Can Money Be Removed From Politics?

The South Australian election on 21 March 2026 was a landmark moment in democratic design: it was the first time in Australia that an election campaign has been funded almost entirely through public money.

The Electoral (Accountability and Integrity) Amendment Act 2024, in force since July 2025, fundamentally restructured how political competition is financed. It has been described as “world-leading” in its attempt to remove private money from politics.

The legislation makes it unlawful for political parties, candidates, or MPs to receive electoral donations. Instead, public funding replaces private contributions, supplemented by strict expenditure caps and enhanced disclosure rules.

Public funding is distributed largely on the basis of electoral support. Parties receive payments per vote (for example, around $6 per vote up to a threshold), with funding capped at actual campaign expenditure. Additional streams include administrative funding, policy development grants, and advance payments to assist new entrants.

Certain new entrants and non-incumbents will be allowed to accept electoral donations subject to donation caps, including an individual donation limit of $5,000.

The reforms also regulate the political expenditure of third parties including businesses, unions and think tanks, with groups wanting to influence the outcome of an election subject to an expenditure cap of $450,000.

In effect, it is an attempt to create a closed financial ecosystem for elections: no private donations, controlled spending, and taxpayer-funded campaigns.

The policy has long been advocated by the Greens, who argue that the only reason they are unable to win elections is because their opponents spend more money.

Libertarians argue that it is not the government’s role to dictate how people choose to spend their own money, including contributing to the promotion of their preferred political party or viewpoint. While it might be tantalising to consider that the taxes of Greens voters are helping to fund One Nation’s campaign expenses, it is also true in reverse.

The rationale for public funding is to eliminate the perception (and reality) of political influence tied to money. Large donations have long raised concerns about access, lobbying power, and policy bias. The South Australian government explicitly framed the reform as a way to ensure decisions are made “because they’re the right thing to do”, rather than in response to donors.

By banning donations entirely, the reform goes further than most jurisdictions, which typically rely on caps and disclosure rules. In theory, this removes a key pathway for corruption.

There is also a goal of restoring trust in democratic institutions. If voters believe elections are not “for sale”, confidence in outcomes may increase. Public funding signals that elections are a public good rather than a marketplace.

Another claimed benefit is greater equality between political competitors. Campaigns are no longer dependent on access to wealthy donors or corporate backing. In theory, this should make elections more about ideas and policies than financial resources.

The inclusion of advance payments for new parties and candidates is also significant, as it aims to reduce barriers to entry and encourage political diversity.

Despite its ambitions, evidence from the South Australian election suggests several complications. One is the shift of political spending to non-party structures. While parties cannot accept donations, third-party campaigners can still raise funds and spend within regulated limits. This is similar to “Super PACs” in America, which can accept unlimited contributions from individuals, unions, and corporations to spend on advertising, provided they do not directly coordinate with a candidate’s campaign.

Such groups are likely to become major players in Australian election campaigns, raising concerns about transparency and accountability. Banning donations to parties does not eliminate money from politics; it simply redirects it.

Public funding tied to vote share also tends to favour larger, established parties. A large majority of public funding flows to major parties, with only a small fraction reaching new entrants. This will reduce competition rather than enhance it.

The transition to a donation-free system introduces legal and administrative complexity. Questions have already arisen about what constitutes a donation versus a campaign expense, as illustrated by controversies over privately funded travel during the campaign.

The South Australian experiment has implications beyond the state. It represents one of the most comprehensive attempts globally to remove private money from electoral politics. If successful, the model could influence reforms at the federal level or in other states. Public funding systems already exist in many democracies, but few have gone as far as banning donations entirely.

The reforms aim to shift the basis of political competition away from financial capacity. However, it also highlights that money remains integral to politics, even if its channels change. That raises the question of whether the broader ecosystem of political communication is actually more important.

Further, the reforms raise fundamental questions about the balance between equality and freedom. Strict controls on funding and spending may enhance perceptions of fairness, but they also limit how individuals and groups participate in political debate.

Full public funding of election expenses is a bold attempt to reshape democratic practice. Its core promise – to remove the influence of private money and restore trust – addresses longstanding concerns in modern politics.

However, while the reform reduces certain risks, it curtails individual freedoms and introduces new challenges. Ultimately, it shows that public funding is not a simple solution but a trade-off. It can reduce direct financial influence on politicians, but has unintended consequences. As other jurisdictions watch this experiment, its long-term impact will be crucial in determining whether full public funding represents the future of democratic elections or is yet another imposition on liberty.