Electoral funding talks collapse over late move to lock in union campaign power

An eleventh-hour change from the Government to its own electoral laws torpedoed a tentative deal between Labor and the Coalition.

Talks with the Coalition fell over after the Government sought changes on Sunday to ensure union fees that fund campaigns weren’t caught up in the $20,000 donation cap.

Special Minister of State Don Farrell has vowed to keep talking with all parties over the summer on the overhaul of electoral funding.

The changes would be the most significant in decades, proposing to cap individual donations at $20,000 and campaign spending at $800,000 per seat or $90 million nationally.

They also implement near-real-time disclosure of all political donations above $1000.

The Government unveiled the laws last week and wanted them through the Senate on Thursday.

But cabinet minister Katy Gallagher revealed on Thursday morning the talks with the Coalition had collapsed.

“We haven’t been able to land it,” she said.

Senator Farrell said later that it “just wasn’t possible this week” but he continued to be optimistic there was a path through.

He said the Coalition had not gone back on any word.

“They never shook hands on the deal. It’s not as if they have broken a deal,” he said.

The West reported last week Labor had suspicions the Coalition might string talks along and back out at the last minute.

Both major parties say their positions on the donation caps and disclosure thresholds were close enough there appeared willingness on each side to do a deal.

Opposition Leader Peter Dutton said it wasn’t healthy to have people “buying elections” or seeking to have outsize influence on results.

“When we see in the United States that both the Democrats and the Republicans spend $1 billion on a campaign, or hundreds of millions of dollars, I just don’t think that has a place in our country,” he said.

The Liberals wanted to double the donation cap to $40,000 and lift the disclosure threshold to $5000, citing fears about small businesses being targeted, sources close to both sides of the negotiations confirmed.

But a new “peak bodies” clause brought into the mix by Labor this week was a step too far.

Government sources said the change was intended to address concerns about “unintended consequences” that would have meant membership or affiliation fees collected by various peak bodies that campaigned on vote-changing issues would be capped at $20,000.

They cited the peak union ACTU along with the Business Council of Australia, Minerals Council of Australia, Pharmacy Guild, the National Farmers’ Federal and small business advocates COSBOA as groups likely to be affected.

However, none of the business groups raised concerns about the impact of the laws with the government and only one had even considered it might be a problem.

Crossbenchers were furious with what they feared was going to be a major party “stitch-up” on the funding laws they said would lock out future independent challengers.

Independent Curtin MP Kate Chaney said now the Government had put the bill on ice, there was no reason why it couldn’t go to a proper inquiry.

“Any way we change our democracy needs to be looked at very closely,” she said.

“I hope that this extra time will mean the government will actually listen … and consider what the community wants, rather than locking in a two-party deal that protects the status quo and make the right decision in the interests of the country.”