The Labor Government secured support from the Liberal Party, Greens and other members of the crossbench to pass the Electoral (Accountability and Integrity) Amendment Bill 2024.
The government says the legislation is designed to strengthen public confidence in democracy by prohibiting electoral donations and gifts to registered political parties, MPs and candidates.
Premier Peter Malinauskas said the legislation was "carefully crafted" on the best advice of experts and in close consultation with democracy groups "to ensure we have a system which is fair and workable".
SA Premier Peter Malinauskas says banning political donations is the "right thing to do". (Bianca De Marchi/AAP PHOTOS)
But Bill Browne, Director of the Australia Institute's Democracy and Accountability Program, says the process has been rushed and the legislation is compromised and unfair.
"Behind Premier Malinauskas' ban on most political donations is around $18 million in new taxpayer funding for political parties and candidates; the vast majority goes to the two major parties," he said.
"While there is a case to be made for public funding of political parties, it should be done in a fair and balanced way that's accessible to new entrants, rather than just going to those incumbents with entrenched power."
The law imposes mandatory expenditure caps on parties, candidates and third parties.
The restructured public funding model, based on the number of votes received at previous elections, is now mandatory.
It will take effect on July 1 next year, and will apply in the lead up to the March 2026 general election.
The reform was "not in my Government's immediate political interests", the Premier said.
"But it is the right thing to do," he said.
The government held a secret consultation earlier this year, and the majority of submissions were opposed to the bill, Mr Browne said.
"They made dramatic revisions to the legislation, and those changes, even though they deliver millions of dollars more to the major parties, never went to any kind of formal inquiry," he said.
"No one's gone to the public and asked them what they want in response for becoming the major financiers and underwriters of political parties in the state."
An independent review had recommended that administrative funding to the major parties be decreased relative to the draft bill, from $1.4 million a year for each major party to $1.2 million a year.
A Deloitte analysis commissioned by the government, as part of its case for defying the independent review and raising major party administrative funding to $1.6 million, did not justify that spending, Mr Browne said.
"Even under the 'donation ban', the major parties can still collect millions of dollars in membership fees and levies on MPs and their staff, and will save money that used to be spent on fundraising," he said.
A statutory review will be completed within 18 months of the 2026 election.
