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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
ELECTORAL LEGISLATION AMENDMENT (MISCELLANEOUS
MEASURES) BILL 2020
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by authority of the
Minister for Finance, Senator the Hon Mathias Cormann)
ELECTORAL LEGISLATION AMENDMENT (MISCELLANEOUS
MEASURES) BILL 2020
GENERAL OUTLINE
The Electoral Legislation Amendment (Miscellaneous Measures) Bill 2020 (the
Bill) amends the Commonwealth Electoral Act 1918 and the Referendum
(Machinery Provisions) Act 1984. The Bill clarifies the relationship between
federal and state and territory electoral finance laws, makes technical
amendments to public election funding rules, and streamlines electoral
processes for the efficient delivery of federal electoral events.
The amendments amend the Bill to:
require regulated entities to deposit monetary gifts in a federal bank
account and use the money for federal purposes, in order to be covered
exclusively by federal donation law;
clarify the requirements for receiving, keeping and using monetary and
non-monetary gifts, and parts of gifts;
provide that, irrespective of any quarantine from state and territory law
about routine reporting of donations, a person or entity may be
compelled to disclose specific information related to a contravention of
State or Territory electoral law; and
require people or entities covered by these amendments to keep records
of transactions to and from the federal account for five years for
purposes of allowing a regulatory body to investigate compliance with
the law.
FINANCIAL IMPACT STATEMENT
The financial implications of the amendments do not impact the financial
implications outlines in the Explanatory Memorandum to the Bill.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human Rights has been completed in
relation to the proposed Government amendments to the Bill. The amendments
have been assessed as compatible with Australia's human rights obligations.
The amendments do not alter the analysis in the Statement of Compatibility
with Human Rights outlines in the Explanatory Memorandum to the Bill.
Page 2 of 13
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
Amendments to the Electoral Legislation Amendment (Miscellaneous
Measures) Bill 2020 (the Bill)
The amendments are compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the amendment
The amendments:
require regulated entities to deposit monetary gifts in a federal bank
account and use the money for federal purpose, in order to be covered
exclusively by federal donation law;
clarify the requirements for receiving, keeping and using monetary and
non-monetary gifts, and parts of gifts;
provide that, irrespective of any quarantine from state and territory law
about routine reporting of donations, a person or entity may be
compelled to disclose specific information related to a contravention of
State or Territory electoral law; and
require people or entities covered by these amendments to keep records
of transactions to and from the federal account for five years for
purposes of allowing a regulatory body to investigate compliance with
the law.
Human rights implications
The amendments do not engage any of the applicable rights or freedoms. The
amendments do not alter the Statement of Compatibility with Human Rights
outlined in the Explanatory Memorandum to the Bill.
Conclusion
The amendments are compatible with human rights as they do not raise any
human rights issues.
Page 3 of 13
Amendments to the Electoral Legislation
Amendment (Miscellaneous Measures) Bill 2020
NOTES ON CLAUSES
Amendment 1
1.1 Amendment 1 amends Schedule 1, item 3, page 3 (before line
11) of the Bill to introduce a definition of federal account as an account
where the only amounts of money deposited in the account are amounts
to be used for a federal purpose (as proposed in Part 1, Item 2 of the
Bill).
1.2 The definition provides that the only amounts that can be
withdrawn or transferred from the accounts are amounts to be used for a
federal purpose or transferred to another federal account.
1.3 The amendment provides that a federal account may be
established by a federal party, or by a State or Territory branch of the
federal party, recognising that federal parties may have a variety of
organisational structures.
1.4 Where a State or Territory-based regulated entity contests both
State or Territory and federal elections, a federal account cannot be used
for State or Territory electoral expenditure. If the regulated entity uses
funds from a federal account for a non-federal purpose then the account
will cease to be treated as a federal account for the purposes of Part XX
of the Electoral Act and the regulated entity may be subject to the
relevant State or Territory electoral laws.
1.5 These amendments require regulated entities to use completely
separate accounts, and as such the tracking of funds separately to the
account, for example in a ledger, will not be sufficient.
1.6 Where a party has both state or territory and federal arms
registered as separate parties, a federal account used by the federal
organisation cannot be dual -purposed to be used for both federal and
state or territory purposes. All money placed into a federal account may
only be used for a federal purpose or transferred to another federal
account.
1.7 The federal status of a political entity is not sufficient, in and of
itself to demonstrate that a bank account held by that political entity is a
federal account for the purposes of this definition.
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1.8 The definition of a federal account is used in subsequent
subsections that describe circumstances where a monetary gift will be
exclusively regulated by federal law. Exclusive regulation under federal
law is conditional on using a federal account to manage the depositing,
keeping and use of that money in accordance with these subsections.
Amendment 2
1.9 Amendment 2 amends Schedule 1, page 3 (after line 29) of the
Bill to add the words "(including a part of a law)" after "means a law" in
the definition of State or Territory electoral law in subsection 287(1) of
the Electoral Act.
1.10 This amendment revises the definition to recognise the
possibility that some State or Territory laws may be broad laws that deal
with electoral matters alongside other non-electoral subject matter. For
instance if a State or Territory introduces laws with a wide purpose like
regulating all the affairs of unions, or of an industry, or a profession, or
a type of community group, a part of those laws might comprise an
electoral law if they regulate electoral matters pertaining to the persons
or entities who are the subject of those laws.
1.11 This definition looks at whether a "part" of a law is electoral,
that is, would ordinarily appear in an electoral law. In doing so, the
definition focusses on the substance of the provision and not on, for
example, what kind of an Act they are located in or the name of the Act.
This definition avoids any intrusion on laws that only touch incidentally
on electoral issues, for instance a penalty provision contained in a State
or Territory Crimes Act.
1.12 This definition does not include a State or Territory law which
does not deal specifically with electoral matters but which may regulate
the behaviour of people or entities covered by this Part of the Act. For
example, a law, or part of a law, that exclusively regulates a person or
entity's electoral activities would be a State or Territory electoral law
while law relating to criminal behaviour such as fraud, corruption and
the proceeds of crime generally would not be.
Amendment 3
1.13 Amendment 3 amends Schedule 1, item 25, page 8 (lines 14 to
30) to omit and substitute subsections 302CA(4) to (8).
Receiving gifts
Page 5 of 13
1.14 The substituted subsection 302CA(4) establishes that despite any
State or Territory electoral law, a regulated entity, or a person on behalf
of a regulated entity, may receive a gift of money where the gift of
money is deposited in a federal account as soon as practicable after the
money is received.
1.15 Receiving a gift can include for example accepting a gift from a
donor to subsequently convey to a party treasurer, secretariat or
accountant. The gift must be deposited into a federal account as soon as
practicable after it is received. A regulated entity like a political party
can direct money into its federal account including:
o gifts from donors who gave money expressly for a federal
purpose; and
o unconditional gifts from donors that the recipient chooses to
allocate exclusively to federal electoral purposes.
1.16 Gifts from donors which are expressly given for state or territory
electoral purposes, or unconditional gifts that the recipient intends to
allocate to State or Territory electoral purposes, must not be placed into
a federal account.
1.17 The requirement to deposit the gift of money "as soon as
practicable" into a federal account is a statutory requirement that
regulated entities will deposit this money without unreasonable delay, as
a condition for being exclusively covered by federal electoral law.
However, it is also intended to take into account that immediate deposit
may not be practical in all circumstances. For example, the method of
receiving donations may require time to prepare the money for deposit
(e.g. counting or sorting cash donations) or additional time may be
required due to other reasons such as transporting donations collected in
a regional or remote location to a central location before depositing.
1.18 Paragraph 302CA(4)(b) provides that once money is deposited in
a federal account, these funds must only be used for federal electoral
expenditure, or transferred to another federal account, in order for the
federal electoral law to continue to exclusively apply. If the gift
recipient instead retains or uses the gift for a non-federal purpose then
this gift would not be covered by this subsection and State and Territory
laws may apply.
Keeping gifts
1.19 The amendment introduces new subsection 302CA(4A) which
establishes that, despite any State or Territory law, a regulated entity, or
a person on behalf of a regulated entity, may keep a gift of money if that
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money is kept in a federal account, and is only withdrawn from the
account to use for federal purposes, or transferred to another federal
account.
1.20 In order for a party to have certainty that its federal donations are
regulated exclusively by federal law, these donations may not therefore
be transferred into a general account that also contains State or Territory
electoral funds, and may not be used to cover the costs of a State or
Territory election.
1.21 The requirement to keep federal donations in a federal account is
intended to give certainty about whether federal electoral law
exclusively applies. This approach is consistent with the approach taken
by some State or Territory laws which require that all funds covered by
those laws must be deposited into an account exclusively for those State
or Territory purposes.
1.22 Subsection 302CA(4B) provides that, for clarity, that
subsections 302CA(4) and 302CA(4A) do not apply unless the regulated
entity transfers or withdraws the money out of the account in accordance
with subparagraphs (4)(b)(i) or (ii) or (4A)(b)(i) or (ii).
1.23 In other words, money in a federal account must only be used for
federal electoral purposes. As successive donations arrive into a federal
account, other amounts in that account cannot be repurposed for a non-
federal purpose. If this occurs, then this money will not be exclusively
regulated by federal law and the account will no longer be a federal
account and may therefore be subject to relevant State or Territory
electoral laws.
Non-monetary donations (gifts-in-kind)
1.24 The following subsections cover amounts that are non-monetary
gifts, known as gifts-in-kind. Subsection 302CA(5) establishes that
despite any State or Territory law, a regulated entity, or a person on
behalf of a regulated entity, may receive or keep a non-monetary gift,
unless the regulated entity keeps or uses the gift for purposes other than
federal purposes.
1.25 Subsection 302CA(5A) clarifies that subsection 302CA(5) is
taken to have never applied if the regulated entity keeps or uses the gift
for purposes other than federal purposes.
1.26 Although a non-monetary gift cannot be deposited in a bank
account in the same way as a monetary gift, this rule ensures a parallel
treatment for non-monetary gifts by requiring them to be kept and used
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only for federal purposes to ensure they are regulated exclusively by
federal law.
Receiving or keeping gifts - additional operation
1.27 The amendment substitutes subsection 302CA(6) to clarify that
subsections 302CA(4), (4A) and (5) also apply as if a reference to a gift
was confined to a gift expressly given for federal purposes.
1.28 Subsection (6) is a constitutional savings provision. It gives the
immunity in subsections (4), (4A) and (5) a narrower operation if it is
found that the Commonwealth does not have the power to cover all gifts
that are received or kept. The narrower operation limits the immunity to
gifts that are expressly given for federal purposes.
Using gifts
1.29 The amendment substitutes subsection 302CA(7) which
establishes that despite any State or Territory law, a regulated entity, or
a person on behalf of a regulated entity, may use or authorise the use of
a gift of money for federal purposes only if the gift has been
continuously kept in a federal account since it was deposited in that
account, or any other account, in accordance with 302CA(4).
1.30 Subsection 302CA(7A) establishes that despite any State or
Territory law, a regulated entity, or a person on behalf of a regulated
entity, may use or authorise the use of non-monetary gifts for federal
purposes if the gift has been continuously kept for federal purposes
since it was received.
1.31 This amendment addresses concerns raised by the Joint Standing
Committee on Electoral Matters in their review of the Bill, concerning
the potential for a disconnection between the source of funds and their
ultimate use. The revised provision ensures that a gift will only be
exclusively regulated by federal law when it is used if the recipient also
treated it consistently with federal law in the period preceding its use.
For a monetary gift this means holding the money only in federal
accounts, for a non-monetary gift it means keeping that gift for federal
purposes.
1.32 For example, if money was transferred from a federal account to
a non-federal account prior to being used for federal purposes, it will not
be regulated exclusively by federal electoral law and may therefore be
subject to State or Territory laws. Such transfers if they occurred could
diminish transparency of the connection between the source of funds
and their eventual destination.
Page 8 of 13
1.33 Subsection 302CA(8) clarifies that subsections 302CA(7)) and
302CA(7A) which permit the use of a gift for federal purposes, do not
prevent a State or Territory electoral law from prohibiting the offering,
seeking, giving, receiving or keeping of the gift. For instance if a donor
gave an unconditional donation (not given expressly for either a federal
or state or territory purpose) that was greater than the disclosure
threshold in the relevant State or Territory electoral law, they would
need to disclose this regardless of whether the recipient ultimately used
the money for federal purposes.
Amendment 4
1.34 Amendment 4 amends Schedule 1, item 25, page 9 (after line 3)
to add subparagraph 302CA(10) clarifies that if parts of gifts that are
offered, sought, given, received, kept or used for different purposes,
then each part will be treated as a separate gift.
1.35 This amendment ensures that if a single sum is split, then
different laws can apply to each part as relevant. For instance if a donor
gives a single $100 banknote to a political party and asks that half
supports the re-election of their local state MP and half supports the re-
election of the local federal MP, then each half is treated as a separate
donation. Federal law will only apply to the federal part of the gift.
1.36 As a further example, if a donation of $500 is given to a political
party without the donor stating an express purpose, the recipient party
may decide that $300 of that sum will be set aside to be used for federal
purposes. In this example, if the party deposits the $300 in a federal
account to be used only for federal purposes, then this is treated as a
separate gift and federal law will apply to that portion.
1.37 This rule ensures that if part of a gift is regulated exclusively by
federal law, this does not mean that the whole amount is regulated
exclusively by federal law. This subsection provides reassurance that
State and Territory laws can apply to part of a donation if only part of
that donation is used federally.
Amendment 5
1.38 The amendments to section 314B ensure that there is
transparency and public accountability after gifts or loans have been
made for electoral purposes. These provisions ensure that federal data is
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reportable to the Australian Electoral Commission and state and territory
data is reportable to the respective State or Territory authorities.
Disclosure of amounts and other information
1.39 Amendment 5 amends Schedule 1, item 27, page 9 (before line
17) amends and substitutes subsections 314B(1) to (4). Subsection
314B(1) is amended to establish that despite any State or Territory law,
a regulated entity is not required to disclose under that law an amount of
money, or information relating to amounts of money including gifts or
loans, if the regulated entity gives the amount to, or for the benefit of, a
regulated entity for federal purposes.
1.40 Amendment 5 also adds subsection 314B(1A) to establish that
despite any State or Territory law, a regulated entity is not required to
disclose under that law the value of a non-monetary benefit, or
information relating to a non-monetary benefit, if the regulated entity
expressly provides the benefit to, or for the benefit of, a regulated entity
for federal purposes.
1.41 Amendment 5 also adds subsection 314B(1B) to establish that
despite any State or Territory law, a regulated entity is not required to
disclose under that law an amount of money, or information relating to
amounts of money including gifts or loans given to the regulated entity
where the amount is deposited in a federal account as soon as
practicable after it is received, and the regulated entity does not transfer
or use the amount except for either a federal purpose, or to transfer the
amount to another federal account.
1.42 Amendment 5 also adds subsection 314B(1C) to clarify that
subsection 314B(1B) is taken to have never applied if at any time the
regulated entity transfers or withdraws the money from the federal
account except to use the money for federal purposes or to transfer the
amount to another federal account.
1.43 Amendment 5 adds subsection 314B(2) to establish that despite
any State or Territory law, a regulated entity is not required to disclose
under that law the value of a non-monetary benefit, or information
relating to a non-monetary benefit that is received by, or on behalf of the
regulated entity, unless the regulated entity keeps or uses the benefit for
purposes other than federal purposes.
1.44 Amendment 5 also amends subsection 314B(3) to clarify that
subsection 314B(2) refers to non-monetary benefits.
1.45 Amendment 5 also makes a consequential amendment to
subsection 314B(4) to insert reference subsection 314B(1B).
Page 10 of 13
1.46 These amendments give certainty about whether federal electoral
disclosure laws exclusively apply to a gift. If federal law does not
exclusively apply, for example if the gift is used for a State or Territory
electoral purpose, then the gift may be subject to State or Territory
electoral laws. This may mean that relevant entities or persons need to
provide annual returns, make periodic returns, or register under those
laws.
1.47 These amendments do not prevent a relevant authority (such as a
State or Territory electoral commission) exercising powers conferred
under a law of a State or Territory to compel the production of
information or records for the purposes of investigating a potential
contravention of that law (see also Amendment 6).
Amendment 6
1.48 Amendment 6 amends Schedule 1, item 7, page 1 (lines 8 to 18)
to amend subsection 314B(7) to clarify the meaning of federal
information and replaces the former term 'federal amount or
information' to include reference to an amount, information or value
referred to in section 314B.
1.49 Amendment 6 inserts subsection 314B(8) to define the new
concept of a non-monetary benefit as being a "gift, or a good or service
that is lent, that is not money."
1.50 Amendment 6 also adds subsections 314B(9), (10) and (11) to
the Bill to provide that section 314B of the Electoral Act does not apply
where there is a compulsory production provision in a State or Territory
electoral law.
1.51 Compulsory production provision is defined in new subsection
314B(11).
1.52 Amendment 6 also inserts a note in subsection 314B(11) to note
that a provision that confers a power for a person or body to give a
notice to produce to a regulated entity is an example of a compulsory
production provision.
1.53 This amendment makes clear that a relevant State or Territory
authority (such as a State or Territory electoral commission) is not
prevented from exercising powers to compel the production of
information or records for the purposes of investigating a potential
contravention of that law.
Page 11 of 13
1.54 For example, a state authority may compel an entity to provide
information regarding donations where a State or Territory regulator is
investigating potential donations for non-federal purposes from donors
prohibited in that State or Territory, including where there is whistle-
blowing about wrong-doing, or where there are unexplained levels of
spending on a state campaign that are not explainable by sums in a state
campaign account.
1.55 This may also include investigating the contravention of
electoral laws of that jurisdiction, or any other law. For instance if there
were serious wrong doing, evidence about the relevant behaviour might
inform investigation of breach of criminal laws in addition to breach of
electoral laws.
1.56 This amendment does not enable State and Territory regulators
to seek routine reporting (like annual returns) for federal donations that
are appropriately regulated by federal laws made by the Commonwealth
Parliament. However, it ensures that State and Territory regulators can
appropriately exercise their investigative powers to enquire into specific
matters of concern.
Amendment 7
1.57 Amendment 7 amends Schedule 1, page 10 (after line 18), after
item 27 to add subsection 317(1A) to provide that a person or entity
must keep records in accordance with subsections 317(2) and 317(3) for
the purposes of allowing a person, court or other body to determine
whether section 302CA or 314B applies in relation to the record keeper.
1.58 This amendment also provides an example of such records being
a statement of all transactions into and out of a federal account. This
makes clear that the AEC's powers of investigation extend to looking at
details of federal accounts.
1.59 This amendment also provides that the civil penalty in respect of
a contravention of this provision is 200 penalty units.
1.60 This amendment also makes a consequential amendment to
subsection 317(2) to clarify that the definition of "a record" under that
subsection includes records kept under subsection (1) or (1A).
1.61 This amendment also amends subsection 317(2) to add
subparagraph (e) which provides that records relating to the application
of section 302CA or 314B must be kept for 5 years after the day the
relevant gift or amount is offered, sought, given, received or used, or the
relevant expenditure or debt is incurred. This ensures the AEC has
Page 12 of 13
access to appropriate documents to assist it to undertake investigations
and to support compliance action. The 5 year retention period is
consistent with similar retention rules in the Act.
1.62 This amendment also makes a consequential amendment to
subsection 317(3) to omit "A record" and substitute "The record".
Amendment 8
1.63 Amendment 8 is a consequential amendment to Schedule 1, item
34, page 11 (line 30) to insert an additional reference to 'non-monetary
benefits in section 317 of the Electoral Act.
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