Labor, Coalition strike electoral reform deal, angering crossbench with higher donation caps

Australia's two major parties have reached a deal on electoral funding reform that will reshape how money flows through federal politics—and in doing so, they have locked out the voices that have been pushing for the toughest rules. The agreement, struck at the last moment, doubles the threshold for individual donations to $50,000 per candidate or party, well above Labor's original proposal of $20,000. Because state and territory branches count separately, the effective cap for a fully structured party like Labor or the Coalition reaches $450,000. The disclosure threshold—the point at which donations must be made public—drops to $5,000, down from the current $16,900, which means roughly one-third of all federal political donations, previously hidden, will now be visible.

The deal represents a significant retreat from Labor's initial ambition. In December, the two major parties had nearly agreed on similar terms, but the negotiation collapsed when Labor tried to amend its own bill to restrict how much peak bodies like the ACTU, Business Council, and Minerals Council could collect from their members for national political campaigns. Labor had proposed capping those affiliate fees at $20,000 per member organization. The final agreement instead allows these peak bodies to collect $250,000 from each member—a tenfold increase from Labor's original limit and a preservation of the status quo that Labor had sought to disrupt.

The legislation marks the first time Australia has imposed federal caps on either political fundraising or spending. The national party spending limit of $90 million sits modestly below what the major parties have spent in recent elections, creating a ceiling that could arrest the escalating cost of federal campaigns. Individual candidate spending remains capped at $800,000. Third-party organizations—unions, business groups, and campaign outfits like GetUp and Advance—will face a $11 million expenditure cap. The bill is expected to pass the Senate this evening and return to the House of Representatives for final approval.

The crossbench, however, sees the deal as a betrayal. Greens Senator Larissa Waters accused the major parties of "agreeing on rigging the system to lock out their competitors," noting that Labor had given assurances it would negotiate the transparency elements with the Greens and independents before cutting a separate deal. Independent MP Kate Chaney pointed to the speed and secrecy of the negotiation as evidence that the major parties wanted to avoid scrutiny. The crossbench's core complaint centers on the $800,000 candidate spending cap, which is substantially lower than the seven-figure sums that successful teal independents deployed in the 2022 election. The agreement also increases public funding for candidates who receive at least four per cent of first preference votes, from roughly $3 to $5 per vote—a change the crossbench argues will entrench the advantage of sitting members and make it harder for challengers to compete.

What emerges from the deal is a system that genuinely constrains money in federal politics for the first time, yet does so in ways that protect the major parties' structural advantages. The lower disclosure threshold will end decades of secrecy around political donations, a genuine transparency win. But the higher donation caps, the preservation of peak body fundraising, and the spending rules that favor incumbents suggest that Labor and the Coalition have written rules that limit the arms race between themselves while leaving the playing field tilted against anyone trying to break their duopoly. The bill now moves toward passage, and the question for the crossbench is whether they have the numbers to block or amend it—or whether they will watch it become law as written.