One state is making ‘world leading’ changes to how money influences power. It won’t happen in NSW

NSW Premier Chris Minns has ruled out pursuing a South Australian-style blanket ban on political donations for state elections, preferring to strengthen existing laws rather than spending more public money on campaigns.

South Australian Premier Peter Malinauskas announced on Wednesday night the state’s electoral amendment bill would ban electoral donations and gifts to registered political parties, MPs and candidates.

Under the proposal the state government would increase public funding to allow parties and candidates to campaign for elections without the influence of interest groups and lobbyists.

NSW Premier Chris Minns says NSW will not follow the lead of South Australia.Credit: Kate Geraghty

Despite Malinauskas urging other jurisdictions to adopt similar reforms, Minns told this masthead on Thursday he would not follow his Labor counterpart’s lead.

“We’re not pursuing these changes. We’re open to changes that strengthen reforms we’ve already made around political donations, but a blanket ban is not on our agenda,” Minns said.

NSW has strict caps on donations and real-time disclosures in place, with developers, clubs and the tobacco and liquor industries all banned from making contributions to political parties.

‘We’re open to changes that strengthen reforms we’ve already made around political donations, but a blanket ban is not on our agenda.’

Chris Minns, NSW premier

Under Malinauskas’ proposed legislation, newly registered political parties and unendorsed candidates in state elections would be able to receive donations up to $2700 but would remain subject to campaign spending caps, an effort to ensure new entrants were not disadvantaged.

As he spruiked the bill that he said would make South Australia a “world leader in ending the nexus between money and political power”, he foreshadowed an effort to scupper the proposal in the High Court.

“We want money out of politics. We know this is not easy. These reforms may well face legal challenge,” Malinauskas said.

Reforms proposed by the previous NSW Coalition government to limit the contributions of third-party contributors (TPC) such as unions, GetUp or the gambling lobby to $24,700 were ruled unconstitutional by the High Court in January last year.

South Australian Premier Peter Malinauskas has announced a blanket ban on political donations for parties, MPs and candidates.Credit: Ben Searcy

In a unanimous decision the court agreed with the argument presented by Unions NSW that the previous $24,700 cap impinged on implied freedom of political communication as laid out in the Constitution.

The decision forced a cross-party committee to find a new cap that would not be struck out if challenged in the High Court. The Minns government banned political parties from accepting financial donations from clubs that have gaming machines after the last election.

However, the ABC late last year revealed the NSW Labor Party accepted donations worth more than $100,000 in the run-up to the 2023 state election from 17 different lobbyists. This was despite calling for donations from lobbyists to be prohibited in 2019.

Disclosures lodged with the state’s electoral commission during the 2022-23 financial year show the NSW Labor Party reported receiving $5.3 million in donations, and spent $11.6 million, including $8.1 million on advertising.

The Liberal Party received $9.7 million, however, 44 per cent was through loans. Nearly $9 million was burnt through, with more than a third spent on advertising, and a quarter on research.

The Nationals received a little more than $1 million in reportable donations.

The Greens’ democracy spokesman Kobi Shetty applauded Malinauskas’ move, saying it was disappointing Minns had already ruled out the prospect, but expressed concern about elements in the South Australian proposal.

“We don’t want to see a ban that would impact one group of participants differently from others,” she said.

“Stifling donations to candidates and political parties but allowing third-party campaigners like fossil fuel companies and the gambling lobby to pour money into elections would not be a win for democracy in SA, assuming it could survive a legal challenge.”

A spokesman for the NSW Opposition did not commit to adopting the reforms, saying “these matters will be considered in due course ahead of the next election”.

“Given the importance and value of union donations to Labor, it’s no surprise that Chris Minns doesn’t propose further reforms to strengthen the integrity of NSW’s political system and remove union influence,” he said.

In South Australia, only financial institutions would be allowed to provide loans to registered political parties, MPs, groups or candidates, with shadow banks and other sources prohibited. In a bid to even the contest, newly registered political parties and unendorsed candidates will be entitled to receive donations of up to $2700, and will also be subject to a spending cap.

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