Donations of more than $4,000 across any parliamentary term are set to be banned in Victoria as the government in that state moves to crack down on undue political influence from large donors.

Releasing its planned overhaul of laws relating to donations, the Victorian State Government says it will usher in what it says will be Australia’s most transparent donation laws.

Under the new legislation:

• Donations to political parties will be capped at $4,000 over a four-year parliamentary term
• Political donations from foreigners will be banned.
• The disclosure limit for donations will be reduced from $13,200 to $1,000 per financial year.

Disclosable donations will also need to be disclosed in real-time by the Victorian Electoral Commission (VEC)

To ensure the cash-flow of political parties and continued participation in election campaigns is not compromised, however, public funding to political parties will be increased.

The government says a new funding arrangement will be determined over coming months.

From the viewpoint of the property sector, the moves come amid public suspicions that influential developers and cashed-up industry lobby groups may be exerting undue political influence.

In a study of political influence in land rezoning decisions over a six-year period in Queensland, for example, University of Queensland economists Cameron Murray and Paul Frijters found that donors to a political party owned more than 40 percent of the land within the rezoned areas but just over 1 percent of the land outside of those areas (though factors other than political donations also contributed to this apparently lop-sided outcome).

The changes also come as Fairfax Media has alleged that a number of property developers were asked to pay $10,000 into an electoral fundraising account as part of sponsorship for an ‘industry forum’ organised by state opposition leader Matthew Guy’s now deputy David Hodgett which included Guy, Hodgett, two property developers, lobbyist Stephen Kerr, and staff.

Both Guy and Hodgett deny wrongdoing, Guy saying he merely turned up at the meeting and Hodgett saying relevant monies were declared through the Liberal Party and the Victorian Electoral Commission.

Premier Daniel Andrews said the reforms delivered transparency and accountability.

“These will be the strictest donation laws in the country, because Victorians deserve to know who donates, how much, and when,” Andrews said.

“We’ll give Victorians confidence that governments are making decisions on their merits, not repaying favours to big political donors.”

Guy acknowledged that donations laws needed updating but said he would wait to see the detail before deciding whether the opposition would support the proposed changes.