Trade unions as associated entities

Updated: 4 January 2011

The financial disclosure scheme established by Part XX of the Commonwealth Electoral Act 1918 (the Act) informs the public about the financial dealings of people and organisations involved in the electoral process.

Candidates, political parties and associated entities, donors and those who incur political expenditure must lodge financial disclosure returns with the AEC. These are made available for public inspection. The disclosure scheme was amended with effect from 22 June 2006 to include trade unions affiliated with a political party as associated entities. The amendments also require people or organisations (including associated entities) incurring political expenditure to disclose this from the 2006–07 financial year.

What are the obligations of an associated entity?

The obligation is to lodge a financial disclosure return with the AEC by 20 October each year.

The return form was redesigned for the 2006-07 financial year to require disclosure of:

  • Total revenue, expenditure and loans of the entity (as per the current form);
  • Revenue amounts received of more than $10 300 (item 3 of the current form covering the full financial year and with increased disclosure threshold);
  • Loans outstanding at 30 June of more than $10 300 (item 6 of the current form with increased disclosure threshold);
  • Capital contributions (deposits) from which payments to a party were generated (as per item 7 of the current form);
  • Political expenditure of more than $10 300 (new part of the form).

What is an associated entity?

An associated entity is defined in section 287 of the Act as an entity that:

  • Is controlled by one or more registered political parties; or
  • Operates wholly or to a significant extent for the benefit of one or more registered political parties; or
  • Is a financial member of a registered political party, or on whose behalf another person is such a member; or
  • Has voting rights in a registered political party, or on whose behalf another person has such voting rights.

Examples of associated entities include '500 clubs', 'think tanks', registered clubs, service companies, trade unions and corporate members of political parties.

Associated entities may be:

  • Companies or incorporated associations;
  • Trusts, including charitable foundations; or
  • Unincorporated associations, societies, groups or clubs.

Is a trade union affiliated with the ALP an associated entity?

The Australian Labor Party is a registered political party. Trade unions affiliated with the ALP are, prima facie, associated entities as they pay fees analogous to membership fees and provide delegates with voting rights to State or Territory (but not National) party conferences.

Trade unions may also pay affiliation or membership fees, or have voting rights, in other registered political parties. Such unions are likely to be associated entities and should discuss their circumstances with the AEC.

Who is the reporting entity?

Industrial relations legislation provides that a registered trade union is a legal entity. The reporting entity or associated entity is the registered trade union that is affiliated with the party.

It may be a:

  • State or Territory branch of a Federally registered trade union; or
  • A State or Territory-registered trade union; or
  • A trade union with dual State or Territory and Federal registration; or
  • A Federally registered trade union with coverage of federal workers in a State or Territory.

Associated entity returns are required for all such affiliated entities.

Information in respect of more than one trade union entity may be consolidated into a single return (e.g. where there is dual registration, or merged operational arrangements) provided that the return clearly identifies those unions whose information is included.

What accounting rules apply?

The annual return is to be prepared on a cash rather than accruals basis. In other words, only revenue and expenditure actually received or paid is included.

The information required is transactions made by the entity, or made by others on behalf of the entity. Payments by another person to the benefit of the trade union (e.g. to pay down a loan, to cover advertising costs or to provide discounted services) should be included as revenue of the entity.

What details of revenue and loans is required?

The name and address of those people or organisations from whom more than $10 300 was received during the 2006–07 financial year, or to whom more than $10 300 is owing at 30 June must be disclosed.

These revenue items should be identified as 'gifts' or 'other revenue'. More detailed information (e.g. denoting that payments from employers are employee union fees) may be given.

Political expenditure

Expenditure in excess of the $10 300 disclosure threshold across any of five categories of political expenditure must be reported, together with details of gifts received used (wholly or partially) to incur or to reimburse this expenditure.

Political expenditure is expenditure across the following categories of advertising, polling and research:

  • Public expression of views on a political party, candidate or member of the Federal Parliament by any means;
  • Public expression of views on an issue in an election by any means;
  • Printing, production, publication, or distribution of any material that is required by section 328 or 328A of the Act to include a name, address or place of business;
  • Broadcast of political matter in relation to which particulars are required to be announced under subclause 4(2) of schedule 2 to the Broadcasting Services Act 1992;
  • Opinion polling and other research relating to an election or the voting intention of voters.

Other expenditure (e.g. administration or travel) is not political expenditure for reporting purposes.

Completion of this part of the return may require best estimates of, for example, the proportion of the annual cost of a union journal that is devoted to the expression of views on a party, or the cost of expression of views on an issue such as industrial relations reform over an election period (the period from the issue of the writ until 30 days after the election).

Who is responsible for lodging the return?

Responsibility for lodging the associated entity return lies with the person who is responsible for the financial records of the union. This person is called 'financial controller' in the Act.

Does an associated entity also have to lodge a donor annual return?

No. An associated entity is not required to lodge a donor annual return.

What administrative arrangements apply?

The disclosure return form, information sheets and Funding and Disclosure Handbook for Associated Entities are available on this website under 'How' and 'Political disclosures'. The return forms are publicly released on this webpage on the first working day in February each year.

The return forms may be completed 'on screen' and submitted by email.

The AEC is empowered to investigate whether associated entities have properly met their disclosure obligations. To this end it may undertake compliance reviews of their books and records from time to time.

An amendment return form is available should it be necessary to correct or vary information provided in an annual return.

The $10 300 disclosure threshold is indexed, increasing in line with the CPI in July each year.

What is the authority for the associated entity annual return?

The authority for the 2006–07 associated entity annual return form is contained in sections 314AEA and 314AEB of the Commonwealth Electoral Act 1918.