Business Law

Political donations: are you up-to-date on your disclosure obligations?

B2B Editor1 September 2014

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One of the most polarising federal bud gets in decades, talk of double dissolutions and a unpredictable Senate – with an early election not out of the question, now is a good time to ensure that both you and your business are up to speed on your disclosure obligations when it comes to making financial or other donations to political parties or their state branches.

Many individuals and businesses make political donations, which will generally include any gift or disposition of property (other than by will) to a political party or candidate, but many are unaware of their disclosure obligations or the myriad complex legislative provisions which may deem them to be making donations they aren’t even aware of.

At the federal level, any donations to a registered political party in excess of $12,800 (a indexed figure that fluctuates year to year 2) must be disclosed in an annual return lodged with the Australian Electoral Commission within twenty weeks of the financial year ending. 3

Commercial discounts, freebies or mates-rates for your local pollie could also land you in hot water – such concessions could be considered reportable donations. Indirect donations made to third party organisations, such as an interest or industry group for the purpose of benefiting a political party, may also be caught. 4

The disclosure threshold applies equally to political expenditure, and covers items like election advertising, whether through broadcast, publication or display, 5 so if you’ve ever considered printing posters of your local candidate or running an event for your local party, you should make sure you’re up to date on the current disclosure thresholds. When figuring out whether you’ve exceeded the threshold, donor-organisations should be aware that donations by a related organisation may be included as the same entity,6 meaning that the value of all gifts and expenditure incurred across the organisations is aggregated and a single return required.

Political entities also have to lodge their own returns. If you or your business appear on their return, but haven’t lodged your own, you could be caught out. Failure to lodge a return within time, or lodging a return that is incomplete or known to be false, is an offence and may attract a fines of up to $5,000.7 These obligations will vary depending on the relevant state or territory and level of government. For those engaged in the ACT political scene, the donation disclosure threshold is far lower, kicking in at a mere $1,000 (although generally it is the receiving entity that carries the responsibility for disclosure).

With disclosure records publicly accessible, the potential consequences (and financial penalties) of non-disclosure are serious.

1 Commonwealth Electoral Act 1918 s 287(1). 2 The disclosure threshold is indexed on 1 July every year in accordance with s 321A. 3 Commonwealth Electoral Act 1918 s 305B(1). 4Commonwealth Electoral Act 1918 s 305B(2). 5 Commonwealth Electoral Act 1918 s 308. 6Commonwealth Electoral Act 1918 s 287(6). 7 Commonwealth Electoral Act 1918 s 315.