The regulation of election finance has been an issue which has received considerable discussion in the past decade in Australia. For most of the period since independence, Australia has operated – at both the national and state levels – a system of free enterprise politics with campaigns organized around political parties. Parties in Australia are organized at the state level but have strong national coordinating units that control campaigning in federal elections.

The two major conservative parties, the Liberals and the Nationals (formerly the Country Party), have controlled the Federal Government in coalition for twenty-one of the past twenty-eight years, although they were in opposition in the national government and in four of the six states at the beginning of 1988. The conservative parties are each strongly organized at the state level, and their national organizations have only minimal control over the behavior of the state parties. The major left-oriented party, the Australian Labor Party (ALP), however, is more powerful at the national level. The national executive of the ALP can – and often does – intervene in the internal affairs of its state parties when it sees fit to do so.

Traditionally, both the conservative parties and the Labor Party have had the responsibility for organizing funds for election campaigns, as well as for regular party maintenance activities. The Labor Party has been heavily dependent on union affiliations and union donations for its election finance, and in recent decades has found itself hard-pressed to raise sufficient monies to remain elect or ally competitive.