Bills Digest no. 115 2008–09
Commonwealth Electoral Amendment (Political Donations
and Other Measures) Bill 2009
Note: this Digest updates an
earlier Digest of 20 August
2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Commonwealth Electoral Amendment
(Political Donations and Other Measures) Bill 2009
Date introduced: 12 March 2009
House: House of Representatives (the Bill passed the House on 16
March 2009)
Portfolio: Special Minister of State
Commencement: Sections 1–3 commence on the
day the Act receives Royal Assent. Schedule 1 commences on 1 July
2009.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The main purpose of the Bill is
to amend the Commonwealth Electoral Act 1918 (the Act) so
as to:
- reduce the donations disclosure threshold from $10 900 (current
rate, CPI-indexed) to $1000 and remove CPI indexation
- prohibit foreign donations to registered political parties,
candidates and members of Senate groups and also prevent the use of
foreign donations for political expenditure
- prohibit anonymous donations above $50 to registered political
parties, candidates and members of Senate groups and also prevent
the use of anonymous donations above $50 for political
expenditure
- permit anonymous donations of $50 or less in certain
circumstances
- limit the potential for ‘donation splitting’
- introduce a claims system for electoral funding and tie funding
to electoral expenditure
- extend the range of electoral expenditure that can be claimed
and prevent existing members of Parliament from claiming electoral
expenditure that has been met from their parliamentary
entitlements, allowances and benefits
- introduce a biannual disclosure framework in place of annual
returns and reduce timeframes for election returns, and
- introduce new offences and increase penalties for a range of
existing offences.
The Bill is essentially a revised version of the Commonwealth
Electoral Amendment (Political Donations and Other Measures) Bill
2008.
The Bill also contains other provisions such as application and
savings provisions.
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The Commonwealth Electoral Amendment (Political Donations and
Other Measures) Bill 2008 was introduced in the Senate on 15 May
2008. On 18 June 2008 the Senate referred the Bill to the Joint
Standing Committee on Electoral Matters (JSCEM) for inquiry and
report.[1] The JSCEM
concluded its inquiry in October 2008, and a majority of the
Committee recommended that the Senate support the proposals in the
Bill relating to electoral funding, the donations disclosure
threshold, reporting periods and the biannual framework, donation
splitting, foreign and anonymous donations, and penalties, offences
and compliance.[2] A
majority of the JSCEM also recommended two changes to the Bill:
- a broadening of the current definition of ‘electoral
expenditure’ in section 308 of the Act to ‘include
reasonable costs incurred for the rental of dedicated campaign
premises, the hiring and payment of dedicated campaign staff, and
office administration’, and
- an amendment of the proposals in the Bill relating to anonymous
donations so as to allow for anonymous donations of under $50 to be
received ‘without a disclosure obligation being incurred by
the donor, and without the recipient being required to forfeit the
donation or donations to the Commonwealth’.[3]
In December 2008 the Government introduced amendments to the
2008 Bill partly in response to the JSCEM’s recommended
changes. Ultimately the Bill was defeated in the Senate on
11 March 2009 with the Government, the Australian Greens and
independent Senator Nick Xenophon voting in favour of the Bill and
the Coalition and Family First parties voting against the
Bill.[4]
Given its opposition to the 2008 Bill and its vote against the
revised Bill in the House of Representatives on 16 March
2009,[5] it is clear
that the Opposition will vote against the Bill in the Senate. On 11
March 2009 the Opposition stated that the 2008 Bill was ‘a
highly selective and self-serving series of amendments’ and
that both the 2008 Bill and the revised Bill ‘have worked to
reinforce Labor’s strong political donation
position’.[6]
The Opposition also criticised the Government for progressing the
Bill ahead of the conclusion of the Green Paper process.[7]
It is likely that the Australian Greens will vote in favour of
the revised Bill in the Senate given their support for the 2008
Bill. On 11 March 2009 the Australian Greens criticised the
Coalition and Family First parties for voting against the 2008
Bill.[8]
It is likely that independent Senator Nick Xenophon will vote in
favour of the revised Bill in the Senate given his support for the
2008 Bill.
Assuming a consistent voting pattern for the Opposition, the
Australian Greens, and Senator Xenophon, Family First’s vote
will decide the fate of the revised Bill in the Senate. Family
First opposed the 2008 Bill on the basis that it did not limit
electoral funding for political parties to $10 million per
party,[9] and so will
presumably oppose the revised Bill unless an agreement is reached
in negotiations with the Government.
See the
earlier Digest on the 2008 Bill for a summary of the Opposition
and minor party positions in relation to that Bill and for other
background matters.[10]
Media comment since the defeat of the 2008 Bill in the Senate
has focused on the defeat of that Bill, its measures, the
reintroduction of the legislation into the House of
Representatives, and the positions of the parties.[11]
See the
earlier Digest on the 2008 Bill for a summary of the media
commentary in the lead up to that Bill’s introduction.
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The revised Bill retains the measures in the 2008 Bill and adds
some additional measures. In the Second Reading speech on the Bill
it was stated that:
The measures contained in the bill incorporate
not only the measures in the Bill that were rejected at second
reading in the Senate but also the measures that were foreshadowed
to be included as government amendments to the bill in the Senate
in response to the October 2008 advisory report from the Joint
Standing Committee on Electoral Matters (JSCEM). There is also a
further minor amendment to the categories of ‘electoral
expenditure’ against which public funding can be claimed
following an election and after consultation in the Senate.[12]
The main new measures in the Bill relate to electoral funding
and anonymous donations.
See the
earlier Digest on the 2008 Bill for a summary of the key
measures in that Bill as introduced.
The revised Bill proposes to insert a definition of
‘electoral expenditure’ into subsection 287(1) of the
Act. The Explanatory Memorandum notes that the definition will
constitute ‘an exhaustive list of the types of expenditure
that can be claimed to obtain election funding’ under the
provisions of the Bill.[13]
The new definition would retain the substance of the current
definition of ‘electoral expenditure’ in section 308
while relocating it to subsection 287(1) and adding the following
elements:
- the inclusion of 5 new categories of expenditure incurred
during the election period in relation to election campaigns,
and
- the exclusion from the definition of any expenditure incurred
by existing members of Parliament under subsection 287(1) and met
by their parliamentary entitlements, allowances (except
remuneration), or benefits.
The proposed 5 new categories of electoral expenditure are:
- the rent of any house, building or premises used for the
primary purpose of conducting an election campaign
- paying additional staff employed, or a person contracted, for
the primary purpose of conducting an election campaign
- office equipment purchased, leased or hired for the primary
purpose of conducting an election campaign
- the costs of running or maintaining that office equipment,
and
- expenditure incurred on travel, or on travel and associated
accommodation, to the extent that the expenditure could reasonably
be expected to have been incurred for the primary purpose of
conducting an election campaign.
The Explanatory Memorandum states that the proposed amendments
‘are partly in response to the second recommendation in
JSCEM’s Advisory Report that the categories of electoral
expenditure set out in the 2008 Bill be expanded’.[14] The Explanatory
Memorandum further states that the exclusion of electoral
expenditure met by members’ entitlements, allowances and
benefits from the new definition of ‘electoral
expenditure’ ‘is necessary due to the introduction of a
public funding scheme’, and that:
As sitting members of Parliament may be able to
meet some electoral expenditure by way of allowances, entitlements
or benefits paid by the Commonwealth in some circumstances, it is
not appropriate that this electoral expenditure is claimed for
public funding purposes.[15]
The Bill also seeks to amend subsection 287(1) so as to insert a
new definition of ‘office equipment’ for the purposes
of the new definition of ‘electoral expenditure’
(telephones, faxes, computers, communication equipment,
photocopiers etc.), and to repeal section 308 of the Act given the
relocation of the definition of ‘electoral expenditure’
from section 308 to subsection 287(1).
The Bill further proposes to specify the funding entitlement for
related registered political parties making a single claim for
funding. Under the proposed rules, related registered political
parties making a single claim for the expenditure of the federal
branch of the party and one or more state branches would be
entitled to either the funding rate per first preference vote
received, or the amount of electoral expenditure claimed and
accepted by the Australian Electoral Commission (AEC), whichever is
the lesser.
Finally, the Bill would revise the base electoral funding rate
per first preference vote received from $2.1894 in the 2008 Bill to
$2.24851 (CPI-indexed). The indexation of the base rate would
commence on 1 July 2009.
The 2008 Bill sought to prohibit foreign and anonymous donations
to registered political parties, candidates and members of Senate
groups and also prevent the use of foreign and anonymous donations
for political expenditure. The revised Bill contains the same
regime, but further proposes to exempt the receipt of anonymous
money donations of $50 or less made in certain circumstances from
being unlawful. In the Second Reading speech it was stated
that:
The revised bill … includes measures
that respond to the recommendation of the Joint Standing Committee
on Electoral Matters that there should be a $50 exception to the
prohibition on the acceptance of anonymous gifts. The basis for
this recommendation was to remove an onerous recordkeeping burden
in relation to fundraisers such as raffles, trivia nights and
street stalls.[16]
Under the provisions in the Bill anonymous money donations of
$50 or less received by registered political parties, candidates
and Senate groups would be permitted where the donation was
received at either:
- a general public activity (an activity conducted in a public
place or in a place to which members of the public have ready
access)—for example street and fete stalls, or
- a private event (a function, meeting or other event that is not
a general public activity).
The Explanatory Memorandum states that the purpose of
restricting permitted anonymous donations to these circumstances is
to ensure that permitting anonymous donations of $50 or less
‘does not lead to a flood of donations which are not
disclosed’.[17] Under the changes proposed by the Bill, it would be
lawful to incur political expenditure that was enabled by permitted
anonymous donations.
In each circumstance a person involved in the organisation of
the activity/event would be required to make a record of the date,
location and nature of the activity/event; the details of people
involved in the collection or receipt of donations at the
activity/event; and the total amount of anonymous donations
received by/on behalf of the recipient at the activity/event. For
private events a record would also need to be made of the number of
people attending the event, and if the total amount of donations
received at a private event exceeded the total of $50 multiplied by
the number of attendees, the donation would only remain a permitted
anonymous donation if the excess was returned within 6 weeks or
paid to the Commonwealth if a return was not possible or
practicable.
Provisions in the Bill would also ensure that, where an
individual made multiple donations at an activity/event totalling
more than $50, and a person involved in the collection or receipt
of donations was aware that the donations totalled more than $50
and were from the same individual, the excess would not be a
permitted anonymous donation.
The Bill would also impose disclosure obligations on registered
political parties, candidates, Senate groups, and those incurring
political expenditure regarding permitted anonymous donations
received during the disclosure/reporting period and the associated
activities/events.
Finally, the Bill would create a new offence for making a record
in relation to a general public activity or private event where it
was known that the record was false or misleading in a material
particular or omitted a matter or thing without which the record
would be misleading in a material particular. The maximum penalty
for this offence would be imprisonment for 12 months or 120 penalty
units or both.[18]
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The Government has indicated that the amendments may result in
increased costs for the AEC. Public funding may be reduced due to
the electoral funding reforms and there may be additional revenue
from the recovery of unlawful or undisclosed donations.[19]
In October 2008 a majority of the JSCEM recommended that the
Government provide the AEC with appropriate resources with respect
to administration of the proposed measures in the legislation and
other matters.[20]
This section notes the main new provisions in the Bill.
Item 5 relocates the existing definition of
‘electoral expenditure’ from section 308 to subsection
287(1) and inserts 5 new categories of electoral expenditure into
the definition. These categories are electoral expenditure incurred
during the election period on:
- the rent of any house, building or premises used for the
primary purpose of conducting an election campaign
- paying additional staff employed, or a person contracted, for
the primary purpose of conducting an election campaign
- office equipment purchased, leased or hired for the primary
purpose of conducting an election campaign
- the costs of running or maintaining that office equipment
(See proposed subparagraphs
287(1)(b)(i)-(iv)).
- travel, or on travel and associated accommodation, to the
extent that the expenditure could reasonably be expected to have
been incurred for the primary purpose of conducting an election
campaign
(See proposed subparagraphs
287(1)(c)(i)-(ii)).
Item 5 also excludes from the
definition of ‘electoral expenditure’ any expenditure
incurred by existing members of Parliament under subsection 287(1)
and met by their parliamentary entitlements, allowances (except
remuneration) or benefits (proposed paragraphs 287(1)(d)
and (e)).
Item 10 inserts a definition of
‘office equipment’ into subsection 287(1) further to
item 5.
Item 13 inserts a definition of ‘single
claim’ into subsection 287(1) to mean a claim made by
registered political parties that are related to each other and for
electoral expenditure that covers both the federal and one or more
State branches of the registered political parties.
Item 21 adds proposed subsection
293(3) to the proposed Subdivision A, section 293 to
provide that entitlement to election funding for related registered
political parties making a single claim for the expenditure of the
federal branch of the party and one or more state branches is: the
funding rate per first preference vote received, or the amount of
electoral expenditure claimed and accepted by the AEC, whichever is
the lesser.
Item 8 inserts a reference to the proposed
definition of ‘general public activity’ (see
proposed subsection 306AF(3)) into subsection
287(1).
Item 11 inserts a reference to the proposed
category of ‘permitted anonymous gift’ (see
proposed section 306AF) into subsection
287(1).
Item 12 inserts a reference to the proposed
definition of ‘private event’ (see proposed
subsection 306AF(6)) into subsection 287(1).
Item 49 inserts proposed
section 306AF into the proposed Division 4A,
Subdivision A to permit anonymous money donations of $50 or
less received by registered political parties, candidates and
Senate groups in certain circumstances, and to impose record-making
obligations on those involved in the organisation of general public
activities and private events (proposed subsections
306AF(1), (4), (7)).
Proposed section 306AF also defines ‘general public
activity’ and ‘private event’ for the purposes of
the section (proposed subsections 306AF (3) and
(6)). Proposed subsection 306AF also provides for
the treatment of multiple donations received at general public
activities and private events totalling in excess of $50
(proposed subsections 306AF(2) and
(5)).
Items 28, 30,
73 and 93 amend subsections
304(2) and (3), section 314(AC), and subsection 314AEC(2) to impose
disclosure obligations on registered political parties, candidates,
Senate groups, and those incurring political expenditure regarding
permitted anonymous donations received during the
disclosure/reporting period and the associated
activities/events.
Item 96 inserts proposed
section 315(4C) to provide for a new offence of making a
record in relation to a general public activity or private event
where it was known that the record was false or misleading in a
material particular or omitted a matter or thing without which the
record would be misleading in a material particular. As previously
noted, the maximum penalty for this offence would be imprisonment
for 12 months or 120 penalty units or both.
See the
earlier Digest on the 2008 Bill for a listing of the main
provisions in that Bill as introduced.
Nicholas Horne
18 March 2009
Bills Digest Service
Parliamentary Library
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