Published August 29, 2014 - Sean Nicholls, Sydney Morning Herald State Political Editor

Liberals ponder $1.7m cap on private donations for 2015 NSW election
NSW Premier Mike Baird is considering a radical overhaul of how the 2015 state election will be funded, including cracking down on the amount of private donations able to be raised by parties. This follows sensational allegations of illegal payments, made at the Independent Commission Against Corruption hearing into campaign funding.

Greens MP Jamie Parker declined to comment on the specifics of what was being discussed but he confirmed briefings had occurred with Liberal state director Tony Nutt.

"If we want clean politics in NSW, it is absolutely essential to reduce the incentive for parties to seek political donations, increase funding disclosure and reduce donation limits," he said.

Read the SMH article online here

NSW Premier Mike Baird is considering a radical overhaul of how the 2015 state election will be funded, including cracking down on the amount of private donations able to be raised by parties. This follows sensational allegations of illegal payments, made at the Independent Commission Against Corruption hearing into campaign funding.

It is understood key figures in the government and the NSW Liberal Party have embarked on discussions about a new funding model, less than a week after Mr Baird said he wanted some changes to NSW election funding rules put to parliament by the end of September.

Under the model being discussed, the amount able to be raised through private donations and to be spent on the election campaign by the Liberal and Labor parties would be capped at about $1.7 million.

This would be about 20 per cent of the base taxpayer funding available, which would be set at about $8.5 million – similar to that available now.

Under the present funding system, Labor and the Liberals need to raise and spend, through borrowings and private donations, more than $10 million to be eligible to reclaim the maximum taxpayer funding of about $8 million.

The new system would not only cap the total amount of private donations that may be raised, it would remove the need to raise and spend the extra money on campaigns in order to be reimbursed the maximum amount of taxpayer funding.

It is argued that this will significantly reduce the pressure on parties to seek donations from private companies and individuals, and therefore lower the risk of corruption. 

Mr Baird has publicly advocated a system of fully taxpayer-funded elections, as has Opposition Leader John Robertson.

However, the decision to include the ability to raise some private donations in the proposed model is designed to reduce the possibility it could be challenged in the High Court as a restriction of political expression.

Significantly, the model is designed to not increase the amount of money taxpayers spend on election campaigns at present. It has been devised using the existing system of administrative funding for political parties in NSW, whereby parties with more than three MPs are entitled to be paid $469,900, plus $86,800 for each extra MP up to a maximum of 22, capped at $2.1 million.

Parties with two MPs, such as the Shooters and Fishers Party and the Christian Democrats, are entitled to annual administrative funding of $365,500. The Greens, with six MPs, are entitled to $730,300.

The new public funding model being discussed applies a multiple to the administrative funding entitlement to reach the new taxpayer-funding limit. The multiple has yet to be decided, but up to four times the current entitlement is being discussed.

For the Liberal and Labor parties this means the amount they could raise from private donations would be capped at about $1.7 million. Smaller parties such as the Shooters and Fishers and Christian Democrats could raise up to about $290,000 in private donations; the Greens could raise up to $580,000.

Sources familiar with the discussions insisted the details were fluid but that the government and the NSW Liberal Party were actively pursuing the basic approach.

The Greens have advocated a different model, whereby political parties would be entitled to a reimbursement of 85 per cent of their campaign spending, up from about 33 per cent at present.

Donations to parties would be capped at $1500, down from the current $5000. For candidates, the cap would be $500, down from $2000.

Greens MP Jamie Parker declined to comment on the specifics of what was being discussed but he confirmed briefings had occurred with Liberal state director Tony Nutt.

"If we want clean politics in NSW, it is absolutely essential to reduce the incentive for parties to seek political donations, increase funding disclosure and reduce donation limits," he said.

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