Win for charities in electoral donation law reform

The recommendation was contained in the final report from the parliamentary committee reviewing the conduct of the 2022 federal election, tabled in federal parliament.

The Joint Standing Committee on Electoral Matters (JSCEM) also recommended that a group should have to register as a third party only if it incurred more than $20,000 in electoral spending.

The recommendations in relation to charities were welcomed by the Stronger Charities Alliance (SCA), a coalition of 140 organisations.

SCA spokesman Hassan Mirbahar said the report was a positive outcome for the sector, which engages in vital issues-based advocacy during elections.

“We told the committee that treating charities the same way as political parties would not work and the committee has listened,” said Mr Mirbahar.

“Charities enrich our democracy by being a voice for communities during election periods. Without charities, voters would only hear from politicians and business groups.”

The Special Minister of State, Senator Don Farrell, asked the committee in August last year to conduct an inquiry into all aspects of the conduct of the 2022 federal election.

The committee received more than 1,500 submissions and held eleven public hearings.

Its final report included 21 recommendations (on top of those already made in an earlier interim report) for reforms, including ways to improve donation transparency, reduce the influence of big money, and strengthen trust and participation in Australia’s elections.

Committee chair Kate Thwaites said that while Australia’s electoral system was strong, the nation’s democracy was too important for people to be complacent.

“The committee heard clear evidence of the need for reform,” she said.

“Based on the evidence we have received, the committee has recommended reforms to improve donation transparency, address the electoral ‘arms race’ of increased spending on elections, limit the potentially corrupting influence of big money, and build public trust.”

The SCA’s Mr Mirbahar said defining third parties as those that had met a threshold of $20,000 in electoral spending in a financial year would ensure small community groups didn't get tied up in red tape.

Sector organisations argued that amending the electoral laws to improve transparency on money matters – including donation caps and disclosure thresholds – could have unintended consequences, particularly for charities and not-for-profits, on the basis that applying them to that sector would considerably inhibit their work.

Organisations that raised concerns included the Centre for Public Integrity, the Human Rights Law Centre (HRLC), the Australian Democracy Network (ADN), the Australian Conservation Foundation (ACF) and the Australian Council of Trade Unions (ACTU).

While welcoming the changes recommended in the report, the alliance said it remained concerned about the potential impact of donation caps on NFPs that are not registered as charities with the Australian Charities and Not-for-profits Commission (ACNC).

“The purpose of donation caps is to ensure decision-makers aren’t overly influenced by any one donor, but third parties don’t sit in parliament making laws,” said Mr Mirbahar.

“Capping donations to third parties would mean NFPs that rely on donations would have their income cut while doing nothing to address flows of money to industry lobby groups”. 

Mr Mirbahar said the SCA had previously made a submission to the JSC on Electoral Matters calling for increased transparency on money matters in Australian elections that wouldn’t unintentionally silence community voices. 

The committee’s final report comes as a poll by the Australian Human Rights Law Centre (HRLC) revealed 72% of Australians think the federal government should close loopholes that allow for secret donations to infiltrate the political system.

The HRLC said that in the federal election year of 2022, "dark money" donations with no disclosed source reached a record-breaking $119 million and accounted for 40% of money received by the major parties.

HRLC acting director Alice Drury said Australians were fed up with the status quo.

“It’s time to stop the influence of big money on Australia’s democracy and to put the voices of ordinary Australians first.”