In a landmark move being hailed as “world-leading”, the South Australian parliament has passed game-changing legislation completely banning political donations and gifts to MPs and candidates in the state. The Electoral (Accountability and Integrity) Amendment Bill 2024, which secured bipartisan support, is set to dramatically reshape the political landscape with the goal of bolstering public trust in the democratic process.
Premier Peter Malinauskas championed the reform as a necessary step, even while acknowledging it may not be in his Labor government’s immediate political interests. “It is the right thing to do,” he asserted, emphasizing that the laws were carefully crafted based on expert advice and close consultation with democracy groups to ensure a fair and workable system.
Restructured Public Funding Model Raises Eyebrows
However, the legislation has drawn scrutiny for its revamped public funding provisions. The new model, based on votes received in previous elections, is now mandatory and is estimated to funnel around $18 million in taxpayer funds to political parties and candidates. Critics argue the lion’s share will flow to the two major parties, solidifying their power.
Bill Browne, director of the Australia Institute’s Democracy and Accountability Program, contends the reforms are “compromised and unfair,” diverting public money to incumbents without adequate safeguards for new entrants. He argues any public funding should be allocated in a balanced way accessible to all, rather than entrenching the dominance of major parties.
The Fine Print: Caps, Concessions, and a Contentious Consultation
Under the new laws, parties, candidates, and third parties will face mandatory expenditure caps. As a concession, new candidates can still receive donations up to $5,000 but will be subject to strict campaign spending limits. The provisions are slated to take effect in July 2025, ahead of the March 2026 state election.
The path to passing the landmark legislation was not without controversy. The majority of submissions to a secretive government consultation earlier this year opposed the bill. The government then made significant revisions, including boosting administrative funding for major parties to $1.6 million annually – a move that went against an independent review’s recommendations, according to Browne.
“No one’s gone to the public and asked them what they want in response for becoming the major financiers and underwriters of political parties in the state.”
– Bill Browne, Australia Institute
Loopholes and Lingering Questions
Some point out that even with the “donation ban”, major parties can still amass substantial funds through membership fees and levies on MPs and staff. They’ll also save on fundraising costs. A Deloitte analysis commissioned by the government to justify the contentious funding boost lacked adequate substantiation, Browne argues.
Special Minister of State Dan Cregan maintains the reforms aim to “end the pervasive impact of political donations in our electoral system and reverse an emerging trust deficit seen worldwide.” But doubts linger over whether the specific provisions, hammered out largely behind closed doors, will achieve that lofty goal.
A Pioneering Test Case
As South Australia ventures into uncharted territory with this bold ban, the nation and the world will be watching closely. Will this pioneering legislation truly curtail the sway of wealthy donors and special interests? Can it rekindle flagging faith in the integrity of the democratic process? Or will it simply channel taxpayer funds to further entrench major party dominance without sparking a genuine democratic renewal?
A statutory review slated for 18 months after the 2026 election may yield some answers. In the meantime, South Australia has firmly positioned itself at the forefront of the global debate over money in politics, offering a fascinating case study in whether “world-leading” donation reform is truly a panacea for the erosion of public trust.
