Sweeping campaign and donation reforms needed for democratic renewal

Reform in this area is long overdue and shouldn’t have to wait for a minority government to make it happen.

In recent years, the discourse surrounding political campaign and donation reform in Australia has reached a tipping point and it’s clear to most people that change is needed. Spearheaded by the crossbench, including the Australian Greens and independent politicians, there has been a renewed push for sweeping changes to how political campaigns are funded and how donations are regulated. This movement underscores a broader concern that the current system disproportionately benefits major parties—Labor, Liberals, and the Nationals—perpetuating a cycle that impedes genuine democratic reform. Despite the apparent need for overhaul, these parties have historically shown reluctance towards reform, primarily because the status quo serves their interests well. This inertia is particularly evident in the case of the Labor Party, which, despite its vocal support for reform while in opposition, has demonstrated a notable lack of action on this front upon assuming power.

The proposed reforms by the crossbench are comprehensive and aim to address several key issues that undermine the democratic process. Among these proposals is the introduction of truth in advertising laws and a significant reduction in the donations disclosure threshold from $16,300 to $1,000. These measures are complemented by proposals to ban donations from industries deemed socially harmful, mandate real-time disclosure of donations, and impose absolute limits on donation amounts, capped at $1.5 million. These initiatives collectively aim to mitigate the undue influence of wealthy donors and special interest groups on the political landscape, which have the potential to sway election outcomes in ways that do not reflect the will of the electorate.

The urgency for reform is further enhanced by the recent entry of individuals and entities such as Clive Palmer’s United Australia Party, whose financial contributions have raised concerns about the integrity of the electoral process. The full public funding of campaigns is a viable solution to ensure a level playing field, particularly for smaller parties and independents, although in a recent Essential Poll, only 29 per cent of voters support either an increase, or full funded election campaigns from the public.

The support offered by Simon Holmes à Court’s to the teal independent candidates in the lead up to the 2022 federal election, demonstrates a method of political financing that aligns with the values of transparency and accountability, contrasting sharply with the opaque and disproportionate spending by figures such as Clive Palmer, although simply replacing one conservative wealthy donor with another wealthy donor with progressive leanings doesn’t solve the issue of individuals with the means and resources having the ability to sway electoral outcomes.

The debate over campaign and donation reform in Australia is not just a matter of regulatory adjustment but a question about the nature of democracy itself. The existing system, which allows for significant disparities in financial influence on politics, arguably distorts the democratic principle of equal representation. The reforms proposed by the crossbench aim to redress this imbalance, ensuring that the political arena is not unduly swayed by the wealthiest voices but reflects a broader, more equitable spectrum of the Australian populace. It is increasingly clear that the path to a more democratic and politically sustainable Australia lies not only in the enactment of these reforms but also in a cultural shift towards greater transparency, accountability, and inclusivity in political financing.

How much money in politics is too much?

The cost of democracy is high in Australia—the public cost of the 2022 federal election was $522 million, including public funding payments—but it’s a price worth paying, especially in the context of the increasing influence of substantial financial contributions on Australian politics and significant concerns regarding the integrity of democratic processes. This phenomenon is not unique to Australia; however, the specific manifestations of financial influence in the Australian context reveal systemic vulnerabilities that undermine the principles of equitable representation and accountability.

The case of Palmer and other wealthy individuals spending exorbitant sums to sway political outcomes underscores a troubling trend where financial might can override the collective voice of the electorate. Palmer’s expenditure, over $200 million across two election cycles, exemplifies how political influence can be bought, rather than earned through persuasive policy and principled leadership. Such actions not only distort the political landscape but also erode the foundational democratic principle that each citizen’s voice should carry equal weight.

Setting higher limits on political donations inherently benefits conservative politics—consistently raised whenever the Liberal Party gains office, as was the case in 1996 and 2013—and always ignites debates about the fairness and impartiality of the current system.

The influence of wealth in politics has been linked to policy decisions that disproportionately benefit the affluent at the expense of broader societal interests, including resistance to effective taxation of the mining industry (in 2010 when the Rudd government sought to introduce a carbon emissions trading scheme and a super-profits mining tax), opposition to reforms on franking credits and negative gearing (during the 2019 federal election campaign) and policies that adversely affect marginalised communities, such as the cashless debit BasicsCard that was championed by mining magnate Andrew Forrest, even though he has no expertise in social policy. These policy outcomes illustrate the broader implications of allowing unchecked financial contributions to dominate political discourse and decision-making.

The phenomenon is not limited to direct electioneering efforts but extends to broader attempts to shape the political and ideological landscape. Movements such as the American Tea Party movement, financed in part by the Koch brothers, shows how strategic financial contributions have sought to install legislators amenable to a particular ideological agenda. This strategy aims not only to influence individual policies but to fundamentally alter the role and capabilities of government, reducing regulatory oversight and dismantling social safety nets in favour of a deregulated environment that privileges the interests of the wealthy.

The danger of such influence is the potential to erode democratic institutions and principles, fostering cynicism and disengagement among the electorate. When political success becomes closely tied to financial resources and well-heeled individuals, the essential democratic tenet of government being determined by the citizens of a nation, is imperilled. This situation raises profound questions about the nature of representation and governance in a democratic society and the extent to which the current trajectory can be altered to ensure a more equitable and participatory political process.

In light of these concerns, the push for campaign and donation reform in Australia is not only an administrative or regulatory issue but a fundamental and necessary challenge to the prevailing dynamics of power and influence. The goal of such reform is to restore public confidence in the democratic process, ensuring that political decisions are made in the public interest, rather than being dictated by the financial interests of a privileged few. The need for comprehensive reform that addresses the root causes of financial influence in politics is becoming increasingly urgent, and if these reforms are achieved, will pave the way for a more inclusive and democratic political landscape.

The traditional two-party system is eroding

The dynamic shifts within the Australian political landscape, particularly the decline in the combined primary vote for major political parties and the unprecedented rise of the crossbench—17 from a total of 151 lower house electorates—signify a burgeoning desire among the electorate for more diverse representation and a departure from traditional two-party dominance, which has dissatisfied the public for far too long.

This evolution reflects a broader trend of public disillusionment with established political entities and a craving for transparency, accountability, and genuine democratic renewal. The 2022 federal election, which recorded the lowest combined primary vote ever for the Labor Party and the Liberal and National coalition—68 per cent—alongside the largest crossbench in history, is a clear indicator of this shift. Such developments not only challenge the status quo but also highlight the critical need for comprehensive reform in campaign and donations rules to facilitate a more equitable and representative political process.

The relationship between the growing disenchantment with major parties and the ascendancy of independents and minor parties suggests that the public is increasingly wary of the influence wielded by substantial financial donors over political agendas and decision-making. The call for reforms, particularly those that aim to level the playing field, is not merely about altering the mechanics of political financing but about restoring faith in the democratic process. The potential introduction of these reforms in the context of a future minority government—which, based on the current trajectory is going to become the norm rather than the exception—underscores the inevitability of change and the urgency for current political leaders to proactively address these concerns.

Transparency in political funding is paramount, and the public’s demand for it should transcend partisan lines: this would be desirable but we just know that in Australia, under the current two-party system which is no longer fit for purpose, this is never going to be achieved. Transparency is about ensuring that government is influenced by the will of the people rather than by the financial power of a select few.

The support from groups like Climate 200 for the teal independent candidates, also underscores the necessity of a framework that does not disproportionately favour those with access to significant financial resources, regardless of the political or ideological spectrum they occupy. While the contributions of donors such as Simon Holmes à Court and Graeme Wood to progressive causes should be acknowledged, influential donations usually flow into the coffers of conservative political interests, and the principle of limiting the influence of large donors remains paramount to preserving the integrity of the political system.

The debate over campaign and donation reforms is not just a matter of policy but a reflection of a deeper crisis of trust between the electorate and their representatives. The scrutiny of political donations is a manifestation of broader concerns about the motivations behind political decisions and the accountability of elected officials to their constituents rather than to their benefactors. This trust deficit, particularly pronounced among younger voters who exhibit diminishing support for traditional major parties, represents a critical challenge that must be addressed to ensure the long-term viability of Australia’s democratic institutions.

The trajectory towards more diverse and representative governance in Australia, as evidenced by the shifting dynamics within the political landscape, necessitates a comprehensive overhaul of campaign and donations rules. Such reforms are not only essential for mitigating the undue influence of wealth in politics but also for enhancing democratic engagement and rebuilding public trust in the political process.