Australia: Making a political donation for the 2016 Federal Election: A quick refresher on the key issues for business

With the Budget announced and the 2016 Federal Election imminent it is the ideal time for business to refresh their knowledge on Commonwealth political donation laws.

Laws governing political donations differ between Federal and State jurisdictions, and amongst the States. Getting it wrong runs the risk of fine, or, worse, reputational damage.

Eight considerations for business

If you are considering making a political donation in the lead up to the federal election, it's worth remembering these eight considerations about political donations laws:

  1. The electoral laws governing political donations may be different depending on whether you are making a donation to an individual candidate or to a political party.
  2. Donations will include both monetary and non-monetary donations as well as gifts-in-kind.
  3. If you are donating to a political party, and the total of all donations made to that political party in the financial year exceeds the disclosure threshold (which for the 2015/2016 financial year is $13,000) then each individual donation must be reported by the donor to the Australian Electoral Commission (AEC) on or before 17 November 2016. 
  4. If you are donating to an individual candidate, the disclosure threshold will remain the same (that is, $13,000) but the total period of time over which donations must be aggregated for disclosure will be different depending on the candidate's circumstances. For example, for a sitting member of the House of Representatives seeking re-election, the disclosure period will be from 30 days after the last election (so from 8 October 2013) to 30 days after the forthcoming election. Different provisions apply for candidates who did not contest the last election.  These donations must be reported to the AEC within 15 weeks of the election.
  5. Body corporates who are related under the provisions of the Corporations Act are considered to be one single entity. Consequently, business should be aware that donations need to be calculated across the entire corporate group to determine whether disclosure needs to be made.
  6. If donations by a business exceed the disclosure threshold, it will be necessary to disclose certain details of each donation including name, date and amount, even if the individual donations are below the donation threshold. This information will become publicly available.
  7. Assessing whether a payment is a donation can be tricky.  For example, attending a political party function where the cost of the ticket is significantly greater than the value of the meal or services received will be considered a donation and count towards the $13,000 total.
  8. Donations made "indirectly" can be considered a donation and will count towards the disclosure threshold. For example, donations to individuals or organisations on the understanding that they will support the activities of a political party will be regarded as donations.

Unlike the electoral laws in some states such as New South Wales, there is no federal prohibition preventing certain types of businesses from donating to political parties.

How to report a political donation

If a business has made a reportable donation, there is an obligation on both the donor AND the recipient to report that donation to the AEC. This involves completing a disclosure return which is then lodged with the AEC. This can now be done electronically.

The risk for business

All businesses will be alive to the reputational risks of being involved in a political donations scandal. Reputational risks aside, failing to comply with political donation laws has other serious consequences

For example, not lodging a disclosure, providing false or misleading information and failing to keep proper records for three years are all offences under Commonwealth law that are punishable with a fine.

Managing the risks

The legal risk associated with political donations can be easily managed by following a couple of key steps:

  • keep your own records of what donations are made and to whom, remembering that donations can be both monetary and non-monetary and that donations are aggregated; 
  • take ownership of the reporting/disclosure process and report promptly at the start of and within the timeframes;
  • proactively seek advice on your disclosure obligations if needed; and
  • if you are a prohibited donor under certain state laws (for example, a property developer) take steps to ensure that your donations are made strictly to federal parties and candidates.

Making a political donation is a strategic investment for any business. By following good due diligence procedures, businesses can be confident in making donations to parties and candidates in the upcoming federal election without risking their good name and reputation.

With the Budget announced and the 2016 Federal Election imminent it is the ideal time for business to refresh their knowledge on Commonwealth political donation laws.

Laws governing political donations differ between Federal and State jurisdictions, and amongst the States. Getting it wrong runs the risk of fine, or, worse, reputational damage.

Eight considerations for business

If you are considering making a political donation in the lead up to the federal election, it's worth remembering these eight considerations about political donations laws:

  1. The electoral laws governing political donations may be different depending on whether you are making a donation to an individual candidate or to a political party.
  2. Donations will include both monetary and non-monetary donations as well as gifts-in-kind.
  3. If you are donating to a political party, and the total of all donations made to that political party in the financial year exceeds the disclosure threshold (which for the 2015/2016 financial year is $13,000) then each individual donation must be reported by the donor to the Australian Electoral Commission (AEC) on or before 17 November 2016. 
  4. If you are donating to an individual candidate, the disclosure threshold will remain the same (that is, $13,000) but the total period of time over which donations must be aggregated for disclosure will be different depending on the candidate's circumstances. For example, for a sitting member of the House of Representatives seeking re-election, the disclosure period will be from 30 days after the last election (so from 8 October 2013) to 30 days after the forthcoming election. Different provisions apply for candidates who did not contest the last election.  These donations must be reported to the AEC within 15 weeks of the election.
  5. Body corporates who are related under the provisions of the Corporations Act are considered to be one single entity. Consequently, business should be aware that donations need to be calculated across the entire corporate group to determine whether disclosure needs to be made.
  6. If donations by a business exceed the disclosure threshold, it will be necessary to disclose certain details of each donation including name, date and amount, even if the individual donations are below the donation threshold. This information will become publicly available.
  7. Assessing whether a payment is a donation can be tricky.  For example, attending a political party function where the cost of the ticket is significantly greater than the value of the meal or services received will be considered a donation and count towards the $13,000 total.
  8. Donations made "indirectly" can be considered a donation and will count towards the disclosure threshold. For example, donations to individuals or organisations on the understanding that they will support the activities of a political party will be regarded as donations.

Unlike the electoral laws in some states such as New South Wales, there is no federal prohibition preventing certain types of businesses from donating to political parties.

How to report a political donation

If a business has made a reportable donation, there is an obligation on both the donor AND the recipient to report that donation to the AEC. This involves completing a disclosure return which is then lodged with the AEC. This can now be done electronically.

The risk for business

All businesses will be alive to the reputational risks of being involved in a political donations scandal. Reputational risks aside, failing to comply with political donation laws has other serious consequences

For example, not lodging a disclosure, providing false or misleading information and failing to keep proper records for three years are all offences under Commonwealth law that are punishable with a fine.

Managing the risks

The legal risk associated with political donations can be easily managed by following a couple of key steps:

  • keep your own records of what donations are made and to whom, remembering that donations can be both monetary and non-monetary and that donations are aggregated; 
  • take ownership of the reporting/disclosure process and report promptly at the start of and within the timeframes;
  • proactively seek advice on your disclosure obligations if needed; and
  • if you are a prohibited donor under certain state laws (for example, a property developer) take steps to ensure that your donations are made strictly to federal parties and candidates.

Making a political donation is a strategic investment for any business. By following good due diligence procedures, businesses can be confident in making donations to parties and candidates in the upcoming federal election without risking their good name and reputation.


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