Specifically, the amendments prohibit donations from:
Beyond these targeted bans, the Bill establishes a cumulative limit of $3,000 per election term on donations from any source (individual, organisation, or business) [Explanatory Memorandum page 2]. It also broadens the definition of what constitutes a "gift" to include subscription and membership fees (with specific exceptions for membership fees under $1,000), affiliation fees, interest-free loans, the provision of services for free or below market value, and tickets or entry fees for fundraising events when these are for federal purposes or credited to a federal account [Explanatory Memorandum page 3, 4].
The legislation introduces robust offence provisions, outlining criminal and civil penalties for individuals or entities that make, accept, or solicit unlawful political donations. These penalties can include imprisonment for up to two years and substantial fines, underscoring the seriousness of non-compliance [Explanatory Memorandum page 5]. To prevent circumvention, anti-avoidance provisions are included, prohibiting schemes designed to channel funds through other persons or entities to bypass the prohibitions [Explanatory Memorandum page 6]. The Australian Electoral Commission is tasked with maintaining a public register of determinations, allowing entities to seek clarity on their donor status [Explanatory Memorandum page 6].
In its Statement of Compatibility with Human Rights, the Bill addresses potential implications for the rights to freedom of expression and participation in public life, as outlined in the International Covenant on Civil and Political Rights. It asserts that while the Bill places some limits on political parties' advertising capabilities and donors' financial contributions, these measures are a proportionate response to the risks of corruption and undue influence, ultimately serving the legitimate aim of a more representative democracy and levelling the playing field in political access [Explanatory Memorandum page 7, 8, 9].
This Bill represents a crucial advancement towards strengthening the integrity and accountability of Australia's electoral system. Its primary objective is to prevent certain industries from exerting undue influence over policy decisions, thereby ensuring that politicians are guided by the public interest rather than the specific interests of donors [Explanatory Memorandum page 2]. This directly supports the fundamental principle of a healthy democracy, where all citizens should have an equal opportunity to influence government.
The prohibition on donations from industries such as property developers, mining, and banking directly targets sectors where there is a "strong public perception of impropriety associated with political donations and decision making" [Explanatory Memorandum page 8]. By removing these specific avenues of influence, the Bill aims to "level the playing field and avoid those with more money gaining unequal access to government" [Explanatory Memorandum page 9]. This aligns with an egalitarian ethic regarding political power, ensuring that wealth does not disproportionately translate into political leverage.
Furthermore, the Bill's introduction of a $3,000 cumulative cap per election term on all other donations, alongside an expanded definition of "gift," closes critical loopholes that have allowed significant campaign income to remain undisclosed. This holistic approach strengthens the electoral framework against the "potentially corrupting influence of large donations, irrespective of their source" [Explanatory Memorandum page 2]. This legislative action is consistent with the High Court's findings in McCloy v NSW, which recognized that addressing "the risk to equal participation posed by the uncontrolled use of wealth may warrant legislative action to ensure, or even enhance, the practical enjoyment of popular sovereignty" [Explanatory Memorandum page 9]. By implementing these reforms, the Bill will foster greater public confidence in the independence of Parliament and enhance the capacity of individuals to participate in public life free from distorting influences [Explanatory Memorandum page 2].
While the stated intention of this Bill to reduce undue influence in politics is understandable, the proposed measures risk an overreach that could inadvertently undermine fundamental democratic rights, particularly the right to freedom of expression and the right to take part in public life. The Explanatory Memorandum itself acknowledges that a bill of this nature will "ultimately limit the ability of political parties to engage in activities like electoral advertising and promotion, to express their policy positions to the public" and that "Some argue that this could limit the right of prohibited donors to engage in the political process" [Explanatory Memorandum page 8].
The argument that donating money is not equivalent to freedom of speech, while a legalistic distinction, overlooks the practical reality that financial contributions are a significant and long-standing means by which individuals, businesses, and organisations engage in the political process and express their support for certain policies or parties. An outright ban on donations from entire industries, even those with perceived influence, curtails the legitimate ability of these entities and their constituents to participate in political discourse through financial means. This broad prohibition could be seen as an erosion of the freedom to associate and support political causes, rather than merely regulating it.
Moreover, the expanded definition of "gift" and the strict penalties, including potential imprisonment, for non-compliance introduce a complex and potentially punitive regulatory environment. This could create an administrative burden and a chilling effect, deterring legitimate engagement and contributions, particularly from smaller entities or individuals who might inadvertently fall foul of the extensive new rules [Explanatory Memorandum page 5, Judgment]. A more proportionate response might involve enhanced transparency, real-time disclosure, and stricter enforcement of existing anti-corruption laws, rather than outright bans that could diminish overall political participation and expression, thus not truly enhancing democratic vitality in a comprehensive sense.
2026-02-04
Senate
Before Senate
HODGINS-MAY, Sen Steph
Unspecified
Democratic Institutions, Anti-Corruption, Civics