A re-run of the 2022 election reveals how Labor's new funding rules really work
Labor's proposal to redesign election funding rules is expected to become law this week and will take effect in the election after next. (ABC News: Kathy Lord)
Labor's election finance bill is expected to become law this week with the support of the Coalition.
It is a substantial change to how political campaigns are funded, with limits on what can be donated and what can be spent.
Labor says it will get "big money" out of politics, but minor parties and independents say it is a smokescreen to entrench major party dominance.
They complain the caps of $20,000 per donor, $800,000 per seat and $90 million per party will only meaningfully restrict smaller players, allowing the Labor and Liberal parties to campaign much as they do now.
Is that true? It's hard to say, not only because the bill is hundreds of pages long and was released a week ago, but also because we know little about how political parties raise and spend their money.
That's because current laws allow one-third of donations to escape disclosure — something the bill would address — and parties do not provide a seat-by-seat breakdown.
But from what we can see, there would be scope for the major parties, the Greens, most minor parties and some independents to replicate their 2022 campaigns.
Only Clive Palmer and the teal independents would be clearly restricted, although the rules may offer them workarounds.
Here's a closer look at how the new rules would have functioned in 2022.
Labor
Labor spent $108 million in the year of the last election, excluding transfers between its federal, state and territory branches.
That amount is for the entire financial year and includes non-election expenditure, which would have been exempt from the $90 million limit.
We can't be sure how much, but Labor's federal branch spent about $13 million in the last non-election year, suggesting a $95 million election spend, only modestly over the limit.
But would Labor have been able to raise that much money if each donor was limited to $20,000? The short answer: probably.
About half of what the Labor branches spent did not come from donations, including tax returns, bank interest and electoral commission reimbursements.
And the new rules would have added about $18 million by giving Labor and other successful candidates and parties $5 per vote instead of $3.
If the new election rules had been in place, Labor would likely have been able to raise and spend a comparable amount on their victorious 2022 campaign. (ABC News: Nick Haggarty)
When it comes to donations, each of Labor's nine federal, state and territory branches is counted separately, meaning a donor can give Labor up to $180,000 split among the branches ($20,000 each).
And there are separate limits for the election campaign and the rest of the year, doubling the maximum to $360,000 in an election year. Donors could give even more spread across non-election years.
That leaves only five Labor donors clearly above the limit: billionaire Anthony Pratt, who gave Labor nearly $2 million, and unions the CFMEU, the UWU, the SDA and the ETU, who each gave at least $1 million.
Pratt would be curtailed, because he would face a national donation cap of $600,000 and he also gave around $2 million to the Liberals and Nationals combined.
But the union money would be protected because the rules allow unions to treat their own state and territory branches as separate entities, allowing them to give millions.
That means it's very likely Labor would have been able to raise enough to spend its full $90 million and run a similar campaign.
Within that, it could have spent at most $800,000 per lower house seat and $30 million in total on Senate campaigns, plus any amount on nationwide campaigns.
We don't know how it split funding among seats in 2022, but the $90 million would be enough to spend the maximum on 50 target seats and have more than half the total left.
The $30 million for Senate campaigns is the same for all parties, and is split up among states and territories based on size ($9.6 million in NSW down to $400,000 in the NT).
The "nationwide campaign" component could also include generic Labor ads targeted at specific seats, which would not count towards the $800,000 seat limit.
Liberal
Much like Labor, the Liberal Party's spending would have been at most modestly restricted by the $90 million limit.
And like Labor, the Liberals would have pocketed an additional $18 million from the $5-a-vote rule.
Its donations would also have mostly been unscathed. The Liberal financial structure is different to Labor's, with more of its money coming from wealthy individuals including through financial "clubs" like Kooyong 200.
But like Labor, most of these donations would have been allowed under new rules provided they were split up among branches and spaced out over time — again, with Anthony Pratt as the only clear exception.
The 2022 Liberal campaign could also have been run on a similar scale under the new rules, but in some previous elections the party would have been constrained. (ABC News: Matt Roberts)
Kooyong 200 and similar clubs could either have been absorbed into the Liberal party or could have donated in much the same way as a union branch.
The Cormack Foundation and Vapold, two Liberal financial vehicles that provided a combined $5.5 million, could still have done so if the party nominated them as its own under the new rules.
That means the Liberals, like Labor, could likely have spent their full $90 million and run a similar campaign.
But there is an important asterisk. While Labor and Liberal spent similar amounts in 2022, that hasn't always been the case.
The Liberals out-raised and out-spent Labor by wide margins in the 2010, 2013 and 2019 elections, but could not expect to repeat that under these rules.
Nationals
The Nationals' spending tally is dominated by Queensland, where the party has merged with the Liberals into a single entity, the LNP. That will be double-counted, but the Nationals are well short of their national cap regardless.
Little would have changed, except that the party received $250,000 from serial donor Anthony Pratt, who would have been capped at a grand total of $600,000.
With what they spent, the Nationals could have allocated the maximum $800,000 in the 16 seats they held, with money left over for a Senate campaign.
The Nationals could likely have run a similar campaign to the one that saw them retain all their seats, including Barnaby Joyce's seat of New England. (AAP: Dominic Giannini)
Greens
Like the Nationals, the Greens did not spend enough to breach the $90 million limit.
That would change little on the fundraising side, except that its largest donor, Duncan Turpie, who gave over half a million, would have to segment his donations.
With what they spent, the Greens could have funded the maximum $800,000 in 10 house seats with $17 million left for Senate and national campaigns. We don't know whether they spent more than that in 2022 in seats they targeted heavily.
The Greens spent well under the party limit in the 2022 election, but public disclosures don't tell us whether they would have exceeded the seat-by-seat limits in the Queensland seats they won. (ABC News: Jessica van Vonderen)
Climate 200
The group Climate 200 spent nearly $6 million on independent campaigns, which aided the election of several "teal" independents.
It was registered as a single donor, so would have been limited to $600,000 under the new rules.
But it could instead have registered as a "third party", which would have allowed it to spend $11 million on its own campaigns — the same limit that applies to the Business Council, the ACTU and campaign groups GetUp and Advance.
With that money, it could have endorsed specific independents and even run ads promoting them, without counting towards their $800,000 campaign limits.
But it would need to avoid "anti-scheme provisions" that prevent any structures that deliberately evade the limits.
A simpler model might have been to become a party with a federated structure. That is something founder Simon Holmes a Court has resisted, but it would have allowed the group to do exactly what it did: prioritise the candidates it believed could win.
The seven candidates it funded the most were the seven who were newly elected, including Senator David Pocock. All seven also raised significant war chests of their own, but Climate 200 accounted for at least one-third of the total in every case.
Monique Ryan was among the biggest independent spenders in her successful campaign to unseat then-treasurer Josh Frydenberg, but could not have spent so much under the new rules. (AAP: Luis Ascui)
By contrast, "safer" incumbent independents Zali Steggall, Helen Haines and Andrew Wilkie got only token amounts from Climate 200, and it gave less to candidates with only a modest chance, including Caz Heise in Cowper and Alex Dyson in Wannon.
Labor and Liberal campaigners regard this sort of prioritisation as the behaviour of a political party and believe Climate 200 should be regarded as such.
But there are two complications. One is that more than half of Climate 200's money came from just three people: Scott Farquhar, Robert Keldoulis and Mike Cannon-Brookes. Each gave over $1 million and could not have done so under the new rules.
The second complication is that the successful teal independents would clearly not have been able to spend as much as they did, including what they raised themselves.
All seven went well beyond $800,000 and Monique Ryan and Allegra Spender went beyond $2 million.
Some have argued this spending was particularly important for new independents trying to build name recognition, although it is notable that Dai Le won the seat of Fowler spending just $161,131 and no Climate 200 support, trading on her local identity.
Other minor parties would mostly have been unaffected, except for the requirement to be more transparent about the source of their money.
Clive Palmer
The most dramatic effect would have been on billionaire Clive Palmer, who spent enormous sums on his United Australia Party.
The UAP would have had a $90 million limit like every other party. But crucially, all its money came from just one donor: Palmer himself, via his company Mineralogy.
Palmer and any company controlled by him could have given no more than $600,000 nationwide to any party or candidate, massively constricting his activities.
Clive Palmer has spent large amounts on successive election campaigns, funnelled into his own party, but would face obstacles trying to do so under the new rules. (AAP: Darren England)
There may have been some workarounds. If Mineralogy or Palmer had registered as a third party, he could have spent $11 million a political campaign instead of running candidates.
And if he had created a financial vehicle similar to the Liberals' Cormack Foundation, he may have been able to "nominate" this as belonging to the party. But either way, he would likely have risked running foul of the bill's scheme provisions.