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ELECTION FUNDING (AMENDMENT) BILL 1993
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
In September 1992, the Joint Select Committee upon the Process and Funding of the
Electoral System delivered its second report to Parliament. The Committee was
established as part of the Government's undertaking to reform the system of electoral
funding.
The object of this Bill is to amend the Election Funding Act 1981 to give effect to
certain recommendations made by the Joint Select Committee in its report, especially
those dealing with disclosure requirements and various other administrative matters
dealing with reform of the electoral funding system. In particular, the Bill provides for
the creation of a Political Education Fund to be administered by the Election Funding
Authority. Parties will be entitled to receive payments from the Fund for the purposes of
political education.
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides for the proposed Act to commence on a day or days to be
proclaimed.
Clause 3 gives effect to the Schedule of amendments.
SCHEDULE 1--AMENDMENTS
Definition of "gift"--Schedule 1 (1) (b)
Schedule 1 (1) (b) substitutes the definition of "gift" so that it will extend to the
provision of a service (other than volunteer labour) for no consideration or for
inadequate consideration, This will bring the definition into line with the
Commonwealth Electoral Act 19 18 and widen the scope of disclosure of political
contributions received by parties.
Recovery of advance payments--Schedule 1 (3)
Under Division 5 of Part 5 of the Act, a party is entitled to receive advance payments
for expenditure to be incurred for election campaign purposes for a general election.
Schedule 1 (3) inserts proposed section 7 1A to provide for the immediate repayment
of advance payments in certain circumstances (such as where the party ceases to operate
before the election) and to enable the Election Funding Authority to recover any such
amount as a debt.
False statements--Schedule 1 (4) and (13)
At present under sections 82 and 97, it is an offence for a person to make a false
statement in a claim for payment under Part 5 (Public funding of election campaigns) or
in a declaration lodged under Part 6 (political contributions and expenditure).
Schedule 1 (4) and (13) provide that it will also be an offence (penalty not exceeding
100 penalty units) if a person gives (or withholds giving) information to the official
agent knowing it will result in the making of a false claim or declaration.
Disclosure periods--Schedule 1 (5)
At present, parties are required to lodge a declaration of political contributions
received and electoral expenditure incurred covering a period which commences on the
day after the polling day for the previous election and ending on the polling day for the
current election. Groups and candidates have similar reporting periods.
Schedule 1 (5) substitutes sections 83, 84 and 85 to extend the disclosure period so
that it finishes 30 days after the polling day. Where relevant, the starting time of the
disclosure period is correspondingly altered. The period for lodging returns is also
correspondingly extended.
Third party disclosures--Schedule 1 (6), (7) (a), (9) (a) and (b), (11), (12) and (16)
Generally as a result of the amendments made by these items, third parties (i.e.
persons other than parties, groups or candidates) which incur expenditure for political
purposes will be required to disclose details relating to the expenditure and certain gifts
received to finance that expenditure.
Schedule 1 (6) inserts proposed section 85A to require a person who incurs electoral
expenditure of more than $1,500 to submit a return to the Authority detailing the
expenditure. The new section does not apply to parties, groups or candidates.
Schedule 1 (7) (a) and (9) (a) and (b) are consequential amendments on the proposed
new section 85A (e.g. Schedule 1 (9) (a) and (b) provides that the electoral expenditure
to be disclosed under the Act extends to a third party under the new section 85A and
also that it includes any gift made to a party, group or candidate that constitutes a
political contribution of a kind required to be disclosed under sections 83-85).
Schedule l (11) provides that a declaration under proposed section 85A relating to
expenditure does not need to be accompanied by an auditor's certificate.
Schedule 1 (12) makes it an offence (penalty not exceeding 100 penalty units) for a
person to fail to lodge a declaration if required by proposed section 85A.
Schedule 1 (16) extends existing powers of inspection under section 110 in respect
of parties, groups and candidates to apply to persons whom the Authority suspects of
not furnishing a return as required by proposed section 85A.
"Maintenance" contributions-Schedule 1 (7) (c) and (h)
Schedule 1 (7) (c) removes a provision that in effect provides that contributions to a
group or candidate need not be disclosed if they are not made for the purposes of a
current election. Retention of this provision could enable groups and candidates to
refrain from disclosing contributions made for "maintenance" or "administrative"
purposes. However, a new provision is included to make it clear that a gift need not be
disclosed if made to a candidate in a private capacity for personal use and not for use
solely or substantially for a purpose related to an election. The new provision (section
87 (2)) corresponds to section 304 (5) (b) (i) of the Commonwealth Electoral Act 1918.
Schedule 1 (7) (h) substitutes section 87 (7) to remove paragraph (c) of that section
which, in effect, currently provides that contributions need not be disclosed if made
under the condition that they not be used for electoral expenditure. It is by this provision
that parties presently need not disclose contributions made for "maintenance" or
"administrative" purposes.
Decrease of disclosure thresholds for political contributions--Schedule 1 (7) (d),
(e), (f), (g) and (10) (a)
The Act currently requires contributions to be disclosed by parties, groups or
candidates if the amount of the contribution (or the aggregate amount of 2 or more
contributions made by the same person during a 12 month period) to a party or group is
$2,500 or more, or in the case of a candidate, $500 or more. Schedule 1 (7) (d), (e) and
(g) decrease these thresholds to $1,500 (in the case of a party), to $1,000 (in the case of
groups) and to $200 (in the case of candidates). Schedule 1 (7) (f) and (10) (a) are
consequential amendments.
Reporting source of donations--Schedule 1 (8)
Schedule 1 (8) inserts proposed section 87A which will require parties, groups and
candidates to ascertain the names and addresses of persons who make gifts to them of
any amount required to be declared to the Authority ($1,500 or more for parties, $1,000
or more for groups and $200 or more for candidates). It will be unlawful to receive such
a gift if the person's name and address is not known or disclosed and the gift will be
forfeited to the State.
Fund-raising events--Schedule 1 (7) (b) and (10) (c)
Schedule 1 (7) (b) inserts a new provision (section 87 (1AA)) to provide that the net
proceeds from political fund-raising events are a gift for the purposes of that section and
will be required to be disclosed in returns in the same way as ordinary political
donations. The disclosure requirements for these net proceeds will also be subject to the
same disclosure thresholds as for ordinary political donations.
Schedule 1 (10) (c) amends section 89 to avoid the double disclosure of proceeds
from fund-raising ventures and functions.
Annual subscriptions to parties--Schedule 1 (7) (h) and (10) (b)
The substitution of section 87 (7) by Schedule 1 (7) (h) also provides that an annual
subscription of any amount paid to a party by a member does not have to be disclosed
by the party. However, Schedule 1 (10) (b) substitutes section 89 (b) to provide that a
statement of the subscription rates and the number of subscribers at each such rate have
to be disclosed, as well as the total amount of annual subscriptions paid.
Political Education Fund--Schedule 1 (1) (a), (2), (14), (15) and (17)
Schedule 1 (14) inserts proposed Part 6A (sections 97A--97K) which contains
provisions relating to the Political Education Fund. The main feature of the new Part is
that parties will be entitled to receive, following each general election, annual payments
from the Fund for the purposes of political education (such as the posting of written
materials about the party). The spending of payments from the Fund must be in
accordance with any determinations made and published by the Election Funding
Authority.
The amount that a party will be entitled to receive each year is the amount received
by multiplying the cost of an ordinary postage stamp with the number of first
preferential votes recorded at the last general election for the candidates endorsed by the
party for election to the Legislative Assembly.
A party will have to claim each year for payments from the Fund. Payments will be
made to the party's agent, who will be required to declare how previous payments were
spent. This declaration must be accompanied by an auditor's certificate. The Authority
will be able to recover from a party any unauthorised expenditure (such as spending
payments contrary to the Authority's determinations).
A new offence is created of making a statement in any claim for payments from the
Fund, or in a declaration made with a claim, that is false or misleading (penalty not
exceeding 100 penalty units).
Schedule 1 (1) (a) distinguishes the Political Education Fund from the funds
established under Part 5 (i.e. the Central Fund and Constituency Fund).
Schedule 1 (2) recognises the Authority's functions as including the responsibility of
dealing with claims for payments from the Fund.
Schedule 1 (15) provides for the appropriation of the Consolidated Fund for the
purposes of making payments to parties out of the Political Education Fund.
Schedule 1 (17) extends section 112 (Prosecution of unincorporated parties) to
enable proceedings relating to the recovery of amounts that are to be returned to the
Authority under the new Part 6A (and under the new section 71A) to be instituted
against officers of unincorporated parties.
Transitional provisions
Schedule 1 (18) inserts transitional provisions consequent on the enactment of the
proposed Act.