The financial disclosure scheme established under Part XX of the Act seeks to ensure that the public is aware of major sources of party and candidate funding of any possible influence.
The scheme requires annual returns to be lodged with the AEC by registered political parties, and by some parties who have not elected to register (e.g. because they are branches of a registered party). It also requires returns to be lodged by associated entities (organisations controlled by, or operating to a significant extent to the benefit of political parties), and by donors to political parties.
The scheme also requires candidates, Senate groups, donors, third parties and the media to lodge election period returns. In this context, a third party is a person or organisation other than a party, associated entity or a candidate who receives political donations, and/or incurs election expenditure.
The annual returns, and election period returns (other than media returns) for the 2001 election were made publicly available on the AEC website at http://www.aec.gov.au/. Copies of all returns, including media returns are available, for a fee, direct from the AEC.
Return forms, and Handbooks providing background information and guidance for the completion of returns, were also available on the website.
A media release on 26 April 2002 advised that election returns (with the exception of media returns) would be available on the AEC website on 29 April 2002. Media releases each year advised the availability of annual returns from the first working day in February.
An overview of the disclosure scheme is at Table 1, with the lodgement timetable and coverage details at Table 2.
This Table should be read in conjunction with Table 2
|Donors||Political Parties and Associated Entities|
|Third Parties||Candidates||Broadcasters & Publishers||Senate Groups|
|Return||Lodgement Date||Period Covered||Public Release|
|Annual Returns||Election Returns|
|Political parties||16 weeks after financial year||Financial year – 1 July to 30 June||1st working day in February|
|Associated entities||16 weeks after financial year||Financial year – 1 July to 30 June||1st working day in February|
|Donors||20 weeks after financial year||Financial year – 1 July to 30 June||1st working day in February|
|Broadcasters & Publishers||8 weeks after election||Issue of writs to election day||24 weeks after election|
|Third parties||15 weeks after election||Returns of donations made and donations received – 31 days after last election to 30 days after election day
Return of electoral expenditure – from the issue of the writ until election day
|24 weeks after election|
|Candidates||15 weeks after election||31 days after the last election contested within 4 years (House of Reps) or 7 years (Senate), or from commencement of candidacy, to 30 days after election day||24 weeks after election|
|Senate groups||15 weeks after election||From request to AEC to be grouped until 30 days after election day||24 weeks after election|
The AEC has no authority to vary these dates. Returns are not required to be audited prior to lodgement, and are prepared on a cash accounting basis. The 2001 election was held on 10 November 2001. This Table should be read in conjunction with Table 1.
The overview tables highlight the complexity of the scheme, with ten separate return forms and three separate disclosure thresholds. These disclosure thresholds are in some cases amounts totalling the threshold or more and in other cases are individual amounts equalling the threshold or more.
There is also a significant time between the period covered by the various returns and their public availability, gaps in coverage (e.g. complete details of election expenditure are not available), overlaps whereby donations are reported (subject to differing definitions) by donors and by the parties or candidates receiving the donation, and the coverage periods vary between category of return.
AEC recommendations for the development and maintenance of the enabling legislation are regularly made to the JSCEM.
Table 3 provides details of the number of annual returns lodged with the AEC for the period from the 1998 election to the 2001 election, and the number of election returns lodged in respect of the 2001 election. It also provides the number of amended returns lodged.
|Political Parties – original||99||99||79|
|Political Parties – amended||31||21|
|Associated Entities – original||78||75||68|
|Associated Entities – amended||2||6|
|Donors – original||777||705||807|
|Donors – amended||20||11|
|Third party return of donations made||321|
|Third party return of donations received||16|
|Third party return of electoral expenditure||40|
|Total election returns||3 281|
The annual returns provide information about revenue and expenditure, and details of donations and loans equal to or in excess of a $1 500 disclosure threshold. A summary of annual return information is at Table 4.
As the identity of parties and associated entities is, in very large part, known to the AEC prior to lodgement deadlines, it is able to remind them of their disclosure obligations and to assist with the lodgement process. There are nonetheless, instances of late lodgement.
Parties are not required to advise donors of their disclosure obligations. While the AEC uses information from the party returns to contact donors and remind them about their disclosure obligations, returns are not always received by the due date. In part, this is because there are only four weeks between the time when party returns are due and donor returns are due. This gives the AEC only a very short period in which to extract information from the party returns and to use this to contact donors about their disclosure obligations. Notwithstanding their clear legal obligations, donors then need time to prepare and to lodge their returns.
The number of amended returns reflects, in part, corrections made following AEC compliance review activity reported elsewhere in this Report.
The candidate disclosure return provides information about donations received and electoral expenditure incurred. Details of donations totalling $200 or more are required, together with six categories of electoral expenditure covering advertising, production of campaign material and market research. Total expenditure is not disclosed (e.g. travel and office costs are not disclosed).
There were 1 324 House of Representatives and Senate candidates at the 2001 election. Of these candidates, 1 318 lodged candidate disclosure returns, of which 396 were lodged after the statutory deadline of 25 February 2002. It was not cost-effective to pursue the six outstanding returns further.
Seven hundred and sixty six candidate returns were 'nil' returns submitted by endorsed candidates. Disclosure information for these candidates is required to be incorporated into their party's annual returns.
These returns are substantially similar to the candidate returns, but with a higher ($1 000) disclosure threshold.
There were 101 Senate groups at the 2001 election. Nineteen independent groups and three joint Senate ticket groups were required to lodge returns. The other 79 endorsed groups were not required to lodge returns as their information is required to be included in party annual returns. Twelve Senate group returns were lodged late.
Section 17(2A) of the Act requires the publication of a list of persons who, in the opinion of the AEC, are or may be required to lodge a donor or third party return in relation to the 2001 election.
A list of those persons who provided such returns is at Appendix 3.
This return requires disclosure of details of donations totalling $200 or more made to candidates, and $1 000 or more made to bodies gazetted by the AEC.
Three hundred and twenty one returns of donations made to candidates were received. Only 53 of these were received prior to the due date of 25 February 2002, mainly from donors who were aware of their disclosure obligations in prior years.
The high proportion of late lodgements reflects the fact that candidates are under no obligation to advise donors of their disclosure obligations. Thus, notwithstanding their clear legal obligations, many donors are not aware of these obligations until contacted by the AEC subsequent to its receipt of the relevant candidate return in a situation where the candidate return and the donor return are each due to be lodged by the same day. As donations of endorsed candidates are generally consolidated into the party annual return (with a higher disclosure threshold), many donors can never be identified and do not lodge returns.
This return requires disclosure of details of donations of $1 000 or more received by third parties that are applied to electoral expenditure of $1 000 or more by those third parties.
Sixteen returns were lodged; all but two were received before the due date of 25 February 2002. In large part, these returns were from third parties who were aware of their disclosure obligations e.g. through prior dealings with the AEC.
This return requires disclosure of the amount of electoral expenditure incurred in each of six categories. The focus of the categories is on advertising, production of campaign material and market research.
Forty returns were lodged, eight of which were lodged after the due date of 25 February 2002.
The broadcasters and publishers returns provide details of election advertisements over an election period. There are separate returns for broadcasters and for publishers.
All broadcasters and publishers were contacted by letter advising their disclosure obligations in the event that they ran election advertisements over the election period. One thousand five hundred and sixty four media returns were received; 31 from television broadcasters, 415 from radio and the balance from publishers. Seven hundred and forty four returns were 'nil' returns.
Candidates and Senate groups have the opportunity to appoint an agent for election funding and financial disclosure purposes. Some candidates take advantage of this in order to ensure the effective management of their disclosure obligations.
Forty-three candidates and 21 Senate groups appointed agents to deal with their financial disclosure obligations for the 2001 election. The remaining candidates were deemed by the Act to be their own agents and, in the case of Senate groups, the person whose name was listed first on the ballot paper was deemed by the Act to be the agent.
The window of opportunity for appointment of agents begins at the issue of the writs and ends at close of nominations. As many candidates and Senate groups did not nominate until late in this period, not all who wished to appoint an agent were aware of, or had the opportunity to, appoint an agent within the statutory time limits. To address this, the AEC provided information to candidates when they nominated, and wrote to those candidates who nominated earlier in the period.
The AEC necessarily devoted considerable resources to the task of seeking compliance with the financial disclosure obligations. This is due to the nature and complexity of the financial disclosure scheme as well as the reality that financial disclosure issues were not at the forefront of the minds of those who were actively involved in contesting the election.
In addition to making Handbooks and similar information available to those with disclosure obligations:
In excess of 7 000 letters, together with phone calls and other administrative actions, were required to obtain lodgement of the 3 281 election returns. This is notwithstanding that disclosure obligation information is made available on the AEC website, in AEC funding and disclosure handbooks and in AEC nominations material.
No prosecution action for failure to lodge, or for incomplete or inaccurate returns, was undertaken in respect of the 2001 election.
Subject to compliance trends and other information supporting the operational need, and the public interest benefit of such action, the need for prosecution will be assessed for the 2004 election.
Loans of $1 500 or more from a source other than a financial institution such as a bank or credit union that are not properly documented are unlawful. Anonymous donations in excess of $200 for a candidate and $1 000 for a party are similarly unlawful.
No such unlawful loans or donations came to the attention of the AEC in respect of the 2001 election. Reporting issues in relation to loans are addressed in the 'Compliance Review' chapter of this Report.
A summary of the aggregate annual return information provided by parties and associated entities over each of the financial years 1999–00, 2000–01 and 2001–02 is at Table 4.
This is based on information as lodged with the AEC by February 2002. It does not incorporate amendments to returns as a result of AEC compliance reviews, nor does it include returns that were lodged after the returns generally became publicly available.
The information is derived from returns that are required to be prepared on a cash accounting basis. This means that non-cash items (e.g. depreciation and provisions) are not included in the returns with the result that data extracted from the returns can only be taken as indicative of the true financial position.
Notwithstanding these limitations, key observations to be drawn from the data include:
|Category||1999–00 $m||2000–01 $m||2001–02 $m|
The requirement for political parties to provide details of their electoral expenditure was discontinued by Parliament prior to the 2001 election. Electoral expenditure information for endorsed candidates is included in party annual returns that now do not provide any break-up of this expenditure.
The effect is that details of electoral expenditure by category as shown at Table 5 are only available in respect of independent candidates and third parties.
In addition, Table 5 does not cover all components of electoral expenditure. For example, it does not include travel and office costs as these are not required to be disclosed. Internet advertising and Internet marketing are similarly not captured by the definition of electoral expenditure.
|Category||Candidate $'000||Third party $'000|
|Polling and research||102||192|
The total amount of media advertising reported by 820 broadcasters and publishers for the 2001 election was $27.7 million: