Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.

Overview of Bill

The object of this Bill is to prohibit political donations by property developers. The
Bill provides that:

(a) it is unlawful for a person to make a political donation if the person is a
property developer or makes the donation on behalf of a property developer,
and

(b) it is unlawful for a person to accept a political donation that was made by or
on behalf of a property developer, and

(c) it is unlawful for a property developer or a person on behalf of a property
developer to solicit another person to make a political donation.

The Bill includes close associates of property developers as property developers for
the purposes of these restrictions.

The Bill includes loans as political donations (other than loans from financial
institutions).

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Election Funding and Disclosures Amendment (Property Developers Prohibition) Bill 2009
Explanatory note

Outline of provisions

Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on the date of assent
to the proposed Act.

Schedule 1 Amendment of Election Funding and
Disclosures Act 1981 No 78
Prohibition of property developer donations
Schedule 1 [1] inserts Division 4A into Part 6 of the Election Funding and
Disclosures Act 1981 (the principal Act) which prohibits property developer
donations.

Proposed Division 4A provides that:

(a) it is unlawful for a property developer or a person on behalf of a property
developer to make a political donation, and

(b) it is unlawful for a person to accept a political donation that was made (wholly
or partly) by a property developer or on behalf of a property developer, and

(c) it is unlawful for a property developer or a person on behalf of a property
developer to solicit another person to make a political donation.

Meaning of “property developer”
The Bill defines a property developer to be:

(a) a corporation engaged in a business that regularly involves the making of
relevant planning applications by or on behalf of the corporation in connection
with the residential or commercial development of land, with the ultimate
purpose of the sale or lease of the land for profit, or

(b) close associates of such a corporation.

Any activity engaged in by a corporation for the dominant purpose of providing
commercial premises at which the corporation or a related body corporate will carry
on business is to be disregarded for the purpose of determining whether the
corporation is a property developer.

A close associate of a corporation includes:

(a) directors and officers of the corporation and their spouses, and

(b) a related body corporate of the corporation (within the meaning of the
Corporations Act 2001 of the Commonwealth), and

(c) persons whose voting power in the corporation or a related body corporate is
greater than 20% and their spouses.

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Election Funding and Disclosures Amendment (Property Developers Prohibition) Bill 2009
Explanatory note
A relevant planning application has the same meaning as in section 147 (Disclosure
of political donations and gifts) of the Environmental Planning and Assessment Act
1979 (the EP&A Act) and includes:

(a) a formal request to the Minister for Planning (the Minister), a council or the
Director-General of the Department of Planning (the Director-General) to
initiate the making of an environmental planning instrument or development
control plan in relation to development on a particular site, and

(b) a formal request to the Minister or the Director-General for development on a
particular site to be made State significant development or declared a project
to which Part 3A of the EP&A Act applies, and

(c) an application for approval of a concept plan or project under Part 3A of the
EP&A Act, and

(d) an application for development consent under Part 4 of the EP&A Act.

Offences and recovery of unlawful donations
Schedule 1 [2] makes it an offence for a person to do any of the acts set out above if
the person knows that the act is unlawful. The maximum penalty will be the same as
for other offences relating to political donations, that is, 200 penalty units for a party
(currently, $22,000) and 100 penalty units in any other case (currently, $11,000).

As is the case for other political donations that are unlawful under the principal Act,
the Election Funding Authority of New South Wales (the Authority) may recover the
amount of any political donation that is unlawful under proposed Division 4A from
the person who made the donation as a debt due to the State.

Inclusion of loans as political donations
Proposed Division 4A provides that a loan is to be regarded as a political donation if
it would as a gift be a political donation. Loans from financial institutions are not
included as political donations.

Exceptions for membership contributions
Proposed Division 4A includes an exception for membership contributions that
would otherwise be considered political donations under the principal Act.

An annual or other subscription paid to a party by an individual for membership of
the party or for the individual’s affiliation with the party will not be a political
donation for the purposes of proposed Division 4A unless it is a reportable political
donation. Under the principal Act, a reportable political donation means a political
donation of $1,000 or more.

Determination by Authority that person is not a property developer
Under proposed Division 4A, a person may apply to the Authority for a
determination by the Authority that the person (or another person) is not a property
developer for the purposes of the Division. The Authority is to make its

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Election Funding and Disclosures Amendment (Property Developers Prohibition) Bill 2009
Explanatory note
determination solely on the basis of information provided by the applicant and may
make such a determination if it is satisfied that it is more likely than not that the
person is not a property developer. The Authority is to maintain a public register of
any determinations and the register is to be published on the Authority’s website. A
determination by the Authority is conclusively presumed to be correct in favour of
any person for the purposes of a political donation that the person makes or accepts
while the determination is in force (even if the determination is subsequently found
to be incorrect). The presumption does not apply in favour of a person who knew that
information provided to the Authority in connection with the making of the
determination was false or misleading in a material particular.

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 

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