Sweeping election donation and spending reforms recommended by parliamentary committee

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Caps on spending and donations for federal elections and “real time” disclosure of donations to parties and candidates are among the sweeping recommendations for reform made by a powerful parliamentary committee.

The Joint Standing Committee on Electoral Matters, in its interim report tabled on Monday, also recommends donation and spending caps apply to third parties and associated entities.

The majority report also urges a new system of increased public funding for parties and candidates, in light of the impact its proposed changes would have on private funding in elections.

Under the reforms proposed, the donation disclosure level would be reduced to $1000. The present threshold (from July 1 last year) is $15,200.

The committee has also said the government should develop legislation “to provide for the introduction of measures to govern truth in political advertising”.

The committee does a review after each election.

In her foreword to the report, the committee chair, Labor’s Kate Thwaites says the evidence it heard allowed the committee “to develop clear goals for reform to increase transparency in election donations and curb the potentially corrupting influence of big money, to build the public’s trust in electoral and political processes, and to encourage participation in our elections”.

The Albanese government is committed to substantial reform on electoral spending and donations. The committee will undertake further evidence and work before its final report to be delivered late in the year.

Electoral reform is likely to become a battlefield between the government and Coalition. In addition the community candidate movement will be concerned that some reforms would disadvantage aspiring new players.

Coalition members of the committee put in a dissenting report, disagreeing with the “caps” on donations and spending as they are proposed, and with other aspects of the majority report.

Opposing spending caps the Coalition dissenting report says: “A spending cap that fails to take into account Labor’s union-funded campaign machine is nothing short of a financial gerrymander”. It also says if any caps on donations or spending are introduced, they should apply to third parties and associated entities, and any spending caps should be lower for third parties and related entities.

The report points out that while there have been reforms in many states and territories to improve transparency and accountability, there has not been substantial reform at the Commonwealth level.

“It is time for the government to reform the Commonwealth system,” the report says. It says the issues are not new and urges reform before the next federal election. Changes should be implemented together.

The report says the aims of the reforms are to improve transparency, reduce “the potentially corrosive influence of big money”, level the playing field for new entrants, ensure integrity and compliance, and allow continued participation in elections from the public, civil society, business, parties and others.

Crossbencher Kate Chaney, a member of the committee, said “imposing caps is complicated. People don’t want big money influencing election outcomes, but they also want to know they have a choice of candidates.

"The major parties have developed an election funding system that embeds them. Only about 0.4% of Australians are members of a major political party and voters want to know about other candidates too. We need to level the election playing field” by addressing party and incumbent advantages, she said.

The report notes the 2022 election saw “the rise of independents who were the recipients of donations from a significant third party - Climate 200, a crowdfunding initiative with over 11,000 Australians who provided donations’ Climate 200 raised about $13 million which was donated to selected independent candidates, Wealthy individuals also donated substantial amounts to Climate 200.”

Special Minister of State Don Farrell said, “The Albanese Government is committed to improving transparency and accountability across our democracy”. It looked forward to the final report. “Electoral reform should always be consultative and bipartisan,” he said.