Billionaire businessman Clive Palmer has warned Labor against legislating electoral spending and donation caps, accusing it of attempting to “silence the diversity of ideas in this country”.
The Albanese government is preparing legislation to cap political donations and electoral spending, citing the influence of Palmer’s hundreds of millions of electoral spending, backed by donations from his company Mineralogy to the United Australia party.
Although the reforms are backed by an inquiry into the 2022 election by the joint standing committee on electoral matters (Jscem), Palmer’s intervention into the debate spells trouble for the government, which could face a high court challenge on the basis caps infringe the implied freedom of political communication.
Guardian Australia first revealed in July 2022 that the special minister of state, Don Farrell, planned to legislate truth in political advertising laws and spending caps, an intention confirmed in June 2023 when he said the government “can’t allow our electoral system to be held hostage by rich people”.
“It can’t only be rich people who can afford to run and fund electoral campaigns,” he said, citing Clive Palmer’s $117m spending at the last election.
On Tuesday, Palmer responded to a report in the Sydney Morning Herald and Age suggesting the law would allow tens of thousands – but not millions – to be donated and spent.
“The more advertising dollars that are spent, the greater the chance of media surviving and journalists keeping their jobs,” Palmer told Guardian Australia.
“Advertising allows all political parties to express their ideas.
“Limiting the flow of ideas reduces people’s ability to choose.
“It is worrying that Labor wants to silence the diversity of ideas in this country.”
In February 2023 the high court ruled that the New South Wales cap of $20,000 on electoral spending before a byelection was unconstitutional. The NSW government conceded the cap was set too low, after a state committee recommended the cap be raised to $198,750.
In 2019 the high court struck down a NSW law which cut the amount third-party groups can spend on state campaigns from $1.05m to $500,000, ruling that it infringed the implied freedom of political communication.
The Albanese government aims to introduce and pass the legislation by mid-2024 but may need Coalition support given warnings from the Greens that it would not support any attempt to “rig the electoral funding system, making it harder for Greens candidates, or independents, to compete fairly”.
A spokesperson for the shadow special minister of state, Jane Hume, said “we will wait for the government to put forward a response to the final report of [Jscem] and then consider our position through the normal party processes”.
The Nationals leader, David Littleproud, warned that unions must be included in spending caps or the reforms would amount to an “effective gerrymander” by the government.
Littleproud told ABC TV “if there is equity, then we are open to being constructive in those reforms”, provided the package did not include expanding parliament.
The independent MP Kate Chaney said “no one thinks it’s good for democracy when one individual can spend $100m to influence the outcome of an election”.
“But if taxpayers fund election campaigns instead, through an increase in public funding, it entrenches the status quo.”
Although senator David Pocock has given in-principle support for caps on political donations and spending, the Climate 200 fundraising group has raised concerns that caps may make it difficult for newcomers to compete against MPs.
“Australia’s federal electoral funding system provides MPs with literally hundreds of millions in public funding to help retain their seats but there are no arrangements to help outsiders have a fighting chance against this system,” the Climate 200 executive director, Byron Fay, said in June.
