Victoria will introduce new caps on how much money major political parties can withdraw from their fundraising war chests and lock in a 10-day early voting period ahead of a High Court challenge to the state’s donation laws.
The changes, which are set to be introduced to parliament on Tuesday, will limit political parties to withdrawing a maximum of $500,000 from their nominated entity during an election period, while independent candidates will be able to access a tenth of that, with a $50,000 cap.
The state government faces a High Court showdown over millions of dollars held in secretive funding vehicles.Credit: Alex Ellinghausen
Under the current system, Labor, the Liberal Party and the National Party have been able to withdraw unlimited sums from their multi-million dollar fundraising bodies, known as “nominated entities”, while a 2020 cut-off effectively blocked new parties from setting up similar financial structures.
Former independent candidate Melissa Lowe, who ran as a teal in the seat of Hawthorn in the 2022 state election, said the concession put independents in a David and Goliath battle against the major parties.
The about-face on caps comes after The Age last week revealed the government had conceded in its High Court defence that the pre-2020 deadline was “discriminatory” to newer political parties, “not justified” and must be “severed”.
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However, the government defended its broader donations scheme in its submission, arguing Victoria should keep the exemption that allows parties to receive uncapped donations from their decades-old fundraising bodies, while newer parties could do the same, but would only be able to raise money under tighter caps.
The High Court challenge has been brought by Lowe and another independent candidate, Paul Hopper, who contested the Werribee byelection in February.
In 2018, Labor announced the donation caps that restricted donations from any individual or organisation to $4850 over a four-year period, but provided a carve-out to three nominated entities – the Liberal Party’s Cormack Foundation, Labor’s Labor Services & Holdings and the Nationals’ Pilliwinks – which had decades of stockpiled cash and investment income. Those nominated entities were permitted to donate uncapped amounts to the major parties.