Electoral (Accountability and Integrity) Amendment Bill

Second Reading

The Hon. D.R. CREGAN (Kavel—Minister for Police, Emergency Services and Correctional Services, Special Minister of State) (17:03): I move:

That this bill be now read a second time.

Today I introduce the Electoral (Accountability and Integrity) Amendment Bill 2024. This bill, which amends the Electoral Act 1985, is the culmination of years of work in developing a scheme to implement the state government's election commitment to ban political donations from state elections.

South Australia has a long and proud history of democratic reform. In 1894, we became the first jurisdiction in the world to grant adult women the right to both vote and stand as members of parliament. In doing so, South Australia ensured that the subsequently federated Australia would follow our state's example.

We have led the world in some of the most significant changes for the betterment of democracy. It was a 24-year-old Englishman turned South Australian, William Boothby, who in 1854 singlehandedly redesigned the ballot paper itself with this system now standard across the world. It was South Australian author, activist and polymath, Catherine Helen Spence, who in 1861 began a lifelong campaign for the adoption of preferential voting in her state and later her country. This work contributed to a system by which representatives are not selected by the largest majority of voters but are chosen because they have earned a majority of support from the electorate.

Consistent with this reformist tradition, the South Australian government now seeks to introduce legislation to ban political donations. Democracy in South Australia has a strong history. That does not mean it faces no risk. Democracy worldwide is in a crisis of confidence. Trust in democratic institutions and leaders is at an all-time low. The Centre for the Future of Democracy at the University of Cambridge published a study titled Youth and Satisfaction in Democracy, which combined data from close to five million respondents in over 160 countries. The study concluded that current millennials, 18 to 34 year olds, are the first generation in living memory where the majority are dissatisfied with the way that democracy functions.

Among the large democracies, recording their highest ever level of democratic dissatisfaction, were the United Kingdom, Brazil, Mexico, the United States and Australia. It is incumbent upon democratic leaders to act. Democracy has been described as a work in progress—an ever evolving and living system which can and should be continually refined and improved to better serve the people it represents.

Complacency is itself a profound risk. The pervasive impact of private donations in our electoral and political processes has contributed to this trust deficit. Private money impacts our politics in a variety of ways. In its most corrosive form private donations made with the aim of securing a particular outcome from members of parliament or ministers can have a corrupting effect. Whilst fortunately blatant attempts to purchase favourable decision-making may be rare, a ban on donations has a prophylactic effect of reducing the opportunity for such criminality. Less extreme but nonetheless very troubling is that private money may be gifted to members of parliament or ministers, not with a view to securing any particular result but rather in the expectation that decision-makers will be more favourably disposed to generous donors.

As uncomfortable as it may be for those of us who are politicians to admit, the truth is that money can and does buy influence. As the Premier said in his Hawke Lecture, when he announced that he would be taking this policy to the 2022 election, the truth is every insider has some questions to answer about how we do our job, who we listen to, who we think matters, whose voice we think counts the most. It is a well-known feature of our current system that powerful lobbyists can by making donations purchase access to decision-makers. Yet, no-one should be able to gain additional access to a politician or leader on the basis of their bank account balance, no-one should be able to cut the queue because they are willing to fork out to attend a fundraiser just to gain access.

The decisions taken by members of parliament and ministers must always be made in the public interest and should never be influenced by the private interests of political donors or those who can afford access. A ban on political donations will prevent wealthy donors from purchasing influence or access. Perhaps the most pervasive and therefore insidious impact of private money on our political system is not the actual impact that it has on the process or outcome of decision-making but the perception that it creates, and even where the making of a donation has no impact at all on decision-making many quarters of the electorate remain sceptical. One need only look at the recent media scrutiny about flight upgrades offered to federal politicians to understand the degree of community concern about the impact that even relatively modest gifts have.

For these reasons, political donations engender distrust in our politics. However, political donations give rise to a further related problem. As touched upon already, members of parliament and ministers can be inundated with requests for their attention. People can and should have the opportunity to engage with their leaders, share their concerns, express their views and advocate for their passions. It is how a democracy is intended to work.

However, time is a finite resource. When our members of parliament and ministers are beholden to donors, the fundraising activities that they must necessarily engage in, under the rules as they stand in order to compete, distract them from their duties as representatives and decision-makers. If a politician attends a fundraising event then that is time taken away from meeting with a constituent or a small business with a complaint, attending a community sporting event, participating in a department policy briefing or meeting with a company CEO to discuss the state's economic objectives. A ban on political donations will go a long way towards both restoring trust in politics and relieving our leaders and representatives from fundraising that distracts from them serving South Australians.

It may be argued that a ban on donations is unnecessary, that it goes too far. It may be said that a cap on large political donations would be sufficient to restore trust in politics because relatively small donations will not impact on the integrity of political decision-making. This is wrong for two reasons. Firstly, it does not address the perception problem discussed above. Levels of trust in politics are such that even small donations raise suspicions in the minds of many electors. Secondly, a cap on large donations exacerbates the fundraising problem discussed above. In a system where politicians can only secure small donations, they will be required to spend even more time fundraising in order to compete.

The bill has been drafted in pursuit of these purposes. Although the purposes of the bill are clear, the implementation of the government's policy must be nuanced. A ban on donations prevents the flow of private money that would otherwise be available to fund political communication by participants in our political system. In this way, the ban potentially impacts free political communication, which is protected under the Commonwealth Constitution. Therefore, the publicly funded scheme that replaces the status quo must be implemented in a manner that balances the interests of major parties and minor parties, parties and Independents, incumbents and new entrants, and political candidates and third-party campaigners.

Critical to the balancing approach is the need to ensure that the voices of all the different participants in our political process can be meaningfully heard. These reforms have been shaped by an expert panel that produced a report titled, 'Review of the Electoral (Accountability and Integrity) Amendment Bill 2024 (SA)'. The panel comprised of the Hon. Greg Parker PSM, Professor John Williams AM and Mr Steven Tully, and is dated October 2024. I table the expert report for the information of members.

Report tabled.

The Hon. D.R. CREGAN: In addition to the expert panel's report, this bill has been further informed by independent accounting analysis undertaken in respect of the historic annual administration expenditure of the two major parties. In the interests of transparency, the government proposes to table its analysis in the form of a report and I table the independent accounting report for the information of members.

Report tabled.

The Hon. D.R. CREGAN: In the interests of time, I seek leave to insert the remainder of my second reading speech and the explanation of clauses into Hansard without my reading them.

With these principles in mind, the Government instructed the drafting of a Bill with the following features:

In order to prevent well-resourced participants from drowning out other voices, the Bill imposes caps on electoral expenditure for all parties, candidates and other participants.

The Bill prohibits absolutely political donations to incumbent members of Parliament and registered political parties, and replaces it by expanding the existing system of public funding. That funding is based upon the number of votes garnered at previous elections.

New entrants into the electoral process, such as independent candidates or registered parties without parliamentary representation, will still be permitted to accept donations, as will third party campaigners. However, anonymous donations of $200 or more are unlawful and the amount of any individual donation is capped at $5,000. Further, donations cannot be accepted above the amount of the participant's expenditure cap for the election.

The Bill provides for payments to be made to all registered political parties, candidates and groups in advance of a general election, in order to enable them to have sufficient funds to run a campaign.

Having drafted the Bill, the Government then embarked upon an extensive consultation process. The draft Bill was released in order to garner the views of the various stakeholders who would be affected by this reform. The process elicited 55 responses from electors, registered political parties, former Members of Parliament, academics and political advocacy groups as well as comments and feedback on the YourSAy website—being the State Government's online consultation forum.

In addition to public consultation, the Government commissioned an expert panel to review the reform proposals contained in the consultation Bill and the various consultation responses. The Panel was asked to advise on matters such as appropriate levels for expenditure caps and donations, public funding, and candidate and party registration thresholds.

The panel was comprised of the Hon Gregory Parker PSM, Professor John Williams AM, and Mr Steven Tully.

The Hon Gregory Parker was a Judge of the South Australian Supreme Court from 2013—2022, and before then the Crown Solicitor of the State of South Australia. He has extensive experience in public and constitutional law and the processes of government. Professor Williams is the Provost of Adelaide University and a Pro-vice Chancellor, Foundation Director of the South Australian Law Reform Institute, and a former Dean of the Adelaide Law School. He is widely recognised as a leading expert on Australian constitutional law. Mr Steven Tully has extensive experience in the management and administration of elections. He was the South Australian Electoral Commissioner from 1997-2005, and was then the Victorian Electoral Commissioner from 2005-2012.

Collectively, the Panel possesses a significant body of experience and expertise in public and constitutional law and electoral matters.

In its Executive Summary of the Report, the Panel endorsed the need for this reform, noting 'the growing concern about the power of unregulated expenditure on the probity and fairness of the electoral contest', and that 'the power of ideas and policy, can too easily be overwhelmed by the megaphone of money.'

The Panel's report made 19 recommendations to the Government. Having considered the consultation responses and the Panel's recommendations, the Government has now made substantial revisions to the consultation Bill. Those changes have picked up many of the suggestions made through the consultation process and generally reflect the recommendations of the Panel. The relatively minor respects in which the Government has departed from the Panel's recommendations are discussed below.

The Government would like to thank all of those who contributed a submission in the consultation process. The Government would also like to thank the Panel for its careful and detailed consideration of the many issues arising from the implementation of this reform.

One of the most important things that the Panel was asked to consider were the appropriate expenditure caps for political parties and candidates. After carefully reviewing the figures contained in the consultation Bill, the panel endorsed the figures contained in the draft Bill, concluding that, '[t]he panel does not consider the proposed caps upon expenditure will unreasonably prevent any class of candidate from presenting their case to the electorate.'

Next the Panel considered the position of third party campaigners, which had received significant attention in the public consultation process. The Panel expressed the view that, 'upon the imposition the proposed prohibition on donations to political parties, there will be a flow of donations to third party campaigners.' The Panel considered that 'unregulated third party expenditure can be harmful to the democratic process.'

The Government accepts the Panel's reasoning, and has incorporated into the Bill caps to regulate the expenditure of third party campaigners. As the Panel acknowledged, 'the purpose of such a cap is not to prevent loud and vociferous voices from being reasonably able to present their case but rather to facilitate a level playing field for third parties.'

The Panel considered that a cap of $375,000 applicable to State-wide campaigns at general elections was appropriate. Having made some adjustments to the administrative and campaign funding for candidates (which I will outline later), the Government considers that it is appropriate to allow for a modest increase to the cap for third party campaigners to $450,000. This is intended to maintain the relativities between candidates and third parties within the same range as that proposed by the Panel. For the same reason, the Government has increased the proposed donation cap applicable to third party campaigners from $2,700 to $5,000, to ensure that third party campaigners are not unduly hampered in their ability to fund their campaigning.

Another significant issue raised during public consultation, and addressed by the Panel, was the effect of the reforms on new entrants. Given that the scheme for public funding under the Bill operates generally by reference to the number of votes garnered at the last election, a different model of funding is required for new entrants. Some advanced funding is provided for new entrants in the Bill.

In preparing the consultation Bill, the Government considered that there was a risk that too many new entrants may register to seek advance funding which may lead to a blow out in costs and voter confusion through a multiplicity of candidates. Accordingly, the consultation Bill proposed an increase to the registration requirements for parties and independents.

The Panel did not accept the increased registration requirements were necessary based on the material available. The Government accepts the Panel's recommendation on this issue. The first election undertaken under the new system will be taken into account in reviewing the operation of the Act and if any subsequent changes become necessary.

The Bill provides for administrative funding for political parties and independent candidates. The consultation Bill had provided that a proportion of this funding could be spent on political campaigning. The Panel, however, noting that this is not permitted in other jurisdictions, recommended that operational funds should be prohibited from use for political purposes. The Government accepts this recommendation.

The Panel also recommended that, in order to address the problem of advantaging incumbents, non-incumbent parties and candidates should also be able to access administrative funding. The Government also accepts this recommendation.

As to the quantum of funding, the Panel recommended a reduction in administrative funding for political parties to $600,000 each half-year. The Panel made this recommendation following a review of the historical expenditure of the major parties. Following receipt of the Panel's recommendation, the major parties have queried the financial conclusions reached by the Panel in arriving at this conclusion. The parties maintain that their administrative expenditure has historically been in the order of $800,000 each half-year.

It was never the Government's intention to deprive political parties of the funds necessary for administrative purposes. The Bill as presented in the Other Place contained funding for $800,000 based upon representations made by the major parties. The Government advised at that time that it had commissioned an expert accountant report concerning the historical expenditure of the major parties to verify those figures, and that it would be guided by that independent accounting advice, which was expected to be received before the Bill passed both Houses.

That expert accounting advice has now been received, and a copy has been tabled. It confirms that, on the basis of the definition of administrative expenditure in the Bill, the historical average expenditure of the major parties was over $1.7 m per year. Accordingly, the provision in the Bill for administrative funding of $800,000 per half-year is considered appropriate to enable parties the funds necessary for their administrative purposes.

In order to afford parity to minor parties and independent candidates, the Government also proposes to increase the administrative funding available to them. Accordingly, the Bill increases the base administrative funding for minor parties from $225,000 to $245,000, and that for independents from $15,000 to $20,000.

Acceptance of the Panel's recommendation that administrative funding should not be available for political purposes has required another change to the Bill. The allowance of expenditure of a portion of administrative funding for political campaigning contemplated by the consultation Bill, would have allowed for limited political spending prior to the pre-election campaign period (commencing on 1 July in the financial year before the election is held). The prohibition of administrative funding for this purpose, as recommended by the Panel and accepted by the Government, leaves a funding gap for those parties and independents who cannot receive donations or advance funding, before the commencement of the pre-election campaign period. However, political campaigning is not something to be restricted only to the election campaign.

Accordingly, provision is made in the Bill for parties and independents to be able to draw upon a small amount of their permitted election expenditure in advance of the formal pre-election period. This provides necessary flexibility, but does not constitute additional funding or allow a party greater relative advantage, because any such expenditure will count towards the maximum election expenditure cap.

The Panel reviewed the dollar per vote funding proposed in the consultation Bill, and concluded that the proposed funding was insufficient. The Panel recommended an increase of $1 per vote funding. The Government agrees. In fact, the Government, in order to ensure that these reforms succeed in providing sufficient funding for all candidates to campaign, proposes to go further and increase party funding to $5.50 per vote, from the current amount (with indexation) of approximately $4.00 per vote for registered political parties. To ensure this increase in funding does not operate to the relative advantage of parties over independents, the Government proposes to increase funding to independents to $8.50 per vote and impose a cap on a party's funding by reference to 33% of the primary vote. The Government expects that these funding levels will ensure that these important reforms will not unduly restrict the capacity of candidates to be heard.

The Panel recommended that the proposal contained in the consultation Bill, that the threshold for the receipt of per-vote funding for Legislative Council members should be increased from 2% to 4%, could not be justified. The Government accepts this recommendation.

The Panel discussed a problem that had been referred to in submissions received in the public consultation process as a 'funding trap'. That problem may arise where minor parties perform badly at an election, thereby leaving them with little, or no, public funding to engage in the next campaign. The Panel recommends that a minor party that finds itself in that position should be able to elect whether to obtain public funding, or to be treated as a non-incumbent party, and therefore able to receive donations.

The Panel identified a similar situation that arises for independents, although in reverse. The consultation Bill would have treated them as equivalent to new entrants, meaning they could always engage in fundraising but the amount of their advance funding would be that for a first-time candidate and not be based on their previous vote performance (if they had previously stood for election). The Panel also recommended that independent candidates in this situation should be able to choose whether to be treated as an incumbent or a new entrant for funding purposes. In accordance with the need to ensure that these reforms do not shut out voices of minor parties and independents, the Government has accepted these recommendations. Finally, the Panel recommended that these reforms would benefit from further consideration and additional evidence when it becomes available following the next State election. The Government agrees. Accordingly, the Bill contains a statutory review process.

I will now explain the major reforms within the Bill:

Definitions (Sections 4 and 130A)

The Bill includes new definitions and concepts to accompany the reforms, including the following terms describing different classes of electoral participants:

Entitled candidate

Entitled group

Entitled registered political party

An entitled candidate is a candidate which is not elected or endorsed by a registered political party. An entitled registered political party is a registered political party without any sitting members.

The definition of associated entity has been amended to exclude a registered industrial organisation or an entity wholly comprised of registered industrial organisations.

Ban on electoral donations (New Division 6A, Part 13A)

The Bill proposes to prohibit the giving and receiving of an electoral donation to a registered political party, member of Parliament, group, candidate or third party.

The Bill removes the definition of 'gift' to be replaced by the definition of 'donation'. The definition is broad and contains certain exclusions and a regulation making power to include or exclude dispositions of a prescribed kind or in prescribed circumstances.

There are several exclusions made expressly by the legislation—for example, an allowance is made for the payment of party membership fees, and for political parties to impose a levy on their sitting Members of Parliament (that being a modest percentage of a Member's parliamentary income) without these items constituting a donation.

The Bill introduces the concept of an 'electoral' donation, which is:

A donation made to or for the benefit of a registered political party or group; and

A donation (or such part of a donation) made to or for the benefit of a member of Parliament, candidate or third party which was used or intended to be used solely or substantially for State electoral purposes (and in the case of a member of Parliament—duties as a member of Parliament); or to enable the participant to make an electoral donation or incur political expenditure; or to reimburse those participants for making an electoral donation or incurring political expenditure.

The intent of this provision is not to capture incidental items which may be considered a 'donation' but are not an electoral donation—for example, in circumstances where a Member of Parliament is gifted a drink bottle, tickets to an event, a meal or a similar type of item.

A third party that is a registered entity within the meaning of the Australian Charities and Not-for-profits Commission Act 2012 is only prohibited from receiving an electoral donation from a foreign entity. No other limitations will apply. This decision was made with consideration to the limitations imposed on the political activities of registered charities and in recognition of their inherent reliance on donations to operate. The intent of this provision, and of others which may impact on the operation of not-for-profit community advocacy groups, is to not suppress the voices of community advocates in the political process.

A recontesting participant (an entitled registered political party, entitled candidate or entitled group that elects to be treated as a recontesting party, candidate or group for the purposes of advance payments), will be prohibited from receiving electoral donations from the capped expenditure period. In exchange, these recontesting participants will be eligible for advance funding on the basis of their previous (unsuccessful) election result. This is to better allow recontesting participants to demonstrate and build on support within the community. A defence applies should the recontesting participant have received donations and subsequently lodged their certificate after the day the capped expenditure period commences.

An electoral donation made to an associated entity is taken to be a donation to or for the benefit of the party to which the entity is associated.

Self-funding by certain participants is allowed subject to certain limitations outlined in the Bill.

Ban on electoral loans (New Division 6A, Part 13A)

The Bill proposes to prohibit the giving and receiving of an electoral loan to a registered political party, member of Parliament, group, candidate or third party.

The Bill includes a definition of loan which does not include a loan provided by a financial institution.

The Bill introduces the concept of an electoral loan, which is:

A loan made to or for the benefit of a registered political party or group; and

A loan (or such part of a loan) made to or for the benefit of a member of Parliament, candidate or third party which was used or intended to be used solely or substantially for State electoral purposes (and in the case of a member of Parliament—duties as a member of Parliament); or to enable the participant to make an electoral loan or incur political expenditure; or to reimburse those participants for making an electoral loan or incurring political expenditure.

A third party that is a registered entity within the meaning of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) is only prohibited from receiving an electoral loan from a foreign entity. No other limitations will apply.

A recontesting participant (an entitled registered political party, entitled candidate and entitled group that elects to be treated as a recontesting party, candidate or group for the purposes of advance payments), will be prohibited from receiving electoral loans from the capped expenditure period. However a defence applies should the recontesting participant lodge their certificate after the day the capped expenditure period commences.

An electoral loan made to an associated entity is taken to be a loan to or for the benefit of the party to which the entity is associated.

Limitation on electoral donations (New Subdivision 3, Division GA, Part 13A)

An entitled registered political party, entitled candidate, entitled group and third party (defined as a regulated designated participant) may receive an electoral donation up to the individual cap of $5,000 (2026 indexed) per donor each financial year.

A regulated designated participant is prohibited from accepting an electoral donation from a foreign entity.

It will be an offence for a regulated designated participant to receive an electoral donation of more than the individual cap. There is a defence for a regulated designated participant if certain actions are taken.

In addition to the individual cap, an entitled registered political party, an entitled candidate or an entitled group (defined as a relevant regulated designated participant) is subject to a general cap in respect of total electoral donations received during the capped expenditure period in an election. The general cap for a relevant regulated designated participant in relation to an election is the amount equal to the relevant regulated designated participant's applicable expenditure cap for the election.

It will be an offence for a relevant regulated designated participant to receive electoral donations that exceed the general cap. In addition to the offence, twice the excess may be recovered as a debt due to the Crown. There is a defence for a relevant regulated designated participant if certain actions are taken.

Limitation on electoral loans (New Subdivision 3, Division GA, Part 13A)

An entitled registered political party, entitled candidate, entitled group and third party (defined as a regulated designated participant) may receive an electoral loan up to the individual cap of $5,000 (2026 indexed) per lender each financial year.

A regulated designated participant is prohibited from accepting an electoral loan from a foreign entity.

It will be an offence for a regulated designated participant to receive an electoral loan of more than the individual cap.

In addition to the individual cap, an entitled registered political party, an entitled candidate or an entitled group (defined as a relevant regulated designated participant) is subject to a general cap in respect to total electoral loans received during the capped expenditure period in an election. The general cap for a relevant regulated designated participant in relation to an election is the amount equal to the relevant regulated designated participant's applicable expenditure cap for the election.

It will be an offence for a relevant regulated designated participant to receive electoral loans that exceed the general cap. In addition to the offence, twice the excess may be recovered as a debt due to the Crown. There is a defence for a relevant regulated designated participant if certain actions are taken.

Nominated Entities (New Division 2A, Part 13A)

The Bill introduces the concept of a nominated entity and a register of nominated entities.

A registered political party may, by notice in writing, appoint no more than two associated entities as the nominated entities of the registered political party. A nominated entity must be an associated entity of the registered political party.

The Electoral Commissioner must establish and maintain a register to be known as the Register of Nominated Entities, which must be published on a website maintained by the Electoral Commissioner. The Register must include the following details in relation to each nominated entity:

the name and address of the entity;

the registered political party of which the entity is the nominated entity; and

any other details prescribed by regulation.

A disposition of property made by a registered political party to a nominated entity of the registered political party is not a donation. A donation to a registered political party from the nominated entity of the registered political party that is used for administrative expenditure is not an electoral donation and is not subject to the ban.

Similarly a loan made by a registered political party to the nominated entity of the registered political party is not a loan. A loan to a registered political party from a nominated entity of the registered political party that is used for administrative expenditure is not an electoral loan and is not subject to the ban.

The purpose of the nominated entity scheme is to provide a practical vessel for political parties (which can, on occasion, consist of nothing more than an unincorporated association) to exchange assets or funds with a dedicated company which holds those assets or funds (for example, an asset holding company which has legal ownership of a party's headquarters). As an associated entity of a registered political party, a nominated entity cannot receive outside political donations. In recognition of the possibility that there is potential for a nominated entity to entrench an existing financial advantage, amounts received by a political party from a nominated entity can only be used for administrative expenditure. This will prevent a party using legacy assets to build a long-term political advantage over more-limited new entrants.

Administrative Funding (Division 5, Part 13A)

Registered political party

The Bill proposes to amend the operation of the existing 'special assistance funding' in section 130U of the Act. It will be renamed 'administrative funding'.

Under the Bill, a registered political party meeting the current criteria in section 130U(1), including that at least 1 member of the party is a member of Parliament will be entitled to administrative funding. Whilst the entitlement does not operate on a reimbursement basis, a claim must still be submitted to the Electoral Commissioner in accordance with the requirements in the Bill.

The amount to be paid for a half yearly period is:

If the registered political party has 1 member who is a member of Parliament—$85,000 (2026 indexed)

If the registered political party has 2 members who are members of Parliament—$245,000 (2026 indexed)

If the registered political party has more than 2 members who are members of Parliament, the lesser of the following:

the amount of $245,000 (2026 indexed) in respect of 2 members of Parliament plus $55,000 (2026 indexed) for each additional member of Parliament;

$800,000 (2026 indexed).

A registered political party will also be entitled to a one-off payment (available on a reimbursement basis) of up to $200,000 if:

the party has received a half yearly entitlement payment;

a claim is submitted by the prescribed date and in a form determined by the Electoral Commissioner; and

expenditure was incurred on prescribed administrative expenditure.

Proposed section 130W limits the purpose for which administrative funding may be used by a registered political party.

lndependent Member of Parliament

Under the Bill a non-party, or independent, member of Parliament will be entitled to be paid a half yearly administrative funding if the member is a member of Parliament for all or part of the half yearly period and a claim is submitted to the Electoral Commissioner. The amount of the entitlement for a half yearly period is $20,000 (2026 indexed) and it is not on a reimbursement basis. This funding is subject to the same limitations as that which is made available for registered political parties in section 130W—namely that it can only be used for administrative purposes.

In addition to the half yearly entitlement, a non-party member of Parliament will be entitled to a one-off payment of up to $50,000 if:

the non party member is a member of Parliament at the commencement of the section;

a claim is submitted by the prescribed date and in a form determined by the Electoral Commissioner; and

expenditure was incurred on prescribed administrative expenditure.

Repayment of Administrative Funding

The Bill provides that administrative funding must be repaid if it has not been spent and the Electoral Commissioner becomes aware of certain matters triggering the repayment provision.

Policy Development Funding (Division 5A, Part 13A)

The Bill introduces policy development funding for an entitled registered political party. Under the reforms an entitled registered political party will be entitled to policy development funding of up to $20,000 (2026 indexed) per year if:

it was an entitled registered political party for all the year to which the funding relates;

a claim is submitted to the Electoral Commissioner in the form determined by the Electoral Commissioner; and

expenditure was incurred on policy development expenditure.

The policy development expenditure scheme seeks to provide a mechanism for the better development of a contest of ideas, by assisting non-incumbent parties in the development of new policies and concepts.

Advance Payment Scheme (new sections 130PA-130PG)

The Bill introduces an advance payment scheme for participants so that funding is available prior to an election campaign.

Under the Bill, electoral participants will be eligible for an advance payment of election funding in respect of a general election, or a Legislative Council election. A different scheme applies for a by­election. There will be two payments of advance funding and there is a requirement to lodge a certificate with the Electoral Commissioner for the provision of the advance payments.

In respect to by-elections, only entitled registered political parties and entitled candidates will be eligible for advance payments.

The level of advance payment is dependent on the class of the participant and the type of election for which the funding is required.

For registered political parties, incumbent non party members of Parliament and groups not endorsed by a registered political party with a member of Parliament, the advance payments will be calculated based on the results of the relevant previous election.

For an incumbent independent member of Parliament that was, at the previous House of Assembly general election, endorsed by a registered political party, the level of advance payments will be based on the number of first preference votes given for that member at the previous general election (in accordance with item 3 of section 130PA). The registered political party would be entitled to advance funding based on the first preference votes won by that former member in the previous election along with all the other first preference votes of candidates endorsed by that party in the House of Assembly (in accordance with item 2 of section 130PA).

For an incumbent independent member of Parliament that was at the twice preceding Legislative Council general election endorsed by a registered political party, additional provisions in relation to the level of advance payments will be provided for in the regulations.

An entitled registered political party, entitled candidate or entitled group may elect to be treated as a recontesting party, candidate or group and therefore be entitled to advance payments calculated based on the results of the relevant previous election. In other words, they can choose whether to receive the fixed amount of funding provided in the Bill or funding based on previous election results. A participant who opts for funding based on previous results will be subject to the electoral donations and electoral loans ban.

The Bill provides a limit on the amount of advance payments being up to the applicable expenditure cap of the participant.

A registered political party (other than an entitled registered political party) or non party member may request the early payment of an advance payment, being before the start of the capped expenditure period. Certain requirements apply including a limitation on the portion of the advance payment that can be provided earlier.

There are additional provisions relating to advance payments applying to a Legislative Council minor party as outlined in the Bill.

The quantum of the total of advance payments provided to an electoral participant will be deducted from the amount payable under section 130P.

As a result of the Government moved amendment in the Other Place the provision relating to the repayment criteria for advance payments has been amended. Any amount provided by way of advance payment will need to be repaid where:

In all cases—the registered political party, candidate or group does not contest the election unless, in the case of a candidate or group, the Electoral Commissioner is satisfied that the candidate or group had good reason for not contesting; or

In the case of a registered political party, candidate or group (other than a registered political party with at least one member of Parliament, candidate who is an incumbent member of Parliament or a group with an incumbent member of Parliament)—is not entitled to payment by virtue of section 130Q(1) or (2).

In the case of a registered political party—before polling day for the election, the party ceases to operate or be registered or it has been, or is being, dissolved or wound up.

Election Funding (Section 130P)

The Bill proposes a change to the amounts and the structure of the per vote funding in section 130P.

The amount per-vote has been raised to $5.50 (2026 indexed) for candidates of registered political parties with a member of Parliament, with candidates of entitled registered political parties remaining eligible for an additional 50 cents per vote for the first 10 percent of first preference votes received.

An additional amount is provided for independent members of Parliament, with incumbent independents eligible for $8.50 (2026 indexed) per vote, and entitled non party candidates also eligible for an additional 50 cents for the first 10 percent of first preference votes.

A separate value applies for by-elections, with $8.50 (2026 indexed) per vote being adopted for candidates of registered political parties with a member of Parliament. Other candidates are eligible for an additional 50 cents per vote for the first 10 percent of first preference votes received.

A limit of electoral funding will apply for registered political parties. There will be a 33% limit on the number of primary votes which can be counted in determining the dollar-,per-vote funding under section 130P. The limit is applied by deducting the excess above the 33% limit from the funding payable. This is referred to as the deductible amount in section 130Q.

Expenditure limits (Section 1302)

The Bill proposes there will be mandatory application of expenditure caps. The amounts in current section 130Z have been adjusted.

The amounts will be reduced to their pre-indexed amounts which is indicated by the reference to '2026 indexed' in the Bill. Indexation will be retained going forward.

Expenditure caps have been introduced for a third party. The limits are:

For a general election (including in relation to a simultaneous Legislative Council election)—$450,000 (2026 indexed)

In relation to an election for a House of Assembly district (other than 1 held as part of a general election)—$60,000 (2026 indexed)

A limit of $60,000 (2026 indexed) applies for expenditure relating to an election in a House of Assembly electoral district at the general election.

For a group of non party candidates in a Legislative Council election the cap will be $100,000 (2026 indexed) multiplied by the number of members of the group but up to a maximum of 5.

State campaign accounts (Division 3, Part 13A)

The requirement to keep a State campaign account will remain for a registered political party, third party, candidate and group.

The Bill outlines the categories of money received or funding provided that must be paid into the State campaign account.

Payments of money for political expenditure must be paid from or attributed to the relevant participant's State campaign account in accordance with any requirements of the Electoral Commissioner.

The Bill also recognises that donations may be received for a federal purpose under the Commonwealth Electoral Act 1918 (Cth) and provides for those circumstances.

The Electoral Commissioner will be required to establish and maintain a register of State campaign accounts. An agent will also be required to provide details relating to the account on the request of the Electoral Commissioner.

Disclosures (Division 7, Part 13A)

The disclosure requirements have been amended to reflect the prohibition and limitation on electoral donations and electoral loans.

Section 130ZF has been amended to apply to an entitled candidate, including a member of an entitled group.

Section 130ZG has been amended to apply to those making a donation or loan to an entitled candidate or a member of an entitled group.

Section 130ZH has been amended to apply to those making a donation to an entitled registered political party.

The threshold for disclosure has changed in sections 130ZF, 130ZG and 130ZH to apply a tiered approach for reporting requirements, where detailed disclosure is required for donations and/or loans of more than $1,000.

New section 130ZHA has been introduced applying to those making an electoral donation to a third party. There is a tiered approach for reporting requirements where detailed disclosure is required for electoral donations of more than $1,000.

The threshold for anonymous loans in section 130ZK has been reduced from $1,000 to $500.

Returns (Division 8, Part 13A)

Sections 130ZN (return by a registered political party), section 130ZO (return by an associated entity) and section 130ZP (return by a third party) have been amended to apply a tiered approach to reporting. In respect to a return by a registered political party and an associated entity detailed disclosure is required for amounts received and outstanding amounts of more than $1,000. In relation to a return by a third party, detailed disclosure is required for electoral donations and loans incurred solely or substantially for State electoral purposes or for the purpose of political expenditure of more than $1,000.

Party Registration and Candidate Nomination (sections 39, 42AA and 53A}

The Bill:

Introduces additional information requirements for applications by a party, that is not a parliamentary party, for registration.

Removes the requirement for incumbent independent candidates to provide elector signatures for nomination.

A new provision has been introduced to disapply certain entitlements to registered political parties until the period of 8 months after the date of registration of the political party.

Audits by the Electoral Commissioner (new section 43C and 130ZWA)

The Bill proposes further requirements and powers to assist the Electoral Commissioner in monitoring the activities and documents of applicable entities. Applicable entities are defined as, an entity to whom funding is payable under Part 13A, an associated entity or third party.

The Bill also provides the Electoral Commissioner with additional audit powers for the purpose of determining whether the political party, continues to be eligible for registration.

Offences—Donations and Expenditure Limits (Section 130ZZE)

The Bill inserts penalty provisions in relation to acts or omissions under Division 6 (division relating to political expenditure) and Division 6A (division relating to electoral donations).

There are two new sections which distinguish between an offence where the person knows of the facts that result in the act or omission being unlawful as opposed to an offence where the person ought reasonably to know of the facts that result in the act or omission being unlawful.

New section 130ZZE(a1) provides that a person who does an act or makes an omission that is unlawful under Division 6 or Division 6A is guilty of an offence if the person knows of the facts that result in the act or omission being unlawful. The maximum penalty is $20,000 or imprisonment for 4 years.

There is another penalty provision in section 130ZZE(a2) applying where the person ought reasonably to know of the facts that result in the act or omission being unlawful under Division 6 or Division 6A. The maximum penalty is $10,000 or imprisonment for 2 years.

There is a specific penalty provision in section 130ZZE(a3) relevant to persons participating in schemes to circumvent Division 6 and Division 6A. That provision provides that:

A person must not knowingly participate, directly or indirectly, in a scheme to circumvent:

(a) a prohibition or requirement under Division 6 relating to political expenditure; or

(b) a prohibition or requirement under Division 6A relating to electoral donations.

Maximum penalty: $50,000 or imprisonment for 10 years.

A transitional power for the Electoral Commissioner (applying within the 2 years after commencement) to informally caution or require a person to undertake training, if the person admits to the commission of the offence.

Statutory Review (new provision)

The Bill inserts a statutory review provision requiring the Special Minister of State to cause a comprehensive review of the operation and impact of the reforms to be conducted and a report on the review to be submitted to the Minister. The report must be laid before both Houses of Parliament within 6 sitting days after the report is received. The Government supported an amendment moved in the Other Place to the provision which further outlined the purpose of the review and inserted a requirement that the Special Minister of State, within 6 sitting days of the expiration of 6 months after receiving the report of the review, cause a report to be laid before both Houses of Parliament setting out in relation to each recommendation details of any action taken or proposed to be taken and if no action is to be taken to give reasons. The provision includes other details in relation to the statutory review.

Electoral Commission Report

The Electoral Commission of South Australia, Report into the Operation and Administration of South Australia's Funding, Expenditure and Disclosure Legislation (July 2019), incorporated the review undertaken after the 2018 State election, which was the first election after the commencement of Part 13A and being the first time that participants received public funding and had to satisfy compliance and disclosure requirements. The 2019 Electoral Commission Report made 44 recommendations for legislative change. The following reforms in the Bill implement some of those recommendations:

Conferral of agent powers (new section 130HA)—An agent will have the ability to confer official functions and powers to the acting agent during a temporary absence or unavailability.

Clarification in relation to the agent appointment provisions (sections 130H and 1301)—These changes are technical in nature.

Details of associated entities (section 130ZWB)—The agent of a registered political party must provide the Electoral Commissioner with details of each associated entity on a yearly basis. In addition, notification to the Electoral Commissioner is required within 30 days of when an entity becomes an associated entity.

Appointment of agents for associated entitles (section 130F)—Associated entities will be able to appoint an agent.

Registration of third parties (new Division 8A)—A scheme for the registration of third parties as been introduced, including a requirement for the Electoral Commissioner to publish the register of third parties.

Definition of designated period (section 130ZG, 130ZH and 130ZHA)—The time for donor returns to be lodged for donations made during the designated period has been extended to allow lodgement up to 7 days after the end of the designated period.

Annual political expenditure return (section 130ZR)—The separate expenditure threshold for a third party of $10,000 for the provision of an annual return relating to political expenditure has been removed. The amount applying to all cases, including third parties, will be $5,000.

Entitled group returns (section 130ZF(5a))—Members of an entitled group will not be required to lodge a donation return if it is a nil return. Due to the deeming provisions in section 130A(5) a gift or loan to a member of a group will be deemed to be a donation or loan to the group if it is made for the benefit of all members of the group. Due to the deeming provision, the individual campaign donations return of members of a group will, in most cases, be nil returns.

Definition of State electoral purposes (section 130A)—A definition of State electoral purposes has been included in the Bill.

Investigations (section 130ZZB)—The investigation powers of authorised officers have been extended in scope to include using the powers for the purpose of finding out whether agents of a candidate or group have complied with Part 13A.

Other Changes

The Bill also makes other changes including:

Technical changes

Changes consequent on the reforms

Minor changes necessary to support the reforms; and

Changes to penalties

In concluding, I would like to thank the many people who have contributed to this process, both in making this election commitment and in formulating this Bill.

While there are too many to name them all, I would like to particularly acknowledge the efforts of the numerous officers who have contributed to this work, particularly Anna Markou of Legislative Services and Mark Emery of Parliamentary Counsel. This reform would not have been possible without their tireless and dedicated work over many months.

I commend this significant reform to Members, and look forward to the debate.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Electoral Act 1985

3—Amendment of section 4—Interpretation

Certain definitions are inserted for the purposes of the measure.

4—Amendment of section 39—Application for registration

Amendments are made to the information required in an application for registration of a political party.

5—Insertion of section 42AA

New section 42AA is inserted:

42AA—Entitlements resulting from political party registration not available until 8 months after registration

A political party (other than a parliamentary party) that becomes registered under the Part is deemed not to be a registered political party until 8 months after the date of its registration for the purposes of specified provisions.

6—Amendment of section 43A—Annual returns and other inquiries

This clause makes amendments related to annual returns and other inquiries relating to registered political parties.

7—Insertion of sections 43B and 43C

New sections 43B and 43C are inserted:

43B—Notification of certain changes

This provision requires parties to provide notification of certain changes.

43C—Audits by Electoral Commissioner etc

This provision provides for audits by the Electoral Commissioner in relation to the registration of a political party.

8—Amendment of section 53A—Nomination of candidate by a person

These amendments relate to requirements with respect to the nomination of candidate by a person.

9—Amendment of section 130A—Interpretation

Certain definitions are inserted for the purposes of the measure.

Other interpretative provisions are amended or inserted for the purposes of the measure.

10—Amendment of section 130B—Objects of Part

The objects of the Part are amended for the purposes of the measure.

11—Amendment of section 130C—Application of Part

This amendment is consequential.

12—Amendment of section 130F—Third parties and associated entities may appoint agents

These amendments relate to the appointment of agents by third parties and associated entities.

13—Amendment of section 130H—Registration of agents

These amendments relate to the registration of agents.

14—Insertion of section 130HA

New section 130HA is inserted:

130HA—Conferral of agent's functions and powers

This provides for the conferral of an agent's functions and powers.

15—Amendment of section 130I—Termination of appointment of agent

These amendments relate to the termination of appointments of agents.

16—Insertion of Part 13A Division 2A

New Division 2A is inserted. Division 2A relates to nominated entities (which is defined) and the keeping of a register of nominated entities.

Division 2A—Nominated entities

130JA—Register of Nominated Entities

130JB—Appointment of nominated entities

130JC—Registration of nominated entities

130JD—Revocation etc of appointment and removal from Register of Nominated Entities

17—Insertion of section 130KA

New section 130HA is inserted:

130KA—Register of State campaign accounts

Provision is made in relation to the keeping of a register of State campaign accounts.

18—Substitution of sections 130L to 130N

Sections 130L to 130N are substituted. The new sections relate to State campaign accounts.

130L—Amounts to be paid into State campaign account

130M—Political expenditure to be paid out of State campaign account

19—Amendment of section 130P—General entitlement to funds

These amendments relate to the general entitlement to funds for votes in elections.

20—Insertion of sections 130PA to 130PG

New sections 130PA to 130PG are inserted. They relate to advance payments of funding for elections.

130PA—Advance payments relating to House of Assembly districts at general elections

130PB—Advance payments—other House of Assembly elections

130PC—Advance payments—Legislative Council election

130PD—Early payment of certain advance funding

130PE—Payments of advance funding to be deducted from public funding

130PF—Certificate for advance payments

130PG—Special provisions relating to certain advance payments

21—Substitution of section 130Q

Section 130Q is substituted.

130Q—Payment not to be made or to be reduced in certain circumstances

Provision is made in relation to the requirements relating to payments under the Division.

22—Amendment of section 130R—Making of payments

23—Amendment of section 130S—Death of candidate

24—Amendment of heading to Part 13A Division 5

These amendments are consequential.

25—Amendment of section 130T—Preliminary

Definitions are inserted for the purposes of the Division.

26—Amendment of section 130U—Entitlement to and claims for half yearly entitlement to special assistance funding

These amendments relate to the entitlement to and claims for half yearly entitlement to administrative funding (previously special assistance funding).

27—Insertion of sections 130UA and 130UB

New sections 130UA and 130UB are inserted. They relate to entitlements to and claims for one-off payments of administrative funding

130UA—Entitlement to and claim for one-off payment of administrative funding

130UB—Entitlement to and claim for one-off payment of administrative funding

28—Amendment of section 130V—Making of payments

These amendments are consequential.

29—Substitution of section 130W

Section 130W is substituted:

130W—Use of administrative funding

Provision is made in relation to the use of administrative funding.

30—Insertion of section 130WA

New section 130WA is inserted:

130WA—Repayment of administrative funding

Provision is made in relation to the repayment of administrative funding.

31—Insertion of Part 13A Division 5A

New Division 5A is inserted. It provides for policy development funding for certain political parties.

Division 5A—Policy development funding for certain political parties

130WB—Preliminary

130WC—Entitlement to and claims for annual entitlement to policy development funding

130WD—Making of payments

130WE—Use etc of policy development funding

32—Amendment of section 130X—Interpretation

Definitions are amended for the purposes of the measure.

33—Repeal of section 130Y

Section 130Y, which provided for certificates for 'opting into' expenditure caps, is repealed.

34—Amendment of section 130Z—Expenditure caps

Expenditure caps under the Part are amended.

35—Amendment of section 130ZB—Regulation of political expenditure by parties and candidates endorsed by parties

This amendment changes when political expenditure relates to the election of a candidate.

36—Insertion of section 130ZBA

Section 130ZBA is inserted:

130ZBA—Prohibition on political expenditure by nominated entities

New section 130ZBA provides that an associated entity must not incur political expenditure during any period in which it is the nominated entity of a registered political party.

37—Substitution of section 130ZC

Section 130ZC is substituted:

130ZC—Recovery in relation to political expenditure in excess of cap

Previous section 130ZC, which prohibited arrangements to avoid an applicable expenditure cap, is proposed to be provided for in section 130ZZE. New section 130ZC relates to the recovery of political expenditure that is in excess of a cap.

38—Insertion of Part 13A Division 6A

New Division 6A is inserted. Subdivision 1 includes definitions for the purposes of the Division, including electoral donation and electoral loan. Subdivision 2 prohibits electoral donations and loans to registered political parties, members of Parliament, groups, candidates and certain third parties. Donations and loans from foreign entities are also prohibited. Subdivision 3 provides for a scheme for limited electoral donations and loans (other than from foreign entities) to be made to regulated designated participants.

Division 6A—Regulation of donations etc

Subdivision 1—Preliminary

130ZCA—Interpretation

130ZCB—Meaning of electoral donation

130ZCC—Meaning of electoral loan

Subdivision 2—Prohibition on donations and loans for certain parties, candidates etc

130ZCD—Donations to certain parties, candidates etc prohibited

130ZCE—Loans to parties, candidates etc prohibited

Subdivision 3—Limitations on donations etc to regulated designated participants

130ZCF—Application

130ZCG—Individual cap on electoral donations

130ZCH—Prohibition on electoral donations that exceed individual cap

130ZCI—General caps on electoral donations

130ZCJ—Individual cap on electoral loans

130ZCK—Prohibition on electoral loans that exceed individual cap

130ZCL—General caps on electoral loans

39—Amendment of Part 13A Division 7—Disclosure of donations

The word 'gift' is substituted throughout the Division with the word 'donation'.

40—Amendment of section 130ZD—Interpretation

This provision is amended to insert that donation (in the Division) does not include a donation that is a disposition by will.

41—Amendment of section 130ZF—Returns by certain candidates and groups

These amendments relate to returns by certain candidates and groups.

42—Amendment of section 130ZG—Gifts, loans to candidates etc

These amendments relate to returns for donations and loans to certain candidates and groups.

43—Amendment of section 130ZH—Gifts to relevant entities

These amendments relate to returns for donations to certain parties.

44—Insertion of section 130ZHA

New section 130ZHA is inserted:

130ZHA—Donations to third parties

This provision relates to returns for donations to third parties.

45—Repeal of section 130ZI

Section 130ZI is repealed as a consequence of new Division 6A.

46—Amendment of section 130ZJ—Certain gifts not to be received

These amendments relate to donations requiring certain details.

47—Amendment of section 130ZK—Certain loans not to be received

These amendments relate to anonymous loans requiring certain details.

48—Repeal of section 130ZL

Section 130ZL is repealed as a consequence of new Division 6A.

49—Amendment of section 130ZM—Interpretation

This amendment is consequential.

50—Amendment of section 130ZN—Returns by registered political parties

These amendments relate to returns by registered political parties.

51—Amendment of section 130ZO—Returns by associated entities

These amendments relate to returns by associated entities.

52—Amendment of section 130ZP—Returns by third parties

These amendments relate to returns by third parties.

53—Amendment of section 130ZQ—Returns relating to political expenditure during capped expenditure period

This amendment removes the indexation of the amount in subsection (1).

54—Amendment of section 130ZR—Annual returns relating to political expenditure

This amendment relates to annual returns relating to political expenditure.

55—Amendment of section 130ZS—Annual returns relating to gifts received for political expenditure

These amendments relate to annual returns relating to gifts received for political expenditure.

56—Insertion of Part 13A Division 8A

New Division 8A is inserted. It provides a scheme for registration of third parties.

Division 8A—Registration of third parties

130ZU—Interpretation

130ZUA—Political expenditure by third parties

130ZUB—Register of Third Parties

130ZUC—Application for registration

130ZUD—Registration

130ZUE—Third party must notify Electoral Commissioner of change in particulars

130ZUF—Variation and cancellation of registration

57—Amendment of section 130ZV—Audit certificates

These amendments relate to audit certificates under the Part.

58—Insertion of sections 130ZWA and 130ZWB

New sections 130ZWA and 130ZWB are inserted. Section 130ZWA provides for audits of applicable entities (which are defined) by the Electoral Commissioner. Section 130ZWB provides for registered political parties to provide details of associated entities.

130ZWA—Audits by Electoral Commissioner etc

130ZWB—Registered political party to provide details of associated entities

59—Amendment of section 130ZZ—Nil returns

This amendment is consequential.

60—Amendment of section 130ZZB—Investigation etc

The investigation powers for the purposes of the Part are amended.

61—Amendment of section 130ZZE—Offences

Certain offences are provided for in connection with the measure. Procedural provisions relating to offences are also provided for.

62—Amendment of section 130ZZH—Regulations

These amendments relate to regulation making powers for the purposes of Part 13A.

63—Amendment of section 139—Regulations

An existing power to modify the application of Part 13A by regulation is amended. An additional power to modify the application of Part 13A for a limited period by regulation is inserted. Another amendment relates to the power to make transitional and savings regulations.

64—Review

Provision for a review of the measure is inserted.

Mr TEAGUE (Heysen) (17:13): I stand to say some words on behalf of the opposition. I hope that they are some observations that we have not heard before. I do indicate that I am the lead speaker for the opposition and indicate the opposition's support for the bill. I will step through some of these aspects of what we are still on which is a somewhat wild ride. We had a bit of a pause from the wild ride just now because we have seen the minister in this place, as is now fairly consistent form for this government, rehearsing the speech that was given in another place by the Attorney just a couple of weeks ago. It leaves the opposition, as we were a couple of weeks ago as the bill was introduced in another place, to consider where the creative authorship of the piece of legislation really is.

Suffice it to say that what we have heard now in stereo is a somewhat lofty, some might say grandiose characterisation of this whole project in terms of the grand narrative of South Australian democracy. I think that it would be wise of all of us to adopt an attitude of at least some sort of practical incremental humility about how this pans out, because what is going to be now part of the new landscape is really quite untested. There are some significant concerns about the unintended consequences that might flow, let alone the intended consequences, but I think we can all agree that we are in really uncharted territory.

In a way, what we are seeing with the implementation of this new regime is a lot more money in politics and, in a way, the institutionalisation of money in politics and, at the same time, done in circumstances that moves away from what are now relatively familiar changes that were the subject of what I will call the Rau reforms, the introduction of part 13A of the act that came into place and in operation for the 2018 election. Those Rau reforms that were really authored by the then Attorney and Deputy Premier and worked through with the whole parliament—and, I might say, in an orderly way—now some years ago had the virtue, in my view, of introducing public funding to meet part of the cost of electoral campaigns in this state but avoiding many of the difficulties that this bill is now needing to confront by applying only to campaigns and applying on an opt-in basis.

There is a lot that can be resolved where parties are willing participants, where there is a scheme of engagement that is available, but it is a matter of choice as to whether or not to accept the obligations and to take the benefits of participation in the scheme. That is what we have had now in place—not for all that very long, but enough that it has been settled and, I might say, successfully so. It is an opt-in campaign scheme which has worked effectively to keep a lid on the overall cost of participation in election campaigns in this state.

The subject matter of the bill, insofar as it traverses the Rau reforms, the part 13A reforms, will now shoehorn all of that into a compulsory process. All of those Rau reforms will now be part of a compulsory process, and it is going to be amplified quite significantly in terms of the campaign side. Then, of course, we will see what I have described as the institutionalisation of money in politics because we will have now very significant amounts of money that are paid to political participants for the administration and management of their day-to-day activities between elections.

Thirdly, and significantly, we are going to see what is described as caps on expenditure by third parties, but we might see it operate quite possibly in another way, as a sort of normalisation of the expected level, none of which has applied in this state before. We have seen some of this territory, particularly in terms of third parties, traversed in other parts of the country. As the government has already conceded, there are real risks about the constitutionality of at least that part with a view to freedom of expression, let alone the parts that would provide funding for political participants between elections and at elections.

I might just say in terms of a starting point, partly moved by what we have heard rehearsed just now by the government: yes, it is true to say that South Australia has a long and proud history of advances and reforms in terms of democratic institutions. We have a proud history of democratic participation. One of the core criticisms of this compulsory process that will now be the subject of the bill is that it is readily apparent to incumbents—parties, candidates for parties, current members and incumbent third parties; I include all of those categories of incumbents—that there are distinct, if you like, head starts or support mechanisms for incumbents. It is providing a means by which the status quo is supported.

I am conscious of the words of the Chief Justice in Kable that have been referred to recently by the reporters, among others. It is just a short observation. Chief Justice Brennan observed that 'novelty is not necessarily a badge of error'. He is making that observation in the context of an exposure to attack in a constitutional argument. But we have to be very careful that, in making a new move and then claiming the inheritance of the democratic institutional reforming history of the state, the new move is not a retrograde step in terms of the enhancement of vibrancy, the participation and the possibility for newcomers to actually have a proper look-in and, frankly, for incumbents to remain as dynamic in their approach and engagement with the community as ever.

It has been put in the course of this debate by plenty of thoughtful stakeholders that we ought not to forget that, while there will be great popular support for the removal of money as a form of political influence—and I just indicate that the bill is far from guaranteeing an end to that—where there is a lot of thoughtful consideration is in the circumstances of a virtue of small donations, particularly by individuals resident in the area in which they are making a contribution, providing a means by which an individual can facilitate participation.

We all know people are time poor, we all know that not everybody is going to get directly involved in politics themselves, so a means of endorsing an idea, facilitating the possibility to further that advocacy and so on, can and has come over a long period of time by way of small donations by individuals, and particularly those who are resident in a candidate or member's local area. Without making too many predictions, I am struggling to keep up with the whole whirlwind of what we have seen coming down the line in recent weeks. I just will remain interested in that aspect of the small and individual contribution.

It is good to mention, I think, in that frame that the possibility to join a political party is spared from the general reframing of the whole environment. It will still be possible to join a political party and to pay a notional amount to join, and that may provide a means by which such individual adherents' endorsement of individuals and groups may still find its voice.

There will be new norms that will emerge from this new environment, in which donations are notionally banned and where public funds come in to replace those donations and then change the structure of management and the operation of campaigns for parties. As I have flagged, there are real concerns about the exclusion of third parties from that new environment, albeit with a cap associated on their capacity to participate. We will have to see how that pans out. As I said, it is a significant departure indeed to move away from the Rau approach—opt in, voluntary participation—to one in which the entire scene is compelled to a particular outcome, and therein is the constitutional vulnerability.

The government, in flagging these changes and trumpeting its pioneering in this area, has conceded many of those things, and I guess we will just have to see how that pans out. The government set itself anyway a task and objective by describing the legislation as having been designed to get money out of politics and to strengthen public confidence in democracy. The government in the same breath has claimed that the reform is complex and has conceded that it may well be subject to legal challenge, and so again we will see that pan out.

There is concern about the criminalisation of certain conduct that might until now have been part of ordinary engagement. Along with a ban comes an offence: a capacity to enforce the ban. It goes with the territory, but it is something that can put the chills into people who have been long participating. Of course, it is not the only serious offence provision in the Electoral Act, but it will for the first time attach significant penalties, including prison time, to activities associated with donation alongside those longstanding serious offence provisions—sections 109 and 111, and so on—to do with bribery and undue influence.

So the government had just better get it right. If it is seeking to promote confidence, it had better ensure that it is not creating a chilled political environment because people will fear that, whatever else the merits might be of their participation, they will not want to risk tripping over this new regime, even for lack of complete knowledge of how it might work.

We have heard from the Attorney in the other place about the expert panel and the various considerations the government has given to those who are thoughtful in this area over a period of time. The minister just now, in rehearsing that contribution, has tabled some if not all of those documents in the context of this step. I think it is important for the record to have those documents freely available so that the regime can be properly assessed as it commences and as it pans out and not have to wait until the review process sometime in 2027.

Just a word about the evolution of the bill. I have had a glimpse of that over recent months. I do not put this as some sort of generalised criticism. In some ways, the way the government has gone about this has ended up having elements of the Rau approach, but it is probably good to put it into some context. The government made this a key commitment at the election, and we have been anticipating this coming along in some form ever since March 2022. At various points, there would be long silences, and I remember making an inquiry to the Attorney's office through 2022: 'Is this coming along at some stage? What form might it take?' We on this side looked to be gearing up and thinking about the various aspects that might be coming our way for a long period of time.

We heard from the Treasurer about a year or so ago, maybe a bit more, that it has not quite got there because it is a bit more difficult than we might have first thought, or it is complex, and I think there was general agreement that that is true. I think at one point we might have got close to the idea that it is sufficiently fraught, that we might need to think better of it or go back to a model that others might have described as sensible along the lines of a small donations regime and encouragement to individual participation and that sort of thing, but, somewhat out of the blue in the middle of this year, we then heard that there is a bill in the offing. There will be someone who might correct me as to the particulars of the timing, but I recall attending at a briefing, I think, on 2 August, and hearing about a proposal.

We have since heard the government and the government has described that in about late September it took the step to engage the expert panel that has done this very good work and it has reported in October. I have referred just now to some government remarks that were made on 11 November, I think at a time when the government felt that it had come in to land on the final form of all this.

In the process, we have seen at least 83 iterations of the bill and it has moved along quickly enough that I found myself, even this morning, working with what are now two or three sort of working drafts with notes on them reminding me where things are. I think even draft 83 of 11 November has subsequently had a clause added and so on and then we have gone into the council and there has been some amendment there.

So it is a fairly fresh document in its current form. It has taken quite a while to find its way this far. There ought to be credit, and I think those in parliamentary counsel and those in the Attorney's office and so on have clearly been engaged for some considerable period of time. That it is still presented as something that might really be a bit vulnerable to constitutional challenge is a bit of a concern. The fact that the government would now expect it to come into force on 1 July next year leaves limited time for the contents to be tested. I certainly do not wish it on South Australians that any challenge to this that might flow from what happens after 1 July could cause any sort of undue disruption to the period that actually matters as we approach the election in March 2026.

But those are largely matters of history and the way in which things have come to the parliament's attention and to my attention. It is here now and on we go in this place. The government has tabled and made reference to the expert panel report. It is a good document to have to hand over the period ahead. It made 19 recommendations. Its authors are eminent and if that, amongst other things, is providing some means of preparation for responding to legal challenges that might come, well, that is something the government might have in its kitbag.

In terms of the constitutional implications, I think there has been a useful contribution from the Law Society by its president's letter to the Attorney dated 11 July of this year. President Lazarevich writes to the Attorney-General about constitutional implications of the bill. I think it is fair to say that, short of reading that into the Hansard, it might suffice just to refer to part of it as follows:

…the proposed reforms enliven complex constitutional questions. One of the primary questions is whether the proposed laws, if enacted, could be invalidated by the High Court for infringements on the implied right to freedom of political communication (the 'implied freedom').

7. The purpose of the implied freedom is to ensure that the free flow of information on political matters is protected to allow electors to decide for themselves how they exercise their vote at federal elections.

He there cites the relevant authority: the Unions NSW case. He goes on then to say:

The implied freedom is not a personal right; the decision in Unions NSW v New South Wales, unequivocally establishes that the identity of the speaker is irrelevant when considering whether a law offends the implied freedom. The proposed reforms, insofar as they seek to make it unlawful for a person to make or receive an electoral donation to a registered political party, Member of Parliament, group or candidate, appear to engage the implied freedom.

He goes on, so there is a bit of preview. Who knows how any such challenge might go? The Law Society has a bit to say about the way in which the bill treats incumbents, and I appreciate and benefit from those insights as well. The Law Society has considered via its relevant committees human rights implications as well as that. There have been thoughtful contributions also by those others active in this space, including SACOSS. I recognise yet another thoughtful contribution by SACOSS.

I think the test will really be in how in fact the South Australian community responds to this. If there is an increase in public confidence that results and if indeed the impact of money as a means of influence in the state is seen to be diminished, then this will have achieved something.

In terms of the new norms that might be established, intended or otherwise, I say again a new norm in terms of third-party participation, and particularly that of unions who we have seen active in campaigns, including notably the CFMEU at the last election both by way of cash donation and by active participation, is there can be real sources of future concern about the way in which particular campaigns can be still very much vulnerable to distortion by those vested interests.

It is with those considerations primarily in mind that we will now see this new regime pass shortly into law in this state, at least for the time being. There will be some matters to step through in the course of committee, and so for the time being I look forward to the committee stage.

Mr ELLIS (Narungga) (17:44): I rise to make a few brief comments about the bill, and primarily to put some concerns on the record for the purposes of posterity and to see how things age, but I do not intend to stand in the way of the passage of this bill. I am of the firm view that this was a primary consideration at the election. It was a prominent pledge by the then opposition now government, and they have a strong mandate to implement it. It certainly was not something that appeared in fine print at the bottom of a website or anything like that; it was discussed at length ad nauseam during the election campaign and I think that they now have a strong mandate to implement it. Here we are now and it will be law very soon.

Having said all that, it was a very simple message to send at the election, that being to ban donations to political parties—and a very popular one, I imagine, within the electorate. It is something that is quite topical at different times, and it certainly seems to have resonated with the voters. But in the time that has since passed, it has evolved from a rather simple promise of banning donations to a rather complex scheme in how we go about banning those donations but maintaining the ability to run an election campaign, which is an incredibly important thing.

The opportunity to change government when it is needed and to hear the contest of ideas and the different opinions and positions that parties and candidates are willing to put forward is incredibly important. It is something we should not take for granted. The scheme by which we have replaced the private donations and augmented them with public money—a scheme that already exists, mind you, but now has been augmented—has become quite complex.

It is something that the minister ought to be commended for. His ability to navigate the parliament and ensure that all parties, both those who currently populate this place and those who one day aspire to join us in here or join those of us who are left in here, can put forward different opinions and positions would have been a difficult thing. He ought to be commended for his capacity to navigate that. While they do have a mandate, the promise was simple and the solution is complex, but there we go, that is the way it is.

I have a couple of concerns that I want to mention primarily to start with that revolve around that increase in public money. As I said, the scheme already exists to a certain extent. There is already the ability for candidates and parties to seek reimbursement for their costs at the conclusion of an election campaign to a capped amount, but that will now be expanded and provided in terms of pre-emptive funding for an election campaign based on votes secured in the previous election.

I find that increased public funding slightly concerning. I do not consider that this state is in such a prosperous position that it can afford to continue to throw around more money than is necessary. I am worried that this increase in funding is not what the state needs and that it could otherwise be used on other priorities within the electorate. I constantly stand up in this place to talk about our local roads and our local health system, and I suspect that the increase in public funding that will be apportioned to this cause would go a long way towards building the new hospital in Wallaroo that we are seeking. I am worried about that.

I am worried about the fact that I am not so certain that using public money is less evil than securing private money for a campaign. I have to say on that topic that in my time in this parliament, which is coming up on seven years, I have not come across a single member who I suspect is susceptible to influence via donation. I think that everyone I have come across is in here for the right reason. They are all in here because they believe that their solution to the state's woes is the right way to go, and I do not think that anyone would accept a donation on the condition of acting in a certain way in this parliament. But be that as it may, this is the path we are taking and we will see how it all transpires.

I do want to finish out that point. I am not particularly experienced in securing donations, I have to say, but I do suspect that donations come about from the way that people act in here in preparation. I suspect that they are the effect of the way that people conduct themselves in here and not the cause. I do not think that people go around giving donations to people in an attempt to change their mind or influence the way they act. I suspect they are motivated to donate to candidates based on the way that they act and votes that they cast. I think that it is the cause and not the effect and that it does not necessarily try to change the course of history, it tries to reward it. But I can understand the electorate's want on that front.

The second point that I would like to make is that I suspect that the most prominent example of external influence in political decision-making in this state, in this political sphere, would be the union movement. Now, I am not decrying that as an evil; that is a statement of fact. They are prominent actors in the South Australian Labor Party machine. I do not think that will change with the advent of a ban on political donations. I suspect the union movement for better or worse will continue to exert a significant influence on the policy direction of the South Australian Labor Party, which again I am not decrying as evil or anything like that, it is the way it has always been.

I suspect that whether or not they donate money to the cause, it will not change the fact that they will continue to put forward candidates for election in safe Labor seats, they will continue to seek meetings with Labor governments in an attempt to direct the course of history and the policy outcomes that they seek, and I suspect that this ban on donations will do very little to change the most prominent external actor when it comes to political decision-making in this state. That being the case, I wonder if it is all worth it. I wonder if it is all worth it. If we are not going to change the most prominent example of it, is it worth changing the more minor examples going forward?

Those are two concerns that I have. Ultimately, as I said, I think the government does have a mandate to implement these changes. I will not stand in the way of them as they progress but I just think it is important to get a couple of those concerns on the record. We do need to make sure that we consider all the unintended consequences that may occur as a result of this legislation. It is groundbreaking, it is unique. We are the canary in the coalmine in some ways, so we need to give careful consideration.

I think the minister has done an excellent job in consulting with the entire parliament, ensuring that he has considered as much as we possibly can at this point. I look forward to the committee stage and the further investigation of all the clauses and the lengthy examination of clauses that we have in front of us. I just wanted to get those couple of concerns on the record.

The Hon. D.R. CREGAN (Kavel—Minister for Police, Emergency Services and Correctional Services, Special Minister of State) (17:52): I thank the members who have made a contribution. I understand it is the will of the house to go into committee.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr TEAGUE: I refer to remarks of the government on the near finalisation of the bill. There are remarks in a media release attributable to Dan Cregan, including:

It recognises the constitutional guarantee of freedom of political communication and is calibrated to avoid placing an unconstitutional burden on that freedom.

Could the minister indicate how and in what ways he has satisfied himself and whereabouts the bill recognises that guarantee and how it is calibrated in the way that he has described?

The Hon. D.R. CREGAN: The bill has been carefully calibrated taking the best possible advice as you anticipate not only of course from the advisers that are available to government but also in this case from the external panel's report I earlier tabled. Of course, it is also then tabled in the other place.

Mr TEAGUE: Perhaps then, a little bit more particularly, what form has the calibration taken to avoid the placing of an unconstitutional burden on freedom of political communication? What form does that take?

The Hon. D.R. CREGAN: As I earlier outlined to the member, the government has taken the best possible advice. It is the government's intention not to frustrate the High Court if there were an applicant who wished to ventilate the concerns in that forum. In view of the expert panel's report and all of the material that has been received through an extensive consultation process, we have acted on that advice and the final form of the bill represents the benefit of all that advice to government but most particularly, I emphasise to the member, the additional independent expert advice that the government has acted on.

The member indicated in his remarks to the house earlier the extensive series of amendments the government has engaged in to ensure that not only has it taken the benefit of that advice making the calibrations necessary but equally it has met the objective of the government to ensure the bill meets community expectations as received as part of the feedback process.

Mr TEAGUE: If I might sort of express some degree of frustration at question 3 and to put the question another way, this is really an opportunity for the government, as opposed to some sort of trap. The minister has been quoted—in fact, the government has decided proactively—that this description should be attributable to the minister and, in light of what we all understand to be complex challenges with respect to the constitutionality of all this, there is a specific statement recognising the constitutional guarantee of freedom of political communication and a reference to calibration to avoid burdening that freedom.

Calibration means the measuring of something and making adjustment and so the question really provides an opportunity to go to the particular things that have been calibrated to avoid risk. So it is one thing to refer to all the various inputs, but if those inputs prove that, right, we are all on the right track, then it would not be necessary to do any calibration and in terms of the committee's process I am seeking to understand what the particular points of calibration are that have occurred in the light of the benefit of all that the government has received along the way.

Progress reported; committee to sit again.

Sitting suspended from 18:00 to 19:30.