A deep dive into campaign finance reform legislation, federally and in South Australia.
The federal government’s proposed changes to campaign finance laws, to take effect in 2026, passed through the House of Representatives on Wednesday with the support of the Coalition and the opposition of the cross-bench. It will shortly come before the Senate, where the Coalition plans to move amendments to increase proposed spending caps and disclosure thresholds. Katina Curtis of The West Australian reports Labor maintains suspicions that the Coalition “might string talks along but backflip at the last minute for pure politics”, and is duly “keeping its options open” for a late deal with the cross-bench. In the absence of such a deal, Curtis further notes that amendments to the regime will assuredly feature in post-election horse trading in the event of a hung parliament.
That the 227-page bill looks set to proceed swiftly to enactment without a parliamentary inquiry has drawn criticism from constitutional law expert Anne Twomey and former NSW Supreme Court judge Anthony Whealy, the former concluding that the High Court will likely “end up doing the job instead”. At issue is the doctrine of implied constitutional freedom of political communication, by which the court disallowed the Hawke-Keating government’s attempt to ban political advertising in the electronic media, and more recently caps on third party spending in New South Wales. Twomey perceives two potential difficulties: that the spending caps are “so high that it undoes their aim”, and would make it difficult to establish that the laws serve a legitimate purpose justifying limitations on political communication; and that the bill’s provisions, as noted below, tend to favour parties over independents and incumbents over challengers.
The main provisions of the bill are as follows:
• What Graeme Orr of the University of Queensland describes as “the headline the government wants us to focus on” is that federal electoral donations will be capped at $20,000 per donor per year, increasing to $40,000 in election years, with individual donors allowed to donate no more than $640,000 in total. However, this is calculated at the level of the state or territory branch, such that an enterprising donor could contribute $720,000 to a party over a three-year term, plus extra for by-election campaigns. Joo-Cheong Tham of the University of Melbourne law schools notes loopholes include exemptions for union affiliation fees to Labor (uncapped, unlike similar laws in New South Wales) – and, “most significantly”, a failure to apply to donations made by candidates to their parties, which would seemingly amount to ongoing carte blanche for Clive Palmer.
• Caps on spending set at $90 million for general party spending and $800,000 for individual electorate campaigns. As proof against a legal challenge, this would barely clip Clive Palmer’s wings: his party spent $83 million on its 2019 campaign onslaught, and $70 million in 2022. The latter is an issue for the teals, whose campaign spends in some cases exceeded $2 million, which explains the Coalition’s enthusiasm for the package. Katina Curtis of The West Australian notes that spending caps are fair enough to the extent that “limiting donations without limiting spending heavily advantages people who have their own wealth and don’t have to pass the hat around”. However, the two distinct caps mean that parties trying to see off independents will be able to match their local campaign spend, and trump it by targeting the electorate with further spending that doesn’t mention their candidate, or mentions them alongside Senate candidates. Caps can also encourage third-party spending, which has reached its apotheosis with the “super PACs” that dominate election campaigning in the United States.
• The threshold for public disclosure of donations, which the Howard government hiked from $1500 to an indexed $10,000, will be cut from $16,900 to $1000. The Libeals are continuing to grumble about this, arguing that small businesses will feel too intimidated to donate to them. The bill will also dispense with the notoriously lax requirement that disclosures be made only twice yearly, henceforth to be monthly, then weekly during the campaign period, then daily in the week before and after election day.
• The public funding that currently allocates $3.35 per vote to candidates who exceed 4% will have the rate increased to $5. There will further be administrative funding amounting to $30,000 per lower house member and $15,000 per Senator, advantaging incumbents over challengers.
Meanwhile, the South Australian government last week introduced legislation to ban nearly all political donations and fill the gap with public funding, a move that has attracted the interest of The Economist. It may also yet attract the interest of the High Court, with Peter Malinauskas conceding the “challenging” task of drafting the legislation around the objections that might arise.