Squeeze on election spending but cash caps up in air

How much political donors will be able to contribute to campaigns will be capped but the finer details of electoral laws remain elusive despite a rush to pass them.

Individuals would only be able to donate $20,000 and donations above $1000 will have to be disclosed in near real time.

But the thresholds aren't set in stone.

The Liberals, Nationals and some teal independents are negotiating to increase the donation cap by tens of thousands of dollars - potentially as high as $50,000 - and increase the disclosure limit, with one suggestion to double it to $2000.

Increasing the total election spending cap - set at $90 million for political parties and $11 million for special interest groups such as unions and Climate 200 - is also featuring in negotiations ahead of the bill coming before the Senate on Monday.

Political donations
The coalition is negotiating to increase the political donation cap by tens of thousands of dollars. (Joel Carrett/AAP PHOTOS)

In principle, Labor's legislation is what transparency and reform advocates called for but it's struggling to find friends outside the major parties with independents accusing the government and coalition of a political stitch-up.

It's revitalised grassroots supporters with 100 volunteers signing up for independent ACT senator David Pocock's re-election campaign in a single night after the proposed reforms were announced.

Extra public cash for candidates to run elections will disproportionately benefit major parties and boost their coffers by millions of dollars not available to independents, crossbenchers argue.

Liberals have privately raised concerns about an $800,000 cap per electorate exceeding the $90 million federal cap when all 150 seats are accounted for, meaning the full amount couldn't be spent on each campaign.

Despite not all electorates drawing the same expenditure, with major parties putting minimal resources into near-unwinnable seats, there were concerns this could hamper Liberals facing well-resourced independents.

Half a dozen Liberals were unseated by teals in 2022.

Independents only need to focus on a single seat and can spend up to the cap without worrying about breaching it elsewhere, one Liberal MP said.

And while groups such as Climate 200 can spend a lot less than political parties federally, they were targeting fewer seats where advertising could be concentrated, they said.

Independent senator David Pocock
Independent senator David Pocock has questioned proposed funding reforms. (Mick Tsikas/AAP PHOTOS)

The same argument is being made behind the scenes about minor parties such as the Greens following outcry about the reforms stacking the field for major parties, which Labor disagrees with.

But Senator Pocock still questioned whether his history-making victory at the 2022 election could have happened under the reforms due to a mismatch in funds major parties would have had against him.

While caps for all Senate candidates are the same - $200,000 per electorate in the state - political parties had their federal war chests they could use to broadly advertise in key seats or states while he would be limited to $600,000.

"That's not a level playing field," he said.

Senator Pocock and the Greens are likely to vote against the bill in its entirety, arguing there's a lack of scrutiny in the rush to pass a bill that disproportionately helps majors despite it not taking effect until mid-2026, after the next election.

The laws are set to start in mid-2026, which would capture the election slated for 2028.