Late last year, the Albanese Government introduced the Electoral Reform Bill, with plans to pass it into law less than two weeks after it became public. Negotiations with the Coalition collapsed, causing the bill to be delayed until the February 2025 sitting.

The bill would increase public funding of political parties and candidates, introduce new “administrative funding” for sitting MPs and their parties, cap political donations, cap political spending and require stricter and more timely transparency around political donations. The changes would come into effect in 2026, after this year’s federal election.

While electoral reform is needed, the bill is not consistent with the nine principles of fair political finance reform outlined by the Australia Institute in 2023.

Among the concerns with the bill are:

• The extreme haste shown by the government in introducing and trying to pass the bill. Four in five Australians (81%) agree that major changes to electoral law should be reviewed by a multi-party committee, which has not happened.
• The caps on political donations are per “party” (or per independent candidate) but what Australians think of as political parties – like the Liberal, Labor, Greens and National parties – are actually groups of parties, each party in the group being able to receive donations up to the cap. This would limit the ability of independent candidates, new political parties, and political campaigners to fundraise, while leaving established parties much less constrained.
• The nominated entity exception to donation caps intended for the major parties may in practice allow a billionaire-funded minor party to escape spending limits.
• In exchange for having their fundraising limited, established parties and incumbent MPs would receive tens of millions of dollars more in public funding; in some cases, far more than the political donations that they are missing out on. Independent candidates, new parties, their candidates and political campaigners would receive nothing to compensate them for lost revenue.
• The bill would also limit spending on election campaigns. In practice, independent candidates will be far more limited in their spending than party candidates.

The bill does introduce improved transparency for some political donations – particularly those used to fund election campaigns. New Australia Institute polling research shows that real-time disclosure and a lower donation disclosure threshold are supported by more than four in five Australians. These changes are welcome and non-controversial, and could be separated from the rest of the bill and passed.

There are fairer alternatives to public funding, like the democracy voucher model used in the City of Seattle; and ways that the donation and spending caps could be tweaked to make them at the very least less unfair. Sending the bill to a parliamentary inquiry would allow the impact of the government’s proposed changes to be carefully considered, and improvements identified.