Campaign finance reforms risk hurting democracy by entrenching massive financial advantages enjoyed by sitting MPs and senators unless the right balance is struck, think tank The Australia Institute warns.

New research finds that MPs are entitled to nearly $3 million, and senators more than $2.6 million, in pay, resources and perks over a three-year election cycle. It has also calculated that the floor for annual pay and perks amounts to $996,381 for MPs and $885,840 for senators.

As a federal parliamentary committee considers election spending and donation caps, The Australia Institute’s Advantages of incumbency report has warned that donation caps, similar to limits put in place in NSW, could make it harder for new entrants at the next federal election.

Key findings include:

• Each election cycle, parliamentarians receive at least $360,000 for office expenses including for communications and constituent outreach, $297,000 for travel and transport, and at least $1.17 million for staff salaries and allowances on top of their own annual wages starting at $217,000.
• Over the last three federal elections, of the 397 incumbents who contested their seats, 40 were unseated (10%), and just 11 (3%) lost to challengers who were independents or from minor parties.
• During the current election cycle, government MPs and senators will be eligible for collective entitlements worth at least $283 million, and opposition MPs and senators $234 million.
• Meanwhile, collective entitlements for minor party MPs and senators will amount to $53 million and just $35 million for independents.

The Australia Institute supports greater and real-time transparency when it comes to political donations, but warns federal reforms cannot simply raise the bar on what are already significant barriers to entry.

“While elected representatives should be adequately resourced to do their jobs, it’s important to ensure a fair fight between incumbents and challengers come election time,” said Bill Browne, the Australia Institute’s Democracy and Accountability Program director.

“Competition is always healthy for democracy and we cannot afford to make it even more difficult for new entrants to challenge incumbents.”

While the 2022 election proved a high-water mark for new independents and the Greens, just 16 incumbent MPs (12%) lost their seats.

​​“Sitting parliamentarians rarely lose elections. This is at least in part because of the enormous financial advantages of incumbency, including offices, staff, travel and communications budgets.

“While incumbents have a publicly funded head-start, challengers rely on donations to fund their election campaigns.

“Everyone should be able to afford a ticket to enter in an election. Any election donation reform should take into account the significant head-start incumbents enjoy over their challengers,” Mr Browne said.