There’s too much money in Australian politics, and federal Parliament should do more to reduce it, according to a new Grattan Institute policy brief.
Decoupling money from power: Getting electoral expenditure caps right shows that our democracy is in the grip of an election-spending ‘arms race’.
Parties and candidates have a strong electoral incentive to raise more money so they can outspend their opponents to get their messages to more voters.
The political parties collectively declared almost half a billion dollars in expenditure in the year leading up to the 2025 federal election.
Big-money elections mean politicians spend more time and effort on fundraising, and political parties become reliant on major donors to fund their campaigns.
This creates fertile conditions for wealthy interests to have undue influence over policy making, and increases the risk of corruption.
New caps on electoral spending will apply from next year – but there are substantial problems with the federal government’s new caps.
‘The new caps leave too much money in politics, and advantage the major parties over new candidates,’ says Grattan Institute democracy expert Kate Griffiths.
‘The new national cap of $90 million per party per year finally puts a ceiling on money in our politics – but the ceiling is set too high.’
The policy brief shows that $90 million is far more than national advertising campaigns cost. It recommends the cap be lowered to $40 million – sufficient for communicating with voters nationally, while reducing the corrosive influence of money in politics.
On the other hand, the government’s new individual electorate cap of $800,000 is too low for new entrants, who usually need to spend more to introduce themselves to voters.
Successful new entrants at the past three federal elections have on average spent $1.5 million on their first successful campaign.
The policy brief recommends the electorate cap stay at $800,000 for incumbents and established-party candidates, but should be raised to $1.2 million for new independents and new parties.
‘Right-sizing’ the new expenditure caps would finally put an end to the election-spending arms race and decouple money from power in Australian elections.
‘The federal government’s reforms are a step in the right direction, but the Parliament should step in and finish the job,’ Ms Griffiths says.
