Australia: Political donations – what you need to know in the lead up to the election
NSW Planning, Environment & Government Update

Donations from property developers and their associates to political parties are prohibited in New South Wales. If you are in the development industry and have been invited to political fundraisers or functions, it is important to be aware of whether the prohibition applies to you or your company. With a state election around the corner, and the media spotlight on political fundraising events, we set out a brief guide to the prohibition on donations.

We strongly recommend that people in the development industry seek advice and closely check the requirements in the Election Finding and Disclosures Act 1981 and the Environmental Planning and Assessment Act 1979 before contemplating attending any political functions. If you are not sure whether a particular act is a 'gift' or 'political donation', or whether a particular donation must be disclosed, or whether you are a company or person who is prohibited from making a political donation, Gadens can advise you on you particular circumstances.

Property developers – political donations are prohibited

A property developer must not make a political donation or get another person to make a political donation. It is also unlawful for another person to make a political donation on behalf of a property developer or to solicit another person to do so.

'Property developer' includes corporations which make development and planning applications, and close associates of the corporation. A close associate is broadly defined and can include a director or officer of the corporation, related bodies, or a person with greater than 20% voting power (or their spouse), amongst other things.

These prohibited actions are criminal offences, and penalties of up to $11,000 apply.

What is a political donation

Political donation is widely defined to capture both direct and indirect gifts to a party, elected member or candidate. It also includes a gift to a third party or other entity for that entity to make (whether directly or indirectly) a political donation or incur electoral expenditure.

Political donations which are unlawful for property developers include:

• payments for fundraising functions or ventures
• a loan (not from a financial institution)
• some annual or other party membership.

Payments for participating in a fundraising event is specifically defined as a gift. This means that if you are a property developer you must not make payments for fundraising events.

Disclosure of donations

In addition to the prohibition, which has applied since December 2009, the requirement to disclose reportable political donations or gifts also remains in place.

This disclosure requirement applies when making a 'relevant planning application' to the Minister or a consent authority, or when a public submission is made in relation to a planning application. A relevant planning application includes amongst other things:

• development applications under Part 4,
• concept plan applications under Part 3A, and
• rezoning applications.

The disclosure must be made by a person with a financial interest in the application or submission. A person is considered to have a financial interest if the person is:

• the applicant, or
• the person on whose behalf the application is made, or
• associated with the Applicant and is likely to obtain a financial gain if the development is approved.

The political donation which must be reported are those 'reportable donations' made in the two years prior to lodging the application (and up to the time of determination)

A 'reportable political donation' is a political donation of or exceeding $1,000 made to or for the benefit of a party, elected mamber, group or candidate. If a person has made separate donations to the same person or party which add up to more than $1,000 in one financial year, these must also be reported.

To party or not to party

In the lead up to the State election we strongly recommend that people in the development industry seek advice and closely check the requirements in the Election Finding and Disclosures Act 1981 and the Environmental Planning and Assessment Act 1979 before contemplating attending any political functions.

If you are not sure whether a particular act is a 'gift' or 'political donation', or whether a particular donation must be disclosed, or whether you are a company or person who is prohibited from making a political donation, Gadens can advise you on your particular circumstances.

For more information, please contact: