Political donation reforms could hand power back to the parties

What I didn't realise (and I now feel quite stupid for not really thinking about this until now), is that the major parties are associated with investment entities that manage contributions, investments and financial assets. This is where the real money is made, it seems.

The current law involves a disclosure threshold of $16,300 (CPI Index), donation deposit restrictions requiring they can only be deposited into a federal campaign account covered by the political finance laws, lodgement to the AEC reporting regarding annual returns for the political parties, their branches, associated entities and independent members of parliament, and public funding threshold distribution based on the number of votes they receive provided they surpass 4 per cent of the vote. These rules act to regulate who can make and receive political donations, how and when those donations must be disclosed, and the amount of public money political parties receive for the election campaigns.

However, to date, these laws have done little to actually prevent political campaign finance scandal from hitting the headlines.

When former prime minister Scott Morrison surprised the nation by returning to the lodge in the 2019 election, 53 per cent of sources of the donations to the Coalition were hidden. And this wasn't the only political finance headline about their 2019 campaign. It has been argued the Coalition's win was perhaps the byproduct of Clive Palmer's unprecedented spend.

Despite not netting him a seat in parliament, Palmer's anti-Labor advertising campaign certainly harmed Bill Shorten's bid for top job to the extent Palmer actually claimed credit for Morrison's victory. This really brought to the fore concerns about the vulnerability of Australian elections to the influence of the wealthy, both directly and indirectly.

In 2022 the Centre for Public Integrity (CPI) revealed the main parties had collected $1.2 billion over 22 years, with "more than one-third of the cash flowing to the Liberal and Labor parties ... coming from shadowy entities that can hide the true source of the funds".

However, if, as Mike Cohen stated in his response to the 2022 Senate inquiry into campaign finance, "raising funds through donations makes the politician highly likely to be corruptible or open to improper influence", what is the alternative that creates a fair and level playing field? Facebook boosts don't come for free!

That wealthy people could essentially buy an election is untenable. Minister of State Don Farrell, who tasked a high-powered committee to probe election funding laws, has claimed it is in fact "out of control and we've got to do something about it." However, despite stern words last year that promised to "press ahead for reforms by the end of the year", what that "something" will actually be still remains to be seen.

With the largest crossbench in Australian history including an unprecedented number of independents, there are concerns these calls for reform could be taken advantage of to damage grassroots campaigns for independent candidates to effectively challenge sitting party members.

As a growing number of Australians are turning to the community-centric participatory democracy model the independents champion as the answer to stymy political corruption and give parliament back to the people, it seems like a perfect opportunity for the major parties to deliver a blow to the rising threat of those making noise in the party-held electorates across the country.

Reforms could easily hand power back to the parties through making it increasingly difficult to fundraise by imposing stricter limits on contributions, making it harder for independents to gain exposure through restricting advertising or other forms of campaign spending, imposing stricter regulations that act as a barrier to entry, and by changing the way small donations can be collected or used could significantly hamper grassroots support.

We should all be watching this space very closely to see if our political leaders choose to genuinely improve campaign transparency, or act under the guise of integrity to stamp out their biggest threat to power in current times: the rise of the community independents.