Liberals blindsided by proposed $500,000 cap on party donations
The opposition was not consulted over the Allan government’s reforms aimed at further restricting donations to political parties during election campaigns.
Donations to political parties will be further restricted during election campaigns under new Allan government laws set to blindside the state opposition.
With a year to go until the state election, the government will introduce legislation on Tuesday designed to forestall a High Court challenge to the current donation regime which was introduced by Daniel Andrews in 2018.
The proposed law will create a new cap of $500,000, which the Liberal Party’s main donor the Cormack Foundation can give the party in an election period, which is the time in between elections.
Currently the amount a so-called “nominated entity” can give a party is uncapped.
The High Court challenge, to be heard next year, will seek to have the current law thrown out as among other things it discriminates against small parties and independents.
The Allan government reforms, which will allow independent and minor parties to establish similar entities, are understood to be an attempt to avoid the act being ruled unconstitutional months out from next November’s poll.
The High Court challenge was brought by independent candidates Melissa Lowe, who contested Hawthorn as a teal in 2022, and Paul Hopper, who ran in the Werribee by-election in February.
Sources familiar with the case have said privately that if the challenge is successful it is highly likely to also knock out similar federal government legislation which is due to come into effect at the next federal election.
Under the Allan government’s proposal, the up to $500,000 can only be used for administrative purposes such as paying for office space, and cannot be used for campaign expenses such as advertising.
In addition to funding from its nominated entity Labor Services & Holdings Pty Ltd, Labor also receives millions of dollars in affiliation fees from trade unions.
Under the changes, the early voting period would also be reduced from 12 to 10 days.
It is understood that the opposition was not consulted over the reforms, which will form part of the Electoral Amendment Bill 2025.
Premier Jacinta Allan said the overhaul was about making elections fairer, easier to run and ensuring there is “integrity and transparency” around political donations.
“Fair elections are the bedrock of democracy, and we are delivering these reforms to ensure Victorians can be confident in their electoral processes,” she said.
Shadow attorney-general James Newbury accused the government of hastily bringing in the reforms, and said the bill would consolidate Labor’s power over the electoral system.
The Greens, who will face significant funding challenges under the reforms, slammed the changes as an attempt to “rig” the state’s electoral system.
“Labor only set up these funds to rig the electoral system in their own favour and entrench the power of the Labour and the Liberal parties,” Greens Leader Ellen Sandell said.
“This was dodgy to begin with, and I think the Victorian public are sick of Labor and the Liberals teaming up to rig the system for themselves.”
Political observers believe this is unlikely to be the only change to the state’s voting system before the next election with group voting tickets in the upper house likely to be abolished – a move likely to outrage minor parties.
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Originally published as Liberals blindsided by proposed $500,000 cap on party donations
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