REGISTERED clubs will still be able to donate to political parties in NSW despite a ban on donations from organisations with gambling and liquor interests.
The ban, which passed State Parliament this week as an amendment to the government's election funding bill, with support from the Greens, prohibits for the first time political donations from hotels and their umbrella organisation, the Australian Hotels Association.
The legislation also bans donations from the supermarket giants Coles and Woolworths because of their ownership of liquor retailers. Star City casino and its owner, Tabcorp, are also prohibited from making political donations, while a ban on donations from tobacco companies has also been implemented.
However, under an agreement between Labor and the Greens, clubs are exempt from the ban.
Clubs NSW has been a significant donor to both sides of politics. One of Labor's largest donors is the Randwick Labor Club.
Clubs own a large proportion of the state's poker machines, but are exempt because the legislation specifies that it applies to corporations whose business is ''mainly concerned'' with liquor or gaming ''but only if it is for the ultimate purpose of making a profit''. Clubs and Clubs NSW are non-profit organisations.
The legislation was amended early on Thursday after a marathon Legislative Council session.
It imposes wide-ranging changes to the rules governing donations and election spending, including a new cap on donations from individuals and organisations to political parties of $5000 each a financial year and $2000 to candidates or elected members.
Clubs remain subject to the caps despite their exemption from the donation ban.
The Greens MP John Kaye defended the exemption. ''The legislation puts the brakes on the clubs lobby by limiting donations to $5000 a year,'' he said. ''While a complete ban is vastly preferable, the new cap will rule out a repeat of the last seven years where Clubs NSW poured $1 million into the major parties' coffers.''
A spokesman for Clubs NSW said it had no discussions about the exemption. ''The first we learnt of the amendment was through the media.''
The chief executive of the NSW branch of the Australian Hotels Association, Sally Fielke, said it was examining the legislation.
The Opposition Leader, Barry O'Farrell, has criticised the reform bill because it allows unions and other third-party groups to spend up to $1.05 million during an election campaign, which he says significantly advantages Labor.
Dr Kaye praised the work of his former colleague, the senator-elect Lee Rhiannon, and the director of the Greens' Democracy for Sale donations project, Norman Thompson, for their work in achieving the donation reforms.
''Future governments will be able to make reasoned decisions about important public health … issues without the influence of [millions flowing from] the highly profitable gambling, alcohol and tobacco industries,'' he said.
The Labor MP Luke Foley said it was a significant achievement. ''NSW is the first jurisdiction … to place caps on donations and campaign spending, which protects our democracy,'' he said.