Changes to Australian election laws have a major party skew

Recent and proposed changes to electoral laws at the national and state levels risk perverse, unfair outcomes. Sometimes these are called “unintended consequences”, but that is too generous to politicians who are often fully aware of what they are doing.

Last year, the Albanese Government capped political donations and election campaign spending and increased taxpayer funding for political parties by tens of millions of dollars. These dramatic changes to political finance laws passed in an eleventh-hour deal with the Liberal Opposition despite the warnings of integrity experts. The laws will have their first test at the next federal election, due in 2028.

On the face of it, limiting the role of private money is reasonable. Nobody wants to see millionaires and billionaires exercise more influence than they already do.

But the devil is in the details. The laws are structured so that major political parties with multiple registered branches can split donations and spending among their various arms to work around the caps, while their independent and minor party rivals are held back.

The government did not reveal these workarounds in the brief parliamentary debate it allowed on the changes. It has been forced to be more forthcoming by a constitutional challenge from former independents Rex Patrick and Zoe Daniel, who argue that the new laws potentially breach the Constitution’s freedom of political communication.

In new court documents, the government confirms that if the new donation rules had applied at last year’s election, the Labor Party would have received an additional $18 million and the Liberals $14 million in taxpayer funding, more than compensating them for revenue lost to donation caps. But while the major parties would have received a windfall, the same government documents indicate independents would have been left worse off, including Nicolette Boele by $746,000, Sophie Scamps by $632,000 and Allegra Spender by $447,000.

Because they receive so much taxpayer funding, the major parties gain a competitive advantage by limiting access to private funding.

Similar changes are being made at the state level. In South Australia, new laws introduced by Premier Peter Malinauskas mean incumbents and established parties will receive about $20 million more in public funding over this election cycle, while new entrants face very strict donation caps.

This week, the Labor Opposition in Tasmania put forward a private member’s bill that would cap state election campaigns at $60,000 for an independent and $1.75 million for a political party.

Tasmania has a power-sharing parliament where no one party has a majority. That means good ideas can become law even if the state government is opposed to them, if the Labor opposition and independents and Greens on the crossbench vote together.

Unfortunately, Tasmanian Labor’s proposed spending cap looks like it would have the same flaws as spending caps elsewhere in the country: it would give major parties and incumbents a major advantage and suppress independents and new entrants.

Tasmania has proportional representation. There are seven MPs representing each of the state’s five electorates.

Labor’s spending cap would be $50,000 per party candidate, or $60,000 for an independent candidate. But a party can field up to seven candidates in an electorate, allowing them to spend up to $350,000 per electorate (outspending the independent about six times over). The party could draw additional resources from other electorates to spend even more in key races.

And that’s without considering the taxpayer-funded incumbency advantages that sitting MPs receive, like office, staff, travel and salary. New entrants spend private money to cover those costs, making their effective spending cap even lower.

At the last Tasmanian election, political parties won between zero and three seats in each electorate. Several independents won a seat each. Why should a party chasing anywhere between one and three seats be able to spend six times as much as an independent chasing one seat? The Tasmanian Greens had a much more reasonable proposal of allowing a party to spend just twice as much as an independent.

In the same week that the High Court saw how Labor and Liberal tilted the playing field towards the major parties federally, Tasmanian Labor’s private member’s bill threatens to do the same at the state level.

There is hope. In Tasmania, the same power-sharing that makes it possible for a Labor private member’s bill to become law allows for it to be improved by amendments from crossbenchers and backbenchers. But finding a democratic, competitive solution requires being upfront about the perverse outcomes and unspoken risks at the start – not waiting for High Court litigation to expose the democratic implications of these dramatic changes.

Bill Browne is Director of the Australia Institute’s Democracy and Accountability Program.