Labor risks kicking political donation reform bill to an uncertain future

The deferment of the Albanese government’s attempt to clean up political donations until parliament resumes has potential to cause the reform’s complete collapse, should the parliament not return next year to make way for a federal election.

The donation reform was one of many pieces of legislation affected by Labor’s negotiating troubles as it tried to push more than 30 bills through the Senate on Thursday’s final sitting day of the year.

The new law was aimed at curbing big donations to Labor and the Liberals. But the bill’s proposal of an $800,000 spending cap in each electorate sent the teals and other candidates into a tail-spin, and they joined forces on Wednesday night to oppose the changes, claiming the limit was unfair.

The bill had a reasonable chance of passing after Opposition Leader Peter Dutton held informal talks with Labor powerbroker Don Farrell to negotiate the deal.

Things faltered just as mining billionaire Clive Palmer raced to Canberra to try to stop the changes. Climate 200 founder Simon Holmes a Court also held last-minute talks online with Farrell to warn against the cap as currently designed.

Finance Minister Katy Gallagher has confirmed changes to the Electoral Legislation Amendment (Electoral Reform) Bill 2024 will be renegotiated over summer and said it was the government’s intention that parliament should sit in February. “We want to get big money out of politics,” she said.

But intentions are not outcomes and Labor has kicked the legislation down the road to an uncertain future with a federal election looming.

The Coalition spent $132 million at the last federal election, Clive Palmer’s United Australia Party $123 million and Labor $116 million. The Centre for Public Integrity, a not-for-profit advocacy group, wants a tight cap on donations and spending as well as real-time disclosure of all donations, and has warned against rushing the changes through.

The Albanese government’s legislation has been the closest we have ever come to political donations reform, but there is still far to travel. One unintended consequence of parliament potentially failing to resume due to a February or March election is that players, big and small, will be able to blithely continue to milk the system for all they can get.

That is not good for democracy. Spending caps could not only put a stop to the fund-raising arms race between political parties but also prevent billionaires such as Palmer influencing the result. His campaign was a joke, securing only one Senate seat. However, his advertising drowned out other voices, skewed the debate and made it a closer race for major parties.

Palmer’s bare-faced cheek carried him a long way in Australian politics, and he has foreshadowed a High Court case against the legislation, claiming the bill not only was “designed to rig elections” but would “hinder the independents, the regular Australians, from standing for parliament”.

Labor’s stumble on donation reform only further undermines the public trust in our political system. Elections should be a contest of ideas, not chequebooks.

Bevan Shields sends an exclusive newsletter to subscribers each week. Sign up to receive his Note from the Editor.