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Canberra's two major political parties backed the creation of a loophole that rendered the government's much-promoted $40,000 cap on other groups' election campaign spending effectively useless. The union movement appears to have capitalised on the loophole at the 2016 election, when the CFMEU spent $38,000 supporting Labor, and its training arm, Creative Safety Initiatives, spent another $35,000. This was despite a $40,000 cap on spending for any single group. The Canberra Liberals' Jeremy Hanson spoke out against the loophole last week, telling ABC Radio Canberra it was time to amend the Act to make it clear "you can't have umbrella organisation, many of them with the same directors, being in the position to spend twice at an election". But Mr Hanson's party - of which he was then leader - backed Labor's changes that created the loophole in 2015, against the advice of the then electoral commissioner. It was created after the government repealed a clause stopping third-party campaigners from "acting in concert", in an apparent attempt to prevent any potential challenge to the ACT's electoral laws after a High Court case in New South Wales. But it is unclear if any such challenge would have been successful, as that case dealt with different campaign finance laws. Then ACT electoral commissioner Phillip Green also urged a legislative committee against it in 2014. He said while there was some "legal uncertainty", he was concerned removing it could create "a way for various groups to get around the expenditure cap" that "might open up a loophole in the act". UNSW constitutional law expert Professor George Williams also told the inquiry that while there was some uncertainty, the clause was written much more narrowly than the NSW laws and he believed "there was certainly a real prospect" it could survive a challenge. Those warnings led to the committee, on which current Liberals leader Alistair Coe sat, recommending against repealing it. But Labor and the Liberal parties ignored this recommendation in favour of avoiding a potential court challenge. Despite voting with Labor to repeal the clause at the time, Mr Hanson criticised the unions for capitalising on it. Greens leader Shane Rattenbury was the only MLA to vote against the reforms. During the 2015 debate, he urged the major parties to reject it, saying repealing it "means that anybody can go out and set up a string of associated entities that can spend money to benefit another party". "It makes a mockery of the expenditure cap that is being used to justify other positions taken in this place," Mr Rattenbury told the assembly. University of Queensland political finance expert Professor Graeme Orr said the change had created a loophole that "you could drive a truck through" and effectively defeated the spirit and purpose of the spending caps. "What happens at the next election when there's some issue and one giant business or union group wants to swamp the campaign? There's no coordination rules," Professor Orr said. "It was retrograde to remove such a rule - if you're going to have third party expenditure caps you need to have a rule against coordination." An ACT government spokesman said the advice from the committee and Mr Green was "that there was uncertainty around the clause" and the government decided to repeal it. He said the Liberals, who had supported the changes, were "now playing politics". A committee inquiry into the 2016 election is currently open for public submissions, and the loophole is expected to be debated.

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