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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Commonwealth Electoral Amendment
(Cleaning up Political Donations) Bill 2023
EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Circulated by authority of
Andrew Wilkie MP
Commonwealth Electoral Amendment (Cleaning up Political Donations) Bill 2023
OUTLINE
This Bill amends the Commonwealth Electoral Amendment Act 1918 (the Act) to
strengthen the transparency and accountability of political donations by introducing a
number of measures including:
• lowering the donation disclosure threshold from $13,800 (or $15,200 as indexed) to
$1,000 for individual donations and requiring aggregation under the threshold. This
means that multiple donations received by the same recipient from the same source
must be disclosed if the sum of those gifts is equal to or greater than the threshold;
• Donations include gifts. This Bill expands the definition of 'gift' to include electoral
expenditure and gifts-in-kind to a political entity, where the value of the gift is equal
to or more than $1,000 and provided without consideration or with inadequate
consideration. The Bill also expands the definition to include amounts paid to attend
fundraisers or functions;
• introducing a cap of $50,000 on the total amount of donations a donor can provide
during an electoral cycle;
• requiring real-time disclosure by gift recipients to the Australian Electoral
Commission (AEC) within two business days of the donation threshold being
reached or exceeded;
• requiring the AEC to publish returns provided by reporting entities on the
Transparency Register as soon as reasonably practicable;
• implementing an electoral expenditure cap to limit the amount that can be spent on
election campaigns;
• prohibiting political donations from particular industries, including fossil fuel entities,
gambling companies, liquor companies and the tobacco industry; and
• increasing penalties for contravention of the Act for corporations.
Australians' trust in politicians and the political process is at an all-time low. The
provisions in the Bill will increase the public's confidence in donations made to, and
received by, political entities.
FINANCIAL IMPACT
The Bill will have no financial impact.
NOTES ON CLAUSES
Clause 1: Short Title
This clause is a formal provision and specifies the short title of the Bill as the
Commonwealth Electoral Amendment (Cleaning up Political Donations) Bill 2023.
Clause 2: Commencement
This clause provides for commencement of the Act on the first day of the next financial
year occurring the 28th day after this Act receives Royal Consent.
Clause 3: Schedules
This clause establishes that, as the intent of the Bill is to be realised through amendments
to another Act, the Schedules of this Bill will amend that Act accordingly.
Schedule 1 - Disclosure Threshold
Commonwealth Electoral Act 1918
Item 1: Subsection 287(1) (definition of disclosure threshold)
Item 1 repeals and substitutes the current definition of disclosure threshold, changing it
from $13,800 (or $15,200 as indexed) to $1,000.
Item 2: Subsection 314AC(2)
Item 2 ensures that aggregated donations, once they reach or exceed the donation
threshold, must be provided as a return to the AEC.
Item 3: Transitional provision
Item 3 provides for indexation of the amended disclosure threshold 12 months after the
commencement of the item.
Schedule 2 - Real-time disclosure of donations
Commonwealth Electoral Act 1918
Item 1: After Division 4 of Part XX
Item 1 inserts a new Division into the Act, which requires the continuous disclosure of
political donations where those donations are above the disclosure threshold of $1,000.
Section 307AA provides definitions for agent or financial controller, disclosure gift,
disclosure sum and reporting entity.
The provision relating to agent or financial controller specifies which entity is responsible
for the conduct of that agent.
A disclosure gift is a gift that is equal to or greater than the disclosure threshold.
A disclosure sum is the sum of all gifts, received from the same donor during the relevant
reporting period, that are equal to or greater than the disclosure threshold. This definition
is designed to capture multiple, smaller donations which on their own would not require
disclosure, but when aggregated would be greater than the disclosure threshold. For
example, if a donor donates $950 to a reporting entity in one transaction, and then donates
$100 to the same reporting entity in another transaction within the same reporting period,
the total sum of donations is $1050, thus exceeding the disclosure threshold and
requiring disclosure.
A political entity, a group, an associated entity, and a Senator or Member of the House of
Representatives are considered reporting entities for the purposes of this Division.
Section 307AB requires the reporting entity to provide a return to the AEC within two
business days of receiving a gift which makes the sum of all gifts equal to or greater than
the disclosure sum. It also requires returns to be provided for each subsequent gift
received over the disclosure threshold within two business days.
This section also specifies the particulars which must be included in the return.
Section 307AC requires significant third parties and third parties to provide a return to the
AEC within two business days of using any part of a disclosure gift or a disclosure sum to
incur electoral expenditure. The section acknowledges that significant third parties and
third parties often receive gifts for multiple purposes, not just electoral purposes, and it is
designed to ease the administrative burden for those organisations.
Section 307AD excludes the requirement of disclosure for gifts made in a private capacity
for personal use. This section assumes that gifts of this nature would be encompassed in
the Register of Senators' Interests and Register of Members' Interests.
Item 2: Subsection 320(1) (after table item 4)
Item 2 outlines the timeframes in which the AEC must publish certain returns. A return
provided under this Division must be published by the AEC as soon as reasonably
practicable after receiving the return.
Schedule 3 - Prohibited Donors
Commonwealth Electoral Act 1918
Item 1: After Division 5A of Part XX
Item 1 encompasses the whole of Schedule 3 and inserts a list of prohibited donors into
the Act. Prohibited donors include a fossil fuel extraction industry business entity, a
gambling industry business entity, a liquor industry business entity, and a tobacco industry
business entity.
As per sections 314AGD and 314AGE, it is unlawful for a prohibited donor to make a
political donation, for a person to make a political donation on behalf of a prohibited donor,
or for a prohibited donor, or someone on behalf of a prohibited donor, to solicit another
person to make a political donation. It is also unlawful for a recipient to accept a gift from a
prohibited donor. The fault element for these offences is knowledge by the defendant
(section 314AGE(6)).
As per section 314AGF, it is an offence for a person to enter into or carry out a scheme for
the purpose of circumventing the requirements under this Division. This provision seeks to
prevent donors or recipients from channelling funds through other entities to avoid
restrictions imposed by the Act.
Under section 314AGG the AEC may, in writing, declare a person or entity to not be a
prohibited donor. This declaration remains in force for 12 months and may be revoked at
any time by the AEC in writing. Decisions made by the AEC are not legislative instruments.
The AEC must maintain a register of determinations and publish the register on
its website.
Unlawful political donations may be recoverable by the Commonwealth as a debt due to
the Commonwealth.
Schedule 4 - Capping Donations
Commonwealth Electoral Act 1918
Item 1: Before Division 5B of Part XX
Item 1 inserts Division 5AB into the Act. The item imposes a cap of $50,000 on political
donations provided by any one donor to, or for the benefit of, a registered political party or
state branch of a political party, member of the Commonwealth Parliament, candidate,
group or member of a group, or associated entity within a donation period (section
314AGJ). The amount of $50,000 is the aggregated sum of all donations provided to any
entity by a donor within the donation period (section 314AGK).
As per section 314AGK(6), only donations made to associated entities for the purpose of
electoral expenditure are included under the cap. This Bill recognises that many of these
organisations also perform a range of non-electoral work. It is not the intention of the Bill to
impose a cap on donations provided for this non-electoral work.
As per section 314AGL it is unlawful to receive a donation if that donation would exceed
the cap. However, subsection (2) allows for a donation that has been accepted, but which
the recipient subsequently discovers has exceeded the aggregate donation cap, to be
returned to the donor within five days of discovery.
Where an unlawful political donation has been accepted, the amount of that political
donation is recoverable by the Commonwealth as a debt.
Item 2: Subsection 315A(1)
Item 2 allows for the Electoral Commissioner to bring actions in the name of the
Commonwealth for certain contraventions of the Act.
Schedule 5 - Definition of Gift
Commonwealth Electoral Act 1918
Item 1: Subsection 287(1) (definition of gift)
Item 1 repeals the current definition of gift in the Act and replaces it with the definitions
provided by Item 2 in this Schedule.
Item 2: After section 287
Item 2 expands the definition of gift.
Section 287AAA expands the general definition of gift to include the disposition of property
or provision of services without consideration or with inadequate consideration. It also
includes amounts paid to attend fundraisers or functions. This amendment aims to prevent
the perception that attendees pay money to attend party/political fundraisers or functions
to gain access to politicians and exercise undue influence. The section also extends the
definition to cover gifts to political entities (section 287AAB) and Members of Parliament
(section 287AAC).
Sections 287AAB and 287AAC expand the definition of gift beyond monetary donations, to
include the incursion of electoral expenditure or the giving of a gift-in-kind, to the value of
$1,000 and without consideration or with inadequate consideration, for the dominant
purpose of promoting a political entity for political office.
Subsection 287AAB(4) recognises that there is potential for overlap between state and
federal political entities. It stipulates that, for the purpose of disclosure, the gift is taken to
be given to either the State branch, or the candidate endorsed by a party, or a member of
group, but not all three.
The political entity is taken not to have received the gift if they could not reasonably have
known that the gift was given.
Schedule 6 - Capping electoral expenditure
Commonwealth Electoral Act 1918
Item 1: Part XX (heading)
Item 1 is procedural and includes 'electoral expenditure' in the heading of the Part relating
to election funding and financial disclosure.
Item 2: After Division 5 of Part XX
Item 2 inserts a new Division into the Act, which caps the amount of electoral expenditure
that can be incurred during the expenditure cap period.
Section 314AAAA provides definitions for acts in concert, election and expenditure cap
period.
A person or entity will be determined to act in concert with another person or entity where
they have entered into an agreement to campaign with the object of having a particular
party or candidate elected or opposing the election of a particular party or candidate.
Where this is the case, the expenditure is aggregated (section 314AAAE).
The expenditure cap period, in which electoral expenditure must be recorded and
reported, begins 18 months from the date of the previous election. This provision
acknowledges that federal elections occur, on average, every 2 years and 7 months.
The expenditure cap for a by-election will commence on the day that the writ or writs are
issued.
Section 314AAAB implements a cap on the total amount of electoral expenditure that may
be incurred nationally. The section sets the cap at $40m for political parties and $5m for
significant third parties or third parties.
Section 314AAAC implements a cap on the amount that may be spent on a Senate
candidate. The section sets the cap at $500,000 per candidate for political parties and
independent candidates and $250,000 for significant third parties and third parties. This
figure is greater than that provided to House of Representatives candidates to reflect that
candidates for the Senate must reach a much wider audience geographically.
Section 314AAAD implements a cap on the amount that may be spent on a House of
Representatives candidate. The section sets the cap at $250,000 per candidate for
political parties and independent candidates and $100,000 for significant third parties and
third parties.
Section 314AAAE(2) states that expenditure incurred by an associated entity is taken to be
incurred by the political party with which the entity is associated.
It's important to note that the respective caps for significant third parties and third parties
are included as a response to the High Court decision of Unions NSW v New South Wales
which found that imposing a lower cap for these entities was unconstitutional.
Section 314AAAF stipulates when certain electoral expenditure is taken to have occurred.
Schedule 7 - Penalties
Commonwealth Electoral Act 1918
Item 1: subsection 384A(1)
Item 1 increases the pecuniary penalty that a court may impose on a corporation to five
times that specified for the civil penalty provision.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
Commonwealth Electoral Amendment (Cleaning up Political Donations) Bill 2023
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
This Bill amends the Commonwealth Electoral Amendment Act 1918 (the Act) to
strengthen the transparency and accountability of political donations by introducing a
number of measures including:
• lowering the donation disclosure threshold from $13,800 (or $15,200 as indexed) to
$1,000 for individual donations and requiring aggregation under the threshold. This
means that multiple donations received by the same recipient from the same source
must be disclosed if the sum of those gifts is equal to or greater than the threshold;
• Donations include gifts. This Bill expands the definition of 'gift' to include electoral
expenditure and gifts-in-kind to a political entity, where the value of the gift is equal
to or more than $1,000 and provided without consideration or with inadequate
consideration. The Bill also expands the definition to include amounts paid to attend
fundraisers or functions;
• introducing a cap of $50,000 on the total amount of donations a donor can provide
during an electoral cycle;
• requiring real-time disclosure by gift recipients to the Australian Electoral
Commission (AEC) within two business days of the donation threshold being
reached or exceeded;
• requiring the AEC to publish returns provided by reporting entities on the
Transparency Register as soon as reasonably practicable;
• implementing an electoral expenditure cap to limit the amount that can be spent on
election campaigns;
• prohibiting political donations from particular industries, including fossil fuel entities,
gambling companies, liquor companies and the tobacco industry; and
• increasing penalties for contravention of the Act for corporations.
Australians' trust in politicians and the political process is at an all-time low. The
provisions in the Bill will increase the public's confidence in donations made to, and
received by, political entities.
Human rights implications
The amendments proposed in the Bill engage the right of freedom of expression under
Article 19(2) of the International Covenant on Civil and Political Rights. This right includes
freedom to seek, receive and impart information and ideas of all kinds, either orally, in
writing or in print, or through another media of his or her choice.
As this Bill places a cap on the amount that people and organisations can donate and the
amount that can be spent on electoral campaigns, and restricts donations from particular
industries, it may be argued that this limits the right for people to participate in the political
process. However, this prohibition is proportionate to the benefit that will be gained from
the public, as the Bill will improve public confidence in the political system by enhancing
transparency and accountability of politicians and political parties. The Bill also recognises
the High Court decision of Unions NSW v New South Wales and accordingly provides a
higher cap for significant third parties and third parties, allowing them to continue to
engage with the political process while proportionally limiting undue involvement.
Further, there is a strong and ongoing correlation between bodies considered 'prohibited
donors', and the development of public policy and government funding. The Select Senate
Committee on the Political Influence of Donations highlights clear examples of this
correlation and the extent to which such donations may have resulted in favourable policy
determinations for the industries, which may suggest undue influence.
The Bill also engages the implied right to political communication. However, per common
law, any burden on the implied right to political communication will be acceptable if it is for
a legitimate purpose and is proportionate. History has shown that political donations from
'prohibited donors' has resulted in favourable policy outcomes for the respective industries.
As such, banning political donations from such industries is a proportionate response to
achieving the legitimate aim of a more representative democracy.
Conclusion
This Bill is compatible with human rights because it promotes the equality within human
rights, namely the protection of freedom of expression.
Andrew Wilkie MP