Established under Part XX of the Act, the financial disclosure scheme deals with disclosure of information relating to political donations and expenditure. The scheme was introduced in 1984 to increase overall transparency and inform the public about the financial dealings of political parties, candidates and others involved in the political process.
The funding and disclosure scheme requires various participants in the political process to lodge disclosure returns with the AEC. Returns are required to be submitted annually by political parties, associated entities, donors to political parties and third parties who incur political expenditure. Disclosure returns are also required following each federal election and by-election from candidates, Senate groups and donors to candidates. Current provisions of the Act do not require political parties to lodge election returns. Instead, they include election related receipts and expenditure in their annual returns.
Disclosure returns are made publicly available on the AEC website.
The information disclosed varies between each type of return. However more detailed information on amounts received by parties, outstanding debts and loans at the end of each financial year is required when the amount is above the minimum disclosure threshold, which was $11 500 for the 2009–10 financial year. A list of disclosure thresholds applicable since the implementation of the current financial disclosure scheme is provided later in this report.
An overview of the financial disclosure scheme and timetable in effect for the 2010 federal election is provided at Appendix 1.
An online lodgement facility – eReturns – for election and annual returns, was made available by the AEC in July 2010. The eReturns system provides the option for clients to lodge returns using a secure online lodgement facility on the AEC website. The eReturns system allows clients to log on, complete and submit their disclosure returns using a wizard style interface. At the end of the process the system generates a PDF document identical in appearance to a paper return. The user has the opportunity to review their return, re-access the return and make amendments, or certify and lodge the return.
Clients can log on to their eReturns account at any time during the financial year and regularly record details of disclosable transactions before lodging their completed return. They can also attach spread sheets and other documents to support their return.
Return data is stored on a secure server until the completed return is lodged by the client, at which time it then becomes available to the AEC to process.
The eReturns system eliminates the need for FAD staff to data-enter the return as they have done in the past when processing hardcopy returns. Instead, AEC staff undertake a data quality check using the information input by the client. Inbuilt system quality control rules also improve the quality of the data recorded by clients.
Since the release of the eReturns portal more than 40 per cent of clients submitted their 2009–2010 annual returns and 2010 federal election returns electronically. For those that prefer to lodge a paper return, hardcopy returns are available from the AEC website. Hardcopy returns can be downloaded and completed, and then either scanned and emailed, faxed or posted to the AEC's National Office in Canberra for processing.
Political parties and associated entities with disclosure obligations currently have 16 weeks from the end of the financial year to lodge annual disclosure returns. Donors and third parties who incur electoral expenditure have 20 weeks following the end of the financial year to lodge their disclosure returns. Candidates, Senate groups and election donors have 15 weeks to lodge election returns.
With the current disclosure threshold and annual reporting requirements, political party returns often contain hundreds of records that need to be manually processed by the AEC.
If electoral reform should eventuate that reduces the disclosure threshold, requires more frequent reporting and/or significantly reduces reporting and disclosure periods the AEC is of the view that political parties should be required to lodge returns electronically.
The AEC has the authority to demand records electronically under the provisions of s.316 for the purposes of investigation, but there are currently no provisions to demand returns to be submitted electronically.
Electronic lodgement would facilitate timely processing and publication of returns. The AEC acknowledges that political parties may need the relevant tools to assist them to achieve these reduced reporting deadlines. The AEC's eReturns system, in its current form, will go a considerable way to achieving this. However, some additional functionality may be required to enhance the system to fully meet the needs of political parties.
In the event of electoral reform increasing the frequency of periodic reporting, reducing the disclosure threshold and reducing the timeframe for political parties to lodge periodic returns, and for the AEC to make them publicly available, the Act be amended to require political parties and associated entities to lodge disclosure returns electronically.
Completed annual returns for the preceding financial year are made publicly available on the AEC website on the first working day in February each year. Annual returns since the 1998–99 financial year are currently still available on the website.
Election returns are made publicly available on the AEC website 24 weeks after an election. All by-election returns since the scheme was introduced in 1984 and all election returns since the 1996 federal election are available on the website.
The website includes a search and analysis facility for annual returns and is updated as late and amended returns are received. Scanned copies of paper returns and returns lodged using the eReturns system are available, with the search and analysis facility based on data extracted from the returns.
The financial disclosure information included in this report is, in large part, extracted from the AEC website. Because the website is regularly updated it may contain data not included in this report and may update data reported previously.
Disclosure of detailed information, such as the source of donations, is subject to a minimum disclosure threshold.
The financial disclosure scheme was amended with effect from 8 December 2005 to increase the disclosure threshold to 'more than $10 000'. This amount is indexed with effect from 1 July each year based on increases in the Consumer Price Index (CPI).
Disclosure threshold amounts since implementation of the scheme are as follows:
Threshold amounts for each financial year are calculated after the release of the CPI information and published on the AEC website.
The AEC often finds errors when processing disclosure returns.
Subsection 319A provides that where the Electoral Commissioner is satisfied that a return contains a formal error or is subject to a formal defect, the Commissioner may amend the return to correct the error or remove the defect.
Current AEC practice is that an error which does not alter the substance of a return can be classified as a 'formal error' and corrected by FAD staff. For example, these types of corrections may remove an ambiguity, correct spelling or grammar, complete a missing or partial date, or correct an incorrect reference to an organisation or person. Following consultation with the lodging client, FAD staff will correct the error and notate the return accordingly.
Correction of a major error or omission, such as an undeclared donation or an incorrect money amount, requires the lodging client to submit an amendment to their return to correct the defect or omission. This provides a clearer record of the original error and the correction. However, in the case of errors discovered after the return is published, it may also delay the publication of the correction and allow an error to remain in the public records while an official amendment is sought and processed.
Without a definition in the Act for 'formal error' and 'formal defect' it is not clear what the AEC can correct on a return. If offences are to be created for failure to amend a return, clarification is required which clearly indicates those corrections the AEC can make and which corrections are the responsibility of those lodging returns.
Division 6 of Part XX of the Act be amended to insert definitions for 'formal error' and 'formal defect' with guidance from Parliamentary Counsel on appropriate wording.