Labor and Coalition Strike Deal to Rewrite Election Funding Rules

A voting booth for the Brisbane City Council election in Calamvale in the south of Brisbane, Australia on March 16, 2024. Daniel Teng/The Epoch Times

The Electoral Reform Bill is now law. In a significant turn of events, Labor reached an eleventh-hour agreement with the Coalition to pass the bill in the Senate late on Feb. 12, followed by approval with amendments in the House of Representatives early on Feb. 13.

This marks the first time Australia has imposed both fundraising and spending limits at the federal level.

While the bill aims to curb excessive political spending, critics argue it entrenches advantages for major parties at the expense of smaller competitors.

What’s in the New Law?

Under the revised deal, the cap on individual donations has been lifted from the initially proposed $20,000 (US$12,500) to $50,000 per candidate or political party.

However, with state and territory branches of major parties treated separately, the effective limit extends to $450,000 for parties with a full federal structure, such as Labor, the Liberals, the Nationals, and the Greens.

The disclosure threshold has also been revised, settling at $5,000 instead of the originally proposed $1,000.

Though lower than the current threshold of $16,900, the change ensures a larger number of donations remain undisclosed.

The major parties had been close to striking a similar deal last November, but negotiations collapsed at the last minute when Labor attempted to amend the bill to limit funding from unions and business groups.

The revised agreement now allows peak bodies such as the Australian Council of Trade Unions (ACTU), the Business Council of Australia, and the Minerals Council to collect up to $250,000 from each of their members—far above the initial proposal of $20,000.

Why Independents Are Furious

For independent candidates, particularly the Teal independents who gained traction in the 2022 election, the new laws present a considerable challenge.

The bill maintains an $800,000 spending cap for individual candidates—significantly lower than the seven-figure sums that successful Teals relied on in their campaigns.

Adding to their concerns, public election funding will increase to $5 per first-preference vote for candidates securing at least four percent of the primary vote, up from the current rate of approximately $3.

While framed as a measure to reduce reliance on private donations, crossbench MPs argue it disproportionately benefits incumbents, who already enjoy name recognition and established political machinery.

Independent MP Kate Chaney condemned the move, calling it a strategic ploy by the major parties to retain control.

“The manner in which this has been pushed through is a clear indication that the major parties are determined to protect their dominance and limit genuine competition,” she said.

Fierce Debate

The controversial bill sparked heated debate in Parliament, with opposition from both the Greens and independent MPs.

Greens Senator Larissa Waters accused the government of colluding with the Coalition to manipulate the system.

“The major parties have agreed on rigging the system to lock out their competitors,” she said, arguing that the lack of meaningful engagement with the crossbench showed the deal had been preordained.

In the House of Representatives, tensions ran high as a bloc of independent MPs occupied the opposition benches in protest.

Greens leader Adam Bandt attempted to have his opposition formally recorded in Hansard, accusing the government of rushing through legislation that served its own interests rather than working with the Greens on unrelated childcare reforms.

Speaker Milton Dick intervened, rebuking MPs for their behaviour.

“I understand the issue is emotive, but this behaviour is not acceptable. Members need to show restraint and dignity while we debate these critical issues,” he said.

The backlash extended beyond the chamber, with independent MP Zali Steggall confronting Special Minister of State Don Farrell over the perceived advantages granted to unions and major parties.

“Why don’t you tell the Australian people that the big money in politics will now come from public funds?” she asked Farrell while he was conducting a doorstop interview.

Farrell denied any special treatment for unions, asserting that they would be subject to the same rules as all other donors.

However, Steggall continued to press the issue, raising concerns about undisclosed funds controlled by party-affiliated entities.

What Happens Next?

Independent Senator David Pocock has vowed to push for a rethink of electoral donations and spending caps if the next election results in a minority government.

The changes—requiring donations over $5,000 to be disclosed and imposing spending caps for candidates and parties—passed after a deal between the major parties.

But Pocock argues they create barriers for new independent candidates.

“It'd be incredibly important to look at this. It’s pretty telling that I haven’t seen a single civil society group come out and say this is a good thing for democracy,” he said.

“The cost-of-living crisis is so real. Underpinning that is a lack of competition. Why would we allow a lack of competition in our political sphere?”

Independent MP Helen Haines also signalled she would challenge the law if re-elected.

“It’s clearly unfair. The Australian public will see through this,” she told ABC.

“If I’m fortunate enough to be re-elected into the next federal Parliament, this so-called electoral reform will be well and truly in my line of sight to reform.”