Bills Digest: Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017

Political campaigns Political corruption Politics Political donations Political ethics Political parties Election campaign funding Australia
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The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 makes a number of changes to the provisions of Part XX of the Commonwealth Electoral Act 1918 relating to public funding of election campaigns and the receipt and reporting of donations. It arrives in the midst of allegations about foreign interference in Australian politics by China, the resignation of Sam Dastyari from the Senate due to his alleged involvement with a Chinese donor, and is accompanied by other national security legislation targeting foreign interference in Australian politics. In addition, it follows recommendations of the Joint Standing Committee on Electoral Matters to ban foreign political donations.

Making donations to a political party over $250 will be restricted to Australian citizens, residents and entities incorporated in Australia or whose head office or principal place of business is Australia. Foreign political entities and foreign public enterprises are specifically banned from donating. Accepting or soliciting donations from nonallowed donors carries substantial criminal and civil penalties. Provisions are provided for all Australian noncitizen residents to be classed as non-allowable donors by disallowable instrument.

Special provisions are made for charities, not-for-profit organisations and registered organisations (which are primarily unions) in relation to donations. Charities and registered organisations will not be able to receive donations from non-Australians for political purposes of over $250, and any donations they receive from nonallowable donors must be kept in a separate bank account and not used for political expenditure. Any person or entity receiving donations for political purposes must obtain a statutory declaration (or by other means as per regulations) that the donor is an allowable donor.

Additional regulation is imposed on entities that incur political expenditure that are not political entities (that is, not registered parties or candidates), requiring registration with the Australian Electoral Commission (AEC) as either a third party campaigner or a political campaigner, depending on electoral expenditure. Generally, third party campaigners are those that incur political expenditure above the disclosure threshold ($13,500, indexed) and less than $100,000 in a year, and political campaigners are those that spend $100,000 or more. The criteria for an entity to be registered as an associated entity is expanded to include entities that have less direct connection to political parties, and the AEC will maintain a register of associated entities. Substantial penalties may result from not registering when required to do so.

Third party campaigners, political campaigners and associated entities will be required to lodge annual returns with the AEC outlining their total income, total expenditure, and any outstanding debts, and list donors who have donated above the threshold, similar to political parties. They will also be required to declare any memberships of political parties by their senior officers and any money received from the Commonwealth or any state or territory. Returns from political campaigners and political parties must be accompanied by an auditor’s report.

The Bill imposes a number of civil, and some criminal, penalties for breaches of the provisions. The penalties imposed are generally much more severe than those currently in the Act.

The payment of public funding for candidates and parties in elections that win at least four per cent of the vote, which is currently provided as an entitlement without any linkage to election spending, will be capped at the amount of expenditure claimed by the party or candidate. The AEC will be responsible for assessing that the claimed amount is election expenditure and the spending was incurred.

The provisions of the Bill, particularly in relation to donations requirements for charities, have drawn a negative response from the charities sector, from Labor and from the Greens. The changes to public funding have been opposed by the Greens.

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Bills Digest No. 81 2017-18