The financial disclosure scheme requires returns to be lodged annually with the AEC by:
The annual disclosure cycle leads to delayed reporting of information in respect of key events such as the 2010 federal election. Annual returns for the financial year 2010–2011, which includes the conduct of the 2010 federal election, will not be made publicly available until 1 February 2012. Accordingly, the details of electoral expenditure incurred by political parties will not be publicly available until that time.
The Commonwealth Electoral Amendment (Political Donations and Other Measures) Bill 2010 (the Bill) makes provision for a reduction in the disclosure threshold and a reduction in the times to lodge and disclose periodic and election returns, and for disclosure to occur on a biannual basis.
From the commencement of the disclosure scheme in 1984 until 1992, political parties were only required to submit election returns. Following the passage of the Commonwealth Electoral Amendment Act 1992, the election returns were replaced by a requirement to disclose all receipts, payments and debts on an annual basis.
Table 6 provides details of the number of annual returns lodged with the AEC between the 2007–08 financial year (the year in which the 2007 federal election was conducted) and the 2009–10 financial year (the financial year ending before the 2010 federal election).
|Political Party – amendment||43||36||11|
|Associated Entity – amendment||29||21||6|
|Donor – amendment||50||18||0|
|Political expenditure – amendment||1||0||0|
The number of party returns decreased in 2009–10 compared to 2008–09. This can be attributed to a reduction in the number of registered political parties following a review of the Register of Political Parties conducted by the AEC.
Table 7 outlines the decline in receipts and payment following the 2007–08 financial year. This is largely due to a natural decline from an election year, where receipts also include the payment of election funding. Following this logic, it could be anticipated that there may be an increase in income and expenditure reported in the 2010–11 disclosure period as a result of the 2010 federal election. However, this data will not be made publicly available until February 2012.
|Annual return summary||Federal election year 2007–08 ($m)||Non-federal election year 2008–09 ($m)||Non-federal election year 2009–10 ($m)|
The comparison data is a national aggregate and may include receipts and payments applicable to state and territory elections.
Political party periodic returns are due on 20 October each year. Returns are made publicly available on the AEC website on 1 February the following year. Any returns or amendments received after the public release date are made available on the website once processing has been completed, usually within 48 hours of receipt.
The summary of annual returns by type, provided at Table 6, highlights the number of amended returns lodged by registered political parties (and their organised state or territory branches and their associated entities). The number of amended returns includes multiple amendments for some parties and branches. The number of amendments for 2009–10 is likely to increase because the AEC has not yet finalised the 2009–10 compliance review program.
Amended returns occur as a result of deficiencies in the original returns identified by the party, by the AEC undertaking analysis of discrepancies (that is, between party returns and donor returns) and through identification of issues through the AEC compliance review activity.
A summary of amended political party returns received for the 2007–08, 2008–09 and 2009–10 reporting periods is provided at Table 8. Six parties, the Australian Labor Party (Victorian Branch), Australian Labor Party (Western Australia), Liberal Party (WA Division) Inc, Liberal Party of Australia (Victorian Division), Liberal Party of Australia NSW Division and The Greens (WA) Inc lodged amendments to their returns in three successive years. Twelve parties or branches lodged multiple amendments for at least one reporting period over this three year period.
The amendments to political party returns appear to mainly focus on three categories of changes:
|Party||Number of amendments received|
|Australian Greens (South Australia)||1||2||n/a|
|Australian Greens (Australian Capital Territory)||1||n/a||n/a|
|Australian Greens Tasmanian Branch||1||n/a||n/a|
|Australian Labor Party (ALP)||2||2||n/a|
|Australian Labor Party (ACT Branch)||n/a||1||n/a|
|Australian Labor Party (NSW Branch)||3||1||n/a|
|Australian Labor Party (Northern Territory)||1||1||n/a|
|Australian Labor Party (State of Queensland)||1||n/a||n/a|
|Australian Labor Party (Tasmanian Branch)||2||n/a||n/a|
|Australian Labor Party (Victorian Branch)||3||2||1|
|Australian Labor Party (Western Australian)||1||3||1|
|Christian Democratic Party (Fred Nile Group) WA||n/a||1||n/a|
|Citizens Electoral Council||1||2||n/a|
|Country Liberals (Northern Territory)||1||2||n/a|
|Democratic Labor Party (DLP) of Australia SA||n/a||n/a||1|
|Environmentalists for Nuclear Energy Australia||1||n/a||n/a|
|Family First Party||1||1||n/a|
|Family First Party – VIC||1||n/a||n/a|
|Family First Party –WA||1||n/a||n/a|
|Liberal Party of Australia||n/a||n/a||1|
|Liberal Party (WA Division) Inc||5||2||1|
|Liberal Party of Australia – ACT Division||1||n/a||n/a|
|Liberal Party of Australia – Queensland Division||1||n/a||n/a|
|Liberal Party of Australia – Tasmanian Division||n/a||1||1|
|Liberal Party of Australia – (SA Division)||1||1||n/a|
|Liberal Party of Australia (Victorian Division)||1||4||2|
|Liberal Party of Australia NSW Division||4||1||1|
|National Party of Australia||1||n/a||n/a|
|National Party of Australia NSW||n/a||1||n/a|
|National Party of Australia – Victoria||n/a||1||n/a|
|National Party of Australia (WA) Inc||1||n/a||n/a|
|One Nation Queensland||1||1||n/a|
|One Nation Victoria||1||n/a||n/a|
|Pauline's United Australia Party||1||n/a||n/a|
|Socialist Equality Party||n/a||1||1|
|The Australian Greens – Victoria||1||n/a||n/a|
|The Greens (WA) Inc||1||3||1|
|The Greens NSW||n/a||1||n/a|
An analysis of amendments made to political party returns is provided at Table 9. The figures relate to the number of returns which contained each category, not the total number of adjustments, new donations or changes of more than 10 per cent. It should also be noted that because 10 per cent is a relative measurement, parties with very large expenditure and receipts often weren't captured in these figures as adjustments of as much as $1 million were less than 10 per cent of total receipts which sometimes are as much as $60 million.
|No. of amendments lodged||43||36||11|
Before 30 June 2011 there were a total of 11 amendments received from 10 political parties for the 2009–10 financial year. Of these, eight amendments were received after the date of public disclosure. However, additional amendments may result following completion of the 2009–10 compliance review program.
The most significant amendment from 2009–10 was to a party return in which total receipts doubled from $779 819 to $1 560 858, total payments rose from $895 071 to $1 167 953, and six additional donations totalling $187 000 were detailed.
Thirty six amendments received were from 23 political parties for the 2008–09 financial year. Of these, 22 amendments were received after the date of public disclosure.
The most significant amendment from 2008–09 was to a return which listed a new donation of $2 million from an associated entity as a result of a forgiven loan.
Forty three amendments were received from 30 political parties for the 2007–08 financial year. Of these, 33 amendments were received after the date of public disclosure.
The most significant amendment from 2007–08 was to a return in which almost $2 million of debt was added to the total debts. An additional $200 000 of detailed donations was also disclosed, including three receipts previously recorded as 'subscriptions' being amended to 'donations'.
The distribution of political party revenue, provided at Table 10, shows that the majority of registered political parties and their branches report receiving less than $1 million in total revenue.
|Revenue range||Number of party returns|
|$10m or more||6||2||0|
|$1m to $10m||19||16||20|
|$100 000 to $1m||18||16||17|
|Less than $100 000||30||40||25|
|Number of parties||73||74||62|
The receipt of monies through party fundraisers or sponsorships is a constant source of confusion in party, associated entity and donor disclosure returns. That is, there is a high level of uncertainty as to the types of receipts that should be disclosed as 'donations' on financial disclosure returns when a transaction relates to either fundraisers or sponsorships. The NSW disclosure scheme has already included these in the definition of 'gift' in their legislative provisions.
The Act be amended to include total monies received at fundraising events in the definition of 'gift' for disclosure purposes.
A further source of confusion in the context of political party, associated entity and donor disclosure returns is the payment of financial guarantees.
Financial guarantee arrangements generally include situations where a 'guarantor' enters an agreement to provide payment on a bond, loan or other liability in the event that the person who incurs the debt is unable to make the payments.
The AEC is of the view that these arrangements should be included in the definition of 'gift' to eliminate confusion in the records disclosed on party and associated entity returns and give greater transparency to a political party or associated entity's revenue and expenditure records.
The Act be amended to include 'financial guarantees' in the definition of 'gift'.
In October 2010 a party agent lodged a return that recorded a donation of $11 220, that is, just over the disclosure threshold. A replacement return was lodged later on the same day with the same transaction, but instead of being recorded as a donation it was recorded as an 'other receipt'.
On enquiry the AEC was advised that the donor had indeed made a payment to the party but, because that payment was made by credit card and the donor had included the cost of the credit card administration fee in the donation, the party only received the benefit of the lesser amount which was under the disclosure threshold.
As the replacement return received recorded the amount received as an 'other receipt' an obligation letter was not sent to donor.
The Act be amended to clarify that receipts should not be "netted off" for disclosure purposes.
A number of enquiries were received during the year regarding the permitted use of parliamentary allowances for the production of election material.
Enquirers were advised that the AEC has no jurisdiction over the approved use/s of parliamentary allowances. However, any expenditure that was incurred and that was required to be disclosed under the provisions of s.308 of the Act must be disclosed in accordance with Part XX of the Act.
Subsection 288(1) of the Act provides that a political party shall have an agent for the purposes of Part XX of the Act.
Subsection 292(2) of the Act provides that a person shall not be removed from the register of party agents unless the person gives written notice to the AEC that they have resigned their appointment as agent, and the party or state branch gives notice that that person has ceased to be the agent of that party. The party is also required to give notice under ss.290(1) of the appointment of another person as agent.
The AEC considers the provision of ss.292(2) to be an administrative hindrance in that the requirement for the outgoing agent to resign before the party can appoint a new agent is unnecessary and inefficient and has been the cause of significant delays in the new appointment process in the past.
Subsection 292(2) of the Act be amended to automatically revoke the appointment of a party agent when a new party agent is appointed.
Section 290 of the Act provides the prerequisites of a person to be appointed as a party agent. Subsection 290(2) refers specifically to the agent of a political party, candidate or Senate group who is convicted of an offence against Part XX of the Act in relation to a particular election being ineligible to be appointed or hold office as an agent.
This subsection was not amended to remove the reference to 'a particular election' when the requirement for political party election returns was replaced with annual returns.
Subsection 290(2) of the Act be amended to remove reference to 'a particular election'.
Section 315 of the Act gives effect to penalties in regard to a number of funding and disclosure provisions. However, penalties have remained unchanged since 1984.
Where a penalty is to be applied for a breach of the Act the AEC provides a brief to the Commonwealth Director of Public Prosecutions (CDPP) with a request to pursue prosecution action on behalf of the AEC. This is a time consuming and costly process that may be better managed with the introduction of administrative penalties for offences such as late lodgement of a return without a valid and sufficient reason (such as a notification of inability to complete a return in accordance with s.318). The application of administrative penalties is also discussed in the Electoral Reform Green Paper – Donations, Funding and Expenditure December 2008 as being "…more appropriate than criminal penalties for dealing with offences such as failure to lodge a disclosure return by the due date.".
The addition of administrative penalties would assist the AEC to enforce compliance requirements without the necessity of referring all matters to the CDPP. It is expected that this would result in more timely compliance with disclosure provisions without creating an additional burden on CDPP resources.
The Act be amended to introduce administrative penalties to support compliance with the provisions of the disclosure scheme based on objective tests, for example late lodgement.
Large political parties often rely on several hundred party-units to furnish information in order for the party to complete their disclosure return. Where a party unit is unable, or refuses, to provide this information the party may lodge an incomplete return under the provisions of s.318 of the Act. Subsection 318(1) requires that the party also provide the AEC with details of the missing information, the reason why they are unable to provide the missing information and the details of the person they believe can provide that information.
The AEC may then issue a notice requesting that the missing information is provided within a specified period. However, in the past the AEC has had difficulty encouraging some people to provide the information required to finalise an incomplete disclosure.
The AEC is of the view that the application of an administrative penalty for failure to provide missing details within a set timeframe, to either the person completing the return or the AEC, would support a notice issued under the provisions of s.318.
The Act be amended to provide a penalty similar to the penalty for failure to furnish a return provided under s.315 of the Act, for individuals that do not cooperate with a notice issued under s.318(1) requesting information required to complete a return.
Section 317 of the Act makes reference to particulars that are, or could be, required to be set out in a claim or return relating to an election being retained for a period of at least 3 years. However, s.317 was not updated when periodic disclosures were introduced a number of years ago and there is no specific retention period for records relating to annual returns.
Section 317 of the Act be amended to recognise periodic disclosures.
Subsection 315(2)(b) makes provision for a penalty to apply where a person fails to retain records in accordance with s.317. However, there is no penalty that applies to a person who fails to make a record.
Persons who fail to make or maintain such records to enable compliance with the disclosure provisions of the Act should be subject to the same penalty provisions as those which apply to persons who fail to retain records.
The Act be amended to provide a penalty for a person who fails to make records to enable complete and accurate disclosure.
Section 320 of the Act requires that the AEC shall keep, at its principal office in Canberra, copies of claims for public funding and copies of disclosure returns. Subsection 320(2A) provides that the AEC will make a copy of these claims and returns available, on request, for inspection at the AEC's principal office in each state and Darwin.
Copies of disclosure returns dating back to the 1998–99 disclosure period are available on the AEC website, as well as through public access terminals located in state/territory offices in each capital city and at the AEC's National Office in Canberra.
Since changes to the payment of public funding provisions in 1995, political parties are no longer required to lodge claims for public funding.
There is no timeframe specified in the Act for retention of claims and returns.
The AEC has not received any requests to access older returns that are not available from the AEC website. However, the Act requires the AEC to keep copies of claims made under Division 3 and returns made under Divisions 4, 5 and 5A at its principal office in Canberra indefinitely.
If the intention of this provision is now fulfilled by making all recent returns available electronically, the AEC does not see any advantages in retaining these documents indefinitely.
Section 320 of the Act be amended to reflect the ability to publish returns on the internet and include a requirement to retain copies of claims and returns for a period of at least 10 years.
Table 6 shows a steady decline in the number of associated entity returns lodged since the 2007–08 financial year, which was an election year, compared to 2008–09 and 2009–10. This can be partly attributed to the decline in activity of smaller associated entities in non-election years. Returns for 2010–11 are yet to be received.
The significant decline in numbers between 2007–08 and 2008–09 may also be partly explained by a change in the membership structure of the National Party of Australia, which saw individual farming businesses ceasing to be treated as associated entities.
As part of its regular reviews of the continued eligibility of political parties, the AEC seeks assistance from political parties to identify their known associated entities. However, there is no legal requirement for parties to provide this information.
Consistent with the stated policy behind the transparency of the disclosure scheme there is an argument that parties should have an obligation to provide the AEC with the details of their associated entities to address the test on s.287(1) of 'associated entities'. This would assist the AEC to identify those associated entities that have a disclosure obligation.
The Act be amended to include a provision that requires political parties to provide to the AEC details of their known associated entities, including a penalty for failure to comply.
Political parties and associated entities mark receipts declared on returns as 'donations' or 'other receipts' even though this is not required under the Act. This assists the AEC in identifying people and organisations that may have an obligation to lodge a donor return.
In the case of associated entities, however, a receipt considered by the entity to be a 'donation' may not have been a donation for the benefit of a political party. For example, during the 2009–2010 financial year some associated entities raised money for bushfire and flood appeals. People making donations to these appeals would not be considered donors to political parties under the Act. If the requirement to distinguish between donations which go to benefit political parties and all other receipts was formalised in the Act, this confusion could be avoided, providing a clearer disclosure of funding of political parties. This would also assist the AEC to more effectively identify persons who have legitimate disclosure obligations.
The Act be amended to formalise the requirement for political parties and associated entities to distinguish between donations which go to benefit a registered political party and all other receipts on disclosure returns.
Associated entities that are idle or inactive for a period should still be obliged to lodge disclosure returns. Only when their operations change and they no longer meet the definition of an associated entity under the Act, should they cease to have an obligation to lodge disclosure returns. This would add clarity and end the confusion created where no disclosure returns are lodged because of either the suspension or cessation of operations.
Associated entities should be required to lodge a final disclosure return if they cease to operate.
The Act be amended to impose an obligation on inactive associated entities to lodge a disclosure return until such time as they lodge a final disclosure return with the AEC after cessation of their association.
There is significant confusion in relation to the meaning of 'associated entity' as provided in s.287 of the Act. There are competing interpretations of the meaning of operating to a '… significant extent' for the benefit of one or more registered political parties (ss.287(b)), even within the AEC. Further clarification is required to provide a clearer definition that enables the AEC to administer the provisions containing an objective test that can be measured.
The Act be amended to clarify the definition of 'Associated Entity' by extending the definitions of:
Annual returns of donations to political parties lodged between the 2006–07 and 2009–10 financial years are shown in Table 11.
Similar to associated entity returns, the number of donors and the value of donations made decreased significantly in 2008–09 and 2009–10 compared to the 2006–07 and 2007–08 financial years. The number of donations reported during an election year is historically higher than those in non-election years, which is reflected in the 2007–08 data. However, the data also indicates that the number and total value of donations has significantly decreased in the lead up to the 2010 federal election. That is, the 2009–10 total number of donations decreased by 599 and the total value decreased by $5.51 million compared to 2006–07.
Details of donations made in the 2010–11 financial year, the year in which the 2010 federal election was held, will not be made publicly available until February 2012.
|Donation Size||Number and % of donations||Amount and % of donations|
|Donor summary return 2006–07||%||%|
|Less than $10 300||1 883||82||$4.95m||27|
|$10 300 to $24 999||238||10||$3.79m||21|
|$25 000 or more||182||8||$9.34m||52|
|Donor return summary 2007–08||%||%|
|Less than $10 500||2 058||78||$5.87m||22|
|$10 501 to $24 999||333||13||$5.13m||19|
|$25 000 or more||249||9||$15.46m||59|
|Donor return summary 2008–09||%||%|
|Less than $10 900||1 422||82||$3.49m||28|
|$10 901 to $24 999||202||11||$3.22m||26|
|$25 000 or more||117||7||$5.65m||46|
|Donor return summary 2009–10||%||%|
|Less than $11 200||1 473||86||$3.46m||28|
|$11 201 to $24 999||118||7||$1.93m||15|
|$25 000 or more||113||7||$7.18m||57|
Donor returns often provide a valuable source of information for the AEC to test the compliance of political party returns. For example, a donor will sometimes disclose a donation they have made to a party, but the party might not include the transaction in their detailed receipts or they may report the transaction as an 'other receipt' rather than as a donation.
Third parties are people or organisations (other than registered political parties, candidates and federal government agencies) who incur political expenditure as defined in the Act.
Subsection 314AEB(1)(a) of the Act provides that political expenditure is expenditure incurred by a person or organisation, or with their authority, on:
Table 12 reports on the aggregated political expenditure reported in returns received for the 2007–08, 2008–09 and 2009–10 reporting periods.
Third party expenditure is currently required to be disclosed on an annual basis. This makes reference to 'an issue in an election' in s.314AEB of the Act problematic in the context of assessing whether there is a disclosure obligation when the 'issues' for the next election may not be known or clear at the time the third party return is lodged.
The AEC often receives enquiries in relation to the interpretation of this requirement and, in particular, the broadness of ss.314AEB(1)(i) and (ii). One of the issues often raised is "what is considered to be an issue in an election?".
The current definition of 'political expenditure' in s.314AEB of the Act would be assisted with further clarification. The AEC is of the opinion that suitable clarification of the definition of political expenditure would provide clearer guidance on who has a reporting obligation.
For example, a person lobbying on a particular issue may believe that the issue should be an issue for the next election, but this belief may not be reflected in the election platform or material put forward by any party or candidate. This could be clarified by amending the Act to change the reference to "the public expression of views on an issue in an election by any means" to "the public expression of views on a political matter by any means" which would capture any matter that is intended to promote or oppose, directly or indirectly, a party, group or candidate, or has the purpose of influencing, directly or indirectly, the vote at an election.
The following aspects of the definition in s.314AEB(1)(a)(v) are also problematic:
Given that the current definition could be argued not to add to the overall aims of the disclosure scheme and therefore places an unnecessary burden on groups of people that are not legitimately partaking in political 'campaigns', the AEC is of the view that these groups should be excluded by removing these two parts of the definition.
Subsection 314AEB(1)(a)(ii) of the Act be deleted.
The Act be amended to delete ss.314AEB(1)(a)(v).
|Public expression of views on a political party, candidate or member of the Federal Parliament by any means||$2 698 432||$1 499 894||$1 489 476|
|Public expression of views on an issue in an election by any means||$13 872 229||$1 540 256||$2 112 579|
|Advertisements requiring authorisation under s.328, s.328A or s.328B of the Act||$5 964 882||$1 501 791||$8 839 441|
|Advertisements requiring authorisation under subclause 4(2) of schedule 2 to the Broadcasting Services Act 1992||$26 759 087||$1 601 347||$14 699 652|
|Opinion polling and other research relating to an election or the voting intention of voters||$2 152 595||$523 670||$803 214|
Expenditure in the area of broadcasting and advertisements requiring authorisation rose dramatically in 2009–10 compared to 2008–09. The likely timing of the federal election in August 2010 would appear to have been responsible for this, as a significant amount of advertising by third parties took place in the first half of 2010 leading up to the election, particularly expenditure by the mining industry in Western Australia.
The highest third party expenditure in 2009–10 came from major advertising campaigns run by the Minerals Council of Australia who reported electoral expenditure of $17 184 924.
Similar amounts of electoral expenditure were reported in 2007–08 by the Australian Council of Trade Unions ($15 834 139) and the National Business Action Fund ($13 227 897).
These large political expenditure campaigns can be attributed to advertising conducted in relation to industrial relations issues in 2007 and proposed mining taxes in 2010.