2. Political expenditure and registration

2.1
The Bill proposes a range of measures intended to improve the transparency of significant political actors. The changes recognise that actors, in addition to those currently defined in the Electoral Act, are exercising increasing influence on elections and seek to reflect the nature of modern campaigning.
2.2
The Bill introduces new definitions and new or expanded requirements to register as a:
political campaigner;
third party campaigner; or
associated entity.
2.3
These definitions do not apply to a political entities already covered under the Act or a member of the House of Representatives or the Senate.
2.4
This Chapter outlines the evidence put to the inquiry on each of these definitions.

Political purpose

2.5
The Bill introduces the term political expenditure, which is defined as expenditure for political purpose.
political purpose means any of the following purposes:
a.
the public expression by any means of views on a political party, a candidate in an election or a member of the House of Representatives or the Senate;
b.
the public expression by any means of views on an issue that is, or is likely to be, before electors in an election (whether or not a writ has been issued for the election);
c.
the communicating of any electoral matter (not being matter referred to in paragraph (a) or (b)) for which particulars are required to be notified under section 321D;
d.
the broadcast of political matter (not being matter referred to 34 in paragraph (c)) in relation to which particulars are required to be announced under subclause 4(2) of Schedule 2 to the Broadcasting Services Act 1992;
e.
the carrying out of an opinion poll, or other research, relating to an election or the voting intentions of electors;
except if:
f.
the sole or predominant purpose of the expression of the views, or the communication, broadcast or research, is the reporting of news, the presenting of current affairs or any editorial content in news media; or
g.
the expression of the views, or the communication, broadcast or research, is solely for genuine satirical, academic or artistic purposes.
2.6
Evidence received focussed almost exclusively on concerns with sub-clause b and sub-clause g. The intention of sub-clause b is to recognise that modern political campaigning takes place beyond the period in which the writs have been issued and is now continuous.

Evidence received

2.7
The breadth of the term ‘political purpose’ raised concerns from a number of submitters, primarily for registered charities who are concerned the definition may capture non-political activities.
2.8
The Law Council of Australia submitted that:
The definition of ‘political purpose’ has a fundamental drafting issue as paragraphs (a) to (e) are not purposes but are activities. For example, the activity of cooking can be either charitable or not, depending on the purpose for which the activity is undertaken. If the cooking activity is undertaken for a private or commercial purpose it would not be charitable but if the cooking activity was undertaken for a charitable purpose (such as feeding the homeless), it would be charitable. The definition does not address the purpose of conducting the activities listed.
For charities, these activities are done in pursuit of their charitable purposes and generally not done with the purpose of ‘actively seeking to influence the outcome of elections’ as referred as the intention of the reforms in paragraph 2 of the Explanatory Memorandum.1
2.9
Prof. Tham also raised concerns about the precision of the definition:
This definition is both too broad and imprecise for two related reasons. It is, firstly, based on the purposes of the expenditure, which can often raise complicated questions as to the motivations underlying the spending. Secondly, ‘for’ (in the definition of ‘political expenditure’) admits of various degrees of connection with the activities stipulated in the definition of ‘political purpose’. This raises complicated questions of a different kind: Is rent for buildings that house organisations that engage in public campaigning ‘political expenditure’? What about general organizational support such as human resource services?2
2.10
The Institute of Public Affairs noted concerns about the subjectivity of the definition stating:
This is an extremely wide and poorly-drafted definition. The range of matters it could cover is essentially unlimited, given that issues that are ‘before electors’ at an election is wholly subjective and dependent on the concerns and priorities of the voters themselves. Voters cast their votes at federal elections for all manner of reasons; every issue imaginable is ‘before voters’ at every election.3
2.11
Prof. Twomey raised concerns with the lack of clarity of ‘political purpose’, stating:
What if, at the time you made the expenditure, you had no realistic idea that what you were spending it on might become an issue before an election but it does later become an issue before an election? Here I will give a personal example. I've just written a book on the reserve powers. Given that the government at the moment holds a very slim majority, it's not completely inconceivable that there may be some crisis involving the exercise or possible exercise of reserve powers before the next election. My book could therefore be a public expression of views on a matter before the people at an election. I didn't know that at the time that I wrote the book, but potentially it is. How does the legislation apply to make that assessment of when likelihood is to be assessed or relevant? We just don't know from the legislation. It is so extraordinarily badly drafted that it could, frankly, apply to anything.4
2.12
Charities were concerned about the breadth of sub-clause b and its potential application more broadly to public advocacy work. The submission by the Benevolent Society is representative of these concerns.
We believe the definition of ‘political purpose’ is problematic because:
a.
it is too vague to be meaningful and enforceable. There is no metric to assess, or time frame to determine, what ‘likely to be, before electors in an election’ means. In effect, it could cover comments or views on any issue at all as there is no way to determine what is likely to become an electoral issue in the future. For instance, there may be issues that charities have advocated for in the past, that may have not been picked up by political parties. The fact that they might focus on such issues in the future may render such charities a political campaigner at such times, which would be unfair.
Furthermore, the term is so vague that almost anything that a charity says or does publicly could be captured. Acts such as preparing a submission to a public inquiry, or participating in a public hearing, or even corresponding with a Member of Parliament could be captured by the clause, meaning that many charities would then be captured by the provisions of the proposed Bill and be required to comply with its administrative imposts. Or, conversely, charities may be too worried about potential capture within the scope of the Bill that they deliberately reduce their public commentary and output in fear of falling within its purview. Neither is a desirable outcome.
b.
The use of the terms ‘political purpose’ and ‘political expenditure’ in Subsection 287 (1) of the Bill, is confusing as it conflates campaigning and advocacy undertaken by political parties for political purposes with allowable advocacy activities by charities in line with the Charities Act and the ACNC.5
2.13
The ACNC submitted that:
Under this broad definition of political purpose, it is likely that some charities would have a political purpose. Under the Charities Act, a charity can undertake advocacy and campaigning on relevant issues as a legitimate way of furthering its charitable purpose. In the lead-up to the 2016 Federal Election, the ACNC issued public guidance to assist charities in understanding their obligations under the Charities Act in relation to political campaigning and advocacy. This guidance was previously provided to the Joint Standing Committee.
These differences between the Charities Act and the amended CEA may affect a charity’s ability to undertake some forms of advocacy and may decrease the amount of advocacy work undertaken by charities that are unable to meet the proposed regulatory burden and the risk of non-compliance as set out in the new regime.6
2.14
Despite this, the Committee heard evidence from Mr Krystian Seibert, Insight and Advocacy Manager at Philanthropy Australia, that:
When looking at the list of organisations that have submitted returns, there are many organisations on that list, and I won’t name them, because I don’t want to dob them in, who I know undertake public expression of views on an issue in an election and have not submitted a return.7
2.15
The Committee also heard concerns from the ACNC many charities were not complying with their strict liability obligations under the Electoral Act. In response to a question on these concerns Dr Gary Johns stated:
I am concerned that there are a number. I can't know the number; we don't gather that information. But we do know that many charities are very active in advocacy. So, to the extent that they spend sufficient money to trigger the Electoral Act, there could be any number that come on board. I think the issue for the sector is that, for the first time, they will have to start counting the dollars; where do they come from? And, when they accumulate to a certain trigger level, they will have to register. It does have significant implications for tracking the money. Now that to me could apply to quite a number of charities.8
2.16
The Community Council for Australia also addressed concerns that charities were not compliant with the Electoral Act with Chief Executive Officer Mr David Crosbie observing:
I think the current law is clearly not adequate or not addressing what it purports to address in terms of the broad definition of political expenditure. The definition of political expenditure in this bill, which is spelt out to include any public advocacy on an issue that might become an election issue over a period of four years, means that I can't think of a single charity that I work with that wouldn't be a political campaigner.9
2.17
Mr Crosbie further noted that: ‘There are thousands of charities not complying,’ and said:
I’ve talked to World Vision in the last hour about their return. Their return does not cover all their political expenditure.10
2.18
In response to evidence provided by organisations unaware of compliance requirements Mr. Paul Pirani, Chief Legal Officer for the Australian Electoral Commission (AEC), observed:
I was a little bit disturbed when I was hearing the evidence earlier today that these organisations were saying they were unaware that they currently may have disclosure and reporting obligations under the Commonwealth Electoral Act. We've had a look at the website for the Australian Charities and Non-for-Profits Commission, and that website clearly has information available to all the 54,000 charitable organisations that are on the register that clearly links to their obligations under the Commonwealth Electoral Act.
There are two key obligations. It's not just the ones for funding and disclosure. If they're out there making public expressions of view on matters that are going to be before electors, they have disclosure obligations on their electoral advertising. Those laws apply 365 days—every day of the year—and not just during an election campaign.11
2.19
The definition provides an exemption for ‘genuine satirical, academic or artistic purposes’. Academic institutions and arts groups submitted that the exemptions are ‘too narrowly drafted’. Arts groups argued that the Bill would restrict artistic freedom. Academics argued the Bill would prevent meaningful engagement with government and Parliament.12 For example, university sector peak body, the Group of Eight submitted:
This definition is extraordinarily broad in scope, potentially capturing a range of common and legitimate activities routinely performed by universities and academics during the course of their required activities. For example, Australian higher education providers are legislative mandated, via the Higher Education Standards Framework (Threshold Standards) 2015,to have a ‘clearly articulated higher education purpose that includes a commitment to and support for free intellectual inquiry in its academic endeavours”. The pursuit of this free intellectual inquiry will inevitably involve public expression on a range of issues, including those with the potential to be before electors during an election. Examples of activities conducted for genuine academic purposes could include publication of articles or opinion pieces in journals, in mainstream media, or on websites such as The Conversation, and participation in radio interviews or public debates. Furthermore, it is inevitable that these activities will overlap with issues likely to arise during an election for the very reason that both elections and academic commentaries tend to be focused on key areas of public concern.
Academics also routinely respond to requests for information from Government or Governmental departments, many of which are released into the public domain and are therefore potentially captured by this Bill. Examples include:
The public release of consultation papers submitted to Government as part of routine consultation processes; or
Appearing before a parliamentary inquiry.
Again, any issues significant enough to have become subject to a parliamentary inquiry or departmental consultation process have a strong potential to become election issues at a later date.13
2.20
Arts organisations raised concerns that because works of art may commonly ‘express views or to communicate and inspire public debate or insight on issues of social importance’ … ‘determining where an artist’s artistic intent ends and political or social intent begins is not clear cut. Introducing a law that requires such a distinction is inappropriate.’14
2.21
In response to these concerns the AEC submitted that in order for an issue to be considered “before electors at an election”:
there must be a temporal nexus between:
1
the actual views that have been publically expressed; and
2
an issue in an ‘upcoming election’; and
3
the actual incurring of expenditure in the particular financial year.15
2.22
The AEC further submitted that the approach it has taken in interpreting s314AEB16 is as follows:
1
Section 314AEB is interpreted in a way that confines its operation to situations where the “primary or dominant purpose” of the particular expenditure is one of the categories of purposes listed in subsection 314AEB(1);
2
Incidental expenditure or expenditure for a variety of purposes of which only a minor aspect falls within one of specified purposes will not be required to be included;
3
The “expression of views” does not cover the presentation of merely factual information;
4
There is also a distinction between an “issue before electors in an election” and other “public issues”. Merely because a person raises an issue in the public domain does not result in that being an “issue before electors in an election”;
5
In the absence of an actual election being called, to determine whether or not a matter is likely to be before electors involves an assessment of how topical the issue is and the difference, if any, between the policy platforms of each party;
6
An assessment is required to ascertain the subjective public expression of the relevant issue;
7
The nearer in time the “public expression” to the possible date for the holding of an election (e.g. the three-year term of the House of Representatives under section 28 of the Constitution), the more likely that it will meet the subjective intention of placing an “issue before electors in an election.”
2.23
The AEC also gave evidence that, under the existing Act, the ‘dominant and subjective purpose of the public expression of views in this scenario would result in it not giving rise to a disclosure obligation.’

Definition of electoral expenditure

2.24
It was put to the Committee that difficulties with this section could be assisted by defining the subject matter of the expenditure.17 For example the Election Funding, Expenditure and Disclosures Act 1981 No. 78 (NSW) defines ‘electoral expenditure’ and ‘electoral communication expenditure’ as follows:
87 Meaning of “electoral expenditure” and “electoral communication expenditure”
1
For the purposes of this Act, electoral expenditure is expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election.
2
For the purposes of this Act, electoral communication expenditure is electoral expenditure of any of the following kinds:
c.
expenditure on advertisements in radio, television, the Internet, cinemas, newspapers, billboards, posters, brochures, how-to-vote cards and other election material,
d.
expenditure on the production and distribution of election material,
e.
expenditure on the Internet, telecommunications, stationery and postage,
f.
expenditure incurred in employing staff engaged in election campaigns,
g.
expenditure incurred for office accommodation for any such staff and candidates (other than for the campaign headquarters of a party or for the electorate office of an elected member),
e1. expenditure on travel and travel accommodation for candidates and staff engaged in electoral campaigning,
e2. expenditure on research associated with election campaigns (other than in-house research),
h.
such other expenditure as may be prescribed by the regulations as electoral communication expenditure,
but is not electoral expenditure of the following kinds:
(g), (h) (Repealed)
i.
expenditure incurred in raising funds for an election or in auditing campaign accounts,
j.
such other expenditure as may be prescribed by the regulations as not being electoral communication expenditure.
3
Electoral expenditure (and electoral communication expenditure) does not include:
a.
expenditure incurred substantially in respect of an election of members to a Parliament other than the NSW Parliament, or
b.
expenditure on factual advertising of:
i.
meetings to be held for the purpose of selecting persons for nomination as candidates for election, or
ii.
meetings for organisational purposes of parties, branches of parties or conferences, committees or other bodies of parties or branches of parties, or
iii.
any other matter involving predominantly the administration of parties or conferences, committees or other bodies of parties or branches of parties.
4
Electoral expenditure (and electoral communication expenditure) does not include expenditure incurred by an entity or other person (not being a registered party, elected member, group or candidate) if the expenditure is not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election.18

Committee comment

2.25
The Committee notes submitters’ concerns about the definition of ‘political purpose’ in sub-clause b.
2.26
The Committee notes that a significant degree of this concern may be based on a lack of understanding of the current provisions of the Act.
2.27
The Committee has concluded that the introduction of the definition of ‘political purpose’ should be reconsidered and the definition of ‘political expenditure’ can be tightened to reduce subjective interpretation, particularly in light of the AEC’s evidence that it will continue to take into account the intent and subjective purpose of the activity when considering whether it had ‘political purpose’.
2.28
The definition of ‘political expenditure’ needs to specify intent to:
recognise that there is a distinction between advocacy to government and political campaigning with an intent to influence voters; and
reduce the subjectivity from interpretation of activity under this section.
2.29
Under a more precise definition of ‘political expenditure’, non-partisan issue advocacy of the type commonly engaged in by many charities and not-for-profits would not be considered.
2.30
It would also clarify that educative, artistic, satirical or journalistic activities that are not intended to influence voting behaviour at an upcoming election are not captured under proposed subsection 287(1). It will also exclude academic opinions and information published and provided to parliamentary committees.
2.31
Further, the definition of ‘political expenditure’ needs to more explicitly define the type of expenditure that is undertaken to influence voting intentions. This will also assist applications for public funding under the proposed new arrangements.19
2.32
This definition should balance the need for objective rules, removing subjectivity from decision-making, with ensuring the regulatory framework can be responsive to changing campaign methodology

Recommendation 1

2.33
The Committee recommends the Government reconsider introducing the term ‘political purpose’ into the Electoral Act 1918, having regard to potential confusions with the Charities Act 2013 in which the term has a divergent meaning.

Recommendation 2

2.34
The Committee recommends that the Government consider amending the definition of ‘political expenditure’ to define the type of expenditure which constitutes expenditure undertaken to influence voters to take specific action as voters, so as not to capture non-political issue advocacy.

Political and third-party campaigners

2.35
The Bill proposes requirements to register as a political campaigner or a third party campaigner.20 Registration is triggered by political expenditure.
2.36
Registration as a political campaigner is required if a person or entity has political expenditure of:
$100,000 or more over the previous 3 financial years;
$50,000 or more during that financial year and 50% of the person or entity’s allowable amount.21
2.37
Registration as a third party campaigner is required if a person or entity is not already registered as a political campaigner and has political expenditure during the financial year of:
more than the ‘disclosure threshold’.22
2.38
Registered charities and organisations are able to receive gifts from foreign sources as long as no domestic political expenditure is made from the account in which the foreign gift has been deposited.23

Evidence received

2.39
Prof Joo-Cheong Tham supported the proposed registration scheme, for the transparency it offered to the voting public:
I broadly support this proposal. As I noted in the Sustainable Framework report, registration schemes have two purposes: they enable the regulatory authorities to more effectively administer the legislation as they identify the entities and individuals that would be subject to such laws. Secondly, by being made public, registers provide information to the general public, in particular voters, as to who are the main participants in elections. This may lead to more informed voting decisions, a consequence that protects the integrity of representative government through more effective electoral accountability.24
2.40
GetUp has submitted financial information to the Committee in the context of another inquiry and, while opposing some measures of the Bill, also stated:
Certainly, as you've correctly outlined, we have done so in the interest of greater transparency and to show that GetUp! supports legislative changes that would bring about greater transparency across the political spectrum for all of those who are engaged to a very significant extent in engaging in federal election campaigns or trying to change the outcome within parliament. To that end, we welcome transparency measures that would apply across the board, that would apply to GetUp!, that would entail us providing the sort of financial information we've provided to this committee.25
2.41
Submitters also called for the Bill to recognise what the key differences that they believe are between political parties and third-party campaigners.26
2.42
A group of professors from the University of Sydney and the Australian National University submitted that:
it is also clear that while third party campaigners, political campaigners and associated entities must be registered, they accrue no benefits from this status. This stands in stark contrast to the situation of political parties, for whom registration is not mandatory, and brings significant benefits, including public funding of their election campaigns. This begs the question that if both parties and other political actors subject to the same (if not stricter) disclosure and registration requirement, why are political actors not correspondingly resourced? While we are not suggesting that political actors (associated entities, political campaigners, and third party campaigners) should receive public funding for their electoral expenditure, it is important to note that these groups face significant compliance costs in meeting their regulatory obligations (beyond those of political parties) and should therefore be resourced or compensated for it.27
2.43
They also submitted that:
the rationale for distinguishing between political campaigner and third party campaigner is not at all clear. The registration burdens differ in very few respects, so we would argue that if the two categories are to be kept in the legislation then more clarification is required. Consideration also needs to be given to the fact that the legislation will inevitably produce different administrative burdens and uncertainties for different political actors, according to their resources, mandate and activities.28
2.44
Concerns were also put to the Committee about the registration thresholds requiring a prospective assessment of future expenditure:
what we're currently required to do is retrospective. We have to report by 17 November as to what we did in the previous financial year, so we have the benefit of hindsight; we can look back and say, 'In the last financial year we talked about all of the things that Helen just talked about, and they did become issues in an election.' Then we know. But what this legislation requires us to do is to have a crystal ball that says: we're now talking about tax and the garment industry and other things. Once we hit $13,500 we have to register, and if we don't there is a civil penalty attached to that. We have to register, as detailed in the explanatory memorandum, in advance of hitting that level, and if we hit $100,000 there are even more serious penalties that attach. So it substantially shifts.29
2.45
A number of submitters proposed the threshold for registration be increased. Prof. Tham argued that there is a conceptual error with a reliance on the ‘disclosure threshold’ as a regulatory threshold. He further argued that a $100,000 threshold is more consistent with the Minister’s statements on ‘significant political expenditure’. He noted that raising the threshold would not ameliorate existing obligations under the Act regarding authorisation requirements for electoral advertising.30
2.46
Prof. Tham also argued that the threshold for political campaigners is set too low given the regulatory burden the Bill imposes. He stated:
Given that varying organisational character of ‘political campaigners’ and that they are to regulated in a similar way to political parties, the level of their expenditure should be comparable to established political parties with parliamentary representation.31

Committee comment

2.47
The Committee agrees with the intent of the Bill to improve transparency by registration of political campaigners, actors and organisations seeking to influence voters. This recognises the influence of these organisations in elections and modern campaigning.
2.48
The Committee notes concerns of some submitters doubting the case to differentiate between a political campaigner and a third-party campaigner.
2.49
In line with the principle of introducing greater simplicity into the Act, the Committee is proposing that, instead of the proposed ‘campaigner’ registration categories, a single general transparency register be established for all entities expending more than the disclosure threshold on activities undertaken to change voter intention as defined under an amended definition of ‘political purpose’.
2.50
The Committee is of the view that a single register will place less compliance burden on entities wanting to engage in democratic campaigning. A benefit of registration will be of greater support in understanding and meeting reporting obligations. It will also offer benefits to voters by providing a consolidated list of entities involved in political campaigning.
2.51
The categories of ‘third-party campaigners’ and ‘political campaigners’ should be retained to set the thresholds at which increased reporting obligations are imposed.
2.52
All entities undertaking political activities (excluding political parties which are separately regulated) may register but mandatory registration and reporting obligations are only triggered when expenditure exceeds the disclosure threshold (currently $13,500, indexed).
2.53
The registration process for the transparency register should be simple, preferably online, requiring no more than the registered organisation/business name and the public officer’s name and contact details.
2.54
Both the AEC and the ACNC should provide organisations with information on compliance obligations under the Electoral Act when they expend or plan to expend an amount more than the disclosure threshold.
2.55
Although the current disclosure threshold will be a trigger for registration, it is the Committee’s view that, given its common usage, the term ‘disclosure threshold’ should not be used as a defining term for registration schemes under the Electoral Act or the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2017, and a different term, such as ‘expenditure threshold’ should be used in its place.

Recommendation 3

2.56
The Committee recommends that instead of the categories of ‘third party campaigner’ and ‘political campaigner’ being established as registration thresholds, the Government consider establishing a publically available ‘Transparency Register’ be established that provides:
voluntary registration for all entities engaged in ‘political expenditure’;
mandatory registration for all entities engaged in activities that require disclosure of ‘political expenditure’ that reach a minimum ‘expenditure threshold’; and
disclosure obligations that are commensurate with levels of expenditure.
The registration process for the Transparency Register should be simple and provide access to additional support for registrants to fulfil their reporting obligations.
2.57
The Committee notes concerns about the registration threshold for third party campaigners being too low. However, the Act presently requires third party returns for expenditure at this level and, as such, it does not agree with these concerns.32
2.58
The Committee further notes that campaigners such as GetUp expressed support for the transparency this measure would insert into the system.
2.59
However, in proposing a general ‘transparency register’, there will need to be an associated establishment of expenditure thresholds that will trigger increased reporting obligations. These should take into consideration expenditure by existing political campaigners and be set at a level that could reasonably be considered to have a significant impact on voter behaviour.
2.60
Reporting obligations should be proportionate to expenditure levels, so those third-party campaigners with lower expenditure levels, including one-off campaigns, are not subject to the same obligations as political campaigners with significant expenditure and greater influence on electoral outcomes.

Recommendation 4

2.61
The Committee recommends that the Government consider setting expenditure thresholds for triggering increased reporting obligations under the proposed Transparency Register be set at a level that could reasonably be expected to have a significant impact on voter behaviour and that these obligations be proportionate to levels of expenditure.

Registration of political parties

2.62
Information regarding all registered and deregistered political parties is publically available through the AEC. The establishment of the proposed ‘Transparency Register’ will provide a level playing field between all political actors by making similar information available to voters.
2.63
However, in the interests of transparency, and ensuring that the list of registered parties accurately reflects those parties actively contesting an election, the Committee considers it reasonable that, prior to each election, all political parties be required to reaffirm their registration or be subject to automatic deregistration.
2.64
Given that Australia does not have fixed federal election dates, the Committee considers that this process should take place in the six months prior to the earliest possible date for a half-Senate election.

Recommendation 5

2.65
The Committee recommends that the Government consider establishing a process that requires, prior to each election, all political parties to reaffirm their registration or be subject to automatic deregistration.

Associated entities

2.66
The Act currently contains a requirement to register as an ‘associated entity’ of an entity if it:
is controlled by one or more political parties;
operates wholly or significantly to the benefit of one or more political parties;
is a financial member or has voting rights in a political party.33
2.67
Associated entities have specific financial disclosure obligations. The regime is intended to ensure that political parties are not able to hide donations through proxy organisations that are, for all real purposes, de-facto extensions of a political party.
2.68
The Bill proposes an extension of the definition of ‘associated entity’. Under the Bill, an entity is taken to operate wholly, or to a significant extent, for the benefit of registered political parties if:
the entity, or an officer acting in his or her actual or apparent authority, has stated (in any form and whether publically or privately) that the entity is to operate:
to the benefit of one or more registered political parties or a candidate;
to the detriment of one or more registered political parties or a candidate in a way that benefits a registered political party;
the entity’s expenditure during a financial year is wholly or predominately political expenditure to:
promote one or more registered political parties and/or policies or a candidate;
oppose one or more registered political parties and/or policies or a candidate in a way that benefits one or more other registered political parties.34
2.69
The Explanatory Memorandum outlines the conditions in which proposed s287(5) should be interpreted, namely that it:
applies to statements by the entity, or an officer of the entity acting in his or her actual or apparent authority. What constitutes a statement for the purposes of this paragraph should be broadly interpreted. Statements may include oral, visual, graphic, written, digital electronic and pictorial communications, and could be communicated in a public, professional or private setting. Statements by officers not authorised by the entity to determine the desired outcome of its operations would not cause the entity to be required to register as an associated entity.35
2.70
Penalties apply for a failure to register. There is no means to appeal a determination of ‘association’ by either the concerned entity or a political party. Given that registration can be determined on non-public information there may be scope for malicious registration.

Evidence received

2.71
Two concerns were raised about the proposed expansion of the definition of an associated entity:
the broad nature of the definition could create political relationships contrary to the will of the entity or the will of the political party;
the uncertain, and potentially subjective, interpretation of ‘intent’.
2.72
Many submitters argued that the broadened definition of ‘associated entity’ would associate entities with parties that they have no relationship with and in fact may be opposed to politically. Prof. Twomey submitted:
Under the definition of an associated entity, an entity can be an associated entity of a party even if it has no relationship with that party, other than the fact that it opposes some of the opponents of those parties – s 287H. This could lead to peculiar outcomes. For example, an anti-fracking body which campaigns against any candidate that supports fracking, may be regarded as being an ‘associated entity’ of candidates that oppose fracking, and thus their registered political parties, even though in other electorates it opposes candidates from the same parties, who may take a different position on fracking. Similarly, a group that supported an Australian republic could target and oppose in an election those candidates who oppose Australia becoming a republic, even though they may come from quite different registered political parties. It might well be that some entities would have to be registered as ‘associated entities’ of all major political parties simultaneously. If this is not intended, some consideration may need to be given to redrafting the definitions.36
2.73
Australian Lawyers for Human Rights submitted:
The concept of an associated entity is misconceived and far too broad. It does not take into account the complexities of political discourse, nor the nature of the diverse and non-linear ways in which public speech operates. The expression of a particular viewpoint in common with a candidate or registered political party is taken as indicating political alignment in all respects, which may well not be the case.37
2.74
GetUp was stronger in its criticism of the proposed provisions stating:
The revised definition would lead to fairly ludicrous results. For example, if this Bill applied to GetUp’s campaign activities in the 2016 Federal Election in the electorate of Mayo alone, it would potentially make GetUp an associated entity of the Nick Xenophon Team, the Labor Party, Family First, the Greens and the Liberal Democrats. And if applied to GetUp’s campaign for a diverted profits tax to combat corporate tax cheating, for example, it would also potentially make GetUp an associated entity of the Liberal Party.38
2.75
Prof. Luke Beck questioned whether the provision would result in any transparency increases:
The principal difference is that the Australian Electoral Commission register would note that an entity is associated with a particular political party. I am not sure that, for example, GetUp! being listed as associated with the Labor Party or the Business Council of Australia being listed as associated with the Liberal Party contributes anything to disclosure and transparency. Everyone already knows that GetUp! is a progressive organisation and that the Business Council of Australia is a conservative organisation.39
2.76
Some submissions also noted that an association may be inferred without an intent to benefit. Philanthropy Australia noted:
These provisions cast a wide net and make many presumptions about intent, purpose, benefit and impact that will be extremely difficult for charities and philanthropic organisations to interpret and navigate.
Charities may have policy positions which align with some of the policy positions of one or more political parties, or with none. Under the proposed expansion of the definition of associated entity, charities and potentially philanthropic organisations which support their advocacy activities may be deemed to be associated entities.40

Committee comment

2.77
The Committee notes concerns regarding the proposed expanded requirement to register as an ‘associated entity’ and the range of groups it will capture.
2.78
The broad nature of the proposed provision including statements made by officials in a public or private capacity also raises a number of regulatory concerns including how the AEC would be able to verify statements made in private. There is also potential for malicious registration under the provision that could act to the detriment of all political actors.
2.79
The Committee considers that the recommended establishment of a ‘Transparency Register’ will insert a high degree of transparency into the electoral system and assist entities that are currently not complying with the Electoral Act. A registration requirement would also alert the AEC to any entities that should be, but are not, registered under existing associated entity provisions.41 Therefore, the Committee considers that there would be no benefit in extending the ‘associated entity’ definition.

Recommendation 6

2.80
The Committee recommends that the Government reconsider the definition of ‘associated entity’ proposed in the Bill, and instead consider retaining the definition of ‘associated entity’ currently in the Electoral Act.

Obligations under the Electoral Act

2.81
As noted in Chapter 1, the Committee is concerned about evidence put to it about charities being unaware of their obligations under the Electoral Act.
2.82
Australian charities are regulated under the Charities Act 2013 which is overseen by the ACNC. This Act defines the charitable purposes under which charities are to operate and sets out grounds for disqualification from charitable status. Under the Charities Act,
disqualifying purpose means:
a.
the purpose of engaging in, or promoting, activities that are unlawful or contrary to public policy; or
Example: Public policy includes the rule of law, the constitutional system of government of the Commonwealth, the safety of the general public and national security.
Note: Activities are not contrary to public policy merely because they are contrary to government policy.
b.
the purpose of promoting or opposing a political party or a candidate for political office.
Example: Paragraph (b) does not apply to the purpose of distributing information, or advancing debate, about the policies of political parties or candidates for political office (such as by assessing, critiquing, comparing or ranking those policies).
Note: The purpose of promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State, a Territory or another country may be charitable purpose (see paragraph (1) of the definition of charitable purpose in subsection 12(1).’42
2.83
The ACNC provides more detailed advice on its website on the interpretation of this Act as it relates to elections, advocacy and campaigning. The ACNC’s website advises, among other things, that:
a charity can campaign if it is satisfied that:
what it is doing is advancing its charitable purpose
its governing document (e.g. its constitution or rules) does not prevent the activity
it does not have a purpose of advancing a particular political party or candidate or campaigning against a particular party or candidate
it does not have a purpose of engaging in or promoting activities that are unlawful, and
it does not have a purpose of engaging in or promoting activities that are contrary to public policy (i.e., the rule of law, our constitutional system, the safety of the public or national security).’43
2.84
The Committee heard evidence that there is a lack of awareness among charities of their legislative obligations, which are strict liability, under the Electoral Act concerning their campaign expenditure. Further, the Committee notes that the ACNC takes a broad interpretation of ‘disqualifying purpose’ under the Charities Act which is out-of-step with AEC interpretation of the Electoral Act.
2.85
The Committee notes that the High Court has found that ‘by raising issues and engaging in debate in the public sphere, charities make a substantial contribution to the democratic processes on which our constitutional system of government depends.’ A number of submissions raised concerns that the Bill was contradictory to this ruling.44
2.86
The tightening of the ‘political expenditure’ definition as recommended above, should provide surety to the charities sector that their general advocacy work – provided that it does not aim to influence voter intentions – will not be impacted by the Bill.

Recommendation 7

2.87
The Committee recommends that the Government consider introducing administrative action to support consistent compliance with the provisions of the Electoral Act, as amended, by third party entities.

  • 1
    Law Council of Australia, Submission 46, p. 8.
  • 2
    Prof. Joo-Cheong Tham, Submission 12, p. 19.
  • 3
    Institute of Public Affairs, Submission 137, p. 13.
  • 4
    Prof. Anne Twomey, Private Capacity, Committee Hansard, 16 February 2018, Canberra, p. 2.
  • 5
    The Benevolent Society, Submission 136, pp. 5-6.
  • 6
    ACNC, Submission 31, pp. 3-4.
  • 7
    Mr Krystian Seibert, Insight and Advocacy Manager, Philanthropy Australia, Committee Hansard, 31 January 2018, Canberra, p. 25. Evidence given to the 2016 Election inquiry.
  • 8
    Dr Gary John, ACNC Commissioner, Committee Hansard, 16 February 2018, Canberra, p. 27.
  • 9
    Mr David Crosbie, CEO, the Community Council for Australia, Committee Hansard, 31 January 2018, Canberra, p. 51. Evidence given to the 2016 Election inquiry.
  • 10
    Mr David Crosbie, CEO, the Community Council for Australia, Committee Hansard, 31 January 2018, Canberra, p. 55. Evidence given to the 2016 Election inquiry.
  • 11
    Mr Paul Pirani, Chief Legal Officer, AEC, Committee Hansard, 31 January 2018, Canberra, p. 2.
  • 12
    Australian Lawyers for Human Rights, Submission 65, p. 5.
  • 13
    Group of Eight Australia, Submission 7, pp. [4-5].
  • 14
    Australian Major Performing Arts Group, Submission 128, p. 3.
  • 15
    AEC, Submission 147.2, p. 3.
  • 16
    Annual returns relating to political expenditure.
  • 17
    Prof. Joo-Cheong Tham, Submission 12, p. 19.
  • 18
    Election Funding, Expenditure and Disclosures Act 1981 No. 78 (NSW), s. 87.
  • 19
    Discussed in Chapter 3.
  • 20
    Proposed s287F-G.
  • 21
    Any amount received by the person or entity, or to which they have access, during the financial year except gifts from non-allowable donors and loans.
  • 22
    New definition. Currently $13,500, indexed.
  • 23
    Proposed s302F.
  • 24
    Prof. Joo-Cheong Tham, Submission 12, pp. 16-17.
  • 25
    Paul Oosting, National Director, GetUp, Committee Hansard, 31 January 2018, Canberra, p. 36. Evidence given to the 2016 Election inquiry.
  • 26
    See for example, Australian Council for International Development, Submission 123; Human Rights Law Council, Submission 142; Synod of Victoria and Tasmania, Uniting Church, Submission 130.
  • 27
    Associate Prof. Anika Guaja, Prof. Darren Halpin, Prof. Ariadne Vromen, Submission 11, p. 5.
  • 28
    Associate Prof. Anika Guaja, Prof. Darren Halpin, Prof. Ariadne Vromen, Submission 11, p. 5.
  • 29
    Dr Nicole Bieske, Humanitarian Advocacy Lead, Oxfam Australia, Committee Hansard,
    1 February 2018, p. 20. Evidence given to the 2016 Election inquiry.
  • 30
    Prof. Joo-Cheong Tham, Submission 12, p. 16.
  • 31
    Prof. Joo-Cheong Tham, Submission 12, p. 18.
  • 32
    s314AEB.
  • 33
    s287(1)(a-f).
  • 34
    Proposed s287H(5) (a-b).
  • 35
    Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017, Explanatory Memorandum, p. 20.
  • 36
    Prof. Anne Twomey, Submission 3, p. 8.
  • 37
    Australian Lawyers for Human Rights, Submission 65, p. 2.
  • 38
    GetUp, Submission 129, p. 7.
  • 39
    Prof. Luke Beck, Submission 80, pp. 3-4.
  • 40
    Philanthropy Australia, Submission 139, p. 8.
  • 41
    s287(1).
  • 42
    Charities Act 2013, s. 11.
  • 43
    ACNC, April 2016, ‘Charities, elections and advocacy’. Available at: <acnc.gov.au/ACNC/Reg/Charities_elections_and_advocacy_.aspx>, accessed 27 March 2018.
  • 44
    Law Council of Australia, Submission 46, p. 6. See also for example, Uniting Church, Synod of Victoria and Tasmania, Submission 130; Anglicare Australia, Submission 33.

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