In a democracy, elections should be about the contest of ideas, the battle to convince voters that your vision for the nation’s future is the one they want to vote for. But the reality, in recent Australian elections, has been the battle to see who could spend the most money. In the 2022 federal election, almost $250 million was spent by the major parties. Clive Palmer spent $117 million just on his own. In some seats, Independent candidates spent more than $2 million on just a single race. Big money in politics distorts the contest of ideas. We desperately need reform to our donations laws to reduce the impact of big money and remove dark money from politics in Australia.
That is why I wish I could stand up today and fulsomely welcome the Electoral Legislation Amendment (Electoral Reform) Bill 2024. We need it, and Australians want it, too. The 2022 Australian Election Study found that more than 90 per cent of Australians supported limiting donations to political parties, and, in a world that is more and more divided, this is something most Australians actually agree on. Australians are increasingly dissatisfied with the major political parties. In 2022, one-third of Australians voted for a minor party or an Independent. Support for the two major parties has never been lower.
What do the two major parties do in response? Do they have a good, hard look at themselves; introduce policies that reflect the migration of votes towards Independents and minor parties; fix their internal processes to be more representative? No. They make a backroom deal to make sure the two-party duopoly is stronger than ever. A 224-page bill was drafted without it being shown to anyone else in the parliament but the two major parties, a bill that ultimately gives the major parties more money and everyone else less—with no exposure draft for the rest of us to see.
I received the 224-page bill and 180-page explanatory memorandum on Friday afternoon. My team and I have been going through it to try and understand just how these reforms will work—because we want them to. What impact will this have on our elections? In the short time I’ve had with the bill, questions and concerns have arisen. These are questions and worries about aspects of the bill that go to the core issue of our democracy—elections and how Australians participate in them as voters and candidates—and they should give every Australian pause for concern.
But, before I outline my concerns, I want to celebrate some measures in this bill, because there are some good ones. This bill includes some excellent measures that will shine a light on money in politics that has not existed before, and I welcome that.
I welcome the new requirements to disclose all donations above $1,000. This is what I do now on my own website. I also support the provisions for real-time donation disclosures. Under the bill, donations above $1,000 will be required to be disclosed once a month to the Australian Election Commission outside of election periods. During elections, gifts must be disclosed once a week and then, in the week before the election, every day. That’s good. This is a win for transparency. It will ensure voters know who is donating to candidates and political parties and, importantly, they will have this information before they cast their vote. I congratulate the government on this section. Right now, we only know who donates to an election candidate for donations above $16,900 and only once a year. Right now, voters are going to the polls with no line of sight as to who has donated to the names on the ballot paper. This bill fixes that, and I am unequivocal in my support for this section.
I also support the intention of other key elements of the bill. Let me be crystal clear. I support donation caps and I support expenditure caps. I want to see a fair and level playing field. The government say they do too, but the devil is in the detail. The government are very quick to say the donation and expenditure caps should come as no surprise, that they were recommended by the Joint Standing Committee on Electoral Matters and so subsequently we don’t need any additional scrutiny of the actual legislation. But this is not exactly true, is it? Yes, the committee recommended we should have donation and expenditure caps. But they did not recommend a number for those caps. Yes, the committee recommended that we should amend the definition of a gift to ensure it meets community expectations of transparency. But they did not recommend the four pages of things in the bill that are excluded as gifts. Yes, the committee recommended a new system of administrative funding and increased public funding for elections. But, again, they didn’t mention how much or how this should be calculated. And there are some things in this bill that the committee report doesn’t actually touch on at all. This is where we get to my concerns with this bill.
Firstly, let’s look at the new donation cap, called a ‘gift cap’ under this bill. Right now, a business, individual, organisation or anyone can donate as much money as they want to a party, a member of parliament or a candidate. This means those with the deepest pockets have the potential to have undue influence over our elections and over those elected. Voters feel that these large donations are never just donations; one day, they will likely be used to call in a favour. So I support donation caps, and the committee on electoral matters does too. But, importantly, they did not mention what the caps should be. It’s important, then, that we scrutinise how exactly the government arrived at the figures they did. Under the bill, the donations are capped at $20,000 to a party, MP or candidate per year. In that same year, a donor cannot give more than $600,000 overall. So, if they want to donate to multiple candidates, they can—up to $600,000.
A key issue I have with the gift cap is not necessarily the cap itself. It’s what is considered a gift and what is not—what’s in and what’s out. For example, in my reading of the bill—and, remember, I haven’t had much time to read it—it appears that union affiliation fees, MP and senator levies and a subscription paid to a political party can all be excluded from the definition of a gift. If you’re wondering what all these things are and what they all mean, fair enough. The bill currently has four pages of things that are excluded from the definition of a gift. While it looks like the government are turning off the tap of big money, they are still leaving plenty of ways for money to flow to the major parties. I seriously question how this creates a fair playing field in elections. I think the government needs to answer this.
Next, I have real concerns that the spending caps under the bill skew in the favour of major parties and not Independents, especially Independents that are new entrants, that are not incumbents. This is a really big concern for me. Under the bill, each candidate cannot spend more than $800,000 in an electoral division. This seems very reasonable. I don’t want to see elections becoming an arms race on whoever gets elected and the person that’s elected being the candidate that spent the most in that division. A cap like this appears sensible. Then there is the national cap, set at $90 million. This applies only to a registered political party, not an Independent candidate in the House or the Senate.
This means that a major political party could spend up to $800,000 in the 30 or so marginal seats they’re focusing on to form government and significantly less in other, safe, seats and still not reach the $90 million cap. But this isn’t the end of it, of course. Under the bill, registered political parties won’t exceed the $800,000 cap if they don’t ‘target’ that division. What does that mean? It means that, if advertising or other electoral spending doesn’t mention the candidates or the electorate name or refer to their likeness, it doesn’t count towards the $800,000 for that seat. What does that mean in reality? It means you could be on the main street of Wodonga in my electorate of Indi and looking at a billboard for an Independent, whoever that might be, that counts towards the $800,000 spending cap and, on the other side of the road, a billboard that says ‘Vote Liberal’ or perhaps ‘Vote Labor’ wouldn’t count towards the cap at all. This is deeply concerning. That does not feel fair and equal. That does not feel like a level playing field to me. These caps still mean the races in particular seats can be completely distorted by who can spend more than the other, and isn’t that what we are trying to avoid? And it will be the major parties that can spend more. Does that sound fair to you? It doesn’t sound fair to me.
The government is reducing how much money can be donated and how much money can be spent in elections. But don’t for a second think the Labor Party is turning off the funding tap. Who exactly is picking up the tab? Well, dear taxpayer, you are. This bill increases public funding for elections. In 2022 where a candidate received more than four per cent of the primary vote they were paid by the AEC about $3.35 per first-preference vote. Under this bill, this will be increased to $5 per vote. This change will cost taxpayers $41 million per election.
On top of this public funding, under the bill the government will give members of parliament a new administrative funding payment—$30,000 per year for members of the House of Representatives and $15,000 for senators. The government says this funding is needed to help members comply with the new donation disclosure requirements that I outlined earlier. They are onerous. They will take administrative support. Of course they will. But I have two issues with this as well. Firstly, this increase in public and administrative funding is going to disproportionately benefit the major parties, plain and simple. Analysis by the Australia Institute reveals that, under the change to public funding, 75 per cent of this $41 million going to politicians will go to the major parties. Then, on top of this, 85 per cent of the new administrative funding will go, guess where? To the major parties. If a challenger from outside the major party duopoly wants to run for election for the first time, they will not benefit from any of this money, compared to a new entrant or incumbent from a major party, who likely will. As an incumbent, I will benefit from this funding, make no mistake. But, as an Independent, I don’t want to just pull up the ladder behind me. I want to see new Independents and challengers fairly enter the competition because, as we have seen, they only improve the competition. That’s the heart of democracy.
The second issue I have with an increase in funding is that the government have simply not justified it. They haven’t justified their calculation for how they got to $5. This is taxpayers’ money. We need justification. Where’s the detail? Why $5? Why tens of thousands of dollars for administrative fees? It’s as if they’ve plucked these numbers right out of thin air. These amounts could be justified, but the government simply hasn’t explained why. We’re just asked to accept that.
These are the problems I’ve identified in just a few days. Some elements of this bill are good, as I have said, some are concerning and some are simply just too hard to call. It’s why it’s vitally important that the bill is referred to a joint parliamentary committee for a full inquiry before there’s any vote. What is wrong with that? To be frank, on the concerns I have just outlined—public funding, administrative funding and donation spending caps—I can’t be certain my interpretation of the legislation is correct. There must be an opportunity to scrutinise this bill for voters, for all the experts out there and for politicians alike.
To be a good legislator, you need to understand the detail. It’s not just a vibe; it’s not just something that appears on your desk a couple of days before you give a speech and then, dear Lord, actually have to vote on it. You need to look at the detail and ask, ‘What is the impact of this? Are there any unintended consequences?’ and, the big one, ‘How will it impact our democracy?’
Australians agree there needs to be greater scrutiny on these laws before they’re passed by the parliament. Polling released on Tuesday by the Australia Institute reveals more than four out of five voters believe proposed changes to Australian electoral laws should be reviewed before they’re introduced to parliament—not much to ask. My constituents sent me here to interrogate laws. They didn’t want someone who just follows the directions of the major parties; I’m not just a rubber stamp. If the government are serious about electoral reform, then they shouldn’t be afraid of scrutiny. If your bill is as good as you say it is, put it under scrutiny. Scrutiny isn’t a dirty word. When our parliamentary processes work, we make laws better. Why is this government so afraid of making this bill better? What is this government truly afraid that we might see if we give this bill the scrutiny it deserves? Are they afraid of making it better or afraid of us looking at the detail and finding that it could have serious ramifications for our democracy?
Deputy Speaker, if you think the Chairman’s Lounge is an exclusive club, then you should have a look at this so-called electoral reform bill. It’s going to make the federal parliament an exclusive club for incumbents and the major parties. I have serious concerns about this bill and I say to the government: do better. Give this the scrutiny the Australian public deserves.