2017-2018

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

THE ELECTORAL LEGISLATION AMENDMENT (ELECTORAL FUNDING AND DISCLOSURE REFORM) BILL 2017

 EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Finance, Senator the Hon Mathias Cormann)

Contents

 GENERAL OUTLINE

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

NOTES ON CLAUSES

Schedule 1 – Electoral funding and disclosure reform

Chapter 1: Interpretation and definitions

Definitions

Other general interpretational provisions

Simplified outline

Objects

Requirement to register

The registration process

Administration of the Registers

Application and transitional

Chapter 3: Agents and financial controllers

Simplified outline

Appointing an agent

Nominating a financial controller

Requirements for, and process of, appointment or nomination

Chapter 4: Public election funding

Simplified Outline

Election funding entitlements

Claims for election funding

Payment of election funding

Miscellaneous

Chapter 5: Foreign donation restrictions

Simplified outline

Interpretation

Object

Key political actors

Third party campaigners and certain political campaigners

Foreign property restriction and anonymous donations limit

Exceptions and ancillary provisions

Chapter 6: Disclosure

Simplified outline

Interpretation

Disclosure of gifts

Anonymous gifts and loans

Repayment of gifts in cases of insolvency

Disclosure of electoral expenditure

Annual returns

Miscellaneous

Referendum (Machinery Provisions) Act 1984

Division 2 – Application and transitional provisions

 

GENERAL OUTLINE

Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017

1.  The integrity, real and perceived, of Australia’s electoral system is critical to our system of government. However, Australia’s regulatory approach to political finance has not kept pace with international and domestic developments.
2.  Election campaigning has radically changed through the professionalisation of politics and the proliferation of media advertising. New political actors neither endorse candidates nor seek to form government, yet actively seek to influence the outcome of elections. While a positive indicator of the strength of Australian civil society and civic engagement, these new actors lack the public accountabilities of more traditional actors, such as registered political parties or parliamentarians.
3.  Internationally, media reports increasingly document foreign attempts to influence elections around the world. This is problematic, because the real and perceived integrity and fairness of elections is critical to peaceful democratic government.
4.  The Joint Standing Committee on Electoral Matters (JSCEM) considered this issue in its Second interim report on the inquiry into the conduct of the 2016 federal election: Foreign Donation s (the second interim report). The JSCEM made the following recommendations:
5. a) donation reform should be aligned with Australia’s sovereign interests;
6. b) donation reform should be transparent, clear, consistent and enforceable;
7. c) donations from foreign citizens and foreign entities to political parties and their associated entities and third parties should be banned;
8. d) an extension of the foreign ban to prevent ‘channelling’ should be considered as part of JSCEM’s broader inquiry into donations and disclosure; and
9. e) penalties for non-compliance should be increased.
10.  Public confidence in Australia’s political processes can be enhanced by increasing the accountability and transparency of those involved in political finance, particularly in relation to election campaigns. The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 (the Bill) builds on the Electoral and Other Legislation Amendment Act 2017 to improve the consistency of regulation applying to the financed election campaigns of key political actors. The Bill will also reduce perceived and actual foreign influence on Australian political actors by restricting the ability of foreign money to finance domestic election campaigns, and reduce opportunities for election funding to be used for private gain.
11.  In summary, the Bill:
12. a) establishes public registers for key non-party political actors;
13. b) enhances the current financial disclosure scheme in the Commonwealth Electoral Act 1918 (the Electoral Act) by requiring non-financial particulars, such as senior staff and discretionary government benefits, to be reported;
14. c) prohibits donations from foreign governments and state-owned enterprises being used to finance public debate;
15. d) requires wholly political actors to verify that donations over $250 come from:
16.            an organisation incorporated in Australia, or with its head office or principal place of activity in Australia;  or
17.            an Australian citizen or Commonwealth elector;
18. e) prohibits other regulated political actors from using donations from foreign sources to fund reportable political expenditure;
19. f) limits public election funding to demonstrated electoral spending;
20. g) modernises the enforcement and compliance regime for political finance regulation; and
21. h) enables the Electoral Commissioner to prescribe certain matters by legislative instrument.

Financial impact statement

7.  Implementation costs are estimated to be $70 million over the forward estimates.

Statement of compatibility with human rights

8.  A Statement of Compatibility with Human Rights has been completed in relation to the amendments in this Bill and assesses that the amendments are compatible with Australia’s human rights obligations.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

2.  The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 (the Bill) amends the funding and disclosure provisions of the Commonwealth Electoral Act 1918 (the Electoral Act).  The Bill introduces new measures to improve transparency and accountability in relation to political donations.
3.  The Bill contains provisions that will:
4. a) establish public registers for key non-party political actors;
5. b) enhance the Electoral Act’s current financial disclosure scheme by requiring non-financial particulars, such as senior staff and discretionary government benefits, to be reported;
6. c) prohibit donations from foreign governments and state-owned enterprises being used to finance public debate;
7. d) require wholly political actors to verify that donations over $250 come from:
8.            an organisation incorporated in Australia, or with its head office or principal place of activity in Australia;  or
9.            an Australian citizen or Commonwealth elector;
10. e) prohibit other regulated political actors from using donations from foreign sources to fund reportable political expenditure;
11. f) limit public election funding to demonstrated electoral spending;
12. g) modernise the enforcement and compliance regime for political finance regulation; and
13. h) enable the Electoral Commissioner to prescribe certain matters by legislative instrument.

Human rights implications

4.  The Bill engages the following rights as provided for in the International Covenant on Civil and Political Rights (ICCPR):
5. a) the right of citizens to take part in public affairs and elections, as contained in article 25;
6. b) the right to freedom of opinion and expression, as contained in article 19;
7. c) the prohibition on interference with privacy and attacks on reputation, as contained in article 17; and
8. d) the right to freedom of association with others, as contained in article 22.
9.  The Bill’s requirements, addressed in turn in the below sections, are objective, legitimate and proportional because they:
10. a) are provided for by law;
11. b) serve a genuine public interest by protecting:
12.            the free, fair and informed voting essential to Australia’s system of representative government;
13.            national security; and
14. c) apply to an objectively defined group of entities who freely choose to play a prominent role in political debate, or provide financial or administrative support to those who do.

Registration of key non-party political actors

6.  Registration of key non-party political actors promotes the rights of citizens to participate meaningfully in elections by assisting them to understand the source of political communication. These key non-party actors are already required to identify themselves in political communications with the public under the Electoral and Other Legislation Amendment Act 2017 (Authorisation Amendment Act) .Registration will complement the Authorisation Amendment Act’s transparency reforms by:
7. a) allowing voters to distinguish between political opinions popular because of their merits, and those that are common in public debate because their promoters incurred significant political expenditure;
8. b) allowing voters to form a view on the effect that political expenditure is having on the promotion of a particular political opinion, as opposed to opinions that are being debated without financial backing; and
9. c) discouraging corruption and activities that may pose a threat to national security.
10.  Internationally, it is relatively common for liberal democracies to require those with significant electoral expenditure to publically register with the electoral management body prior to committing significant campaign funds. Registration facilitates a compliance approach based on education rather than enforcement, allowing electoral laws governing the campaign period to be implemented in the least rights-restrictive way possible.
11.  Registration of key non-party political actors also engages the right to privacy, as it may require personal information to be published. Registration, however, is required only in a limited regulatory context, and only those with a direct involvement with elections will be required to register. The Bill allows the Electoral Commissioner to determine, by legislative instrument, additional information to be published on the registers. However, this legislative instrument is subject to mandatory prior consultation with the Privacy Commissioner.

Reporting of non-financial particulars

9.  The Bill requires limited non-financial particulars to be disclosed in addition to the financial information currently disclosed. These non-financial particulars are details of:
10. a) senior staff of candidates and Senate groups on ballots; and
11. b) discretionary government benefits, such as payments and grants, received in the past 12 months.
12.  Making this information publicly available engages the right to privacy of the candidates and their senior staff. However, these limitations are justifiable on the basis that they promote transparency of the electoral system, with the corresponding public benefits outlined in paragraph 6.
13.  It is important to remember that the individuals whose privacy is impacted freely choose to play a prominent role in public debate and put themselves, or those they represent, forward for public office. It is therefore appropriate, objective, legitimate and proportional that the public has access to this information.

Foreign donations restrictions

12.  Genuine freedom to vote at elections requires freedom from undue influence or interference. Foreign-sourced political funds amount to undue influence in a domestic public political debate, particularly in the context of an election. Therefore, it is appropriate to require political donors to have a meaningful connection to Australia, and to make it unlawful to knowingly retain or use foreign donations to finance political expenditure in Australia.
13.  The offences are necessary for protecting public order. Public order encompasses the rules which ensure the peaceful and effective functioning of society, or the set of fundamental principles on which society is founded. Accepting foreign donations creates a conflict of interest, or the perception thereof, among key figures in electoral debate and campaigning and can therefore undermine democracy. Elections serve not only to select the winner but also to convince the unsuccessful candidates and their supporters that they lost fairly. Therefore, perceptions of fairness, integrity and accuracy are as important as the reality for elections to result in peaceful transitions of power in democracies. As Kofi Annan stated in Deepening Democracy (2012) ‘legitimacy is the crucial currency of government in our democratic age… victory without legitimacy is no victory at all.’
14.  The right to take part in public affairs by donating to key political actors must be balanced against the need for transparency and accountability in the political system and the overarching importance of public confidence in, and the integrity of, political institutions and the democratic system. It is also worth noting that, as this measure targets those without strong links to Australia, very few people within Australia’s jurisdiction will be impacted by the foreign donations restrictions.

Limitation of public election funding

15.  This measure does not engage human rights.

Changes to the compliance and enforcement regime

16.  The Bill decriminalises many existing offences in Part XX of the Electoral Act. The new civil penalty provisions do not constitute criminal penalties for the purposes of human rights law as they are not classified as criminal under Australian law and are restricted to people in a specific regulatory context.
17.  In these circumstances the relevant provisions are not unreasonable within the meaning of article 25 and therefore do not offend the right to take part in public affairs. The relevant provisions do not subject political actors to arbitrary or unlawful interference with their privacy, and therefore do not offend the prohibition on interference with privacy.

Conclusion

18.  The Bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

NOTES ON CLAUSES

Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017

 

Glossary

1                     The following abbreviations and acronyms are used throughout this explanatory memorandum:

Abbreviation	Definition
AEC	Australian Electoral Commission
Authorisation Amendment Act	Electoral and Other Legislation Amendment Act 2017
Criminal Code	Criminal Code Act 1995
Electoral Act	Commonwealth Electoral Act 1918
registered charity or organisation	Organisations registered under the Australian Charities and Not-for-Profits Commission Act 2012 or the Fair Work (Registered Organisations) Act 2009 .
the Act	Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2017
the Registers	The Register of Political Campaigners, the Register of Third Party Campaigners, and the Register of Associated Entities. Note this does not include the Register of Political Parties.
Regulatory Powers Act	Regulatory Powers (Standard Provisions) Act 2014

 

Clause 1 – Short title

2                      This clause provides that the short title of the Bill, when enacted, will be Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2017 (the Act).

Clause 2 – Commencement

3                      This clause sets out the commencement provisions for the Act, in accordance with the table in subclause 2(1) (the commencement table).

4                      Item 1 of the commencement table provides that sections 1 to 3 of the Act and anything in this Act not covered elsewhere by this table commence the day the Act receives the Royal Assent.

5                      Item 2 of the commencement table provides that Schedule 1, Part 1 of the Act commences on the earlier of two alterative dates; the first 1 July that occurs on or after the day on which this Act receives the Royal Assent, or 28 days after this Act receives the Royal Assent.

6                      Item 3 of the commencement table provides that Schedule 1, Part 2 of the Act commences on the first 1 July that occurs on or after the day on which this Act receives the Royal Assent.

7                      A note is included under the commencement table to clarify that it relates only to the provisions of the Act as originally enacted, and will not be amended to deal with later amendments of the Act.

8                      Subclause 2(2) provides that any information in column 3 of the commencement table is not part of the Act.  Information may be inserted in column 3, or information in it may be edited, in any published version of the Act.

Clause 3 – Schedules

9                      Clause 3 is an enabling provision which provides that legislation specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule, and any other item in a Schedule to this Act has effect according to its terms. Notably, these terms include application and transition provisions in Division 2 of Parts 1 and 2 of Schedule

Schedule 1 – Electoral funding and disclosure reform

Chapter 1: Interpretation and definitions

Division 1 – Amendments

Commonwealth Electoral Act 1918

Part 1 – Registration of political campaigners, third party campaigners and associated entities:

Item 1 – Subsection 4(1)

Item 2 – Subsection 287(1)

Item 3 – Subsection 287(1) (definition of associated entity )

Item 4 – Subsection 287(1)

Item 5 – Subsection 287(1) (definition of gift )

Item 6 – Subsection 287(1) (at the end of the definition of gift )

Item 7 – Subsection 287(1)

Item 8 – At the end of section 287

Item 9 – After section 287

Item 10 – At the end of Division 1 of Part XX

Note:   Items 11-13 are dealt with in the Chapter 2: the Registers.                

Part 2 – Other Amendments:

Item 14 – Subsection 17A(1)

Item 15 – Before section 287

Item 16 – Subsection 287(1)

Item 17 – Subsection 287(1) (definition of financial controller )

Item 18 – Subsection 287(1) (paragraphs (a), (b) and (c) of the definition of financial controller )

Definitions

10                  These items insert defined terms into subsection 4(1) and section 287 to assist with interpretation of new provisions. Consolidating defined terms with other definitions for general application will assist readers and make Part XX more navigable.

Allowable amount            

11                  Item 2 provides that allowable amount , of a person or entity for a financial year, means any amount received during the financial year, or to which they have access. Entity is defined in subsection 287(1) to mean a body (whether incorporated or not), or the trustee of a trust.

12                  The concept of allowable amount is intended to act as a proxy for the quantum of an entity’s domestic revenue and savings. Accordingly, gifts received from non-allowable, foreign donors are excluded from the definition, as are loans (lines of credit) to which the entity has access. Loans are excluded from the definition as an anti-avoidance mechanism, preventing a situation where foreign donations are used to finance debt instruments in order to avoid the Bill’s foreign donations restrictions.

13                  Item 8 inserts new subsection 287(9) which provides that, in working out a person or entity’s allowable amount for a financial year, a gift is taken to have been made by an allowable donor to the person or entity during the financial year if all of the following apply:

•  the gift was made to the person or entity during the financial year by a donor who is not an allowable donor (subparagraph (a)(i));
•  the person or entity obtained appropriate donor information in accordance with section @302P establishing that the donor was an allowable donor (subparagraph (a)(ii));
•  the person did not, at any time during the period of six weeks after receiving the gift, know, or have reasonable grounds to believe, that the donor was not an allowable donor (subparagraph (a)(iii)); and
•  the amount or value of the gift is less than $250 (paragraph (b)).

—           As an anti-avoidance measure, all gifts from the same donor to the same recipient in a financial year are aggregated for the purposes of the $250 threshold. The $250 test is intended to operate as a materiality threshold so that small donations can continue to be made anonymously.

14                  This provision allows recipients to assume that a gift was from an allowable donor for the purposes of working out their allowable amount during the six-week grace period afforded under the concept of allowable action in relation to restrictions on foreign donations.

Allowable donor

15                  Item 9 provides that allowable donor has the meaning given by section 287AA of the Electoral Act. Item 9 inserts the new section 287AA after section 287 of the Electoral Act, providing in subsection (1) that:

•  an individual is an allowable donor if they are:

—           an elector or Australian citizen;

—           unless the Minister has otherwise determined, Australian permanent residents;

•  an incorporated association, including an incorporated trust, is an allowable donor if they are incorporated in Australia; and
•  an unincorporated association is an allowable donor if it has its head office or principal place of activity in Australia. Head office is defined in subsection 287(1);
•  for unincorporated trusts, or an unincorporated foundation, out of which a gift is made, the person or entity is an allowable donor .

16                  New paragraph (d) of the definition of allowable donor allows the regulations to prescribe additional classes of persons or entities that are allowable donors. Entity retains its current definition in Part XX’s dictionary, that is, an incorporated or unincorporated body, or the trustee of a trust.

17                  However, new subsections (2) and (3) interact with the list of allowable donors in subsection (1). New subsection (2) provides the Minister with the power to determine, by disallowable legislative instrument, that Australian permanent residents are not allowable donors.

18                  New subsection (3) provides foreign political entities are never allowable donors by excluding the following persons and entities from the definition of allowable donor, whether or not they meet the criteria in subsection (1):

•  a body politic of a foreign country, such as a country’s central government;
•  a body politic of a part of a foreign country, such as a local or provincial government;
•  a part of a body politic mentioned above, such as a political party in a foreign country or in a local government;
•  a foreign public enterprise, defined later in Part XX’s dictionary to have the same meaning as in section 70.1 of the Criminal Code.

Associated entity

19                  Item 3 inserts the defined term associated entity into Part XX’s dictionary, to mean an entity that is registered as an associated entity under new section @287L. A note alerts readers to new section @287H, which sets out the circumstances in which a person or entity must register as an associated entity.

Australian resident

20                  Item 4 inserts the defined term Australian resident into Part XX’s dictionary to mean a permanent resident of Australia. Permanent residents hold permanent visas under the Migration Act 1958 .

Civil penalty order

21                  Item 1 inserts the defined term civil penalty order into subsection 4(1), providing that the term has the meaning given by subsection 82(4) of the Regulatory Powers Act each time it appears in the Electoral Act.

Credit card

22                  Item 4 moves the defined term credit card from its current location in section 306A of the Electoral Act into Part XX’s interpretation section. This amendment reflects that the term credit card is used by the Bill more broadly than in section 306A, and does not change the meaning of credit card outside of Part XX.

Disclosure threshold

23                  Item 4 inserts the defined term disclosure threshold into subsection 287(1) of the Electoral Act, to mean $13,500. A note is included to explain this amount is indexed under section 321A of the Electoral Act.

Electoral expenditure

24                  Item 16 inserts the defined term electoral expenditure into Part XX’s interpretation section, providing that the term has the meaning given in subsection 308(1). This amendment is designed to assist the reader by consolidating the defined terms in Part XX into a single section at the beginnings of Part XX. This does not change the meaning of electoral expenditure.

Financial controller

25                  Items 17 and 18 amend the definition of financial controller to reflect that persons who do not meet Part XX’s definition of an entity may have a financial controller. A person must meet this definition to be nominated as a financial controller under new section 292F.

Foreign public enterprise

26                  Item 4 inserts the defined term foreign public enterprise into subsection 287(1) of the Electoral Act, to have the same meaning given by section 70.1 of the Criminal Code. This term is used in relation to the definition of allowable donor .

Gift

27                  Item 5 expands the definition of gift to include bequests.

28                  Item 6 amends the definition of gift in Part XX’s dictionary to exclude any visit, experience or activity provided for the purposes of a political exchange program. These exchange programs, for example, the programs administered by the Australian Political Exchange Council, are similar to student exchange programs and aim to develop Australia’s future generations of political leaders.

Head office

29                 Item 7 inserts the defined term head office into Part XX’s dictionary to mean the place of business where central management and control of the entity are exercised. Head office is used in the definition of allowable donor in section 287AA, and is most relevant to unincorporated associations, as the place of incorporation is intended to determine whether an incorporated association is an allowable donor.  Central management and control is the control and direction of an entity’s operations. The key element is the making of high-level decisions that set the entity’s mission, general policies, and determine the direction of its operations and the type of activities in which it will engage.

30                 Merely because a person has the power to appoint those who control and direct an entity’s operations, does not by itself mean the person controls and directs the entity’s operations and activities.

Loan

31                 Item 7 moves the definition of loan from existing section 306A to Part XX’s dictionary. A loan continues to mean any of the following financial arrangements:

•  an advance of money;
•  a provision of credit or any other form of financial accommodation;
•  a payment of an amount for, on account of, on behalf of or at the request of, a beneficiary, if there is an express or implied obligation to repay the amount; or
•  a transaction (whatever its terms or form) which in substance effects a loan of money.

32                  Loans made on non-commercial terms, for example, at a non-market interest rate, are not simply loans for the purposes of the Electoral Act. Instead, the interest foregone on non-commercial loans is a gift , and the borrowed money is a loan. Similarly, only money can be loaned. Borrowed equipment or real-estate is not a loan where the beneficiary does not pay the owner for its use (that is, the equipment or real-estate is not rented), it is a gift .

33                  A note underneath the definition of loan alerts readers to new subsection 287(10), which has been moved from existing subsection 306A(7). New subsection (10) treats each transaction on a credit card as a separate loan for the purposes of Part XX.

Political campaigner

34                  Item 7 inserts the defined term political campaigner into Part XX’s dictionary, to mean a person or entity that is registered as a political campaigner under new section @287L. Note 1 alerts readers to new subsection 287(8), which clarifies that a political campaigner that has branches is to be treated as a single political campaigner, and new section @287C (political campaigners and third party campaigners that are not incorporated). Note 2 alerts readers to new section @287F, which sets out the circumstances in which a person or entity must register as a political campaigner.

Political entity

35                  Item 7 inserts the defined term political entity into Part XX’s dictionary, to mean a person who is any of the following:

•  a registered political party;
•  a State branch of a registered political party;
•  a candidate in an election (including a by-election); or
•  a member of a group.

Political expenditure

36                  Item 7 inserts the defined term political expenditure into Part XX’s dictionary, to mean expenditure incurred for one or more political purposes. A note is included under the definition of political expenditure pointing readers to new section @287J. New section 287HA deems the political expenditure of those who did not comply with a registration requirement to have occurred in a later year, so that non-compliance with registration in a year does not absolve an entity of their reporting obligation.

Political purpose

37                  Item 7 inserts the defined term political purpose into Part XX’s dictionary, to include any of the following purposes:

•  the public expression by any means of views on a registered political party, a candidate in an election or a member of the House of Representatives or the Senate;
•  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);
•  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;
•  the broadcast of political matter (not being matter referred to in paragraph (c)) in relation to which particulars are required to be announced under subclause 4(2) of Schedule 2 to theBroadcasting Services Act 1992 ; or
•  the carrying out of an opinion poll, or other research, relating to an election or the voting intentions of electors.

38                  These purposes are currently contained in subsection 314AEB(1), as amended by the Authorisation Amendment Act . Similarly to the exemptions provided by the Authorisation Amendment Act, the following exemptions are provided in relation to political purposes :

•   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
•  the expression of the views, or the communication, broadcast or research, is solely for genuine satirical, academic or artistic purposes.

39                  These exemptions are intended to ensure that the press, academia, artists and entertainers are not required to register as a political actor by virtue of carrying on their core business. In order to meet these exemptions, the person incurring the expenditure must not do so in order to affect voting in an election. The news media exemption requires that the sole or predominant purpose must be the reporting of news, or presentation of current affairs and editorial content. The satire, academic and artistic exemption is narrower, requiring that the sole purpose must be those activities. In the event that there are multiple purposes, then the communication cannot be solely for genuine satirical, academic or artistic purposes.

40                  Defendants will bear an evidentiary burden of proof if they wish to rely on exemptions. This is appropriate, as the intent of persons engaging in these activities as part of their business is particularly within the knowledge of the defendant. It would be significantly more difficult and costly for the prosecution, or applicant in a civil case, to prove the defendant intended to influence the election results than for the defendant to establish the expenditure was incurred as part of normal business activity.

Registers of associated entities, political campaigners and third party campaigners

41                  Item 7 inserts the defined terms Register of Associated Entities , Register of Political Campaigners and Register of Third Party Campaigners into Part XX’s dictionary, to mean the Registers of those name established and maintained under section @287N.

Senior Staff

42                  Item 7 inserts the defined term senior staff into Part XX’s dictionary, to mean a person or entity’s directors, or if the person or entity does not have directors, any person who makes or participates in making decisions that affect the whole or a substantial part of the operations of the person or entity. For example, subject to the way decisions are made within a candidate’s campaign, their senior staff might be the campaign’s communications director, and/or its financial controller.

Third party campaigner

43                  Item 7 inserts the defined term third party campaigner into subsection 287(1) of the Electoral Act, to mean an entity that is registered as a third party campaigner under section @287L. Item 8 inserts new paragraph 287(8), to clarify that a third party campaigner that has branches is, for the purposes of Part XX, to be treated as a single third party campaigner. Note 1 refers readers to section @287C (political campaigners and third party campaigners that are not incorporated). Note 2 refers readers to section @287G for those circumstances in which a person or entity is required to be registered as a third party campaigner.

 

Other general interpretational provisions

Simplified outline of Part XX

44                  Item 15 inserts new section 286A, which provides a simplified outline of Part XX. This simplified outline is designed to give readers an overview of, and introduce important concepts in, Part XX of the Electoral Act.

Application to entities that are not incorporated

45                  Item 10 inserts the new section 287C at the end of Division 1 of Part XX of the Electoral Act. This section clarifies the application of the Electoral Act and Regulatory Powers Act to political campaigners and third party campaigners that are legal persons. New section 287C provides that campaigner’s expenditure can be attributed to entities that are not legal persons and that the financial controller of an entity that is not a legal person will be held responsible for any contraventions of Part XX. For this attribution to occur, the expenditure must be incurred by or with the authority of any member, agent, or officer (however described) of the entity who, acting in his or her actual or apparent authority, incurred the expense.

Annual reports by the Electoral Commissioner

46                  Item 14 updates the references to offences in existing subsection 17A(1) to reflect the new civil penalty provisions introduced by this Bill. This has the effect that the Electoral Commissioner can include information in his or her annual report relating to the new civil penalty provisions, as well as the existing offences under the Electoral Act.

 

Chapter 2: The Registers

 

Item 11 – After Division 1 of Part XX

47                  Item 11 inserts new Division 1A (Registration of political campaigners, third party campaigners and associated entities) after Division 1 of Part XX of the Electoral Act.

Simplified outline

Subdivision A – Simplified outline of this Division

48                  New section @287D provides a simplified outline of new registration requirements, designed to give readers an overview of, and introduce important concepts in, new Division 1A.

Objects

49                 New section @287E specifies that the objects of the new registration requirements are,  by providing for the registration of more key participants in election campaigns, to support the transparency of:

•  the foreign donations restrictions established by new Division 3A of Part XX;
•  the financial disclosure scheme under Part XX; and
•  requirements relating to the authorisation of electoral matter under Part XXA, as amended by the Authorisation Amendment Act.

Requirement to register

Subdivision B – Requirement to register as a political campaigner, third party campaigner or associated entity

@287F  Requirement to register as a political campaigner

50                  Except for political entities and sitting Commonwealth parliamentarians, new section @287F requires a person or entity to be registered for a financial year as a political campaigner if they fall into one of the two categories provided.

51                  Paragraph (1)(a) requires a person or entity to register as a political campaigner if their political expenditure during the current, or in any of the previous three, financial years was $100,000 or more. Paragraph (1)(b) requires an entity to register as a political campaigner if:

•   their political expenditure in the current financial year is $50,000 or more, and
•  their political expenditure during the previous financial year was at least 50 per cent of their allowable amount (as defined in new subsection 287(1)).

52                  A note alerts readers that political expenditure may be deemed to be incurred in a later financial year under section @287J.

53                  Subsection (3) provides that, subject to the 28 day grace period set out in subsection (2), incurring further political expenditure without being registered is subject to a maximum civil penalty of 240 penalty units. A note is included to remind the reader that, under section @287C, the financial controller of the entity may contravene this subsection if the entity is not legal person.

54                  Subsection (4) provides that each day that a person or entity is required to register as a political campaigner and has not, including the day of registration, is a separate contravention of subsection (3). This provision is designed to have a similar effect to section 93 of the Regulatory Powers Act (continuing contraventions), and means the maximum applicable penalty is 240 penalty units for each day they are in breach of subsection (3).

 

Example 1 :

 

Joseph’s political expenditure in 2016-17 was $40,000 and his allowable amount was $60,000. This was the first year in which he incurred political expenditure.

 

Joseph plans to spend $10,000 per month in political expenditure in 2017-18. Joseph must register as a political campaigner for 2017-18 before he incurs $50,000. According to his expectation of his spending pattern, this will occur in mid-November 2017.

 

Given the 28 day grace period for registration in subsection 287F(2), Joseph will need to register as a political campaigner no later than 28 days after this time, which is likely to be in mid-December 2017.

Example 2 :

 

Joseph’s deadline for registration as a political campaigner was 14 December 2017. He misses this deadline, applying for registration on 25 January 2018. He is registered on 30 January 2018.

 

Joseph contravened section 287F for 47 days, and so may be subject to a maximum civil penalty of 11, 280 penalty units (47 days x 240 penalty units, approximately $2.4 million).

@287G  Requirement to register as a third party campaigner

55                  Except for political entities and sitting Commonwealth parliamentarians, new section @287G requires a person or entity to be registered as a third party campaigner if their political expenditure for a financial year is more than the disclosure threshold. However, the registers of third party and political campaigners are mutually exclusive. This means that if the entity is, or is required to be registered, as a political campaigner, it is not necessary to also register as a third party. A note is included to remind readers that, under @287J, not registering in a financial year when required to do so may trigger registration obligations in the next financial year.

56                 Subsection (3) provides that, subject to the 28 day grace period set out in subsection (2), a person or entity that is required to be registered as a third party campaigner must not incur further political expenditure until they are registered as a third party campaigner. A note is included to remind the reader that, under section @287C, the financial controller of the entity may contravene this subsection if the entity is not legal person. The civil penalty for contravention of subsection (2) is 120 penalty units. Similarly to section @287F, subsection (4) indicates subsection (2) is to be treated in a similar manner as continuing contraventions.

@287H  Requirement to register as an associated entity

57                  Except for political parties and their State branches, new section @287H requires entities to be registered as an associated entity for a financial year if any of the following apply:

•  the entity is controlled by one or more registered political parties;
•  the entity operates wholly, or to a significant extent, for the benefit of one or more registered political parties;
•  the entity is a financial member of a registered political party;
•  another person is a financial member of a registered political party on behalf of the entity;
•  the entity has voting rights in a registered political party;
•  another person has voting rights in a registered political party on behalf of the entity.

58                  These criteria replicate the existing definition of associated entity in subsection 287(1) of the Electoral Act. Paragraph (b) of the definition is clarified by new subsection (5), which sets out circumstances in which an entity is deemed to operate wholly, or to a significant extent, for the benefit of one or more registered political parties. These circumstances include where the entity, or an officer of the entity acting in his or her actual or apparent authority, has stated that the entity is to operate:

•  for the benefit of one or more registered political parties or an endorsed candidate; or
•  to the detriment of one or more registered political parties or endorsed candidates in a way that benefits one or more political parties.

Statements about an entity’s operations that meet @287H(5)(a)

59                  Paragraph (5)(a) 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. For example:

Example 1 :

Jane is the chief executive officer of a privately-run business that sells humorous t-shirts. In election years, the business sells many shirts making fun of well-known endorsed candidates and political parties. Jane is recorded stating in an employee meeting that, even though some of the business’ t-shirts make fun of the Garment Party, the business’ real mission is to insidiously support the Garment Party, a registered political party.

 

The t-shirt business is an associated entity of the Garment Party because:

–  Jane has the authority to state the purpose of the business’ operations; and

–  Jane has stated the purpose of those operations is to benefit a registered political party.

Example 2 :

Max volunteers with a charity. One of Max’s activities as a volunteer is to door-knock during an election period to raise awareness of the charity’s position on an election issue. Max tells several people he visits as part of his door-knocking that his charity’s strategy is to ensure no candidates from the Garment Party are elected.

 

The charity is not an associated entity because of Max’s statements because:

–  Max does not have the authority to state the purpose of the charity’s operations; and

– even if Max did have this authority, there is no evidence that the opposition to the Garment Party would benefit one or more political parties (i.e. it may not be possible to determine to whom the charity would be associated).

60                  In addition to circumstances involving statements, paragraph (5)(b) provides that an entity will be deemed to operate wholly, or to a significant extent, for the benefit of one or more registered political parties where the entity’s total expenditure wholly or predominantly consists of political expenditure, and that political expenditure is used wholly or predominantly:

•  to promote one or more registered political parties, or the policies of one or more registered political parties; or
•  to oppose one or more registered political parties, or the policies of one or more registered political parties, in a way that benefits one or more registered political parties; or
•  to promote an endorsed candidate; or
•  to oppose an endorsed candidate, in a way that benefits one or more registered political parties.

Association can be inferred from negative campaign techniques in some circumstances

61                  Where an entity operates to the detriment of, or to oppose, a candidate or registered political party, they must do so in a way that benefits one or more political parties in order to be deemed an associated entity under subsection (5). The entity is associated with the party or parties that benefited from the entity’s negative campaigning. For an entity to be associated with a registered political party because of negative campaign techniques (that is, the entity opposes a party, or operates to its detriment), intent to benefit is not required in order for an association to exist. For example, if an election is contested by a limited number of parties, and an entity operates predominantly to the detriment of a contesting party, the entity may be an associated entity of the other contesting party or parties.

Other elements of the requirement to register as an associated entity

62                  Subsection (3) provides that, subject to the 28 day grace period set out in subsection (2), incurring any political expenditure without being registered is subject to a maximum civil penalty of 240 penalty units. A note is included to remind the reader that, under section @287C, the financial controller of the entity may contravene this subsection if the entity is not legal person. Similarly to section @287F, subsection (4) indicates subsection (3) is to be treated in a similar manner as continuing contraventions.

63                  It is possible to be registered as an associated entity and either a political campaigner or a third party campaigner simultaneously. However, as previously outlined, no-one will be simultaneously registered as a political campaigner and third party campaigner.

The registratio n process

@287J  Expenditure incurred by persons and entities that are not registered when required to be so

 

64                  New section @287J is a deeming provision. It is intended to ensure that failure to register does not absolve a person or entity of its other obligations under Part XX, which are a consequence of registration. Subsection (1) provides that a person or entity is taken to have incurred an amount of political expenditure in a financial year (the current financial year) if:

•  the person or entity incurred that amount of political expenditure in a previous financial year (paragraph (a)); and
•  as a result of incurring that political expenditure, the person or entity was required to be registered as a political or third party campaigner in the previous financial year (paragraph (b)); and
•  the person or entity was not so registered:

—           in the previous financial year (subparagraph (c)(i)); or

—           if the person or entity was required to be registered as a political or third party campaigner and the 28-day grace period ended after the end of the previous financial year—by the end of the grace period (subparagraph (c)(ii)).

65                  Subsection (2) provides that subsection (1) ceases to apply at the end of the financial year in which they register, so that entities that cease to meet the applicable registration criteria do not continue to trigger this deeming provision.

 

@287K  Application for registration

 

66                  New section @287K allows a person or entity to apply to the Electoral Commissioner to be registered as a political campaigner, a third party campaigner, or an associated entity.

67                  Subsection (2) requires that the application must:

•  be in the form approved by the Electoral Commissioner;
•  identify the entity or person’s financial controller; and
•  for applications for registration as an associated entity, identify any associations with registered political parties.

@287L  Determining an application for registration

68                  New section @287L requires the Electoral Commissioner to register an entity within a reasonable period of time if certain conditions are satisfied. Generally, if the application complies with subsection (2) and does not trigger subsection (4), the Electoral Commissioner must register an entity within a reasonable period.

69                  To ensure a person or entity does not appear simultaneously on the third party and political campaigner registers, if the Electoral Commissioner registers a person or entity on one of these registers when it is already registered on the other register, subsection (3) requires the Electoral Commissioner to deregister the person or entity from the first register.

70                  However, if a person or entity has applied to be registered as a third party campaigner, and the Electoral Commissioner knows the applicant is a political campaigner, paragraph (1)(b) provides that the Electoral Commissioner is not required to register the applicant as a third party campaigner. To avoid doubt, subsection (2) clarifies that paragraph (1)(b) does not limit the Electoral Commissioner’s discretion to register an applicant in accordance with its application.

Example :

The Electoral Commissioner receives an application for registration as a third party campaigner from an entity currently on the Register of Political Campaigners. The applicant submitted a return in relation to the previous financial year detailing political expenditure in excess of $2 million.

 

The Electoral Commissioner is not required to register the applicant as a third party campaigner, because the Electoral Commissioner knows, based on the annual return provided by the applicant in relation to the previous financial year, that the applicant continues to meet the criteria for registration as a political campaigner.

 

However, if the Electoral Commissioner does register the applicant as a third party campaigner, the Electoral Commissioner must remove the applicant from the Register of Political Campaigners at that time.

71                  New subsection (2) also clarifies that voluntary or early registration is possible; an entity does not have to be required to be registered under one of new sections @287F to @287H in order to register.

Example 1 :

Josh is planning on raising at least $150,000 to spend on his best friend’s election campaign. He’s not sure if he will actually raise this money, or how much of it he will spend in this year versus the next financial year, so he applies to be registered as a political campaigner with the AEC just in case.

 

Example 2 :

A group of university students decide to door-knock on an issue they learn about in class. They do not, or plan to, incur any political expenditure. However, they wish to, and can, register as a third party campaigner so there is a public record of their activity.

Refusing registration

72                  The Electoral Commissioner must refuse to register an applicant under new subsection (4) in certain, specified circumstances. If the Electoral Commissioner would be required to refuse the registration if it was made in relation to a registered political party, the Electoral Commissioner cannot register the entity as a political campaigner, associated entity, or third party campaigner. This provision is intended to protect the object of transparency, as confusing registrant names would run counter to the objects of this Division.

73                  An exception to this rule applies in relation to registrant names longer than six words. This is given effect by the reference to subsection 129(1)(a), which operates in relation to a registrant’s name longer than six words. This requirement applies to registration of registered political party names, and is necessary for practical reasons related to ballot printing. As the length of name is not impractical for the new Registers, this is not included as grounds for the Electoral Commissioner to refuse registration under new section @287K.

74                  New subsection (5) allows for applications under this Division to be varied in the same way as applications for registration as a registered political party (see section 131 of the Electoral Act).

75                  New subsection (6) provides that decisions regarding registration are reviewable by the Administrative Appeals Tribunal under section 141 of the Electoral Act.

@287M  Applications for deregistration

76                  New section @287M provides that a registrant may apply to the Electoral Commissioner to be deregistered. If the application is in an approved form, the Electoral Commissioner must deregister the person or entity as a political campaigner, third party campaigner or an associated entity.

Administration of the Registers

Subdivision C—Register of Political Campaigners, Register of Third Party Campaigners and Register of Associated Entities

@287N  Register of Political Campaigners, Register of Third Party Campaigners and Register of Associated Entities

77                  New section @287N requires the Electoral Commissioner to establish and maintain a Register of Political Campaigners, a Register of Third Party Campaigners and a Register of Associated Entities.

78                  New subsections (2),(3) and (4) set out the content of the registers. The registers will contain:

•  the name of each registrant (paragraphs (a));
•  the name of the registrants’ financial controllers (paragraphs (b));
•  details of any links between the Registers, for example, where an entity appears on both the associated entity register and the political campaigner register (paragraphs (c)); and
•  any other information determined by the Electoral Commissioner under subsection (6) (subsection (5)).

79                  New subsections (5) and (6) allow the Electoral Commissioner to prescribe, by legislative instrument, additional information to be included in the Registers. However, in order to safeguard the privacy of individual’s personal information, given that the Registers are published, subsection (7) requires the Electoral Commissioner to consult the Information Commissioner in relation to any matters that relate to his/her privacy functions prior to making any such instrument. For example, if the Electoral Commissioner wished to publish the addresses of the financial controllers on the Registers, he/she would need to first consult the Information Commissioner. The Information Commissioner’s privacy functions are set out in section 9 of the Australian Information Commissioner Act 2010 , and relate primarily to the privacy of an individual.

@287P  Obligation to notify Electoral Commissioner of changes to information on register

80                  New section @287P requires registered entities to notify the Electoral Commissioner within 28 days if any of their information on the Registers ceases to be correct or complete. Failure to notify is subject to a civil penalty of 60 penalty units per day. For example, if an entity’s financial controller changed, the entity must notify the Electoral Commissioner of the change within 28 days of the old financial controller ceasing their duties.

@287Q  Registers to be made public etc.

81                  New section @287Q allows the Registers to be maintained electronically, and requires the Registers to be made publicly available. The publication requirement is expected to be met by publishing the Registers on the AEC’s website and mobile applications, allowing the public easy access to the most up-to-date information.

@287R  Entry in Registers prima facie evidence of information

82                  Subsection @287R provides that an entry in the Register of Political Campaigners, the Register of Third Party Campaigners or the Register of Associated Entities is prima facie evidence of the information contained in the entry. This is similar to other provisions in the Electoral Act, such as current subsection 391(2), and assists with efficient administration.

Item 12 – Section 314AA (definition of amount )

83                  Item 12 amends the definition of amount specific to Division 5A to exclude bequests as a consequential amendment of item 5 (see Chapter 1, definition of gift ).

Application and transitional

Division 2 – Application and transitional provisions

Item 13 – Application and transitional provisions

84                  Except where otherwise specified in the item, item 13, subsections (1) and (2) provide that the amendments to the Electoral Act made by this Part apply on and after the commencement of this item. These provisions interact with the commencement table in item 2 to allow the registers to be established prior to the commencement of the requirement to register. This ‘soft start’ will assist in implementation.

85                  Subsection (3) provides that, if Part 1 commences before Schedule 1 to the Authorisation Amendment Act, paragraph (c) of the definition of political purpose in subsection 287(1) of the Electoral Act, as inserted by this Part, applies until that commencement as if that paragraph referred instead to “the printing, production, publication or distribution of any material (not being material referred to in subparagraph (i) or (ii)) that is required under section 328, 328A or 328B to include a name, address or place of business”. This allows for the possibility that relevant provisions of the Authorisation Amendment Act will commence after this Bill.

 

Chapter 3: Agents and financial controllers

Part 2 – Other Amendments

Note: Items 14-18 are dealt with in Chapter 1: Interpretation and Definitions

Item 19 – Division 2 of Part XX (heading)

Item 20 – Before section 288

Simplified outline

Subdivision A – Simplified outline of this Division

86                  Item 19 expands the title of Division 2 to reflect that financial controllers are covered by this Division. Item 20 provides for new section @287V, which provides a simplified outline of this Division, designed to give readers an overview of, and introduce important concepts in, this Division.

Appointing an agent

Item 21 – Section 288A to 290

Subdivision B – Appointment of agents

Existing section 288A  Principal agents

87                  Item 21 repeals section 288A, which set out the appointment of agents for the Australian Democrats. This provision has ceased to have any practical effect as the Australian Democrats are no longer a registered political party.

Section 289  Appointment of agents by candidates and groups

88                  Item 21 replaces the existing provisions governing the appointment of agents for candidates and groups with new section 289. New section 289 requires these entities to have agents. This does not impact candidate’s ability to act as their own agent, or alter the current deeming rules. These deeming rules provide that where:

•  a candidate does not appoint an agent, they are taken to be their own agent (subsection (2));
•  a Senate group for which a single registered political party has endorsed all the listed candidates does not appoint an agent, the agent of the party’s Senate group is taken to be the agent of the State branch of the party (paragraph (4)(a)); and
•  a Senate group has unendorsed or multiple endorsing political parties, the candidate whose name is to appear first on the ballot is taken to be the agent of the group (paragraph (4)(b)).

—           If the person whose name appears first on the ballot dies, the next highest candidate in the Senate group is taken to be the agent.

89                  The deeming provisions for candidates and Senate groups operate in parallel. This means that candidates in Senate groups will have an agent for the purposes of their candidature, and an agent for their Senate group. A note is included under new subsection 289(1) to alert readers to this. The agent of a Senate candidate and their Senate group may be the same person. Persons who become agents by virtue of the deeming provisions in subsections (2) and (4) do not need to provide a notice, signed form of consent, or declaration under section 292F.

Existing section 290  Requisites for appointment

90                  Item 21 repeals existing section 290. Item 26 moves key elements of this existing provision into new Subdivision D.

Item 22 – Paragraphs 292(2)(b) and (3)(b)

91                  This item updates the references to the requisites for appointment in section 292 to reflect the amendment made by items 21 and 26.

Item 23 – Section 292B(a)

92                  This item adds new Division 3A to the list of divisions under which an agent bears an obligation, in order to clarify what happens when that office becomes vacant.

Item 24 – Subsection 292(4)

93                  This item updates references to the requisites for appointment in section 292 to reflect the amendment made by items 21 and 26.

Item 25 – Section 292D

94                  This item amends section 292D to separate the requirements relating to action that must be taken following the death or resignation of an agent of a candidate or group. Agent vacancy for registered political parties is dealt with in section 292B.

95                  New subsection (1) does provides that, where a candidate or group agent dies, the candidate or a group member must, without delay, notify the Electoral Commission in writing of the death. This is the current requirement.

96                  New subsection (2) provides that, where a candidate or group agent resigns, the resigning agent must, without delay, notify the Electoral Commission in writing of their resignation.

Item 26 – At the end of Division 2 of Part XX

97                  This item inserts new Subdivisions C and D into Division 2.

Nominating a financial controller

Subdivision C – Nomination of financial controllers

Section 292E  Financial controllers of political campaigners, third party campaigners and associated entities

98                  New section 292E requires political campaigners, third party campaigners and associated entities to nominate a financial controller. If the campaigner or entity is an individual, he or she may nominate him or herself as the financial controller. If the campaigner or entity is not a legal person, an individual acting on behalf of the campaigner or entity must nominate the financial controller of the campaigner or entity. Subsection 287(1) provides that a person or entity’s financial controller is:

•  in the case of a company – the secretary of the company;
•  in the case of the trustee of a trust – the trustee; and
•  in other cases – the person responsible for maintaining the financial records of the entity.

99                  The financial controller is a matter of fact. Nominating someone to be the financial controller, when that person is not the secretary, trustee, or responsible for maintaining financial records (as relevant), does not make them the financial controller. Rather, nominating a financial controller assists entities to meet their obligations, and the AEC to effectively administer Part XX, by making the financial controller known to the AEC for education and compliance activities. In practice, it is expected that nomination of a financial controller will occur during registration, or updating of changed registration details, under new Division 1A.

Example:

Ben is the Chairperson of a political campaigner, while Humphrey is the Treasurer. As Chairperson, part of Ben’s role is to approve the electoral communications of the political campaigner, including associated expenses. As Treasurer, Humphrey’s role is to keep the group’s books up-to-date, and to advise Ben as to whether the group has sufficient funds for a proposed activity.

Humphrey is the financial controller of the political campaigner, and must be nominated as such under new subsection 289A.

If Ben was incorrectly nominated as the financial controller, Humphrey would still be responsible for meeting the obligations of a financial controller.

Requirements for, and process of, appointment or nomination

Subdivision D – Requirements for appointment or nomination

100              New section 292F expands the requisites for appointment of an agent or nomination of a financial controller. Unless a person has been deemed to be an agent or financial controller under subsection 289(2) or (4), an appointment or nomination must meet the following conditions:

•  the person appointed or nominated must:

—           be an individual who is at least 18 years old (paragraph (1)(a)). Organisations and individuals younger than 18 cannot be appointed or nominated;

—           not be someone convicted of a criminal offence under Part XX (subsection (4)), which includes persons convicted of any Part XX contravention prior to commencement, and persons convicted of a Division 3A offence after commencement;

—           have signed a form of consent and declaration of eligibility (paragraph (1)(d);

•  the Electoral Commission must be notified in writing of the nomination or appointment (paragraph (1)(b)). These notices must include the appointee/nominee’s name and full street address and suburb or locality (paragraph (1)(c)), and be given by the person with the relevant authority (paragraph (1)(b)), that is:

—           for an appointment made by a registered political party or a State branch of a registered political party, the notice must be given by the party or branch making the appointment;

—           for an appointment  made by a candidate, the candidate; and

—           for an appointment make made by a Senate group, each member of the group.

101              Persons deemed to be an agent under subsection 289(2) or (4) do not have to meet the requirements in subsection (1).

 

Note: Items 14-18 are dealt with in Chapter 1: Interpretation and Definitions

 

Chapter 4: Public election funding

 

Item 27 – Sections 294 and 297

102              This item repeals and replaces sections 294 and 297 with new subdivisions relating to the amount of public election funding to which a candidate or party is entitled, and the new claim process.

Simplified Outline

Subdivision A – Simplified outline of this Division

 

Section 292G  Simplified outline of this Division

103              New section 292G provides a simplified outline of the public election funding arrangement, designed to give readers an overview of, and introduce important concepts in, new Division 3.

Election funding entitlements

Subdivision B – Election funding

Section 293  Election funding for registered political parties 

104              New section 293 outlines the election funding payable to a registered political party. A note alerts readers that a claim must be made in order for funding to be paid.

105              Subsection (1) contains the requirements in existing section 297, as applied to registered political parties. That is, it provides that public election funding is payable in relation to a registered political party where the total number of formal first preference votes for candidates it has endorsed is at least four per cent of the overall total of formal first preference votes cast in the election (paragraph (1)(a)). Where the endorsed candidates are part of a Senate group, the four per cent threshold applies in relation to above and below the line votes cast for the all the candidates in the group, whether or not it is a joint Senate group (paragraph (1)(b)).

106              Subsection (2) provides that once a registered political party meets the threshold requirements in subsection (1), the amount of the public election funding that can be paid is the lesser of:

•  $2.70479 for each formal first preference vote received counted as at the day the determination on the claim is made (the public funding rate amount; paragraph (2)(a));

—           As indicated by the note under subsection (2), the public funding rate will continue to be indexed under section 321. The progress of indexation will not be impacted by the Bill; and

•  the amount of electoral expenditure incurred in the election period that has been claimed for all elections held on that day and accepted by the Electoral Commission under new section 298C (paragraph (2)(b)).

107              Paying according to the status of the count on the day of the determination allows those eligible to receive election funding to balance their cash flow needs against the progress of the count when deciding when to make a claim.

Joint Senate groups

108              Joint Senate group funding is payable through the participating political parties. Different claims must not include the same expenditure, although splitting an incurred cost across parties is possible if this reflects how the cost was incurred.

Example 1:

Parties A, B and C endorse candidates in a joint Senate group. The Senate group receives ten per cent of formal first preference votes cast in the election, and so is eligible for public election funding.

Parties A, B and C agreed the cost of producing and distributing the group’s how-to-vote cards would be met by Party A. Party A should include the costs of the how-to-vote cards in their claim. Parties B and C should not include these costs in their claims.

Example 2:

Parties A, B and C agreed the cost of producing and distributing the group’s how-to-vote cards would be split, with Party A paying for 60 per cent, and Parties B and C paying for 20 per cent each. Party A should include 60 per cent of the how-to-vote card costs in their claim, and Parties B and C should each include 20 per cent of the costs in their claims.

Section 294  Election funding for unendorsed candidates 

109              New section 294 outlines the election funding payable to an unendorsed candidate, who is not a member of a Senate group. Subsection (1) provides that these candidates are entitled to public election funding for all elections where the total number of formal first preference votes for the candidate is at least four per cent of the overall total of formal first preference votes cast in the election for either the House of Representatives or the Senate. A note alerts readers that a claim must be made in order for funding to be paid.

110              Subsection (2) provides that once a candidate meets the threshold requirements in subsection (1), the amount of public election funding that can be paid is the lesser of:

•  the public funding rate amount (see section 293); and
•  the amount of electoral expenditure incurred in the election period that has been claimed and accepted by the Electoral Commission under new section 298C.

Section 295  Election funding for unendorsed groups

111              New section 295 outlines the election funding payable to an unendorsed group. A note alerts readers that a claim must be made in order for funding to be paid. For this section to apply:

•  none of the group’s members can have been endorsed by a registered political party (paragraph (1)(a)); and
•  the total number of formal first preference votes for the group is at least four per cent of the overall total of formal first preference votes cast in the Senate election.

112              Subsection (2) provides that once an unendorsed group meets the threshold requirements in subsection (1), the amount of the public election funding that can be paid is the lesser of:

•  the public funding rate amount (see section 293); and
•  the amount of electoral expenditure incurred in the election period that has been claimed and accepted by the Electoral Commission under new section 298C.

Claims for election funding

Subdivision C – Claims for election funding

 

Section 297  Need for a claim

113              New section 297 requires an agent to lodge a claim with the Electoral Commission prior to payment of election funding. Subsection (2) provides that an agent may make an interim claim, a final claim, or both.  A note underneath subsection (2) points readers to subsections 298C(3) and (4), in the instance that only an interim claim is made.

114              Subsection (3) provides that a final claim for public election funding must specify all of the electoral expenditure against which the claim is to be assessed, even if some or all of it has been included in an interim claim. However, subsection (4) provides that a final claim is able to incorporate, by reference, electoral expenditure that has been included in the interim claim.

115              In order to streamline administration of public funding payments, subsection (5) provides that only one interim and one final claim can be made.

 

Section 298  Electoral expenditure incurred

116              New section 298 requires claims to specify electoral expenditure incurred for which public election funding is sought.

 

Section 298A  Form of claim

117              New section 298A requires a claim to:

•  specify whether the claim is an interim claim or final claim (paragraph (a));
•  be in the form approved by the Electoral Commissioner (paragraph (b));
•  specify the person or persons to whom the election funding is payable (paragraph (c)), and where the election funding is payable to more than one person, specify the percentages in which the election funding is payable to each person (paragraph (d)). This option to specify percentages is expected to be most relevant in the case of joint Senate groups and political parties with federated structures who wish to share funding amongst branches. It replaces existing section 299, and significantly simplifies payment arrangements and provides flexibility for future intra-party governance arrangements; and
•  provide all the information and be accompanied by any documents, required by the form.

 

Section 298B  Lodging of claim  

118              New section 298B sets out the time period during which a claim can be made, that is:

•  no earlier than 20 days after polling day; and
•  no later than six months after polling day.

119              Claims lodged outside of these time periods will not be considered by the Electoral Commission, and no election funding will be paid.

 

Section 298C  Determination of claim

120              New section 298C sets out rules relating to the Electoral Commission’s decision on claims for public election funding. New section 298H provides for application for external review of this decision by the Administrative Appeals Tribunal, as is available for reviewable decisions under section 141.

121              Subsection (1) provides that the Electoral Commission must decide whether to accept, in whole or in part, a claim for public election funding within 20 days of receiving the claim.  To the extent that the Electoral Commission accepts the claim, the amount required by sections 298D or 298E must also be paid within this time period.

122              Subsection (2) provides that, in deciding whether or not to accept the claim, the Electoral Commission must only have regard to the following matters.  These are:

•  whether expenditure claimed meets the definition of electoral expenditure, as prescribed by the Electoral Act and applicable regulations (if any);
•  where expenditure is electoral expenditure, whether:

—           the claimed electoral expenditure was actually incurred; and

—           any duplication with another claim, that is, whether the electoral expenditure has been specified in a claim made by another agent.

123              Subsections (3) and (4) provide that, where only an interim claim is lodged, the interim claim will be deemed to be the final claim and no further funding will be payable. If the interim claim was accepted in part or refused, the refused part of the claim will be deemed to be a refused final claim refused, triggering:

•  the provision of reasons for the refused part of the claim under section 298F;
•  the opportunity for the agent to apply for reconsideration of the decision under 298G and 298H.

124              The process under subsections (3) and  (4) will finalise any claim for public election funding.

125              However, if the Electoral Commission becomes satisfied that there was an overpayment and decides to vary the decision under subsection 301(1), the excess funds paid may be recovered as a debt to the Commonwealth under subsection 301(3). This decision is also subject to sections 298F, 298G and 298H.

126              If the interim claim is taken to be the final claim under subsection (3), section 141 will apply to the interim claim as if it were the final claim.

127              Subsection (5) clarifies that, where an interim claim is deemed to be a final claim under subsection (3), the public funding rate amount does not need to be recalculated to reflect the progress of the count as at the day the deeming occurs.

 

Section 298D  Payment to be made following acceptance of an interim claim

128              New section 298D provides that in relation to an interim claim, the Electoral Commission must pay 95 per cent of the public funding rate amount within 20 days of receiving the claim, as set out in sections 293 to 295, and section 298A.

Section 298E  Payment to be made following acceptance of a final claim

129              Section 298E provides that in relation to a final claim, the Electoral Commission must pay the public funding rate amount, as set out in sections 293 to 295 reduced by any amount that has been paid in accordance with section 298D. In other words, the balance of the funding will be paid at this point, provided that the amount of accepted electoral expenditure is equal to, or greater than, the entitlement.

130              If the Electoral Commission becomes satisfied that there was an overpayment based on the interim claim, that is, the final payment is a negative number once it has been reduced by the amount paid in relation to the interim claim, the Electoral Commission may rely on the variation power in new section 301 to recover the excess funds paid.

131              A note alerts readers to a claim’s ability to specify to whom the funding is paid, including the ability to specify percentages (see section 298A). If the specified person is the agent of a registered political party, another note alerts readers to section 299A.

 

Section 298F  Refusing a final claim

132              New section 298F provides that if a final claim is refused, in whole or in part, the Electoral Commission must notify the agent that the claim has been refused and provide reasons for the refusal to the agent. The intent of this provision is to ensure that only the decision on a final claim attracts review rights and facilitate the exercise of those rights through the provision of reasons for a refusal to pay an amount claimed in a final claim.

133              However, it is important to note that an interim claim will be taken to be a final claim in some instances under paragraph 298C(3)(b). If an interim claim is taken to be a final claim, refusal of the claim will be accompanied by reasons under new section 298F, and attract review rights, as if it had been lodged as a final claim.

 

Section 298G  Application for reconsideration of decision to refuse a final claim

134              New section 298G provides for the reconsideration of decisions made by the Electoral Commission on a final claim for public election funding.  Reconsideration will be undertaken by the Electoral Commission in a review process that is similar to the review of other administrative decisions made under the Electoral Act.

135              Subsection (1) provides that where a final claim has been refused, the agent (and only the agent) may apply to the Electoral Commission for reconsideration of the decision. This is not affected by someone other than the agent being specified by a claim to receive the election funding under paragraph 298A(c).

136              Subsection (2) provides that an application for a reconsideration of a decision on a final claim must be in writing and set out the reasons for the application.

137              Subsection (3) provides that an application for reconsideration must be made within 28 days of the agent being notified of the delegate’s decision, unless an extension has been granted by the Electoral Commission.

Section 298H  Reconsideration by Electoral Commission

138              New section 298H sets out how the Electoral Commission is to deal with an application for the reconsideration of a decision on a final claim.

139              Subsection (1) provides that the Electoral Commission is to reconsider the delegate’s decision that refused all or part of a final claim for public election funding and has the power to affirm, vary, or set aside and replace that decision with another decision.

140              Subsection (2) provides that the Electoral Commission is required to give the agent written reasons for its decision on the application. Subsection (3) provides that if the Electoral Commission’s decision results in any additional payment of public election funding, that payment must be made within 20 days of its decision.

141              Subsection (4) provides that the Electoral Commission is unable to delegate its power to undertake a reconsideration of a final claim for public election funding if it has received an application under subsection (1).

142              Subsection (5) provides that subsections 141(5) to (6A) apply in relation to a decision under this section in the same way as those subsections apply to a reviewable decision made by the Electoral Commission under subsections 141(2) or (4). This means that application can be made to the Administration Appeals Tribunal to review the Electoral Commission’s decision, but that the standard composition of the Tribunal is not applicable. Instead, the Tribunal is to have three members, at least one of whom must be a Judge of the Federal Court.

  Payment of election funding

Subdivision D – Payments of election funding

Item 28 – Section 299

143              This item repeals existing section 299 to reflect the new system of claims for public election funding. New section 299 provides that election funding paid to a person not entitled to receive it, in whole or in part, is recovered by the Commonwealth as a debt due to the Commonwealth by action against the person in a court of competent jurisdiction.

Item 29 – Subsections 299A(1)

Item 31 – Subsections 299A(8)

144              These items remove the references to section 299 and “or principal agent”, to reflect the repeal of existing sections 299 and 288A.

Item 30 – At the end of subsection 299A(1)

145              This item inserts a note under subsection 299A(1) to alert readers that funding will no longer be paid automatically to agents. Instead, funding will only be paid based on an accepted claim, and will be paid to the person or persons specified in paragraph 298A(c).

Item 32 – Sections 300 and 301

Miscellaneous

Subdivision E – Miscellaneous

146              Item 32 repeals sections 300 and 301, substituting new sections to reflect the new claims process. The new provisions also simplify the process for paying funds with respect to a deceased candidate and provide for varying a decision on an accepted claim.

Section 300  Death of candidates or group members

147              New section 300 sets out how payments of public election funding are to be made if a candidate dies.

148              Subsections (1) and (3) provide that a payment may be made with respect to a candidate or group, even if a candidate dies. See new paragraph 289(4)(b) for deeming arrangements in relation to the death of a deemed Senate group agent.

149              Subsection 300(2) provides that where a candidate was his or her own agent (for example because he or she was not endorsed by a registered political party and not a member of a group), the payment of public election funding may be made to the candidate’s legal personal representative. A candidate’s legal personal representative is likely to be the Executor of the deceased candidate’s estate.

 

Section 301   Varying decisions accepting claims

150              New section 301 provides the Electoral Commission with a post-payment variation power to vary the previous decision, based on, for example, the results of compliance audits and monitoring activities in relation to claims for public election funding.

151              Subsection (1) provides that the Electoral Commission is able to vary decisions previously made on final claims for public election funding.  Given the timeframes specified in the Act for making decisions and paying of public election funding, it is likely that situations will arise where the basis of claims will be questioned after payment has been made.  Accordingly, the Electoral Commission is given a specific power to be able to revisit previous decisions made under section 298C and to vary the amount of payments that had previously been approved.

152              Subsection (2) provides that where the Electoral Commission makes a decision to vary the amount of public election funding under subsection 301(1), the agent is able to make an application to have that decision reviewed.

153              Subsection (3) provides that where the decision under subsection (1) results in a decrease in the amount of the entitlement to public election funding, the amount of the previous overpayment can be recovered as a debt due to the Commonwealth.

 

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