United Australia party’s $80m-plus war chest sparks call to limit election spending

The United Australia party's warning it will outspend its 2019 campaign in the looming election has prompted calls for urgent reforms to limit party expenditure.

Integrity experts have claimed this would stop money distorting the electoral process.

The Centre for Public Integrity released a reform blueprint on Wednesday aimed at removing the influence of money in federal politics and fixing what it described as the "weakest donation laws in the country".

The paper recommended lowering the donation disclosure threshold to $1,000, implementing donations caps, and beefing up the Australian Electoral Commission, giving it a new dedicated enforcement division to better police donation laws.

The UAP's recent suggestion it will outspend its $80m election campaign in 2019 also prompted the Centre for Public Integrity to call for urgent expenditure caps.

Even well before the campaign proper begins, the UAP's social media spending alone is vast.

A Guardian analysis of YouTube ads shows the party has spent an average of $472,625 each week for the past six weeks, totalling $2.83m on the platform alone in 2022. Its spend on ads across other mediums - including print, radio and digital - has been estimated at more than $31m since August.

Expenditure caps exist at a state level in the Australian Capital Territory, where a spending limit of $42,750 is in place per candidate, and New South Wales, where spending is capped at $132,600 per electorate. Caps also exist in Queensland and South Australia, where spending is limited to $95,964 and $83,635 per seat respectively.

The Centre for Public Integrity chair, Anthony Whealy, a former NSW supreme court judge, said the lack of spending caps was, in a sense, the "root of all evil" in electoral financing.

Huge campaign spends forced parties to seek large donations from private hands, he said, giving donors greater influence over politics.

"I think there is every reason to believe it does distort the outcome of an election and the sheer bulk of the funds is the main factor in that," he said. "We would never accept someone buying an election. This doesn't buy them directly, but it does buy them indirectly, and therefore it is a savage blow."

The UAP has traditionally sourced the majority of its donations directly from Palmer, rather than from external donors. In 2019-20, for example, all of its $5.9m donations came from Palmer's Mineralogy Pty Ltd.

The blueprint says caps should seek to reign in current spending to levels that still allow for parties to campaign and communicate with voters, but ensure equality of participation.

The report also warns that "millionaire donors" were becoming the dominant source of funding for parties.

It said in the two decades between 1998-99 and 2020-21, 22.48% of Coalition fundraising and 21.83% of Labor fundraising came from donations of more than $1m.

"The small number of people who have the financial capacity to make large donations have a disproportionate ability to gain political access and influence," the report said.

The report proposes donations caps of $5,000 per donor per party. The amount is based on state caps, which exist in NSW, Queensland and Victoria.

The Centre for Public Integrity executive director, Han Aulby, said that, without reform, the commonwealth's donations system would remain the weakest in the country.

The commonwealth's donation disclosure threshold is now $14,500, compared with about $1,000 for many of the states, and donations are only reported on publicly once a year, with no requirement for more regular transparency during election periods.

"The public will have no idea who is funding our parties before the next federal election," Aulby said.

"We urgently need to lower the disclosure threshold to $1,000, and cap political donations and election spending."

The UAP was approached for comment.