They said they’d clean up political donations. The major parties will certainly clean up

For five years, the Centre for Public Integrity has advocated to get rid of “big money” in politics. Caps on donations and campaign spending are central to any major reform.

Labor, with the apparent approval of the Coalition, has introduced a bill to address this problem. On Wednesday, it passed the House, and next week it is expected to be approved by the Senate. The regime will not come into practical operation until 2026 but its swift passage in the next few days, Labor tells us, will enshrine this important reform in our laws immediately.

Illustration: John ShakespeareCredit:

The bill reduces the threshold at which donors must disclose their contributions from $16,900 this financial year to $1000. It also implements speedier disclosure. Rather than voters waiting up to 19 months to learn who has donated to whom, monthly donation disclosures will be required. Once an election is called, donation disclosures will be required within seven days — and within 24 hours in the week before and after polling day.

These transparency improvements are welcome, and the government should be commended for them. Otherwise, however, the bill raises significant concerns – both in terms of process and substance.

The fact that it is set to proceed in the absence of a parliamentary inquiry is alarming, considering its complexity and significance. Independents David Pocock and Kate Chaney have said this is a secret deal, a “stitch-up” to subvert parliamentary process and enshrine the incumbent duopoly in a manner that threatens proper democratic principles.

Are Pocock and Chaney right? Is this a principled and integrity-based reform, designed to generally remove the undue influence of money in politics? Or is it a cynical and disingenuous scheme to ensure the two-party system is entrenched at the expense of the independents or new entrants? Or is it perhaps both at the same time?

The answer to these questions is not easy. First, the amending bill is a mammoth, 227-page document which was made public for proper scrutiny only on Monday. Second, the apparent but unusual mutual satisfaction of both Labor and the Coalition might suggest to some a “conspiracy” of sorts rather than a genuine desire for reform.

For the past year, we have seen the Coalition stand resolutely in the way of other potentially worthwhile reform legislation brought forward by the government. Now, suddenly, the two combatants – both recipients of very large donations for the 2022 election – are enjoying a celebratory drink in the same dressing room. Again, a cynic might say: “What’s happening here? Strange bedfellows.”

In respect of the substance, the truth is that this legislation will not fix the problem of money in politics. It sets donations caps so high, at $20,000 annually, that they are unlikely to prevent undue access and influence. This is especially so given peculiar aspects of the bill, which allow $40,000 to be donated in an election year. Another aspect is that a wealthy supporter of a major party with state and territory branches, and a federal branch, could contribute $180,000 a year by donating $20,000 to each of the party’s individual branches. Over an electoral cycle, this amounts to $540,000. How could the ordinary citizen possibly match donations of that size, and achieve the access and influence that these donations bring?

Undue access and influence is the evil that is truly at the heart of our donation system. It is not simply money that is corrupting. Rather, it is the influence it enables. Wealthy donors and politicians will want this relationship to continue. This legislation seems to enable this to happen.

On the other hand, given the high level at which the bill sets expenditure caps, federal elections will remain the most expensive in the nation on a per-elector basis. The bill sets a campaign spending limit of $90 million per party, and $800,000 for an individual campaign.

To take one example of what this means, an independent competing in a seat can spend $800,000, as can a party competing for the same seat. However, it can also spend the remainder of its $90 million federal cap on general party advertising, permitting the flooding of key seats and placing major parties and deep-pocketed parties at an advantage over independents and new entrants. Is this fair? Without fairness, we undermine democracy.

In addition, by introducing generous administrative funding for themselves ($30,000 per lower house member per year, $15,000 per senator), the major parties have again shown their preparedness to treat taxpayer dollars as theirs for the spending – even in a cost-of-living crisis.

Importantly, there has been no evidence provided to justify this level of funding. There has also been no evidence to justify the increase in the dollar-per-vote public funding, up from $3.35 to $5. This may seem a small amount per vote but when translated to the 2027 election, it is likely to represent a hefty windfall for the major parties. The last thing we need is a major escalation of public funding for politicians.

The total absence of policy development funding for new entrants fails to incentivise the competition of ideas that must inform our elections.

Significantly, the failure to include an expert statutory review of the legislation is alarming and raises concerns as to its genuineness. Such a feature, commonplace in important legislation, ensures that impartial experts will review the legislation and its operation. Why is it omitted?

Finally, making it public only days before it is passed is deeply worrying. This is serious legislation – once-in-a-lifetime stuff. Why the haste, particularly when the bill is not intended to come into practical operation until 2026? Why not follow the ordinary processes – referral to a committee for careful and mature consideration.

When legislation critical to integrity in public administration is introduced, it should not be sullied with the slightest perception that its genesis lies in the entrenchment of incumbents, rather than in the advancement of the public interest. Moreover, it should be set up to achieve its objects, not fail them. It is the enrichment of our democracy that is at stake here.

Anthony Whealy is a former NSW Supreme Court judge and former assistant commissioner of the ICAC. He is the chair of the Centre for Public Integrity.