Major Parties’ Secret Deal on Political Donations: Is Australia’s Democracy Under Threat?

In a move that has sparked outrage among crossbenchers and transparency advocates, Labor and the Coalition have joined forces to push through changes to Australia’s political donation and campaign spending laws. 

While the reforms introduce new limits on donations and expenditure, critics argue that they are designed to entrench the dominance of the major parties while leaving loopholes for undisclosed funds to flow into campaigns.

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The Deal: A Win for Transparency or a Political Stitch-Up?

The revised legislation sets an individual donation cap of $50,000—more than double the initially proposed $20,000 limit. 

It also increases the disclosure threshold from $1,000 to $5,000, ensuring that more donations will need to be publicly declared. 

While this is significantly lower than the previous $16,900 threshold, it still leaves room for large sums of money to be donated without full transparency.

Additionally, spending caps have been set at $800,000 per electorate and $90 million nationwide, as per the original bill. 

These figures aim to curb excessive campaign spending, but critics argue they disproportionately benefit the well-funded major parties while limiting the ability of independents and minor parties to compete on an even playing field.

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Crossbenchers Cry Foul

The crossbench, who were led to believe that Labor would engage with them on transparency measures, have accused the government of a backroom deal with the Coalition. 

Greens Senator Larissa Waters condemned the move, saying the major parties were "rigging the system to lock out their competitors."

"From the outset, the lack of genuine engagement with the Greens and the crossbench indicated the government was always seeking a stitch-up," Waters said.

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The Loophole That Remains

One of the biggest concerns with the amendments is the failure to close a glaring loophole that allows donors to legally distribute large sums across multiple branches of a political party without triggering disclosure requirements. 

Under this provision, a donor could legally contribute nearly $45,000 to the nine state and federal branches of the ALP (or any major party) without having to declare their donations.

This loophole means that while the disclosure threshold has been lowered, "dark money"—donations that remain hidden from public scrutiny—can still flow into political campaigns through technical workarounds. 

Transparency advocates argue that without addressing this gap, the legislation falls short of genuine reform.

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What Does This Mean for Democracy?

Passing bills of this magnitude in essentially the darkness of the night places a precedent for voters that while they do have the freedom to vote for who they want, their options are limited. 

Limited to two major parties which are of course the Labor and Liberal Party. 

Placing emphasis on the two major parties in regards to individual donations and campaign spending, while in turn ostracising the smaller parties/independent ministers leaves a bitter taste in the mouths of voters. 

All Australian voters want is the freedom to vote, not the perception of freedom. 

It is time for the Australian government to take a long hard look at itself as it has once again passed crucial legislation that was not in the best interests of the Australian public. 

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