Sanitised or sterilised? A ban on donations to fully publicly funded political parties

Abstract

Political finance regulation commonly aims to prevent private money from unfairly affecting electoral outcomes and unduly influencing elected officials. A totalising option is to ban all private funding of parties and candidates – to replace it fully with public funding. South Australia, a sub-national jurisdiction in Australia, has done just that, by legislating to ban donations to parties and candidates and to replace party finances with public funding based on legislated metrics and drawn from consolidated State revenues. This article analyses the South Australian model of a ban on donations and full public funding. It offers a critique of the idea of full public funding, a quantum leap into cutting parties off from any private funding (aside from limited membership fees). It argues that in the process of sanitisation of parties from the risk of undue influence, it poses another risk, of sterilising parties by further cutting them off from broader social relations.

Introduction: the contours of party finance systems

Existing regimes of regulating political finance purport to balance various goals. A common, underlying driver is a suspicion of private money unfairly affecting electoral outcomes and unduly influencing elected officials. Given that fear, a totalising option is to ban all private funding of parties and candidates – to replace it fully with public funding. ¹ Not just to fund party electioneering, but parties themselves, including their year-round administration and non-electoral activities and outreach.

South Australia (SA), a geographically large sub-national jurisdiction in Australia, with a population of around 1.8 million people, has done just that, via the Electoral (Accountability and Integrity) Amendment Act 2024. In essence, it has legislated to ban donations to parties and candidates and to replace party finances with public funding based on legislated metrics and drawn from consolidated State revenues. As far as we know – and as proclaimed by the government that drove this reform – it is the first democratic jurisdiction to ever attempt this. ²

How innovative is the SA regime of full public funding? At the outset, we need to distinguish models, notably in the US, where candidates can eschew donations and run solely on public funding, for three reasons. First, such ‘opt-in’ models involve a choice, not a mandate. ³ Second, even the paradigm of opt-in models, the Maine Clean Election Act of 1996, involves private donations. (To qualify for public funding, candidates must demonstrate popular appeal by attracting private donations from a sufficient number of electors.) ⁴ Third, opt-in systems cannot deal with the ‘waterbed’ problem, of big money being re-routed via unlimited third-party or lobby group electioneering. ⁵ In contrast, the SA system is couched within broad expenditure limits, which apply to ‘third-party’ lobby groups at a lower level than parties.

Whilst SA is the first polity to attempt full public funding in the world, other jurisdictions have gone part-way down the path. Some set low donation caps; others give generous public funding. ⁶ But none go the whole hog. Moreover, full public funding of election campaigns is only part of the SA model. It takes an extra conceptual and practical leap by banning donations to parties for any of their activities. As we will argue, that may be its Achilles’ heel.

In terms of structure, the article opens with an overview of the means, ends and risks in the regulation of party finances. After that is an account of the origin and key features of the new SA model. In the final, analytical section, we offer a critique of the idea of full public funding. As just noted, the uniqueness of the SA model is not just in its application to party electioneering, but its extension to all party activities that require financial resources.

Underpinning the SA move to full public funding are two related assumptions. The first, not unreasonable, assumption is that many donations seek to curry influence, or to tilt the electoral scales in favour of the donor’s preferred ideology, or both. The related, but more problematic, second assumption is that if private money carries a democratic taint, then public funding is pure ‘clean money’. There is indeed some international evidence that public funding can increase public trust, provided it avoids cartelisation (May, 2018: 125).

Yet the framing of public money as clean obscures as much as it enlightens. As a recent review has found, direct public funding of parties pulls in two ways. Parties may become more focused on the public interest, if they focus more on competing for votes and not donations (Bértoa et al., 2025: 7). But public subsidies may also have a negative impact on party responsiveness, by feather-bedding parties and their existing routines (Bértoa et al., 2025: 5).

The ultimate question is whether a diet of only public funding will be as healthy for electoral democracy as its proponents hope. Whilst it will provide a kind of security blanket for party organisations, it risks inhibiting experimentation and evolution in party structures and activities. The attempt to sanitise parties of financial influence and associations thus also risks sterilising them. The systemic risk is less of entrenching a cartel of currently established parties, and more of distorting the accountability of parties, both internally and externally, by configuring them, financially, as public utilities with static structures. Only time will tell, therefore, if the full public funding model we describe here is an overreach.

Regulatory means, ends and risks

There are various reasons why political finance is regulated. ⁷ Collectively, they imply a view that politics should not be unduly influenced by money from interest groups or wealthy concerns. Beneath this lies an ideal of electoral democracy that straddles conceptions that are at once liberal-individualist (based on one person, one vote) and egalitarian (seeking a public interest beyond, and even in the face of, markets and economic inequalities).

Before considering and evaluating the SA model in detail, it is salutary to situate it within some fundamental practical and normative concepts. This involves identifying the established means of regulating political finance, the ideal purposes of such regulation and the risks it may entail. When it comes to means and ends, the work of Keith Ewing is instructive because of its emphasis not just on abstract values but the practical importance of political parties. As Matteo Bonotti and Zim Nwokora remind us, a regime of political finance must ‘take account of the party system [in which it] will operate’ and try to ‘counterbalance the pathologies inherent [in that] system’ (2024: 693).

When it comes to public funding of parties, the ultimate concern is that the pre-existing pathology – of skewing electoral outcomes and governance in favour of large donors – could be replaced with the risk of parties becoming unresponsive in another way, due to over-reliance on public funding. To adapt the well-known metaphor of Ingrid van Biezen (2004) equating publicly funded parties to ‘public utilities’, this is the risk that parties become flaccid and unresponsive: just as a public agency might, if it is insulated by a guaranteed long-term budget.

In Ewing’s account, the regulatory options (ie means) can be represented by a smorgasbord with ‘three dishes on the menu’ (Ewing, 2011: 150; Tham, 2010: 20–23). The ‘starter’ is transparency, via financial disclosures. Disclosure may be a sine qua non of regulation, as shown by its relative ubiquity. But transparency is not particularly relevant to our topic. Indeed, a system of complete public funding would not even require transparency, in the sense of donation disclosure by the main actors, ie parties and candidates. Only third-party advocacy groups would have funding sources to disclose.

The ‘main course’ involves stronger regulation than just disclosure of financial information (Ewing, 2011: 151). It involves financial restraints, through either ‘contribution caps or spending limits’ (Ewing, 2011: 151). For example, expenditure limits are found in the UK, contribution (ie donation) caps in the US, and both are employed in Canada. Within Australia, each of these types of caps are employed in the two large, eastern jurisdictions of New South Wales and Queensland, and they will also be rolled out, from 2026, for national electoral campaigns.

The third, ‘sweet’ dish on the menu is ‘public or state funding’ (Ewing, 2011: 153). The novelty of the SA system is to introduce a ban (ie a prohibition, not just a cap) on donations to established parties in particular, whilst simultaneously tying public funding to not just an explicit limit on election campaign spending but also to an implicit estimate of what a party might need to fund its year-round activities. (As we will see, private contributions via party membership fees are permitted; but even these are capped to ensure donations cannot be disguised as inflated membership fees.) ⁸

What are the ends, or goals, of these regulatory measures? There are, of course, illegitimate purposes that should be off-limits. Most obviously, a desire to entrench incumbents and nobble their rivals. Outside that, the normative aims of regulating political finance are contested. This is unsurprising, given there is no singular notion of democracy beyond the bedrock aggregative principles of ‘one-person, one-vote’ and ‘count all the votes’ (Orr, 2020: 159–68). But this does not leave us in a vacuum, free of any positive aims. Instead, we can identify several well accepted normative ends, which are differently accommodated in different regimes.

Drawing on Ewing again, ‘the guiding principles’ of regulating political finance are four-fold (Ewing, 2011: 147). First, electoral politics needs resources. Political actors cannot be starved of funding: the baby thrown out with the bathwater would be clean, but not alive. Second, political financing needs to minimise ‘dangers of corruption and conflicts of interest’ (Ewing, 2011: 148–149). This is consistent with a wider ideal of governance as a public service in the public interest: something not biddable by the wealthy nor something engaged in by those primarily driven by self-dealing. Disclosing and limiting donations fit within this aim.

Third, political finance must seek ‘fair competition’ between electoral actors (Ewing, 2011: 149). This invokes a broader ideal of political equality. Equality is not a simple concept: a broad-church party cannot be held to the same yardstick as a slender, single interest movement. So the idea of ‘fair competition’ is linked to the ability to get a message across without being drowned out, as well as ranking parties via measures of support such as recent vote shares. As Richard Briffault argued in the context of the US, ‘[p]ublic funding is necessary to bring our campaign finance system more in line with our central value of political equality’ (1999: 577).

The concept of competition necessarily implies a fourth concern. That is with political participation and liberty. Again, like political equality, ‘freedom’ does not carry a simple or singular conception. But within it is a recognition that political expression and association have to be accommodated, indeed encouraged. For their own sake; but mostly because politics needs to be responsive to the values and interests of a wide variety of people and groups. Concern for political participation and liberty counsel lawmakers to be cautious in framing bans or limits.

A distinctive feature of this is a focus on party finance and funding (Orr, 2020: 168–70). This party-centricity is assumed in, say, a European context. It is also significant in the anglophone parliamentary tradition, where parties are essential conduits of political activity. (This contrasts with some executive-presidential systems; most obviously the US, where ‘primary elections’ act to weaken parties and encourage a focus on individual candidacies.) SA, our topic, has a Westminster-derived parliamentary system exhibiting what Bernard Manin called ‘party democracy’ (1997: 206–211). That is, a tradition where people vote for parties more than individual candidates and parties (and their leaders) are the primary units of electoral accountability.

How do all these concepts help frame the SA model? In terms of the means used, the model employs all four: transparency, expenditure caps, donation limits and public funding. But it does so with a radical approach to the last two. Donations are not just limited, they are largely banned in the hands of the key actors, namely parties with MPs, their candidates, and independent parliamentarians. Public funding is then used not as a mere adjunct, to discourage reliance on private contributions. Rather, it becomes the overwhelming source of funding for those actors, both for electioneering and general party administration, with a firewall erected against all manner of donors.

Does this erection of a wall between incumbent parties and all forms of donor open the design of the scheme to an accusation that a cabal of established parties are acting as a ‘cartel’? As Richard Katz and Peter Mair put it, cartel parties form an oligopoly not just in fact (by being electorally successful and alternating to form governments) but in a normative practice where they share, rather than compete, for resources (2018).

Any metric for public funding is, literally, a means of ‘sharing’ it. The established parties in SA have agreed to self-limit – both by eschewing private money and by capping their budgets – whilst leaving funding pathways equally open to all. The means employed in SA appear to be less the work of a cartel than a manifestation of the call of Julia Cagé (2020: 132) for ‘democratic governments to massively reoccupy the field of the public good’, by driving out ‘selfish’ private money from the funding political parties.

In relation to ends, then, the SA model has radical aims. It seeks to guarantee resources whilst simultaneously limiting them, in a statist approach where the law effectively sets minimum and maximum levels of party financing. The model seeks to bolster integrity – in the sense of avoiding corruption and undue influence or their perception – by erecting a wall between established parties and MPs generally, and private money. This is to be achieved by maximising a kind of equality of arms between parties and key candidates. In doing so, the model treads heavily on the ability of citizens and private entities alike to financially associate with parties (except by taking the formal step of joining a party and paying its annual subscription). Whether it can do so without falling into the trap of rendering parties systematically less – rather than more – responsive to public voice and accountability (cf Bonotti and Nwokora, 2024: 695) and without ossifying their structures, are its key challenges. We will turn to those question at the end.

The SA model: Origins, key features and rationales

Whilst SA is not a large jurisdiction, it prides itself on its history of democratic innovations. As a self-governing British colony, populated by free settlers rather than convicts, SA helped pioneer several electoral innovations. In 1858, it adopted the ‘Australian Ballot’, as an untraceable secret ballot (Brent, 2006: 41–42). From the 1850s, it developed permanent, professional and independent electoral administration (Brett, 2019: 35–37). In the 1890s it became the second jurisdiction in the world to enfranchise women, behind New Zealand (Oldfield, 1992: 22–44). In the 1960s, as a State of Australia, it led the elimination of rural malapportionment of electorates in favour of ‘one-vote, one-value’. And, in 1985, it crafted a novel offence against misleading electoral advertising (Ng, 2024).

In November 2024, the SA Parliament passed the full public funding model under discussion. ⁹ This ban on private money going to all but new parties and non-incumbent independent candidates is stunning because, at first glance, it runs against the interests of political actors, especially the more powerful ones, to deprive themselves of the ability to access private funding (Premier of South Australia, 2025). Whilst entirely novel, the move comes after a period in which public funding in Australia generally has ratcheted up, and in which some former senior leaders had floated the idea of full public funding of party electioneering (Orr, 2018: 91–94). As noted earlier, some Australian jurisdictions have donation or spending caps. ¹⁰ A few also ban donations from certain sectors (such as property developers, the liquor, gambling or tobacco industries). ¹¹ But the SA model is, as we have stressed, unprecedented.

The SA Labor Party government was able to usher its Bill through Parliament after extensive consultation with the opposition party (the centre-right Liberals), The Greens party and independent MPs, as well as civil society groups. ¹² An expert panel comprising a former judge, a former electoral commissioner and a constitutional law professor also advised on the draft bill (Parker et al., 2024).

The SA Premier expressed his hope that the legislation would help ensure that ‘election campaigns are a contest of ideas, not a contest of money’ (Kelsall, 2022). He explained it was intended to ‘level the playing field so all participants in the political process have access to an appropriate degree of funding relative to their level of support within the community’, and to ‘diminish the likelihood that a campaign war chest size informs the outcome’ (Malinauskas, 2024a).

The funding and expenditure regime in the State’s electoral act now formally declares its ‘objects’ as being:

(a) to enhance public confidence in the electoral process by fairly and effectively regulating electoral finance

(b) to promote integrity and accountability and reduce the risk and perception of undue influence in the electoral process, through prohibitions on donations, public funding and expenditure caps

(c) to ensure transparency in sources of funding and political expenditure by participants in the electoral process

(d) to reduce the need to engage in fund-raising, so as to improve those participants’ capacity to represent constituents and perform their public functions. ¹³

To compensate for the inability of parties to raise funds, the new regime provides for lashings of additional public funding, building on a long-standing rule where payments depended on the number of votes received at each election. The new rate will start at AUD5.50 per vote in upper house elections and AUD8.50 per vote at lower house elections. The payments remain subject to minimum vote thresholds. ¹⁴ At each four-yearly general election then, every elector can effectively allocate AUD14.00, according to their votes. ¹⁵ This metric retains the concept of voter choice which is part of the ‘voucher’ idea championed by Cagé (2020) and others – but it lacks the voluntary aspect of vouchers, which may permit electors to withhold funding or to allocate it prospectively. Instead, the metric has the conservative aim of guaranteeing a level of public funding, to match its ‘full’ public funding ideal.

These enhanced electoral payments are coupled with a new stream of ‘administrative’ funding. ¹⁶ This will be paid twice-yearly to parties based on their parliamentary representation, as well as to independent MPs. These twin sources form the basis of the full public funding system for political parties. For registered parties without MPs, a small amount of ‘policy development’ funding is available annually. ¹⁷ To balance between public funding of established parties and MPs and the interests of new entrants or those operating at lower-scale, public funding per vote for independents is enhanced compared to that paid to registered parties.

Further, to avoid monopolisation of funds, the funding of any single party is capped at 33% of the vote across those races it competed in. ¹⁸ Advance payments are available to all registered political parties, to enable them to have sufficient funds to run a campaign. Political parties remain free to collect membership fees but, as noted earlier, these are to be capped (at AUD250 per member). Parties and candidates will also be able to receive volunteer labour or professional services. These membership and volunteer dispensations from the ban on donations are designed to not discourage parties from broadening their membership and activist base. ¹⁹

Complementing all this, the SA law introduces a system of mandatory expenditure caps on parties, candidates and third-party electioneering groups. These caps aim to keep a lid on public funding of parties and, above all, to level the playing-field and avoid any arms race in electoral spending.

A danger of any system with significant public funding or electioneering caps is that it may favour incumbents enjoying existing political support, and stifle new voices. The SA scheme therefore allows new and small entrants (in effect, registered parties without MPs or independent candidates who are not incumbent MPs) to receive private donations and loans of up to AUD5,000 per annum from any single source. Such new entrants are still subject to the spending cap. Even with these measures, the SA law has been criticised as being weighted towards established parliamentary parties, at the potential disadvantage of new or small players (Long, 2024).

Third party lobby groups, such as business associations, unions and other advocacy groups, are subject to donation limits but not bans, as well as expenditure caps. Previous elections in South Australia have, it might be noted, been influenced by advocacy group campaigns. An example is the Australian Hospitality Association spending more than AUD750,000 in the 2018 State election, to target a minor party’s plan to halve the number of gaming machines. In the 2022 election, the ambulance workers’ union spent AUD340,000 targeting the then Liberal government over ambulance ramping, effectively campaigning in support of the Labor Party (Biggs, 2024).

The expert panel report noted the fluctuating and issue-specific nature of third-party electioneering, with no particular third parties dominating long-term (Parker et al., 2024: 54). The government accepted the panel’s recommendation to impose an expenditure cap on third parties, to level the playing field across participants and avoid any such group drowning out other participants (Parker et al., 2024: 57–58). In doing this the legislation hopes to avoid money now denied to parties simply being hoovered up by groups simpatico with particular parties. The compromise ultimately seeks to ensure that parties and their candidates remain the primary focus, consistent with a party system rooted within Westminster-style parliamentary accountability.

No ‘associated entity’ of a party is to be permitted to spend money on electioneering. This is to ensure that party spending caps are meaningful. Controversially for some conservatives, the definition of ‘associated entity’ expressly excludes trade unions. This may benefit the Labor Party, given its traditional links to around half of all unions. However, affiliation fees by trade unions are to be treated as donations, so they will fall within the donation ban. Union money has sometimes proved politically problematic for SA Labor; it was forced to hand back a significant donation from the much-maligned construction union (Biggs, 2024). It is fair to speculate that the SA legislation is part of a longer-term move by some within the Labor Party to reduce union influence within their party. That said, unions remain free to electioneer under their own name.

Ultimately, what spurred this move to ban most political donations and erect a system of full public funding? Two main justifications were provided for the donation ban. The first is to prevent the perception and reality of undue donor influence. The government labelled this a corruption risk, with the ban on donations intended to ‘prevent wealthy donors from purchasing influence or access’ (South Australian Legislative Council, 2024: 7131). The Premier reiterated that such donations invite at least a belief that favours can be bought, weakening public trust in the political process and institutions of democracy (Parker et al., 2024: 19; Malinauskas, 2024b).

The second justification concerns fairness, in the sense of levelling the playing field of electoral competition. The tendency for corporate donations (if not ideologically driven) to follow power is well demonstrated in Australia. Private funding tends to skew towards governing parties, or to opposition parties seen as likely to assume power (McMenamin, 2013). Keeping a lid on campaigns, by staunching donations and erecting expenditure limits, is meant to advance the Premier’s hope that elections be more a ‘contest of ideas, not a contest of money’.

Proponents of the SA public funding model have not, however, claimed that some nirvana of electoral equality will be achieved: the bulk of public funding will follow public support as measured at the previous election. Parties without MPs including new parties, and independent candidates, will be able to accept private funding, but in limited amounts. They will not be able to ‘bootstrap’ themselves to mount a big, breakthrough campaign.

A third, if subsidiary, rationale for the donation ban was that fundraising activities distract politicians from the task of governing, developing policy, and electorate activities (South Australian Legislative Council, 2024: 7131). The Premier stated that politicians have to weigh up speaking with constituents versus spending time raising money. He noted the situation in the United States, where a majority of a Congressperson’s time during an election period may be spent raising funds (Parker et al., 2024: 19).

The Premier and government were less clear why a donation ban, as opposed to a low cap on gifts to parties or MPs, was required. The obvious explanation is simplicity in appearance and enforcement. The SA Attorney-General thus claimed that a ban was needed because perceptions of influence (rather than its actuality) would not be dispelled whilst private donations remained (South Australian Legislative Council, 2024: 7132). In addition, time spent fundraising might increase if donations were capped, further distracting politicians and candidates from their public duties (South Australian Legislative Council, 2024: 7132). The logical endpoint of banning private funding was that a system of full public funding had to fill the resources void.

However, as the SA opposition pointed out, it is unclear how small donations of say AUD100 truly generate perceptions of money influencing policy (South Australian Legislative Council, 2024: 7147). The opposition also objected to the ideology behind a full public funding model, arguing that it turns political parties into state-funded entities, divorced from the support of private citizens (South Australian Legislative Council, 2024: 7147). Yet, despite these practical and philosophical claims, the Liberal party ultimately supported the Bill (South Australian House of Assembly, 2024: 10445).

There are also factors specific to SA that may have prompted this reform. As noted above, the State tends to see itself as an incubator for democratic reform. The Attorney-General invoked this history as if the new funding regime was an extension of it (South Australian Legislative Council, 2024: 7131–7132). As a smaller, modest-spending jurisdiction, SA can more easily implement such reforms than a more involved jurisdiction where big-spending and donations are more entrenched. If the ban on political donations withstands constitutional challenge, the model is scalable. It thus could be an inspiration for other Australian jurisdictions and even overseas.

Full public funding: concept, constitutionality and critique

As just sketched, the South Australian model can be summarised as: (a) a ban on donations to parties and candidates of any significance, coupled (b) with wide-ranging electoral expenditure limits, that aims (c) to erect a system of essentially full public funding of political parties. To say this, however, is to assume that the idea of ‘full’ public funding is an obvious or simple one. In this section, we explore the concept and critique it, both within the particular SA model and more generally.

The word ‘full’ suggests absoluteness: to the brim; no more nor less. ²⁰ Outside physical containers however, the word may be used less literally. A room full of people is likely to accommodate a few more, just not comfortably; a heart full of love may accommodate other emotions. In relation to a complex regime for regulating finances, the term ‘full’ public funding is less an exact phrase than a marker of something substantially comprehensive. The same applies for the complementary idea of a ‘ban’ on donations.

But comprehensive of what? As we have noted, the SA scheme must allow for exceptions. The most obvious exception – given Australia is a federation – is that it does not apply to national electioneering or political campaigns. The Commonwealth of Australia has set its own limits on donations that fund federal politicking. ²¹ The aim of the SA scheme is to suture State (including local) party activity – along with the internal administration of the SA division of each party – from any reliance on private donations. ²²

A second, more relevant exception, is to permit independent candidates who are not MPs, as well as start-up or micro-parties without any parliamentary presence, to raise some money privately. This is a practical concession. Even if a new party launches with a bang, it will lack an electoral record on which to base advance payments of public funding or to raise bank loans, and hence struggle to fund any upcoming campaign without gathering donations. Further, whilst the scheme does meddle with the ability of third-party groups to collect donations to electioneer in their own name, it does so via caps, not a ban. This too is partly practical, as there is no metric – let alone appetite – for publicly funding such advocacy.

Beyond this, these exceptions are also driven by principled concerns. One is to avoid ring-fencing established parties and incumbent MPs from reasonable challenges by new independents or parties. To do that would breach the principle of fair competition. Advocacy groups, in turn, are entitled to participate in the exercise of their freedom of political communication. Any risk of corruption through their private funding is, in any event attenuated, since they do not seek election to hold public office or power.

In such considerations, the SA legislature – and its counterparts throughout Australia – has to navigate a couple of constitutional constraints. No law can disproportionately limit the freedom of political communication implied from the Australian Constitution. Nor can any law unreasonably burden the ability of voters to exercise electoral choice. These limits are explained by the bedrock concept of ‘free and informed choice’ of electors (Babet v Commonwealth of Australia [2025] HCA 1, [37]–[38] per Gageler CJ and Jagot J). Outside these two implications, however, there is no free-standing freedom of political association in Australian constitutional law (Mulholland v Australian Electoral Commission [2004] HCA 41, [116], [150]).

Nor is there any independent rule against ‘discrimination’ between different electoral actors (Mulholland v Australian Electoral Commission [2004] HCA 41, [188]–[191] per Edelman J). Such discrimination can be justified, as long as it doesn’t trammel on the ‘great underlying principle’ that a sovereign people enjoy ‘an equal share’ or claim on ‘political power’ (Mulholland v Australian Electoral Commission [2004] HCA 41, [42] per Gageler CJ and Jagot J). Thus, the Australian High Court has upheld a ban on donations from property developers, because it was legitimate to prevent the reality and perception of undue influence on decision-making involving land (McCloy v New South Wales [2015] HCA 34).

Legislative goals such as promoting political equality or fairness, and minimising risks of corruption or undue influence (including its appearance) are thus legitimate justifications for laws that otherwise trammel on freedom of political communication – as the caps on electioneering and the raising of donations to fund it clearly do. In any case, our purpose here is not to definitively comment on the constitutionality of the SA regime. Rather, we mention the constitutional terrain in which it was drafted because it placed a limit on any absolutely totalising ban on donations, and helped inform elite-level discussion of the law’s means and ends.

Critique: Party sanitisation or sterilisation

Leaving aside the exceptions for new parties, independent candidates, and advocacy groups, the SA regime erects a wide and profound moat around any parliamentary party or MP. This moat will also extend to new parties or independent candidates if they enjoy electoral success. The regime essentially enacts a complete prohibition on their accepting donations. Even bequests – gifts on death, via a will – can no longer be made to political parties. ²³ To top this off, those established parties or MPs will not be able to accept ‘electoral loans’ either. ²⁴

Unlike some comparable jurisdictions where donation caps are set fairly low, ²⁵ the SA model all but obliterates the ability of people or groups to associate with political parties by resourcing them – except through joining for a limited membership fee or by providing voluntary work. The regime is backed up with stiff penalties. Maximum sentences range from 2 to 5 years and fines of AUD10,000 to AUD50,000, depending on the level of knowledge or scheming involved. ²⁶

A critical feature of this model is that the prohibition on donations and loans is directed not merely at private money entering a party’s campaign account. ²⁷ It is a blanket prohibition regardless of the purpose or use of the gift. In effect, parties become entirely dependent on public funding, and membership or volunteers. Incentivising the latter makes sense from a participatory democracy standpoint but, in truth, parties’ membership and activist bases have been dwindling in recent decades. The level of public funding has accordingly been enhanced, including via half-yearly payments to help cover operational or administrative costs.

Supporters of this approach will argue that public funding is ‘clean’ money. However excessive dependence on such funding comes with unintended consequences. A commonly cited risk, as noted earlier, is of established parties co-opting state resources to privilege and further entrench themselves (Katz and Mair, 1995; Katz and Mair, 2009). They may do this by structuring public funding in ways that put extra hurdles in the way of newer parties – a concern which the SA model seeks to palliate. The SA model, as noted, passed with the support of the three main parties in the State: Labor, Liberal and Greens.

As Van Biezen (2000) argues, cartelisation risks are diminished if public funding is tied to vote share rather than, say, the size of a party’s parliamentary contingent. The SA model employs both of these metrics of funding. Moreover, as we also noted earlier, the SA model lacks the classic ‘cake-and-eat-it’ feature where established parties reward themselves with generous public funding, whilst continuing to receive significant levels of private financing. On the contrary, the established SA parties have foresworn the incumbency benefit whereby private funding seeks to ingratiate parties and politicians with access to power (McMenamin 2013).

A less acknowledged risk than such feather-bedding involves the level of public funding and a healthy freedom of association. How is it possible to set a ‘one-size-fits-all’ system of funding, given the potential variety of party structures? Historically, parties have manifested in diverse ways. Some sought to have ‘broad church’ membership (such as the Labor and Liberal parties). Others were driven by a strong focus (eg environmentalism in the case of the Greens). Yet others are single interest parties (such as the Legalise Cannabis Party, which has MPs in numerous Australian States). Some parties are driven by activists (eg the Greens) whilst others are ‘eponymous’ and built around a single charismatic founder. Between such archetypes lie a world of variations.

The ultimate problem with the idea of ‘full public funding’, therefore, is not that a prohibition on donations breaches some individual right to financially associate with a party through gifts. There is no natural ‘right to donate’ to parties. True, there are time-poor people who do not wish to be party members or volunteers, yet still want to symbolically associate with a party through modest donations. ²⁸ However it is not obvious their interests outweigh the simplicity of a ban on private donations, in avoiding loopholes that undermine donations cap and in enabling parties to say ‘we cannot be influenced by private money because we do not take any’.

Rather, the deeper problem with the concept of full public funding lies in its potential systemic effects on parties themselves. It is likely to constrain the evolution of parties. For party administrators focused on day-to-day activities outside election periods, full public funding offers a ‘security blanket’ (Orr, 2018: 97–98). Even the SA Liberals, despite voicing some philosophical opposition to the means used in the legislation, waved it through. They too will enjoy the fairly predictable flow of funding, provided they maintain significant electoral support.

The risk is not simply of parties becoming flaccid or lazy due to over-reliance on public funding. This much risk was indirectly acknowledged when the reform was partly sold as eliminating the need for politicians to engage in fundraising: as if fundraising were only a time-wasting distraction and never a fillip to reach out and engage with potential supporters. Van Biezen and Kopecký (2017), in a study focused on the ‘new’ democracies of eastern Europe, found that high levels of state funding of parties did not necessarily affect levels of party membership. ‘[M]embers are also useful for things other than fund-raising’ (Van Biezen and Kopecký, 2017: 101). This need will remain in Australia, as the preferential (aka alternative vote) system, combined with polling over a fortnight or so, requires parties to have large numbers of activists to canvass electors with ‘how-to-vote’ material, via both letterboxes and outside polling stations.

Instead, the challenge of the SA regime is that it offers established parties and incumbent MPs no other choices or incentives but to rely on public funding (or donations of supporters’ time). Concerns about this are heightened at a time when, across most democracies, party systems are in flux and realignment. The noble aim of publicly funded election campaigns may become a fools’ errand when it is extended year-in, year-out to cover the entirety of party financing. The SA model ends up going beyond its aims of electoral fairness and the accountability of officials and MPs: it reaches into the very nature of party organisations and their relationship to civil society.

The SA model thus risks overreach, by becoming a totalising law about party finances, floating in an electoral law. Even those who have argued for full public funding of election campaigning have avoided – until now – arguing that the concept should extend to all party activities. Sarah Birch (2022: 503), reasoned only that that ‘the specific features of elections require actors to refrain from the use of private money’ (and rely only ‘public funding … and flat party membership/supporter fees’) (emphasis added). ²⁹

To put the overreach objection another way, the full public financing regime in SA is grafted onto an electoral law conception of parties as essentially campaign machines. When electoral law defines a ‘party’, it unsurprisingly focuses on the requirement to nominate candidates to contest elections. ³⁰ That however is a case of the hammer seeing the nail. One hardly needs to be conversant with the work of VO Key and others, on the variety of roles and functions that parties can play within society, to know that the conception of parties as essentially electoral brands is a reductive one (Orr, 2014).

Key (1942) painted parties as having three functional manifestations: in office/parliament, in the electorate, and as organisations. Obviously, a party ‘machine’ running an election campaign to connect its endorsed candidates to voters, in the hope some of them will gain public office, links the three functions. But it is a long way from exhausting them. The ‘electorate’ is properly understood as not just voters, but the wider population including other civil society groups. Election periods are a time of one type of contestation and ritual; yet they are just occasional events. Throughout a term of office, a party’s parliamentary caucus and leadership play other roles, and the party’s organisation ideally draws on and interacts a diverse range of interests and not just its formal membership or loyal supporters.

As Australia’s Centre for Public Integrity put it, the radical thesis underlying the SA reform ‘could corrode the internal vitality of parties as forums for political participation’ (Parker et al., 2024: 32). This critique emanates not from a libertarian group, but one with a history of advocating tight controls on money in politics. The risks of a ‘full (and only) public funding’ model for parties are not just ones about allowing for new competitors: those may be compensated for by tweaking access to funding. The risks run to the internalities of the party system itself.

Proponents of such a model may still fall back on an argument that the system is ‘clean’. It is certainly clean in the sense of simple. A prohibition on donations will have fewer loopholes than a system of donation limits. Crude simplicity of enforcement is likely to aid perceptions too. Even hardened cynics will have to admit that parties and MPs are not likely to be influenced by donations from which they never benefit.

The cleanliness concern is ultimately one about accountability. MPs and ministers should not be engaged in greasing fund-raising wheels; they should be focused on broad consultation. Above all, democratic politics should be a contest about the public interest, not affected by the lucre of donors. But as Bonotti and Nwokora (2025: 18) argue, accountability in political finance is not just about positive incentives. Accountability ultimately relies on sanctions for perceived failures. Somewhat ironically – given the SA system was heralded in an Act of Parliament entitled ‘Integrity and Accountability’ – the SA system risks putting all its eggs in the basket of promoting accountability by severing reliance on influential private donors. In doing so it forgets that parties are insulated from electoral pressures for years at a time (between elections) during which time the need to appeal to donations may act as a form of accountability in itself.

In other words, guaranteeing party incomes certainly insulate parties from donations as tainted lures. But it also effaces the reverse form of accountability. Donors withdrawing support can act as a salutary signal to a party. One example of this in Australia’s recent history is some unions (such as the Electrical Trades Union) withholding financial support from the Labor Party, because of its drift away from its foundations in employment rights and the labour movement. Another example is business supporters of the Liberal-National Party staging a kind of ‘donor strike’ when that party, in opposition in Queensland, was seen as engaging in factionalism and culture wars rather than shaping itself as an alternative party of government.

This accountability risk may seem counter-intuitive, when concern with undue influence of donors is a fundamental driver of regulating donations. But there is a downside risk that a party, guaranteed state resources, can become a closed ideological or self-referential patronage system. This is particularly so when factions within parties engage in branch-stacking: recruiting just enough pliant or dummy members for the faction to control key elements of the party including its pre-selection of candidates and election of its leaders. Systemic accountability, it seems, would best be advanced not by the extremes of big donations versus no donations, but a model of dual public and private funding, where donation limits (rather than bans) encourage a reliance on widespread ‘kitten’ (ie smaller) as opposed to ‘fat cat’ (larger/wealthy) donors (Bonotti and Nwokora, 2025: 76–112).

In conclusion, the SA model emerged from a desire to erect a tight system of election spending caps, for the sake of intra-party fairness and, by preventing private money funding such spending, to avoid the buying of favours from those seeking election. It then made the quantum leap into cutting parties off from any private funding (aside from limited membership fees). In the process of sanitising parties from the risk of undue influence, it poses another risk, of sterilising parties from further cutting them off from broader social relations. Parties will necessarily fund almost all their activities from a pool of public funding. This is a novel experiment indeed.

Ultimately the SA model’s noble stated aims mask a wider risk to the scope of party organisation beyond election campaigning. To adapt Ewing’s regulatory ‘menu’ metaphor, the SA model narrows the sources of funding on the table. To its proponents, ‘clean’ money is healthy for parties and the political system. But is a diet limited to one source healthy in the long term?