Labor, Coalition to avoid repaying investment funds under donations fix
A reform to campaign finance laws proposed by Victoria could save Labor and the Coalition from having to pay back donations from investment vehicles if the money has already been spent.
However, it is unclear how the Allan government’s new laws will work, as major political parties keep money from investment vehicles in the same campaign accounts as political donations; This clouds the task of determining whether funds have already been spent.
Labor introduced legislation on Tuesday to reinstate Victoria’s charity laws, which were struck down by the Supreme Court on April 15 over exemptions allowing investment funds. Organizations nominated to provide unlimited support Labour, Liberal and National parties.
The legislation will not be made public until it is tabled for a second time in parliament on Wednesday.
Draft version distributed to MPs and viewed Age Labor says any payments exceeding the $10,000 donation limit received by the Liberal and National parties from their nominated organizations since July 1, 2023 must be repaid by November 28 this year (the date of the state election).
But the proposed legislation also stipulates that funds can only be refunded if they are “in the party’s former state campaign account on the day this section becomes operational;” This means that the parties will not have to pay back money that has already been spent.
This unbundling poses serious logistical challenges for implementation, given that funds from designated organizations are held in the same pool of money as all other political donations and campaign funds.
There have been five by-elections in Victoria since July 1, 2023, for which campaign funds can be spent.
Under the proposed new laws, nominated organizations would have the same obligations as political parties to report gifts to the Victorian Electoral Commission.
The draft law also requires an expert review of the state’s donation laws after the election; This was the Greens’ demand during negotiations to pass the law through the upper house.
The review will consider the appropriate level of donation caps as well as alternative models of public political financing, such as “democracy vouchers” in which registered voters in some U.S. municipal elections can direct funding to candidates of their choice.
Donations will be limited to $10,000 per person or business per election cycle. this is twice the previous limit. However, a special upper limit of $5030 will apply between the elections of April 15 and November 28. The disclosure threshold will remain at $1250.
Political parties and independent candidates running for parliament for the first time will have the right to register as “new participants” under the proposed legislation, and donation limits will be doubled to $20,000.
Shadow attorney general James Newbury said he was considering the Coalition’s legal position on the proposed legislation after receiving the draft late on Monday night.
“I don’t say this lightly. My personal opinion is that these laws are worse in a constitutional sense than the laws that the Supreme Court struck down,” he said.
Newbury said he believed the laws unfairly protected incumbent MPs and parties when comparing increased public funding for administrative purposes with donation caps.
According to the proposed law, parties will receive $300,000 for the first elected MP, $100,000 for the second MP, and $55,000 for the MPs from the third to the 45th.
“When you read the Supreme Court’s decision, you see that they talk quite specifically about not only the nominated organizations, but also the barriers to entry,” Newbury said.
“When you strongly increase public funding for incumbents but keep the cap on donations low, you actually solidify that advantage.”
Greens leader Ellen Sandell said charity laws needed to be fixed quickly, but warned the government’s fix would not fix its own significant loopholes.
“We need to see the final proposal before we decide whether this is actually good for democracy,” Sandell said.
Simon Holmes à Court, co-convener of Climate 200 successful Supreme Court case brought by former state independent candidates Paul Hopper and Melissa LoweHe warned Greens and other MPs not to support the legislation, questioning why they would “choose to reward Labor with an extra $3 million of taxpayers’ money”; This only undermines democracy in Victoria.
Prime Minister Jacinta Allan indicated on Monday that the government would have more to say about donation laws this week. But he did not appear before the media and no events were planned for Tuesday where he would discuss the legislation.
Health Minister Harriet Shing said the government wanted to negotiate a bill that would allow Victorians to have transparency over the system, ensure integrity in charity laws and be retroactive following the Supreme Court ruling.
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Patrick Hatch is a transport correspondent for The Age and a former business correspondent.Connect with: X or email.
