Last-minute delay on donation deal as Clive Palmer makes last-ditch play to sink it

Labor and the Coalition will negotiate over summer to gain a deal on political donations amid fierce objections from Senate crossbenchers who fear it would boost the major parties and hurt independent candidates at the next election.

The law to strip big money from Australian democracy came close to passing the Senate after Opposition Leader Peter Dutton held informal talks with Labor powerbroker Don Farrell to negotiate the deal, while mining billionaire Clive Palmer raced to Canberra to try to stop the changes.

Special Minister of State Don Farrell.Credit: Alex Ellinghausen

Climate 200 founder Simon Holmes a Court also held last-minute talks online with Farrell to warn against plans to set a cap of about $800,000 on spending in each federal electorate – a level many of the “teal” independents believe will stop well-funded campaigns against major party incumbents.

Finance Minister Katy Gallagher confirmed on Thursday morning that all sides could not agree on the final details of the bill, so the changes will be negotiated over summer.

“The decision taken was, we won’t proceed with that bill today,” Gallagher told ABC’s RN Breakfast.

“But Senator Farrell will be working over summer with all, all senators across the Senate chamber to try and reach agreement for that. We want to get big money out of politics. We want to have donation caps. We haven’t been able to land it.”

The government aims to place a new cap on political donations so that individuals or companies could contribute $20,000 to a political party every year in each state and territory, enabling big donors to contribute at least $160,000 by spreading the payments across the country.

Labor has rubbished criticism of the bill and portrayed the teals as reliant on millionaires, arguing the rules applied equally to all political participants and would protect voters from being swayed by vested interests.

The deal would prevent Palmer from repeating the funding blitz he deployed at the last election, when he gave $117 million to United Australia Party.

Big political donors Clive Palmer and Simon Holmes a Court.Credit: Glenn Hunt, Kristoffer Paulsen

A deal between Labor and the Coalition would represent a defeat for Palmer despite his last-minute visit to Canberra to urge Farrell to stop the crackdown, which the Mineralogy chief has threatened to challenge in the courts because he believes the new limits are a curb on freedom of political expression.

Independent senator David Pocock warned on Wednesday night against a deal between the major parties on donations.

“There is a real possibility that this major party stitch-up on elections will be rammed through the parliament with no parliamentary scrutiny, no debate and no chance to move amendments,” he said.

Independents MPs have expressed alarm about the donations crackdown.Credit: Dominic Lorrimer

“Prioritising more money for politicians in the last week of parliament over bills to protect Australians from scams and a mandatory food and grocery code in the middle of a cost of living crisis is unconscionable.”

The Centre for Public Integrity, a not-for-profit advocacy group that wants a tight cap on donations and spending as well as real-time disclosure of all donations, also warned against rushing through the changes.

“Electoral reform, with its enormous impacts for our democracy, cannot be the plaything of the major parties,” said Catherine Williams, executive director at the Centre for Public Integrity.

“It is unconscionable that such complex, significant reform could pass the Parliament without an inquiry. Legislation of far less importance is the subject of inquiries: why not this?”

The Coalition wanted a higher cap on donations but has sought an agreement with Labor in the belief it would be better than an alternative law agreed by Labor and the crossbench, with a lower cap that would deter business donors.

As well as the cap on donations, the changes include a threshold for disclosing donations and a requirement that every donation is revealed more quickly than under the current rules, which state that donations made in the year to June 30 are revealed on February 1 the next year.

Labor went to the last election with a promise to overhaul the laws so that all donations of more than $1000 would have to be disclosed, far below the current threshold of $15,200.

While this would ensure that more donations are revealed, the Coalition is concerned that greater disclosure would discourage smaller businesses from making contributions to the Liberals or Nationals.

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