Australia’s new political finance laws target big donations, but money buys influence in many other ways, from lobbying and media narratives to market power that shapes voter preferences. Real reform needs to go beyond donation caps to include competition policy, fairer public funding, and far greater transparency.
Running political parties and election campaigns costs money. Lots of it. In 2024–25, Australian political parties took in approximately A$490 million. Of this, around A$347 million came from private and other non-government sources, including party members, unions, businesses and other donors. Big donors are ever more frequent. This year, One Nation made headlines after associates of Gina Rinehart announced A$3 million in donations, while one of her companies donated an aircraft.
This pattern is not specific to Australia. Across the world, big businesses and billionaires are increasingly making large donations to parties and candidates.
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During the 2024 US election cycle, Elon Musk contributed approximately US$292 million to Republican candidates and aligned political groups. Michael Bloomberg contributed about US$64 million to Democratic candidates and groups. On the other side of the pond, if Reform UK is allowed to retain the two £36 million donations announced in September 2026, the next UK general-election cycle is likely to break all British records for funding from ultra-wealthy donors.
While many donors may not demand or expect anything in exchange for their donations, the mere suspicion that they do undermines voters’ trust in democratic institutions. In 1997, Britain’s Labour
Party accepted a £1 million donation from Formula One chief Bernie Ecclestone.
After taking office, the Labour government supported an exemption for Formula One from a proposed ban on tobacco sponsorship. Labour subsequently returned the donation and denied that it had influenced the decision. But this and similar episodes inevitably look suspicious. Is economic power buying political power? Is democracy on sale?
In response to this global trend, Australian lawmakers have recently passed the largest overhaul of federal political finance in four decades. From January 2027, donations over A$5,000 will have to be promptly disclosed (down from A$17,300) and the total amount a donor can give each year will generally be capped, while parties and candidates will face a complicated set of spending limits. These changes are already being challenged in the High Court, and the Court’s decision in Hopper v Victoria suggests it may not accept rules that weigh unjustifiably more heavily on newcomers than on established parties.
There is also a bigger problem. Parliament wrote those laws with good intentions but based on very little evidence. In fact, the amount of rigorous evidence-based research on the effect of political donations, access, and connections in Australia is close to zero (apart from limited work on regulated industries such as alcohol and tobacco). This is in stark contrast with other democracies in which donor information is available through tax records and lobbying registers.
Data from overseas paints a complex picture. The main lesson is that economic power knows many ways to skin the democracy cat. In other words, money has many routes to political influence and most are missed by the new law, and some of its strictest measures could make things worse.
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Australia political finance system
The most obvious way in which economic power can buy political power is through donations. An experiment involving 191 US congressional offices shows how donations can buy access to policymakers: telling staff that a prospective meeting attendee was a donor made senior policymakers three to four times more likely to show up. Access matters because it decides which facts, risks and options land on a minister’s desk.
In this sense, the new rules passed by the Australian Parliament go in the right direction. Most importantly, they require parties to quickly reveal the identity of donors who give more than A$5,000. US evidence shows that campaign-finance transparency makes politicians accountable for their choices and empowers voters.
But capping donations doesn’t stop other ways of buying access. Hiring lobbyists is another proxy for access. Businesses may have good reasons to hire them, including the lobbyists’ expertise, yet research using US data finds that lobbyists with strong political connections are more valuable to businesses than those with strong policy expertise. Following the money isn’t always enough either. For example, US data reveal that companies whose owners and managers had been university classmates of politicians were valued more highly on the stock market when those politicians sat in state legislatures.
Controlling what people see and hear
Another well-established way to gain political influence is to control the information and the political narratives people get. Examples range from the “Fox News effect” to the rise of populist parties in Italy. Australian voters have benefited from a robust independent public broadcaster, the ABC. But news consumption is also moving away from traditional broadcasters. Forty-three per cent of Australians access news from online creators or influencers and almost half of 18-to-24-year-olds use TikTok for news.
Outside traditional media, political influence travels through culture long before it appears as donations. New work at the UNSW Resilient Democracy Lab uses US primary elections individual-level data to study how exposure to The Joe Rogan Experience, one of the largest podcasts in America, shaped the political behaviour of young American male voters. Before 2020, when Rogan’s anti-establishment message favoured Senator Bernie Sanders, young men exposed to the show increased their turnout in Democratic primaries involving Sanders. After Rogan’s message shifted toward support for Donald Trump, they increased their turnout in Republican primaries. The old Left-versus-Right divide doesn’t capture how online influencers shape politics.
Shaping political preferences
The third way economic power shapes democratic policymaking is even less visible. The political hold-up problem means that some companies do not need to lobby, donate or persuade to get the policies they want. A company may be able to direct technological innovation towards creating a world in which voters’ political preferences align more with the company’s objectives. For example, Uber’s expansion strategy hinged on rapidly scaling its user base and then leveraging these consumers—who are also voters—to oppose restrictive regulation. In the words of a former Uber executive: “we co-opted democracy itself by leveraging consumers’ political power.”
But not all firms in all markets can do this. In our research, we show that only firms that have market power can afford to use this technological-innovation channel. A more competitive market forces firms to focus on making good products at a good price rather than products that shape political preferences.
The money we need and the money we don’t
So many of the campaign-finance reforms aimed at constraining money entering politics miss what is going on in many of these other channels. In fact, they may also make matters worse, if they starve legitimate political organisations of the resources they need for a lively political contest between players that are accountable to voters.
Democratic politics requires such a lively contest of ideas and policies. But that “contest” is increasingly only conducted over traditional media which most voters rarely consume, especially the younger ones. As a result, parties now need to spend a lot more money to reach people across multiple platforms run by the global tech companies, often operating beyond any national regulator.
The main risk posed by caps on donor funding is that the main narrative won’t be set by politicians whom the Australian voters can ultimately kick out of office. Instead it may be set by players with virtually unlimited finances who are entirely unaccountable to the Australian voters, including foreign governments, multinationals and Big Tech.
What better political funding reform could look like?
First, treat competition policy as democracy policy. Large companies with too much market power have too much leverage in exploiting the political hold-up problem. Therefore, in evaluating mergers and anti-competitive strategies, our market authorities should not simply ask whether these strategies increase prices. They should also ask whether they make consumers, workers or governments politically dependent on the choices of one or a few companies. Making products work together, letting people move their data, and independent oversight of industry standards, cartels and guilds can reduce that dependence.
Second, give parties and genuine challengers enough money to take part in public debate. The law moves partly in this direction by increasing public funding, which has been shown increase competition in French departmental elections. However, access to campaign funds shouldn’t depend only on past election results, or it will simply protect those in power and shut out new ideas. At the same time, public money should not simply be awarded to anybody who chooses to run for office. Public funding should reflect, if not past votes, at least current voters’ support. Recent proposals on small-donor matching or democracy vouchers may help balance these two needs, by broadening participation in funding and direct public funding to candidates chosen by voters.
Most importantly: make financial influence transparent and visible. Australia needs fast disclosure of donations at every level, a full register of professional and in-house lobbyists, published ministerial diaries, public datasets of political ads, and secure access to platform data for researchers.
The goal should not be the utopia of making politics money-free. The goal should be to make politics accountable to the Australian voters.
Voters must know exactly who donated what to whom. And researchers must be able to tell Australian voters what type of influence is shaping which policy decisions. With this information available, Australians are smart enough to see for themselves if political favours were gained in exchange for money. And whether that deserves to be electorally punished or supported.
Gabriele Gratton is Professor of Politics and Economics at UNSW Business School and co-director of the UNSW Resilient Democracy Lab, Sydney, Australia. Originally published under Creative Commons by 360info
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