Australia’s New Electoral Laws Hand $25m Windfall To Major Parties Over Independents

CANBERRA — If the donation rules agreed by Labor and the Liberals in February 2025 had applied at the last federal election, Labor would have received an extra 15.4 million Australian dollars and the Liberals an extra 9.4 million for their campaigns.

Those figures, contained in the government’s defense of the law in the High Court of Australia, appear to substantiate concerns the law provides a massive advantage for the major parties.

The law aims to cap donations, increase public funding and limit electoral expenditure.

Independents seeking to break into parliament for the first time would have been the biggest losers. Nicolette Boele’s successful 2025 campaign for the seat of Bradfield in Sydney would have been $746,000 worse off if the new rules had applied.

The new system caps donations by a person or entity to a single recipient at $50,000 per year, with an overall cap of no more than $1.6 million to multiple recipients.

However, the reform also increases the amount of public election funding at the next election. The allocation rises from $3.58 per vote to at least $5 per vote next year, ahead of the next election due by mid-2028.

While the donation cap would have reduced that funding stream by up to $18.5 million, in the case of the Liberals, and $11.9 million, in the case of Labor, the High Court documents reveal the impact could be substantially mitigated by splitting donations between state and federal branches of the party.

If donors were prepared to split their donations, the financial hit at the 2025 election would have been dramatically smaller: $4.1 million for the Liberals and $2.4 million for Labor. This would have been more than made up for by an increase in public funding of $17.8 million for Labor and $13.6 million for the Liberals, leaving Labor a total of $15.4 million better off and the Liberals $9.4 million ahead.

Independents have no ability to split donations because they lack a federal and state party structure and are contesting just one electorate, so many would have lost hundreds of thousands in donations and received just tens of thousands more in public funding.

An examination of campaign funding for high profile independent MPs shows the total financial impact for most would have been negative: $746,000 less for Boele, $632,000 less for Sophie Scamps, $447,000 less for Allegra Spender, $397,000 less for Kate Chaney, and $165,000 less for Monique Ryan.

Helen Haines’ campaign for Indi would have been $58,000 ahead; while Zali Steggall’s campaign in Warringah would have been $70,000 better off.

The donation and spending caps have been challenged by former independent member for Goldstein, Zoe Daniel, and former South Australian Sen. Rex Patrick, on the basis they breach the implied freedom of political communication in the Australian constitution. The case, to be heard in 2027, follows a similar challenge in Victoria.

The new figures are contained in the Commonwealth’s amended defense, lodged in the High Court on Oct. 23.

The Albanese government only revealed its intention to cap political donations and spending after winning the 2022 election, citing the need to curb the influence of high net-worth individuals such as mining magnate Clive Palmer who spent $117 million on that election.

But the proposal drew the ire of bodies such as Climate 200, which pooled donations to raise $13 milion dollars from 11,200 donors, using a new fundraising model to support community independents, who had a major breakthrough at the 2022 election.

Independents object to the new spending limit of $800,000 per seat, arguing that it often takes campaigns costing more than $1 million to raise the profile of a candidate above the much-recognized brands of the major parties.

The court documents note Daniel would have exceeded that cap (back-indexed to 2022 values) by $629,000 in her 2022 campaign depriving her of around 40% of her campaign war chest.

In its defense, the Australian government argues that without spending and donation caps, some candidates and third parties would be disincentivized from running at all “because of a belief that they are unable to compete with [those] incurring substantial amounts of electoral expenditure.” This would skew politics in favor of those with greater financial means, it said.