Greens and some independents are biggest winners from Labor’s proposed donation cap, data shows | Australian political donations

The Greens and independent MPs who ran low-cost campaigns have emerged as the biggest winners from Labor’s proposed donation cap and increased public funding of elections, data shows.

According to a Guardian Australia analysis of 2021-22 data, the Greens would have lost just $2.7m in donations if Labor’s proposed $20,000 cap had been law at the time, a sum more than made up for by a $5.6m increase in public funding. In net terms, the Greens would have been $2.9m better off.

According to this analysis, Labor and the Coalition would have missed out on $18.7m and $19.7m in donations, sums only partially recouped from proposed higher public funding, indicating the major parties would have to run smaller campaigns.

The analysis considers the hypothetical scenario of applying the donation cap to the year 2021-22 by assuming that any total donation amount from a single donor to a single entity that was over $18,462 (the amount the new $20,000 donation cap would have been in 2022, adjusted for inflation) would instead be limited to $18,462.

For example, a single large donation of $500,000 to a party branch or candidate, or four separate donations of $25,000 from the same donor to the same branch, were instead counted as $18,462. (The analysis does not take into account how the new rules might change the behaviour of both donors and recipients.)

To reflect that Labor’s bill would have increased public funding to $5 a vote from the commencement of the bill, the value of the new public funding rate was deflated to $4.42 in 2022.

In absolute dollar terms, Clive Palmer’s United Australia party loses the most from the donation caps, with $116.8m of donations above the cap in 2021-22 – mostly from Palmer’s company Mineralogy.

Once additional public funding of $15.6m to the Coalition and $14m to Labor are considered, the major parties would have been $4.1m and $4.7m worse off.

In the 2021-22 financial year, the Coalition and Labor declared a total income of $115m and $124m respectively, so the potential loss is only a very small portion of their overall funding – less than 4%.

Once administrative funding of $15,000 per senator and $30,000 per MP is added for a single year, the Coalition and Labor would receive an extra $2.3m and $2.2m each, though their net change in funding would still be down slightly overall.

But the major parties insist this will be needed to pay for increased compliance for real-time donation disclosure and ensuring donations are within the caps.

The bill contains an explanatory note that “an amount of administrative expenditure, including remuneration paid to staff, can also be electoral expenditure”.

Funding aggregator Climate 200, which helped six teal independent MPs win seats off the Coalition at the 2022 election and to elect senator David Pocock, would have collected $7.7m less in donations with the new rules applied to 2021-22 returns.

All six of those independent teal MPs – Zoe Daniel, Monique Ryan, Allegra Spender, Kylea Tink, Kate Chaney and Sophie Scamps – were worse off with donations capped and increased public funding, with net losses ranging from $720,000 to $1m.

MP Zali Steggall, who was elected at the 2019 election when she defeated Tony Abbott and later held her seat in 2022, was just $44,000 worse off.

In addition to the Greens, other winners included independents Dai Le, Helen Haines and Andrew Wilkie, who would have gained between $35,000 and $56,000.

The Greens Senate leader and democracy spokesperson, Larissa Waters, said they were “very concerned that in grandfathering in the two big parties’ war-chests through ‘nominated entities’ while limiting donations to other smaller parties and independents, the two big parties will benefit the most from these changes, which is not a good outcome for democracy”.

“This is about grassroots representations and the will of the people being reflected in our democratic parliament … the bill in its current form is a stitch up between the major parties which undermines our democracy,” she said.

Le told the lower house on Wednesday she spent just $170,000 to get elected – well below the bill’s proposed $800,000 spending cap – half her own money and $80,000 from community donations.

“For me, there are some fundamental flaws to this bill in terms of the money that major parties are being given, in particular, the bill introducing a new system of administrative funding to assist people that are already in the House and are incumbent,” she said.

“This bill certainly benefits those that are currently sitting in the house. Thinking of those who are like me from three years ago, it would be more of a challenge.”

Palmer told ABC’s 7.30 on Monday he spent $117m at the last election but “only got one seat”. “The amount of money we spent didn’t have any effect whatsoever”.

“At least in my case I’m spending my money – they’re [the major parties] spending your money.”

Simon Holmes à Court, the Climate 200 convener, said the major parties’ share of the vote had fallen from 96% in 1975 to 68% now.

“There are two ways they can arrest the slide, either be better or right the system,” he said, accusing them of “having taken the second option”.

The special minister of state, Don Farrell, has said he “completely rejects” the suggestion the bill gives major parties an advantage.