Labor, Coalition push to keep splashing cash at state elections

Labor and the Coalition want to keep spending big at Victorian election campaigns despite integrity experts calling for limitations, as the Liberals argue donation caps should be quadrupled.

The Andrews government on Friday defended the appointment of former Labor senator David Feeney – who is a paid board member of a public entity – to a panel reviewing political donation laws. Legislation bans employees of public entities from the panel, but paid board members are not legally considered employees.

Victorian Deputy Premier Jacinta Allen (left) and Premier Daniel Andrews.Credit: James Ross

The three-member independent review panel, which is chaired by former Victorian Electoral Commission deputy Elizabeth Williams, also includes former Liberal senator Helen Kroger.

Labor committed to the review in 2018 when sweeping reforms were introduced to blunt the influence of political donors, by capping donations at $4670 for every four-year election cycle.

The Greens have repeatedly called for further reform to remove donation cap exemptions that benefit major parties, and MP Tim Read, the chair of the parliament’s integrity and oversight committee, said he worried the “partisan” panel might be unsympathetic to such changes.

In its submission to the review, the Liberal Party argued the indexed donation cap of $4670 should be effectively quadrupled by applying to each financial year rather than every four-year period. The Nationals also suggested increasing the donation cap by an unspecified amount.

David Feeney in 2017, when he was a federal MP.Credit: Fairfax Media

“This change would enhance the freedom of Victorians to freely express themselves while still seriously curtailing the potential influence of political donations in Victoria,” Liberal state director Stuart Smith wrote in the party’s submission.

Labor, the Liberals and Nationals all argued against campaign expenditure caps, as has been recommended by the Centre for Public Integrity, the Accountability Round Table, constitutional law Professor Anne Twomey and the Greens. The review is specifically tasked with considering spending caps.

Labor claimed limitations on donations effectively acted as a de-facto expenditure cap, which it said could create unintended consequences. The party also wanted to close the loophole that allows candidates to donate unlimited cash to their own campaign.

The Liberals argued that if a spending cap was proposed, it should include taxpayer funded advertising and research that benefits the government of the day. The Nationals said the cap would have to apply to third-party campaigners such as the Trades Hall.

Read said it was important the panel heard from all parties, including the majors, “but the panel shouldn’t be the Labor and Liberal parties”.

“I think that Victorians would be more confident of the panel’s findings if the panel was not partisan,” Read said.

Controversial carve-outs in the 2018 reform allowed registered political parties to appoint a “nominated entity” to provide uncapped cash.

That decision means Labor continues to receive unlimited funds from Labor Services and Holdings, the Liberals can rely on its investment vehicle the Cormack Foundation, and the Nationals use Pilliwinks Pty Ltd.

Nominated entities are not available to independents and while any party can appoint one, the value of any new entity is limited by the $4670 cap to set it up.

Read described the exemption as “a structural advantage in favour of the major parties”.

“With two-thirds of the panel from the major parties, we cannot be confident that the nominated entity problem will be resolved,” he said.

Liberal Party state president Greg Mirabella said he was not consulted on any of the appointments to the review panel. A government spokeswoman said neither party’s head office was consulted.

Helen Kroger, pictured in 2019, is part of the panel reviewing Victoria’s political donation scheme.Credit: Alex Ellinghausen

Mirabella agreed the reforms entrenched incumbency for the major parties, but said this was particularly to Labor’s benefit.

“You’d be struggling to find any other democratic jurisdiction where this situation exists, where you’ve got a government of the day passing legislation which effectively neutralises everybody else,” he said.

“It doesn’t neutralise the Liberal Party because we have assets, but it certainly makes it almost impossible for any other nascent political organisation to generate sufficient financial resources to credibly achieve political success.”

Feeney is paid $344 for each day of meetings as a board member of the public entity Defence Council Victoria and his expenses are “in accordance with the rates that apply to employees of the department”, said the advertisement for the board position.

But Feeney is not considered an “employee” under the Public Administration Act.

“As a board member of the Defence Council Victoria, Mr Feeney is not an employee of the entity – as such, he is eligible to sit as both a board member and as a member of the electoral review expert panel,” the government spokeswoman said.

David Harper, a former judge of the Court of Appeal and Supreme Court of Victoria, speaking generally, said that if an employee of a public entity was considered inappropriate then a board member must also be inappropriate.

“There was a reason, no doubt, an appropriate reason, why [public entity] employees were not suitable for this job. There is no obvious reason why the considerations which would disqualify an employee wouldn’t also disqualify a member of the board,” Harper said.

The government spokeswoman said Feeney and Kroger were both extremely well-qualified to ensure Victorians had faith in the integrity of the electoral system.

Government Services Minister Danny Pearson appointed the panel in May, and the positions were approved by parliament’s electoral matters committee. The panel is due to report back by November.

Feeney’s long involvement in the ALP included stints as national assistant secretary and as state secretary, where he was renowned for his fundraising prowess. He was a senator for five years and then a lower-house federal MP for a further five years.

Kroger, a senator for six years, was also previously the president of the Victorian division of the Liberal Party and vice president of the federal party.

Feeney and Kroger were both approached for comment.

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