs v National Bank of Australasia  53 CLR 643 at 652-653. However someone who sues without first using an internal grievance procedure is herself in breach of contract (at 653). A judge may view a rule ousting jurisdiction as a reason to not intervene in a relatively trivial case: Sullivan v Della Bosca  NSWSC 136. Or a judge may scrutinise the party’s grievance processes to see how robust they are: Clarke v ALP (SA Branch) (1999) 74 SASR 109 at 139-140.
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Conclusion: Party Law and Grundnorms
As political finance law grows more complex, major parties are finding ways to insulate themselves from harsh electoral and financial winds, and to gain partisan advantage. Money may not make the political world go round, but it certainly lubricates all the cogs. As a result, the regulation of political money is of considerable moment to all parties, large and small. There is no purely ‘neutral’ setting for political finance law: laissez-faire is not a level playing field (McMenamin 2008; Tham 2010: ch 4). Besides political finance, the second issue of the day is what Hughes and Costar (2006: 85) mischievously dubbed the ‘Alsatia of candidate selection’. This was not a reference to Alsace-Lorraine, but to a ‘haunt for rogues and thieves’ in 18th century London. Pre-selections are not entirely lawless spaces. As we have seen, courts (and in Queensland, electoral commission audits) may be used to oversee pre-selection processes. Rather, Hughes and Costar were commenting on the worst aspects of branch-stacking and power plays within pre-selections. The tripartite model of party-administration, parliamentary party and party-membership, a la Key (1964: 163-5) and Katz and Mair (1993), offers an analytic to understand the dynamics within parties. However, that model underestimates the flatness of contemporary parties, where power is concentrated in the hands of a senior administration and the parliamentary leadership, between whom there is a fusion of interests around maintaining the party’s brand and immediate electability. In relation to the legal environment governing parties, therefore, it is rare to find examples where the parliamentary and administrative wings of any particular party will disagree profoundly on which direction to take. Realistically, we should only expect such disagreement if a public scandal pushes the parliamentary leadership to adopt some regulation, to appear to be ‘doing something’, even if that regulation burdens party administration. The underlying difficulty in all moves to adopt more sophisticated regul ation is that parties are torn three ways. They are pulled in various directions by: (1) their differing principles, (2) their shared concern to ensure their collective well-being, and (3) their competitive desire for partisan advantage. This has proven a recipe for stasis in statutory regulation, except at the margins. Courts, for their part, offer only narrow private-law solutions to developing the law in the field. Whilst the courts may provide modest reassurance for dissident members and factions that parties can be required to abide by their own internal rules, they offer no bridge to the public interests which regulation needs to protect.
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Certainly no jurisprudential conception of the broader public purposes of political parties has evolved in Australia. Whilst the courts have awoken to the idea that a party is a collective, the judicial mindset is contractualist: a party’s rules might as well be those of a sporting or cultural association as the rules of bodies critically important to a liberal democracy. And, as we have seen, the statutory conception of political parties in Australia is explicitly minimalist. Statute law sees parties as mere electoral machines, subject to some campaign finance rules designed to mitigate the worst excesses of the political free market. In short, the law follows the reality of Australian political culture. It recognises that Australian parties are typically hierarchically structured, electoral competitors, but leaves them the freedom to self-organise in more, or less, democratic or ordered ways. In all, the evolution of the law affecting parties illustrates the resilience of the traditional party form in the face of concerns about the hollowing out of their membership bases, policy platforms and community connections. That resilience may, of course, rest on narrow foundations: in terms of electoral success, a three-and-a-half party system endures in the form of Labor, the Liberal-National coalition, and one or two significant minor parties. In the end, the resilience of the party system is as much axiomatic as organic. It emerges from the brute shape of the electoral and voting system – compulsory and majoritarian, but with some proportional representation – rather than from any regulation of parties. The shape of the electoral and voting system is rooted in constitutional and electoral law. But the fundamental structure of parliaments and voting systems are not mutable in the way, say, the law of party finance or registration is. Those fundamental rules form something more like grundnorms: the grounded earth of politics from which the party Golems emerge.
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