Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill and seek leave to move government amendments (1) to (8) on sheet UV130 together.

Leave granted.

I move government amendments (1) to (8) on sheet UV130 together:

(1) Schedule 1, item 2, page 3 (before line 11), before the definition of federal purpose, insert:

federal account means an account where:

  (a) the only amounts deposited into the account are amounts to be used only for a federal purpose; and

  (b) the only amounts withdrawn or transferred from the account are amounts:

     (i) withdrawn or transferred for a federal purpose; or

     (ii) transferred to another federal account.

Example:   A federal account of a federal party may be established by the federal party or a State branch of the federal party.

(2) Schedule 1, page 3 (after line 29), after item 2, insert:

2A Subsection 287(1) (definition of State or Territory electoral law )

After "means a law", insert "(including a part of a law)".

(3) Schedule 1, item 25, page 8 (lines 14 to 30), omit subsections 302CA(4) to (8), substitute:

Receiving or keeping gifts—money

(4) 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 if:

  (a) the money is deposited into a federal account as soon as practicable after the money is received; and

  (b) the money is not transferred or withdrawn out of the account except:

     (i) to use the money for federal purposes; or

     (ii) to transfer the money to another federal account.

(4A) Despite any State or Territory electoral law, a regulated entity, or a person on behalf of a regulated entity, may keep a gift of money if:

  (a) the money is kept in a federal account; and

  (b) the money is not transferred or withdrawn out of the account except:

     (i) to use the money for federal purposes; or

     (ii) to transfer the money to another federal account.

(4B) To avoid doubt, subsections (4) and (4A) are taken never to have applied if, at any time, the money is transferred or withdrawn out of the account, or any other federal account, except as provided by subparagraph (4)(b)(i) or (ii) or (4A)(b)(i) or (ii).

Receiving or keeping gifts—gifts other than money

(5) Despite any State or Territory electoral law, a regulated entity, or a person on behalf of a regulated entity, may receive or keep a gift that is not money unless the regulated entity keeps the gift for use for, or uses the gift for, purposes other than federal purposes.

(5A) To avoid doubt, subsection (5) is taken never to have applied if, at any time, the regulated entity keeps the gift for use for, or uses the gift for, purposes other than federal purposes.

Receiving or keeping gifts—additional operation

(6) Subsections (4), (4A) and (5) also have the effect they would have if a reference to a gift were confined to a gift expressly given for federal purposes.

Using gifts—money

(7) Despite any State or Territory electoral law, a regulated entity may use, or authorise the use of, a gift of money for federal purposes if the gift has been continuouslykept in a federal account since it was deposited in that account, or any other federal account, in accordance with subsection (4).

Using gifts—gifts other than money

(7A) Despite any State or Territory electoral law, a regulated entity may use, or authorise the use of, a gift, that is not money, for federal purposes if the gift has been continuouslykept for federal purposes since it was received.

Using gifts—relationship with State or Territory electoral laws

(8) To avoid doubt, the fact that, as a result of subsection (7) or (7A), a State or Territory electoral law does not prohibit the use of a gift does not prevent that law from prohibiting the offering, seeking, giving, receiving or keeping of the gift.

(4) Schedule 1, item 25, page 9 (after line 3), at the end of section 302CA, add:

Parts of gifts

(10) For the purposes of this section, if a part of a gift is offered, sought, given, received, kept or used for a particular purpose, and that same action is taken in relation to another part of the gift for a different purpose, each part of the gift is taken to be a separate gift.

(5) Schedule 1, item 27, page 9 (lines 10 to 28), omit subsections 314B(1) to (4), substitute:

Disclosure of amounts and benefits given etc.

(1) Despite any State or Territory electoral law, a person or entity is not required to disclose under that law an amount of money, or information relating to an amount of money, (including a gift or loan) if the person or entity expressly gives the amount to, or for the benefit of, a regulated entity for federal purposes.

(1A) Despite any State or Territory electoral law, a person or 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 person or entity expressly provides the benefit to, or for the benefit of, a regulated entity for federal purposes.

Note: For the definition of non-monetary benefit, see subsection (8).

Disclosure of amounts and other benefits received

(1B) Despite any State or Territory electoral law, a regulated entity is not required to disclose under that law an amount of money, or information relating to an amount of money, (including a gift or loan) that is received by or on behalf of the regulated entity if:

  (a) the amount is deposited into a federal account as soon as practicable after the amount is received; and

  (b) the amount is not transferred or withdrawn out of the account except:

     (i) to use the amount for federal purposes; or

     (ii) to transfer the amount to another federal account.

(1C) To avoid doubt, subsection (1B) is taken never to have applied if, at any time, the amount is transferred or withdrawn out of the account, or any other federal account, except as provided by subparagraph (1B)(b)(i) or (ii).

(2) Despite any State or Territory electoral 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 the benefit for use for, or uses the benefit for, purposes other than federal purposes.

(3) To avoid doubt, subsection (2) is taken never to have applied if, at any time, the regulated entity keeps the benefit for use for, or uses the benefit for, purposes other than federal purposes.

(4) Subsections (1B) and (2) also have the effect they would have if a reference to an amount or benefit were confined to an amount or benefit expressly given or provided for federal purposes.

(6) Schedule 1, item 27, page 10 (lines 8 to 18), omit subsection 314B(7), substitute:

Interpretation

(7) Despite any State or Territory electoral law, if, as a result of this section, a person or entity is not required to disclose under that law an amount, information or value referred to in this section (the federal information), then:

  (a) it is immaterial whether the federal information is required to be included in a return provided under this Part; and

  (b) a total amount, or information relating to a total amount, that is required to be disclosed under that law is not required to include the federal information.

(8) A non-monetary benefit is a gift, or a good or service that is lent, that is not money.

(9) For the purposes of this section, if an action (such as, giving or using) is taken in relation to a part of an amount or non-monetary benefit for a particular purpose, and that same action is taken in relation to another part of the amount or benefit for a different purpose, each part of the amount or benefit is taken to be a separate amount or benefit.

Compulsory production provisions excluded

(10) This section does not apply in relation to any compulsory production provision in a State or Territory electoral law.

(11) A compulsory production provision in a State or Territory electoral law is a provision that confers a power on a person or body (the regulator) to compel a particular person to disclose information (including an amount or value) for the purposes of the regulator investigating a potential contravention of that or any otherlaw.

Note: 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.

(7) Schedule 1, page 10 (after line 18), after item 27, insert:

27A After subsection 317(1)

Insert:

(1A) A person or entity (the record keeper) must keep records in accordance with subsections (2) and (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.

Example:   A statement of all transactions into and out of a federal account is example of a record that must be kept for the purposes of this subsection.

Civil penalty:   200 penalty units.

27B Subsection 317(2)

After "A record", insert "kept under subsection (1) or (1A)".

27C At the end of subsection 317(2)

Add:

; and (e) if the record relates to the application of section 302CA or 314B—5 years after the day the relevant gift, amount or benefit is offered, sought, given, provided, received or used, or the relevant expenditure or debt is incurred.

27D Subsection 317(3)

Omit "A record", substitute "The record".

(8) Schedule 1, item 34, page 11 (line 30), after "amounts given,", insert "non-monetary benefits provided,".

These amendments give effect to recommendations from the Joint Standing Committee on Electoral Matters. I restate on the record my thanks for the committee's work. The government and the opposition representatives on the committee agreed that the Commonwealth Electoral Act should apply exclusively to federal political donations, but they recommended that this should be conditional on banking federal donations in separate federal purpose-only accounts to strictly separate these funds from any state campaign funds. As the committee put it, this would align the accounting treatment of federal donations with the legal treatment proposed in the bill.

This proposal raised on a bipartisan basis by JSCEM members is compatible, I believe, with the technical amendments in the government's bill and is entirely consistent with the intention behind those amendments. The government amendments circulated in my name will implement this recommendation. The amendments provide that, as a condition for being covered exclusively under the federal electoral law, federal funds must be deposited in a federal account and can only be used for federal electoral expenditure or transferred to another federal account. This is equivalent to legislative requirements adopted in some state and territory electoral laws. It is increasingly the case if recent years for state and territory jurisdictions to require that political parties deposit all funds intended for election use at state and territory level in dedicated campaign accounts. Accordingly, many political parties already operate separate bank accounts for their state and federal campaigns. To the extent some do not, these amendments will require new practices for dedicated handling of federal money. As JSCEM put it:

A Federal-purpose account would effectively create a sanitised stream of financial activity within a state arm of a party that is fully separated from the State-affairs of the party. It would remove a capacity to shuffle funds between purposes, after they have been committed and banked.

The amendments include integrity rules that will nullify inappropriate attempts to misuse federal donations for non-federal electoral purposes. For example, if a political party initially banks a donation in a dedicated federal account but later spends that amount at a state level then Commonwealth law is deemed to have never applied to that donation. The federal account would also lose its federal status at that time. In this instance, a donation may be subject to state or territory law, including where relevant, penalties, reporting requirements and potentially registration obligations.

Importantly, while the amendments protect the right of the Commonwealth parliament to make exclusive laws for federal elections, they are very carefully drafted to ensure state and territory electoral regimes continue to apply to their fullest extent possible to donations related to their own elections. Specifically, these amendments make clear that, for avoidance of doubt, the Commonwealth does not in any way impair powers of a state regulator to seek compulsory production of documents in relation to contravention of state laws. Together, the effect of this set of amendments is to ensure that there is a uniform federal set of requirements for donations that have a federal purpose. Without laws to protect the Commonwealth parliament's power to regulate its own elections, people in different corners of the country could potentially be subject to very inconsistent donation rules based on where they live. The amendments reflect the government's readiness to address issues that surface in the Joint Standing Committee on Electoral Matters process. These amendments make parts of the bill more targeted and they demonstrate the value of improving electoral legislation on a bipartisan basis through that committee. I commend the amendments to the Senate.