Repeat delays are testament to how fiendishly difficult it is to get changes to electoral law right. The most recent delay has been attributed to constitutional concerns: how to design laws that limit political finance without violating freedom of political expression, which is protected by the constitution.

The High Court has reined in legislative overreach, and may get another chance to do so: last month former state independent candidates wrote to Premier Jacinta Allan arguing the carveout in Victoria’s political donation laws for the major parties’ funding vehicles is unconstitutional. Victoria introduced strict donations caps ahead of the last election. There were three independent MPs in the state’s lower house. After the election, none remained.

Only in politics does the winning team get to change the rules of the game. The risk is that MPs may vote to skew the electoral system to their own benefit, at the expense of a level playing field.
The Albanese government has given some clues of its plans, including a cap on donations, and a cap on spending of somewhat less than $1 million per candidate. One million dollars sounds like an eyewatering sum, but putting up a viable challenge to a sitting MP does not come cheap. The Australia Institute calculates each MP enjoys almost $3 million in incumbency advantages, plus non-financial benefits.

Senator Farrell has also flagged a “relatively modest” increase in public funding, plus an unspecified amount of administrative funding. During a cost-of-living crisis, the public may take a dim view of politicians voting to give themselves more public money. Australia Institute polling research finds 71 per cent of Australians oppose increased public funding for political parties and candidates.

It is hard to regulate from a position of ignorance, but Australia’s political finance system is so murky that it is impossible to calculate exactly how changes might affect elections. Stricter disclosures of political donations and cash-for-access would give the public more confidence in the electoral system, and give decision-makers useful information to guide the next tranche of reforms.

A logical addition is to require political parties accepting public funding to publish annual reports. We expect no less from other institutions that depend on public money, like art galleries and museums. Unlike donation and spending caps, better transparency could be legislated in time for the next election.

The Albanese government’s plans do reportedly include several promising elements – including lower disclosure thresholds and real-time disclosure so we find out about political donations weeks or months after they occur, instead of up to 19 months later. Another welcome addition is truth in political advertising laws, which have operated successfully in Farrell’s home state of South Australia for almost 40 years.

But other changes coming out of South Australia demonstrate why the electoral reform process is so difficult. In June this year, Premier Peter Malinauskas announced sweeping changes to the state’s political finance laws following an election promise to abolish political donations altogether.

In an electoral system where donations are banned for many and restricted for new entrants, how do you decide who gets to spend money on their campaigns – and how much they get to spend?

Like Farrell, Malinauskas is proposing increased public and administrative funding to compensate for lost donations – but the sums involved could not be described as “relatively modest”. If legislated, it would cost South Australians about $14 million per electoral cycle – most of which would go to the major parties. The amount going to new entrants is little more than a rounding error.

Extrapolate the South Australian funding proposal federally, and during an electoral cycle the major parties would get tens of millions of dollars each in “operational funding”.

In practice, limits on donations and spending have been to the advantage of incumbent MPs – who have taxpayer-funded salaries, staff, offices, travel and communications budgets, not to mention the non-financial advantages of incumbency like name recognition. Established parties and candidates also get public funding based on election results, which exacerbates the incumbency advantage since new entrants, by definition, have not contested an earlier election.

The South Australian laws seek to address this by providing a small upfront payment of $5000 per candidate to new parties and to independent candidates. Of course, $5000 does not get you very far when major party candidates and sitting MPs could be going into the election with their $100,000 campaigns fully publicly funded.

Australia’s political finance system is deeply flawed. Even donations and cash-for-access payments above $15,000 can escape scrutiny.

The Parliament of Australia could legislate immediately to require prompt disclosure of every cash-for-access payment and all large donations. The reporting framework is already in place.

Truth in political advertising is another proven policy that would be straightforward to legislate.

Limits on political finance are complicated and can threaten the constitutional freedom of political communication.

But there is no barrier to Australia’s parliamentarians shining a light on who is funding our parties and candidates. That information would help guide future reforms to return financial power to voters and limit the influence vested interests have on our democracy.