New political candidates in Victoria will be allowed to raise twice as much from individual donors as established candidates under proposed changes to the state’s electoral laws, after a High Court ruling left Victoria without a functioning donations regime just months before the state election.
Premier Jacinta Allan has announced the government will lift the political donation cap to $7,500 over each four-year parliamentary term, while first-time candidates will be able to receive up to $15,000 from each donor over the same period.
Allan said the higher cap for new candidates was designed to help them “get a foothold” in the electoral system, while restoring donation rules after the High Court struck down parts of Victoria’s previous laws in April.
The proposed laws will also ban all foreign donations, require parties to disclose donations received during the recent legal blackout period, and force Labor, Liberal and National parties to refund any unspent money received from their nominated entities after the High Court judgement was handed down on 15 April.
The changes follow a major legal defeat for the Victorian Government after independent candidates Paul Hopper and Melissa Lowe successfully challenged the state’s political donation laws. They argued the previous system gave major parties an unfair advantage by allowing them access to legacy funds through “nominated entities”, while other candidates were subject to strict donation caps.
The High Court ruling created a legal vacuum in Victoria, with no effective state donation caps or foreign donation ban in place ahead of the November election. The Guardian reported last week that the government had been working to pass interim laws after the court decision left the state without donation limits or disclosure rules.
Under the proposed fix, cash provided by nominated entities to Labor, Liberal or National parties after 15 April must be returned if it has not already been spent. The nominated entity structure had been a key part of the High Court challenge, with critics saying it allowed established parties to rely on historic funds unavailable to independents and new entrants.
The Coalition has attacked the changes, arguing they remain unfair and may again be constitutionally vulnerable. Shadow Attorney-General James Newbury accused the government of trying to “rig” the system and said the Coalition believed the proposed laws were unconstitutional.
The opposition has also criticised the public funding model attached to the reforms, arguing taxpayers should not be asked to provide more money to political parties during a cost-of-living crisis. Earlier reporting suggested the government’s broader electoral funding plan included increased public funding for parties and elected members, with critics warning the model could favour incumbents.
The government insists the changes are needed to restore integrity to the system before voters go to the polls.
Special Minister of State Ingrid Stitt said Victorians deserved elections that were “fair, transparent and free from undue influence”, arguing the outcome should be determined by voters, not “big money”.
Foreign donations will be banned outright under the new model, a measure the government says is designed to ensure Victorian elections are decided by Victorians.
But the reforms have not ended the threat of further legal action. Hopper and Lowe have already indicated they are willing to return to the High Court if they believe the new rules still advantage incumbents or major parties.
The Greens are expected to support the bill’s passage to ensure some donation regime is in place before the election, but leader Ellen Sandell blamed Labor for creating the “complete mess” and said a wider review would be needed after polling day.
The government has in-principle support from crossbench MPs in the upper house, meaning the bill is expected to pass parliament this week.
The proposed changes land at a politically sensitive time for the Allan Government, which is already facing polling pressure, rising cost-of-living concerns and criticism over integrity, public debt and service delivery.
For new independents and minor party candidates, the higher $15,000 donor cap could offer more room to raise campaign funds. For major parties, the end of easy access to nominated entity cash marks a major shift in how election campaigns are financed.
But with another High Court challenge still possible, Victoria’s political donation system may not be settled before voters head to the polls in November.
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