Queensland to limit political donations and electoral expenditure

The Queensland Government has moved to limit political donations and electoral expenditure in advance of the next state election, due on 31 October 2020. The Government will also substantially increase the amount of public funding to political parties and candidates. But the limit on spending by third parties like unions could be unconstitutional.

The law will also apply to local government elections in Queensland.

Limits on donations

Under the proposal, an individual or organisation cannot donate more than $10,000 in each four-year term of parliament. Of that amount:

• donations to each political party cannot exceed $4,000;
• donations to candidates of a given political party cannot exceed $6,000; and
• donations to each third party cannot exceed $4,000, and a person cannot donate to more than six third parties.

These limits are stricter than those in New South Wales (which are measured annually)[1] and comparable to those in Victoria.[2] Queensland previously introduced donation caps in 2011, but these were repealed in 2014.[3]

Queensland wholly prohibits donations from property developers.[4] It has declined to adopt the New South Wales model, which additionally prohibits donations from liquor and gambling industry entities and tobacco industry entities.[5]

Limits on expenditure

Expenditure limits will apply during the final 12 months of a parliamentary term. During that period, the maximum amount that can be spent is:

• by endorsed candidate, $58,000;
• by an independent candidate, $87,000;
• by a party, $92,000 in any single electorate in which it endorses a candidate; and
• by a third party, $87,000 in any single electorate and no more than $1 million in the aggregate.

There is a risk that the limitation on third party expenditure will breach the Constitution. The High Court held in Unions NSW v New South Wales that equivalent laws in New South Wales were invalid because they limited the ability of trade unions to participate in free political communication.[6] The New South Wales Parliament had sought to reduce the cap on third party expenditure from $1.05 million to $500,000, whereas a political party could spend up to approximately $11.5 million.[7] The Court found that the State had failed to show that the reduced limit was necessary to prevent third parties ‘drowning out’ parties and candidates, or that the figure was reached on some principled (rather than arbitrary) basis.

Under the Queensland reforms, a party could spend up to approximately $8 million and a third party could spend $1 million – that is a ratio of approximately 1:8, rather than 1:23 in New South Wales. In setting these figures, it may be that the government has sought to avoid restricting third parties’ communication so gravely as to render the cap unconstitutional. Whether that is effective will only be revealed if the laws are challenged in the High Court.

Increased public funding

As a result of the reforms of donations and expenditure, parties and candidates will receive less private funding of their election campaigns. As such, the government proposes to increase the availability of public funding. That funding will be available to a party or candidate who receives at least 4% of first preference votes (whereas the current threshold is 6%). In addition, the amount of funding has increased for parties to $6 per vote (up from $3.14) and for candidates to $3 per vote (up from $1.57).

Progress of the legislation

The Government intends to provide a draft of the Bill to the Centre for Public Integrity, an independent think-tank that aims to oust corruption. The Bill will be introduced to Parliament in late November 2019 and public consultation will be conducted for 10 weeks (over the holiday period). From February 2020, Parliament will debate the Bill. Although the Liberal National Party in Queensland has indicated its opposition, the Bill is likely to become law given the Labor government’s comfortable parliamentary majority in the unicameral Queensland Parliament.

But the full impact of the Bill will not be felt immediately. For instance, it is difficult to imagine that the law will limit expenditure in the 12 months preceding the October 2020 election (as it would in future elections) given that it will come into force less than eight months before that election is held. This and other uncertainties will be clarified when the text of the legislation is released.

Implications for business 

If implemented, the legislative changes could significantly limit the ability of business to make donations in Queensland because the new cap creates an upper ceiling for donation amounts.

The limitation on both donations and expenditure may also have a broader flow-on effect for businesses who benefit from election-related expenditure by parties and candidates. Although public funding will be increased, this will only be received after the election, meaning some candidates and parties may be forced to reduce spending during the campaign.

Business, organisations and individuals who intend to participate in Queensland elections should monitor the progress of the proposed reforms. It may be prudent to seek legal advice when the bill is released, whether to ensure compliance or to inform a submission to be made during public consultation.

The reforms in Queensland contribute to a robust electoral framework across the nation’s three most populous states. Apart from recent changes in the Northern Territory, which still do not bring it in line with the eastern states, other jurisdictions have been largely inactive. It is possible that the increased national prominence of anti-corruption measures, including the proposed Commonwealth Integrity Commission, will motivate the other states and territories and the Commonwealth to strengthen their electoral funding laws.