Labor, Coalition strike in-principle deal to shut out big money donors

The major parties are on the cusp of a critical deal to overhaul Australia’s election system and strip big money from politics, with a plan to ward off US-style elections dominated by billionaire backers gaining in-principle agreement from Labor and the Coalition.

Special Minister of State Don Farrell has previously flagged a bill would be put to parliament in the next two weeks after months of talks with the Coalition about the legally complex proposals to put a cap on how much candidates can receive in donations and spend on elections.

Special Minister of State Don Farrell has helmed months of talks over the planned reform.Credit: Alex Ellinghausen

The major parties reached in-principle agreement on the shake-up in recent weeks, according to several senior sources in both major parties who spoke anonymously to discuss the confidential talks.

The caps on donations and real-time disclosure rules are designed to head off the rising influence of billionaires such as Clive Palmer, who spent more than $100 million on the last election, and teal funding vehicle Climate 200, which spent millions on ads backing independent candidates at the last election.

The sources stressed that details, including Coalition concerns, were still being discussed and the fate of the deal was not absolutely guaranteed.

However, Coalition sources said the party had decided to deal with Labor to ensure the campaign finance changes were as palatable as possible to its interests. Farrell had threatened to do a deal with the Greens if the Coalition did not play ball.

“We understand [Labor] have a mandate so it’s better to try and work with them and get the best outcome we can,” one Liberal said.

This masthead reported in August elements of the draft legislation that are being considered, including a cap on the amount of money a candidate can receive, likely in the tens of thousands of dollars per year.

It is also expected to include a limit on how much a party can spend in an individual seat, likely to be under $1 million, and powers for the electoral commission to stop donors gaming the system by having others write cheques on their behalf. There will likely be more public funding made available for MPs to offset the drop in private donations.

Real-time reporting of donations worth more than $1000 is likely to be included, marking a sharp change from the current regime where disclosure of donations can take up to 18 months after an election.

Palmer, the mining magnate and benefactor of the United Australia Party, has flagged a legal challenge if the bill passes parliament.

Teal figures including Climate 200 founder Simon Holmes a Court have warned a major-party deal could hurt independents and entrench incumbents.

If successful, the legislation would take effect for the election after next, likely to be in 2028, to allow the Australian Electoral Commission and political parties to prepare for the changes.

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