Think the major parties have turned their backs on democracy? Here’s proof

Don Farrell, the federal minister in charge of this week’s “reforms” of political donations and election funding, made two claims: that the legislation removes big money from politics and that it creates a level playing field. Regrettably, even a cursory examination reveals each claim is utter nonsense.

So we are left to interrogate whether this backroom deal between the two major political parties reflects a deliberate and contrived assault on the integrity of our democratic system. Furthermore, is it unconstitutional?

For once, a bipartisan position: Opposition Leader Peter Dutton and Prime Minister Anthony Albanese.Credit: Alex Ellinghausen

First, the big money. We know that in the financial year 2023-24 that the top individual donors were Pratt Holdings ($1 million to Labor) and Keldoulis Investments Pty Ltd, a major donor to Simon Holmes a Court’s Climate 200 (a total of about $1.1 million). Under the new laws, Anthony Pratt will still be able to donate more than $1 million to Labor (or the Coalition if he chooses) – albeit over a whole electoral term.

Let us assume a three-year election cycle. Pratt can donate up to the new cap of $50,000 each year, but that is only the cap for the federal Labor branch. He can also donate $50,000 to each of Labor’s eight other branches in the states and territories. That is, he can donate $450,000 each year to his favourite party. Over the electoral cycle, that adds up to $1,350,000 – a nice little earner for Labor. In some electoral cycles, if an election is called early, the cap is extended for a fourth time – potentially yielding his preferred party $1.8 million.

How about the Climate 200 donor? Sadly, in the absence of multiple Climate 200 branches, the donor will be restricted to a cap of $50,000 a year. So, unlike Pratt, it is restricted to stumping up $150,000 over the three-year cycle, or $200,000 in those electoral cycles allowing four donations.

Taking big money out of politics? Creating a level playing field? I don’t think so. By the way, the cap of $50,000 is utterly off the planet in any event. It contrasts steeply with the donation caps in our states and territories, which vary between $3000 and $8000.

Next, campaign expenditure. Under the new rules, registered political parties – whether Labor, Liberal, the Greens or others – can amass a war chest of $90 million to spend on a campaign. An individual candidate, meanwhile, can spend no more than $800,000 on campaigning to win a seat. That limit applies to any candidate, whether an independent or from a major or small party. A party, however, can also spend from its $90 million war chest for general party advertising – and manipulate it to target marginal seats. That puts deep-pocketed parties at an advantage over independents and new entrants. Hardly fair. Hardly democratic.

There is a strong argument that this legislation will prove to be unconstitutional. The High Court is likely to look closely at its purpose. If it is demonstated to be principally designed to entrench incumbency and keep new entrants out, it is likely to be thrown out.

Is the bill all bad? No. It does reduce the threshold at which donors must disclose their contributions, from $16,900 this financial year to $5000. It also implements speedier disclosure. Rather than voters waiting up to 19 months to learn who has donated to whom, as is currently the case, donations must be disclosed within 21 days. 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.

The government should be commended for these transparency improvements. Otherwise, there is little to commend it in totality.

Federal elections will remain the most expensive in the nation on a per-elector basis. No evidence is provided to justify the bill’s increase in the dollar-per-vote taxpayer funding, up from $3.35 to $5. This money is an advance payment to sitting politicians – before the election. It is not paid to their rival candidates attempting to secure a seat in parliament for the first time. They get nothing. The principal aim of this legislation is arguably to entrench the incumbents, especially the major parties, and to disadvantage their opponents. It will represent a hefty windfall for the major parties at the 2027 election while deterring any new entrants from trying their hand.

Democracy at its best? I don’t think so.

This bill is a mammoth, 227-page document, yet it was made publicly available only days before it was rammed through both houses of parliament this week with the Coalition’s support. And without adequate debate. It was guillotined to prevent the parliamentary processes from taking place. It has passed without parliamentary or committee scrutiny. It does not contain, as important legislation usually does, provision for an independent statutory review. This deliberate chicanery is an affront to our proper democratic process.

Why the haste, given the legislation is not intended to come into practical operation until 2026. For the past year, we’ve seen the Coalition stand resolutely in the way of other potentially worthwhile reform legislation from the government. Now, suddenly, the two combatants – both recipients of big donations at the 2022 election – are enjoying a celebratory drink in the same dressing room. Strange bedfellows.

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 ensure it will.

Australians have a healthy distrust of their politicians. Sometimes that is unfair, especially to those politicians who reflect the values of integrity and honesty. However, this legislation will likely deepen this lack of trust. The false claims made by its authors demand that citizens ask: do we, as a nation, want to elect into power a duopoly that has abandoned honesty, accountability and integrity? We have seen overseas how the abandonment of these principles has poisoned democracy.

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.