Mega donations of more than $1.5m would be banned under a crossbench plan to get big money out of politics.
Lower house independents, including Kate Chaney, Zali Steggall, the Greens, David Pocock, Lidia Thorpe and the Jacqui Lambie Network, will present a united front by introducing the fair and transparent elections bill in both houses of parliament.
The bill contains a suite of reforms including truth-in-political advertising, a ban on donations from socially harmful industries including fossil fuels, and tightening the definition of gifts to capture major party fundraisers, including dinners and business forums.
The bill legislates Labor’s election promises to lower the donation disclosure threshold to $1,000 and real-time disclosure of donations within five business days.
But it excludes a recommendation from the electoral matters committee to cap spending on elections, after concerns from the Climate 200 fundraising body this could effectively entrench the two major parties.
The special minister of state, Don Farrell, first revealed in July 2022 that Labor planned to legislate spending caps, with a bill now expected by mid-year. Farrell has repeatedly cited Clive Palmer’s $117m spending at the last election, funded by donations from his company Mineralogy.
Palmer has warned that a spending and donation cap in the tens or even hundreds of thousands would “silence the diversity of ideas”, threatening a high court challenge.
The crossbench fears that Labor could seek a deal with the Coalition to increase public funding of political parties and enact restrictive caps that make it difficult for new political entrants to challenge incumbents while continuing controversial practices like cash-for-access dinners.
In a draft explanatory memorandum, Chaney warned that “any significant increase in public funding in a cost-of-living crisis is poor reform”.
The crossbench bill proposes that individual donors be limited to donating 2% of the total amount of public funding paid by the Australian Electoral Commission in the last election, which currently stands at $1.5m.
Donations from socially harmful industries – including gambling, alcohol, fossil fuels and tobacco companies – would be banned, as would donations from current or potential government contractors.
The bill also seeks to level the playing field by limiting government ads before elections, stopping postal vote applications being used to harvest data and creating an independent campaign entity to allow independents some of the advantages of parties, such as easier access to the electoral roll.
Chaney, who will introduce the house bill, told Guardian Australia: “The government has committed to transparency and truth and we’re demonstrating that it doesn’t need to wait for opposition support to get this done.”
With the Greens’ 11 Senate votes, the Jacqui Lambie Network, Thorpe and Pocock, the bill could pass parliament without the support of the Coalition – if Labor gets behind it.
Chaney said if the government wants to propose its own electoral reforms, it should “bring it on”, but the crossbench had set the fair and transparent elections bill as a “baseline”.
“This bill provides the government the opportunity to show it has listened and is interested in reforms that build trust, not changes that embed the two-party system.”
Larissa Waters, the Greens Senate leader, said that “history shows that electoral reform proposed by the major parties has in-built loopholes to ensure their own big money is retained while hampering the chances of any challengers”.
“Any reform which limits donations to those who challenge Liberal and Labor, while protecting the establishment parties’ sources of income, will be seen for what it is – a complete stitch- up, undermining our democracy and the public’s expectation of fair play.”
Pocock, who will introduce the bill in the Senate, said the bill “gives this parliament an opportunity to enact serious and long-overdue electoral reform before the next federal election”.
“We live in a well-functioning democracy, but we have seen this increasingly under threat and must act now to improve our democratic processes.”
Steggall said the reforms “could be passed ahead of the next election, fulfilling the wishes of Australian voters and strengthening trust in our political system”.
On Thursday Peter Dutton suggested truth-in-political advertising laws would be “probably welcome”, raising expectations that a major party deal might be possible, despite the Liberals resisting both caps and truth in advertising in the electoral matters inquiry.
