Federal political donations overhaul imminent as SA Premier Peter Malinauskas pursues radical ban

A major overhaul of Federal political donation laws will be put to Parliament in the coming months as Labor attempts to stop billionaires such as Clive Palmer from “undermining” democracy.

However, the Government will not replicate South Australian Premier Peter Malinauskas’ radical plan to completely ban political donations.

All donations and gifts to political parties, MPs and candidates would be outlawed under Mr Malinauskas’ bold push to get “money out of politics”.

Parties would get extra public funding to run campaigns under the proposal, while new parties and candidates would be allowed to receive donations of up to $2700 to ensure they can compete.

Asked about the plan while standing alongside the SA Premier in Adelaide on Thursday, Prime Minister Anthony Albanese said the Federal Government was pursuing its own set of electoral reforms.

Special Minister of State Don Farrell will introduce new laws to overhaul Federal electoral rules, including drastically reducing the threshold for donations to be publicly disclosed and capping campaign spending and donations.

The disclosure threshold is expected to be lowered from $16,300 this year to as little as $1000, according to sources briefed on the Government’s intentions.

The parliamentary committee examining electoral reform has recommended a $1000 threshold, along with real-time reporting of donations and caps on spending and donations.

Labor is desperate to curb the influence of wealthy individuals, in particular Mr Palmer, after the mining billionaire’s spending blitzes during the 2019 and 2022 Federal elections.

While the Government wants the laws passed this term, it remains up in the air if the new rules would be ready in time for the next election due in May.

Speaking on Thursday, Mr Albanese said the “extraordinary” donations from billionaires such as Clive Palmer were “undermining our democracy”.

The proposed shake-up is creating tension between Labor and the crossbench, in particular the teal independents elected with the backing of Simon Holmes a Court’s Climate 200 fundraising machine.

The teals strongly support political donation reform but are concerned restricting donations and spending will disadvantage independents and minor parties trying to compete against Labor and the Coalition.

The six successful teal candidates raised a combined $10 million in donations to fight the 2022 election campaign.

Curtin MP Kate Chaney – the leading crossbench voice on donations reform – said any changes must preserve the “possibility of political competition”.

“At the last election, a third of people didn’t cast their first vote for a major political party,” she said.

“Australians do want that choice. And we need to make sure that the effect of any donation or spending cap does not restrict the choice they can make about how they are represented.”

Ms Chaney earlier this year drafted her own proposal that would cap donations from individuals at roughly $1.5 million per election-cycle but would not limit campaign spending.

The Bill also included a $1000 disclosure threshold, “real-time” reporting of donations and truth in political advertising laws.

She said she wanted all of those transparency measures – which Labor support – in place ahead of the next Federal poll.