Government-Coalition deal secures sweeping new regime for political donations and spending

The Albanese government has secured bipartisan support for a major new regime covering political donations and spending, after making significant concessions.

The government agreed to increase the proposed threshold above which donations must be disclosed from $1000 to $5000. The present disclosure threshold is $16,900.

In addition, it has boosted the cap on individual donations to a candidate or party from the earlier proposed $20,000 to $50,000.

The deal was sealed on Wednesday when Special Minister of State Don Farrell had separate meetings on the final package with Prime Minister Anthony Albanese and Opposition leader Peter Dutton.

The legislation had been expected to pass late last year but negotiations between the government and opposition stalled at the final moment.

The government concessions were to accommodate not just the Coalition but also to respond to a degree to criticism from crossbenchers and some stakeholders outside parliament.

The government needed to get opposition backing to ensure the legislation’s passage before parliament rises this week. If the PM called an April election this would be the last parliamentary sitting.

Also, it wanted to pass the measures with the support of the alternative government so the new regime would not be undone in the future.

The reforms are the most comprehensive changes to the electoral system in four decades. The government says they will stop big money coming to dominate politics. But they have been under attack from teal MPs and other critics, including Simon Holmes à Court from Climate 200, which has funded community independents. The critics say they favour the major parties and disadvantage new and small players.

The new regime will not come into operation until the next parliamentary term and so does not affect this election.

The changes include disclosure of donations in real time or near-real time, and a series of caps on spending, The cap on each candidate in an electorate would be $800,000, while a party’s national spending would also be capped. At the moment there are no spending caps.

The legislation increases public funding for elections from under $3.50 per vote to about $5.

Farrell has not proceeded with a separate measure on truth in advertising, saying there was not enough support for it.

The Greens described the deal as “a fix”. “Labor and the Coalition are agreeing on rigging the system to lock out their competitors.”

Independent Zoe Daniel, a teal, said the legislation “entrenches the dominance of the major parties and locks out independents and new competitors”.

She said it imposed “strict campaign spending caps on Independents while allowing major parties to exploit loopholes to pour millions into key electorates.

"Under the new rules, all an independent’s campaign materials – posters, ads, or billboards – would count towards the cap, while major party branding on billboards, leaflets and ads would not. This deliberate imbalance ensures that Labor and the Coalition maintain a financial stranglehold over elections,” Daniel said.