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2008 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA SENATE COMMONWEALTH ELECTORAL AMENDMENT (POLITICAL DONATIONS AND OTHER MEASURES) BILL 2008 SUPPLEMENTARY EXPLANATORY MEMORANDUM Amendments to be Moved on Behalf of the Government (Circulated by the authority of the Special Minister of State, the Senator the Hon John Faulkner) COMMONWEALTH ELECTORAL AMENDMENT (POLITICAL DONATIONS AND OTHER MEASURES) BILL 2008 OUTLINE The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 (the Bill) amends the funding and disclosure provisions of the Commonwealth Electoral Act 1918 (the Electoral Act). The Government amendments are partly in response to the inquiry by the Joint Standing Committee on Electoral Matters (JSCEM) into the Bill. Following JSCEM's inquiry, on 23 October 2008 the Advisory report on the Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2008 (the Advisory Report) was presented to the House of Representatives. JSCEM made eight recommendations in the Advisory Report, two of which called for changes to the Bill. In addition to amendments that go to addressing the two JSCEM recommendations, the amendments also propose a number of minor and technical amendments to the Bill. The majority of these amendments arise because the Bill as introduced was to commence on 1 July 2008. The amendments will: . change the commencement date of the Bill from 1 July 2008 to 1 July 2009; . add, with specified restrictions, three additional categories of electoral expenditure to the categories proposed in subsection 287(1) of the Bill. These additional categories are the rental of premises, the hire of additional staff and the purchase and maintenance of office equipment; . prevent sitting members of Parliament from claiming electoral expenditure if allowances, entitlements or benefits received by a member of Parliament in his or her capacity as a member are used to meet that expenditure; . exempt unendorsed candidates and Senate groups from reporting against the three new categories of electoral expenditure; . provide for the option for related registered political parties to make a single claim for public funding covering the electoral expenditure of the federal branch or division and one or more State branches or divisions; . allow for anonymous gifts of no more than $50 to be received in specific circumstances, including that particular records are kept; . provide for details of the receipt of anonymous gifts to be disclosed; . provide for a new offence of knowingly making a false or misleading record of the details required to be kept in relation to the receipt of permitted anonymous gifts. The proposed penalty for breaching this offence is imprisonment for 12 months or 120 penalty units, or both; and . provide for a mechanism to update the rate at which public funding payments are made. FINANCIAL IMPACT STATEMENT As with the Bill, it is difficult to quantify the exact magnitude of any additional costs to the Australian Electoral Commission or the affect that these amendments will have upon Government expenditure or revenue. NOTES ON AMENDMENTS Amendment 1 - Clause 2, page 2 (table item 2) (Commencement date) 1. This amendment will change the commencement of Schedule 1 to the Bill from 1 July 2008 to 1 July 2009. Amendment 2 - Schedule 1, item 5, page 3 (line 25) to page 4 (line 18) (Definition of electoral expenditure) 2. Amendment 2 will make two changes to the definition of 'electoral expenditure' set out at Item 5 of Schedule 1 to the Bill. First, this amendment will expand the categories of electoral expenditure relating to an election that may be the subject of a claim for election funding. This amendment is the response to the second recommendation in JSCEM's Advisory Report that the categories of electoral expenditure set out in the Bill be expanded to include 'reasonable costs incurred for the rental of dedicated campaign premises, the hiring and payment of dedicated campaign staff, and office administration'. 3. To encourage transparency and to maintain the nexus between public funding and legitimate campaign expenses, limitations are imposed on these new categories of electoral expenditure. This is because unlike 'How to Vote Cards', for example, these new categories of electoral expenditure may be used for many more purposes than conducting an election campaign. 4. The first limitation is that each additional category is restricted to expenditure incurred during the election period. Subsection 287(1) of the Electoral Act defines the 'election period' as the period commencing on the day of the issue of the writ for the election and ending at 6pm on polling day. In this way the relationship between election campaigning and the new categories of electoral expenditure is made clearer. 5. For the rental of dedicated campaign premises, the premises are limited to any house, building or premises used for the primary purpose of conducting an election campaign. The rent of premises that were, for example, leased before the issue of a writ could come within the definition of electoral expenditure if the premises were leased for that primary purpose. Only the rent that was incurred during the election period may be claimed. 6. The hiring and payment of dedicated campaign staff will be limited to those additional staff employed or contracted for the primary purpose of conducting an election campaign. Staff employed under the Members of Parliament (Staff) Act 1984 cannot be the subject of a claim for electoral expenditure. 7. General office administration will be limited to the purchase, lease, hire or hire purchase of office equipment for the primary purpose of conducting an election campaign. The costs of running and maintaining the equipment may also be claimed as electoral expenditure. To provide some level of administrative certainty and to prevent an endless variety of equipment being claimed, 'office equipment' is defined to include telephones, faxes, computers, personal digital assistants, personal organisers, photocopiers and printers and other equipment that can be used for the purposes of communication. 8. The second change that Amendment 2 will make to the Bill is to introduce provisions to clarify that if allowances, entitlements or benefits received by a member of Parliament in his or her capacity as a member are used to meet electoral expenditure, then that electoral expenditure cannot be claimed. Allowances relating to remuneration are not covered by this provision so that a sitting member may use what could be thought of as his or her 'salary' to contribute to election campaigns. 9. This 'double dipping' provision is necessary due to the introduction of a public funding scheme that pays the lesser of funding under the 4% rule or the claimed electoral expenditure. As sitting members of Parliament may be able to meet some electoral expenditure by way of allowances, entitlements or benefits paid by the Commonwealth in some circumstances, it is not appropriate that this electoral expenditure is claimed for public funding purposes. While clarifying that electoral expenditure incurred using these allowances and benefits may not be claimed for public funding purposes, the amendment does not affect the legitimate use of these allowances, entitlements and benefits. Amendment 3 - Schedule 1, page 4 (after line 22), after item 7 (Definition of 'general public activity') 10. This Amendment inserts into subsection 287(1) of the Electoral Act a reference to 'general public activity'. This subsection defines many of the terms used in Part XX of the Electoral Act. The concept of 'general public activity' is used to distinguish one of two situations when a permitted anonymous gift may be received. The definition refers to subsection 306AEA(3) which is discussed under Amendment 23. Amendment 4 - Schedule 1, page 4 (after line 29), after item 8 (Definition of 'office equipment', 'permitted anonymous gift', 'private event' and 'single claim') 11. This Amendment defines 'office equipment' for the purposes of one of the additional categories of electoral expenditure that may be claimed. Office equipment is discussed under Amendment 2. 12. Amendment 4 also inserts into subsection 287(1) of the Electoral Act references to 'permitted anonymous gift' and 'private event'. A 'permitted anonymous gift' is an anonymous gift that is received in the circumstances set out in section 306AEA and is discussed under Amendment 23. The concept of 'private event' is used to distinguish one of two situations when a permitted anonymous gift may be received. The definition refers to subsection 306AEA(6) which is discussed under Amendment 23. 13. A definition of 'single claim' is also inserted into subsection 287(1) by this Amendment. A definition of 'single claim' is required as a number of Amendments will introduce into the Bill another means of making a claim for electoral expenditure. A single claim may cover the electoral expenditure of the federal branch of the registered political party and one or more related State branches of the registered political party. In this way, the electoral expenditure of the federal branch may be included in a claim for electoral expenditure even though it might not have endorsed any candidates. Amendment 5 - Schedule 1, item 16, page 6 (line 21) (Claims for election funding) 14. Amendment 5 makes a consequential amendment to section 293 of the Bill to allow for the new option of making a single claim for electoral expenditure. Amendment 6 - Schedule 1, item 16, page 6 (line 24) (Rate of election funding) Amendment 7 - Schedule 1, item 16, page 6 (line 27) (Rate of election funding) 15. Amendment 6 and 7 insert into the Bill the rate at which public funding is paid per formal first preference vote given to a candidate or group. The rate that is inserted into the Bill is the rate that is correct for the period 1 January 2009 to 30 June 2009. As this rate is indexed by section 321 of the Electoral Act every six months using the All Groups Consumer Price Index for the previous quarter's index number, it is not possible to insert into the Bill the correct rate for the six months commencing on 1 July 2009. This is because that figure would be calculated using the March 2009 index which is not published until late April 2009. To ensure that the rate is correct from 1 July 2009, Amendments 35, 36 and 46 work to update the rate so that it is current on 1 July 2009. Amendment 8 - Schedule 1, item 16, page 6 (after line 38) (Single claims for election funding) 16. This Amendment inserts a new subsection 293(3) into the Bill to provide for the entitlement to election funding for related registered political parties making a single claim. Modelled on subsection 293(2) in the Bill, the entitlement to election funding for registered political parties making a single claim is the lesser of the dollar amount for each formal first preference vote given to a candidate endorsed by any of the parties and the amount of electoral expenditure claimed in respect of the parties covered by the claim. 17. A note to the Amendment draws attention to the operation of section 296 of the Bill which provides for how formal first preference group votes are divided between two or more registered political parties that have endorsed candidates who are members of a Senate group. Amendment 9 - Schedule 1, item 16, page 7 (line 13) (Rate of election funding) Amendment 10 - Schedule 1, item 16, page 7 (line 29) (Rate of election funding) 18. Amendment 9 and 10 insert into the Bill the rate at which public funding is paid per formal first preference vote given to a candidate or group. The reason for inserting this rate is discussed under Amendment 6 and 7. Amendment 11 - Schedule 1, item 16, page 8 (line 8) (Claims for election funding for joint Senate groups) 19. This Amendment makes a consequential amendment to subsection 296(2) of the Bill due to new subsection 293(3) of the Bill. The Amendment recognises that it is now possible to have Senate groups with candidates endorsed by two or more registered political parties in circumstances provided for by subsection 293(2) and 293(3). Amendment 12 - Schedule 1, item 16, page 8 (lines 22 and 23) (Claims for election funding) 20. Amendment 12 is a consequential amendment following the provision to make single claims for election funding. The Amendment allows a single claim to be made by any agent of one of the registered political parties covered by the claim. Amendment 13 - Schedule 1, item 16, page 9 (line 5) (Claims for election funding) Amendment 14 - Schedule 1, item 16, page 9 (after line 9) (Claims for election funding) 21. Amendment 13 is a consequential amendment following the provision to make single claims for election funding. It inserts into subsection 298(1) of the Bill an exception for agents making single claims to the rule in subsection 298(1). Amendment 14 provides what electoral expenditure agents must specify when making a single claim. Amendment 15 - Schedule 1, item 16, page 10, (lines 32 and 33) (Determination of a claim) 22. With the introduction of the single claim covering electoral expenditure of related parties, confusion might arise over what expenditure is claimed by which registered political party. To ensure that there is no double counting of electoral expenditure, Amendment 15 specifically provides the Electoral Commission with the power to consider whether electoral expenditure has been specified in a claim made by another agent. Amendment 16 - Schedule 1, item 16, page 11 (line 14) (Claims for electoral funding) Amendment 17 - Schedule 1, item 16, page 11 (line 28) (Claims for electoral funding) 23. Amendment 16 and 17 are consequential amendments following the provision to make single claims for election funding. Amendment 16 inserts into subsection 298D(2) a reference to new paragraph 293(3)(a) for the purposes of paying an interim claim. Amendment 17 inserts into 298E(2) a reference to new paragraph 293(3)(a) for the purposes of paying a final claim. Amendment 18 - Schedule 1, item 17, page 13 (lines 8 to 11) (Claims for electoral funding) Amendment 19 - Schedule 1, item 18, page 13 (before line 14) (Claims for electoral funding) Amendment 20 - Schedule 1, item 18, page 13 (lines 14 and 17) (Claims for electoral funding) 24. Amendment 18, 19 and 20 are consequential amendments following the provision to make single claims for election funding. Amendment 18 will amend Item 17 of the Bill to change the introductory words of subsection 299(1) of the Electoral Act to provide for the payment of single claims. Amendment 19 will insert a new subsection into the Bill, 299(1A), to provide that the Electoral Commission must pay to the agent who makes a single claim any amount of electoral funding payable. In consequence of a new 299(1A) being inserted into the Bill, Amendment 20 will change Item 18 of the Bill to refer to the preceding two subsections before 299(2). Amendment 21 - Schedule 1, item 20, page 15 (after line 14) 25. Amendment 21 clarifies that, if a single claim has been made, a reference to an agent in sections 298D, 298E, 298F and 298G includes a reference to the agent who makes the single claim. Amendment 22 - Schedule 1, item 22, page 16 (lines 12 and 13) (Disclosure of anonymous gifts) 26. This amendment firstly repeals Item 22 of the Bill which reduces the period from 15 weeks to 8 weeks in which a return must be made under subsection 304(2) and (3) of the Electoral Act. It then inserts five new Items into the Bill. Items 22 and 22B re-introduce into the Bill the reduced 8 week period in which to make a return under subsection 304(2) and (3). 27. Item 22A introduces a new disclosure requirement under subsection 304(2) of the Electoral Act for the agents of candidates, including members of a group, to provide details of anonymous gifts received by candidates and members of a group during the disclosure period for the election. Item 22C inserts a similar requirement into subsection 304(3) of the Electoral Act for agents of groups. The 'disclosure period' is defined by subsection 287(1) of the Electoral Act for various purposes in the Act, and for candidates and Senate groups, might extend from 30 days after the previous election to 30 days after polling day. 28. With the recasting of subsection 304(2) and (3), it is no longer necessary to have 304(4) apply to the whole section. This is especially the case as the details required to be disclosed in relation to anonymous gifts are set out at paragraphs 304(2)(c) and 304(3)(c). Accordingly, Item 22D would amend subsection 304(4) of the Electoral Act so that it only applies to new paragraphs (2)(b) and 3(b). Amendment 23 - Schedule 1, item 40, page 28 (after line 18) (Permitted anonymous gifts) 29. Section 306 of the Electoral Act currently provides that candidates, political parties and members of a Senate group may not accept anonymous donations which exceed an indexed threshold, currently at $10,900. The Bill proposes to prohibit anonymous donations of any amount and extend the prohibition to associated entities and those 'third parties' who incur specified political expenditure above the threshold in a reporting period. 30. In its Advisory report on the Bill, JSCEM recommended (Recommendation 6) that the Bill be amended to allow for an anonymous donation below a threshold of $50 to be given without a disclosure obligation and received without having to forfeit the donation to the Commonwealth. The basis for its recommendation was to remove a perceived onerous recordkeeping burden on fundraisers where only small amounts of money might be donated, for example, by 'passing a hat' around. 31. In response to JSCEM's recommendation, Amendment 23 will amend the Bill to insert new subsection 306AEA allowing for the receipt of anonymous donations by the full range of political participants. To ensure, however, that such an amendment does lead to a flood of donations which are not disclosed, subsections 306AEA(1) and (4) provide that a 'permitted anonymous gift' may only be received in two situations. The first of these is at some general public activity, such as a fete, where people passing by might, for example, place a donation into a tin. The second situation is at a private event, such as a trivia night, where attendees might donate small sums of money. At both general public activities and private events, a gift would not be a 'permitted anonymous gift' unless records specified at 306AEA(1)(c) and 306AEA(4)(c) were kept of the activity or event. 32. For both general public activities and private events, paragraphs 306AEA(1)(a) and (4)(a) provide that single donations of more than $50 may not be received. In addition, subsections 306AEA(2) and (5) provide that collectors of gifts cannot knowingly receive more than $50 from the same person. A further requirement imposed upon private events by paragraph 306AEA(4)(d) is the total collected may not be more than an amount calculated by multiplying $50 by the number of people who attended the event. If the total collected exceeds the amount calculated by this formula, the excess has to be returned or, if not possible or practicable to return the excess, it has to be paid to the Commonwealth. For greater administrative simplicity, subsection 306AEA(7) limits the operation of the section to gifts of money. Amendment 24 - Schedule 1, item 40, page 28 (line 29) (Permitted anonymous gifts) Amendment 25 - Schedule 1, item 40, page 30 (line 27) (Permitted anonymous gifts) Amendment 26 - Schedule 1, item 40, page 32 (after line 10) (Permitted anonymous gifts) Amendment 27 - Schedule 1, item 40, page 32 (line 21) (Permitted anonymous gifts) 33. As Amendment 23 provides for the receipt of anonymous gifts in specific circumstances, consequential amendments are required to the provisions of the Bill that make the receipt of any anonymous gift unlawful. These Amendments make the required changes to section 306AG and 306AH (political parties, candidates and members of a group) and 306AI (persons incurring political expenditure). Amendment 28 - Schedule 1, page 33 (after line 14) (Reporting against electoral expenditure) 34. Section 309 of the Electoral Act requires candidates and members of a Senate group that are not endorsed by a registered political party to furnish a return to the Electoral Commission setting out details of all electoral expenditure in relation to an election. As Amendment 2 expands the categories of electoral expenditure, without a consequential amendment to subsection 309(1A) of the Electoral Act, the provision would cover the three new categories of electoral expenditure. Accordingly, Amendment 28 inserts a new Item 48A into the Bill which would amend subsection 309(1A) of the Electoral Act to limit the provision to electoral expenditure specified at paragraph (a) of the definition in subsection 287(1). Amendment 29 - Schedule 1, Amendment 49, page 33 (lines 15 and 16) (Reporting against electoral expenditure) 35. This amendment firstly repeals Item 49 of the Bill which reduces the period from 15 weeks to 8 weeks in which a return must be made under subsection 309(2) and (3) of the Electoral Act. It then inserts four new Items into the Bill. Items 49 and 49B re-introduce into the Bill the reduced 8 week period in which to make a return under subsection 309(2) and (3). 36. Similar to Amendment 28, Items 49A and 49C would limit a return furnished under subsection 309(2) or (3) of the Electoral Act to details of electoral expenditure specified at paragraph (a) of the definition in subsection 287(1). Amendment 30 - Schedule 1, page 35 (after line 12) (Disclosure of anonymous gifts) 37. Similar to the requirement introduced by Amendment 22 for candidates, members of a Senate group and Senate groups to disclose anonymous gifts, Amendment 30 inserts a new Item 59A into the Bill. This Item would amend section 314AC of the Electoral Act to require registered political parties to include in its annual return furnished to the Electoral Commission specified details in relation to the receipt of anonymous gifts if a permitted anonymous gift was received during a reporting period. Amendment 31 - Schedule 1, item 74, page 37 (lines 5 to 8) (Disclosure of anonymous gifts) Amendment 32 - Schedule 1, items 77 and 78, page 37 (lines 18 to 23) (Disclosure of anonymous gifts) Amendment 33 - Schedule 1, page 37 (after line 25) (Disclosure of anonymous gifts) 38. Similar to Amendment 22 and 30, these Amendments provide for the disclosure of the receipt of anonymous gifts by persons incurring political expenditure. New Items 74 and 79A, and the amendments to subsection 314AEC(2) of the Electoral Act, would operate so that details of the receipt of anonymous gifts will be disclosed in a two step process. First, a person must have incurred electoral expenditure of a kind specified in paragraph 314AEB(1)(a) and that expenditure must be above the proposed $1,000 threshold. If that step is satisfied, a return under 314AEC must include specified details of permitted anonymous gifts if any permitted anonymous gifts were received during a reporting period. 39. While repealing Items 74, 77 and 78, these Amendments do not alter the operation of section 314AEC as proposed by the Bill in relation to 'major donors' as the new text inserts these requirements back into the Bill. Amendment 34 - Schedule 1, item 82, page 39 (after line 23) (new offence) 40. Amendment 34 provides for a new offence of making a record that is required to be kept for the purposes of receiving a permitted anonymous gift that is false or misleading in a material particular. The maximum penalty for breaching this offence is imprisonment for 12 months or 120 penalty units, or both. Currently a penalty unit equates to $110 dollars. The proposed penalty is the same as for the offence in the Bill at subsection 315(4B) of furnishing a return for the purposes of Division 4, 5 or 5A that is false or misleading in a material particular. Amendment 35 - Schedule 1, item 100, page 47 (lines 6 to 8) (Rate of public funding) 41. Amendment 35 inserts a new Item 100 into the Bill so that the rate per formal first preference vote for the purposes of public funding is current as at 1 July 2009. 42. As discussed at Amendment 6 and 7, the rate that is inserted into the Bill is the rate that is correct for the period 1 January 2009 to 30 June 2009. As this rate is indexed by section 321 of the Electoral Act every six months using the All Groups Consumer Price Index for the previous quarter's index number, it is not possible to insert into the Bill the correct rate for the six months commencing on 1 July 2009. This is because that figure would be calculated using the March 2009 index which is not published until late April 2009. To ensure that the rate is correct from 1 July 2009, Amendments 35 defines the 'relevant amount' for the purpose of section 321. The relevant amount is defined by reference to the dollar amounts expressed in section 293, 294 and 295 of the Bill. Amendment 36 - Schedule 1, item 101, page 47 (line 10) (Rate of public funding) 43. As the Bill was to commence on 1 July 2008, the rate per first preference vote for the purposes of public funding specified in the Bill is correct for the period 1 July 2008 to 31 December 2008. Item 101 specified 1 January 2009 as that was the first date on and from indexation would occur under section 321 of the Electoral Act. As the rate specified in these Amendments will be indexed with effect on and from 1 July 2009, the 'relevant period' for the purposes of section 321 of the Electoral Act is changed by Amendment 36 to replace 1 January 2009 with 1 July 2009. Amendment 37 - Schedule 1, item 104, page 48 (line 4) (Commencement date) Amendment 38 - Schedule 1, item 104, page 48 (line 6) (Commencement date) Amendment 39 - Schedule 1, item 105, page 48 (line 10) (Commencement date) Amendment 40 - Schedule 1, item 105, page 48 (line 12) (Commencement date) Amendment 41 - Schedule 1, item 106, page 48 (line 14) (Commencement date) 44. These Amendments make consequential changes to application provisions to reflect the new commencement date of 1 July 2009. Amendment 42 - Schedule 1, item 106, page 48 (line 15) Amendment 43 - Schedule 1, item 106, page 48 (lines 16 and 17) Amendment 44 - Schedule 1, item 106, page 48 (line 18) Amendment 45 - Schedule 1, item 106, page 48 (line 22) 45. These Amendments make consequential changes to the application provisions of Item 106 to reflect the new commencement date of 1 July 2009 and to account for changes to item numbering and the insertion of new items. Amendment 46 - Schedule 1, item 106, page 48 (after line 24) 46. Amendment 46 is linked to the changes made by Amendments 35 and 36 in relation to the indexation of the rate per formal first preference vote for the purposes of public funding. Amendment 46 ensures that the rate specified in these Amendments will be indexed with effect on and from 1 July 2009. Amendment 47 - Schedule 1, item 107, page 48 (line 26) Amendment 48 - Schedule 1, item 107, page 48 (line 27) Amendment 49 - Schedule 1, item 107, page 48 (line 29) Amendment 50 - Schedule 1, item 107, page 48 (before line 30) Amendment 51 - Schedule 1, item 107, page 48 (after line 32) 47. These Amendments will make consequential changes to Item 107 of the Bill to reflect the new commencement date of 1 July 2009. The Amendments also take account of new Items inserted into the Bill and clarifies that a gift made before 1 July 2009 is not a permitted anonymous gift. Amendment 52 - Schedule 1, item 108, page 49 (line 2) Amendment 53 - Schedule 1, item 108, page 49 (line 4) Amendment 54 - Schedule 1, item 109, page 49 (line 10) Amendment 55 - Schedule 1, item 109, page 49 (line 12) Amendment 56 - Schedule 1, item 110, page 49 (line 14) 48. These Amendments make consequential changes to application provisions to reflect the new commencement date of 1 July 2009. Amendment 57 - Schedule 1, item 110, page 49 (lines 15 and 16) 49. This Amendment clarifies the operation of Item 110 of the Bill as the term 'that commencement' was unclear. The substituted words 'on and after that day' make clear that a notice given under subsection 316(2A) as then in force has effect after 1 July 2009 as if it had been given under that subsection as amended by Item 89 of the Bill.Index] [Search] [Download] [Bill] [Help]