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The government is proposing new laws to drastically limit donations in federal politics, but the move already faces a High Court challenge, with independents and minor parties criticising it as a play to entrench the two-party system and limit competition in elections.
The bill, to be introduced to parliament next week, will cap how much individuals and businesses can donate each year.
It will also limit how much candidates and parties can spend on election campaigns: $800,000 for individual candidates in a single electorate, and a $90 million nationwide cap for parties – less than what both Labor and the Liberals spent in 2022.
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Organisations not running for election will face an $11 million cap during campaigns.
The reforms, which have in-principle support from the opposition following consultation and so likely won't need crossbench support to pass, have drawn heavy criticism from independent MPs, who say it will unfairly benefit the two major parties.
"Election reform will never be a fair fight when it's done by Labor and the Liberals," Senator Tammy Tyrrell said.
"Caps on donations don't address money funnelled to parties through fundraiser dinners and membership fees… anything that stops people like me getting a fair run at an election isn't the way to move forward."
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Fellow senator David Pocock was similarly scathing of the move.
"Electoral reform is urgent but a major party stitch-up that subverts parliamentary process and seeks to lock out more community independents won't protect our democracy," he said.
Pocock was one of several teal candidates who attracted more than $1 million in donations during the last election as voters flocked to independents.
The crossbench in the lower house is currently at its highest-ever level, with 16 seats.
Clive Palmer, whose United Australia Party spent more than $120 million to get one senator into parliament in 2022, said the new laws were "designed to rig elections" and that he will challenge them in the High Court.
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"It will hinder the independents, the regular Australians, from standing for parliament, which is what the constitution was designed for," he said.
Special Minister of State Don Farrell denied the laws were designed to specifically target Palmer and fellow major donator Simon Holmes a Court, who was behind the Climate 200 movement that bankrolled teal independents.
"This is designed to take big money out of Australian politics," Farrell said.
"We are not targeting individuals, we're targeting the system that allows an uncapped amount of money to be spent on elections."
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Farrell said the government has tried to ensure the limits in the legislation will survive a legal challenge.
"We think this balances all of the interests of all the parties and independents," he said.
"We've set it at a rate which I think is fair and reasonable but, more importantly… also would survive a challenge in the High Court."
The new laws will also reduce the disclosure threshold from $16,900 to $1000, and increase the amount of federal funding for candidates and parties from just over $3 per vote to about $5.
If passed, the legislation will come into effect for the 2028 election.
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