Michelle Grattan: Tough road for donation cap

Don Farrell usually finds his way into the news cycle in relation to some or other trade issue. But Farrell, who’s Special Minister of State as well as Trade Minister, plans a throw of the dice soon that, if he can pull it off, would give him a place in the history books for driving a major reform of Australia’s Federal electoral law.

The changes, long in the pipeline, would place caps on both donations and spending for Federal elections, and include more timely disclosure of money flows.

But the far-reaching reforms, which Farrell aims to bring to Parliament in the fortnight sitting starting August 12, would seem unlikely to be in place for the coming election, due by May next year.

The proposals are generally in line with the majority of recommendations from the parliamentary Joint Standing Committee on Electoral Matters.

It’s been a tortuous process, much longer than Farrell initially hoped, with extensive discussions with other players, and constitutional hurdles to consider. How much of the reform package can be wrangled through Parliament, and how long that might take can’t be predicted.

The reforms will include a minimalist “truth in advertising” measure, based on the model operating in South Australia. But that might fall by the wayside in the Parliament.

The Australian Electoral Commission, which has resisted being the designated cop on the beat to adjudicate on truth, will be relieved if it doesn’t eventuate.

And Farrell won’t even try to increase the number of Australian Capital Territory and Northern Territory senators (currently set at two each) because there is not enough support to do so.

For Farrell, the core issue is the caps to stop the explosion of spending and politicians having to devote so much energy to fundraising.

Billionaire Clive Palmer’s massive spend on the last election has obsessed Labor, although for his $123 million outlay, his United Australia Party won only one Senate seat, secured by Ralph Babet in Victoria.

Farrell says: “Our system needs to be protected, including from billionaires who try to influence our elections.

“The focus of the reforms I will introduce into the Parliament is to address the growing threat of big money in politics.” But his package would also protect “genuine political communications,” he insists.

All donations of $1000 or more would have to be disclosed, and this would be a hard, non-indexed threshold. The present indexed threshold is more than $16,900.

There would be a cap on how much each donor could give, with figures still being finalised.

Under the three-tier proposal in the Farrell legislation, caps would be set for what parties could spend on their national campaigns, and at the State level (to cover campaigns for the Senate). There would also be caps for spending in a seat.

The key cap would be seat one, and this is set to be somewhere under $1 million per candidate.

Unsurprisingly, some of the teals, who were elected after expensive campaigns, are concerned about new players. (Monique Ryan and Allegra Spender both ran campaigns costing more than $2 million apiece.)

One effect of the caps would be to limit the extent to which a party could pour huge sums of money into a seat where it perceived the MP was under threat.

The legislation will likely include an increase in public funding, although the intention is to keep this increase relatively modest, based on the judgment that anything too large would go down poorly with the public.

Parties, however, would also get an amount for administrative costs. This would be a new thing, although they have previously received grants for specifics such as updating cyber-security.

There will be measures to try to catch some of the spending by “significant third parties”, for example, unions, advocacy groups such as Advance, and groups such as Climate 200, which financially backed a number of community candidates in 2022.

But how these will operate remains unclear. This third-party spending is a crucial issue and the devil will be in the detail.

Parties, candidates and other players in an election will have to have dedicated Commonwealth campaign accounts for all donations and spending, which will be subject to auditing by the Australian Electoral Commission.

There have long been calls for “real-time” disclosure of donations. Under the proposed reforms, donations outside election periods would be disclosed within weeks. During campaigns, the time would be reduced down to weekly, then daily as polling day nears.

When it comes to electoral reform, players start from a position of self-interest. So while there have been extensive discussions with the opposition parties, the Greens, the Teals and others, getting agreement — or, at least, agreement from some players on some aspects — is a huge ask.

The Liberals are staying publicly mum. Some of the teals, as newcomers and minions compared to the major parties, are vocal.

WA teal Kate Chaney, who has been at the forefront of electoral issues, stresses: “My lens is whether the reforms prevent future competition”.

Victorian teal Zoe Daniel remains “suspicious that the major parties will dress up their proposals as electoral reform when their real goal is self-interest”.

The package is expected to have a rough parliamentary road, not helped by its arrival so late in the term. It’s likely to see bits peeled off or dropped off during its journey.

Given the timing, it is hard to see that much of it could be operational in time for a 2025 election — the AEC would require a period to gear up.

Farrell, who is overseas, will return to yet more haggling over his changes.

A pragmatic numbers man of Labor’s right faction, he knows if he doesn’t get as many reforms as he can through during this Parliament, there is a danger a re-elected Albanese Government could be in the minority when negotiating electoral changes would become even more difficult.