Senator the Hon Don Farrell

Michelle Grattan, host: Getting big money out of politics has long been talked about. Now the Albanese Government has a set of changes to the electoral law before Parliament, which it says will achieve this aim. These include lowering the disclosure threshold from $16,900 to $1000 and introducing caps on donations.

However, there's been a strong reaction against the Government's plan for a spending limit of $800,000 in a single electorate. Many on the crossbench have accused the Government of a stitch up with the Coalition to lock out challengers taking on the major parties. To discuss this complicated package, which has general support from the Coalition and is being rushed through the Parliament, we're joined today by Don Farrell, who's the Special Minister of State.

Don Farrell, you want to get this bill, which was only introduced on Monday, passed before the end of this sitting fortnight. Critics say it should have much more time for scrutiny. Why the rush, given that the measures are not going to start until July 2026?

Special Minister of State, Don Farrell: Well, thanks, Michelle. And that is a very fair question. I think there are two answers to that question. Firstly, nothing in this bill is a surprise to anybody who's been involved in the process that has taken place over the last two and a half years. We went to the last election saying we were going to reduce the disclosure threshold, saying that we were going to introduce real time disclosure of donations, saying that we were going to introduce caps on spending and donations. And that's exactly what we've done in this legislation. And there's now been two Senate inquiries into this legislation. All of the parties have absolutely adequate time to have looked at the recommendations. So, I don't think there's any surprises here for anybody.

Now, why are we doing it? Why do we need to get it through so quickly? Well, these are significant changes to the electoral system. They're probably the most significant changes to the Australian electoral system in decades. And it's going to take time to set up the systems that are going to be required to implement this system. Just looking at one of those things, real time disclosure, just getting the software ready to do all of the things that are going to be required. But secondly, the education process. Because people are going to have to change the way in which they participate in the electoral system, we're going to have to do a big job on education. And my view is that that has to start as soon as we possibly can. So if we can get this legislation through in the next two weeks, that gives us the maximum opportunity to implement it and get the system set up before the deadline starts.

Michelle Grattan: One of the primary concerns from the crossbench is that this bill locks in the advantage that the major parties have and incumbents have. Now, let me just put this scenario to you. A new independent challenger and an incumbent party MP contest a seat. Both are limited to spending $800,000 in the seat. But the incumbent party may also spend tens of millions of dollars in its nationwide media campaign. And also the incumbent in the seat has enjoyed three years of publicly funded resources. All that disadvantages the new aspirant. Why are the benefits of incumbency and the party spends not more recognised in these caps?

Minister Farrell: Well look, I think what this bill does is firstly it takes big money out of the electoral system, and it does provide a level playing field. And what that means is if you're an incumbent, sorry, somebody wanting to get into parliament, you don't have to go to a billionaire and say, can you give me one million, two million, three million, four million dollars. You're set at a cap of $800,000, as is your opponent, and I don't think you can draft a system that is fairer than that. And what we saw at the last election was that the so-called Teals had to find and spend millions of dollars in order to compete with incumbent candidates. Well, they don't have to do that anymore. They don't have to do that anymore. There is now a, I think, fair and sensible cap. If the challenger can't get their message across in a seat with a spending of $800,000, then maybe they shouldn't be in the in the game in the first place.

Michelle Grattan: Now, you were making the point earlier that everyone who has an interest in this should know and understand what's happening. But some of the crossbenchers say they haven't been properly consulted and they weren't briefed until the legislation actually appeared. What's your reply to them?

Minister Farrell: There's nothing in this legislation that would have come as a surprise to any of those crossbenchers. I've met with them, all of them, on a regular basis. They often bail me up in the parliament saying, look, Don, can we do this? Can we do that? And you know, some of the things we've done, some of the things we haven't done. I've consulted until I've been blue in the face, Michelle, to be honest with you. This is an excuse not to pass this legislation. The proposition that the, particularly the Teals put to me is – we don't want a cap on donations, we want the billionaires to be able to continue to pour as much money as they want into the Australian electoral system. I understand that's their position. But that's not my position, it's not the Government's position, and I don't think it'll be the majority position of the Parliament. We've seen as recently as a couple of weeks ago how much you can spend if there are no caps on electoral spending.

Michelle Grattan: You're talking about America?

Minister Farrell: I'm talking about the American system. You know, four billion dollars spent on that election. We don't want the American system here. I think $800, sorry, $800,000 is a fair and reasonable cap on electoral spending. And, you know, I believe I've consulted widely on the fact that we're going to go down this track. The difficulty is the Teals don't want any cap, and I don't think that's the position that the Australian people want.

Michelle Grattan: One of the reasons why the caps are in fact as high as they are is to avoid a successful challenge in the High Court. Now we've already heard Clive Palmer say he's going to mount a challenge and I notice that constitutional expert Anne Twomey says that, in fact this legislation is vulnerable to a successful challenge. How confident are you in your legal advice that such a challenge wouldn't be successful?

Minister Farrell: Michelle, one can never predict what the High Court of Australia might do with any piece of legislation. I think I've come up with what is a fair and reasonable way in which to protect democracy and to protect the Westminster system in the Australian context. I'm hopeful that the way we've designed this will not attract the wrath of the High Court. As you say, Clive Palmer has already indicated that he's going to challenge it and I imagine, you know, there will be other people who will seek to challenge this legislation. But I'm hopeful, in fact, I'm probably confident that the way we've designed this will survive a High Court challenge.

Michelle Grattan: Now, we've seen disillusioned voters increasingly moving away from the major parties. Labor's vote at the moment, its primary vote, is down to under a third in some surveys of voters. Do you believe that these changes will in fact re-strengthen the two-party system, and is the two-party system in fact desirable to be re-strengthened?

Minister Farrell: What this legislation does, Michelle, is put everybody on a level playing field. If people want to vote for independents or minor parties, they’re perfectly capable of doing this under this new system. In fact, this new system, I believe, makes it easier for new, you know, new people to enter the system, because you no longer need the support of billionaires to fund your campaign. And your opponents can't spend as much as what they were previously able to do. So, I think this legislation is actually the reverse of what the critics claim. In fact, it's helping those challengers, because it's a level playing field into the future.

Michelle Grattan: Now, the Liberals say that they haven't reached a final deal with you. But nevertheless, I think all the indications are that you've got an in-principle deal with them. And I just wondered how difficult this was or was the way smoothed by the fact that a deal was to your mutual advantage? And was there a glass or two of the wine you produce in South Australia involved, by the way?

Minister Farrell: I wish it was, or wish it were, Michelle. And perhaps at the end of this process I might have a beautiful glass of big, bold South Australian Shiraz. But no alcohol hasn't played any part in the process, regrettably so far.

Michelle Grattan: But mutual interest has probably?

Minister Farrell: Look, this is not about mutual interest. This is about putting downward pressure on the cost of Australian elections. I don't believe, as I said before, Australians want to see the Americanization of our election process. We're capping donations and we're capping expenditure. That is in the interest, I think, of all Australian voters. It's not just the Liberal Party, the Labor Party, the Greens, or the Teals. That's in everybody's interest to keep downward pressure. Otherwise, otherwise, the only people who are going to be able to contest elections are those people that have the support of billionaires. That's how it's going to work if we don't pass this legislation.

Michelle Grattan: Just a question in the weeds of the legislation, why are Labor and the Coalition allowed to have nominated financing entities, for example, the Liberals Cormack Foundation, which is reportedly worth some 120 million, but independents and new parties are not?

Minister Farrell: Well, all parties are going to be governed by the same set of rules. The reason that that particular circumstance exists is to ensure that, for instance, the Cormack Foundation is governed by the same set of rules as everybody else. So, it's going to be subject to the limits that will apply to every other candidate. So, for instance, they're not going to have to spend any more than $800,000 on an election campaign, and that will be included in the Victorian Liberal Party total. So, it's actually the opposite of what people are saying. This ensures that those bodies which the large political parties have used, are caught up by the same set of rules that everybody else has to apply to.

Michelle Grattan: And what about the unions? Because their affiliation fees to the Labor Party won't be captured by this, and yet they're pretty important for that party in its campaigning.

Minister Farrell: Well, unions will be subject to the same rules as everybody else. So a union will not be able to donate more than $20,000.

Michelle Grattan: Separate from affiliation?

Minister Farrell: Yes. No, no, no, I'm coming to that. I'm going to answer every question, Michelle. Unions are subject to the same donation cap, so a union can't donate any more than $20,000. BHP can't donate more than $20,000. The Mining Council can't donate more than $20,000. So it's fair, it's level. There's been a historical link between the unions and the ALP. I was a former union official myself and we're not going to break that link in this process. It's an important link. It's the way that the Labor Party stays in touch with ordinary working people through the affiliation process. And we're not going to change that process, but we are going to ensure that unions, like every other potential donor, are subject to the same set of rules.

Michelle Grattan: Now these laws do increase the public funding for election campaigns, and that funding is not available to challengers prior to the election. Isn't the increase in the public subsidy to $5 a vote ensuring that the incumbent parties have a baked in monetary advantage over new parties and candidates, which have to wait until after the election?

Minister Farrell: No, look, I don't think so. It's quite a modest increase in the public funding.

Michelle Grattan: It's roughly just under $3.50 at the moment, $3.50?

Minister Farrell: It's about $3.50 and it will jump to $5, yep. That's a, I think, a relatively modest increase. Of course, it doesn't have application until the election after next, so we're talking some three years away. I think that's a modest price to pay to protect our electoral system. I think the Australian people want to know that we've got a safe, secure, reliable political system in this country. An honest political system, a fair dinkum political system. I think that's a very small price to pay to ensure that.

Michelle Grattan: So that a newcomer will have to just take out a loan until they can get their funding back. Of course, under a certain percentage of the vote, they don't get the funding back.

Minister Farrell: Correct. That's how the system works, that's how the system works at the moment. Nothing changes in that regard.

Michelle Grattan: Now, does this legislation do anything to stop the major parties raising money in one seat, a safe seat where they might have a lot of donors and spending it on a marginal seat that they're trying to win or trying to defend?

Minister Farrell: Every seat is going to be subject to that cap of $800,000.

Michelle Grattan: But the money can come from anywhere?

Minister Farrell: Well, no, under our system, under our system, so we're talking here about real time disclosure. So ,when you walk in to vote on Election Day in three years’ time, you'll know exactly where all of the money has come from to support, for instance, the candidate that you're going to vote for. You're capped at $800,000 for that seat, and that applies to every seat. So, if you're suggesting you can raise money in one seat and spend it in another, no, there are provisions in this legislation that don't allow that.

Michelle Grattan: Now, while this bill puts a cap on how much is donated, there's no change in who can donate. But isn't there a case for the government to look at banning certain industries? I'm thinking particularly of the gambling industry, which seems to be able to get into the ear of governments very effectively, putting a ban on some industries from donating for political parties, because one of the big issues, of course, is influence and money. Even more limited money does carry influence.

Minister Farrell: Well, the Greens, for instance, would have us allowing some donors to be banned and other donors to be allowed to donate unrestricted amounts of money.

Michelle Grattan: We've seen such bans at state level on property developers, for example.

Minister Farrell: Yes. Well, the South Australian Government is introducing a total ban on all donations, so they're stopping everybody from donating.

Michelle Grattan: And their Premier is a protege of yours?

Minister Farrell: And their Premier is a protege of mine, but we have a deal. He worries about the state electoral system, and I worry about the federal electoral system.

Michelle Grattan: Chinese walls.

Minister Farrell: No, no, he's told me what he's doing, and I've told him what I'm doing. So, we have had we have had that discussion. Look, if we were to do what you're suggesting there and then ban some companies, I think we would run into exactly the issues that Anne Twomey was talking about in her article. One thing that would guarantee a challenge and perhaps a successful challenge if we started to pick which companies in this country could donate. The cap that we're applying, $20,000, really does limit the ability of any company or any union, for that matter, or any other party, or any individual to influence, dramatically influence the outcome. I mean, the moment we're seeing Clive Palmer putting at the last election $117 million of money into the electoral process. I don't think that's what Australians want to want to see. But if I was to ban, say, the companies I don't like from donating, I think that would result in a challenge to this legislation. And so, we're applying a low cap. You know, you can, you're spending can be relatively high, but the cap that entities can donate is a very low cap. And I think that's the fairest way and the most likely way to protect us from a High Court challenge.

Michelle Grattan: Now, you've introduced a bill for truth in political advertising as part of this package. But you've acknowledged that it doesn't have support and you're not going to push it at this point. Do you think that such a measure is worth pursuing in the next term?

Minister Farrell: Yes, I do. We've had truth in political advertising in South Australia. We had a by election in South Australia last weekend and that that legislation was used to clarify some statements that the Opposition were claiming against the State Government. So, I think it's a good it's a good provision. I've said all along that I want to get the maximum support for any piece of legislation in the electoral space. So I've tried at every step along the way, both when I was the Shadow Minister and when I'm the Minister, to bring as many people in the Parliament with me on the legislation. Just at the moment, we haven't been able to convince people that, enough, I think enough people, that that legislation is worth their support. But I'm going to be continuing to work on that. And one day we will get legislation through for truth in advertising. I think it's also fair to point out that the AEC does not want to be the determination or the body that determines whether statements are true or not in the legislative process. And that is an additional practical problem just at the moment.

Michelle Grattan: Now, the bill will be in the Senate next week. Are you open to any amendments?

Minister Farrell: Look, we’re continuing to discuss the legislation. I think the bill is, I mean, we've put a lot of work into this, Michelle. This has been more than two years in the making. This hasn't been just dreamed up overnight. I'd like to think that we've covered the field, that we've got it right, and that this piece of legislation is the best way that we can ensure that billionaires are not the people that determine the outcome of Australian elections. That it's ordinary working Australians who get an opportunity to participate in the process. And we're going to continue with pressing for the parties to support our legislation.

Michelle Grattan: But would you, if push comes to shove, be willing to accept some amendment?

Minister Farrell: Politics is the art of the possible, Michelle. Just at the moment, I think we've got it right in terms of the legislation, but we'll see what happens next week.

Michelle Grattan: So are you confident that at the end of next week you'll be able to enjoy that glass of Shiraz?

Minister Farrell: Yes.

Michelle Grattan: And just finally, is this your political legacy? And do you intend to stay around for the remaining years of your current term, because you're not up for election, you're only halfway through your present Senate term, to oversee the implementation of your changes?

Minister Farrell: Oh yes. I'm a very young man. I've just turned 70. And so I think I've got a very long…

Michelle Grattan: The new 60.

Minister Farrell: Might be the new 50. Did you see today that Senator Thorpe confused me and Murray Watt? He's 51.

Michelle Grattan: I did see that.

Minister Farrell: I'm 70, so maybe, maybe 70’s the new 50. No, I love my job. I've got three terrific portfolios – Trade, Tourism and Special Minister of State. I enjoy all of them equally. I think I've you know, I can continue to contribute to political debate in this in this country. And just in my trade space, we started with $20 billion worth of trade impediments from China. We've managed to get that removed, or certainly by the end of the year to get that removed. So, I think that's an achievement. So, I think I can look back on a number of things. In the tourism space, we've pretty much got back to where we were pre-COVID. So again, that's an achievement. I like being involved in politics. I enjoy the process. And I'd like to continue doing it.

Michelle Grattan: Don Farrell, thank you very much for talking with The Conversation's Politics podcast. That's all for today. Thank you to my producer, Ben Roper. We'll be back with another interview soon, but goodbye for now.