Allan government seeks to double donation cap to fix electoral laws

Labor will push to lift the cap on donations to at least $10,000 as it seeks to reinstate Victoria’s electoral laws, with the state government scrambling to reach a deal after messy negotiations with the Coalition and the crossbench.

Ahead of parliament sitting next week, the Allan government is haggling with upper house MPs to back legislation that is urgently required after the High Court struck out Victoria’s campaign finance laws as unconstitutional last month.

Under the previous regime, the maximum that any individual or organisation could donate to a candidate was $4970.

The Allan government needs the support of either the Coalition or seven crossbench MPs to pass the revised laws in the upper house, and has been hoping to secure bipartisan support.

A Labor source, speaking anonymously to detail private conversations, said the government would be willing to strike a deal with a $25,000 cap if it meant securing the support of the Coalition on the legislation.

“Our strong preference is to do a deal with the Liberal Party,” the source said. “If not, they will force us to do a deal with the crossbench.”

A $10,000 cap has separately been proposed to crossbench MPs, in case the government cannot land an agreement with the opposition.

The government also remains committed to making the laws retrospective and to require disclosures of donations over $2500.

At the start of the month, Premier Jacinta Allan repeated her commitment to ensuring the laws were backdated and to require the disclosure of financial contributions to political candidates.

“The legislation that we’re bringing to parliament will require transparency on all donations that have been made since the High Court decision was handed down,” she said.

These comments have not stopped some groups seeking to make use of the current period in which donation laws do not apply.

The Age revealed earlier this month that Climate 200 co-convenor Simon Holmes à Court’s organisation had tipped $40,000 into the campaigns of both independent candidates in Kew and Hawthorn.

The donations would have been illegal – and punishable by up to 10 years in jail – had they been made before April 15.

Both teal independent candidates received a further $140,000 in donations from Climate 200 supporters on Thursday.

The laws will come to parliament in June but may not necessarily be introduced next sitting week if further talks are needed.

A government source on Thursday said it was increasingly likely they would need the crossbench to pass the laws as it was yet to come to an agreement with the opposition.

Another sticking point in the negotiations has been the use of additional taxpayer funds.

The government has pushed to increase annual administrative funding for registered parties, not used for campaigning, and under the proposed laws they would receive $300,000 for their first MP, $100,000 for their second MP and $55,000 for every MP between three and 45.

The reforms do not contain a carve out for nominated entities – legacy investment funds which Labor, the Liberals and Nationals have relied on for decades to help finance their election campaigns.

The special treatment of these entities was the basis for the High Court’s decision to strike out Victoria’s donation laws, arguing it inhibited political communication, when they were challenged by independent candidates Paul Hopper and Melissa Lowe.

The Liberal Party has resisted any increase in public funding as part of the laws.

Shadow attorney-general James Newbury accused Labor of leeching off taxpayers.

“In the middle of a cost-of-living crisis every Victorian should scream about Jacinta Allan’s scheming plan to pocket more of their hard-earned money,” he said.

“Not only do these new laws stink, but they are dangerously at risk of the High Court knocking them out.”

The Labor source acknowledged that the new laws would likely be challenged in court.

“So any new law needs to be defensible,” the source said, accusing Newbury of refusing to accept that political parties could no longer access nominated entities for electoral spending.

The Allan government has been contacted for comment.

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