Taxpayers to foot bigger bill for political campaigns under Labor plan

Victorian taxpayers would fork out more to pay for the political advertisements and campaign activities of parliamentarians under a government proposal to plug the hole in the state’s electoral laws created by last month’s High Court decision.

The government’s push to increase public funding for political campaigns, outlined in backroom discussions between the major parties, is being resisted by the Liberal Party, which is also opposed to any changes to electoral laws being retrospective.

The government move has prompted a further warning from the independents movement, which says an increase to public funding for established parties and incumbent parliamentarians – in the absence of any provision to help new entrants trying to run for office – could trigger another legal challenge.

“We don’t oppose public funding for political campaigns, but the system Victoria had was grossly unfair to independents and small parties,” Climate 200 co-founder Simon Holmes à Court said.

“Any change that gives the major parties even more taxpayer money, while putting challengers at a disadvantage, would make the problem even worse.”

The Greens, while supportive of ongoing public funding for elections, also want more to be done to make campaign finance laws fairer for minor parties and independents. They agree with the government that any legislative fix must be retrospective.

“The Liberals and One Nation don’t want donation cap laws to be retrospective because they don’t want to cut off the huge amounts of corporate and dark money that’s likely flowing into their coffers right now,” Greens leader Ellen Sandell said.

“We need to get big money out of politics and level the playing field.”

This is disputed by the Liberal Party, which insists it has long held a broad philosophical objection to all retrospective lawmaking, whether this involves changes to taxes, superannuation or campaign finance rules.

“The Coalition will work constructively with the government to restore fair and transparent campaign finance provisions to the Victorian Electoral Act,” an opposition spokesman said.

There is broad agreement between Victoria’s Labor government, Liberal Party, National Party and the Greens that legislation should be introduced as a matter of urgency to restore a campaign finance regime. They agree the new system should include disclosure requirements, public funding, a ban on foreign donations and a cap on private donations.

The government’s attempt to secure bipartisan agreement on the design of the new scheme has reached an impasse over the amount of public funding and its insistence that any future laws be backdated to April 15. This is the date of the High Court decision that declared the state’s previous campaign laws finance unconstitutional.

The major parties have also not agreed on how to negotiate the thorny issue of nominated entities – legacy investment funds which Labor, the Liberals and Nationals have relied on for decades to help finance their election campaigns.

Special treatment given to nominated entities under the previous laws prompted the successful High Court challenge by independent candidates Paul Hopper and Melissa Lowe.

Kiera Peacock, the lawyer who took Hopper and Lowe’s case to the High Court, said the judges in their published reasons flagged concerns beyond nominated entities.

“The court found that public funding did not mitigate the significant impact of the donation cap, particularly on new entrants,” she said. “Changes that disregard this might also prove to be unconstitutional.”

Holmes à Court and Climate 200 legal director Alexandria Rantino last week wrote to Premier Jacinta Allan making clear their support for retrospective legislation to restore a ban on foreign donations and disclosure requirements, but restated their concerns that the previous public funding regime unfairly benefited incumbents.

This week, Allan reiterated that her government’s replacement regime would capture any donations made since April 15.

“The legislation that we’re bringing to parliament will require transparency on all donations that have been made since the High Court decision was handed down,” she said.

Liberal state director Alyson Hannam has advised the party’s MPs and candidates that while there is currently no limit on private donations, they may be required to disclose them at a future time.

Under the old system, public funding was available to registered political parties and independent candidates who secured 4 per cent or more of the vote. While Victoria has provided public funding for political campaigns since 2002, the amount of funding was increased by the Andrews government in 2018 to compensate for the reduction in private donations allowed.

Although the stated intent of the law change was to reduce the prevalence and influence of private money on politics, Holmes à Court argues it created a significant publicly funded war chest that entrenched the major party duopoly.

Before the High Court intervened, the major parties were entitled to $41.8 million in combined, public and administrative funding for the current four-year electoral cycle. On the day of the High Court decision, $7.2 million was still owed.

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