Proposed amendments to the Electoral Act if enacted will profoundly constrain or shut down political advocacy that is the lifeblood of a healthy democracy.
The Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 (ELFDR Bill) seeks to deal with the problem of foreign funding of political activity but goes much further. If passed, it will impose enormous compliance burdens and restrictions on advocacy bodies like GetUp and charities. It was introduced into the Senate on 7 December 2017 and was referred to the Joint Standing Committee on Electoral Matters which must report by 2 March 2018. Despite this timing, the Committee has received 146 submissions which almost unanimously object to the legislation, including St Vincent de Paul, the Ian Potter Foundation, Law Council of Australia, Australian Lawyers for Human Rights, ACOSS, Chartered Accountants Australia and New Zealand, Arnold Bloch Leibler, Universities Australia and Transparency International Australia.
The ELFDR Bill is immensely complex and, as noted by Professor Anne Twomey in her submission, it requires the assimilation of three pieces of legislation: the original Australian Electoral Act, another recent amending Act (the Electoral and Other Legislation Amendment Act 2017) and the ELFDR Bill.
The Explanatory Memorandum, provided by the Minister for Finance Senator Cormann, speaks of the ‘integrity of Australia’s electoral system’.
New political actors neither endorse candidates nor seek to form government, yet actively seek to influence the outcome of elections. While a positive indicator of the strength of Australian civil society and civic engagement, these new actors lack the public accountabilities of more traditional actors, such as registered political parties or parliamentarians.
The Bill deals with the election process and the regulation of candidates and political parties (‘wholly political actors’), in particular banning foreign donations. But it goes much further in regulating advocacy and charitable bodies (‘non-party political actors’) which must register with the Electoral Commission. I will focus on these.
The first category is ‘political campaigners’ who must register if their ‘political expenditure’ exceeds $100,000 or more in any one of the previous 3 financial years or is $50,000 or more in the relevant financial year and at least 50 per cent of the person’s or entity’s ‘allowable amount’ for that year. ‘Political expenditure’ is expenditure incurred for one or more ‘political purposes’ which include the public expression by any means of views on an issue that is, or is likely to be, before electors in an election (whether or not a writ has been issued for the election). ‘Expenditure’ is not defined and it is unclear what it covers.
Another non-political actor is a ‘third party campaigner’ whose political expenditure is more than $13,500 in a financial year.
A third category is an ‘associated entity’ which is an entity associated with a political party but also includes one that operates wholly, or to a significant extent, for the benefit of one or more registered political parties. ‘Benefit’ is defined very widely but, even so, its meaning is not clear. The upshot is that an entity can be treated as an associated entity of a party even if it has no relationship with that party.
These entities must register. Failure to register attracts civil penalties, illustrated in the EM by the hapless hypothetical ‘Joseph’ who faced a fine of $2.4 million. Political expenditure by a body that must register, but which has not, is forbidden and attracts a possible fine of 240 penalty units ($50,400) per day.
Once registered, there is a heavy burden of reporting by an annual return, including disclosing details relating to amounts received or paid or incurred by the entities during the year. These are very detailed and also include disclosure of senior staff engaged in political activities and any membership of any registered political party that any of those members of staff have. Failure to submit a complying annual return attracts a possible civil penalty of 360 penalty units ($75,600) per day.
In addition to banning foreign donations to political parties and candidates, political donations to non-party political actors of $250 or more in a given year from foreign donors are banned. A criminal offence is committed by the donee if it receives a donation from a ‘non-allowable donor’ (one that is not an Australian citizen, resident or Australian registered company). The donee must ascertain whether the donor is an allowable donor by obtaining ‘appropriate donor information’. This is done by requiring the donor to provide a statutory declaration within 6 weeks of the donation. This must be done in respect of each donor. Failure to do this, even if an attempt is made but the donor is not responsive, attracts a criminal offence of 10 years’ gaol, 600 penalty units ($126,000) or both or a civil penalty of 1000 penalty units ($210,000). (Arrival at prison: “what are you in for?” “Er … didn’t get a stat dec.”)
It is possible to avoid punishment by donating the donation to the Commonwealth. Some relief is provided to registered charities and unions if they receive a non-allowable donation so long as the donation is separated from other money and is not used for political purposes, that is, advocacy.
The ELFDR Bill, if implemented into law will:
- severely burden and restrict the stuff of democracy, that is, advocacy;
- probably be unconstitutional because it is inconsistent with the implied freedom of political expression in the Constitution;
- infringe human rights recognised and endorsed by Australia, in particular freedom of speech and political expression (despite a declaration in the EM that it does not);
- not prevent the kind of donation (by a foreign Australian resident) that precipitated the prohibition on foreign donations (the Dastyari affair).
We await the report of the Committee.
Nick Seddon is an academic and practising lawyer. He is not a member of GetUp.