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It's handled in the same way the police handle parking fines and the like.
You get a form from the Electoral Office headed "Notice to an elector who appears to have failed to vote". On that form there is a space where you can fill out the reason why you didn't turn up. (And another where you can claim you did, and give details.)This is a Statutory Declaration - in other words, you are deemed to have given your excuse under oath.
A couple of years ago I got one of those and noted on the form (which was perfectly true) that I suffer from Irritable Bowel Syndrome and had had an attack on that day. It didn't clear up till late afternoon, and by the time I was able to go out I was unable to get to the polling station in time. I never heard anything further. A friend who gets migraines has had a similar experience. The EO are pretty reasonable about all this, and I think if someone were to go into labour on election day and that reason was not accepted it would be headline news and questions would be asked in Parliament.
Or you can simply return the form with a cheque enclosed and the matter is at an end. You don't get a criminal record from this.
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Strictly speaking, it is not compulsory to actually vote. All you are required to do is (1) enroll when you become eligible -- when you turn 18, acquire citizenship, etc -- and (2) attend a polling place on election day.
You enroll by filling out a form at the Post Office, and the enrollment stays for life. Should you change your name or address, you just fill out another form updating your information.
Then on polling day you present yourself at a polling station and give your name and address to the poll clerk, who marks off your name on the Roll and hands you your ballot papers. All you are obliged to do then is put them in the ballot box. As has been said, it is perfectly legal to present a blank paper, whether embellished with rude remarks about politicians or not. It is then counted as an "informal vote", and there is a long tradition of the informal protest vote. Adding comments to a properly filled-out paper doesn't render your vote informal.
There are advantages in all this. First, the new government can be confident that the election does reflect the will of the whole people, not just an interested minority.
More important, perhaps, is that it makes any abuse of the system very difficult. Any attempt to interfere with someone carrying out his/her duty to vote becomes a serious criminal offence -- it's causing/attempting to cause the commission of what is technically a crime. And of course it obliges the government to ensure that people can vote without difficulty. It removes any argument that it is too expensive to provide sufficient polling stations, papers, etc. ("but there are only 65 people in Woop-Woop, it just isn't cost effective to have a station there. If they want to vote, why can't they travel to Galarghambone? It's only 75 miles away?")
Before the last (2004) election, Howard floated the idea of making voting optional, but there was so much opposition to the idea that he was obliged to drop it.
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