A Ban on Political Donations? The search for democratic reform in South Australia

Associate Professor Rob Manwaring, Associate Professor in Government, Flinders University

Dr Josh Holloway, Lecturer in Government, Flinders University


Democratic Reform, Democratic Stagnation

South Australia has a reputation for democratic innovation. When the state’s constitution was established in 1856, it was one of the most democratic in the world. South Australia was at the forefront of a barrage of innovations, including what would be known across the embryonic democratic world as the ‘Australian ballot’, whereby voters indicate in secret the candidate or party they prefer at election time. South Australia was the first place in the world to establish an independent and permanent electoral office to administer its elections. Given the general mayhem that surrounds US elections, and the egregious suppression of voting rights, this has proved to be a far-sighted advance in democratic practice.

These were breathtaking democratic reforms, and include the 1896 South Australian election where Australian women voted for the first time in the country, and just the second time in the world. As the political scientist Judith Brett chronicles in her early history, these changes to depth, breadth, and practice of democracy set South Australia apart.

After this early pace of reform, South Australia has tended to lag in many respects. Indeed, the 54th South Australian parliament had the lowest count of female MPs compared with all the other Australian parliaments. Yet, with the advent of the Malinauskas government, there has been an intriguing appetite for democratic reform, notably the creation of the Australia’s first ever First Nations Voice to Parliament. It would be remiss though to note that such advances have also come with democratic restrictions, including controversial constraints on protest legislation.

A ban on all Political Donations?

One of the other proposed reforms by Malinauskas Labor government has, however, largely passed ‘under the radar’. In a surprising pre-election announcement, Malinauskas announced that his government would seek to introduce and implement a ban on all political donations to registered political parties in the state. This is, potentially, an extraordinary development, and if legislated would be a world first. Currently, the reform is being considered and scrutinised by the Attorney General’s department as they consider the legal and constitutional implications of the proposed ban.

Money, Politics and Power

The nexus between money and political power remains a vexed issue. The ongoing concern is that economic power can shift political results, and crucially undermine the central value of political equality which underpins modern democratic practice. Money dominates elections, and can lead to a range of concerns and risks. At the 2020 US Presidential election, over a staggering $14bn (US dollars) was spent. In Australia, the sums tend to be smaller, but elections are expensive. At the national level, the Liberals spent $132 m, and the ALP spent $116m. What was also notable about the recent federal election is that it was the first since 2010, when the party which spent least won the election. The influence of billionaire Clive Palmer in recent elections has also raised the issues of finance and undue influence.

The most significant reform to counter the influence of political donations was the introduction of public funding to political parties under the Hawke federal government in the 1980s, with the states following. State funding is seen as a critical part of recognising the role that political parties perform in modern democracies in candidate selection and interest aggregation. Australia, like most advanced industrial democracies, does have rules and regulations around political donations, although, these are more lax compared to many similar countries. Very few countries or subnational jurisdictions have attempted to ban all political donations; indeed, they are often defended as a democratic right. Brazil is a striking case of an attempt to reduce corporate influence by banning corporate donations in 2015. It was a problematic reform, and by and large, failed to meet many of its goals. Corporate donors and political lobbyists seek to exploit donation and regulatory loopholes wherever they can find them.

Strengthening Political Finance Regulation in South Australia

So, what if anything, might arise from Malinauskas’ bid to ban all political donations? For one thing, it may prove just too technically difficult to achieve, and there are suggestions it might breach constitutional issues. The most significant barrier, however, is likely to be a political one. Not only is the ALP likely to face resistance from the SA Liberals and crossbenchers in the Legislative Council, it may also face strong internal resistance. The Labor party is, of course, a creation of the union movement, and there is likely to be resistance to any reform with the intended effect of diluting union influence. Union money has proved problematic for SA Labor; it was forced to hand back a significant donation from the Victorian branch of the construction union (CFMEU).

It is also questionable whether a ban on all private donations is democratically desirable. A ban may aid in reducing the real or perceived corrupting influences of democratic practice, and therefore promote public trust in the political process. But this must be weighed against potential negative outcomes. Malinauskas has pitched the reform as involving no significant increase in public funding, yet maintaining party organisational structures and electioneering are expensive tasks. If legal means of private political party financing are closed, parties and prospective donors may adopt other, illegitimate and opaque means of transacting. Eliminating legal private donations also removes a key incentive for parties to maintain meaningful links to civil society, encouraging instead a comfortable reliance on the state through guaranteed public funding.

Prior to the push for a ban on all donations, the political finance regulatory system had been substantially revamped. Currently, all donations over $5,576 (indexed) must be declared, and there is a novel opt in scheme for parties to receive state funding, in exchange for agreeing to a spending cap.  But it remains to be seen if South Australia will emerge as a new global leader in democratic and electoral reform.

Associate Professor Rob Manwaring

Dr Rob Manwaring is an Associate Professor in Government at Flinders University. Rob teaches a range of policy and politics topics, and researches into the areas of centre-left political parties, democratic politics, and public policy. He is currently the director of studies for the Bachelor of Government and Public Management courses and has previously worked for the UK’s Commission for Racial Equality, and the South Australian Council of Social Services. In 2021 his book, ‘The Politics of Social Democracy’ was published with Routledge, and he is currently a member of the Australian Political Science Association, and a co-editor for the Australian Journal of Political Science.

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Dr Josh Holloway

Dr Josh Holloway is a Lecturer in Government at Flinders University. Josh’s research interests include party and environmental politics, digital governance, and democratic resilience to crisis. His work has attracted highly competitive external funding and has been published in several leading journals. Josh is also an experienced and passionate teacher across undergraduate and  postgraduate programs and has contributed to textbooks as well as research on industry engagement in public policy teaching.

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