Labor's 'Godfather' seeks deal on electoral reform – but some fear changes could disadvantage community candidates

Special Minister of State Don Farrell, who’s also minister for trade and tourism and the government’s deputy leader in the Senate, is a numbers man from way back.

A powerbroker of the right, in 2012 Farrell (only a parliamentary secretary at the time) had the numbers to be placed top of the South Australian Senate ticket, relegating the left’s Penny Wong, who was a senior minister, to the second spot for the 2013 election.

Sometimes, however, the numbers don’t prevail. Amid the ensuing controversy, Farrell stepped down to second place.

As a result he lost his seat at the 2013 election. He turned his hand to establishing a vineyard, before being returned at the 2016 election and becoming deputy opposition leader in the Senate. Then he had to cede that position to Kristina Keneally after the 2019 election.

Farrell and Anthony Albanese were long-time factional opponents. But under Albanese’s government, Farrell is prospering. With the thaw in China-Australia relations, it’s a very good time to be trade minister.

Now Farrell is set to wrangle sweeping changes to the donation and spending rules for federal elections. Those changes have the potential to affect parliamentary numbers in future elections.

This week the Joint Standing Committee on Electoral Matters (JSCEM) recommended broad reforms: a drastic lowering of the threshold for disclosing donations, and “real time” disclosure; caps on donations and spending, including for “third parties” (such as Climate 200, founded by Simon Holmes à Court) and associated entities (primarily bodies raising money for parties); and increased public funding for elections. The committee also said there should be legislation for truth in advertising.

The recommendations were made in the committee’s majority report, with the Coalition members dissenting on key issues. JSCEM didn’t spell out fine detail, and its final report won’t come until late in the year.

Farrell is not waiting for JSCEM’s last word. Unsurprisingly, the recommendations from the Labor-dominated committee are in line with Labor’s policy, and Farrell is already off and running. He’ll have negotiations with the players over the next few months, although legislation would wait until after the final report. He says he wants to get consensus if possible – a challenge, given the opposition’s position, but not necessarily out of the question.

A central aim of the proposals is to reduce the power of “big money” to influence elections.

“Big money” donations from business and unions have long been a concern. Clive Palmer elevated this to a new level with his spending in the 2019 and 2022 elections. Palmer spent $83.6 million in the 2019 campaign. In 2022, he spent an extraordinary $117 million (albeit to minimal effect – only one senator from his United Australia Party was elected, and he had little influence on the overall result).

Read more: Sweeping election donation and spending reforms recommended by parliamentary committee

Few would defend the Palmer cash splash as being appropriate in a good electoral system.

But dig deeper and the spending argument becomes a lot more complicated, with the pros and cons of caps nuanced, and decisions requiring fine judgments.

Teals elected in 2022 had expensive campaigns. Allegra Spender (Wentworth) spent more than $2 million, as did Monique Ryan in Kooyong. Without large amounts of money, some of the teal candidates could have struggled to get the name recognition that helped them win. Without Climate 200, a number of candidates would have had substantially less resources.

The teals might be dubbed the high end of the wider “community candidate” movement, which has gained increasing public support and given voters more choice and thus, arguably, more agency in our democracy.

Electoral reform is all about having a “level playing field”. But many factors influence that playing field, including whether the person is already on the field as a sitting member (or has advantaged access, as a candidate backed by an established political party).

Kate Chaney, a teal who holds the Western Australian seat of Curtin, was a member of JSCEM. In her “additional comments” in the report she says, while agreeing with the principle of curbing “big money”, it’s important the system is open to new entrants.

“Caps” need to be “structured to recognise the additional barriers to entry faced by independents or new entrants”, Chaney argues. “Donation caps must not be set too low […] new entrants are dependent on ‘seed capital’ to reach critical mass in campaign viability.”

Chaney is also hesitant about extra public funding, saying it’s “unhelpful” to replace private “big money” with “state dependency/taxpayer funding”. “State dependency is the opposite of community funding and engagement which should be promoted by changes to our system.”

Read more: Australians' feelings towards China are thawing but suspicion remains high: Lowy 2023 poll

Holmes à Court claims “poorly implemented” caps would actually weaken democracy rather than enhance it. He says the changes that have been made in Victoria and NSW “give the majors a free ride and effectively handicap outside competition”.

While superficially the odds might seem against an agreement between government and opposition, they both stand to gain from pushing towards it (there would be less chance on truth-in-advertising legislation). The two main parties share the serious problem of a falling primary vote, which they want to protect from further erosion.

Certainly, Holmes à Court has fears. “We wholeheartedly support reform if it’s fair, but we should all be suspicious because major parties have a track record of changing election laws to rig the game for their own benefit,” he tells The Conversation.

“Let’s be frank, Labor would like to see the back of Palmer, and the Coalition would like to kill the independents movement.

"While the Libs are saying they oppose Labor’s changes, ultimately they have only two ways to get back into government: change their culture, or change the rules, the latter being much easier.

"The devil is very much in the details. If we’re not careful it’ll be a big step backwards for Australia’s recently reinvigorated democracy.”

One person’s “consensus” can be another’s dirty deal, it seems. Different players have distinct interests.

Before the last election Graham Richardson, himself a former Labor right-wing powerbroker, wrote of Farrell, “the Godfather brings traditional common sense to Labor’s decision-making processes”.

Principle, pragmatism and common sense will all be needed to find the combination of reforms most attuned to reflecting the country’s democratic will and giving voters maximum agency. Farrell says it’s a matter of finding the right balance, between restricting the ability to “buy” elections and finding ways to improve access to democracy. “My job in the next six months […] will be to try and find that balance.”