New laws set to take effect next year will limit political donations, impacting independent candidates significantly. Climate 200, a political funding organization led by billionaire Simon Holmes a Court, donated $10.86 million to teal candidates before the last federal election. However, under the new regulations, which cap annual donations at $50,000 per candidate, Climate 200 would have been unable to contribute the majority of that amount.

Critics argue that the legislation, passed through a deal between the Labor Party and the Coalition, favors established parties at the expense of new challengers. Independent MP Kate Chaney expressed concerns, stating, "I think it will be ripe for legal challenge." She noted that the government had previously indicated the need for careful drafting to ensure the amendments were constitutionally valid.

Although the reforms will not be implemented until July 2026, recent election returns for independent candidates highlight their potential impact. An analysis revealed that candidates like Ellie Smith, Alex Dyson, Zoe Daniel, and Sophie Scamps would be among those most affected by the new funding limits.

While Climate 200 and similar organizations may find ways to navigate the new rules, such as advising large donors to contribute directly to candidates, independents believe their campaigns will suffer. Chaney, who received funding from Climate 200, stated, "The election reforms that the major parties pushed through rapidly at the end of last term will have an impact on the ability of new challengers to take them on."

She criticized the disparity in spending limits, saying, "The fact that individual candidates will be limited to spending $800,000 on a campaign and parties can spend $90 million is the most ridiculous inequity."

Many successful independent candidates in the last election exceeded the new spending cap, and several unsuccessful candidates also spent more than $800,000. Warringah MP Zali Steggall echoed Chaney's concerns, stating that the reforms provide an advantage to incumbents and major parties. She noted, "For political parties, there are plenty of workarounds when it comes to donation caps."

Steggall also highlighted the ongoing issue of "dark money" in politics, suggesting that the reforms may not eliminate the influence of undisclosed funding sources. She expressed hope that the donation reforms would face a challenge in the High Court.

Sophie Scamps, another independent MP who received Climate 200 funding, emphasized the financial demands of political campaigns. "There's a lot of misinformation that is targeted at you as a candidate, so I had to combat a lot of misinformation," she said. Scamps pointed out that crowdfunding platforms like Climate 200 are essential for candidates who lack extensive fundraising resources.

Special Minister of State Don Farrell defended the reforms, stating they enhance transparency in political funding. He said, "In the last term of parliament, we successfully passed landmark legislation to stop the billionaire arms race in federal elections by capping expenditure and donations."

Farrell added that the reforms would ensure Australians know who is funding their elections. More than 20 individuals or entities made donations exceeding $50,000 to independent candidates for the 2025 federal election, although not all would be affected by the new caps if donations were spread over multiple years or candidates.